Raz Pty Ltd & Anor v Director of Liquor Licensing (Occupational and Business Regulation) [2008] VCAT 857

Note: These written reasons consist of an edited transcription of reasons given orally at the conclusion of the hearing.

1. I have been asked to decide a preliminary point in this matter and, in order to be able to decide that, it is necessary that I give some background facts to the proceeding.
2. There was a decision on 13 November 2007 whereby the Director of Liquor Licensing refused the applicants a liquor licence to serve meals on premises. The premises to which this licence is concerned is at 14 Margaret Street, Moonee Ponds, which is a fish and chip café that has seating for a number of people.
3. For the purposes of this preliminary point only, it is conceded that the 1st applicant's director was involved in purchasing and disposing of stolen fish in another business in 2006 (Clarendon Fish & Chip shop at Clarendon Street, South Melbourne).
4. The applicants to this application are Raz Pty Ltd and Sonrob Pty Ltd. The Director of Raz Pty Ltd is a Mr Tony Razmovski and the Director of Sonrob Pty Ltd is Robert Petrevski. These two gentleman operated a business in Clarendon Street, South Melbourne (as I have already referred to) and are now operating a business in Moonee Ponds. During the time that the business was being operated in South Melbourne in 2006, Mr Razmovski was charged in relation to receiving and dealing with stolen fish. The matter went to court and, as a result, the police and Mr Razmovski's lawyer agreed that Mr Razmovski should be dealt with by way of a diversion programme which is referred to in s 128A of the Magistrates Court Act 1989.
5. Section 128A(4) reads as follows :

(4) If a defendant completes a diversion program to the satisfaction of the Court -

(b) the Court must discharge the defendant without any finding of guilt; and

(c) the fact of participation in the diversion program is not to be treated as a finding of guilt except for the purposes of -

And then it refers to four particular Acts and the Liquor Control Reform Act is not one of them.

(d) the fact of participation in the diversion program and the discharge of the defendant is a defence to a later charge for the same offence or a similar offence arising out of the same circumstances.

1. Mr Tatarka of counsel, for the applicants, submitted that in considering whether the applicants are suitable persons to hold a liquor licence pursuant to s 44 and 47 of the Liquor Control Reform Act, I should not take into account any circumstances or any facts leading up to the diversion program. He said that would be contrary to the spirit of the Act particularly as the Liquor Control Reform Act is not one of those Acts referred to in s 128A(4) of the Magistrates' Court Act. He said in particular the Tribunal ought not :

(a) admit any evidence of the events leading up to the diversion order made by the Magistrates' Court of Victoria

(b) take into account the matters leading up to the making of the diversion order in considering whether Tony Razmovski of the applicant Raz Pty Ltd is a suitable person to hold a liquor licence. To do so is contrary to the underlying policy of s 128A of the Magistrates' Court Act which provided a means whereby a person accused of an offence could be dealt with without incurring the stigma or ongoing burden of that offence by participation in a diversion program.

Apart from certain defined exceptions as set out in section 128A(4)(c) participation in a diversion program is not to be treated as a finding of guilt. The Liquor Control Act is not one of the defined exceptions. It can be inferred that Parliament did not intend participation in a diversion program.

1. On the other hand, Mr Devlin, who appeared for the respondent, stated that I should take into account in deciding whether the 1st applicant, through its director, is a suitable person, the facts leading up to him being charged. Mr Devlin conceded the fact of Mr Razmovski admitting the offence to the court and being put on a diversion programme, could not be taken into account. Therefore, the only dispute between the parties in relation to this preliminary point in deciding whether the 1st applicant's director is a suitable person pursuant to the _Li_quor Control Reform Act, is whether the Tribunal should take into account the facts leading up to the court appearance where the diversion programme was imposed.
2. The reading of sub-section (4) of s 128A does not preclude me from taking into account the facts leading up to the diversion programme. It certainly precludes me from taking into account the diversion programme itself or the fact that Mr Razmovski admitted his guilt before the court. That cannot be taken into account. However, it is a different matter altogether what facts could be taken into account prior to that time.
3. Mr Devlin has correctly stated that I am entitled to look at the wide range of matters when considering suitability. In this instance, it was submitted by the respondent that I was permitted to consider evidence of Mr Razmovski's role in the unlawful conduct but not whether that conduct eventually led to a finding of guilt with or without conviction or the matter being dealt with by diversion. In making that submission, Mr Devlin properly referred to three important cases. One of those cases was a decision by Murphy J in the Supreme Court of Victoria in Inglese v Estate Agents Board (15 August 1988 unreported). That matter dealt with an estate agent. There his Honour said :

If an estate agent is disqualified, the purpose which the Tribunal should have in mind is not the punishment of the individual (though it may appear to be punishment to him) but the importance of protecting the public and the necessity to maintain standards and the conduct of the estate agent's business.

1. Similar considerations are used in considering whether an applicant is a suitable person in a liquor licensing matter. I am not concerned with criminality or punishment or retribution. I am concerned to make sure that the public have confidence in the standard of people who are participating in the industry and I am concerned that the people who are participating in the industry must have a suitably high standard of reputation. In considering those matters, past conduct is important. Clearly, I take into account that the matters that caused the 1st applicant's director to act in the way he did, and acting in the way he did, must be relevant to the character and conduct of the 1st applicant at this time (see Robbins v Business Licensing Authority (VCAT 457 29 January 2000)). Further, considerations were referred to, which are important considerations, by the Court of Appeal in Cichello v Estate Agents Licensing Authority (19 May 1998). In that case, Buchanan JA said:

The Tribunal, in my opinion, was required to take into account the circumstances of the offence. Those circumstances bore directly upon the question of risks and detriment to which members of the public were exposed by the appellant conducting the business of a real estate agent.

1. In my view, the same can be said in relation to the question of a person wanting a liquor licence. Clearly, if Mr Tatarka's submissions are correct, a person who has done the wrong thing by the community or perhaps allegedly committed an offence but not been charged, would be in a worse position than somebody who has been on a diversion programme. In my view, that would not make any sense. This is a day and age where people are concerned about those who supply liquor. This Tribunal, in its inquisitorial jurisdiction as this particular matter is, must be vigilant to make sure that those who work in the liquor industry are suitable persons within the meaning of s 44(2) of the Liquor Act. Unless those persons are found to be suitable persons, then clearly they should not be licensed. I am not at this stage concerned with the facts which caused Mr Razmovski to act in the way he did, or whether those facts make him an unsuitable person. That is a matter that I will deal with subsequently.
2. What I am required to find is that up until the time at least of the charge of the offence whether the facts leading to that charge can be taken into account. As Mr Devlin correctly said, it would be quite wrong to pretend that those facts do not exist and indeed, it would not be doing the public any favours. Under those circumstances, I find that the facts leading up to the diversion programme can be taken into account but not the diversion order itself or anything that went on in the Magistrates' Court the day that the diversion order was made and I will rule accordingly.

1. Since making the ruling that I have made in this proceeding earlier this morning, the substantive matter has been heard before me and I will deal with the background in more detail.
2. This is a review of the respondent's decision made on 13 November 2007 whereby the respondent refused a liquor licence to Raz Pty Ltd and Sonrob Pty Ltd in respect of premises at 14 Margaret Street, Moonee Ponds. Those premises are conducted by those companies as a Fish and Chip Café and they have seating for a number of people. The licence that is sought is a licence to serve liquor with meals on the site of the premises.
3. Raz Pty Ltd has Mr Razmovski as its director and Sonrob's director is Mr Petrevski. Both companies with the directors working in the business formerly ran a fish and chip business from 2001 to approximately May 2006 in Clarendon Street, South Melbourne, and they held a liquor licence.
4. I should note at this stage that there is one single issue before me and that is whether Mr Razmovski as a director of Raz Pty Ltd is a suitable person to hold a liquor licence within the meaning of s 44(2) of the Liquor Control Reform Act insofar as the same applies to this proceeding by reason of s47(1), (2) and (3).
5. The circumstances in which it is alleged that Mr Razmovski is not a suitable person is that while he was a director of Raz Pty Ltd and his brother-in-law Mr Petrevski as a director of Sonrob Pty Ltd running the Clarendon Street business, Mr Razmovski purchased stolen fish.
6. The circumstances of Mr Razmovski purchasing stolen fish are that in approximately January 2006, he was approached by a driver from Poseidon Seafoods who was his fish wholesaler who supplied fish to the Clarendon Street restaurant. The driver from Poseidon told him that he could obtain fish at approximately 20% discount, which the driver had obtained from Chileans in the fish market. A condition of the sale was that Mr Razmovski did not tell anyone about from where he purchased the fish and that he pay cash and would not be given an invoice. These dealings went on from January until March 2006 (Mr Devlin said for approximately 10 weeks) and in that time there was numerous deliveries of fish which were stolen and brought to the applicant's Clarendon restaurant and paid for. Presumably the fish was then cooked and sold to customers.
7. There is no question that on each of these occasions, the applicants both bought stolen goods, viz the fish, and sold them. It is conduct which in no way can be condoned because it is often said in relation to people who purchase stolen goods, if people do not purchase the stolen goods, the goods on most occasions would not be stolen. In other words, Mr Razmovski received and handled stolen fish.
8. Eventually, the police questioned the applicant and he was open to the police and, indeed, he made a statement to the police which is summarised in a police summary which has been put before me. The evidence in the police summary, reads :

In early January 2008, the Poseidon driver began supplying different varieties of fresh fish to the defendant (Mr Razmovski). He would arrive with whatever fish he was able to access and offer them to the defendant. The defendant accepted all fish presented to him. He weighed them and then paid the driver for the fish at a substantially discounted rate to the market value. Payment was made in cash and no records in relation to the additional supplies were made. The fish was delivered with legitimate goods from Poseidon Sea Foods.

Between the 1st of January 2006 and the 14th of March 2006, the defendant received stolen fish from the delivery driver almost every second day. He received approximately 50 kilograms of stolen fish per week and paid $10 in cash per kilogram. The defendant had a belief that the fish were stolen but continued to purchase them due to the reduce rate.

On the 14th of March 2006, the defendant was spoken to by police at his store where he was found to be in possession of a recently delivered load of fresh, stolen fish. He had just received them from the Poseidon Seafood's delivery driver and had paid him $270 in cash for the fish he knew to be stolen. As a result, he attended at the South Melbourne Police Station where he participated in a taped record of interview. The defendant made full admissions to the offence, stating that he thought it might have been legitimate at first but quickly realised the fish were stolen. The defendant admitted purchasing approximately 50 kilograms of fish per week at an average of $500, which he paid the driver in cash. He stated no records were kept in relation to these supplies. He submitted that he believed he had paid approximately $5000 in cash to the driver for the stolen fish from the 1st of January to the date of interview.

1. That appears to be an accurate record of what the offence was.
2. In Mr Razmovski's statement which was put before the Tribunal, Mr Razmovski tended to play down what had happened. In paragraph 8, he stated :

I did have some concerns about the source of the fish and I queried the driver on a number of occasions however he consistently told me the same story about the Chileans at the wholesale market which I accepted.

I certainly did not buy the goods knowingly or believing them to be stolen.

That is somewhat different to what he said to the police.

In about March 2006 .... I told the police that I had a suspicion that the fish might have been stolen but that I had accepted the driver's assurances that was not the case.

1. In any event, it is with Mr Tatarka's (who appears for the applicants) permission, I now refer to the fact that he was placed on a diversion order at the Magistrates' Court pursuant to s 128A of the Magistrates' Court Act. As a result, Mr Razmovski does not have a conviction against him and he in fact did all that was required by him pursuant to that order. In fact Mr Razmovski did more than was required of him. He sought out the person in charge of Poseidon Seafoods and he repaid him the $5000 that he thought he might have lost, which is to his credit.
2. The question is : Does the conduct by the 1st applicant's director make it unsuitable at the present time to hold a liquor licence?
3. In Hughes and Vale Pty Ltd v New South Wales (No 2) [1955] HCA 28, para 9, the High Court quoted from Coke when they were considering a description of a fit and proper person. I agree with Mr Devlin to the extent that the term "fit and proper person" and a "suitable person" have similar connotations. The Court in that case, quoting from Coke, said :

With respect to an office is said to involve three things, honesty knowledge and ability : 'honesty to execute it truly, without malice affection or partiality; knowledge to know what he ought duly to do; and ability as well in estate as in body, that he may intend and execute his office, when need is, diligently , and not for impotency or poverty neglect it.

1. Further, I am not sitting as a criminal court in this matter. What I must to do to protect the public interest is that I have to make sure that standards are maintained in the liquor industry. I refer to the case of Inglese v Estate Agents Board Murphy J (15 August 1988) and also Robbins v Business Licensing Authority (29 January 2000). I have referred to both those decisions in my earlier ruling. It is not necessary to quote from them again, except to say that they make it clear that I must be concerned that the public is protected, that there are standards in the industry in which the public can have confidence and those standards are maintained.
2. Mr Tatarka, on behalf of the applicant, stated that Mr Razmovski's wrong doing was a single incident. He said it was not an incident for which he should be punished continuously. He said it was only one wrongdoing. To some extent, that is right but only to some extent. It was not a momentary lapse by him. It was a lapse that commenced in January 2006 and continued until March of that year, until it was stopped by the police. It happened approximately every second day. There was plenty of time for Mr Razmovski to change his mind about dealing with the driver from Poseidon Seafoods. I do take into account, however, that by the Court making a diversion order, it was the lowest level of punishment that could be given and Mr Razmovski has not breached the order. Further, I take into account that he has four references which have been put before me and, in particular, one of those references is from the Director of the Poseidon fish supply company who said that he would continue to supply the applicants with fish again.
3. Mr Tatarka also emphasised to me that Mr Razmovski was an impressive witness. I have some difficulty with that proposition. When I heard him in the witness box he was not a person who was impressive. In fact, he appeared to "duck and weave" and it was only after vigorous cross-examination that he admitted facts that were clearly already admitted by him to the police. I found it somewhat surprising that he was not more forthright in cross-examination.
4. I also take into account that Mr Razmovski received and handled stolen fish relatively recently. It is not something where a lot of time has passed. It is quite clear that matters which could cause a tribunal or a court to find that an applicant has bad character can over time be rectified. In my view, in this situation a little over two years, after Mr Razmovski performed the wrongdoing is insufficient time for it to be rectified.
5. To find that Mr Razmovski was a fit and proper person, as things stand today, in my view, would degrade the standards the public think should be attributable to people who are in the liquor industry. It is a privilege for people to be able to sell liquor. Mr Razmovski's company was involved in receiving and handling stolen goods, when at the same time it was holding a liquor licence. To grant a further licence to that company at this time is something which the public would believe would decrease the standard expected of those who hold liquor licences.
6. At this particular time, bearing in mind the impression that I had of Mr Razmovski in the witness box, I cannot be satisfied that he has learnt his lesson. If he had truly learnt his lesson, in my view, he would have been more forthright than he was. I do not think it is an excuse for Mr Tatarka to say that Mr Razmovski is unsophisticated. He indeed knew what had happened and he appeared to be somewhat reticent to come out with the whole truth. It is hard to believe that a man who was driving a truck in the employ of Poseidon Seafoods would be an honourable person that was selling fish from another supplier. That in itself without more should have put the applicant on notice, but it did not. That suggests to me that Mr Razmovski himself may be less than a fit and proper person to be a director of a licensed company. Thus I find that Mr Razmovski is not a fit and proper person to be a director of a licensed company, viz Raz Pty Ltd, who are one of the applicants in this application.
7. It has also been put to me that if I make findings against the suitability of the 1st applicant, I should allow Sonrob Pty Ltd alone to hold a licence. However, it was also put that if I allowed it to hold a licence, Raz Pty Ltd would continue to be a co-owner of the business with Mr Razmovski as director and he will continue to work in the business and run the business much as he does now. In other words, he might still be responsible for purchasing liquor and purchasing other things. In my view, that would be improper given my finding. I also take note that in s 92 which allow disqualification of certain people and companies after an inquiry, particularly sub-section 1(d), (e) and (f) would suggest to me that the legislation did not intend that people who are not suitable persons should have an interest (by way of director and shareholder of a company) and indeed be a full partner in a business that has a licence. This was made even clearer in legislature passing s 3AC of the Act which was inserted in 2007 to broaden the definition of "associate".
8. Under these circumstances, in my view, the decision of the respondent should be affirmed. I also note that the respondent in coming to her decision took into account a decision of the panel which found that the licence should be granted. However, I have read the decision of the panel and, in my view, I disagree with that decision as did the Director. I do not believe I need to say more about that except that it is something to be taken into account. Under those circumstances, I will make the order which will affirm the decision of the respondent.