England and Wales High Court (Administrative Court) Decisions

"We would have expected the judge's judgment to have followed this basic outline: first a consideration of and decisions upon whether it had been shown that the companies were not fit and proper persons to hold a licence ... or that while the licences had been in force the relevant premises had been used for an unlawful purpose ...; and secondly, assuming findings against the companies on either or both of these grounds, whether the Court should exercise its discretion to cancel the licences."

39. Mr Kolvin also relied on the following passage in which Griffiths LJ said if the Court concludes that an applicant is not a fit and proper person, "it is difficult to conceive many grounds upon which it would be right to exercise the discretion not to cancel the licence." (page 316G)

40. Mr Kolvin submitted further that the application should succeed, if for no other reason, because of a failure by the Court to set out its reasons as to why it reached the conclusion it did. In particular he complained of the failure on the part of the Crown Court to describe what he said were the usual or key indicators of unsatisfied demand and explain how, notwithstanding their absence, it was still right to grant the licence. As to the need to give reasons, he cited R. v. Harrow Crown Court, ex parte Dave [1994] 1 W.L.R. 98, at 107A-B (Divisional Court), the International Sporting Club case and R. v. Licensing Justices, ex parte Warner (unreported) 15 October 1998 (Ognall J.).

41. He further submitted that, on the evidence before the Crown Court, the decision to grant the licence was, on the evidence, Wednesbury unreasonable.

42. He submitted that both the legislation by its restrictions on the way that licensed betting offices can operate and the Divisional Court in R v Essex Quarter Sessions ex parte Thomas [1966] 1 W.L.R. 359 had given a "policy steer" to an authority applying paragraph 19(b)(ii). He submitted, basing his argument on a passage in that case (page 362F), that an application must be refused if "made quite irrespective of any demand, but merely to entice custom away from another betting shop in the locality" or "to stimulate demand and to encourage people to bet". Citing Padfield v. Ministere of Agriculture, Fisheries and Food [1968] A.C.997 (H.L.). he submitted that the discretion must be exercised to promote the policy and objects of the Act.

43. In Thomas a Betting Licensing Committee had refused an application by a company for a betting office licence and the company had appealed to Quarter Sessions. There were 8 betting offices within a half a mile of the proposed premises, 5 of which were owned by the company. Lord Parker C.J., in a judgment with which Ashworth J and Widgery J agreed, said (page 361 C-E):

"In the course of giving their decision, the chairman, so it is said, used words to the effect that the neighbouring betting shops were owned by the company, and that the company was willing and anxious to invest further capital in yet another betting office in the vicinity was very good evidence of need for another licence. The chairman, by an affidavit which he has put in, acknowledges that he used words to that effect in giving judgment. What is said here is that quarter sessions wrongly exercised their discretion to grant a licence, having regard to the only evidence available, which was that the company merely stated that they wanted to open another betting shop." (Underlining added)

44. Lord Parker went on to say (pages 362A-363):

"What is urged here by Mr. Durand is that the mere fact that a particular applicant for a betting office licence applies for and desires to get a betting office licence in respect of certain premises is not evidence of any demand, and accordingly that quarter sessions here wrongly exercised their discretion, relying on the application made as showing that there was a demand. For my part I am quite unable to say that quarter sessions went wrong in law. It seems to me that an application made by a bookmaker for a betting office licence may in certain circumstances be evidence of a demand in the locality; it is certainly not conclusive evidence otherwise every application would have to be granted; nor in general is it any evidence to which weight could be attached for two reasons, as it seems to me. In the first place the application might be made quite irrespective of any demand, but merely to entice custom away from another betting shop in the locality; and secondly the application might merely be made not because there was an existing demand, but, if I may put it this way, to stimulate demand and to encourage people to bet. Accordingly, in the ordinary way very little, if any, weight could be attached to the fact that the applicant thought it worth while to invest money and open a new betting shop.

So far as the present case is concerned, however, there was no question of seeking to divert custom from a neighbouring betting shop, because as the plan shows, the proposed premises were a long way away from other betting shops in the locality other than one which was associated with the company; in other words, if the desire was to take away custom, it would be to take away custom from itself. So far as the object being merely to stimulate demand as opposed to satisfying demand, the question as to what weight should be attached to the evidence must depend on what view quarter sessions took of the company's evidence. The evidence before quarter sessions was that of Monty Landsberg, a director of the company B. & J. (Turf Investments) Ltd., and the chairman in his affidavit said:

`Monty Landsberg, who gave evidence upon the appeal, struck me and the justice who with me formed the majority of the court as a sensible and practical businessman who, by reason of his already considerable experience of the betting office business in Romford, had a shrewd appreciation of the demand in the locality for the facilities for which he was seeking a licence. His company's application for a licence was made in the belief that additional facilities were required.'

That was evidence which quarter sessions accepted, and I think that once they accepted that evidence, they were entitled to give some weight - what weight was a matter for them - to his evidence as being evidence of a demand in the locality.

I should say this. It is not a question of what any member of this court sitting in quarter sessions might have decided. Speaking for myself, I would hesitate, and I would expect any chairman of quarter sessions to hesitate, long before differing from the local justices who had dealt with the matter in their locality with the greatest care. But to say that he was as a matter of law not entitled to differ from them is a very different matter. Sympathising as I do with the local justices, who were clearly exercised with the number of betting shops in this locality and the desire to see that no more did come to the area than were really required by demand, I cannot think that quarter sessions went wrong in law. Accordingly, I would refuse this application. "

45. Mr Kolvin also drew my attention to the July 2000 Annual Report of the Gaming Board as reproduced in Paterson's Licensing Acts, 2001. The Board conducts a monthly census. If, at busy times, the average usage in the licensed casino or casinos in the relevant area is more than 50% of capacity, the Board will not normally object to the grant of a new licence on the grounds of lack of demand. If less, the Board "will give active consideration to an objection on the grounds that, at these levels, there could be a real risk that additional supply might threaten successful regulation".

46. Mr Kolvin also relied upon R v Manchester Crown Court, ex parte Cambos Enterprises Limited (unreported) 2 March 1973 (Divisional Court). Mr McCowan sought an order of certiorari to quash a decision of the Crown Court of Manchester dismissing an appeal against the refusal of the Gaming and Licensing Committee of the Justices to grant a Bingo Licence in respect of premises at 55 Bolton Road, Walkden. In Walkden there was a licensed Bingo Club known as the Palace Bingo Club. The Crown Court were unimpressed with its the facilities. There was no dispute that the applicants, if they received a licence, would set up a very much more elaborate establishment than that which was run by their potential competitor, the Palace Bingo Club. It would be "a very much more comfortable and lavish establishment" (page 2D). The relevant legislation was paragraph 18 of Schedule 2 of the Gaming Act 1968:

"18.- (1) The licensing authority may refuse to grant a licence under this Act if it is not shown to their satisfaction that, in the area of the authority, a substantial demand already exists on the part of the prospective players for gaming facilities of the kind proposed to be provided on the relevant premises.

(2) Where it is shown to the satisfaction of the licensing authority that such a demand already exists, the licensing authority may refuse to grant a licence if it is not shown to their satisfaction-

(a) that no gaming facilities of the kind in question are available in that area or in any locality outside that area which is reasonably accessible to the prospective players in question, or

(b) where such facilities are available, that they are insufficient to meet the demand."

47. Lord Widgery, C J, in a judgment with which the other two members of the Court, Ashworth and Bridge JJ agreed, noted what he described as the "slightly odd phraseology" of the first sub-paragraph and went on to say (page 4C):

"that must mean that the intention of Parliament was in general that if a substantial demand was not proved, a refusal of the application was to be expected."

If the demand referred to in sub-paragraph 1 was not proved: "to their satisfaction, then prima facie the application should be refused." (page 4 D-F)

48. Lord Widgery went on to hold that:

"... it does not mean that gaming facilities are provided merely by providing a dark draughty ill-lit room with a bare minimum required for the playing of bingo." (page 5G-6A)

49. Lord Widgery said that if the people of Walkden (pages 6E-F): "found the Palace inadequate for their gaming requirements and wanted something else, then there you have at once the seeds of a demand already existing for gaming facilities of that kind."

50. The Crown Court had come to the conclusion that it had not been established to their satisfaction that a substantial demand already existed and therefore they had to refuse the application (page 7 B-C). As to this Lord Widgery said:

"On my reading of the legislation there is no such mandatory obligation to refuse the application simply because a substantial existing demand is not proved. The language of the paragraph is clearly discretionary; they may refuse the application, and there was therefore a discretion remaining in the Court which fell to be exercised even if they had quite properly reached a conclusion that an existing demand had not been proved. They may well say: what more is there to discuss, what other considerations are to be applied? Obviously Parliament intended that there should be an opportunity for considerations other than the existence of a demand to be taken into account, and I think what is really contemplated here is that in the absence of proof of a substantial demand, the licensing committee may in their wisdom and with their knowledge of the area, still think it right to grant a second bingo licence for the district, and I think that they would be perfectly entitled if they thought it right, to be influenced in favour of granting further facilities to a competitor, by the fact that the competitor was prepared to supply the gaming facilities in question on a more lavish scale, with greater comfort, and in circumstances which the patrons would find more attractive than the existing establishment.

That in my judgment is the kind of legitimate consideration which might move the Committee to make their decision in favour of the Applicants even though no existing substantial demand had been proved."

51. In the latter part of this passage Lord Widgery contemplates qualitative issues as being relevant "even though no existing substantial demand had been proved." There is some conflict between this passage and the passage which suggested that quality can be considered in deciding whether there is an existing substantial demand (page 6E). Bridge J said that in deciding whether or not existing facilities are or are not sufficient to meet the existing demand, "not only the quantity but also the quality of those facilities" should be considered (page 9E-F).

52. It seems to me that Bridge J is right and that issues of quality are relevant when considering demand.

53. Mr Beckett did not accept the two-stage process. He submitted that the authority had to decide whether the grant or renewal would be inexpedient and that in deciding whether it was or was not expedient, the authority was not limited in the manner submitted by Mr Kolvin. Mr Beckett submitted that the word "may" left the authority with considerable discretion and permitted the court to take into account the public interest. He characterised Mr Kolvin's approach to demand as one long since abandoned by licensing committees. Whereas Mr Kolvin concentrates on his so-called "key indicators", Mr Beckett points out that the committees are concerned with latent demand. He draws attention to the passage in Cambos, which I have already cited, referring to "the seeds of demand". The mere fact that punters may not have to queue up to place their bets or collect their winnings, that they have a wide variety of choice and that all current holders offer comfortable modern surroundings, does not mean that the application must be refused.

54. Mr Beckett doubts the "stealing customers" or "not stimulating demand" "policy steer" advocated by Mr Kolvin. He points to the very significant relaxation of the regulatory system over the last 40 years. Mr Beckett relied upon the Thomas case. The only evidence in that case was "that the company merely stated that they wanted to open another betting shop". Viability, so he submitted, was an inherent part of demand.

55. As to the need to give reasons Mr Beckett relied upon the following passage in Eagil Trust Co. Ltd v. Piggott-Brown and another [1985] 3 All E.R. 119 (C.A., Sir John Arnold P. and Griffiths L.J.):

"The next general observation I want to make is as to the judge's duty to give his reasons for his decision. A professional judge should, as a rule, give reasons for his decision. I say `as a general rule' because in the field of discretion there are well-established exceptions. The most obvious and frequently used is the exercise of the judge's discretion on costs. As a general rule the judge gives no reasons for the way in which he is exercising his discretion on costs, although if he were to make an unusual award of costs, it is clearly desirable that he should give his reasons for doing so. Another recent example of the judge not being required to give his reasons is when he refuses leave to appeal to the Court of Appeal, having refused leave to appeal from an arbitrator (see Lord Diplock in Antaios Cia Naviera SA v Salen Rederierna AB, The Antaios [1984] 3 All ER 229 at 237,[1985] AC 191 at 205).

Apart from such exceptions, in the case of discretionary exercise, as in other decisions on facts or law, the judge should set out his reasons, but the particularity with which he is required to set them out must depend on the circumstances of the case before him and the nature of the decision he is giving. When dealing with an application in chambers to strike out for want of prosecution, a judge should give his reasons in sufficient detail to show the Court of Appeal the principles on which he has acted and the reasons that have led him to his decision. They need not be elaborate. I cannot stress too strongly that there is no duty on a judge, in giving his reasons, to deal with every argument presented by counsel in support of his case. It is sufficient if what he says shows the parties and, if need be, the Court of Appeal the basis on which he has acted, and if it be that the judge has not dealt with some particular argument but it can be seen that there are grounds on which he would have been entitled to reject it, this court should assume that he acted on those grounds unless the appellant can point to convincing reasons leading to a contrary conclusion (see Sachs LJ in Knight v Clifton [1971] 2 All ER 378 at 392-393,[1971] Ch 700 at 721)."

56. In his reply Mr Kolvin accepted that an authority could rely on latent demand. He said that those who run betting shops hope that everyone is a prospective punter- "No-one is unpuntable". He stressed, however, the importance of the key indicators. In reply Mr Kolvin accepted, for the first time, that, in determining whether a grant or refusal would be inexpedient, that the authority can have regard to the future. In fact this is what the claimant had done both in 1997 and 1999, opposing, respectively, the grant of a licence to Chase 8 Racing Limited and Chase. The claimant asked the court, when deciding expediency, to take into consideration, respectively, the future re-opening of their premises at 278 Barking Road and the opening of their premises in the High Street (the latter being a matter about which Chase complained in its grounds of appeal to the Crown Court). Mr Kolvin had moved from a position where only "demand for the time being" was relevant to whether the grant or refusal was inexpedient, to a position where the future situation was relevant.

57. I turn to my conclusions on the law. Whilst not accepting that an authority should always consider demand first on an application for a grant or renewal of a licence, I take the view that an authority considering the grant of a licence should normally do so.

58. I reject the claimant's submissions that the so-called key indicators of unsatisfied demand (paragraph 31 above) are all important, indeed decisive in this case. In assessing "demand for the time being" a matter such as lack of overcrowding in the offices for the time being available is only one of the factors which an authority may wish to take into account. I give an example: assume that the only betting office in the locality is owned by the market leaders, Corals or Ladbrokes, assume that the office is exceptionally well run with a wide choice of events on which to bet, assume a good range of competitive prices and that the premises are not at all overcrowded. Nonetheless, an authority would not be excluded from granting a licence to a small owner managed business, upon evidence of an unsatisfied demand for such an outlet. Assessing actual demand "for the time being" may be done in a variety of ways. I have already cited the Gaming Board's provisional approach not to object if usage exceeds 50% capacity (paragraph 45 above). I doubt it would be Wednesbury unreasonable for an authority to adopt such an approach, provided that its approach was not simply mathematical.

59. Mr Kolvin does not dispute that demand includes what has been described in this hearing as latent demand. If latent demand is unmet, then the demand test is satisfied. In determining whether latent demand is being met, the quanity, quality and type of the existing facilities may be relevant. It is for the authority charged with deciding whether to grant or renew licences to make this determination and this Court will be reluctant to interfere.

60. How is latent demand determined? Mr Kolvin criticises the absence of evidence in this case from punters regarding demand for facilities and the absence of market research. That is a matter for the authority. In my judgment, an authority which did not require such evidence would not be acting in a Wednesbury unreasonable manner.

61. An authority may, in my judgment, make a finding of latent demand on the basis that the applicant for a new licence or the renewal of a licence is prepared to invest money in the launch of a new office or the retention of an existing office. Thomas provides an example of the former. To do so would not be Wednesbury unreasonable.

62. I turn to Mr Kolvin's submission that in assessing demand an authority should take into account what he described as the "policy steer" both in the legislation and in Thomas: there should not be more licences than is required by demand and that, in the absence of demand, applications should be refused if made merely to entice customers away from the current licensed offices or to stimulate demand. That must be right if there is an absence of demand. Nonetheless in deciding whether there is an unmet demand, an authority may feel that it should not be overly concerned with whether the consequence of granting a licence may be that customers will be enticed from existing offices to the proposed new office. In Cambos the relevant legislation was much more restrictive than the legislation with which this case is concerned. Yet the result of granting a new licence would have led to the "stealing" of customers from the Palace Bingo Club. In the present case Chase relied on figures which showed that there might be a shift of custom away from the claimant and Corals. It is hard to envisage that such evidence would defeat the application. Likewise an authority deciding whether there is an unmet demand, may feel that it need not to-day be overly concerned with whether a new licence would stimulate demand. So much has changed since the legalisation of betting shops in 1960. When a betting office can, as now, encourage persons in the office to bet and when it can encourage persons to come into the office by, for example, advertising on the office window the odds being offered or by offering snacks and fruit machines, it seems to me to be unrealistic to be overly concerned with stimulating demand. Furthermore, there are now many ways in which persons minded to "have a flutter" can do so. In addition to telephone credit betting (always permitted), bets may now be placed via the internet. The claimant produced a list of 33 offshore companies providing betting facilities to persons in this country (page 99). Because these companies do not have to add a betting duty or add only a lower duty than the duty in force in this country, there may be a financial advantage in betting offshore. Since 1994 there has been a national lottery, heavily advertised on television with odds of winning the jackpot of some 14 million to 1 against. Spread betting is popular. Even if exaggerated there is some truth to-day in Mr Kolvin's expression: "No-one is unpuntable".