Cox v Brakatin Holdings Limited and Mudgway [2009] NZLLA 1295 (26 November 2009)

Last Updated: 29 January 2012

Decision No.PH 1295-1296/2009

IN THE MATTER of the Sale of Liquor Act 1989

AND

IN THE MATTER of an application pursuant to s.132 of the Act for suspension or cancellation of on-licence number 010/ON/08/2004 issued to BRAKATIN HOLDINGS LIMITED in respect of premises situated at 27 Edinburgh Street, Pukekohe, known as “Firemans Arms”

AND

IN THE MATTER of an application pursuant to s.135 of the Act for suspension or cancellation of General Manager's Certificate number GM 138/2005 issued to RAYNOR CHARLES MUDGWAY

BETWEEN STEPHEN GOODHALL COX

(Police Officer of Manukau)

Applicant

AND BRAKATIN HOLDINGS LIMITED

First Respondent

AND RAYNOR CHARLES MUDGWAY

Second Respondent

BEFORE THE LIQUOR LICENSING AUTHORITY

Chairman: District Court Judge E W Unwin
Member: Ms J D Moorhead

HEARING at PUKEKOHE on 20 October 2009
Final submissions received 5 November 2009

APPEARANCES

Sergeant G J Campbell – NZ Police –applicant
Mr P D Swain – agent for respondents
Mr T N Long – Franklin District Licensing Agency Inspector – to assist

RESERVED DECISION OF THE AUTHORITY

Introduction

[1] There are two enforcement applications for our consideration. Both applications relate to licensed premises known as the “Firemans Arms”. The tavern is located in the former Pukekohe Fire Station in Pukekohe. The original licence was issued in 1997. The present licensee is Brakatin Holdings Limited (hereafter called the company). Mr Raynor Charles Mudgway is the company’s sole director and shareholder. The company purchased the existing business in October 2003. At that time Mr Mudgway had little experience in the hospitality industry.

• [2] The on-licence was issued on 10 August 2004. It authorises the sale and supply of liquor between 6.00 am and 1.00 am the following day Sunday to Thursday, and between 6.00 am and 3.00 am the following day, Friday and Saturday. The entire premises are designated as supervised. The first renewal of the licence occurred in August 2005. There were few problems reported at that time. However, it appears that by October 2007 the reporting agencies had begun to meet with Mr Mudgway to express their concerns, and suggest ways of responding to perceived issues.
• [3] In June 2008, the Police filed applications for the suspension or cancellation of the licence and suspension of Mr Mudgway’s General Manager’s Certificate. The application, in respect of the licence was based on the following grounds:

(1) That the licensed premises had been conducted in breach of the following provisions of the Act:

Section 168(1)(a) Allows intoxicated persons to remain on property

Section 168(1)(b) Allows any violent, quarrelsome, insulting or disorderly conduct to take place on licensed premises

Section 164 Minors in supervised areas
Section 165 Unauthorised sale or supply

(2) That the conduct of the licensee had been such as to show that it was not a suitable entity to hold the licence.

[4] Attached to the application was a 16 page agreed statement of facts detailing multiple visits made to the premises by Regional Public Health staff, the District Licensing Agency Inspector, and members of the Police. According to the application the “Firemans Arms” was the number one problem premises in the District. This assessment was based on the Counties Manukau Police Alco-Link data. The application, alleged numerous incidents of patrons being intoxicated on the premises, fighting, lack of food availability, minors gaining access to the tavern, and the intoxication of a duty manager. In addition there were noise complaints resulting from the activities of a DJ in the outside courtyard. The agreed statement of facts concluded with the claim that although the number of incidents had diminished, similar types of incidents continued to occur.

• [5] The application for suspension of Mr Mudgway’s General Manager’s Certificate was based on the ground that his conduct reflected a lack of suitability to hold the certificate. Prior to the hearing, Mr Mudgway agreed to the suspension of the licence as well as his manager’s certificate. Accordingly the licence was suspended for four days from 4 August 2008. Mr Mudgway’s manager’s certificate was suspended for three weeks from 11 August 2008 (see LLA 1002-1003/2008). The on-licence fell due for renewal at about the same time as the suspension applications took effect. Because the issues enumerated in the enforcement applications had been effectively dealt with, the reporting agencies decided not to take any further action against the company, and the licence was duly renewed.
• [6] In May and June 2009 respectively, the Police filed further applications for the suspension or cancellation of the on-licence as well as Mr Mudgway’s General Manager’s Certificate. The grounds for the application concerning the on-licence were:
  • (1) That the licensed premises had been conducted in breach of the following provisions of the Act:

Section 167 Allowing person to become intoxicated

Section 168 Allowing drunkenness or disorderly conduct on licensed premises

(2) That the conduct of the licensee was such as to show that it was not a suitable entity to hold the licence.

[7] On 5 October 2009, after the application had been set down for a hearing, the Police filed an amended application. The new document was virtually identical to the application filed the previous May. However, a more recent incident on 26 September 2009 had been added. The Police advised that they intended to call video evidence showing levels of patron intoxication on that date.

• [8] The particulars in support of the application referred to allegations of intoxicated patrons on 17 October 2008, 20 February 2009, and 28 February 2009. On the latter occasion it was also alleged that improper drinking practices were taking place in the bar. On that occasion, the Police exercised their powers under s.174 of the Act and ordered that the premises be closed. Further incidents of intoxication were alleged on 21 March and 4 September 2009. In addition it was alleged that on 2 April 2009, Mr Mudgway was drinking at his premises, to the point of intoxication. Furthermore, he had been convicted (for a third occasion), of driving with an excess breath alcohol level of 821 micrograms of alcohol per litre of breath. Finally it was contended that the “Firemans Arms” was the number one rated licensed premises in the Counties Manukau Police District according to the Alco-Link data.
• [9] The application for the suspension or cancellation of Mr Mudgway’s General Manager’s Certificate was brought on the ground that Mr Mudgway’s conduct had been such as to show that he was not a suitable person to hold the certificate. The particulars referred to the incident on 9 April 2009, when Mr Mudgway was found to be driving a motor vehicle with a level of 821 micrograms of alcohol per litre of breath for a third or subsequent time. Although there were a number of other incidents showing managerial irresponsibility, it is important to record that the application was based only on this one drink driving charge.
• [10] Mr Mudgway and his company were represented by Mr P D Swain as agent. On behalf of both respondents he responded to the various allegations either by cross-examination of the witnesses or by evidence given by two witnesses. In a case such as this, where the continuation of a licence is at stake, we acknowledge the need to ensure that the allegations have been properly and fairly established.

The Evidence

[11] Mr M R Ball is the Mayor of the Franklin District. He has lived in Pukekohe for nearly 50 years and has been the Mayor since October 2004. He seemed to have first hand knowledge of what was happening in the community. He stated that as Mayor he met with all sorts of people both formally and informally. He advised that in the last five years, no single issue had been aired with him more than the “Firemans Arms”. He argued that it was as a result of the many calls for action that the proceedings had been taken. He said that the community was embarrassed that “Firemans Arms” was the worst performing establishment in the Counties Manukau Police District.

• [12] Mr Ball argued that the Act had been passed to create within New Zealand, a more mature attitude towards the consumption of alcohol. He submitted that some licensed premises had yet to grasp the implications of the Act. As a result, there were a growing number of public calls to reduce the incidence of drunk and intoxicated behaviour. Mr Ball is a member of the Safer Community Coalition that operates night patrols. These patrols consist of volunteers who give up their time to make Franklin a better place. He stated that the over-arching perception was that the operators of “Firemans Arms” did not care about the impact of the business on the community.
• [13] Mr Ball advised that the community had made real efforts to use environmental design to try to prevent crime. He said that the streetscape had been modified, more and brighter lighting had been installed, and planted areas had been opened up. However, he argued that without the support of the “Firemans Arms”, the efforts were wasted. He had chosen to be present because his constituents had asked him to do something. He believed that a strong message was the only way to respond to such concerns.
• [14] Mr T N Long has been a Liquor Licensing Inspector with the Franklin District Council since 1990. In October 2007 he wrote to the company about a recent meeting held at the Council’s offices. Present were representatives from the Police, Auckland District Health Board, and the Agency. He noted that the Graduated Response Model had been explained to Mr Mudgway, as well as the reasons why the business was regarded as problematic. The reasons included intoxication and disorder, staff drinking while on duty, Mr Mudgway drinking as licensee, noise, lack of food, and lack of security.
• [15] Mr Long gave evidence that he had visited the premises on 2 April 2009 because of intelligence received that the premises had been allowed to become overcrowded. The premises have a capacity of 175 with a further 50 people on the top floor. Mr Long was accompanied by a Police Constable and a representative from the Franklin District Council’s Building Control unit. In the event the premises were not overcrowded.
• [16] While in the bar Mr Long recognised Mr Mudgway. He noted that Mr Mudgway had a glass of beer in front of him that he had been consuming. Mr Mudgway claimed to be under control but he had bloodshot eyes, slurred speech and was unsteady on his feet. Furthermore Mr Mudgway was rambling. He appeared to explain that he was not acting as the duty manager and that he was relying on Ms S Renton. Mr Long believed that Mr Mudgway stated that he was only there because the week before a member of a gang had tried to access the bar. Mr Mudgway made a number of random references about other unrelated matters. There were times when his lips were moving but his voice trailed away. Mr Long formed the view that Mr Mudgway was extremely intoxicated.
• [17] Mr Long was concerned about the general levels of intoxication in the bar. He noted that at about this time the staff stopped service at the bar and sent the patrons out into the courtyard. Constable S G Cox is an Alcohol Harm Reduction Officer with the Counties Manukau Police District Licensing Unit. He has had 11 years experience with the Police. He conducts licensed premises compliance visits to observe their practices. He accompanied Mr Long on this visit. He assessed Mr Mudgway’s state of intoxication as extreme and noted his bloodshot eyes, slurred speech, lack of co-ordination, and inability to answer a simple question. He was also concerned about the moderate to heavy states of intoxication in the bar.
• [18] Mr Mudgway gave evidence and denied that he was intoxicated, although he stated that the assessment made by Mr Long and Constable Cox was “slightly” incorrect. He said that he tried to explain that his speech had been impaired as he had just got new teeth. He contended that he had a speech impediment at any event, although this was not noticeable. He stated that he was observing one of the security persons who was later dismissed for not following procedures.
• [19] Mr Long returned to the premises at about 11.00 pm on 16 April 2009. He selected a food item and ordered it. The item was not available but he was offered a plate of fries. The plate arrived in 15 minutes and was quite satisfactory. He said that this was the first time in many months that he had seen food being consumed on the premises. On the other hand he accepted that during the six visits over the previous 12 months, no other concerns had arisen apart from the matters recounted above.
• [20] Ms M R Fleck is currently assigned to the Counties Manukau Police District Licensing Unit as a specialist Alcohol Intelligence Analyst. She has held this position for the past four years. Her role is to monitor and interpret the data captured by the Police Alco-Link database. She applies a simple Harm Evaluation Matrix to the data as well as information received from compliance checks that are made to all licensed premises in the District. Particular attention is paid to intoxication levels that are said to be medium to extreme. The information is gathered on a daily basis and duly reported to Police Alcohol Harm Reduction Officers, to enable them to apply the Graduated Response Model and intervene when deemed necessary.
• [21] Ms Fleck produced a spreadsheet showing the information taken from charge sheets where the particular patrons have been dealt with in the District Court. Between August 2008 (when the previous enforcement applications were dealt with) and September 2009 (relating to the current applications), there had been over 70 patrons who had stated that they had their last drink at the “Firemans Arms”. The majority (80 percent) were assessed as being either moderately or extremely intoxicated. The business received 465 points under the Evaluation Matrix.
• [22] Ms Fleck advised that a total of 1147 licensed premises throughout the country were assigned Alco-Link references because of their performances. She stated that the “Firemans Arms” was the worst performing premises in the Counties Manukau Police District, and the 13th worst performing premises in the country. She conducted a comparative analysis with a similar tavern in the Pukekohe Central Business District. This tavern had been selected as it catered for a similar clientele. The results showed that the “Firemans Arms” was far more likely to produce persons who would be arrested for drink driving, disorder, or violence. The number of patrons who were assessed as being moderately or extremely intoxicated was six times higher than the similar premises.
• [23] Mr P A Radich has been a Liquor Licensing Inspector with the Manukau District Licensing Agency for approximately five years. He confirmed that the Agency was part of the Collaborative Liquor Enforcement Group in the Manukau District. When working on a night shift on 17 October 2008, with Constable C D Lally of the Counties Manukau District Licensing Unit, he was asked to accompany the Constable on a compliance check of the “Firearms Arms”. He accepted that he was working in a purely supportive role as he had no authority to question the licensee or the duty manager.
• [24] On entering the premises Mr Radich observed a female patron whose intoxication level he assessed as extreme. She was having difficulty standing and was reliant on others to hold her up. He also noticed a girl on the dance floor who was falling all over her friends. She had a drink in her hand. She spoke with Mr Radich, and he noted that her speech was slurred, her eyes were bloodshot and she was dishevelled. He assessed her as extremely intoxicated. Mr Mudgway was the duty manager and he was spoken to by Constable Lally.
• [25] Constable W D Paxton visited the premises on 22 January 2009. At that time he was an acting Sergeant. He observed a number of “heavily” intoxicated patrons staggering around the courtyard area. While talking with the doorman he observed a female patron leave the premises. She was unable to walk properly and was slurring her words. Her eyes were bloodshot and glazed and her appearance was dishevelled. After speaking with someone she then attempted to walk back inside. The doorman failed to challenge her so Constable Paxton prevented her from entering.
• [26] On 20 February 2009, Mr Radich returned to the premises with Constable Lally. He noted a number of people that he thought were moderately to extremely intoxicated. In particular he gave evidence about a male who was unsteady on his feet. He needed help from others to keep him upright. His eyes were glazed and bloodshot and he was holding an RTD. He was assessed as extremely intoxicated. Mr Radich saw another male who was also unsteady on his feet and unable to walk properly. That person walked to the bar, showing either physical impairment or intoxication and was served with an RTD. The patron was assessed as being extremely intoxicated.
• [27] A female was also assessed as being extremely intoxicated. She was being served a shooter at the bar. After consuming the drink the woman struggled to stand and appeared to be about to vomit. She was unable to walk and had to be assisted from the bar. The duty manager was spoken to by Constable Lally.
• [28] A further visit was made on 28 February 2009. The venue had apparently been hired out for a 21st birthday party. Mr Radich noticed an older lady (said to be the mother of the person having the birthday party), pouring three “Smirnoff” vodka RTDs into a piece of plastic piping with a funnel attached. A young man then consumed the contents in about 15 seconds. The older lady was then approached by a young female guest. The older lady then poured a further three “Vodka Mudshakes” into the funnel. The young woman consumed the contents in about five seconds. He noted that Mr Mudgway and his staff were about five metres away. He thought that the members of staff were amused by what was happening.
• [29] The older lady approached Mr Radich and said that Mr Mudgway did not have a problem with what was going on. She said that they were just having fun, then abused Mr Radich. Mr Radich observed a male sitting at a table near the bar with a handle of beer in front of him. He was unable to stand unaided and staggered to the bar with his handle. He almost fell over before sitting down again. He too was assessed as extremely intoxicated. Mr Mudgway gave evidence that this person was waiting for a ride home, and that the duty manager had decided to keep him in the bar rather than put him on the street.
• [30] Constable Lally discussed the various issues with Mr Mudgway but Mr Radich thought that Mr Mudgway appeared uninterested. Indeed he considered that Mr Mudgway was dismissive and rude. While standing outside listening to the conversation between Mr Mudgway and Constable Lally, Mr Radich noticed that the pipe was being filled again. He advised Constable Lally but Mr Mudgway appeared to be completely disinterested.
• [31] Mr Mudgway confirmed that although he was present he was not the duty manager. He gave evidence that at the party there was the “usual” stint of drinking alcohol from a plastic tube. He stated, “This appears to have replaced the traditional yard of beer. I did not consider this to be anything but normal fun on such nights”. He contended that neither of the persons drinking from the tube was intoxicated.
• [32] At about 1.30 am on the same day, Constable R C Smith was called to attend a fight in the outdoor covered area. On arrival he could hear people yelling, glass smashing and fighting. He noted that the security staff were watching the fight and making no attempt to quell the disorder. He noted three intoxicated males without shirts leave the premises.
• [33] The Constable could hear fighting inside the premises. He went inside and separated two groups. He said that there were a number of distressed females. He thought that there were about six extremely intoxicated patrons inside the premises, who were staggering, with bloodshot and glazed eyes, dishevelled appearance and loud slurred speech. There were still confrontations on the dance floor. A total of seven patrons were arrested for disorderly behaviour type offences and removed from the premises. Constable Smith considered that intoxication levels were the cause. He accepted that a number of youths were accustomed to sitting in the nearby car park and drinking contrary to the local liquor ban.
• [34] Constable Smith’s evidence was corroborated by Sergeant D J Readings, who has been in the Police for 14 years. He was called to the premises at about 1.30 am and noted a large number of intoxicated people milling about on the dance floor and a number of aggressive people hanging around the entrance and in the car park. He said it was evident that there had been a fight or some mass disorder. He was disappointed to see the security staff making no attempt to move people out of the premises. He was directed to the duty manager who was in the gaming machine area but had to wait until she had sorted out a cash situation. She accepted that there had been a fight.
• [35] The Sergeant advised the duty manager that he intended to close the premises under s.174 of the Act. This was the first time in 14 years he had made such a call. The duty manager advised him that she had already closed the bar. However, he noted that patrons were still standing about and drinking and that little effort was being made to move them outside so he directed Police staff to do so and get the premises locked down.
• [36] Sergeant Readings gave evidence that on 21 March 2009, he went to the Pukekohe Medical Centre and spoke with a female victim of an assault. The female was so intoxicated she could only give her name and date of birth. She remembered few details except that she had been drinking at the “Firemans Arms” when a fight had broken out between herself and another woman.
• [37] On 25 March 2009, just after midnight, Constable Cox conducted a premises visit of the “Firemans Arms”. As he was sitting in his car he observed about four patrons leaving the premises. They were staggering and unsteady on their feet and were carrying bottles of alcohol. According to the Constable, they were behaving in a loud and unruly manner. He approached the doorman and was told that the bar was closed. He observed about 35 patrons in the courtyard area. They were holding bottles and consuming beer straight from jugs. He assessed intoxication levels as being moderate to extreme as many of the patrons were staggering and finding it hard to stay on their feet. They looked dishevelled and had red and glazed eyes. He said that in his experience of 11 years he had never seen premises in this state with so many intoxicated and unruly patrons.
• [38] Constable Cox spoke with Ms S Renton who was the duty manager. He told her there was a serious intoxication problem on the premises. He pointed out a person drinking from a jug. He asked why the bar had been closed and Ms Renton explained that everyone had drunk too much and that the decision had been hers. She even pointed to some intoxicated males and said that they were too drunk to leave. Constable Cox noted that patrons were allowed to leave the premises carrying opened bottles of liquor.
• [39] On 1 March 2009 at about 1.30 am, Constable Paxton was called to the bar to assist. Patrons had been separated because of an earlier fight. He thought there were a large number of intoxicated patrons on the dance floor but no attempt was made to remove them. He asked for the duty manager and was directed to the gaming machine area. He tried to speak with the duty manager about the fight but she seemed more concerned with what she was doing with the machines. However, in response to a suggestion that the premises might be closed down because of intoxication levels, the manager stated that she had already asked staff to move patrons outside.
• [40] On 9 April 2009 at about 10.40 pm Mr Mudgway was observed driving a vehicle from the “Firemans Arms” carpark. When stopped Mr Mudgway smelled strongly of alcohol, his speech was slurred, and he was staggering. He acknowledged that he had been drinking at the “Firemans Arms” and had consumed eight to nine glasses of beer before driving. An evidential breath test revealed a level of 821 micrograms of alcohol per litre of breath. He was convicted in the Pukekohe District Court later in the month and fined $2000 with costs and disqualified for a year and a day. He has two previous convictions for similar offending with high levels of alcohol in 2001 and 1988.
• [41] Mr Mudgway gave evidence that after the conviction he enrolled in a ‘Driving Forward’ programme, which involves education and therapy for preventing drink driving. He said that the premises actively promoted a later version of the course. He noted that since the beginning of the year he had been setting up another business in Hamilton. As a result he only acted as a duty manager when necessary and normally worked in a responsible capacity on Sunday afternoons between 1.00 pm and 7.00 pm. In other words, his three certificated managers did most of the work.
• [42] On 21 May 2009, Constable Paxton drove past the bar and noticed a fight. He parked his car and walked across the road. The group scattered leaving a large group of females swearing and arguing with each other. He assessed one of the females as extremely intoxicated after speaking with her.
• [43] On 20 August 2009, Constable Cox conducted a compliance check on the premises. He observed a male whom he assessed as severely intoxicated. He was unsteady on his feet and clearly uncoordinated. This person was brought to the attention of Ms S Renton the duty manager. He was asked to leave but did not wish to do so. Unbeknown to the duty manager, Constable Cox was standing behind her when she asked the patron again to leave. The Constable heard her say to the patron that he should go outside and have a smoke until the Police left when he would be allowed back in. He then went outside and was observed sitting on a bench. As the Police left, the patron could be seen talking to the doorman.
• [44] Mr Radich returned to the premises with members of the Police on 26 September 2009. He saw two females leave the premises. One female was so intoxicated that she could not stand unaided. She stumbled out of the front door and collapsed after staggering for about 10 metres. He produced an unedited DVD of the video recording of the young woman as she made her way along the road. This showed a woman who was very intoxicated and would have been quite vulnerable but for her friend who was supporting her. On the other hand, her friend was loud and unruly and shouted obscenities at the Police and made rude gestures.
• [45] Mr Radich’s evidence was supported by Constable M F Erceg who is an Alcohol Harm Reduction Officer. The Constable noted that the patron fell face down on the footpath several times and had difficulty getting up. The Constable entered the premises. A number of moderately intoxicated patrons were observed in the courtyard. The duty manager was Lisa Walker. She stated, “We kicked them out. I can’t help it if people come in off the streets use the toilets and do their drugs there”.

The Company’s Response

[46] Mr Mudgway acknowledged that there had been problems in the bar but said he had been doing his best to ensure that staff followed the correct procedures. He agreed that there was still room for improvement. He said because of his new business venture he was spending less time in the bar and had listed the business for sale in April this year. He confirmed that he had sought Mr Swain’s assistance after receiving the enforcement applications in May 2009.

• [47] On the positive side, Mr Mudgway referred to the lack of incidents involving minors and concerns about availability, both of which had been grounds for the first enforcement applications. He said that the company had adopted a new approach to false identifications, which had resulted in fewer minors trying to target the premises. He noted that in 2008 he had produced a detailed Host Responsibility Policy, installed a water cooler, and erected signs about intoxication.
• [48] Mr Mudgway advised that earlier in the year he had changed the way the business was operated on Thursdays (the busiest nights). He said that the duty manager no longer works behind the bar, but circulates. In addition two bar persons work the bar and three security people are employed to monitor the patrons both inside the premises and at the door. He had employed an extra bar person and an extra member of security. A dress code is now in place.
• [49] Mr Mudgway advised that instructions had been given to all staff to monitor intoxication levels to ensure that no liquor is sold to persons who show signs of being affected by alcohol or drugs. This policy had been backed up by appropriate signage. He placed some of the blame for what was happening on the public car park and the tendency for people to consume liquor in the car park before trying to gain entry to the bar.
• [50] He also noted that patrons had been evicted or refused entry. Some times they had been found in the courtyard having climbed the fence. On some occasions liquor had been passed over the fence. He contended that smuggling was common and sometimes intoxicated persons were found who had not purchased liquor from the bar.
• [51] Ms Walker gave evidence for the respondents. It is assumed that she was acting as a temporary manager as her manager’s certificate had lapsed when she was in Australia for 18 months. She said that she had made application for a certificate three weeks prior to the hearing. She does not see her present position with the company as a long-term permanent job. She recalled the incident on 26 September last, and remembered that the two women had purchased two RTDs. She subsequently advised one of the women (who was later assessed as intoxicated), that she did not comply with the dress code that came into force at 9.30 pm. She told her that she could finish her drink. In fact her friend purchased two more drinks while she waited. According to Ms Walker, the woman who failed the dress code did not drink.
• [52] Later Ms Walker was advised that the woman in question was in the toilets being physically sick. She asked the second woman whether her friend had taken any illegal substances or whether she had left her own drinks unattended. The answer was no. Ms Walker told the person that she and her friend would have to leave the premises. She said that she did not want to let the woman leave, as she was concerned for her safety so she sat her near the bar and gave her water. However, Ms Walker was called to the gaming room and while she was away, both women left the premises. After seeing the video Ms Walker accepted that the woman was unable to walk more than two steps without collapsing. She said she had no idea why the security people had not seen her and assisted her. She believed that the woman had consumed illegal drugs in the toilet.

The Submissions

[53] Mr Swain was permitted to provide written submissions following the hearing. He stressed that the burden of proof rested with the Police. He argued that Mr Radich’s evidence should be ruled as inadmissible. He submitted that pursuant to s.131 of the Act, Mr Radich was permitted to enter any licensed premises to inspect those premises, and ascertain whether the licensee was complying with the Act. However, he contended that on entering the premises, Mr Radich was required to produce his warrant of authority pursuant to s.131(2) of the Act. Mr Swain argued that in supporting the Police, Mr Radich was effectively carrying out an inspection. He relied on our comments in Trevor Francis Burton and others v Mark Adrian Jessop LLA PH 254-255/2001.

• [54] Mr Swain pointed out that the two alleged breaches of the Act were offences requiring mens rea. In other words the Police were required to establish that the company or Mr Mudgway had done something or failed to do something that lead to a patron either becoming intoxicated on the premises, or being allowed to be or remain on the premises while in an intoxicated state. He pointed out that on most occasions when there were allegations of intoxication, there was no proof that Mr Mudgway was the duty manager. He argued that there were only two occasions where intoxication had been observed when Mr Mudgway was present on the premises.
• [55] Mr Swain contended that the Act placed responsibility for the control of licensed premises on the shoulders on the duty managers, very few of whom had been identified. He submitted that Ms Walker had established a defence under s.168(2) of the Act in relation to the incident on 26 September 2009. In terms of licensee misconduct, Mr Swain contended that it is not illegal for the licensee to drink on the premises. He noted that Mr Mudgway had denied that he was intoxicated.
• [56] With reference to the Alco-Link data, Mr Swain acknowledged that the information was valuable for the Police when monitoring the efficiency of licensed premises but pointed out that the information was only as good as the person who fed the details into the system. He suggested that some of the drink drivers might have been drinking in the car park rather than in the hotel. Mr Swain argued that the previous enforcement applications had dealt with more examples of intoxicated persons as well as minors. He therefore contended that Mr Mudgway had taken positive steps (such as increasing security) to help sort out the problems.
• [57] In his closing submissions, Sergeant G J Campbell pointed out that the company had not only acquired a number one status for the worst ranked premises in the district but had maintained that record despite the previous sanction imposed in August 2008. He pointed out that the premises had been given considerable attention, some of which had been consultative and advisory, but this had had little effect on the way the premises had been operated. In particular we were asked to accept the impact of the business on the community as expressed by the Mayor.
• [58] In response to Mr Swain’s submissions, Sergeant Campbell argued that in making observations, Mr Radich had not intended to act as an Inspector. He contended that in terms of the CLEG initiative, the jurisdiction of the parties was determined by the physical boundaries. Therefore Mr Radich had no intention or ability to be anything other than an observer. He noted that in Christopher David Lally v Samoa Marist St Joseph’s Old Boys and Sports Association (NZ) Limited LLA PH 891-892/2007, we had accepted Mr Radich’s evidence as an observer.
• [59] Sergeant Campbell argued that when premises come to attention on a regular basis and there has been a consistent systemic breakdown in management practices, then it is a fair and realistic inference that such breakdowns must be the responsibility of the licensee. He submitted that the company had failed to heed the warnings given when the licence was previously suspended.

The Authority’s Decision and Reasons

[60] We deal first with the legal issues. We do not accept the claim that Mr Radich was required to produce his warrant of authority on entering the premises. It is clear that the visit was a Police initiative. It was very clear that Mr Radich was there purely to observe and support Constable Lally. He was not “inspecting” the premises in his official capacity. Indeed he was unable to answer questions such as who was the duty manager because he made no such observations. Of importance is that this was not a covert operation in that Constable Lally was acting officially and made himself known to the duty manager.

• [61] Having two pairs of eyes has several advantages not the least of which, is additional security, as well as the opportunity to compare notes and provide corroboration when possible. As it happens Constable Lally was unable to give evidence at the hearing for personal reasons, and the advantage of working in partnership meant that the case could proceed without the need to adjourn. In the case of Trevor Francis Burton and others v Mark Adrian Jessop (supra), the Inspector was making an official inspection but decided not to produce her warrant to avoid warning the licensee of her presence. We commented that had she been present as part of a social engagement then her evidence may have been admitted.
• [62] While we accept Mr Swain’s submissions that the two alleged breaches of the Act are mens rea offences, we do not accept his claim that the Police must prove that either the company or Mr Mudgway had done something or failed to do something that lead to any breaches. In our view it matters not who the duty manager was at the time. Any underlying connection between the breach and the licensee might be reflected in the sanction to be imposed. Under s.132 of the Act, all that must be established is the breach. In the High Court decision of The Mill Liquorsave Limited v Grant David Verner CIV-2003-485-874, Mr Justice Gendall made these comments:
  

“A reasonable system of control of the supply of liquor includes the need to be able to secure compliance with licence conditions and the law through the exercise of discretionary disciplinary powers specifically given to the Authority by Parliament. If it could not suspend a licence given to a corporate body where a “fault” or breach of the Act was that of a manager, its powers of control over licensed persons or bodies could be rendered nugatory or severely curtailed.”

[63] One of the grounds for the application in respect of the company is that the company’s conduct has been such as to show that it is no longer suitable to hold the licence. Mr Swain’s argument in relation to the need to prove some involvement (or lack of action) by the company or Mr Mudgway, must accordingly apply to any findings under this heading. On the basis of these principles we make the following findings of fact.

• Both the company and Mr Mudgway received their first warning in Mr Long’s letter in October 2007.

• Both the company and Mr Mudgway received a further warning following suspension of the on-licence and manager’s certificate in August 2008.
• On the evidence of Mr Long and Constable Cox and despite Mr Mudgway’s denial, we are satisfied that he was intoxicated in his own bar. This goes to licensee and managerial misconduct, but was not necessarily a breach of ss.167 and/or 168 of the Act, as his signs of intoxication were not said to be demonstrable.
• The Alco-Link records showing that the company has been the worst performing licensed premises for two years in a row affects the type and seriousness of any sanction. The fact that over a period of 13 months, 70 people dealt with by Police had nominated the “Firemans Arms” as the premises where they consumed their last drink is in direct contrast to the objective of the Act. The desirability of imposing any sanction, and the type of sanction, are directly affected by the evidence given by the Mayor.
• On 17 October 2008 a female patron was demonstrably intoxicated in breach of s.168(1)(a) of the Act.
• On 22 January 2009 a demonstrably intoxicated female patron left the premises. It is not known whether she had been ejected. However, the fact that she was about to be allowed back in again, showed licensee misconduct, by not employing adequately trained and alert security staff.
• On 20 February 2009 a demonstrably intoxicated male patron was on the premises in breach of s.168(1)(a) of the Act.
• On the same day a second demonstrably intoxicated male was not only allowed to remain on the premises in breach of s.168(1)(a) of the Act, but was also served with liquor. However, no breach of s.166 of the Act was alleged.
• On the same day a demonstrably intoxicated female was on the premises in breach of s.168(1)(a) of the Act.
• On the 28 February 2009, the licensee allowed patrons to consume liquor though a pipe. These incidents were potentially in breach of s.154A of the Act quite apart from being contrary to the Act’s objective. They demonstrated Mr Mudgway’s and the company’s lack of suitability to be involved in the sale and supply of liquor to the public. Mr Mudgway compounded the company’s misconduct by (a) his lack of interest at the time, and (b) his acceptance of the behaviour at the hearing as “normal fun on such nights”.
• At the same time a demonstrably intoxicated male had been allowed to stay while waiting for a lift home. There may have been some excuse for helping to ensure the patron's safety except that he was observed sitting with a handle of beer in front of him.
• Further evidence of licensee misconduct was displayed when fighting later broke out in the premises. A number of demonstrably intoxicated patrons were observed, and seven patrons were arrested for disorderly behaviour type offences. Further indications of licensee unsuitability became apparent when the security staff failed to move people out of the premises, and the duty manager was busy in the gaming machine area.
• On 25 March 2009, there was evidence of demonstrably intoxicated patrons leaving the premises carrying alcohol. Outside in the courtyard there were even more demonstrably intoxicated patrons. Normally we do not accept generalised evidence about groups of people alleged to be intoxicated. The evidence should (in our view) be directed towards individuals. However, on this occasion the Constable stated that he had never seen so many intoxicated and unruly patrons in 11 years of Policing. Furthermore, the duty manager stated that in her opinion some of the patrons were too drunk to leave. In our view there was a breach of s.168(1)(a) of the Act, as well as evidence of licensee misconduct showing unsuitability.
• On 9 April 2009 Mr Mudgway was seen to drive a motor vehicle out of the carpark, and found to have a level of 821 micrograms of alcohol per litre of breath. An example of managerial and licensee misconduct, particularly as he has two previous convictions for similar offending.
• On 20 August 2009, a demonstrably intoxicated male was observed on the premises in breach of s.168(1)(a) of the Act. He was asked to leave by the duty manager but she told him that he could return when the Police had left. More licensee misconduct.
• On 26 September 2009, a demonstrably intoxicated female was seen leaving the premises. She had been allowed to remain on the premises in breach of s.168(1)(a) of the Act while her friend had another drink or two. Mr Swain argued that the duty manager had a defence under s.168(2) of the Act. We do not accept the proposition that being allowed to sit near the bar is the same as being taken to a place of safety on the premises. This is particularly so because her friend was still drinking, and the duty manager left the intoxicated patron to go and check the gaming machines.

[64] In summary there were at least eight separate incidents where demonstrably intoxicated patrons were allowed to remain on the premises. There were at least 11 separate incidents where there was evidence of licensee misconduct reflecting on suitability.

• [65] However, by far the most damning evidence of unsuitability was given by Mr Mudgway himself. His performance in the witness box regrettably left us with very little confidence in the company’s future as a responsible supplier of liquor. Mr Mudgway had very little understanding of the Act’s objective. Sadly he seemed to have no appreciation of the harm his company was causing in the community. It was easy to see how the perception of antipathy referred to by Mr M R Ball has come about. Mr Mudgway had even less appreciation of the important role played by a duty manager. In other words he accepted that a duty manager could be behind the bar or in the gaming room. He did not seem to think it important to have anyone of responsibility in the courtyard. If there were problems in the bar then he expected other members of staff to inform the duty manager.
• [66] Mr Mudgway blamed the Police for some of the statistics because he believed that they waited for patrons to leave the car park before stopping them, to see if they had been drinking to excess. He saw the drinking of three RTDs all at once as a harmless bit of fun at a birthday party. Not only was he intoxicated in his own premises but also showed no inclination to set any form of example. Most licensees who give evidence before us display a real understanding of what is expected of them and a commitment to do better. Mr Mudgway showed the opposite. There was no suggestion that there were going to be any dramatic changes. Despite the graphic evidence of continuous breaches of the Act and the licence, we were given the appearance that in the future it would be business as usual.
• [67] What is at issue in this case is the integrity of the reasonable system of control over the sale and supply of liquor. Warnings have been given and ignored. Although Mr Mudgway argued that there were fewer breaches on this occasion when compared with the first application, the evidence showed persistent and blatant incidents of patron intoxication and mismanagement. Put in another way, there was no evidence of any strong and effective management. We accept that these premises are difficult to control given the large public carpark next door, but that does not excuse what has been happening. In our view the patrons of the “Firemans Arms” were able to do pretty well what they liked. Mr Mudgway and his company have not just been meeting the patrons’ demands. By a process of inactivity and lack of regard for the Act and the conditions of the licence, they have been stimulating them.
• [68] It is clearly desirable that serious sanctions be imposed in this case. The Act requires us to exercise our discretion and our jurisdiction in a manner that is most likely to promote the Act’s objective. That object is as follows:

The object of the Act is to establish a reasonable system of control over the sale and supply of liquor to the public with the aim of contributing to the reduction of liquor abuse, so far as that can be achieved by legislative means.

[69] Were we able to do so, we would have cancelled Mr Mudgway’s manager’s certificate. However the only ground alleged in support of the application was his third drink driving conviction. We are aware that the sanctions we propose may well have dramatic consequences on the company’s profitability. But any licence is to be regarded as a privilege. There is no guarantee that the licence will be continued indefinitely particularly if the privilege is ignored or abused. In summary, there was sufficient evidence to establish that the licensee’s conduct had been such as to show that it is no longer a suitable entity to hold the licence.

• [70] Accordingly, and for the reasons stated, we make the following orders:
  • [a] On-licence number 010/ON/08/2004, issued to Brakatin Holdings Limited will be suspended for three months from Friday 1 January 2010 to Wednesday 31 March 2010.
• [b] General Manager’s Certificate number GM 138/2005, issued to Raynor Charles Mudgway, is suspended for two months from 1 December 2009.
  

DATED at WELLINGTON this 26TH day of November 2009

Judge E W Unwin
Chairman

FiremansArms.doc