Xia Zhang v Office of Licensing, Gaming, Racing

AGREED FACTS

1. The agreed facts can be summarised as follows. On 24 February 2014, legislative changes were introduced to require that the packaged liquor outlets to cease trade at 10pm. Notice of the legislative change was publicised by the Office of Liquor, Gaming and Racing to licensees and industry associations.
2. The appellant was appointed the licensee of Harbourside Cellars (the store) on 2 March 2012. At about 10pm on 6 February 2015, Inspector Wise and Compliance Officer Williams (together the officers) attended Harbourside Shopping Centre and conducted surveillance of the store. At this time the officers observed that the store had the roller door up, the lights on and an array of stock on display at the front entry.
3. At about 10.15pm the officers entered the store and purchased two bottles of wine. The officers were served by the appellant. At about 10.25pm, two females entered the store and left a short time later carrying bottles in brown paper bags. Shortly afterwards, the officers re-entered the store and identified themselves to the appellant. The appellant told them that her English was poor and asked them to telephone her daughter Margaret. Compliance Officer Williams then had a conversation with the appellant's daughter.
4. Inspector Wise requested the till records for purchases after 10pm on that night. The appellant produced three receipts and they were seized by the inspector and a field receipt issued. Inspector Wise then issued a notice to produce pursuant to s 21 of the Gaming and Liquor Administration Act 2007 requiring a copy of all till records for 6 February 2015, copies of all EFTPOS receipts for 6 February 2015 and CCTV footage for 6 February 2015 between the hours of 11am and 11pm.
5. The appellant informed the officers on 6 February 2015 that the CCTV footage did not record and was limited to live viewing. The officers attended the Harbourside Shopping Centre security office and reviewed some footage. A security officer told the officers that he had witnessed the store remain open past 10pm on weekends in the past.
6. On 9 February 2015, the officer served a notice to produce on the security officers to produce CCTV footage for the store of 24 January 2015, 30 and 31 January 2015, 4 February 2015 and 6 February 2015 between the hours of 9.45pm and 12am. The CCTV footage produced demonstrated the store was open past 10pm on those dates.
7. On 9 February 2015 the appellant failed to produce the documents required by the notice to produce issued on 6 February 2015. The officers thereafter on a date unknown seized the till sale system for three days. The sales past 10pm on the relevant dates demonstrated the following: 24 January 2015, seven sales with the latest being at 10.39pm; 30 January 2015, six sales with the latest being at 10.33pm; 31 January 2015, six sales with the latest being at 10.19pm by till receipt and 10.34pm by CCTV footage; 4 February 2015, one sale 10.15pm; 6 February 2015, six sales 10.20pm.
8. I have had regard to the tills receipts for the purpose of assessing the last sale that took place for the each of the s 9 offences because there is an unexplained discrepancy in the trading figures on 31 January 2015. I could not be satisfied beyond reasonable doubt that the store had traded later when there is a reasonable possibility that, for example, there could have been a time difference between the till sales system and the CCTV system.
9. On 19 March 2015 the appellant participated in an electronically recorded interview with suspected person (ERISP) with the assistance of a Mandarin interpreter. The appellant made full admissions in the ERISP. When asked why she kept the store open past 10pm she stated:
10. "Lots of my clients are staff working in the shopping centre, that's why I would close the shop later."

THE APPELLANT'S EVIDENCE

1. The appellant and her daughter, Margaret, gave evidence before me on 4 November 2015 and were cross-examined. The evidence given on behalf of the appellant can be summarised as follows.
2. In 2008, Margaret came to Australia on a student visa. A short time later her father purchased the store. Margaret's boyfriend was the original licensee. In 2011, the appellant came to Australia with her other two children who are now 11 and 12 years of age. In 2012 the appellant became the licensee of the store. The appellant's husband operates a nursery business in China and resides there. He visits Australia for extended periods when he can.
3. The appellant and Margaret both work in the store and it employs one casual employee. In the financial year of 2015, they both earned a wage of approximately $20,000 gross and the casual employee was paid $17,000 gross.
4. In 2014 significant construction work commenced at Darling Harbour with the demolition of the exhibition and conference centre. This has caused significant downturn in the store's trading that has resulted in profits of approximately $15,000 in the financial year for 2014 and $2,000 in the financial year for 2015. The appellant's husband has injected a further $170,000 into the store to keep it afloat until the construction work at Darling Harbour is finished at which time it is hoped that the business will recover. At the beginning of 2015, the casual employee took leave to return to China. As a result the responsibility for closing the store fell to the appellant.
5. The appellant kept the store open in part to allow other employees at the shopping centre to purchase liquor after they had finished work at 10pm. A number of these customers were her friends and she would speak to them when they came in. The appellant accepted that she would also sell to anyone else who came into the store at that time.
6. Part of the store's business came from supplying liquor to a number of restaurants in the shopping centre when they ran short of particular liquor supplies. During the period that the officers seized the till from the store, the store lost this trade because it could not provide a receipt for the restaurants for these purchases. For the contraventions involved in the section 9 offence, the total amount of sales after 10pm involved a turnover of approximately $1,000.
7. The appellant has a unit in Sydney in her name that is subject to a mortgage. The mortgage and other required living expenses are paid for by her husband. Neither the appellant or Margaret appreciated the seriousness of not closing the store at 10pm as required.

GENERAL SENTENCING PRINCIPLES

1. I have had regard to s 3A of the Crimes (Sentencing Procedure) Act 1999 which provides relevantly: "The purposes for which a Court may impose a sentence on an offender are as follows: to ensure that the offender is adequately punished for the offence, to prevent crime by deterring the offender and other persons from committing similar offences, to make the offender accountable for his or her actions and to denounce the conduct of the offender".
2. The Court must specifically take into account the matters listed in s 21A of the Crimes (Sentencing Procedure) Act 1999 that are relevant and known to the Court. Sentencing is not purely a logical exercise and there is unavoidable difficulty in giving weight to each of the purposes of punishment, the various purposes overlap.
3. An appropriate sentence is to be determined after consideration of the objective and subjective circumstances bearing in mind that the basic principle of sentencing law is that a sentence imposed by a Court should never exceed that which can be justified as appropriate or proportionate to the gravity of the crime considered in light of its objective circumstances.
4. A proper understanding of the purpose of creating an offence is assisted by consideration of the objects of the statute. The seriousness of the offence is also eliminated by the nature of the statutory provision and its place in the statutory scheme. The objects of the legislation are set out in s 3(1)(a) of the Liquor Act 2007. In order to secure its objects, persons including licensees who exercise functions under the Liquor Act are pursuant to s 3(2) required to have regard to: "The need to minimise harm associated with misuse and abuse of liquor (including harm arising from violence and other anti-social behaviour, the need to encourage responsible attitudes and practices towards the promotion, sale, supply, service and consumption of liquor, the need to ensure that the sale, supply and consumption of liquor contributes to, and does not detract from, the amenity of community life. "
5. The grant of a licence to a licensee is a privilege. The use of the criminal law ensures the credibility of the regulatory system. The Court must have regard to the objective harmfulness of the defendant's actions including actual harm, the potential for harm and foreseeable risk of harm.

THE OBJECTIVE CIRCUMSTANCES OF THE OFFENCES

1. The proportionality principle requires that a sentence should neither exceed nor be less than the gravity of the crime having regard to the objective circumstances. At common law the term "objective circumstances" was used to describe the circumstances of the crime. The gravity of the offence was assessed by reference to its objective seriousness. The task requires the Court to consider where in the range of conduct covered by the offence the conduct of the offender falls. This assessment will generally indicate the appropriate range of sentences available which will reflect the objective seriousness of the offence committed and set the limits within which a sentence proportional to the criminality of the offender will lie.
2. The sentencing judge should take account not only of the conduct that actually constitutes the crime but also such of the surrounding circumstances as are directly related to the crime and properly regarded as circumstances of aggravation and litigation.

THE S 34 OFFENCE

1. The matters relevant to the s 34 offence are as follows. The notice to produce issued to the appellant on 6 February 2015 allowed until 9 February 2015, a period of three days (of which two were not business days) for compliance with it. That period was only a reasonable time for compliance by reason of the plea of guilty. Objectively viewed, it was far too short and there was no demonstrated need for urgency. The documents required to be produced were of marginal relevance to the offence that was being investigated.
2. The officers had on their evidence purchased liquor from the appellant at 10.15pm and they had seized three till receipts for purchases after 10pm on 6 February 2015. I cannot see the relevance of the documents requested by the notice to produce except insofar as they related to events saying after 9.45pm on 6 February 2015. In addition the officers had been told on the night and informed themselves that the CCTV footage was not being recorded.

THE SECTION 9 OFFENCES

1. Matters relevant to the s 9 offences are as follows. The offences demonstrated some intentional disobedience of the law. The law requiring provided packaged liquor outlets to cease the supply of liquor at 10pm was introduced as a harm minimisation initiative. There was no actual harm and very little scope for potential harm from the commission of the s 9 offences. The offences occurred over a two week period and at worst involved a 40 minute transgression of the trading hours.

DETERRENCE

1. General deterrence is relevant to this offence. The prosecution submit that this is potentially the first prosecution for offences relating to trading outside the authorised period after the introduction of the legislative changes in February 2014. There is also some need for specific deterrence in respect of this matter as there was more than one transgression over a relatively short period of time.
2. The need for specific deterrence is lessened by reference to the steps that the appellant has taken after the offence to close the doors of the shop at 9.45pm to ensure that a further transgression in the future does not occur.

AGGRAVATING FACTORS

1. The s 9 offences each involved a series of criminal acts pursuant to s 21A(2)(m) of the Crimes (Sentencing Procedure) Act 1999.
2. The prosecution chose to proceed with representative charges. They involved between one and six supplies of liquor contrary to the licence on each of the relevant dates. I will exercise some caution in applying this aggravating factors because the prosecution could have proceeded with a discrete count in respect of each supply after 10pm but chose note to. Accordingly there is a degree of double counting inherent in this aspect of the sentencing exercise.
3. The s 9 offences were committed for financial gain ,s 21A(2)(o) of the Crimes (Sentencing Procedure) Act 1999. The incident showed that there was about $1,000 inclusive of GST in sales that took place after 10pm on the dates of the s 9 offences. On the basis of two years of trading figures supplied and the financial statements for 2014 and 2015 the percentage of net profit to total trading income was 1.67% in the financial year of 2014 and 0.25% in the financial year of 2015.
4. The range of profit based on turnover excluding GST would have been in the vicinity of $2.27 and $15.18 for all of the sales that took place after 10pm. The financial gain was negligible and that should be reflected in the weight given to this aggravating factor.

MITIGATING FACTORS

1. The injury, emotional harm, loss or damage caused by the offence was not substantial. The sales recorded after 10pm on the dates of the s 9 offences were not likely to adversely affect the harm minimisation objective of the legislation. Most of the sales related to a relatively small quantity of liquor.
2. The appellant does not have any prior convictions. The appellant was a person of good character. The appellant tendered references from a number of people known to her. Each of the referees attested to her good character and of her diligence ordinarily applied to her functions as a licensee. The appellant is unlikely to reoffend.
3. I am satisfied on the basis of the appellant's evidence that she has taken steps that will prevent her from reoffending. I also accept her evidence that she became responsible for closing the store as a result of the unavailability of the casual employee. I am satisfied that she now understands the importance of closing the store in accordance with her legal obligations as a licensee.
4. The appellant has good prospects of rehabilitation. In this matter it follows from my finding that the appellant is unlikely to reoffend and that she has good prospects of rehabilitation with respect to the matters now before the Court.

THE APPELLANT HAS DEMONSTRATED REMORSE

1. The appellant has accepted responsibility for her actions and taken steps to ensure that the store closes by 10pm by introducing a practice of closing the front door at 9.45pm and requiring customers already in the store to leave by 10pm. I am satisfied on the balance of probabilities that she has demonstrated genuine contrition and remorse.
2. The appellant entered a plea of guilty at an early stage of the proceedings before the Local Court. The appellant is entitled to discount on penalty that reflects the utilitarian value of that plea. The extent of the discount should generally be assessed in the range of 10% to 25% but that is only a guide. The primary consideration of determining where the range of the particular case falls is the timing of the plea so that the earlier the plea the greater the discount. The plea also indicates remorse.
3. The discount given for the plea of guilty can result in a different type of sentence being imposed. The plea was entered on the second occasion at the Local Court and I am satisfied that it was an early plea.
4. In the circumstances I propose to allow a discount of 25% on the otherwise appropriate penalty for the utilitarian value of the plea.

OTHER MATTERS

1. s 21A(1) of the Crimes (Sentencing Procedure) Act 1999 allows the court to consider other relevant matters. In this case it is appropriate to take into account the appellant's cultural background as relevant to penalty. She is 53 years of age and I am satisfied that the s 9 offences occurred at least in part by reference to a work ethic arising from her cultural background.

CONSIDERATION OF THE S 34 OFFENCE

1. The objective seriousness of the objective 34 offence was so low as to be almost negligible because the time allowed for compliance was far too short and the documents requested were not properly required by the officers to complete the investigation into the offence of trading past 10pm on 6 February 2015. The commission of the offence was contributed to by the appellant's poor English skills of which the officers were fully aware. The circumstances are such that I would deem it I deem it inexpedient to inflict any punishment. on the appellant for this offence.

SECTION 9 OFFENCES

1. The s 9 offences arose by reason of the casual employee of the store being absent and the responsibility for closing the store falling to the appellant. For the reasons I have given that I am satisfied that the late trading of the store arose from the appellant's desire to be available to other employees in the Harbourside shopping centre and her desire to speak to them as friends on these occasions. I do not accept the late trading of the store was motivated by greed.
2. The offences should be viewed as a continuing course of conduct, that is, a disregard for the law for approximately 14 days. The situation should be distinguished from one where there had been an earlier conviction or contact with the authorities followed by continuing disobedience.
3. The appellant is a 53 year old woman who immigrated from China in 2011, I am satisfied that the offences occurred from a misplaced sense of loyalty to other people employed at the shopping centre and possibly work ethic rather than financial gain. I am satisfied the appellant has learnt from the experience of being charged and being dealt with by the courts.
4. The business has suffered considerably from the construction work at Darling Harbour that commenced last year and is expected to complete in late 2016. The downturn in trade has required the appellant's husband to inject further considerable funds into the business to keep it afloat until the construction work ends.
5. The imposition of large fines and costs on the appellant would require that punishment to be borne at least in part by the appellant's husband and her children who are of school age.
6. The s 9 offences are regulatory offences and would ordinarily be dealt with by way of an imposition of a fine. For the two most serious offences of 24 January 2015 and 30 January 2015 the appropriate fine would be $1,100. For the other offences the appropriate fine would be $550 per offence.
7. The appellant and her daughter gave evidence that the appellant has a limited capacity to pay. The appellant lives in Sydney with two children of school age. She works in the business and was paid a wage for the last two financial years of approximately $20,000. Her daughter works in the business and is paid approximately the same. She has employed a casual employee who is paid slightly less.
8. The appellant's husband runs a business in China and resides there. The money to purchase the business and also to keep it afloat comes from the appellant's husband. The appellant has an apartment in Sydney in her name which is subject to a mortgage which is paid for by her husband.
9. I am required to have regard to s 6 of the Fines Act 1996 before imposing a fine. Where an offender seeks to have a fine reduced on the basis of a limited capacity to pay he or she bears the evidentiary onus of convincing the Court that it should exercise its discretion to limit the amount of the fine. The offender's capacity to pay is relevant but not decisive, Jandideh v R [2014] NSWCCA 178, para 16. A substantial fine may still be warranted as a result of the seriousness of the offence and the need for general deterrence.
10. On the basis of the evidence I accept that the appellant has a limited capacity to pay any fines that may be imposed or the prosecution's costs. A sentence must always be linked to the particular circumstances of the offender as well as the particular circumstances of the offence. A sentence derives its character of justice or injustice from a combination of those two factors.
11. The principle of totality should be applied in the context of this case. The s 9 offences are of course a single course of conduct. The totality principle is designed to ensure that aggregate penalties are not oppressive or crushing. I must have regard to the prosecution's costs as part of the financial penalty imposed.
12. The prosecution seeks an order for costs in the sum of $7,870.70. The appellant contends that is too high and is not just and reasonable. I have had regard to the accounts that were tendered in the Local Court. In short there were fees charged for the drafting of the court attendance notice in the sum of about $3,000. Those charges can clearly not be justified.
13. Taking into account all of the matters referred to in those accounts and progressed the matter before the Local Court I would assess a just and reasonable amount for the prosecution's costs in the sum of $4,000.
14. In assessing penalty I have also taken into account the extra curial punishment involved in the loss of trade for the three day period when the till system was seized, together with the fact that a strike will be incurred against the licence that will last for a three year period. The extra curial punishment of the strike provided for by the Liquor Act will serve the purpose of ensuring that the appellant is compliant with the Liquor Act in the future.

PENALTY

1. In relation to the s 34 offence the Court finds the offence proven. Because of the trivial nature of the offence and the circumstances of it, having reference to the objective circumstances which I have outlined, together with the appellant's lack of understanding of English, I deem it inexpedient to inflict any punishment. The charge is dismissed under s 10 of the Crimes (Sentencing Procedure) Act 1999.
2. In relation to the s 9 offences, taking into account all the relevant matters, including the objective seriousness, deterrence, totality and capacity to pay, the appropriate penalty is one that involves a total financial penalty of $4,000.
3. Accordingly, I intend to deal with the various offences as follows:
4. In relation to the offence of 24 January 2015 the appellant is convicted. Pursuant to the terms of s 10A of the Crimes (Sentencing Procedure) Act 1999 I impose no further penalty.
5. In relation to the remaining s 9 offences the Court finds the offences proven. Because the offences were a continuing course of conduct that is dealt with by reference to the conviction in respect of the matter occurring on 24 January 2015, together with the order I intend to make for costs, I deem it inexpedient to inflict any punishment. Those charges are dismissed under section 10(1)(a) of the Crimes (Sentence Procedure Act) 1999.
6. I order that the appellant pay the prosecution's costs in the sum of $4,000.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 02 December 2015