England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE QBCOF 97/0012/D

(MR JUSTICE KEENE )

Royal Courts of Justice

Strand

London WC2

Friday 12 December 1997

B e f o r e:

LORD JUSTICE SIMON BROWN

LORD JUSTICE HENRY

LORD JUSTICE AULD

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IN THE MATTER OF AN APPLICATION FOR JUDICIAL REVIEW

R E G I N A

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STAFFORD CROWN COURT

STEVEN JOHN SHIPLEY

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(Transcript of the Handed-down judgment of

Smith Bernal Reporting Limited, 180 Fleet Street,

London EC4A 2HD

Tel: 0171 421 4040

Official Shorthand Writers to the Court)

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MR J SAUNDERS QC (Instructed by Messrs Jeffrey Green Russell, London W1Y 0SX) appeared on behalf of the Appellant

MR J QUIRKE (Instructed by The Chief Constable's Office, Staffordshire Police, Staffordshire, ST17 0QG) appeared on behalf of the Respondent

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J U D G M E N T

(As approved by the Court )

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©Crown Copyright

JUDGMENT

LORD JUSTICE SIMON BROWN: For the reasons given in the judgment handed down, the appeal will be dismissed.

LORD JUSTICE HENRY:

INTRODUCTION

This appeal raises fundamental questions of liquor licensing law in relation to the late-night (up to 2.00am - or 3.00am in London) sale or supply of liquor under a Special Hours Certificate (SHC) granted by licensing justices under Section 77 of the Licensing Act, 1964 as amended (the Act).

If a music and dancing licence is in force for the premises, then an SHC may permit the sale of liquor ancillary to the music and dancing and substantial refreshment that are provided to a later hour than is permitted by the regimes under which normal licensing hours are extended. The respondents contend that on days when the SHC permits the sale of liquor, the permitted hours for such sales (and the conditions of them) are set out in the SHC.

The appellant contends that an SHC is simply a "bolt-on extra" to the permitted hours of his existing on-licence which only becomes operative after normal closing time. Thus he claims that until 11.00pm the premises can operate as a normal pub, selling liquor on its own, ancillary to nothing, under the general licensing hours permitted by Section 60. After 11.00pm, he contends that he can continue to sell liquor under his SHC provided that its sale is ancillary to the provision of dancing and food for so long as the SHC permits. So for the first part of his evening his "permitted hours" are those permitted by Section 60, and from 11.00pm onwards by the hours permitted by the SHC granted under Section 77.

The issue arises in this way. The appellant holds a full justices on-licence for a public house known as Stones in the Market Place in Cannock, Staffordshire. The police describe the premises as "a one-room pub, with a very small dance-floor, selling pub food". From December 1993 until April 1995 the premises had an SHC for Wednesday to Saturday whereby the permitted hours lasted until midnight. In April 1995, however, the public entertainment licence for the premises was by oversight not renewed so that by virtue of s.81(1) of the 1964 Act the SHC was revoked automatically. Following the grant of a new public entertainment licence on 4th October 1995 permitting the premises to be used for public dancing, music and other public entertainment between 11 am and 12 midnight on week-days and Saturdays (with more restricted hours on Sundays), application was made for a new SHC on the same terms as before. That application was heard by the Cannock Licensing Justices on 4th December 1995. There were no police objections, but they asked for a limitation on the time of commencement of the permitted hours of the SHC to 7 pm. Their reasons for so doing are set out in the Chief Officer of Police's affidavit:

"A policy of requesting the justices to impose starting times on Special Hours Certificates has been agreed by Divisional Command. The reasons include:

(a) The spirit of the legislation distinguishes in our view between operations (however called) which are essentially of the night club/entertainment variety and pubs intending to open late. Pubs are not always structurally adapted to the purposes of providing entertainment set out in paragraph 77 of the Licensing Act 1964. Many are marginally so. The instant case must be near the border of such a requirement.

(b) Night clubs and pubs should be distinguished as intended by Parliament. If not, a large number of pubs will be applying for Special Hours Certificates and turning into "night clubs" after 11pm by means of the contended "bolt-on" provisions. The consumption of alcohol all day followed by consumption which may or may not be detectable as ancillary to entertainment etc is undesirable.

(c) If Special Hours Certificates proliferate, the resources of the police will be stretched more widely to cope with an increase in the number of potential sources of disorder. There are already a number of bona fide night clubs in the Cannock Town Centre Area which open until 2am and are easily identifiable as such for the purposes of Special Hours Certificates.

It is upon these facts that I instructed Police Inspector Timmis to make application to the justices to impose a start time upon Stones, The Stumble Inn and Silk's Night Club. All of these premises proposed to make applications for section 77 Special Hours Certificates at the Cannock Licensing Justices on Monday 4th December 1995. The imposition of such a restriction will in my view sort out those who wish to run night club operations in accordance with the intent of the Act from those who wish to run extended hours "pub" operations. The alternative is that breweries will see the Special Hours Certificate more and more as a way of extracting extra revenue from "pub" operations on the basis of a convenient misapprehension of the law."

That affidavit is useful in explaining the police view. It was before Keene J, but not before the justices, nor the Crown Court on appeal. We do not know whether those submissions were made to those courts, and it does not help the questions of statutory construction. Similar comments can be made as to the affidavits before Keene J, and us, setting out the appellant's view, which I deal with below.

The justices granted an SHC so limited "in respect of Wednesday, Thursday, Friday and Saturday with a start time of 7 pm and an end time of midnight." This was quite unacceptable to the appellant. He submits that if the respondents are right, it leaves him and others like him, on days when the SHC is operative, with the choice of either accepting the loss of his day time trade and operating under the SHC alone, or surrendering his SHC and reverting to the general licensing hours for the district (see paragraph 5 of Mr Coulson's affidavit at p 281). The appellant submits that to impose opening hours on an SHC was, before the case of Marsden (see below) unheard of. And Mr Coulson, a specialist legal journalist, suggested than an object of the Licensing Act, 1988 was to ensure that thereafter:

"special hours certificates were to be a form of extension to permitted hours, similar to other extensions [presumably under Sections 68 & 70] and not, as previously, a set of ´special hours' throughout the day"

The appellant's appeal against that decision was heard at Stafford Crown Court on 31st May 1996 by Judge Chapman sitting with Licensing Justices. The appellant argued that the Cannock Licensing Justices had no power to limit the commencement time of the SHC. The appeal, however, was dismissed because the court (reluctantly) ruled that it was bound by Owen J's decision in Chief Constable of the West Midlands v Marsden (unreported, 7th April 1995); he had held that the power exists. By these judicial review proceedings the appellant seeks to quash that decision of the Stafford Crown Court. Their application failed before Keene J on 16th December 1996. They now appeal to this court.

Two grounds of appeal are raised:

"1 The learned Judge erred in ruling that by virtue of S. 78A of the Licensing Act, 1964 the Licensing Justices were entitled to restrict the time of commencement of permitted hours in premises which had the benefit of a Special Hours Certificate.

2 The learned Judge erred in law in ruling that throughout the permitted hours in premises w[h]ere a Special Hours Certificate was in force the sale of alcohol has to be ancillary to music and dancing and/or substantial refreshment."

The actual legal issue involved in this case is Ground 1, whether the magistrates had power to impose an opening time of 7.00pm on days when the Special Hours Certificate applied. The appellant sought to broaden the debate by Ground 2, raising the question whether, on days when the SHC applies, the sale of liquor during the hours permitted by the SHC must be ancillary to the provision of music and dancing and refreshment (the respondent's case) or need only be so ancillary after the expiry of the "general licensing hours" as defined by Section 60 of the Act. It is said that this second issue is, in the words of Keene J, "a significant consideration in the determination of the main issue". The argument runs that unless the sale of liquor during the permitted hours on days when the SHC was operative has always to be ancillary to the food and entertainment provided, there would be no point in imposing an opening time. I understand that point and will consider it, but at the end of the day, it is the first ground of appeal that is decisive.

This is because if the justice have power to lay down at what time the Special Hours Certificate comes into effect, then (as will be seen) there being no statutory fetters on the exercise of that jurisdiction, on ordinary principles the limits on the exercise of that discretion is that it should be used to promote the policy and the objects of the Act (see Padfield -v- Minister of Agriculture, Fisheries and Food [1988] AC 977). The police policy set out in the Chief Officer of Police's affidavit clearly satisfies the Padfield test, and therefore in my view the decision on Ground 1 is decisive of this appeal.

The appellant contends that, on days when their SHC comes into operation, the permitted hours for sale of liquor are:

i) from 11.00am to 11.00pm, being the permitted hours laid down by Section 60 of the Act, without any kind of requirement that the sale of liquor must be ancillary to the provision of food and entertainment;

ii) from 11.00pm to 2.00am (at latest) being the permitted hours under the SHC with its requirement that sales under the SHC permitted hours regime must be ancillary to the provision of food and entertainment.

This interpretation of the Act is conveniently referred to as the SHC providing a "bolt on extra" to the general licensing hours permitted by Section 60.

If that was the appellant's entitlement under the Act, then the imposition by the Crown Court of a 7.00pm commencement for the permitted hours would be unlawful, as made under an error of law, namely that the permitted hours on days when the SHC was operative were the hours when the premises were open for the provision of food and entertainment.

THE SCHEME OF THE ACT

The question then is one of statutory interpretation. I start by considering the overall scheme of the Act as it is today. We are dealing with Part III, headed Permitted Hours. There then follow various sub-headings:

"Prohibition of sale, etc of intoxicating liquor outside permitted hours (Section 59)

General provisions as to permitted hours (Section 60 - 62)

Exceptions (Section 63)

Restrictions on permitted hours in licensed premises (Section 64 - 67)

Restriction orders with respect to licensed premises and clubs (Section 67(a) - 67(d)

Extension of permitted hours in licensed premises and clubs (Section 68 - 75)

Special Hours Certificates (Section 76 - 83)."

While headings offer limited assistance in questions of statutory construction, the point to be made is that the sections dealing with "Special Hours Certificates" are not included within the heading "Extension of permitted hours in licensed premises and clubs". The extensions to permitted hours possible under Section 68 and Section 70 are clearly both bolt-on extras. The respondents' case is that SHCs have always operated in substitution for ordinary permitted hours, and not as a bolt-on addition to them. Though the Act has often been amended, the scheme of the Act has never changed.

In examining the scheme of the Act, I will be summarising the effects of various sections. In do doing, I feel able to make certain simplifications when dealing with the law. The Act deals with licensed premises and clubs. I concentrate on licensed premises only. The Act deals with the possibility of the permitted hours (under whichever regime) applying to part of premises only - that is not this case as these premises are not divisible, and so I ignore it (but I note in passing that where an SHC is granted in respect of part of the premises only, other licensing regimes extending permitted hours may simultaneously apply to other parts of the premises: see Section 82 and the notes to that section in Paterson's Licensing Acts, 1997). The Act deals with "used" or "intended to be used" - I deal only with the former. The Act deals with the sale and supply of liquor - again I deal only with the former. In illustrating opening hours, I have taken weekday timings, ignoring weekends and religious festivals specially provided for. Against that background I set out the regulatory regime.

Subject to the provisions of the Licensing Act, 1964 as amended, liquor can be sold in licensed premises or clubs only during the permitted hours for those premises (see Section 59 - the offence creating section). There are four different regimes for those permitted hours.

First, basic permitted hours in any licensing district are "the general licensing hours" as defined by Section 60. Absent any local modification under Section 60(4), the ordinary weekday hours are 11.00am to 11.00pm (Section 60). In premises governed by this basic regime, there is never a need for the sale of liquor to be ancillary to anything - it can be the principal object of the transaction.

Second, those general licensing hours may be "added to" (see Section 68) on ordinary weekdays by one hour where the Magistrates' Court is satisfied (and issues a certificate that) the premises are set apart, adapted and habitually used for the purpose of supplying table meals (substantial refreshment) to which the sale of liquor is ancillary (the supper hours certificate - Section 68 - which provides that the Section 68 hours "shall be added to the permitted hours"). That is subject to the crucial proviso:

"but for other purposes ... the permitted hours shall be the same as if that paragraph did not apply to the premises." (Section 68)

The effect of that provision is that advantage can only be taken of the extra hour by those taking the table meal to which the provision of liquor is ancillary. The extra hour is not for just drinking - the sale of liquor in that period to one not taking a table meal would be a sale outside the "permitted hours" by virtue of that provision (see Section 59(1)). The effect is that the extra hour for the "supper licence" is "added to" the general licensing hours as a true "bolt-on extra".

The third regime is that of the Extended Hours Order granted under Section 70, which permits the premises to be open until 1.00am where licensed premises are structurally adapted and used for the purpose of habitually providing musical or other live entertainment as well as substantial refreshment, and the sale of liquor is ancillary to that refreshment and entertainment (Section 70(1) and (2)). Though the same formula for qualification of premises is used as was for the extension to midnight under Section 68, there the applicant was entitled to a certificate on satisfying the statutory criteria, while under Section 70 the grant remains discretionary - see the powers given to refuse to sanction the use of premises or to limit the operation of the Section by Section 73(2). The section does not authorise sale of liquor to persons admitted after midnight or less than half an hour before the end of entertainment. Section 70(4) provides that premises do not qualify as being used habitually for providing refreshment and entertainment:

"unless it is used ... for the purpose of providing them after, and for a substantial period preceding, the end of the general licensing hours on every weekday or on particular weekdays in every week ..."

In dealing with the permitted hours the Section makes clear that the permitted hours are the Section 60 hours plus "the time added by the said Section 68(1)" which (where an extended hours order is made) "shall extend until" 1.00am.

This then is also a bolt-on, albeit that the rule as to drinking being ancillary is apparently invoked in the part of the premises habitually set apart for the refreshment and entertainment "after and for a substantial period preceding the end of general licensing hours". That provision is, in my judgment, a pointer to Parliament's intention that entertainment at licensed premises should be integral to the enjoyment of a normal evening, and not an excuse for late night drinking. One of the mysteries of this case is why the appellant - who was only seeking an end time of midnight - could not get what he wanted from an Extended Hours Order under Section 70, unless it was because he did not wish to have to provide live entertainment and refreshment before 11.00pm (but that is pure speculation, and I do not rely on it).

The fourth regime is that of the Special Hours Certificate, which extends weekday permitted hours until 2.00am (subject to the exception in Section 76(2)a), b) and c). Section 77 requires that a music and dancing licence must be in force, and the licensing justices then have a discretion to grant the SHC if the premises are adapted and used:

"for the purpose of providing ... music and dancing and substantial refreshment to which the sale of intoxicating liquor is an ancillary".

So all but the SHC's extra hour can be provided by an Extended Hours Order granted under Section 71. But, if the judge below and the respondents are right, there is a fundamental difference so far as a public house is concerned between the two methods of obtaining an extension to permitted hours. If they extend permitted hours under Sections 68 and 70, then while the provision of liquor must be ancillary to the meals and entertainment provided outside the general licensing hours, the extension does not affect their mid-day trade when non-ancillary sales of liquor are covered by the general licensing hours. But, if the respondents are right, that would not be true under an SHC. I turn now to examine in detail the SHC regime.

THE SHC REGIME AND ITS HISTORY

Keene J has summarised the history. Originally, SHC's applied to hotels, restaurants and clubs only (see Licensing Act, 1949, Sections 18 and 19). When they applied it was clear that the hours they permitted were a complete substitute for the general licensing hours when the SHC was in force (see Section 21(3)a - which laid down the SHC permitted hours "notwithstanding anything in the Act of 1921"). Then in 1961 they were extended to licensed premises generally. But the statutory provisions continued to make clear that on any day when the SHC was operative, the terms of the SHC governed the permitted hours on that day. It did not operate by way of extension to permitted hours already available through the general licensing hours.

That is made clear by Section 76 as then enacted. I set out Section 76 as it was between 1964 and 1988:

"(1) This section applies to licensed premises or premises in respect of which a club is registered, or any part of any such premises, during the time that-

(a) there is in force for the premises or part a special hours certificate granted under the following provisions of this Part of this Act; and

(b) the section is applied, under subsection (7) of this section, to the premises or part, by the holder of the licence or, as the case may be, the secretary of the club.

(2) Subject to the following provisions of this section, the permitted hours on weekdays other than Good Friday in any premises or part of premises to which this section applies shall be the periods between half past twelve and three o'clock in the afternoon and between half past six in the evening and two o'clock in the morning following, except that-

(a) the permitted hours shall end at midnight on Maundy Thursday and Easter Eve and on any day on which music and dancing is not provided after midnight; and

(b) on any day that music and dancing end between midnight and two o'clock in the morning, the permitted hours shall end when the music and dancing end.

(3) In relation to premises which are situated in any part of the metropolis outside the City of London which is specified for the purposes of this subsection by an order of the Secretary of State, subsection (2) of this section shall have effect with the substitution of references to three o'clock in the morning for the references to two o'clock in the morning.

(4) Where the permitted hours are fixed by this section, section 63(1) of this Act shall apply to the consumption of liquor on the premises as if in paragraph (a) thereof half an hour were substituted for ten minutes and paragraph (b) thereof were omitted.

(5) Nothing in this section applies in relation to any bar in premises or a part of premises to which this section applies, and any such bar shall accordingly be treated as if it were a part of the premises to which this section does not apply.

(6) Where a special hours certificate for any premises or part of premises is limited to particular days in the week, this section does not affect the permitted hours in the premises on days on which the certificate does not apply.

(7) The holder of the licence or, as the case may be, the secretary of the club, may apply this section, or terminate its application, from such day as he may fix by notice in writing to the chief officer of police served not less than fourteen days before that day."

The basic permitted hours under the SHC set out under sub-section 2 were different from the permitted hours under Section 60. Both regimes consisted of a morning and an afternoon session, divided by the "dead afternoon". In each session the SHC starting time was later: 1½ hours in the morning, and an hour in the afternoon. And of course the SHC permitted an extra three hours in the night. So SHC hours were, in the judge's words (picking up on a quotation from Viscount Dilhorne, as we will see):

"a complete substitute for the general licensing hours on those days to which the certificate applied."

That conclusion comes clearly from the words of the statute. Section 76(2) makes it clear that when the SHC is in operation, the "permitted hours ... shall be ..." as there laid out - ie a regime quite different to the Section 60 permitted hours regime. There are two further pointers towards substitution for the general licensing hours. Section 76(4) laid down a more leisurely drinking up time "when the permitted hours are fixed by this section". And Section 76(6) makes the point negatively:

"Where a Special Hours Certificate for any premises ... is limited to particular days in every week, this section does not affect the permitted hours on days which the certificate does not apply."

What I take to be the clear inference from that sub-section is that on a day when the SHC does apply, the permitted hours are affected by Section 76, namely they shall be as set out in Section 76(2) (or - after 1988 - as further limited under Sections 78A and 81A).

Strong persuasive confirmation that that construction is correct can be found in the passage from Viscount Dilhorne's speech in Carter -v- Bradbeer [1975] 1 WLR 1204 at 1212 - dealing with the law in 1974. I have added the emphasis:

"He obtained a special hours certificate and, having done so, it was open to him to apply the provisions of section 76 from such day as he might fix by notice to the chief officer of police. Having applied them, he could also terminate their application by notice: section 76(7).

The main consequence of the application of section 76 is that, while the section applies, the permitted hours for the sale of intoxicating liquor prescribed by section 60 of the Act no longer apply and other permitted hours are substituted for them . Under section 60, on weekdays other than Christmas Day or Good Friday the permitted hours are from 11am to 3pm and, in the case of Torquay, from 5.30pm to 11pm. Under section 76(2) the permitted hours on weekdays other than Good Friday on premises to which a special hours certificate applies are between 12.30pm and 3pm and 6.30pm and 2am. But the permitted hours under the special hours certificate end at midnight on Maundy Thursday and Easter Eve and also when music and dancing are not provided after midnight. If the music and dancing stop between midnight and 2am the permitted hours also end.

These provisions show that it was Parliament's intention to secure that the sale of intoxicating liquor under a special hours certificate should always be ancillary to music and dancing, and that premises to which a special hours certificate applied should not be what was called in argument a ´late night pub' "

Those remarks were obiter (as the case was not concerned with the issue before us), but clearly were considered obiter. They are given particular force as Viscount Dilhorne had the responsibility, as Lord Chancellor, of introducing the 1964 Bill in the House of Lords.

That the SHC regime operated in substitution for the permitted hours regime under Section 60, as extended under Section 68 and 70 is in my view too clear to permit contrary argument (as well as being supported by Viscount Dilhorne, Mr Justice Owen in Marsden (supra), and Mr Justice Keene below). Indeed when pressed by my Lord, Lord Justice Simon Brown, Mr Saunders conceded that point:

"Q (referring to Section 76(2) in its pre-1988 form): It was in truth an express substitution for Section 60, is that it? A: Yes." (Transcript Day 1, page 61).

To summarise the position before the time of the 1988 amendments:

i) on days when the SHC operated, it defined the permitted hours in substitution for the general licensing hours laid down by Section 60 - those hours were not a bolt-on extra as the extra hours under Section 68 or 70 would have been;

ii) the Magistrates' Court or Licensing Justices had no power to alter the start time of the SHC permitted hours (as that was laid down by Section 76(2);

iii) the first time that they were given powers to alter (restrict) the statutory end time of the SHC permitted hours was by Section 81A of the Licensing (Amendment) Act, 1980 (see what is now Section 76(2)(c) of the Act).

THE 1988 AMENDMENTS

I generally find resort to Parliamentary material of some limited value in understanding the general thrust of the Act, but seldom worth the real difficulties of the treasure hunt through Hansard. So when the editors of Halsbury's Statutes or Current Law Statutes do that work for me, I am both grateful and better informed.

I do not find in this Act any ambiguity requiring Pepper -v- Hart assistance, but record that counsel were agreed that the principal object of the 1988 Bill was to open up what the Minister, Mr Douglas Hurd MP, described as "the forbidden afternoon" - the dead period between 3.00pm and 5.30pm when liquor could not be sold, and that there was a subsidiary object to have better late-night control of nuisance. It also seems clear that nuisance by day was also considered - see Section 67A. One does not need assistance from Parliamentary debates to see that the 1988 amendments gave justices much broader powers to limit SHCs. I can find no support (either in the Parliamentary material shown to us by counsel or in any of the statutory amendments) for the suggestion in Mr Coulson's affidavit (already referred to) that the Government's intention (in 1988) was that:

"from then on SHC's would be in the form of extension to permitted hours, similar to other extensions, and not, as previously, a set of ´special hours' throughout the day"

I consider those amendments next. Central to the issue are the amendments affecting the permitted hours. Under both Section 60 and Section 76(2) the permitted hours were redefined:

"Section 60: Permitted Hours in Licensed Premises

(1) Subject to the following provisions of this Part of this Act, the permitted hours in licensed premises shall be-

a) on weekdays, other than Christmas Day or Good Friday, the hours from eleven in the morning to eleven in the evening ..."

Section 76: Permitted Hours where Special Hours Certificates in Force

...

(2) Subject to the following provisions of this section, the permitted hours on weekdays ... in any premises ... to which this section applies shall extend until two in the morning following, except that-

a) the permitted hours shall end at midnight ... on any day on which music and dancing is not provided after midnight; and

b) on any day that music and dancing end between midnight and 2 o'clock in the morning, the permitted hours shall end when the music and dancing end; and

c) in any premises or part for which a Certificate is in force subject to a limitation imposed in pursuance of section 78A or 81A of this Act, the permitted hours on any day to which the limitation relates shall not extend beyond the time specified in the Certificate."

The points to be made are as follows:

1) The basic permitted hours formula is retained, as are the four regimes, Section 60, 68, 70 and SHCs, each with its different set of permitted hours.

2) Section 76(2) no longer itself demonstrates that the SHC permitted hours must start at a different time from the Section 60 permitted hours. But Section 76(4) and 76(6) remain with their references to

"when the permitted hours are fixed by this section"

and

"Where a Special Hours Certificate ... is limited to particular days in every week, this section does not affect the permitted hours on [other] days".

Both those subsections are indicators that a substituted regime continues on SHC days.

3) The appellant's best point is that Section 76(2) makes no reference to when, on SHC days, the start time for the permitted hours shall commence. The only laid down limit is the end time. But, as will be seen, there are new broad powers given to limit the SHC "to particular times of the days".

4) I turn to those amendments giving the magistrates much greater powers in relation to the grant of SHC's, and the terms on which they are granted.

i) Section 77 was amended to give the justices both a discretion as to whether or not to grant an SHC where the conditions in a) and b) are satisfied ("may grant" has replaced "shall grant"), and such a grant may be "with or without limitations".

ii) Such limitations are primarily set out in the new Section 78A:

"Section 78A: Limitation on Special Hours Certificate

1) On any application for Special Hours Certificate the Licensing Justices ... may grant a Certificate under Section 77 or 78 of this Act limited in any of the following respects.

2) The limitations referred to are limitations-

a) to particular times of the day ;

b) to particular days of the week;

c) to particular periods of the year."

Such limitations may be varied by the court on the application of the licensee. Further powers to impose "limitations to particular times of the day" are to be found in the new Section 81A of the Act, empowering the making of such a limitation on an application for revocation, or on the application of the chief officer of police. The discretion to limit the times of the permitted hours is not fettered by Section 78A, but subject to the normal Padfield -v- Minister of Agriculture, Fisheries and Food (supra) principles.

iii) There were also various instances where earlier limited discretions of the justices were replaced by a general discretion: see the Licensing Act 1988, Schedule 4, Section 5(4), and paragraph 8 of Schedule 3, which I must return to later.

The appellant puts particular emphasis on the 1980 amendments already touched on and Section 76(2)(c)), which I will consider next.

Ground 1: That the Licensing Justices have no power to restrict the commencement of permitted hours under an SHC.

Mr Saunders' submission on the first Ground of Appeal are summarised in his skeleton argument, paragraphs 1-11. He starts from the unpromising position that for reasons already given, before the 1988 amendments the permitted hours of SHCs as set out in Section 76 were in substitution for the general licensing hours. He must therefor show that the 1988 amendments changed that.

This is necessary because he contends for a situation where the SHC is a bolt-on extra to Section 60 general licensing hours. Thus on any SHC day the permitted licensing hours must commence at 11.00am, and the justices need only be satisfied that the premises will be used: "for the purposes of providing for persons resorting to the premises music and dancing and substantial refreshment to which the sale of intoxicating liquor is ancillary " after the close of the general licensing hours at 11.00pm. Thus he submits the SHC when operative would no longer be in substitution for the general licensing hours, it would be in addition to them. That would completely alter the scheme of the Act, and in my judgment is a position that simply cannot be reached from the Act as we find it.

I set out the common ground. Until 1989 the justices dealing with an application for an SHC had no power to extend or restrict the permitted hours under Section 76. The first such power came in by Section 3 of the Licensing (Amendment) Act, 1980, inserting a new Section 81A into the 1969 Act. It dealt with a situation where either the music or dancing would be ending earlier or where noise or disorderly conduct made it desirable for the permitted hours to end earlier, and it gave the justices power to cut the end time back to midnight. That power was preserved in the 1988 amendments by Section 76(2)(c)), the grounds limiting its exercise not being re-enacted: Section 76(2)(c)):

"in any premises ... for which [an SHC] is in force subject to a limitation imposed in pursuance of Section 78A or 81A of this Act, the permitted hours on any day to which the limitation relates shall not extend beyond the time specified in the certificate."

The scheme of the new Section 76(2) and (3) is that statute defines the end time of SHC permitted hours unless the music or dancing end earlier ((a) or (b)) or (c) the justices in their discretion impose an earlier limit under the new Section 78A and 81A. Thus the 1980 amendment (a discretion to the justices to act only when satisfied of certain misconduct) is replaced by exercise of the Section 78A and 81A powers, being a broad discretion limited only by Padfield principles.

Mr Saunders compares the wording of the old Section 3 of the 1980 Act, and the new Section 76(2)(c) introduced by the 1988 amendment and submits that Section 76(2)(c) was never intended to be "a power to limit the commencement time as well" of permitted hours under an SHC. He reinforces this by pointing out that Schedule 3 of the 1988 Act describes the introduction of the new Section 76(2)(c) as a "minor amendment" - which categorisation is inconsistent with that provision heralding a major change.

It is clear that Section 76(2)(c) was never intended to give power to limit the start times of permitted hours under an SHC, and also that any such amendment would not be characterised as minor. But that does not assist the appellant. Sections 78A and 81A are not, unsurprisingly, in Schedule 3 as minor amendments. Those sections relate to the imposition of (unqualified) limitations as to "particular times of day" to which the permitted hours of SHCs may be subject. Prima facie those words apply to both start times and end times. SHCs granted under the regime may be either "with or without limitations". If an SHC were granted without such limitations, I would take it as clear that the permitted hours of the SHC ran from the start of the general licensing hours until the end of those hours as fixed by Section 76(2) or (3). Where there are limitations, Section 76(2)(c) makes clear that in relation to limiting end times of permitted hours, Section 78A and 81A govern, and not the more restricted powers first introduced by the 1980 Act. In other words, by Section 78 and 81A the justices powers to control the operation of SHCs was significantly increased.

In these circumstances, I can see no reason to restrict the Section 78A/81A powers to limiting end times only, for the following reasons.

There is nothing in the language that requires any such conclusion. To the contrary, everything points out against it.

First, the fact that SHCs continued to have their own "permitted hours", necessarily involving start times and end times.

Second, that SHCs were not brought into line with the wording used in the bolt-on regimes established by Section 68 supper hours certificates and Section 70 extended hours orders.

Third, that the wording of Section 76(4) and (6) both still point to the SHC regime on operative days being substituted for the Section 60 regime, and that there is nothing in the Parliamentary material which we have been shown to contradict that. Nor is there anything to suggest that post-1988: i) all SHCs must start at 11.00am; and/or ii) that on SHC days liquor can lawfully be sold in the general licensing hours under the provisions of the on-licence and Section 60.

Fourth, that the omission of any reference to any start time for the SHC regime is amply explained by the powers given by Section 78A and 81A to impose such a start time.

Fifth, that the continued requirement of Section 77 that the justices be satisfied that the premises while the SHC is operative will be used "for the purpose of providing for persons resorting to the premises music and dancing and substantial refreshment to which the sale of intoxicating liquor is ancillary" indicates the need for the provision of start times.

Sixth, as the skeleton of Mr Quirke, for the respondents, reminded us, the prescribed forms for the SHC laid down by the Licensing (Special Hours Certificate) Rules 1982, as amended, anticipate that the start time: i) will be entered in the certificate; and ii) will not always be 11.00am by prescribing that the SHC shall read:

"[By virtue of Section [78A] [and] [80] of the Licensing Act, 1964, this certificate shall be limited to [the following times of day, namely] ..."

Seventh, as the 1988 amendments were clearly directed to increasing the control exercised by justices over the grant of SHCs with the intention of preventing noise and nuisance and breach of the peace, this interpretation of the Act is consistent with that objective, and the appellant's contentions inconsistent.

As will be clear, I am in no doubt whatsoever that the appellant has failed to make out his first ground of appeal. In so concluding, I am in agreement with both Owen J and Keene J in the result they reached and essentially on the grounds they gave - though I have covered some ground not covered by them, and do not in all respects accept some of the points of detail each has relied on. But I am in agreement with them on the fundamentals.

I believe this ground to be determinative of this appeal irrespective of Ground 2. Once it is established that the justices have power to impose a 7.30pm start time, then clearly the police's stated objective in seeking that limitation (contained in the affidavit already referred to) is within the policy of the Act.

Ground 2: That the sale of alcohol does not have to be ancillary to music and dancing and/or substantial refreshment throughout the permitted hours under the Special Hours Certificate.

Section 80(1), headed "Special Hours Certificates limited to particular days or parts of the year" provides:

"(1) Where a Special Hours Certificate is granted for any premises ... which are used or intended to be used only on particular weekdays for the provision of music and dancing and substantial refreshment, the Certificate shall be limited to those days in the week on which it is shown to the satisfaction of the Licensing Justices ... granting it that music and dancing and refreshment are, or are intended to be provided as required by Section 77 or 78 of this Act."

Section 77 of the Act states, as we have seen, that the justices may grant a Special Hours Certificate if satisfied, inter alia, that the premises will be bona fide used:

"for the purpose of providing for persons resorting to the premises music and dancing and substantial refreshment to which the sale of intoxicating liquor is ancillary".

While the sale of liquor outside permitted hours is an offence under the Act, there is no specific offence for an individual sale of liquor which is not ancillary to the food and music and dancing during the currency of the SHC. The sanction preventing such sales is revocation of the SHC, or other limitation being imposed on it - see Sections 81, 81A and 78A. For the purposes of Mr Saunders' submission on this point, it is necessary to consider in particular Section 81: Revocation of Special Hours Certificates. Section 81(2) provides:

"At any time whilst a Special Hours Certificate for any premises ... is in force, the Chief Officer of Police may apply to the Licensing Justices ... for the revocation of the Certificate on the ground that, while the Certificate has been in force-

a) the premises have not ... been used as mentioned in Section 77 ... of this Act; or

b) a person has been convicted of having at those premises or that part contravened Section 59 of this Act [sales outside permitted hours];

or that on the whole the persons resorting to the premises ... are there at times when the sale ... of intoxicating liquor there is lawful by virtue only of the Certificate, for the purpose of obtaining intoxicating liquor rather than for the purpose of dancing or of obtaining refreshments other than intoxicating liquor; and if the Licensing Justices ... are satisfied the ground of application is made out they may revoke the Certificate."

Mr Saunders emphasises the words "lawful by virtue only of the [SHC]" and re-submits his basic submission that the SHC is only a bolt-on extra to the permitted hours. He contends that on a day when the SHC is operative, the only time when the sale of liquor is lawful by virtue only of the SHC is during the hours after ordinary closing time - 11.00pm to 2.00am.

If that were the only time that the SHC was the only source of the permission to sell liquor, then that pre-supposes a second legal justification for those sales during the hours permitted by the SHC. The judge reasonably enough assumed that Mr Saunders was submitting that during general licensing hours the SHC for the day in question and Section 60 ran together in harness, each providing a legal justification for sales during ordinary licensing hours.

For reasons already given, this submission is hopeless, as from 1949 until at earliest the 1988 amendments it is clear and accepted by Mr Saunders that the SHC-permitted hours under Section 76 operated in substitution for the hours that would have been permitted under Section 60 had the SHC not been in operation. Thus during the whole of an SHC day, the sale of liquor was lawful by virtue only of that Certificate, as that Certificate laid down the permitted hours.

Mr Saunders submits that the judge misunderstood him. He says (Transcript Day 1, page 103):

"I hope I did not say that the words, as it were, were two sets of permitted hours running concurrently. I accept that pre-'88 the Section 76 hours replaced the Section 60 hours."

But after 1988 he still contends for the bolt-on extra construction. After 1988 he is back to the submissions that have already failed in relation to first, the proper interpretation of Section 76, and second, the more particular point made in relation to Section 76(2)(c). To rehearse those reasons, it seems to me clear that nothing in the 1988 amendments altered the position that when the SHC was in force, it alone defined the permitted hours, and the SHC continued to operate in substitution for the general licensing hours. Parliament did not take the opportunity to turn the SHC regime under Section 76 into a bolt-on extra regime for extended hours as can be found under Sections 68 and 70. The scheme of the Act remains that the only operative regime legitimising the sale of liquor on SHC days is the SHC regime to be found between Sections 76 and 83 of the Act.

But in any event, there is an anodyne construction to Section 81(2) which I regard as the natural and correct one. Section 81 deals with grounds for revocation of the SHC. Section 81(2)b deals with convictions for the supplying of drink outside permitted hours. Such supply might or might not have occurred on SHC days. The section then proceeds to the particular ground of revocation relevant to the phrase "by virtue only", namely a general ground relating to the conduct of the premises at a time when the consumption of liquor should have been ancillary to dancing or obtaining refreshment (which could refer to conduct under three regimes: supper hours under Section 68; or an extended hours order under Section 70; or the conduct of the SHC). The word "only" is to make it clear that the only relevant conduct is conduct when an SHC is in operation, and not conduct under Section 68 or 70 extensions.

Therefore it is clear to me that at all times when the SHC is in operation, the licensee cannot rely on a combination of his on-license and Section 60 to make any non-ancillary sale of liquor compliant with the law. Accordingly I would dismiss the appeal on this ground also.

Various authorities have been cited to us. None of those authorities have focused on the precise question posed by this appeal. Apart from Viscount Dilhorne's summary of the pre-1988 law in Carter -v- Bradbeer (supra), I have not found any of these authorities of sufficient utility to require special treatment. Where a sentence in one authority or another taken out of context appears to assist one side or the other, it seems to me usually to be on the basis of a basic assumption as to what the law is, unsupported by analysis to show that such an assumption would be right. Also, though I looked carefully through the Parliamentary material to see whether there was any basis for the contention that the 1988 amendments were to change the SHC regime into the bolt-on extra that the appellant's contended for, there seems to me to be no ambiguity in the post-1988 Act which would justify any Pepper -v- Hart (supra) intervention.

Finally, after the hearing was concluded, the Court was sent a transcript of an unreported case before Mr Justice Carnwath, judgment dated 22nd March 1996 ( Spence -v- Cooper CO/4210/1995). On page 13 of the judgment there is a sentence which seems to assume that on days when the SHC applies it would be lawful to sell intoxicating liquor up to 11.00pm under both Section 60 and the SHC. This concept of their running in harness was sensibly abandoned by Mr Saunders before us. The point was one of many considered by Carnwath J. It clearly was not argued in any depth before him. If I am right in my construction of what he says, I do not agree with it. I get no assistance from it in this case.

LORD JUSTICE AULD: I agree.

LORD JUSTICE SIMON BROWN: I too agree but, since the appeal was very fully argued and since my approach to it is not perhaps at all points identical to that of Lord Justice Henry, I think it right to add a judgment of my own.

The appeal raises two fundamental questions of liquor licensing law. Both concern special hours certificates (SHCs) and in particular their application to public houses. Question 1 is whether, ever since SHCs were first introduced in 1949, their requirement that the sale of intoxicating liquor be ancillary to the provision of music and dancing or substantial (non-alcoholic) refreshment applies throughout the whole of the permitted hours (the respondents' case), or only during the extra hours permitted by the SHC (the appellant's case). Question 2 is whether, since the Licensing Act 1964 was amended in 1988, licensing justices when granting SHCs (or instead of revoking them) have had power to limit only the licensee's closing time (the appellant's case) or whether they can also restrict his opening time (the respondents' case). These two questions are related in this sense: unless the sale of alcohol has to be ancillary to the provision of entertainment or food throughout the whole of the day's permitted hours rather than merely during the extra hours allowed by an SHC at night, there would appear to be little purpose in having power to limit opening time as well as closing time. The converse is also true.

The relevant facts and legislative provision have already been set out in Henry LJ's judgment and, gratefully taking them as read, I proceed at once to the two questions which I prefer to address in the opposite order to My Lord.

Must the sale of intoxicating liquor (hereafter drink) be ancillary to music and dancing and substantial refreshment (hereafter food) not merely during the additional time permitted by an SHC but also during the permitted hours which would have operated without the SHC?

Much of the argument revolved around s.81(2). This describes three situations in which the police can apply to revoke SHCs, the only sanction, be it noted, for failing to comply with the preconditions for their grant and proper operation. The three grounds for revocation are these:

(a) while the certificate has been in force (by which both parties agree is meant the certificate has been granted and then applied under s.76(7)) the premises have not been used as mentioned in s.77 i.e. to provide customers with music and dancing and food to which the sale of drink is ancillary;

(b) while the certificate has been in force someone has been convicted of selling drink at the premises outside permitted hours;

(c) "on the whole the persons resorting to the premises ... are there, at times when the sale or supply of [drink] there is lawful by virtue only of the certificate, for the purpose of obtaining [drink] rather than for the purpose of dancing or of obtaining [food]."

The inter-relation between grounds (a) and (c) is clear: ground (a) postulates that the certificate-holder has failed to provide the facilities of music and dancing and food to which the sale of drink is ancillary; ground (c) on the other hand postulates that the certificate-holder has done his part in providing those facilities but that "on the whole" his customers have abused them by non-ancillary drinking i.e. by drinking rather than dancing or eating. (That the customers are required to participate by way of dancing or eating rather than merely by listening to the music provided is hardly surprising.)

Grounds (a) and (b), throw no light on the answer to Question 1. True, the premises must be used to provide the customers with music and dancing and food to which the sale of drink is ancillary, but that says nothing as to whether this must be throughout the day or merely after general licensing hours. The extra supper hour too requires that the premises are used for the purpose of providing customers with food to which the sale of drink is ancillary (s.68), but there is no question of this having to be the position throughout the rest of the day. It is to the language of ground (c), therefore, that both parties principally look for an answer and each of them claims to find in it convincing support for his case. Mr Saunders QC for the appellants focuses in particular upon the words "by virtue only" in the phrase "at times when the sale or supply of intoxicating liquor is lawful there by virtue only of the certificate". That, submits Mr Saunders, must mean times after the end of normal permitted hours i.e. after 11 pm, rather than during hours which would in any event be permitted irrespective of whether the premises had an SHC and during which therefore drink could lawfully be sold whether or not there was a certificate in force. The respondents' contrary argument, accepted by the judge below, is that the words in question were included to make it clear that the requirement for ancillary drinking applied only to days (or indeed times of year) when the SHC governs the permitted hours, but that on those days the drinking "on the whole" had to be ancillary.

It is necessary at this stage to indicate something of the history of SHCs and to point out that, until the 1988 amendments to the Act, an SHC, once in force, operated not merely to extend the permitted hours at the end of the day, but also to restrict the permitted hours during earlier parts of the day. That had been so ever since SHCs were first introduced in 1949, initially in respect only of hotels and restaurants in the metropolis, then, from 1961, in respect of hotels and restaurants countrywide, and finally, from 1964, in respect of all licensed premises. The position is sufficiently illustrated by reference to s.21(3)(a) of the 1949 Act which provided that while an SHC was in force "the permitted hours shall be" 12.30pm - 3pm, and 6.30pm - 2am, instead of the general licensing hours which were at that time 11am - 10pm, with a two hour break and subject to a maximum of eight hours. Thus, argues Mr Quirke for the respondents, the permitted hours under an SHC were always wholly different from the general licensing hours, and, for the days that they operated, they imposed a different regime.

That argument was accepted by the judge below who held that:

"It is inconceivable that, under the 1964 Act as it was, the additional time achieved by an SHC after the end of general licensing hours each day was intended to be seen as the only period of time when sale or consumption was lawful by virtue of the certificate, as if during other parts of the same day general licensing hours were still operating as it were in double harness with permitted hours under the certificate. That envisages that the licensee could assert that at, say, 10am his customers were drinking both under the authority of the certificate and under the authority of the general licensing hours. But if that were so, what about the general licensing hours that on the same day fell outside the permitted hours under the SHC? If this argument of the applicant were sound, it would mean that on a day to which the SHC applied customers could consume liquor on the licensed premises between 5.30pm and 6.30pm (part of the general licensing hours), even though the evening permitted hours at that date under the SHC were 6.30pm to 2am. Such a hybrid result is inconsistent with the wording of s.76(2) of the 1964 Act as it originally stood and with the wording of the similar provisions in the other Licensing Acts prior to 1988. The argument cannot, therefore, be a sound one."

Mr Saunders submits that the judge there was misunderstanding his argument: he has never contended that the certificate-holder is entitled to the benefit of both general licensing hours and such additional hours as are permitted under the SHC but argues rather that those additional hours which would not otherwise be permitted hours for drinking at all are the only ones subject to the restriction that drinking must be ancillary to dancing or eating.

In urging his construction upon the Court Mr Saunders poses a number of forensic questions. Why should Parliament wish to confine the benefit of SHCs to premises where the drinking is always ancillary to dancing or eating? Given that SHCs have been extended generally to licensed premises including public houses, and given that few if any public houses trade principally in entertainment and food rather than drink throughout the whole course of the day, why should Parliament require them to open only in the evenings? Why should public houses have to choose between being able to sell non-ancillary drink all day up until 11pm, or only ancillary drink if they wish to stay open until 2am, not least given that they are perfectly entitled to operate an SHC on some days only and to operate general licensing hours on others? Why, in particular, should that be so, given that public houses can obtain cumulative extensions up to 1am under ss.68 and 70, neither of which require that on the days of such extensions the drinking during the earlier parts of the day has to be ancillary (save only "for a substantial period preceding" 11pm under s.70(4)).

As it seems to me, the answers to those questions are to be found in Henry LJ's judgment, explaining as it does the scheme of the legislation as a whole and the intended role within it of the SHC regime. During whatever hours of trading are permitted by the SHC the drinking must "on the whole" be ancillary to the provision of food and/or entertainment; an SHC should not be granted to an ordinary public house so as to turn it into a "late night pub."

True, until recently, SHCs have apparently been granted to many ordinary public houses and some of these in the result may indeed have been operating as late night pubs. But it must be remembered that until the 1988 legislative amendments were made, public houses with the benefit of SHCs had their opening hours postponed by 1½ hours in the morning, and a further hour in the evening, and to this extent were obviously providing less non-ancillary drinking time than the generality of public houses.

It seems to me no coincidence that when in 1988 Parliament not only opened up "the forbidden afternoon" but also ended the otherwise automatic reduction of hours during the earlier parts of the day permitted to SHC holders, it at the same time allowed justices to limit SHC licence holders' opening hours as well as their closing hours. Thus may SHCs be confined to premises where (on the days they apply) drinking "on the whole" is ancillary. That, of course, is to answer Question 2 also in favour of the respondents and to that I now turn.

Do Licensing Justices have power to restrict the hours of SHCs generally or only as to closing time?

Both s.78A and s.81A expressly allow the limitation of an SHC "to particular times of the day." On their face these provisions plainly favour the respondents' argument. They were, moreover, introduced in the context of amending legislation which not merely (a) substituted a discretion to grant one for what had previously been a mandatory requirement to grant an SHC upon the specified conditions being satisfied, but also (b) replaced a provision (the old s.76(2)) under which the permitted hours under an SHC on weekdays were specified as "the periods between half past twelve and three o'clock in the afternoon and between half past six in the evening and two o'clock in the morning following" (subject to exceptions only as to closing time) with a new provision (the new s.76(2)) ending that previous automatic reduction of daytime permitted hours under an SHC, and, more particularly, (c) replaced a provision (the old s.81A(3)) permitting the imposition of a condition precluding the permitted hours from extending "beyond such time earlier than two o'clock in the morning but not earlier than midnight as may be specified" with the present apparently more flexible provision permitting limits "to particular times of the day".

How then do the appellants seek to contend that a power to limit an SHC "to particular times of day" on its true construction allows only a limitation of the closing hour?

Mr Saunders' argument fixes above all upon the terms of s.76(2)(c) which for convenience I now set out again:

"(c) in any premises or part for which a certificate is in force subject to a limitation imposed in pursuance of s.78A or s.81A of this Act, the permitted hours on any day to which the limitation relates shall not extend beyond the times specified in the certificate."

The language of extension in s.76 had always previously referred only to an end time; its continued use, the appellants argue, is likewise intended and apt to refer only to an end time. As to the use of the plural in the phrase "particular times of the day" in ss.78A(2)(a) and 81A(1), that, Mr Saunders submits, is simply to reflect the use of the word "limitations", also in the plural, in the opening clause of both these provisions, and/or to reflect the fact that the justices could impose different end times on different days, and/or is because various different end times could be imposed i.e. any time between midnight and 2 a.m.

Imperfectly though I recognise the language of s.76(2)(c) accommodates limitations imposed other than as to closing time, and ingeniously though Mr Saunders' arguments were presented, I find myself wholly unpersuaded by them. S.76(2)(c), although perhaps infelicitous for the purpose, is certainly capable of providing for restrictions on opening time too - as Keene J pointed out below, s.67A(3) demonstrates that the word "time" is sometimes used in this legislation to encompass a period of time - and in those circumstances the terms of ss.78A and 81A ultimately seem to me just too plain to admit of the severe limitation which the appellants' argument would place upon them. Whatever difficulties there may be in this repeatedly amended legislation, I would hold fast to the apparent clarity of this newly introduced provision - a fresh power to limit an SHC "to particular times of the day" - reserving any criticism for the somewhat clumsy adaptation of s.76 for the purpose - clumsiness which requires too an inference to be drawn in the opening clause of s.76(2) that it is the general permitted hours which (subject to the specified exceptions) are to extend to 2 a.m.

In short, like Henry LJ, I would answer both questions in favour of the respondents and therefore dismiss the appeal.

I add by way of footnote only this. Both parties sought to pray in aid various extracts from Hansard: Mr Saunders in support of his argument on Question 2, Mr Quirk (after the hearing had been concluded) in support of his case on

Question 1. Although de bene esse I considered the parliamentary statements relied upon by both sides, to my mind neither satisfies the stringent tests laid down in Pepper v Hart [1993] AC 593 and certainly neither affects my conclusion on either Question.

Order: Appeal dismissed with costs. Leave to appeal to House of Lords refused.