Lynch v Londonderry Holdings Limited [2009] NZLLA 381 (9 April 2009)

New Zealand Liquor Licensing Authority

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Lynch v Londonderry Holdings Limited [2009] NZLLA 381 (9 April 2009)

Last Updated: 3 April 2010

Decision No. PH 381/2009 – PH 384/2009

IN THE MATTER of the Sale of Liquor Act 1989

AND

IN THE MATTER of the resumption of a hearing of an application pursuant to s.132 of the Act for suspension or cancellation of on-licence number 056/ON/40/2007 and off-licence number 056/OFF/41/2007 issued to LONDONDERRY HOLDINGS LIMITED in respect of premises situated at 109 Greenstone Road, Kumara, known as “Empire Hotel Kumara”

AND

IN THE MATTER of the resumption of a hearing of an application pursuant to s.135 of the Act for suspension or cancellation of General Manager's Certificate number 056/GM/26/2006 issued to PETER PHILIP JENKINSON

BETWEEN ANDREW JOSEPH LYNCH

(Police Officer of Greymouth)

Applicant

AND LONDONDERRY HOLDINGS LIMITED

First Respondent

AND PETER PHILIP JENKINSON

Second Respondent

AND

IN THE MATTER of applications by LONDONDERRY HOLDINGS LIMITED pursuant to ss.18 and 41 of the Act for renewal of on and off-licences in respect of premises situated at 109 Greenstone Road, Kumara, known as “Empire Hotel Kumara”

BEFORE THE LIQUOR LICENSING AUTHORITY

Chairman: District Court Judge E W Unwin
Member: Dr J Horn

HEARING at HOKITIKA on 20 March 2009

APPEARANCES

Sergeant A J Lynch – NZ Police – applicant and in opposition to applications for renewal of on and off-licences
Mrs B H Connors – for respondents and applicant for renewal of on and off-licences
Mr W Godfrey – Westland District Licensing Agency Inspector – to assist
Mr J E Pupich – on behalf of Medical Officer of Health – in opposition to application for renewal of on-licence
Mr C S Dillon – objector – in opposition to applications for renewal of on and off-licences

RESERVED DECISION OF THE AUTHORITY

Introduction

[1] There are effectively four applications for consideration by the Authority. The applications relate to licensed premises known as the “Empire Hotel Kumara”. The hotel was one of two licensed premises in Kumara. It is now the only one. Kumara is a small West Coast town with about 300 residents. Although the premises are situated on the corner of Seddon and Greenstone Roads, the latter road is State Highway 73 between Canterbury and the West Coast. The hotel’s main entranceway is off the main road directly into the bar.

[2] Herein lies the problem that has been the cause of on-going and persistent complaints. Patrons have found it easier and more convenient to walk straight out of the bar and onto the footpath in order to smoke. Rather than use the back yard they have relaxed on the side of the main road. They have additionally (and illegally), been able to drink. They have frequently been joined by other drinkers. Not only is the activity illegal it has a realistic potential for road traffic danger.

[3] The hotel was purchased by Londonderry Holdings Limited (hereafter called 'the company') in June 2004. There were originally two couples in the business. One of the couples was Mr Peter Philip Jenkinson and his wife Dorothy Frances Jenkinson. The company commenced trading under temporary authorities. On and off-licences were granted on 17 January 2005. The hotel style on-licence allowed trading at any time on any day to lodgers and their guests, and from 11.00 am to 3.00 am the following day to members of the public. Accommodation is supplied but is seasonal. According to Mr Jenkinson there is a growing patronage of casual tourists, backpackers, drivers, drillers, and whitebaiters, as well as during the major events being the Coast to Coast endurance event, Kumara Races, and Wildfoods Festival.

[4] Mr and Mrs Jenkinson had little experience in the hospitality industry. They were both in receipt of benefits from the Accident Compensation Corporation following injuries sustained in a motor vehicle accident in 1991. In late 2005, they were required to buy out the interests of the other couple. As a result they became the company’s only shareholders and directors. Mr Jenkinson was granted his manager’s certificate on 12 September 2006.

[5] From June 2005 to June 2006 the management of the hotel was subcontracted to Ms Donna Meates. Between June 2006 and September 2007 there were a number of short-term managers who were employed while the company looked for a suitable management team. For a period of about 18 months, the hotel has been actively marketed for sale. Pending any sale Mr Jenkinson has operated the business using temporary managers for cover when he has been away.

[6] Both licences fell due for renewal on 17 January 2006. The applications drew opposition from the Police based on the claim that liquor was being consumed outside the defined boundaries of the licensed premises. There were also concerns about alleged intoxication of patrons and staff. Mr Carey Dillon is a neighbour who lives diagonally opposite the premises. He objected to the renewal applications. He based his objection on the suitability of the licensee. He had taken videos of the activities over the road. The videos depicted patrons drinking outside the premises, smoking inside the premises, and showing signs of intoxication. In addition both the Inspector and the Medical Officer of Health filed reports with concerns about the way the premises had been operated during its ‘probationary’ year.

[7] In April 2007, the Police filed applications for the suspension of the on and off-licences as well as Mr Jenkinson’s General Manager’s Certificate. However, the application for suspension of the licences was subsequently withdrawn. Mr Jenkinson agreed to have his certificate suspended for four weeks, and accordingly, the matter was dealt with without a hearing. It was claimed that he had breached the hotel’s trading hours, allowed liquor to be taken off the premises and allowed intoxication. Mr Jenkinson argued that there were only three transgressions, those being allowing patrons to take liquor out the front door, allowing patrons to consume liquor in an unlicensed area, and serving patrons prior to the opening time.

[8] The opposed renewal application came before us on 5 June 2007. In our decision LLA PH 588-589/2007, we reduced the period of renewal, and brought the closing hour for the on-licence back to 2.00 am. One of the main reasons for our concerns was that the licensee allowed patrons to gather outside the main bar outside the licensed premises on the footpath and the street. Although the company had an outdoor facility for smokers at the back of the premises, no attempt had been made to stop patrons from drinking and smoking on the street.

[9] Both licences were renewed to 17 April 2008. We said:

“We believe that in the light of the evidence the company should be given a further trial ‘probationary’ period, and be required to re-appear before us if these sorts of problems persist. As it happens the company has had the advantage of trading for 16 months pending the hearing.”

[10] In January 2008, the Police filed applications for the suspension or cancellation of the on and off-licences, as well as an application for the suspension or cancellation of Mr Jenkinson’s General Manager’s Certificate. The application relating to the hotel was brought on the ground that the licensee’s conduct had been such as to show that it was not a suitable entity to hold the licences. The application relating to Mr Jenkinson’s manager’s certificate was brought on the ground that he had failed to conduct the premises in a proper manner. It was also alleged that his conduct had been such as to show a lack of suitability.

[11] The particulars in support of each application were identical. It was alleged that the Police, Westland District Licensing Agency Inspectors, and representatives from Community Public Health had visited the premises and lodged concerns about the way the hotel was being managed. They all alleged that Mr Jenkinson was unable to control the premises to an appropriate standard. It was claimed that the Police had video footage showing an inability to control the premises. It was contended that the video showed a patron urinating on the footpath, and eight people drinking outside the premises.

[12] The two applications came before us on 21 February 2008. We noted that the licences were about to be renewed. As it was clear that such renewal would be opposed, the hearing was effectively aborted. By that time we had heard from Mr Dillon, who had appeared as the applicant's principal witness. The company through its counsel had challenged the admissibility of the video evidence, based on the Privacy Act and the New Zealand Bill of Rights Act. It had seemed to us that because of the brief time between the filing of the applications and the hearing, the parties had little time for preparation. In our interim decision (see LLA PH 282-283/2008), we said:

“In those circumstances we suggested that it might be appropriate to allow all applications to be heard at the same time. This was on the basis that Mr Dillon would give his evidence de novo. Such a proposal would give counsel for the respondent and the applicant a greater opportunity to prepare for what is likely to be a significant hearing.”

[13] The parties accepted our suggestion and accordingly, the first two applications to be determined are the resumed hearings of the two enforcement applications. The third and fourth matters are applications brought by the company to renew its on and off-licences, both of which fell due on 17 April 2008. In addition the company sought to vary the conditions of the licences by restoring the closing times to 3.00 am. Both applications attracted an objection from Mr Carey Dillon and his wife Lynne Dillon. Their objection was based on the suitability of the licensee, the conditions attaching to the licence, and the manner in which the licensee had conducted the sale and supply of liquor. They referred to the video evidence that would demonstrate the grounds for their objections.

[14] The Police opposed to the applications. They alleged that the company had shown that it was unable to control and run licensed premises. The Medical Officer of Health opposed to the renewal of the on-licence. She based her concerns on the following alleged managerial failures:

• (a) Not promoting the availability of food;
• (b) Not having low alcohol drinks displayed and available;
• (c) Allowing intoxication on premises;
• (d) Allowing patrons to consume liquor outside premises;
• (e) Having an exit door locked when the premises were open; and
• (f) Incorrect naming of duty manager.
  

[15] The District Licensing Agency Inspector wrote a full report. He concluded by stating that due to insufficient management improvements, along with the requested extension of licence hours, he opposed the applications. There was a delay in setting down the four applications for hearing. This was partly to accommodate a potential purchaser of the business. However, nothing further was heard on that matter. Mr Jenkinson wrote to the Authority on 5 February 2009. He nominated an acting manager to replace himself, and advised that he would be receiving respite care at the Laura Fergusson Trust in Christchurch for two weeks, from 14 February to 3 March. He also confirmed that his wife, Mrs D F Jenkinson, had passed away on 11 January 2009.

[16] Eventually all the applications were heard in March 2009. There was no further challenge to the admissibility of the video tape evidence. Mr Jenkinson advised that he had received an opinion that the Authority had a discretion to admit such evidence. We assume consideration was given to s.109 of the Act. Mrs Connors appeared for the company and for Mr Jenkinson. She advised that if the request to trade to 3.00 am was a cause of concern then it would be withdrawn.

[17] In a case such as this where the continuation of a licence is at stake, it is necessary to ensure that the allegations have been properly and fairly established. For that reason we have not included evidence that we considered did not reach the required probative level. On the other hand it needs to be emphasised that in the case of the renewal applications, it is up to the applicant to establish the criteria set out in the Act to the same standard of proof.

The Police

[18] Mr C S Dillon is a wood turner and photographer. The Police called him as a witness, and he was also appearing in his own right, as an objector. He explained that he resided with his wife Lynne over the road from the hotel. He gave details of his camera and presented a compilation of the video evidence he had taken since the licences were last renewed. The videos were taken primarily from his retail shop.

[19] Mrs Connors was critical of the fact that the tapes had been edited. For example she suggested that the tapes had been stopped just before a member of staff might well have intervened. However, the reality was that the editing saved us from watching several hours of film. In our view the tapes gave a clear and explicit account of what was happening both inside and outside the hotel. In painting a picture of how the hotel was being managed, it seemed to us that the results were more vivid and accurate than might be expected from viva voce evidence.

[20] Mr Dillon advised that after the hearing in June 2007, there had been an improvement in the way that the premises were managed. Mr Jenkinson advised of forthcoming entertainment, and noise was reduced by midnight. However, by October 2007 the operation of the hotel was back to normal. He contended that this change of standards coincided with Mr Jenkinson taking over the running of the bar. Both smokers and drinkers returned to the street in numbers. Mr Dillon contended that Mr Jenkinson’s response to the 2.00 am closing of the bar was simply to draw the curtains and carry on trading. He said that he could still see people in the bar and hear the music after 2.00 am.

[21] Mr Dillon showed a tape (tape one), when he was woken at about 3.14 am on 2 January 2008 because of the noise from the bar. The video showed patrons moving about the bar. The drinkers included a person who had recently been arrested for wilful damage to the town’s public phone box. The patrons left the bar at about 3.40 am and walked up the street. Mr Dillon accepted in cross-examination that he had no evidence that the patrons had been served liquor after 2.00 am. This tape was the primary evidence of the premises being open when it should have been closed.

[22] The second tape showed drinkers on the street outside the hotel in Mr Dillon’s direct line of sight. The first incident showed patrons smoking and drinking at about 2.00 am on 22 December 2007. They returned to the bar at about 2.15 am. They left behind a patron who used a stick to help his balance. This person had a bottle as well. Although Mrs Connors suggested that his movements were due to his disability, we thought he also appeared to be quite intoxicated.

[23] Other clips showed people drinking on the street on 26 December 2007, as well as 25 and 26 January 2008. On the last two occasions the drinkers were motor cyclists who had come for an annual "Woodstock" event. They gave the appearance that they had the right to drink outside with their bikes. They returned for a similar event on 30-31 January 2009. A video clip showed them drinking outside on the first day despite the rain. On this occasion however, they were encouraged by a member of staff to return to the bar. On the second day they were not only seen drinking outside the hotel, but were allowed inside the hotel before it was due to open at 11.00 am. Mr Jenkinson stated that they had been allowed in to use the toilets, although he accepted that the town had public toilets some 50-70 metres away.

[24] On 11 January 2008, there was a street party outside the hotel. One of the aggravating features of this regrettable event was that it happened shortly after representatives from the monitoring agencies had visited the premises and spoken with Mr Jenkinson. Drinkers were seated for several hours on the footpath, as well as outside the front entrance of the hotel. According to Mr Dillon there had been ongoing raucous noise early in the evening. By 11.00 pm Mr Dillon decided that he would be unlikely to get any sleep so he videoed the activity.

[25] The video showed clips of patrons drinking outside the hotel from 11.11 pm to about 1.50 am the next day. At various stages we saw the same patron urinating three times in some bushes outside the hotel (Mr Jenkinson stated that he was unaware of this happening until he saw the video). There were patrons freely coming from the bar and going back into purchase more liquor. One patron threw a bottle across the road when he had finished drinking from it. At about 1.40 am, there was a drag race on the street that was started by a patron. No members of staff were visible at any stage of the video. At about 1.50 am Mr Jenkinson ushered the last two drinkers inside, and then commenced picking up bottles and bringing a chair inside before closing up.

[26] The third videotape showed a series of incidents that had taken place in the 12 months between the aborted fixture and the most recent hearing. The first clip was at 8.40 pm on 7 March 2008. It showed a member of staff trying to reason with the drinkers to get them to move inside. Her difficulty in doing so illustrated the extent of the problem once patrons have been allowed to exit the premises with liquor. Other clips on 15 March 2008, 12 September 2008, 26 November 2008, 16 December 2008, and 9 January 2009 all showed patrons drinking and/or smoking outside. In one of the clips, Mr Jenkinson can be seen in the background.

[27] On 25 October 2008 (Labour weekend), patrons are seen drinking outside for about an hour. A woman can be seen emerging from the bar carrying full glasses of liquor. Mr Jenkinson disputed that the liquor contained alcohol, as he was aware that the woman in question was not drinking alcohol that day. Nevertheless the scene is almost unbelievable as people carry on as if they have a right to be allowed to drink outside.

[28] On 6 January 2009, a patron attempted to drive his four wheel motor bike into the bar by driving it up the steps. He appeared to be intoxicated. He tried twice to do so before going inside. No one tried to stop him. On 10 January 2009 patrons were outside drinking. Mr Jenkinson was with them but made no attempt to require them to go inside. A male wearing an apron and nothing else paraded in the hotel for about an hour. When he gave evidence, Mr Jenkinson said that he gave the person a warning as soon as he became aware of his actions.

[29] Mr Dillon noted that since the hearing in February 2008, local patronage had dropped substantially, and the bar had not opened until 3.00 pm. However, patronage had increased in the summer months. Mr Dillon contended that Mr Jenkinson left the sandwich board advertisements out all night in breach of the District Plan. He pointed out the high turnover of managers and temporary managers during the last 12 months, and referred to the fact that the hotel’s telephone had been cut off for some weeks.

[30] Mr Dillon believed that patrons of the hotel had tried to intimidate him, but was unable to establish whether Mr Jenkinson was aware of the behaviour. Mr Jenkinson stated that he was unable to do anything about such behaviour but he actively discourages his patrons from getting upset about being videoed.

[31] In summary Mr Dillon painted a picture of an owner who appeared to have lost control of his business. The evidence showed that Mr Jenkinson had made no attempt to close off the front of the premises in order to prevent patrons from moving outside. Once the area outside the bar is available for smokers, it is almost inevitable that they will continue to drink. Once they have started drinking, it becomes very difficult for the staff to persuade them to come inside.

[32] Sergeant Andrew Lynch was the Licensing Officer of the Greymouth Police, and has recently been transferred to Rotorua. He confirmed that as a result of complaints from Mr Dillon and others, he had visited the premises on 7 January 2008, with Mr J E Pupich from Community and Public Health. He noted that Mr Peter Jenkinson was the nominated duty manager. He asked to speak with him but was advised that he had gone to town some 25 kilometres away.

[33] Sergeant Lynch spoke to the late Mrs Dorothy Jenkinson about the allegation that patrons had been drinking on the premises until 3.30 am on 2 January 2008. He said he had viewed the video and had noticed people leaving and carrying what appeared to be liquor. Issues of who was allowed to drink to that time were discussed. After about 45 minutes Mr Jenkinson arrived. He denied that the patrons had been drinking after hours, or that they had left with liquor.

[34] Sergeant Lynch returned to the premises on 9 January 2008, and the issue of guests was discussed with Mr and Mrs Jenkinson. Within 36 hours of his visit, he received advice from Mr Dillon of the video of a party on 11 January 2008, with people drinking outside the premises. He again spoke with Mr Jenkinson who denied that anything had happened on the night in question. However, there may have been a misunderstanding of the correct date.

[35] Sergeant Lynch advised that he had information that the Police had visited the premises at 2.30 am on 11 January 2009, to investigate the theft of liquor from a storeroom. It was reported that there were 20 to 30 people in the bar and that Ms J McGill was the duty manager. Sergeant Lynch contended that at that time she had not been appointed as a temporary manager. The Constable who was investigating the theft saw three young people in the courtyard. It was discovered that they were all under 18 years of age and they were duly served with Liquor Infringement Notices. The evidence was challenged as hearsay.

[36] The Sergeant advised that in his view Mr Jenkinson does not have the ability to operate or control licensed premises. He said that Mr Jenkinson was non-confrontational with patrons, and therefore allows himself to be walked over by staff and patrons. In other words he had effectively lost control of the premises.

The District Licensing Agency Inspector

[37] Mr Warren Godfrey is a Licensing Inspector with the Westland District Council. He stated that the Agency had numerous concerns about the company’s management of the hotel. He pointed out that since issuing his report on the renewal application, there had been no changes made to the premises. On the other hand he noted that once a permit was applied for, the whole of the premises would be required to be brought up to current standards, including provision for disabled people.

[38] Mr Godfrey opined that the concerns about the hotel’s non-compliance with the Act and the licence could be traced to incompetent management by Mr Jenkinson. He noted that Mr Jenkinson’s General Manager’s Certificate had expired on 12 September 2007, after the first ‘probationary’ year. No renewal application had been filed in time. Mr Jenkinson had applied for a new certificate on 9 February 2009 when he became aware of the fact that he had not been legally able to manage the premises for nearly 18 months. Mr Godfrey indicated that an objection would be filed to the application based on the applicant’s unsuitability to hold the certificate.

The Medical Officer of Health

[39] Mr Jeremy Evan Pupich was the Team Leader for Community and Public Health at all material times. On behalf of the Medical Officer of Health he supported the Police application to suspend or cancel the licences. He also appeared in opposition to the renewal of the on-licence. He stated that the Medical Officer of Health’s concerns were based on the intoxication and disorderly behaviour of patrons, as well as the company’s tendency to trade after hours, and allow consumption of liquor off the premises. He submitted that Host Responsibility was about having practices in place to reduce alcohol related harm on licensed premises.

[40] Mr Pupich advised that the Medical Officer of Health had objected to the first renewal of the on-licence in 2006. However, between the time of the objection and the public hearing the Police and Community and Public Health had made a number of visits to try to educate the company’s managers. As a result of a perceived improvement the opposition had been withdrawn.

[41] Mr Pupich had observed the video evidence. He confirmed that the area outside the premises was not licensed and yet alcohol was freely available. He said he took part in a graduated response to the complaints by visiting the premises on 7 and 9 January 2008, with Sergeant Lynch. He confirmed that Mr Jenkinson was the duty manager but was not present. He gave evidence of the conversations that had later taken place with Mr and Mrs Jenkinson.

[42] Mr Pupich inspected the premises on 13 May 2008 as part of the renewal process. At that time Mr Jenkinson was the nominated duty manager. He was not present but arrived later. Mr Pupich noted that there was no advertising of food before 5.00 pm and after 8.00 pm. Mr Jenkinson said that food was always available, and that a previous employee had taken down the sign several months previously. Mr Pupich noted that there were no low-alcohol drinks available in the bar. He was advised that the company had been out of stock for a week. However, Mr Jenkinson did manage to locate some low-alcohol stock at the back of the hotel.

[43] Mr Pupich visited the premises on 28 January 2009. The sole intention had been to pay his respects to Mr Jenkinson on the passing of his wife. Mr Jenkinson was not present and was said to be at home receiving care. The nominated duty manager advised him that she was not qualified and had not been appointed as an acting or temporary manager.

The Company’s Response

[44] Mr P P Jenkinson is the sole director and shareholder and effectively the company’s alter ego. He lives about 300 metres from the hotel. He acknowledged that the company’s traditional difficulty had been the propensity of patrons to want to drink while smoking. He said that in the early stages of the smoke-free regime, patrons would gather at or near the front door to smoke. He said that they had taken their glasses of liquor with them.

[45] Mr Jenkinson contended that in an endeavour to stop this behaviour the company had developed and enhanced a covered outside smoking area at the rear of the hotel. The seating outside the front of the hotel had been removed, and management had worked hard to educate patrons to use the smoking area at the rear of the hotel. He submitted that they had put signs up and installed bar leaners to try and encourage patrons to leave their drinks behind. He argued that he and the staff monitored and addressed the situation but contended that on a busy night it took a few minutes to get outside from behind the bar. However, he accepted that the use of this outside area had not proved successful from a practical point of view.
[46] Mr Jenkinson gave evidence that the company had invested a considerable amount of capital painting the interior and exterior of the hotel, providing a new gaming room (since de-commissioned), installing a laundromat, purchasing a courtesy coach, carrying out rewiring and renewing lighting systems, and carpeting the bar.

[47] Mr Jenkinson appeared to accept that there had been late night trading but said that it should be looked at in the context of his illness. He said that the company had offered an all day breakfast for the bikers who had attended the "Woodstock" weekend. He accepted that he had not been present from time to time, but argued that this was the reality of a country hotel when it was not busy and there was a need to leave the premises.

[48] Mr Jenkinson was adamant that no intoxicated patrons had been served and pointed to the lack of prosecutions since the licences were issued. Mr Jenkinson advised that he had secured a signed agreement for the sale of the hotel. However, the contract was subject to the sale of another property.

[49] We heard from Ms Joyce McGill who lives in Kumara and is one of the potential purchasers of the hotel. She has been appointed as a temporary manager from time to time. She has passed the training course but has yet to make application for a manager's certificate. She said that she was aware, as a patron, that Mr Jenkinson was having difficulties with staff so offered her services. She maintained that there was always sufficient food available for the patrons.

[50] Ms McGill said that she had been working on 11 January 2009, and had called the Police when it was found that liquor had been taken. She was adamant that no liquor had been served after 2.00 am and that the young men had not been served. Given the fact that the evidence to the contrary was in the form of reports from another Policeman, who could not be present at the hearing, we accept her word. She was equally confident that the hotel provides good food at all times when it is open.

The Authority’s Decision and Reasons

[51] We propose to deal firstly with the company’s applications to renew its licences. In such applications, the first point of reference must be the criteria to be taken into account. Pursuant to ss.22 and 45 of the Act we are required to have regard to the following criteria when considering the application. In the case of the off-licence the criteria in s.45 are substantially the same, although the wording is slightly different (instead of ‘supply’ the issue is ‘delivery’);

(a) The suitability of the licensee;
(b) The conditions attaching to the licence;

(c) The manner in which the licensee has conducted the sale and supply of liquor pursuant to the licence; and

(d) Any matters dealt with in any report made under s.20 (or s.43) of this Act.

[52] In considering applications for the renewal of on and off-licences, we are also governed by ss.23(1) and 46(1) and of the Act. That section reads:

(1) After considering an application for the renewal of an on-licence, the Licensing Authority shall –

(a) Renew the licence on the conditions presently attaching to it; or
(b) Renew the licence on such different conditions (relating to

any matters specified in section 14(5) (or 37(4)) of this Act) as the Licensing Authority thinks fit; or
(c) Refuse to renew the licence.

[53] In any renewal application the onus is on the applicant to show that it is suitable to continue to hold the licence. In addition the company carries the onus of showing that the conditions of the licence should not be varied. Furthermore, the applicant must show that the manner in which it has conducted the sale and supply of liquor pursuant to the licence has been satisfactory. It is our considered view that in this case, the company (and its alter ego Mr Jenkinson) have failed all tests.

[54] In terms of suitability, Ms Jenkinson (the company’s sole director and shareholder) failed to satisfy us that he has the ability to control the sale of liquor on the premises. By far the most serious allegations related to the company’s inability to control the consumption of liquor by preventing such consumption off-site. Mr Jenkinson’s response to the evidence was hardly convincing. He seemed to accept that what they had tried to achieve had not been successful. There was no suggestion that there were going to be any dramatic changes. Despite the most graphic evidence of continuous breaches of the Act and the licence, we were given the impression that any renewal would result in business as usual.

[55] What is at issue in this case is the integrity of the reasonable system of control over the sale and supply of liquor. The first renewal of the licence resulted in opposition being filed, based partly on the company’s apparent willingness to allow drinking outside the front door on the main road. As a result the trading hours were reduced and the renewal period was shortened. The company was effectively given a warning. The evidence since that time showed that the breaches of the Act had become more persistent and blatant. There was no evidence of any strong management. We left the hearing with the view that the patrons had effectively taken over the control of the premises.

[56] Not only were there instances of liquor abuse, but the potential for such abuse must inevitably be realised if the rules are allowed to be broken in this way. We considered what options we had, but in the end we found no alternative other than to refuse to renew the licences. It seemed to us that at any event, the licences were only being kept on foot to allow a sale to take place. We feel considerable sympathy for Mr Jenkinson in his plight. However, he needs to understand that we are determined to keep licensing standards high no matter what type of business is being operated.

[57] We have seldom heard a worse summary of the previous 18 months in terms of the manner in which the sale of liquor has been conducted. We include the failure to renew the manager’s certificate, the absences of the nominated duty manager, the difficulty with the telephone account, and the lack of low-alcohol beverages on display. Furthermore the evidence demonstrated that the licensee had conducted the sale and supply of liquor in a manner that in our view has had a detrimental impact on the community. We refer to patron behaviour and intoxication. The patrons seemed to be allowed to drink when they liked and where they liked. While we accept that there is not a great deal of evidence of trading after hours, we were satisfied that the situation would continue if unchecked.

[58] There were times when the nominated duty manager was not present. No attempt had been made to properly appoint a temporary manager or to ensure that the correct procedures were followed. Mr Jenkinson seemed to believe that some form of allowance should be made for a rural licence. But the Act applies to all licensed premises in New Zealand. The importance of having a manager on duty is made clear in the Act. On 1 April 2006, Section 115 was amended and strengthened. It reads:

(1) At all times when liquor is being sold or supplied to the public on any licensed premises a manager must be on duty.

(2) A manager on duty in respect of licensed premises is responsible for-

• (a) The compliance with and enforcement of-
  
  • (i) The provisions of the Act; and
  • (ii) The conditions of the licence in force in respect of the premises; and
    

(b) The conduct of the premises with the aim of contributing to the reduction of liquor abuse.

(3) At all times while a manager is on duty in respect of any licensed premises, the name of the manager must be prominently displayed inside the premises so as to be easily read by persons using the premises; and the person so named at any time is to be treated for the purposes of this Act as the manager at that time.

(4) At all times when liquor is being sold or supplied on licensed premises the licensee must take all reasonable steps to enable the manager to comply with this section.

[59] An offence is committed when there is no manager on duty at any time that liquor is sold or supplied. Section 165 of the Act provides as follows:

• (1) Every person commits an offence and is liable to the penalty set out in subsection (2) who, being the licensee or a manager of any licensed premises, sells or supplies liquor to any person at any time when the licensee is not authorised by the licence or this Act to sell to that person.
  

[60] 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 Buzz & Bear Ltd v Woodroffe [1996] NZAR 404, McGechan J said:

“Times change. Communities and environments change. Social habits and levels of tolerance change. Obviously it would have been seen by the legislature to be wise to keep conditions imposed under review in light of potential social change. The licensee’s submissions would have licence conditions frozen in some time warp while the world marches on; not, even in the arcane world of liquor licensing, a likely legislative intention. Section 4 interpretation directives align with common sense to point towards allowing the Authority to engage in a wider perspective. It can keep its eye on wider trends and needs in a specialist area where it has unique, and uniquely current, expertise. Any licensee takes a licence under risk that conditions may change, and a report may recommend adjustment. There is no asset protected for all time whatever may happen outside.”

[61] As Mrs Connors pointed out, the application concerning Mr Jenkinson’s General Manager’s Certificate has become nugatory given that he no longer holds a certificate. Our decision to refuse the renewal of the licences renders the remaining enforcement application nugatory as well. For the record there was sufficient evidence to establish that the licensee’s conduct had been such as to show that it was no longer a sufficient entity to hold the licences. Whether such a finding would have resulted in a suspension or cancellation of the licences need not be determined given our earlier decision.

[62] Accordingly, and for the reasons stated, we make the following orders:

• [a] The applications by Londonderry Holdings Limited for the renewal of on-licence number 056/ON/40/2007 and off-licence number 056/OFF/41/2007 will be refused. This determination will take effect on 1 June 2009.
  
• [b] In the light of the above decision, we do not regard it as desirable to make orders in respect of application for the suspension or cancellation of the on and off-licences issued to Londonderry Holdings Limited.
  
• [c] The application for the suspension or cancellation of Mr P P Jenkinson’s General Manager’s Certificate is rendered nugatory.
  

DATED at WELLINGTON this 9th day of April 2009

Judge E W Unwin
Chairman

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