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13 December 2010 Mr Paul O’Sullivan O’Sullivan Saddington Level 4 23 Watt Street NEWCASTLE 2300 By email: paul@ossad.nsw.gov.au cc: ian.brown@communities.nsw.gov.au Dear Sir

Decision and Statement of Reasons on complaint against Mr Peter Dobb, former licensee of the Museum Hotel, West Wallsend made under section 139 of the Liquor Act 2007

INTRODUCTION: 1. I refer to a complaint dated 10 March 2010 made by a delegate of the Director-General of

Communities NSW (“Complainant”) against Mr Peter Dobb, the former licensee (“Respondent”) of the Museum Hotel located at West Wallsend, NSW (“Hotel”).

2. The Authority determined this matter at its meeting of 26 October 2010 (“Determination”), following the Respondent’s withdrawal of an earlier request for an oral hearing.

3. An informal summary of the Determination was provided to the Complainant and the Respondent

by email on 27 October 2010. This letter formally gives notice of the Authority’s Determination and statement of reasons, as required by section 142 of the Act.

JURISDICTION:

139 Grounds for making complaint

(1) A complaint in relation to a licensee, manager or close associate of a licensee may be made to the Authority by any of the following persons (referred to in this Part as the complainant): (a) the Director-General, (b) the Commissioner of Police, (c) a person authorised by the regulations to make a complaint under this Part.

(2) A complaint must be in writing and specify the grounds on which it is made. (3) The grounds on which a complaint in relation to a licensee, manager or close associate may be made are as

follows: (a) that the licensee or manager has, while holding a licence or managing licensed premises, been

convicted of an offence under this Act or the regulations (or under the former Act) or of an offence prescribed by the regulations,

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(b) that the licensee or manager has failed to comply with any of the conditions to which the licence is subject,

(c) that the licensee has failed to comply with any of the conditions to which any authorisation or approval held by the licensee under this Act is subject,

(d) that the licensee or manager has failed to comply with any other requirement under this Act or the regulations (or under the former Act), relating to the licence or the licensed premises,

(e) that the licensee or manager has failed to comply with a direction or other requirement of the Authority, the Director-General or the Commissioner of Police under this Act (or of the Director-General or the Commissioner under the former Act),

(f) that the licensee or manager has engaged in conduct or activities that are likely to encourage misuse or abuse of liquor (such as binge drinking or excessive consumption),

(g) that intoxicated persons have frequently been on the licensed premises or have frequently been seen to leave those premises,

(h) that acts involving violence against persons or damage to property have frequently been committed on or near the licensed premises by persons who have been on the licensed premises,

(i) that the licensee is not a fit and proper person to be the holder of a licence (whether for the same reason as that set out in section 45 (5) or otherwise) or the manager is not a fit and proper person to be the manager of the licensed premises (whether for the same reason as that set out in section 68 (4A) or otherwise),

(j) that the close associate is not a fit and proper person to be a close associate of a licensee, (k) that a complaint against a licensee under this section has been made and that:

(i) the close associate knew or ought reasonably to have known that the licensee was engaging (or was likely to engage) in conduct of the kind to which the complaint relates, and

(ii) the close associate failed to take all reasonable steps to prevent the licensee from engaging in conduct of that kind,

(l) that the close associate is (or has become) a close associate of a licensee while disqualified by the Authority from being a close associate,

(m) that a person who is interested in the business, or in the conduct or profits of the business, carried on under the licence is not a fit and proper person to be so interested,

(n) that a person is (or has become) a person who is interested in the business, or in the conduct or profits of the business, carried on under a licence while disqualified by the Authority under this Part from being a person so interested,

(o) in the case of a limited licence—that the licensee has not exercised proper control and supervision over a function held under the licence,

(p) in the case of a limited licence—it is not in the public interest for liquor to be sold or supplied at functions held by or under the auspices of the non-proprietary association on whose behalf the licence is held,

(q) in the case of a licence held by a corporation—that a person who occupies a position of authority in the corporation is not a fit and proper person to occupy such a position in a corporation that is the holder of a licence,

(r) that public entertainment has been conducted on the licensed premises otherwise than in accordance with any requirements under the Environmental Planning and Assessment Act 1979 relating to the use of the premises for public entertainment,

(s) that the licence has not been exercised in the public interest, (t) that the continuation of the licence is not in the public interest.

(4) In subsection (3), former Act means the Liquor Act 1982 or the regulations made under that Act and

includes, in the case of a licensee that is a registered club, the Registered Clubs Act 1976 as in force immediately before the repeal of section 9 of that Act by Schedule 2 to the Miscellaneous Acts (Casino, Liquor and Gaming) Amendment Act 2007.

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BACKGROUND:

4. The Respondent was the licensee of the Hotel from 10 October 2006 to 26 September 2008. The current licensee of the Hotel is Mr Paul Jonathon Duncan, who is not the subject of any complaint.

5. The Complainant filed a lever arch file of documentary evidence and other material in support of the Complaint (“OLGR File”) in which the Authority has tabulated documents and assigned individual document numbers for common reference. The document numbers are referred to in this decision letter.

6. The Complaint is based upon one of the numerous grounds that are available under section 139 (3)

of the Act:

s139(3)(b) – that the licensee … has failed to comply with one of the conditions to which the licence is subject

7. In the Complainant’s cover letter dated 10 March 2010, the licence condition that the Complainant initially alleged was breached by the Respondent was said to be the condition imposed upon the licence of the Hotel by section 17 (1) (a) of the Act, which states:

s17(1) Cash advances prohibited. A hotelier must not:

(a) provide a cash advance in the hotel, or (b) permit a cash advance to be provided in the hotel on behalf of the hotelier, except as a prize or

bonus won as a direct or indirect consequence of participating in a form of gambling that may lawfully be conducted on the licensed premises.

8. The Complainant noted in the cover letter that before the Liquor Act 2007 commenced on 1 July

2008 there was an equivalent licence condition prohibiting the provision of cash advances by hoteliers in section 20 (4A) of the Liquor Act 1982 . That section provided (at all relevant times when the alleged misconduct identified in this Complaint occurred):

(4A) It is a condition of a hotelier’s licence that the licensee is not to provide a cash advance in the hotel, or permit or suffer a cash advance to be provided in the hotel on behalf of the licensee, otherwise than as a prize or bonus won as a direct or indirect consequence of operating an approved gaming machine in accordance with the Gaming Machines Act 2001.

9. On 6 May 2010 a complete copy of the OLGR File was sent by courier to the Respondent’s solicitor Mr Paul O’Sullivan, who had previously notified the Office of Liquor Gaming and Racing (“OLGR”) that he would accept service of the Complaint on behalf of the Respondent. The Authority’s letter to Mr O’Sullivan invited the Respondent to show cause why disciplinary action should not be taken against him.

10. On 17 May 2010 Mr O’Sullivan sent an email to the Authority confirming his receipt of the material and advising that the Respondent seeks the opportunity to make oral submissions (in addition to making written submissions). Mr O’Sullivan advised his client’s intention to file written submissions by 2 June 2010.

11. After requesting an extension of time to file submissions to 9 June 2010 (which was granted) Mr

O’Sullivan filed a one page preliminary submission of that date (the “Respondent’s Preliminary

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Submission”) confined to the preliminary question of whether the Complaint had been properly framed.

12. Mr O’Sullivan submitted that while the Complaint was based upon an alleged failure to comply with

a licence condition imposed by section 17 (1) (a) of the Act, the conduct identified by the Complaint occurred between August and December 2007. While the Complaint refers to the former Section 20 (4A) of the Liquor Act 1982 that former section is not specified as giving rise to the ground of Complaint. Rather, the Complaint specifies an alleged failure to comply with Section 17 (1) (a) of the (current) Act, which did not actually commence operation until 1 July 2008. It follows that the Complaint must fail.

13. On 11 June 2010, the Complainant filed a submission in reply (“Complainant’s Preliminary Submission”). The Complainant argued that the initiating Complaint dated 9 March 2010 did make reference to the prohibition contained in section 20 (4A) of the former Liquor Act 1982 in force at the time of the relevant conduct.

14. The Complainant argued that, were these criminal proceedings commenced under the Criminal

Procedure Act 1986, an incorrect reference in an information to the section or Act under which an offence was prescribed would not have rendered the information invalid, provided that the offence was properly described in the body of the information and all the elements of the offence had been referred to (Wehebe v Vuolgarakis NSWSC Studdert J, 22 October 1991, Unreported). The Complainant submitted that the Complaint’s cover letter had specified the elements of the Complaint with sufficient specificity.

15. However, the Complainant further submitted that, if the Authority deems that the Complainant’s

reference to s 17 (1) (a) of the Liquor Act 2007 is incorrect, then the Complainant “seeks leave” to amend that reference so that it shall be read to refer to “section 20 (4A) of the Liquor Act 1982”.

16. The Complainant submitted that, in criminal proceedings, leave to amend an indictment should be

granted unless the accused would be irreparably prejudiced in meeting the charge as amended, even if the accused may lose some tactical advantage (Borodin v R [2006] NSW CCA 83).

17. The Complainant observed that Mr Dobb would suffer no prejudice because of the Complainant’s

request to amend the Complaint as he was yet to make any substantive submissions on the merits of the matter. The Authority, having a more flexible procedure than a Court, should allow this amendment if it considers it necessary.

18. At its meeting of 31 August 2010 the Authority considered the Respondent’s Preliminary Submission. The Authority noted the requirement of section 139 (2) of the Act which requires that a Complaint must be in writing and “specify the grounds” upon which it is made.

19. The Authority also noted that section 137, located within Part 9 of the Act (which concerns

disciplinary action), deals with certain transitional provisions. Section 137 (1) provides that a reference to a “licensee” within that Part includes a reference to a “former licensee”.

20. The Authority also noted section 137 (2) of the Act, which states:

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“Without limiting the grounds on which disciplinary action may be taken under this Part, the grounds

for taking any such action may relate to conduct occurring before the commencement of this Part.”

21. The Authority concluded that the Complainant’s cover letter had set out in some detail the relevant facts upon which the disciplinary ground was based. The Authority was satisfied that the Complainant’s letter had also noted that the alleged misconduct was proscribed by a licence condition that had been imposed by section 20 (4A) of the former Liquor Act 1982 in addition to being proscribed by section 17 of the current Act.

22. As the Respondent had not yet filed any submissions in response to the substance of the Complaint

the Authority was satisfied that the Respondent would not be prejudiced if the Authority allowed the Complaint to proceed as if it had been drafted to specify that the relevant licence condition alleged to be breached was the condition imposed by section 20 (4A) of the former Liquor Act 1982, not the analogous condition imposed by section 17 of the current Act. The Authority decided to proceed on the basis of this minor correction to the Complaint.

23. The parties were notified of this preliminary decision on 1 September 2010 and advised of a date

for a Conference. The Respondent was invited to make substantive submissions on the Complaint and did so on 29 September 2010.

Summary of the alleged misconduct

24. The Complainant’s cover letter advises that this matter first came to the attention of the OLGR

when a report was received from a member of the public on 3 September 2007 alleging that the owner/manager of the Hotel was lending money to patrons for the purpose of consuming liquor and gaming at the Hotel.

25. On 18 October 2007 Special Inspectors Mr Richard Walton and Mr Jamie Paras from the OLGR Newcastle Regional Office attended the Hotel to investigate this information.

26. The Special Inspectors checked the office area of the Hotel with the permission of the Respondent.

They found a number of TAB betting tickets and other pieces of paper with names written on them. Other pieces of paper appeared to be records of payments of money made to and from various persons and the Hotel. These documents were seized, along with a bank deposit book.

27. The Inspectors prepared lengthy statements of evidence detailing their observations and

conversations with various witnesses while investigating the documents seized from the Hotel.

28. According to Inspector Walton’s Affidavit dated 11 August 2008 (Document 2), on 18 October 2007 the Respondent advised him during a telephone conversation (a file note of which is Document 12) that the seized documents were not records of loans made by the Hotel, but records of a betting syndicate, whereby (for example) a truck driver or other Hotel regular would ring up, and the Respondent would place a TAB bet for them. The Respondent would take money out of the Hotel safe that had been held on behalf of the person to place bets. The Respondent advised that all country pubs operate “betting syndicates” of this kind.

29. The Respondent was asked about a seized document marked “Dapto cheque” (as discussed below,

“Dapto” is a nickname for a Hotel regular, Mr Darrel Cameron). The Respondent advised Special Inspector Walton that this document concerned a man who came into the Hotel from time to time

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and whose wife was at the time about to have a baby. The Respondent told Inspector Walton that he lent money to Mr Cameron before his wife went into hospital. The Respondent stated that the money was not for use on the Hotel’s poker machines.

30. With regard to another seized document referring to a person named “Beryl” (as discussed below,

Ms Beryl Wright, a neighbour and patron of the Hotel) the Respondent advised Inspector Walton that the Respondent lent her money from time to time as she ran out. The Respondent said that this money was not used for poker machines. The Respondent advised that he did the same from time to time for another local man named Daniel, to “help keep a roof over his head”.

31. Inspector Walton’s Affidavit further notes that a former employee Ms Stacey Davis, informed

Inspector Walton that, during her 5 months work for the Hotel, she witnessed money being lent by the Hotel to patrons for TAB bets and simply for personal loans. This money was lent by Ms Sue Scott, the night manager of the Hotel.

32. In a signed statement by Ms Sue Scott given to Inspector Walton and dated 3 March 2009

(Document 71), Ms Scott states that, while she was the Hotel’s night manager from October 2006 to September 2008, she was directed by the Respondent to lend money to patrons, for the purposes either of gambling or of buying cigarettes or food. She would take the money out of either the cash register or the Hotel’s safe.

33. Ms Scott states that after lending the money she wrote the amount and the borrower’s name on a

piece of paper or a TAB ticket. She states that she was instructed by the Respondent not to date these documents, although the Respondent did date them.

34. Ms Scott states that during her period as an employee of the Hotel she lent “many thousands of

dollars” to patrons, but only with the Respondent’s approval. She states that a neighbour, Ms Beryl Wright, would regularly borrow amounts of “$20-30 dollars” and used this money to buy cigarettes and beer at the Hotel.

35. In an interview conducted between Special Inspectors Walton and Paras with Ms Beryl Wright on 18

April 2008, described in Inspector Walton’s Affidavit (Document 2), Ms Wright was shown the Hotel’s records of her payments to the Hotel and Ms Wright stated that she would borrow money from the Respondent before pension day. She stated that she did not use this money for gambling but would buy “cigarettes” and “a couple of beers”.

36. In an statement given by Mr Stuart Andrew Colley dated 27 May 2008 (Document 72), Mr Colley

states that he had been borrowing money from the Hotel for “about 12 months” and had borrowed between $1000 and $2000 from “either Sue the barmaid or Peter the licensee”.

37. Mr Colley states that when he borrowed money, Ms Sue Scott would take it out of the Hotel’s cash

register, write the amount on a slip of paper and place that slip into a clip lock bag that was kept in a drawer underneath the till. On occasions when Mr Colley borrowed money directly from the Respondent, the Respondent gave him cash out of his own wallet.

38. Mr Colley states that both Ms Scott and the Respondent were aware that Mr Colley would go into

the Hotel and play the poker machines using that money. Sometimes Mr Colley borrowed money from the Hotel because he had exceeded his $700 daily key card limit.

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39. In a statement dated 22 October 2008 (Document 73) another Hotel patron, Mr Brett Habner, states that, one Sunday night about six months prior to the date of this statement, the Respondent offered him a loan of $100 when Mr Habner ran out of funds at the Hotel. Mr Habner accepted this money and kept drinking, paying it back to the Respondent the next day. Mr Habner states that the Respondent “did it all the time”.

40. The Complainant has prepared a “Schedule of Cash Advances” (Document 13) compiled from

records seized from the Hotel, copies of which are now before the Authority. This Schedule lists 17 alleged unlawful cash advances made to patrons of the Hotel. The advances allegedly recorded on these documents, to some patrons on a repeat basis, include $10 (to Ms Deborah Powers); $20 to $30 (to Ms Beryl Wright, Mr Ian Williams and another patron named “Simone”); $50 (to the Hotel’s cleaner Mr Mick Ruth, Mr Tony Cloak, Ms Deborah Powers’ sister “Jenny” and another patron nicknamed “Chief”); $120 (to Mr Andrew Colley); $400 (to Mr Vincent Green) and $4000 (to Mr Darryl Cameron).

41. The Complainant has also prepared a schedule of further documents entitled “Schedule of Records

of Money Repaid by Hotel Patrons - Reason for Repayments is Unknown” (Document 30). Again, this Schedule relates to documents seized from the Hotel, copies of which are before the Authority. This Schedule refers to a document noting $80 “owe to safe” regarding Mr Warren Pearce; three documents noting payments made to the Hotel by Mr John Philp for sums of $450, $1850 and $200 respectively; a document noting a payment of $50 to the Hotel by Mr John Moore; a document recording a payment of $2500 to the Hotel by Mr Brendan Chappel; and a payment to a person whose name is indecipherable in the sum of $400.

The Respondent’s substantive case in reply and the Complainant’s Second Round Submissions 42. Mr O’Sullivan filed a letter with the Authority dated 29 September 2009 (“Respondent’s Show

Cause Submission”) addressing the merits of the Complaint.

43. Attached to this submission were several documents, including copies of invoices for the supply of goods from the Hotel to third parties. The Respondent did not tender the original invoices to the Authority. When asked about this by the Authority’s General Counsel, Mr O’Sullivan explained that he had submitted this material from copies that were sent to him by his client, via facsimile, and that Mr O'Sullivan does not hold the original invoices. (The Authority notes that Mr O’ Sullivan is based in Newcastle while the Respondent now lives in the Australian Capital Territory.)

44. The Respondent submits that the unlawful cash advances that the Complainant alleges were made

by the Respondent to various persons total $5,185. 00.

45. Of that total, the Respondent denies that $4,455.00 were actually cash advances made in breach of section 20 (4A) of the Liquor Act 1982, but admits that a total of $730.00 in payments noted on various documents before the Authority describe cash advances made by the Respondent contrary to section 20 (4A) of that Act.

46. In the Respondent’s Show Cause Submission, the Respondent provides an explanation of the larger

suspect transactions that are identified in the Complaint. On 12 October 2010 the Complainant filed a letter providing detailed comments in reply to the Respondent’s explanation (“Complainant’s Second Round Submission”).

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47. The Respondent’s explanation of the larger alleged cash advances, and the Complainant’s comments in reply, are summarised below:

On the alleged cash advance to Mr Darrel Cameron aka “Dapto” (Documents 13 and 18)

48. The Respondent submits that Mr Darrel Cameron held an 18th birthday function at the Hotel for his

daughter. The sum of “$4000” that is noted to have been repaid by Mr Cameron to the Hotel on a seized document before the Authority refers to money that was paid in satisfaction of a handwritten Hotel invoice issued to Mr Cameron numbered 569061 dated 1 September 2007. This invoice is annexed to the Respondent’s Show Cause Submission. The Respondent states that the invoice shows the supply of goods and services for that birthday function.

49. The Complainant contends that this explanation is contrary to the evidence. The Complainant refers to a contemporaneous file note of a telephone conversation between Inspector Walton and the Respondent on 18 October 2007 (Document 12). That document notes that when the Respondent was asked “what about Dapto cheque, what’s that about?” the Respondent is recorded as having said:

“that a guy (sic) comes into the hotel, his wife is about to have a baby and I lend them money before she goes into hospital to have the baby. That’s what you do when you’re a licensee in a country hotel. You’ve got to understand that. You’ve been around a long time. You know what’s going on. They don’t put it in the pokies.”

50. The present explanation (repayment for goods and services supplied by the Hotel) provided to the Authority was not mentioned to the inspectors by the Respondent as the reason for the apparent repayment of money from Mr Cameron to the Hotel noted on the seized document.

51. The Complainant submits that invoice books of the kind now furnished by the Respondent are available in most newsagents. The Complainant notes that the original of this invoice has not been produced - the implication being that this invoice could have been readily fabricated after the event, in response to this Complaint.

52. The Complainant further notes that the invoice is stated to be “from Darrel Cameron to Museum Hotel” whereas it should be the other way around, as the Hotel is the service provider and the issuer of the invoice.

53. The Complainant further suggests that the Hotel would not be expected to have retained the

original, printed invoice, but may have retained an underlying carbon copy. The carbon copy would not bear the same printed detail as the original, yet the invoice tendered to the Authority does show this printed detail.

54. The Complainant further notes that the invoice is dated “1.9.2007”. The relevant payment note that was seized from the premises (Document 18) bears the following handwriting:

“31-08-07 Dapto cheque banked $4000 Given $500 cash Given another 1-9-07 $1000

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Given another $2500 2-9-07 Paid in full (with a signature)”

55. According to the Complainant, a National Australia Bank Deposit slip recovered from the premises (Document 57) would appear to indicate that the “Dapto” cheque was deposited sometime between 31 August 2007 and 3 September 2007.

56. The Complainant submits that, should the Authority accept that the $4000 referred to in the seized document was in fact a reference to money paid by Mr Cameron in satisfaction of an invoice from the Hotel for goods and services rendered, “we are left with the curious fact that the Hotel then provided Cameron with cash totalling $4000 over the next few days”.

On the alleged cash advance of $400 to “Vinnie” (Document 13 and 27)

57. The Respondent explains that this record relates to the purchase of two kegs of beer by a patron

named Vinnie Green and annexes to the Respondent’s Show Cause Submission a photocopy of a handwritten tax invoice number 157403 dated 11 August 2007 made out to Mr Vinnie Green and signed by Sue Scott. The document simply notes:

“2 kegs New $200@ $400”

58. The Complainant notes again that the original of this document has not been furnished. The

Complainant refers to the Statement of Ms Sue Scott (Document 71) which states, at paragraph 21:

“Vinnie’s loan of $400 is in my handwriting. I’m surprised there’s only that one you’ve got for Vinnie. He was one of our bigger players on the poker machines. He lives in England but married to a local girl. $400 wasn’t a lot of money for him. He’d always have a lot of money on him and borrow when he ran out. Again for that $400 I would have to get Peter’s approval because I wouldn’t lend $400 to him out of my own money.”

59. The Complainant observes that the date written on this invoice No 157403 “appears to be traced over” and that the underlying date could have been 11 August 2004.

60. The Complainant further observes that, if the date of the transaction was 11 August 2007, then this invoice appears to be from a different book to the invoice number 569061 dated 1 September 2007. The Complainant comments that “if the invoice books were used consecutively it would mean that 158 invoices had been issued in 29 days”.

On the alleged cash advance of $55.00 for “roo chocks” (Documents 13 and 28)

61. The Respondent explains that this document records a payment made by the Hotel to purchase

chickens on 13 May 2007 from the supplier, Red Lea, for the purposes of a “chook raffle” to be held on the premises. The Respondent tenders a copy of an electronically printed receipt issued by Red Lea Chickens to the value of $55 annexed to the Respondent’s Show Cause Submission.

62. The Complainant concedes that the seized document in fact refers to a purchase of chickens and

notes that the statement by Ms Sue Scott confirms this. (The Authority notes that the reference to “roo chocks” is not a reference to a nickname but an apparent reference to “roo chooks”).

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On the alleged repayment of monies advanced to several other patrons (Documents 30-35)

63. The Respondent denies that any of the records of alleged “repayments” by patrons listed on

Documents 30 to 35 are evidence of cash advances made contrary to section 20 (4A) of the Liquor Act 1982. That is, the handwriting on seized documents are not references to cash advances:

“Hank paid back $80 3.9.07 owe to safe” (Document 31)

“Supa paid $450 7.10.07 ” (Document 32)

“Supa paid $1850” (Document 33)

“*indecipherable+ $400” (Document 33)

“Supa $200” (Document 34)

“John Moore $50” (Document 35). 64. Annexed to the Respondent’s Show Cause Submission is a statutory declaration by Mr Warren

Pearce (aka “Hank”) dated 9 September 2010. Mr Pearce explains that he is a close friend of Mr John Philp (aka “Supa”).

65. Mr Pearce describes the practice of Mr Philp and himself leaving their money in the Hotel’s safe for

use when betting at the Hotel. Mr Pearce explains that part of the reason for doing this was so that people would not know what he was doing with his punting, being a greyhound owner and trainer himself.

66. Mr Pearce states that at times he would have $2000 in the Hotel safe and, depending upon whether

he won or lost, would take money from the safe or deposit money. Mr Pearce says “at no time did I get credit from Peter Dobb or any other employee of the Museum Hotel, to fund my punting activities”.

67. Mr Pearce states that “I observed that John Philp, who is my next door neighbour, adopted exactly

the same practice as I did in relation to depositing money in the safe and punting with it … John and I are partners in greyhounds.”

68. Mr Pearce refers to various documents seized by OLGR that are now before the Authority. He notes

Documents 31 to 34 (referring to “Hank and “Supa”), 38 (referring to “Supa”), 40 (referring to “Supa”), 42 to 47 (referring to “Hank”), 49 (referring to “Hank”), 50 (referring to “Supa”) and 53 to 56 (referring to “Supa” and “Hank”).

69. Mr Pearce states that “such tickets illustrate the manner in which Philp and I would record our

betting activities so that we had a record of what we had invested and won or lost”. 70. The Complainant comments that this method of gambling would not breach the relevant licence

condition imposed by the Act, but there is some evidence that Mr Pearce did, at some point, fall

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into debit, that is, he took advantage of credit supplied by the Respondent, which would place the Hotel in breach of the licence condition. The Complainant notes that Document 31 states:

“Hank paid back 3-9-07 owe to safe.” [emphasis added by the Complainant]

71. The Complainant further submits that paragraphs 24 to 27 of Ms Susan Scott’s statement

(Document 71) state that loans were extended to both Mr Pearce and Mr Philp for gambling. The Complainant further refers to the transcribed statement of Ms Stacey Davis on page 14 of the Affidavit of Inspector Walton (Document 2) in so far as it relates to Mr Philp (Supa), where Ms Davis confirmed to Inspector Walton that Mr Philp placed bets without giving the Hotel money for those bets.

On the alleged cash advance of $2500 to “Brendan” (Documents 30 and 36)

72. Annexed to the Respondent’s Show Cause Submission is a copy of an invoice number 569063 dated

5 September 2007 in the sum of $2500 for liquor supplied by the Hotel to “West Wallsend Soccer Club Grand Final Day”. The document notes that the invoice is payable by Mr Brendan Chappel.

73. The Respondent submits that this document explains the amount recorded to have been repaid by

“Brendan” in the seized document that is Document 36. 74. The Complainant comments that, while no original has been tendered, this appears to be a copy of

an original invoice and one would have expected the Hotel to have retained the underlying carbon copy and not have provided the Authority with a copy of the original, printed invoice.

On the statement of Ms Susan Scott dated 9 March 2009 (Document 71)

75. The Respondent submits that Ms Scott left her employment with the Hotel in circumstances in

which her relationship with the Respondent was “poor”. The Respondent observes that most of the alleged cash advances listed by OLGR in the Schedule of Cash Advances (Document 13) that have now been conceded by the Respondent to be actual cash advances were advances given to patrons by Ms Scott.

76. With regard to paragraphs 21 to 27 of Ms Scott’s statement (where Ms Scott describes Vinnie

lending money from the Hotel from time to time and being a “big” poker machine player) and 29 to 33 of her statement (where she describes the seized “Brendan” docket for $2500 as recording, in the Respondent’s handwriting, a loan made to him for Brendan’s betting on the TAB) the Respondent refers to the account that he has given for those transactions.

77. The Respondent says that Mr Vinnie Green purchased 2 kegs of beer and the seized notes recording

his repayment of $400 to the Hotel was actually payment of that invoice. 78. In response to Ms Scott the Respondent again refers to the invoice for goods purchased from the

Hotel for the West Wallsend Soccer Club’s finals day and that these documents simply relate to those purchases and do not evidence unlawful cash advances.

79. The Respondent denies paragraphs 6 to 9 of Ms Scott’s statement (where Ms Scott makes the

general statement that during her employment she was directed by the Respondent to lend money to patrons for the purpose of gambling, buying cigarettes or food).

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80. The Respondent denies paragraphs 34 to 42 of Ms Scott’s statement (where Ms Scott states that

over the course of her employment she would have lent “many thousands of dollars” to patrons with Peter Dobb’s approval for the purpose of purchasing gambling, drinks, cigarettes or food from the Hotel and that “80%” of the Hotel’s TAB bets would have been placed using the “credit system” or a “dry till”).

81. The Respondent submits that Ms Scott’s evidence should be treated with “significant caution” to

the extent that it contradicts that of the Respondent, by reason of her poor relationship with the Respondent.

82. In reply, the Complainant submits that there is no evidence that Ms Scott would be vindictive

enough to fabricate evidence for the purposes of this matter. The Complainant submits that Ms Scott makes appropriate concessions in favour of the Respondent in her statement of evidence and that her evidence is similar to that given by another former employee, Ms Stacey Davis. The Complainant submits that Ms Scott’s statement is otherwise “fair, cogent and compelling”.

On the statement of Mr Andrew Stuart Colley dated 27 May 2008 (Document 72)

83. The Respondent submits that Mr Colley (who claims that he has borrowed between $1000 and

$2000 from the Hotel and would play poker machines using that money) is a person who has been barred from the Hotel and does not have a good relationship with the Respondent.

84. The Respondent denies Mr Colley’s statement other than confirming that the Hotel did receive a

money order from Mr Colley in the sum of $150.00 for the repayment of some Hotel accommodation that had been provided to Mr Colley on credit.

85. The Complainant replies that Mr Colley’s evidence is in agreement with that of Ms Scott (Document

71).

On the statement of Mr Brett Habner dated 22 October 2008 (Document 73) 86. The Respondent denies Mr Habner’s allegation that six months prior to the date of the Statement

on a Sunday evening he ran out of money and the Respondent lent him $100 which he used to continue to bet and repaid the next day and that the Respondent “did it all the time”.

87. The Complainant replies that there is “no reason to doubt Mr Habner’s statement” and that Mr

Habner’s evidence of the Respondent’s willingness to provide cash advances is similar to the evidence given by Mr Colley, Ms Davies and Ms Scott.

The Complainant’s regulatory antecedents 88. In the Complainant’s Second Round Submission the Complainant notes that the Respondent first

held a liquor licence in New South Wales on 29 July 1988. On 28 May 2008 he was convicted of permitting intoxication on premises by the Licensing Court at Wallsend and fined $550, plus court costs of $67 and the Director of Liquor and Gaming’s costs of $440. There are also records of two other complaints of disturbance to the quiet and good order of the neighbourhood under s104 of the former Liquor Act 1982 that were dealt with by the former Liquor Administration Board on 26 July 1995.

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The Respondent’s Final Submission

89. The Complainant’s Second Round Submission was sent to Mr O’Sullivan by the Authority via email

on 12 October 2010 with an invitation for his client to make any final submissions in reply and to provide any originals of documents that his client wished to tender, by 19 October 2010.

90. On 19 October 2010 the Respondent filed a one page final submission (“Respondent’s Final

Submission”) briefly commenting on the Complainant’s Second Round Submissions. The Respondent asserted that the invoices submitted to the Authority to explain the larger suspect transactions were valid and some of them were under the hand of Ms Susan Scott.

91. The Respondent denies that any cash advances were made to Mr Philp or Mr Pearce; concedes the

adverse regulatory history identified in the Complainant’s Second Round Submission; and reiterates that any penalty imposed by the Authority should be significantly less than the penalty first sought by the Complainant, in light of the proportion of the total alleged unlawful cash advances that have been admitted by the Respondent.

DETERMINATION: 92. The Authority convened to consider this matter at its meeting of 26 October 2010. The Authority

considered all the submissions before it and relevant sections of the Act, including but not limited to the statutory objects and considerations under section 3.

93. The Complainant alleges that a total of $5185 of unlawful transactions are detailed in the seized

records. The Respondent concedes that $730 of this figure did in fact relate to unlawful transactions. Of the $4455 of those transactions that are not admitted by the Respondent, the Complainant concedes (and the Authority accepts) that one transaction for $55.00 was, in fact, a record of payment made by the Hotel to Red Lea Chickens for the supply of chickens.

94. That leaves $4400 worth of suspect transactions that remain in dispute. 95. The Authority notes the qualified concession made by the Complainant as to the mode of betting

described by Mr Warren Pearce in his statutory declaration dated 9 September 2009, whereby the Hotel would act as “custodian” for funds deposited in the Hotel safe by Mr Pearce and Mr Philp. Such funds would be called upon by them from time to time when wagering through the Hotel’s TAB facilities.

96. The Authority agrees that this practice would not, on its face, constitute the provision by a hotelier

of an unlawful cash advance contrary to the statutory condition that was imposed upon the Hotel’s licence, provided that the betting party at all times does not go into debit and does not call upon the Hotelier’s funds to place any bet on the patron’s behalf.

97. As noted by the Complainant, there is one document that suggests that Mr Pearce “paid back”

money to the Hotel or “owed” money to the safe. There are also statements of former Hotel employees, particularly Ms Sue Smith, to the effect that actual loans were being made by the Hotel and that bets were being placed on behalf of patrons that were not covered by pre-deposited funds.

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98. The extent to which Mr Pearce, Mr Philp or other Hotel patrons maintaining such custodial arrangements with the Hotel actually went into debit, if at all, is unclear on the material before the Authority.

99. The Complainant has also raised concerns as to the credibility of the Hotel’s copies of invoices that

are said by the Respondent to account for several larger alleged repayments of money that were noted among the documents seized by OLGR.

100. The Complainant questions whether the handwritten invoice for supply of goods from the Hotel to

Mr Darrel Cameron numbered 569061 and dated 1 September 2007 does in fact relate to a document that appears to note the repayment of money owed by Mr Cameron to the Hotel.

101. The Complainant further questions the authenticity of the handwritten invoice number 569063

dated 5 September 2007 for $2500 in liquor supplies by the Hotel to West Wallsend Soccer Club Grand Final Day and whether it does in fact relate to a document that appears to note the repayment of money owed by Mr Brendan Chappel to the Hotel.

102. The Complainant further questions whether the handwritten tax invoice number 157403 dated 11

August 2007 for the supply of two kegs of beer does in fact explain a document that appears to note the repayment of money owned by a patron named Vinnie to the Hotel.

103. There are two issues here. The first issue is whether the documents tendered by the Respondent

are authentic records of transactions involving the supply of goods or services by the Hotel to third parties. The second is whether, if they are genuine invoices, these invoices in fact relate to and account for the repayments of money noted on the documents seized by OLGR, or whether they relate to separate transactions to the transactions noted on the seized documents.

104. The true nature of the disputed transactions will ultimately turn upon the credit of various

witnesses. 105. In order to make findings on the $4400 worth of contested transactions, the Authority would need

to conduct further investigations. This may require the issue of notices under section 21 of the Casino, Liquor and Gaming Control Authority Act 2007 for the production of documents and other information. It may also involve requiring the attendance of relevant witnesses for examination by the Authority in person or via other media. The Authority notes that the relevant witnesses are located in regional NSW, the Australian Capital Territory and (in one instance) the United Kingdom.

106. In the present circumstances, given

(i) the withdrawal by the Respondent of his previous request for an oral hearing (ii) the admissions made by the Respondent of unlawful cash advances (iii) the size of the total amounts that remain in contention and (iv) the likely costs to the Authority, OLGR Inspectors and other parties of participating in

further investigations,

the Authority decided to determine the matter on the papers and on the basis of the material presently before it.

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107. The Authority is satisfied, based upon admissions made in the Respondent’s Submission in Reply, that the Respondent did in fact provide numerous small cash advances that total at least $730 in contravention of a condition that was, at the time of making those advances, imposed upon the Hotel’s licence by section 20 (4A) of the former Liquor Act 1982.

108. The Authority is satisfied that the ground relied upon by the Complainant under section 139 (3) (b)

of the Act has been established.

PENALTY: 109. The Complainant has submitted for the Authority’s reference a Table of Comparative Judgments

(Document 81) made by the former Licensing Court of NSW in various disciplinary actions that were conducted before that Court under the Liquor Act 1982. The Complainant submits in the initial Complaint that an appropriate penalty, based upon the total cash advances alleged in this Complaint, would be a reprimand and a fine in the sum of $4000.

110. In the Respondent’s Submissions in Reply, the Respondent argues that an appropriate penalty,

based upon the admitted portion of cash advances alleged by the Complainant, would be a reprimand and a fine that is “less than sought by the Complainant”.

111. In making this submission, the Respondent notes that the Respondent has been continuously

involved in the Hotel industry (predominantly as a licensee) for around 22 years. The Respondent submits that the Respondent’s regulatory record in New South Wales has involved no previous disciplinary action against him and only one conviction for an offence against liquor legislation, being an offence of an intoxicated person on licensed premises.

112. The Authority notes that the Table of Comparative Judgments discloses no case that is directly

analogous to the present matter. The Authority notes that the former Licensing Court had the power to impose Court and professional costs against unsuccessful respondents, a power that the Authority does not have under the current Act.

113. When determining what, if any, penalty should be imposed upon the Respondent, the Authority

has had regard to the Respondent’s lengthy period of involvement in the liquor industry and his relatively minor adverse regulatory record in New South Wales. The Authority accepts that the numerous smaller cash advances admitted by the Respondent may have been motivated, in part, by an element of commercial generosity or community spirit by a country hotelier.

114. Nevertheless, disciplinary proceedings under Part 9 of the Act are primarily concerned with the

protection of the public, as distinct from punishment of the respondent. The prohibition against cash advances contained in the former and current Liquor Acts are, in the Authority’s view, important consumer protection and harm minimisation measures that Parliament has seen fit to impose upon the licences of every hotel in New South Wales.

115. The purpose of the statutory licence condition is to minimise the scope for vulnerable consumers

of liquor and gaming services to make poor spontaneous decisions, possibly under the influence of alcohol, against their financial interests and (in the case of those with drinking or gambling problems) their wider personal well being, by purchasing goods or services that they may otherwise not purchase but for the provision of credit.

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116. There are, in practice, ample means by which hotel patrons may access their own funds (including, potentially, retail credit accounts) through automatic teller machines and credit card betting arrangements with the TAB and the like. Parliament has seen fit to prohibit hoteliers from providing a further source of credit to facilitate transactions that are, ultimately, in the hotelier’s interest.

117. In the Authority’s view, financial misconduct of this nature must be met with a sanction that poses

a sufficient economic deterrent to hoteliers. Noting the range of sanctions that are available to the Authority under section 141 of the Act, including a maximum monetary penalty of $22,000 ($44,000 in circumstances of aggravation) the Authority has decided that a fine that is four times the amount of unlawful cash advances found is an appropriate and proportionate penalty to impose in this case.

118. In conclusion, the Authority has decided:

(i) to reprimand Mr Peter Francis Dobb, with such reprimand to be noted on the Authority’s records and considered in the context of any relevant future liquor or gaming application

(ii) to order Mr Peter Francis Dobb to pay a monetary penalty in the sum of $2920.00 with such fine to be paid within 30 days of the date of this letter.

Yours sincerely

Chris Sidoti Chairperson