Victorian Civil and Administrative Tribunal|2005-09-02|Before: Sgt P

Whiting v AMC Investments (Occupational and Business Regulation) [2005] VCAT 1830 (2 September 2005)

Occupational and Business Regulation List - enquiry - director and manager handling stolen liquor - whether suspension justified - Liquor Control Reform Act 1998 s 91(1)(b)(iv), s 92(1)(a)-(f)

AMC Investments Pty Ltd, Bruno Galati, Domenico Galati, Leonard Devlin

1 Pursuant to s 91(1)(b)(iv) of the Liquor Control Reform Act 1998 ("the Act") AMC investments Pty Ltd is fined the sum of $5000 to be paid to the Director of Liquor Licensing Victoria, Level 24, Nauru House, 80 Collins Street, Melbourne. The payment of such fine be stayed until 21 November 2005.

2 Bruno Galati and Leonard Devlin are disqualified for a period of 7 years from carrying out any of the activities referred to in s 92(1)(a)(-(f) inclusive of the Act. Such disqualification shall commence at midnight on 22 November 2005.

[Note: These written reasons consist of an edited transcription of reasons given orally on 22 August 2005]

1 On 7 January 2004 the applicant filed an application in this Tribunal requesting an inquiry pursuant to s 90(1) of the Liquor Control Reform Act 1998 ("the Act") on the grounds that AMC Investments Pty Ltd, the Licensee of premises at 71 Powlett Street, East Melbourne, known as East Melbourne Cellars, is not a suitable person to hold a licence or a BYO permit pursuant to s 90(1)(k) of the Act.

2 The Particulars in Support are -

That between July 2004 and the date of lodgement of the application did have an unsuitable person, Bruno Galati as :

(a)

a person who, directly or indirectly was concerned in and took part in the management of licensed premises, and;

(b)

a director of the licensee company

In that Bruno Galati did, between 1 July 2004 and 6 August 2004 handle stolen goods pursuant to s 88 of the Crimes Act 1958.

That between July 2004 and the date of lodgement of the application did have an unsuitable person, Leonard Devlin as :

(a) a person who, directly or indirectly was concerned in and took part in the management of licensed premises.

In that Leonard Devlin did, between 1 June 2004 and 6 August 2004, handle stolen goods pursuant to s 88 of the Crimes Act 1958.

3 Both Bruno Galati and Leonard Devlin, who are the 2nd and 4th respondents respectively herein, pleaded guilty in the Magistrates' Court at Heidelberg to dishonestly receiving goods, such goods included alcohol, electrical goods and cameras. Both men were placed on good behaviour bonds to be of good behaviour for a period of 12 months. I note that the offences took place between 1 June 2004 and 8 August 2004.

4 AMC is the licensee of the premises to sell packaged liquor. That licence has been held since 1988 pursuant to the Liquor Control Reform Act 1998.

5 Bruno Galati is a Director of AMC and appears to have been responsible for the day to day operation of the liquor outlet business. Leonard Devlin was a manager of the business and was also directly involved in the management of the business. The 3rd respondent, Domenico Galati, is a Director of AMC and the licensed nominee. He was not involved, in any way, in the handling of the alleged stolen goods.

6 The applicant has requested that the licensee (ie AMC) be fined pursuant to s 91(1)(b)(iv) of the Act and that the respondents Bruno Galati and Leonard Devlin be disqualified from holding a licence pursuant to the provisions of s 92(1)(a)-(f) of the Act. No order is sought against Domenico Galati.

7 Although there was some initial controversy over s 90(1)(k) of the Act, ultimately the respondents, through their counsel Mr Tweedie, conceded that there has in fact been a breach of s 90(1)(k) of the Act. When I say a breach, that is, the three respondents to which I have referred come within that category, that is, that if a person referred to in sub-section (2) considers that the licensee or the permittee, has done certain things, is otherwise not a suitable person to hold a licence or a BYO permit, the person may apply to conduct the inquiry into the licensee or permittee and, indeed, such an application has been made in this particular case.

8 A summary of the situation leading to the proceeding which was before me today is contained in written submissions of Sergeant Harman, who appeared for the applicant. At paragraph 11 of those written submissions, Sergeant Harman refers to the interview with Bruno Galati. It states -

Bruno Galati was interviewed on tape and made the following admissions.

•

He was introduced to the persons charged with burglary on or about the 7th of July 2004.

•

He purchased stolen alcohol from these offenders during this period.

•

He purchased stolen cameras and DVD player from the offenders during this period.

•

He was in phone contact with the offenders and informed them he was mainly interested in liquor.

•

He put the stolen alcohol on the racks and sold them through the shop.

9 In paragraph 12 Sergeant Harman refers to matters admitted by Leonard Devlin. It states as follows -

Leonard Devlin was interviewed and made the following admissions.

•

He stated the female offender came to the licensed premises from sometime in June. (I pause here to state that the female offender was a burglar that had been previously apprehended by police).

•

He stated the female offender would come in with a bottle or two of wine or spirit.

•

He stated the female offender came in about 12 times.

•

He purchased cameras and computers from her.

•

On some occasions she would come into the licensed premises with the male offender.

•

He supplied the offenders with the business card.

Alcohol that had been stolen from residences had been knowingly placed on the racks for sale at the licensed premises to customers who believed that they purchased untarnished property.

11 Sergeant Harman then sets out what happened in the Heidelberg Magistrates' Court on 20 May 2004. He then states -

The offence before the Magistrates Court was committed between dates and is evident that the offending by Devlin was a course of conduct committed over a period of time which only concluded when detected by police. This is not handling stolen goods in a one off incident where a person may purchase goods cheap at the local hotel or from a car boot.

12 Sergeant Harman then makes reference to a list of items which he alleges were provided by Devlin to the burglar. Mr Tweedie submitted that there is no evidence that this list was provided to the burglar and, in any event, at most, it was third hand hearsay. I will not take the list into account when considering my decision. In fact I will exclude all reference to the list from my considerations.

13 Both Bruno Galati and Leonard Devlin are over 50 years of age and have been involved in the liquor industry for many years. No other matters of a criminal nature have been alleged against them. In fact since the time of these offences, there are no further matters which have been alleged against them and they have both expressed a considerable amount of contrition and sorrow for their acts and I find that, at all times, they have been completely cooperative with members of the police force who were investigating these matters.

14 Leonard Devlin from 1975 to 1988 was employed as an operating theatre technician in the health industry. He then took up his position as the full time manager of East Melbourne Cellars. However, following the indiscretion in 2004, he was demoted from his position as Manager at the East Melbourne Cellars and has only been permitted to work part time. In order to have sufficient income to support his family, he re-entered the healthcare workforce and has commenced again to work as a part-time theatre technician at the Epworth Hospital.

15 Bruno Galati has acted honourably in the past and has in fact repaid debts of a previous business that unfortunately went bad. He did this inspite of the fact that he could have walked away from the obligation. I also note that Bruno Galati is not a particularly well man and he suffers, amongst other things, from depression. As I have previously mentioned, both men have no criminal record and both have tendered to the Tribunal excellent references from well respected members of the community who testify to the fact that both men are otherwise of good character. I also note that both men have been co-operative with members of the police force, have readily admitted the offences when questioned by police and indeed have shown the police the alcohol in the shop that was stolen. It may well be that without that co-operation, the police may not have been able to detect what alcohol was stolen.

16 I will deal individually with the relevant sections of the Act that I am concerned with -

53. Liability of joint and incorporated licensees or permittees and unincorporated clubs

(2) If a licence or BYO permit is granted or transferred to a body corporate, the directors of the body corporate are severally liable as licensee or permittee.

which in effect means that Mr Bruno Galati has a similar situation to the licensee itself. I have already referred to s 90(1)(k).

17 Section 91(1)(b) of the Act reads as follows :

(1) After conducting an inquiry under this Division and if satisfied that any of the grounds set out in section 90(1) exist, the Tribunal -

(b) in any other case may make any one or more of the following orders -

(ii) an order suspending the licence or permit for the period specified by the Tribunal;

(iii) an order endorsing the licence or permit under section 93;

(iv) an order imposing a fine on the licensee or permittee not exceeding $30 000;

18 Section 92 of the Act reads as follows -

(1) If satisfied that a ground for making an order under section 91 exists, the Tribunal may also order that the licensee or permittee or any director or nominee of the licensee or permittee (if it is a body corporate) or any member of the committee of management or nominee of the licensee or permittee (if it is a club) or any person who, whether directly or indirectly, is concerned in or takes part in the management of licensed premises be disqualified -

(b) from being a director in any body corporate that holds a licence or BYO permit;

(d) from having a beneficial interest (whether directly or indirectly) in the shares of any body corporate that holds a licence or BYO permit;

(e) from in any way (whether directly or indirectly) taking part in, or being concerned in, the management of any licensed premises or any body corporate that holds a licence or BYO permit or any licensed club;

(f) from being employed by any licensed club or any person that holds a licence or BYO permit.

(2) The Tribunal may disqualify a person in all or any of the ways listed in sub-section (1) and may make an order under this section even though it does not make any order under section 91.

19 This proceeding having been conducted on the basis that the factual matters disclose that there is a breach of s 90 against the 1st, 2nd and 4th respondents, I must now decide what course should be taken pursuant to either s 91 or s 92.

20 Mr Tweedie, on behalf of the respondents, has addressed me with some vigour on the basis that this is the one and only indiscretion of both Bruno Galati and Leonard Devlin and to disqualify them pursuant to s 92 would have a devastating effect on their lives and on the lives of their families. They would have difficulty earning a living and it would be quite out of proportion to what they have done. He also emphasised that both men were co-operative and are remorseful and are unlikely to offend again and he has stated that the offences occurred well over a year ago.

21 On the basis of the authorities of Robbins v Business Licensing Authority [2000] VCAT 457 and Inglese v Estate Agents Board (unreported Supreme Court of Victoria, 15 August 1988), I take into account that I must look at what is in accordance with the public interest which embrace matters, amongst others, of standards of human conduct acknowledged to be necessary for the good order and well-being of the public. I also take into account that the Act, as in the Motorcar Traders Act in Robbins case, was designed to protect the interests of the community amongst other things and, accordingly, notwithstanding the fact that the respondents have been punished by the criminal justice system, the issue of protection of the public remains as an important consideration. When I say the respondents have been punished by the criminal justice system, I define that widely to mean the bond which they have been placed on. I also take into account what was said by Justice Murphy in the Supreme Court in the Inglese case where he stated :

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

22 Mr Tweedie submitted that it would be against the interests of the public for the respondents here to be disqualified. He said that if the AMC or Mr Bruno Galati was disqualified, it would automatically mean that the business of East Melbourne Cellars would have to be shut down. He said that bearing in mind that a 12 month period had elapsed since the offence and no further matters were reported, it was unlikely that the parties here would offend again and that no suspension was necessary. He referred to a decision of Re SRH and Comptroller-General of Customs, a decision of Purvis J in the Administrative Appeals Tribunal of NSW. That was a decision concerning the reinstatement of a licence after the offender had already had his licence cancelled. I note that the person who was involved with the customs licence spent some two years out of the industry. Bearing in mind that that was an application for reinstatement, in my view, that is different to the matter here. Here, there has been no period of disqualification served at this time. Further, I take into account that while the respondents have not offended in the last 12 months, that is a relatively short period.

23 I also take into account that it is important that people's property be protected. It is in the community's interests that that be so. As Sergeant Harman stated in his address to me -

There are very few places that stolen alcohol can be disposed of by a thief. One of those places is a liquor shop. We have a licensing system that protects the public and regulates the orderly supply of liquor. If people are placed in the privileged position of being able to hold a liquor licence and sell liquor their behaviour must be of the highest standard particularly in relation to dealing with matters directly related to the business of the outlet.

24 In this case the respondents were in a position where the public were entitled to assume that the liquor they were selling was honestly purchased. What the respondents in fact did was to give to the thief or thieves an outlet for their supply of liquor. In doing so, in my view, they showed a standard that was far below what is required of the industry.

25 Mr Tweedie stated that when one looks at the industry standard, that should play second fiddle to what in fact is in the public interest. In my view, all matters should be taken into account and looked at. It is not proper to necessarily give one preference over the other or even, in my view, can it be said that they are necessarily different from each other.

26 In this particular situation, it is in the public interest that those who sell liquor be of the highest integrity and the public should be able to rely on that fact. If it be less, then of course people, as in this instance, will be encouraged to perhaps rob houses and have liquor outlets at their disposal for their stolen property. Such conduct is just not acceptable within the industry.

27 Little has been put forward by way of explanation for the respondents' conduct, save and except that it was a course of conduct that was outside these men's character and that Mr Bruno Galati suffers from depression and has for some time, for which he is medicated. However, in my view, that does not explain this conduct. The only way this conduct can be explained is by greed. In taking this view, I am not looking to punish the respondents. That happened in another place. What I am looking for is to maintain the industry standards which is part of looking after the public interest and to satisfy the public interest itself.

28 Taking all the circumstances which I have referred to into account, it would be totally inadequate and send a wrong message to others in the industry if I was to simply impose a fine for a matter such as this. Handling and selling stolen liquor is a matter going directly to the business of the licensee. It is not as if these people were handling some other type of stolen goods which had nothing to do with their licence. It was their licence that allowed them to dispose of the stolen liquor which they held. Mr Tweedie suggested that there was only a very small amount of liquor involved; probably, less than 20 bottles. That may be so. In any event, in my view, it would be quite wrong to suggest that even if it is a small amount of liquor, such as here, that there should not be some disqualification involved in this matter.

29 In relation to the company, the applicant has not sought disqualification. I have had some misgivings about not disqualifying the company but bearing in mind there is one director of the company, Mr Domenico Galati, who has had absolutely nothing to do with this matter whatsoever, it would be, in my view, draconian on him to disqualify the company from holding a licence. However, bearing in mind the situation that existed as to the management, and that he was a nominee of the company, in my view, it is proper that the company be fined $5000 which is half of the amount of the maximum fine that I may impose pursuant to s 91 of the Act. On giving my decision that there should be a $5000 fine, Sergeant Harman has informed me that the $10,000 went up to $30,000 as from 8 December 2004. However, taking into account that these offences happened prior to that time, it is still proper to impose a fine of half of the $10,000 that was applicable at that time. So the fine will in fact be $5000 as far as the 1st respondent is concerned.

30 In relation to Bruno Galati and Leonard Devlin, they should be disqualified from holding a licence for any of the functions referred to in s 92(1)(a) to (f) inclusive and that disqualification should be extensive. Sergeant Harman suggested that it should be 15 years. However, bearing in mind the age of both these men, that is that they are now over 50 years of age, that they have lived a long life and have been free of coming under notice of the criminal system in that time, and the other factors which I have already mentioned, a disqualification of 15 years would be excessive. However, taking all the factors into account, I will disqualify each of them for a period of 7 years. I will make the orders accordingly.

Whiting v AMC Investments

At a glance

Court

Decision date

Before

Source

Judgment (44 paragraphs)

Whiting v AMC Investments (Occupational and Business Regulation) [2005] VCAT 1830 (2 September 2005)

Parties