Chapter 16 Passenger Transport Law INTRODUCTION 5 10 15 20 25 30 35 Transport law is a complex area of law covering the carriage (transport) of passengers and their luggage, as well as the carriage of other peoples' goods, freight and cargo. Persons wanting to operate passenger transport businesses in New Zealand, such as airport shuttles, tour buses or private charter aircraft, face a variety of legal obligations and need to be aware of their responsibilities to the public and their legal liability. This chapter explores road, rail, air and sea transport, and examines the different legislative backgrounds and regulatory requirements. HISTORICAL COMMON LAW RIGHTS AND DUTIES In the past, under common law, a strict set of rights and duties for common carriers evolved. Common carriers are organisations that undertook the business of providing transport services on standard terms to the general public. Transport services included coaches, taxis, railways, ships, fairies and aircraft. Common carriers differed from private carriers in that private carriers would select passengers, and strike special bargains or contracts with each passenger (Atherton & Atherton, 1998). Under common law, organiszations declared common carriers had a number of rights and duties, including: Duty to accept passengers- carriers had a duty to carry anyone willing to pay and ready to travel on the carrier's usual route. They could not be selective about their passengers; however they could refuse if a person was intoxicated or otherwise unfit to travel or if there was no space left. Duty to avoid delay and deviation - carriers had to carry their passengers to their destinations by the usual route, without unnecessary deviation and without unreasonable delay. Duty to account for the safety of their passengers - carriers had a duty to take reasonable care of the safety of their passengers and carriages had to be free from defects. Duty to accept luggage - carriers had a duty to carry passengers' luggage without extra charge, but had the right to set reasonable limits and could charge extra for excess luggage. Responsibility for luggage - carriers were held strictly liable for loss or damage to passengers' luggage. Their only defences were: o Acts of God - natural forces that could not reasonably be foreseen or guarded against e.g. earthquakes or floods o Inherent vice - inherent fault or defect in the luggage o Passengers' fault - items worn by the passenger or which were in their pocket were not regarded as luggage, and common carriers were not responsible for them. Lien over luggage - carriers had the right to retain possession of goods until charges for carriage were paid. Transit - carriers' rights and duties only applied during transit and did not extend beyond the vehicle and into the terminal facilities. Given these rights and obligations, it is easy to see why carriers would try to contract out of their duties by including special terms to give them limited liability or to exclude them from liability altogether. Passengers also faced difficulties. If they wished to make a claim against a carrier, they had to sue in contract or tort, which was expensive and time-consuming. As a result, in New Zealand, clear legislation has been developed to provide simpler remedies for situations arising out of different forms of transport. These are outlined below. 5 REGULATION OF TRANSPORT IN GENERAL 10 On a national level, the Ministry of Transport is responsible for any transport legislation. It aims to provide a good, safe and sustainable transport system, considered fundamental to the well-being of every New Zealander (Ministry of Transport, 2004). The Ministry of Transport is responsible for land, sea and air transport, under the guidance of these departments: Civil Aviation Authority (air) Land Transport Safety Authority (land) Maritime Safety Authority (sea) Each of these authorities is discussed in this chapter, along with other relevant international bodies. 15 REGULATION OF LAND TRANSPORT Roads in New Zealand are either controlled by local territorial bodies or Transit New Zealand. These two authorities provide the access required to operate passenger service vehicles and to aid the burgeoning tourism industry. On a national level, the Land Transport Safety Authority (LTSA) is responsible for any land transport regulation. 20 25 30 35 40 Passenger Service Vehicles The LTSA defines passenger service vehicles as (LTSA, 2004a): Vehicles used in passenger service (no matter how may seating positions they might have) Vehicles with more than 12 seating positions (whether they are used for hire or reward or not) Heavy motor vehicles with more than nine seating positions (whether they are used for hire or reward or not) Passenger service vehicles are vehicles used in operations where carrying passengers is an integral part of the business, and can include buses, taxis and shuttles. Rental vehicles can also be called passenger service vehicles when they have more than 12 seating positions or if they are hired by passenger service licence holders (LTSA, 2004a). Requirements All passenger service vehicles must meet the requirements of the Land Transport Rule: Passenger Service Vehicles 1999. This rule covers design, construction and maintenance requirements of all passenger service vehicles in New Zealand. It has been in force since 1 September 1999 and ensures that passenger service vehicles meet general safety requirements and vehicle standards (Land Transport Rule: Passenger Service Vehicles 1999). Passenger service vehicles have to be inspected to ensure they meet the requirements of the Passenger Service Rule before they are registered. Ongoing checks must be undertaken to gain a Certificate of Fitness. Vehicles are inspected to make certain the vehicle standards and other safety requirements of that vehicle class are met and also to ensure that the requirements of the Passenger Service Rule are met (LTSA, 2004a). Operators 5 10 To operate a passenger service vehicle, drivers must also have a P endorsement to carry passengers. Typical holders of P endorsements include drivers of buses, shuttles and taxis. In order to gain a P endorsement, drivers must undertake an approved course, subject to a fit and proper person test, agreeing to an eyesight test and obtaining a medical certificate. A fit and proper person check looks at factors, such as (LTSA, 2006): Criminal convictions (including murder, sexual offences and certain Crimes Act provisions, s 29A(2) Land Transport Act) Transport related offences History of mental health and behavioural problems Past complaints about a transport service the applicant has operated History of persistent failure to pay fines for transport-related offences. Logbooks 15 20 25 30 35 40 Another method of ensuring that passengers are protected is through the use of logbooks. Logbooks provide a record of a driver's work activity, which allows enforcement officers to check compliance with driving hours requirements. Driving hour requirements state that no driver may (LTSA, 2006): In any cumulative work day (defined as being a period of work that begins after a continuous rest time of at least 10 hours) exceed 13 hours of work time In any cumulative work period (defined as being a set of cumulative work days between continuous periods of rest time of at least 24 hours), exceed 70 hours of work time. Log books are required from passenger service vehicles unless the vehicle is subject to approved rosters of timetabled services over distances of no greater than 100 km from terminal to terminal (e.g. buses). Rights and Responsibilities of Taxi and Shuttle Drivers The LTSA outlines various rights and responsibilities for taxi and shuttle drivers and their passengers. It aims to ensure that passengers can expect their driver to (LTSA, 2006): Display, inside the taxi, an ID card with their photo Act in an orderly, clean and civil manner Identify the vehicle by displaying the company name, company telephone number and fleet number or licensee number in English and in Braille Demand no more than the exact amount of the fare and any other charges Display a registered fare schedule Provide fare information when asked Provide a receipt for the fare if asked Carry reasonable quantities of luggage - with appropriate care Check the vehicle for left property immediately after each hire and report it to their office or the Police If it is a taxi, you can also expect the driver to (LTSA, 2006): Take the passenger to their destination in the shortest or most convenient route Not allow people other than the hirer to ride in the taxi, without the original hirer's permission Inform them of any change in tariff for multiple hire 5 10 15 Use the fare meter correctly, without any intent to deceive or tamper Have an extensive area knowledge and communicate in English In return, drivers have the right to refuse to carry passengers on reasonable grounds, when they consider (LTSA, 2002): Their personal safety would be threatened or endangered Passenger are under the influence of drugs or alcohol Passengers are in a filthy condition Passenger are consuming food or drink Passengers are noisy, violent or is disturbing the public peace Passengers are accompanied by animals, unless they are guide dogs Passengers do not have enough money for the journey (when drivers have asked for payment in advance) There are more passengers wishing to travel than the number stated on the vehicle's loading certificate. Accidents If an accident occurs whilst taking a form of road transport, the provisions of the Accident Compensation Scheme (ACC) apply. This system provides a 24-hour, no-fault personal accident cover. However, passenger service organizations also have insurance to cover such situations. International Road Transport Union 20 25 The International Road Transport Union assists bus and coach, as well as taxi and truck operators throughout the world. It does this by providing practical services to the industry. For example, it has a coach and tourism section, which provides rating systems for coaches, standard agreements for coach operators and a code for tourist coaches. In providing such services, it aims to attain to the highest professional standards, improve the safety record and environmental performance of road transport, and safeguard the mobility of people and goods (International Road Transport Union, 2004). REGULATION OF RAIL TRANSPORT 30 35 40 In New Zealand, rail transport is also regulated by the LTSA, which controls about 70 organisations that operate railways and tramways around the country. The operators fall into three main groups (LTSA, 2000a): Network operators - commercial operators with extensive routes Heritage operators - vintage trains on short, dedicated railways or excursion trips on the main networks Industrial operators - railways serving the needs of factories or stores; based on localised sites with connections to main networks The LTSA regulate the railways by (LTSA, 2000a): Licensing rail operators Approving new railway operations Auditing current railway operations Approving operational changes. Regulation is enforced through three key Acts: The Railway Safety and Corridor Management Act 1992 - provides for the safety of rail services operating in dedicated railway corridors The Transport Services Licensing Act 1989 - requires the granting of rail service licences to rail service operators after safety systems for rail services are approved The Land Transport Act 1998. Rail Safety Systems 5 10 15 20 25 30 35 40 Rail safety systems are particular applications of management systems. They defines standards and procedures consistent with accepted good railway operating practices, and regulate control mechanisms to ensure all staff and contractors have access to the current information so as to carry out their duties effectively (LTSA, 2000b). There is no one universal safety system that must be implemented for railways nor is there a suitable arrangement for any given type of rail operation. Rather, systems are developed to match particular features of individual operations and their organisations. The key principle behind safety regimes is that organisations that creates the risk carry the responsibility (LTSA, 2000b). Minimum Requirements Minimum requirements for rail safety systems, as set out in the Transport Services Licensing Act 1989 (s 6B(2)), include: Standards proposed as part of the safety system Procedures for ensuring compliance with such standards by the rail service operators and persons for whom the operators are responsible Procedures for ensuring compliance with such standards by other rail service operators using the same railway line Reporting systems for recording, reporting and retaining details of every accident or incident that occurs on the rail service Management system or structure responsible for implementing and maintaining the safety system Standards of training and experience required by drivers of rail service vehicles Proposed scope of each regular audit under the Transport Services Licensing Act s 39I and the procedures to be followed in auditing the proposed safety system Names and qualifications of auditors proposed under the Transport Services Licensing Act s 39G Such other matters as may be prescribed These safety requirements must be set out so that a Rail Service Licence can be granted to any person or organisation wishing to operate a rail transport service. Once in operation, safe systems must be audited once a year to make sure they are being carried out effectively. Operators are legally liable for the safe operation of their railways. As such, they ought to take out public liability insurance against any unforeseen event, particularly operators that carry passengers (the general public). International Union of Railways (UIC) The International Union of Railways provides guidance of railways globally. Established in 1922, it aims to create uniform conditions for the establishment and operation of railways. It promotes cooperation among its 162 members from all five continents and carries out activities that develop international transport by rail. To achieve its aims, UIC prepares international specifications and standards and encourages state-of-the-art technology and new management methods (UIC, 2004). REGULATION OF SEA TRANSPORT Maritime Safety Authority (MSA) 5 The Maritime Safety Authority is a New Zealand agency that promotes a safe maritime environment, and seeks to provide effective marine pollution prevention and an effective marine oil pollution response system at a reasonable cost (MSA, 2004). Its key job is to carry out the requirements of the Maritime Transport Act 1994. Maritime Transport Act 1994 10 15 20 This Act sets out key responsibilities for boat/ship operators, including that every participant shall (s 17): Ensure that the appropriate maritime documents and all necessary qualifications and other documents are held by that person Comply with the Act, regulations to the Act, maritime rules, and conditions attached to relevant maritime documents Ensure that the activities and functions of the maritime document granted (e.g. fishing, commercial) are carried out by the participant in a responsible, safe manner in accordance with prescribed safety standards and practices If required: o Establish and follow a management system to ensure compliance with the safety standards and conditions o Provide training and supervision so as to maintain compliance with the safety standards and conditions and promote safety o Provide sufficient resources to ensure compliance with the relevant safety standards and conditions Master of the Ship Responsibilities 25 30 Masters of the ship have extended responsibilities, including (s 19): Being responsible for the safe operation of the ship, the safety and wellbeing of all passengers and crew and the safety of cargo carried Having final authority to control the ship and the maintenance of discipline by all persons on board Being responsible for compliance with all relevant requirements of the Act, regulations and maritime rules, except in an emergency when, in the interests of safety, immediate action that might breach any of the above is necessary Where there is an emergency situation and a breach of safety standards occurs, the directors of the action must as soon as practicable notify the authorities of the action and circumstances Obligations 35 40 Specific obligations exist for maritime accidents and incidents. Under s 31 of the Act, masters of any New Zealand or foreign ship in New Zealand waters that is involved in a mishap which results in serious harm should notify the mishap to the Maritime Safety Authority as soon as practicable. This obligation applies to any persons who operate, maintain or service a New Zealand or foreign ship or maritime product. The obligation allows the Maritime Safety Authority to monitor accidents and facilitates the prevention of future ones. A special duty also exists to assist persons in danger and 5 10 respond to distress calls (s 32). Masters of the ship must, without serious danger to the ship or persons on board, do the following: Render assistance to any persons found at sea in danger of being lost After a collision, render assistance to the other ship, its crew and passengers After a collision, inform the other master of the name of their ship, its port of registry and the nearest port at which it will call. Where a signal has been received that another ship, aircraft or survival craft is in distress, masters must: Proceed with all speed to the assistance of the persons concerned and inform them they are doing so Comply with any request of the ship in distress while continuing at speed to the assistance of persons in distress. Failure to do so can result in a fine or imprisonment. Maritime Offences 15 Offences in relation to maritime activity include: Unnecessary danger caused by holders of maritime documents through acts or omissions that causes unnecessary danger or risk irrespective of whether or not injury or damage occurs (s 64) Dangerous activity involving ships or maritime products (s 65) Acting without necessary maritime documents (s 68) Limitation of Liability 20 25 30 35 40 For offences under the Act, there can be a limitation of liability for (s 85): Masters, seafarers or other persons whose act, omission, neglect or default - the owner of the ship is responsible for Any employee of the salvor - the salvor must accept responsibility However, no person shall be entitled to limitation of liability resulting from a person's personal act or omission where the act or omission was committed with intent or recklessly and with the knowledge that such loss or injury would probably result. Claims subject to the limitation include (s 86): Loss of life or personal injury Loss of or damage to property (including damage to harbour works, basins and waterways, and aids to navigation) Claims relating to loss or damage resulting from delay of cargo, passengers or luggage Claims resulting from the infringement of rights, other than contractual rights, connected with the operation of the ship or salvage operations Claims for raising, removing, destroying or rendering useless a ship which is sunk, wrecked, stranded, or abandoned Claims for the removal, destruction or rendering useless of the cargo of a ship Claims for measures taken in order to avert or minimise any loss or injury or damage for which the person liable is entitled to limitation of liability The limitation is calculated by the weight of the ship and setting a number of units of account that can be claimed (s 87). International Maritime Organisation (IMO) The International Maritime Organisation plays a role in the international regulatory aspects of shipping, in particular safety, technology, navigation, trade, pollution and liability of passengers. 5 10 Established in 1948, its purpose is to encourage cooperation among Governments in terms of governmental regulation and practices relating to technical matters that affect shipping engaged in international trade. It also encourages and facilitates adoption of the highest practicable standards in maritime safety, efficiency of navigation and prevention and control of marine pollution from ships (IMO, 2004). IMO is responsible for a number of significant conventions embedded in the New Zealand Maritime Transport Act 1994 including: International Convention for the Safety of Life at Sea International Convention for the Prevention of Pollution from Ships 1973 International Convention on Standards of Training, Certification and Watchkeeping for Seafarers 1978 REGULATION OF AIR TRANSPORT Civil Aviation Authority (CAA) 15 20 Air transport in New Zealand is regulated through the Civil Aviation Authority, which controls the passage of aircraft over New Zealand territory. In New Zealand there is no general freedom of the air. With about 9000 pilots and 3350 aircrafts carrying 4.5 million passengers on domestic airways and 2.69 million people overseas, it is important to have an authority that oversees the safety and security of the flights (Civil Aviation Authority, 2004). CAA's vision is to make New Zealand aviation free from safety failure by establishing aviation safety and security standards, and monitoring adherences to those standards. Civil Aviation Act 1990 25 30 35 40 The main Act that regulates air transport is the Civil Aviation Act 1990. This Act applies to every (s 4): Person, aircraft, aerodrome, aeronautical product, air service and aviation related service in New Zealand New Zealand registered aircraft whether in or outside New Zealand Holder of an aviation document while outside New Zealand and exercising or purporting to exercise privileges accorded by that document Every foreign registered aircraft operating in New Zealand. The Act sets out general requirements for participants in the civil aviation system including that every person (s 12): Shall possess aviation documents and all necessary qualifications and documents required Shall comply with this Act, the rules made under the Act, and conditions attached to any aviation documents Shall ensure that the activities or functions for which the aviation document has been granted are carried out safely and in accordance with safety standards and practices Who authorises the provision of service within the civil aviation system shall: o Establish and follow a management system that ensures compliance with safety standards and conditions o Provide training and supervision to all employees so as to maintain compliance with the safety standards and conditions and to promote safety o Provide sufficient resources to ensure compliance with safety standards and conditions 5 The Minister of Transport can also make rules in the interests of safety or security in the civil aviation system (s 29). These rules can relate to: Providing for the use of aerodromes and other aviation-related facilities General operating rules, air traffic rules and flight rules Providing for the control of things likely to be hazardous to aviation safety Warsaw Convention 10 The Act incorporates schedule four of the Warsaw Convention. The Warsaw Convention was signed in October 1929 and sought to achieve international uniformity in air carriers' liability and documentation for air transport, so that growth in the industry could be encouraged through promoting investment and limiting the taking of financial risks. The Warsaw principles apply to all international carriage of persons, baggage or cargo performed by aircraft for reward (Article 1). The following section looks at specific sections under the Warsaw Convention and the liability imposed. Passenger tickets 15 20 Under Article 3, all passengers must be presented with a ticket containing the following information: Place of departure and destination Notifications of stops in other countries, where applicable Notice that the Warsaw Convention may be applicable and that, in most cases, the Convention limits of liability of carriers for death or personal injury The ticket the passenger is given is evidence of the conditions of the contract of carriage and the absence, irregularity or loss of the ticket will not affect the validity of the contract of carriage. Baggage check 25 30 Article 4 of the Convention requires a baggage check to be delivered and, unless combined with the contents of the passenger ticket, sets out: Place of departure and destination Notification of stops in other countries, where applicable Notice that the Warsaw Convention may be applicable and that, in most cases the Convention limits of liability of carriers for loss of, or damage to baggage. The baggage check the passenger is given is evidence of the conditions of the contract of carriage and baggage, and the absence, irregularity or loss of a check will not affect the validity of the contract of carriage. Cargo 35 40 Where cargo is being shipped, an airway bill must be presented (Article 5). The airway bill must contain: Place of departure and destination Notification of at least one place the cargo will stop at, where applicable Indication of the weight of cargo (Article 8). The air way bill or a receipt for cargo is evidence of the acceptance of the cargo and the conditions of carriage (Article 11). Statements in the airway bill relating to the weight, dimensions and packaging and number of packages are evidence of the facts. The quantity, volume and condition statements do not constitute evidence against the carrier. Liability of the Carrier 5 10 15 20 The liability that carriers face is extensive and includes: Damage sustained in the event of death or injury of a passenger or any other bodily injury when an accident took place on board the aircraft or when getting on or off (Article 17) The destruction or loss of, or damage to any registered baggage when the damage took place during carriage by air (Article 18) The destruction or loss of, or damage to any cargo when the damage took place during carriage by air (Article 18) Delay in carriage by air of passengers, baggage or cargo (Article 19) unless it can be shown that the carrier took all necessary measures to avoid the damage or that it was impossible to take such measures (Article 20) Carriers are not liable for the destruction, loss or damage to cargo where they can prove (Article 18): Inherent defect, quality or vice of the cargo Defective packaging of the cargo by a person other than the carrier and its agents An act of war or armed conflict An act of public authority (government officials checking contents) Article 21 also provides that carriers can be removed from liability, if they can prove the damage was caused or contributed to by the negligence of the person who suffered the damage. Under any of these articles, carriers face a limited amount of liability. These values are incorporated in supplementary conventions to the Warsaw Convention, which have also been included in the Civil Aviation Act 1990. International Civil Aviation Organisation (ICAO) 25 30 35 40 Internationally, there are two organisations that are concerned with aviation. The first is the International Civil Aviation Organisation. ICAO was formed in November 1944, as a means to secure international co-operation on issues such as uniformity in regulations and standards, and procedures and organisation regarding civil aviation matters (ICAO, 2004). The constitution of ICAO is the Convention of International Civil Aviation, of which New Zealand is a signatory and contracting State. Its current work involves standardization, including establishing international standards and recommending practices and procedures. More recently, it has developed a satellite-based system concept to meet the future needs of civil aviation (namely outer space). Part of its work is to undertake regional planning throughout its nine geographical regions, taking into consideration the financial and technical resource variations between nations. Another aim is to unify the development of a code of international air law to ensure general acceptance (ICAO, 2004). However, this is a balancing exercise, as each country has its own geography, demographics and safety culture. Some countries, like New Zealand, do not apply all the ICAO's rules if they are perceived to compromise safety or other standards. Freedoms of the Air At its inception, ICAO established a number of freedoms of the air. These allowed for various rights and privileges to be accorded (ICAO, 2003). However, not all countries prescribe to the following conventions: 5 10 15 20 25 30 First Freedom of the Air - right to fly across another State's territory without landing i.e. to fly over another country. Second Freedom of the Air - right to land in another State's territory for non-traffic purposes e.g. refueling. Third Freedom of the Air - right to take on, in the territory of another State, traffic destined for the home State of the carrier. Fourth Freedom of the Air - right to put down and take on in the territory of another State, traffic coming from or destined to another State. Sixth Freedom of the Air - right of transport, via the home State of the carrier, traffic moving between two other States i.e. Traffic not returning to the home State, but going to another State. Seventh Freedom of the Air - right to transport traffic between two States by flying over a third, without the requirement to include the third State in the operation. Eighth Freedom of the Air - right of transport cabotage traffic between two points in the territory of the State, on a service originating or terminating in the home country of a foreign carrier. Ninth Freedom of the Air - right of transport cabotage traffic on a service performed entirely within the territory of the granting State. Note: The term cabotage refers to the carriage of traffic between two points in one country via the airline of another country. Many of these freedoms are negotiated through specific agreements and between countries. International Air Transport Association (IATA) The second main international organisation is the International Air Transport Association. IATA was founded in April 1945, with the hope of benefiting the world's consumers by promoting safe, reliable, secure and economical air services. With 270 members from more than 140 nations, IATA brings together most airlines around the world. IATA consumers and commercial businesses gain from simplified and lowerpriced tickets and shipping costs. IATA allows airlines to operate more efficiently by offering a sharing of resources beyond the scope of any single airline. This leads to new opportunities, reduced costs and helps resolve problems. IATA creates working standards for the aviation industry that foster safe and efficient transport, and Governments find it a useful medium to work through when dealing with airlines (IATA, 2004). CONSUMER PROTECTION LAW 35 In some cases, consumers can receive protection under the Consumer Guarantees Act 1993 and the Fair Trading Act 1989. These two statutes cover the provision of services which incorporate any passenger transport. More details in relation to the workings of these Acts are found in chapter eight: Consumer Protection. CONCLUSION The laws, rules, regulations and international conventions for transport have on main objective andthat is to ensure the safety and security of passengers and cargo. This trust is important for the growth and development of the transport industry and tourism. It is important to consider the implications of the transport that we are using and more specifically what regulations transport operators must comply with and that they ought to adhere to them, if they want the public to support their services. 5 10 Discussion: 1. Who are common carriers and what were their rights and duties at common law? 2. What is the Civil Aviation Authority and where are the rules and obligations for air transport set out? 3. Discuss the different freedoms of the air that exist. 4. IATA and ICAO are both concerned with air transport regulation. Compare and contrast their roles within the regulation of air transport. Chapter 14 Liquor Licensing INTRODUCTION 5 For many hotels, motels, restaurants, bars and cafes, liquor legislation rules govern part of their everyday operations - in the selling of alcohol and in dealing with those who consume it. This chapter provides a general introduction to the requirements of liquor licensing laws in New Zealand, and addresses the legal framework for liquor licensing, the types of licences available and the practical applications of host responsibility. SALE OF LIQUOR ACT 1989 10 15 20 25 30 The Sale of Liquor Act 1989 governs the sale of alcohol to the public. The object of the Act is to \"establish a reasonable system of control over the sale and supply of liquor to the public with the aim of contributing to the reduction of liquor abuse, so far as that can be achieved by legislative means\" (s 4). Liquor is defined as anything that contains 1.15% or more of alcohol by volume (s 2). The intention of the Act is to reduce liquor abuse by establishing reasonable controls over its sale and supply. This is achieved by ensuring that premises selling liquor are controlled by a system of licensing (s 6) and that the premises reduce liquor abuse by being responsible hosts. The Act applies to anyone who wishes to sell liquor (s 5), although there are a few exceptions, including the defence forces, chemists, perfumeries and police canteens. These are usually covered by their own Acts. The section: \"One is not obliged to sell liquor to anyone\" (s 15) appears straightforward but, in fact, may be subject to the Human Rights Act 1993. In other words, it is wrong to discriminate against selling a person alcohol on the grounds of sex, martial status, religious beliefs, ethical beliefs, colour, race, ethnic or national origin, disability, age, sexual orientation, political opinions, employment status or family status (Human Rights Act 1993, s 21). Licensees cannot sell liquor to a prohibited person. Prohibited persons are considered in s 2 of the Sale of Liquor Act 1989 as: Minors (those under 18 years of age) Intoxicated persons Unauthorised persons To ensure that minors are not served alcohol, three types of evidence of proof of age are considered acceptable (s 2A): New Zealand or overseas passports HANZ 18+ card New Zealand Drivers Licence. LICENCES 35 Any premises wanting to sell alcohol must possess a licence. There are four different types of licences: On-licence Off-Licence Club licence 5 10 15 Special licence. A process must be followed to gain licences. They can be obtained through two bodies: the Liquor Licensing Authority (LLA) and the District Licensing Agency (DLA). Most licences are gained through the DLA, which is a local authority e.g. Hamilton District Council. DLAs receive all licence applications, obtain reports (s 100) and then decide whether to grant a licence. Licence are initially issued for a period of 12 months. DLAs also administer Manager's Certificates and Temporary Authorities, discussed below. Once a licence application has been submitted, two newspaper notices must appear, no less than five days and no more than ten days apart (s 2). DLAs obtain reports from various parties that have an interest in ensuring the object of the Act is upheld. They seek reports from the local Police (for all applications), the public health board (for on-licences and club licences only) and the licensing inspector (for all applications). If an application is opposed, it is sent to the LLA, which is a division of the Department of Courts, located in Wellington. The LLA also considers appeals from the DLA. It hears the facts of a case and then makes a decision based on those facts. This is usually done by a panel of three or four people, one of which is a District Court Judge. Licences can be renewed through the DLA, in a similar way to the initial process. Renewed licences are valid for a period of three years. If, however, objections made they are forwarded to the LLA for review. Licences must be renewed before they expire. ON LICENCES 20 25 30 35 40 On-licences authorise the holders to sell and supply liquor on the premises for consumption on the premises (s 7). These licences apply to restaurants, bars, and cafes that sell liquor on their premises. They are, however, subject to a number of conditions contained in s 14. Anyone over the age of 20 years can hold an on-licence. Companies, partnerships and body corporates can hold on-licences (s 8), but they cannot be held by clubs. Before an on-licence is granted, the DLA takes into consideration the following criteria (s 13): Suitability of applicant Days and hours requested Food supplied Non-alcoholic beverages Low-alcoholic beverages Transport options Other services Strategies for not selling liquor to prohibited persons Areas to be restricted, supervised or undesignated Other significant matters raised in the reports Once the above criteria have been considered, the DLA can impose mandatory and discretionary conditions under s 14 of the Sale of Liquor Act 1989. These include: Mandatory conditions: A range of non-alcoholic refreshments to be provide (always imposed and never changes) No liquor to be sold on Good Friday, Easter Sunday, Christmas Day and before 1pm on Anzac Day (hotels and taverns) Can designate the whole or part of the premises restricted or supervised (hotels and taverns). 5 10 Discretionary conditions: Days and hours Food and appropriate signage Additional designations Prohibited persons Low-alcoholic beverages Transport options Matters promoting responsible consumption Type of person (authorised persons). Once a licence has been approved, a manager must be appointed (s 26) and must be on duty whenever the premises are open for the sale of liquor (s 115). Section 28 of the Act allows premises to sell liquor with endorsed on-licences, otherwise known as BYO licences. Holders of endorsed on-licences can sell liquor with food or hot beverages. Holders of such licences does not need managers. OFF LICENCES 15 20 25 30 35 40 Off-licences authorise the sale of liquor to any person who consumes liquor off the premises (s 29). These licences apply to supermarkets, bottle shops and wholesale liquor stores. As with on-licences, they are subject to a number of conditions. Under s 30, anyone over the age of 20 years can hold an off-licence, as can partnerships, companies and chartered clubs. Any type of premises can hold an off-licence except dairies, petrol stations or sports clubs (s 36). Criteria examined when assessing suitability for an off-licence include: Suitability of applicant Days and hours Low-alcoholic beverages Prohibited persons Other matters Once the criteria have been considered, the DLA can impose mandatory and discretionary conditions under s 37. These include: Mandatory conditions: No liquor can be sold or delivered on Good Friday, Easter Sunday, Christmas Day and up to 1pm on Anzac Day Clubs that have off- licences can only sell to members of their club Supermarkets and grocery stores can only sell wine and beer. Discretionary conditions: Days and hours Designations Liquor not to be sold to minors or intoxicated persons Type of person Off-licensees do not have an obligation to serve alcohol to anyone, subject to the Human Rights Act 1993 (s 38), but the do require a manager (s 49). A special provision under s 51 allows caterers to supply liquor in conjunction with the sale of food outside their normal licence conditions. An auctioneer is also authorised to sell liquor by auction, in the course of his or her business as an auctioneer (s 52). CLUB LICENCES Club licences allow the sale of liquor to three different types of people: 5 10 15 20 25 30 Club members Guests accompanied by club members Members of clubs with reciprocal visiting rights. Any club can hold a club licence, although clubs are not allowed to contract out or privatise the bar operations. The licence requires that all profits from the sale of liquor must belong to the club (s 54). The DLA considers a variety of criteria before deciding to grant a licence to a club: Suitability of applicant Days and hours Food supplied Non-alcoholic beverages Low-alcoholic beverages Transport options Prohibited persons Areas in club Number of club members who are minors. Once the criteria have been considered, the DLA can impose mandatory and discretionary conditions under s 60. These include: Mandatory conditions: Must always have a secretary Must inform the DLA of a change of secretary within 10 days All proceeds from the sale of liquor must go back to the club Must offer a range of non-alcoholic refreshments Discretionary conditions: Days and hours Food and signage Transport options Prohibited persons Designations Low alcoholic beverages Responsible consumption Type of person Clubs do not have an obligation to serve alcohol to everyone, subject to the Human Rights Act 1993 (s 61). They also require a manager (s 71). 35 SPECIAL LICENCES 40 Special licences are available for special events not covered by any other licences. They can be granted on any one day, or for any time up to a 12 months. The licence is issued to the person selling the liquor and that person does not necessarily have to be a certified manager or licensee. The minimum age to obtain a special licence is 20 years (s 75). There are two types of special licences: 5 10 15 20 25 30 35 40 A licence which authorises the holder of the licence to sell and supply liquor on a particular premise not already licensed (s 73) A licence that allows on-licence or club licensees the ability to sell and supply liquor outside the authorised operating hours to persons attending a social gathering (s 74) If there is likely to be an objection, it is recommended that the person applying for the licence place a public notice in the local newspaper, although this is not a prerequisite (s 76). The DLA consider a variety of criteria before deciding to grant a licence (s 79). These include: Type of event Suitability of applicant Days and hours Premises Once the criteria have been considered, the DLA can impose mandatory and discretionary conditions under s 80 of the Sale of Liquor Act 1989. These include: Mandatory conditions: Non alcoholic refreshments must be available Discretionary conditions: Days and hours Food and signage Designations Steps regarding prohibited persons Exclusion of public if necessary Low-alcoholic beverages Transport options Matter promoting responsible consumption Containers in which liquor can be sold They also have no obligation to serve alcohol to everyone, subject to the Human Rights Act 1993 (s 81). If a special licence is made in the name of a company or partnership, a manager must be appointed but, if it is an individual, a manager is discretionary (s 84). DESIGNATIONS Often, conditions in licences specify designations within the premises. If there are no designated areas, then the whole area is undesignated. Types of designations are defined in s 2 as: Restricted- no one under the age of 18 years is allowed in the area. Usually found in hotels and taverns with public bars Supervised- children under 18 years of age are allowed in the bar only when accompanied by a parent or guardian. The parent or guardian can purchase alcohol for the minor, who may consume it in their company. Usually found in hotels and taverns, most bars, night clubs, sports centres and some on-licensed premises Undesignated- any one under 18 years of age is allowed in the bar without a parent or guardian. If they wish to consume alcohol, their parent or guardian must purchase if for them. MANAGEMENT OF LICENSED PREMISES 5 10 15 20 25 30 Most licences require a manager to be on duty. Managers must hold a valid manager's certificate. There are two types of manager's certificates: General Manager's Certificates- qualifies persons to manage any licensed premises Club Manager's Certificates- only qualifies persons to manage the sale of liquor in clubs Just as with licences, the DLA takes into consideration a number of factors when considering whether to grant a manager's certificate to applicants (s 121): Qualifications Experience (must be recent) Character and reputation Convictions Any other relevant matters. Holders of a General Manager's certificate must have prescribed qualifications, including specific unit standards on the Sale of Liquor Act and host responsibility (s 117A). In future, the prescribed qualification will be a Liquor Controller's qualification. Once granted, manager's certificates are valid upon issue for one year and upon renewal for three years. A manager holding a General Manager's Certificate must be on duty at all times (s 115). The name of the manager must be displayed prominently inside the premises. Managers must be responsible for compliance with the Act and licence conditions (s 115). Sometimes, a manager cannot be on-site. Under s 128, a temporary manager can be appointed. Valid reasons for a temporary manager include illness, absence, dismissal or resignation. A temporary manager cannot hold this responsibility for more than 48 hours. If a manager is required for a period of more than 48 hours, an acting manager must be appointed under s 129. The acting manager must apply for a manager's certificate while being an acting manager. Valid reasons for having an acting manager include holidays, absence or illness. Any licensed premises can have an acting manager for up to three weeks at a time, but for no more than six weeks per 12 months. When appointing an acting manager, the DLA, LLA and Police must be notified by letter stating who the person is, the reason for their appointment, the time period, and the premises where they will be acting manager. SIGNAGE AND NOTICES 35 40 To assist in carrying out the aim of the Sale of Liquor Act 1989, signs and notices must be displayed in various locations. These signs are beneficial for staff, as they help verify communication with patrons. The signs required for each licence are: On licence: Licence and conditions - principal entrance Days and hours - principal entrance Manager on duty - needs to be prominent Food availability - needs to be prominent Transport options - needs to be prominent Prohibited persons - point of sale 5 10 15 20 25 30 35 40 Off licence: Licence and conditions - principal entrance Days and hours - principal entrance Manager on duty - needs to be prominent Prohibited persons - point of sale Club licence: Licence and conditions - needs to be prominent Manager on duty - needs to be prominent Food availability - needs to be prominent Transport options - needs to be prominent Prohibited persons - point of sale Special licence: Prohibited persons - point of sale Other signage - discretionary OFFENCES AND ENFORCEMENT When one of the provisions of the Act is breached or licence conditions are broken, enforcement provisions are available. These breaches can give rise to fines. Enforcement provisions include: Power of inspectors to enter licensed premises (s 131) - this allows DLA inspectors to enter premises at any reasonable time to ascertain whether the licensee or manager is complying with the conditions of the licence. A $2000 fine can be imposed if inspectors are not admitted without reasonable excuse. Variation, suspension or cancellation of licences (s132) - allows the Police or DLA inspector to vary conditions, or suspend or cancel any licences on the following grounds: o Breach of any provisions of the Act or conditions of the licences or behaving otherwise in an improper manner o The conduct of licensee is such that they are not suitable to hold licences o Premises are being used in a disorderly manner, so as to be obnoxious to neighbouring residents or the public Suspension or cancellation of licenses by the LLA regarding certain offences (s 132A) - allows the Police to suspend or cancel a licence immediately, following the offence of serving a prohibited person Suspension of licence for non-compliance with public health or fire precaution (s 134) - allows the Police or the Health Department to suspend licences on the grounds of health or safety dangers Suspension or cancellation of manager's certificates (s 135) - allows the Police or DLA inspectors to cancel or suspend a manager's certificates if: o Managers fail to operate licensed premises in a proper manner o The conduct of managers is such that they are not suitable to hold a certificate. Fines 5 10 15 20 25 Numerous fines are associated with failing to comply with the Act or licence conditions. The maximum penalties are: Sale by unlicensed premises (s 151) - $40,000 or 3 months imprisonment Allowing unlicensed premises to be used (s 152) - $40,000 or 3 months imprisonment Promotion of excessive consumption of alcohol (s 154A) - $5000 Sale of liquors to minors (s 155) - licensee $10,000 and/or sevenday suspension of licence; managers $10,000; staff $2000 Purchasing liquor for minors (s 160) - $2000 Employment of minors in restricted areas (s 161) - $2000 Purchasing of liquor by minors (s 162) - $2000 Instant fine for minors on supervised or restricted premises and/or purchasing liquor (s 162A) - $200 Minors in restricted or supervised areas (s 163) - $1000 Permitting minors to be in restricted or supervised areas (s 164) - $2000 Licensees or managers selling to an unauthorised persons (s 165) - licensees $20,000 and/or sevenday suspension of licence; managers $20,000 Sale of intoxicated person (s 166) - licensees $10,000 and/or seven-day suspension of licence; managers $10,000; staff $2,000 Licensees or managers allowing persons to become intoxicated (s 167) - licensees $10,000 and/or seven-day suspension of licence; managers $10,000; staff $2,000 Allowing drunk and disorderly conduct (s 168) - $4,000 Sales of spirits in drinking vessel over 500mls (s 169) - $2,000 Being on licensed premises outside licensed hours (s 170) - $2,000 Licensees/managers allowing persons on premises outside licensed hours (s 171) - $10,000 Licensees not having managers on duty or not displaying signage (s 172A) - $5,000 Failing to admit Police and/or to produce documents (s 175) - $2,000 HOST RESPONSIBILITY 30 35 40 Host responsibility is concerned with the supply and sale liquor in a more responsible manner. There are three reasons why licensed premises should practice Host Responsibility (Henderson & Murphy, 2003): Liability (risk management) - to avoid penalties under the Sale of Liquor Act Service (customer focus) - to create a better image, to attract more customers, beat competition, create licensing advantages and establish different customer orientation Profit (viability / sustainability) - to increase sales potential, extra customers, extra market share, or licensing advantages. While the Act does not mention or make a Host Responsibility policy mandatory, most DLA's require one to be submitted with a licence application. It should include intentions regarding: Food Non-alcoholic and low-alcoholic beverages Transport options Responsible service / promotions Intoxicated persons Underage persons Food 5 Food can limit the degree of intoxication because it reduces the speed at which alcohol is absorbed by the body. On average, the liver can only break down alcohol at a rate of one standard drink per hour. To be effective, food should be eaten before a person has started drinking. Food high in protein and/or fatty food takes longer to digest (Henderson & Murphy, 2003). The sale of food also adds value to the business. Non-Alcoholic refreshments 10 15 Non-alcoholic drinks are not only licence requirements, but give customers the opportunity to decide whether they want to drink or not. They include: Water Fruit juice Soft drinks Energy drinks Alcohol-free cocktails Tea and coffee Low-Alcohol Drinks 20 These can also be a licence requirement. Products include: Low-alcohol beers Low-alcohol wine products Spirits - single nip and tall glasses Transport Options 25 Options for safe transport so that people do not drink and drive include: Courtesy vans and buses Lifesaver schemes Designated drivers (offer them free non-alcoholic drinks) Discounted taxi fares Easy-access telephone Responsible Service/Promotions 30 35 40 Under the Sale of Goods Act 1989, promotions that encourage the excessive consumption of alcohol can incur large penalties. Promotions considered unacceptable include Round the World, Bladder Busters, Bloto Nights and All You Can Drink Nights. Good publicity e.g. entertainment or activitybased promotions, add value to businesses without endorsing excessive consumption of alcoholic beverages (Henderson & Murphy, 2003). Signage can be used as an aid to bar staff. Signs can make people aware of the law and staff can use them to refuse the service of alcohol. Typical signage includes the minimum age to be served alcohol, and reminds customers to: \"Know when to say when\" or that \"Enough's enough.\" Staff should be trained in products, technical skills, legal obligations, and host responsibility. They should also be supported and monitored to ensure they are not only doing their job properly, but are backed up in difficult situations (Henderson & Murphy, 2003). Intoxicated Persons 5 10 15 20 25 30 35 40 Alcohol is not allowed to be sold to people who are intoxicated. Therefore, it is important to ensure that staff are familiar with the signs of intoxication and the factors that lead to customers becoming intoxicated. Similarily, they should be aware of how to cut off service or substitute with other products. According to Henderson & Murphy (2003), the stages of intoxication are: Inhibitions - over-friendliness, bravado, loud speech or changing from loud to quiet Judgement - complaints about the strength of drinks, ordering doubles, argumentative, using foul language, careless with money, buying rounds for strangers or annoying other patrons Reactions - eyes glossy, lacking focus, losing train of thought, slurring speech Co-ordination - unable to pick up change, can't find mouth with glass, unable to sit straight, spilling drinks, swaying, drowsiness, falling over or bumps into things Factors leading to intoxication (Henderson & Murphy, 2003) include: Those something can be done about: o Amount of alcohol consumed o Speed of consumption o Absorption rate o Person's mood o Setting Those not much can be done about: o Time of the day o Person's body weight o Person's tolerance to alcohol o Person's physical health o Medications o Gender When staff recognise these factors, it is important that they try to slow down the customer's consumption of alcoholic beverages. Ways to slow down patrons' drinking are (Henderson & Murphy, 2003): Getting them to eat something Serving them water Giving them one drink at a time Not offering refills Promoting other products (non-alcoholic or low-alcoholic beverages) Having a conversation If these strategies do not work, then it is up to staff to refuse service. Staff generally need support to give them the confidence to refuse potentially aggressive customers. This can be achieved by (Henderson & Murphy, 2003): Providing standard phrases staff can use Using broken record technique - saying the same thing over and over again to intoxicated customers Displaying relevant signs that staff can refer to Helping staff to be creative in offering alternatives Teaching staff to read body language, especially potentially aggressive behaviour Reminding staff that they should be non-judgmental and nonconfrontational Training staff not to embarrass customers. 5 10 15 20 25 Underage persons It is an offence under the Sale of Liquor Act 1989 to sell to minors. Therefore, it is important that minors are carefully controlled, which staff can do by: Knowing the designated areas Displaying the legal drinking age Not letting people on the premises without identification Ensuring valid photographic identification is presented Asking for identification, if in doubt Scrutinizing identification. Sale of Liquor (Youth Alcohol Harm Reduction) Amendment Bill Currently, the Sale of Liquor (Youth Alcohol Harm Reduction) Amendment Bill is in the list to be dealt with. The Bill amends the Sale of Liquor Act 1989 to raise the drinking age to 20 years, strengthen the provisions relation to the supply of liquor to minors, and provide a statutory restriction on broadcast liquor advertising before 10 pm on any day. The increase the drinking age is argued to be necessary due to evidence of increases in alcohol related harm when drinking ages were lowered in Australia, Canada and the US. A report produced by the Ministry of Justice states that people in the 14 to 17 year old category drank and were drinking more and more often. The increase in the drinking age is to be coupled with restrictions in marketing of alcohol. It is felt that marketing has a critical role with an intensification of targeting young people with inexpensive new products designed to appeal to them as well as heavy marketing of established inexpensive products like beer. While the Bill is not high on the list of bills to be heard by Government, it is a bill that will be of interest to watch because of the significant changes it can have to liquor law. CONCLUSION 30 35 40 The sale of liquor is governed by the Sale of Liquor Act 1989. The Act sets out the requirements to gain licences, and what the mandatory and discretionary requirements are for those licences. The Act clearly establishes the penalties for breaching the provisions of the Act or any licence requirements. While it is vital to comply with the Act, Host Responsibility policy can aid staff as it ensures the Act is complied with and adds extra value to a business. It is important for people working in the hospitality industry to be familiar with liquor licensing requirements, as non-compliance not only incurs huge penalties but can prevent a person being eligible for a manager's certificate or from opening their own licensed premises. Discussion: 1. What impact does the lowering of a drinking age have on youth? 2. What penalties are there for serving minors? 3. What must an evidence of age document contain? 4. What are the only precise legal forms of minor identification