Formosa and Hunt v Brazen Head 2008 Limited and MacDonald [2009] NZLLA 291 (26 March 2009)

New Zealand Liquor Licensing Authority

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Formosa and Hunt v Brazen Head 2008 Limited and MacDonald [2009] NZLLA 291 (26 March 2009)

Last Updated: 14 March 2010

THIS IS A COPY – THE ORIGINAL WORD DOCUMENT IS NOT AVAILABLE.

Decision No PH 291/2009 –

PH 294/2009

IN THE MATTER of the Sale of Liquor Act 1989

IN THE MATTER of applications pursuant to s.132 of the Act for suspension of on-licence number 030/ON/25/2008 issued to BRAZEN HEAD 2008 LIMITED in respect of premises situated at 21 Hastings Street, Napier, known as “Brazen Head”

AND

IN THE MATTER of applications pursuant to s.135 of the Act for suspension of General Manager’s Certificate number GM/301986/08 issued to MICHAEL LEE JACKSON MacDONALD

BETWEEN NIGEL ANDREW VINCENT FORMOSA

(Police Officer of Napier)

AND ROYSTON BRUCE HUNT

(Napier District Licensing Agency Inspector)

Applicants

AND BRAZEN HEAD 2008 LIMITED

First Respondent

AND MICHAEL LEE JACKSON MacDONALD

Second Respondent

BEFORE THE LIQUOR LICENSING AUTHORITY

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

HEARING at NAPIER on 24 February 2009

APPEARANCES

Sergeant N A V Formosa – NZ Police – applicant
Mr R B Hunt – Napier District Licensing Agency Inspector – applicant
Mr G W Calver – for first respondent
Mr M L J MacDonald – second respondent

RESERVED DECISION OF THE AUTHORITY

Introduction

[1] Brazen Head 2008 Limited (hereafter called “the company” holds a tavern style on-licence authorising it to sell and supply liquor for consumption on premises situated in Hastings Street in Napier. Mr Richard John Irvine is the company’s sole director and shareholder. The licence was issued on 25 July 2008. The authorised trading hours for the interior of the premises are Monday to Sunday 7.00 am to 3.00 am the following day. The licence also authorises the company to sell and supply liquor in the outdoor courtyard between 7.00 am and 11.00 pm.

[2] The company was the subject of a controlled purchase operation on Thursday 18 December 2008. It was alleged that the volunteer had been able to purchase liquor and remove it from the premises. The sale was made by one of the company’s employees. Mr Michael Lee Jackson MacDonald was the manager on duty at the time but was unaware of the transaction.

[3] As a result of the sale, Sergeant Nigel Andrew Vincent Formosa filed an application for the suspension of the on-licence as well as Mr MacDonald’s manager’s certificate. The ground for the first application was that the licensed premises had been conducted in breach of s.155 of the Act. In addition it was claimed that the company had breached a condition of its licence by allowing liquor to be taken off the premises.

[4] The second application, for the suspension of Mr MacDonald’s General Manager’s Certificate, was based on the ground that Mr MacDonald had failed to conduct the licensed premises in a proper manner. He was granted his certificate on 20 February 2008. The certificate was incorrectly issued in the name of Michael Lee Jackson. His surname is MacDonald and he requested that the original error be corrected.

[5] Two further enforcement applications were filed by Mr Royston Bruce Hunt, a Napier District Licensing Agency Inspector. He sought the suspension of the on-licence on the grounds that the licensed premises had been conducted in breach of ss. 155, 165 and 115 of the Act. In addition he claimed that the premises had been conducted in breach of the condition of the licence allowing the sale and supply of liquor in the outdoor courtyard. Mr Hunt also filed an application for the suspension of Mr MacDonald’s General Manager’s Certificate. That application was similar in all respects to the application filed by Sergeant Formosa.

[6] There are therefore four matters before the Authority for determination. Mr G W Calver appeared for the company. On his client’s behalf he acknowledged breaches of ss. 155 and 115 of the Act, but denied any wrongdoing in the way that liquor was sold and supplied in the outdoor courtyard. In that respect he argued that the company was entitled to the benefit of the 30 minute drink up provision in s.170(1)a of the Act. He contended that the company had taken the sale to the minor very seriously, and the salesperson had since been dismissed. Given the lack of previous problems in the way the licence has been operated he requested a lenient approach.

[7] Mr MacDonald has been in the hospitality industry for 10 years. He is no longer employed by the company but continues to use his certificate. He was very remorseful for what had happened, and said that at the time of the sale he was busy checking the doors to confirm that they had been closed.

The Applications

[8] The evidence was not really contested. The volunteer’s name was “Jasmine”. She was born on 2 May 1992 and was aged 16 years and seven months at the time of the operation. On Thursday 18 December 2008 at about 11.35 pm, she entered the “Brazen Head”. She was followed by Constable D W Carswell who was there to ensure her safety. She thought the room was crowded and the music was loud. “Jasmine” was able to walk past the security doorman who did not ask for identification.

[9] “Jasmine” walked up to the bar and asked for a bourbon and coke. No request was made for identification. The barmaid asked her whether she wanted a pre-mix or a normal mix. She chose the former. She paid for a bottle of “Barrel 51”, and walked out the front entrance of the bar to the footpath. It was accepted that the bottle contained liquor in terms of the definition in the Act. Constable C W Glentworth interviewed the salesperson three weeks later. The salesperson recalled the sale and stated that she thought that “Jasmine” was over 18 years of age. This was partly because she had assumed that the doorman had checked for identification.

[10] Sergeant Formosa returned to the “Brazen Head” about half an hour later. He confirmed that the duty manager was Mr MacDonald. Mr MacDonald was shown a photograph of the volunteer and indicated that he would personally have asked for identification.

[11] In support of his applications, Mr Hunt called Mr Brian Mervyn Wilkie as a witness. Mr Wilkie resides on Bluff Hill and has a view down Hastings Street. Over the past six years he has been troubled by noise from the premises. During that time there have been four different licensees. He recalled a discussion with Mr Irvine about a special licence being obtained for New Year’s Eve. Mr Wilkie explained to Mr Irvine that he thought that the use of the outdoor courtyard had potential for noise and nuisance. The night after his discussion he said he had to call noise control because of the level of noise coming from the premises.

[12] Mr Wilkie also stated that at 11.10 pm on 16 December 2008 he had seen approximately six people seated at tables in the outside courtyard. Two nights later, at about the same time, he had seen about a dozen people in the same area sitting or standing and drinking. He produced a copy of the noise complaints he had made in respect of the business over a period of two months. He said he was confident that his identification of the source of the noise was accurate, although he accepted that there were other licensed premises in the general area.

[13] Mr Frederick Le Roux is an Environmental Health Officer with the Napier City Council. On 18 December 2008 at about 11.15 pm, Mr Le Roux was conducting noise assessments in the neighbourhood. He noticed 10 to 20 people drinking in the outdoor courtyard. He thought he was seen by the doorman because shortly afterwards the outside patrons were ushered inside the premises.

[14] Mr Hunt gave evidence that on 4 December 2008 he visited the premises and noted that Mr Irvine was the nominated duty manager. He asked to speak with Mr Irvine but was told that he had gone home for a while. Mr Hunt argued that all sales made while the duty manager was absent were unauthorised and therefore in breach of s.165 of the Act. He followed up his visit with a letter to Mr Irvine. The letter covered such subjects as noise complaints, the presence of patrons in the outdoor courtyard after 11.00 pm, and Mr Irvine’s absence from the premises despite his appointment as the duty manager.

[15] Mr Hunt argued that the number of incidents in the company’s first ‘probationary’ year undermined the company’s suitability. He referred to our decision in Sarah Jane Reynolds v Irish Bar Company Limited LLA PH 473-474/2005 in which we confirmed that the manager’s physical presence must be continuous when liquor was being sold to the public. In other words even a temporary absence required the appointment of a temporary manager.

[16] Mr Hunt referred to the history of the company obtaining its on-licence. In particular he referred to the previous Inspector’s report on the original on-licence application. The report included these comments;

“The courtyard area has been the subject of noise complaints. Should a licence issue, it has been agreed that the applicant will only use the courtyard from 7.00 am in the morning to 11.00 pm at night, at which time all tavern activities will be restricted to being within the principal building.”

[17] Mr Hunt argued that the basis of the agreement was that the company would vacate the outdoor courtyard area by 11.00 pm. Mr Calver argued that since the courtyard was included in the definition of licensed premises, then the sale and supply of liquor could continue to 11.00 pm and that patrons had 30 minutes to drink up and leave.

The Response

[18] Mr Irvine noted that the bar was busy on the night that the company had failed the controlled purchase test. He said that coincidentally he had that night warned the doorman, as well as Mr MacDonald and all bar staff, to be particularly careful about checking ages. He acknowledged that the company had not only failed to stop the volunteer going into the premises but it had also failed to prevent her from leaving with liquor. He carried out a thorough investigation and reviewed the video footage. He noted that the doorman was talking to a friend at the time the volunteer walked in. He was again distracted when she walked out.

[19] Mr Irvine stated that a security company had supplied the doorman. He had lodged a complaint with that company, and explained that the employee in question would not be allowed back to work at “Brazen Head”. Mr Irvine explained that the company had initiated disciplinary action against the person who was identified as making the sale. She was then dismissed, and the duty manager was given a formal written warning. He had also sent a written notice to all members of staff explaining the seriousness of the situation.

[20] As to the outdoor courtyard, Mr Irvine suggested that the condition of the licence should be amended to allow for consumption (rather than the sale) of liquor in the courtyard. He stated that he had always understood that 11.00 pm was the time that the company should start moving the patrons back inside, but that under the Act, the patrons had 30 minutes in which to finish their drinks.

[21] In relation to the incident on 4 December 2008, Mr Irvine said that he had left the premises briefly to take a member of his family home. He had understood at the time that temporary absences were acceptable, but was now aware of the current interpretation. He stated that a temporary manager would be employed in the future. It seems that Mr Irvine had little prior experience with the hospitality industry. He described his first few months as a huge learning curve. Mr Irvine gave the impression that he was trying very hard to ensure that the business complied with the Act.

The Authority’s Decision and Reasons

[22] In this case there is clear and undisputed evidence that liquor was sold to a minor in breach of s. 155 of the Act. Because of the implications in terms of liquor abuse, we believe that it is desirable to suspend the on-licence for a short period. In addition we believe that a suspension of the licence will, help secure future management compliance by this licensee. Put in another way to do nothing would not be appropriate given the number of other licensees who passed the test, or having failed it, have already accepted a suspension of their licence. At any event we need to remind ourselves that it is nearly 10 years since the purchasing age was lowered from 20 to 18.

[23] Technically the company was not in breach of a condition of the licence by allowing the volunteer to leave with the liquor. Such an incident is a breach of the licence itself but not the conditions. Breaching a licence is not a ground for applying for a suspension order. We accept that what happened was an example of conduct showing unsuitability, and the evidence could have been used to support the contention that the business had been conducted in an improper manner. However, neither of these grounds were included in the applications.

[24] In the same way, issues of noise cannot be taken into consideration. Although the Act provides for us to be satisfied that any of the grounds specified in s.132(3) have been established, we have consistently held the view that as a matter of natural justice, a respondent or licensee is entitled to be made aware of the exact nature of the grounds on which the enforcement application is based. In this case the only grounds specified in the applications were as recounted in the introduction above.

[25] Based on the evidence there was a breach of s.115 of the Act. Since the Act was amended in 1999 total control of licensed premises has been placed squarely on the shoulders of trained managers. The importance of this control has been re-emphasised by recent amendments to the Act; (a) by requiring managers to hold the prescribed qualification; and (b) by giving managers the responsibility of ‘enforcing’ the Act as well as complying with it. In summary there has been a dramatic shift in responsibility from licensee to manager over the last eight years. In our view, such control is less likely to be achieved if a manager is absent for any reason, and for any period of time. The company is now aware that any sale made during the absence of a manager is also a breach of s.165 of the Act.

[26] There was one breach and an explanation has been received. We accept that our relatively strict interpretation of s.115 of the Act may not yet be universally understood in the industry. In the circumstances, we are prepared to show some leniency given the company’s lack of experience, and the submissions made by counsel on its behalf. In other words we have decided not to increase the period of suspension.

[27] In relation to the outside courtyard, we believe that the company’s argument that it is entitled to apply s.170(1)a of the Act is correct. The premises trade as a tavern. Any person found on the premises within 30 minutes after the premises are required to close for the sale of liquor, is not committing an offence under the Act. Although the council may have believed that there was an agreement for the area to be clear by 11.00 pm, no such agreement was signed. We did not see the document under which the company is entitled to make use of the property. In summary, the company is entitled to rely on the conditions of its licence particularly, as in this case, the licence was issued by the Agency.

[28] We appreciate that the reasoning behind the Council’s restriction on the closing time was the issue of noise. The conditions of the licence could be amended by consent, but we understand that the company may wish to extend the time that the courtyard may be used for smokers who will not be drinking. In those circumstances it will be up to the parties to see if the issue can be resolved, pending the renewal of the licence.

[29] It is appropriate that a suspension order be made in respect of the duty manager. After all he was responsible for the tavern’s compliance with the law. High standards are expected of holders of General Managers’ Certificates. As stated above, suspension orders will give some recognition to those premises and managers who, when offered the same opportunity to sell to the minor, resisted the temptation to do so.

[30] We acknowledge the level of co-operation shown at the hearing, as well as the company’s sincerity about its attitude to the incidents. On the other hand, any financial loss associated with the suspension of a licence, should be measured against the social costs that society absorbs in respect of alcohol related harm experienced by young people.

Orders

[31] For the reasons given we make the following orders.

(a) On-licence number 030/ON/25/2008, issued to Brazen Head 2008 Limited, is suspended for 24 hours from 9.00am on Thursday 7 May 2009 to 9.00am on Friday 8 May 2009.

(b) General Manager’s Certificate number GM/301986/08, issued to Michael Lee Jackson MacDonald, is suspended for 21 days from Monday 4 May 2009.

DATED at WELLINGTON this 26th day of March 2009

Judge E W Unwin
Chairman

Brazen Head.doc