QUEEN'S BENCH DIVISION
London, WC2A 2LL
B e f o r e :
| LUMINAR LEISURE LIMITED
|- and -
|NORWICH CROWN COURT
||First Interested Party
|THE NORWICH LICENSING JUSTICES
||Second Interested Party
Smith Bernal Wordwave Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Sir Richard Beckett QC and Stephen Walsh (instructed by the Legal Department of J D Wetherspoon plc) for the First Interested Party
The Defendant and the Second Interested Party did not appear and were not represented.
Crown Copyright ©
Mr Justice Stanley Burnton:
The statutory provisions
"76.—(1) This section applies to licensed premises or premises in respect of which a club is registered, or 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 mid-night and two o'clock in the morning, the permitted hours shall end when the music and dancing end.
77. —If, on an application made to the licensing justices with respect to licensed premises in any area which is subject to statutory regulations for music and dancing, the justices are satisfied—
(a) that a music and dancing licence is in force for the premises, and
(b) that the whole or any part of the premises is structurally adapted, and bona fide used, or intended to 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,
the licensing justices shall grant a special hours certificate for the premises or, if they are satisfied that part only of the premises is adapted or used or intended to be used as mentioned in paragraph (b) of this section, for that part."
"81.—(1) If at any time while a special hours certificate is in force no music and dancing licence or, as the case may be, no certificate under section 79 of this Act is in force for the premises to which or part of which the special hours certificate relates that certificate shall thereby be revoked.
(2) At any time while a special hours certificate for any premises or part of premises is in force, the chief officer of police may apply to the licensing justices or, if it was granted under section 78 of this Act, to the magistrates' court, for the revocation of the certificate on the ground that, while the certificate has been in force—
(a) the premises have not, or the part has not, been used as mentioned in section 77 or, as the case may be, section 78 of this Act; or
(b) a person has been convicted of having at those premises or that part contravened section 59 of this Act;
or that on the whole the persons resorting to the premises or part are there, at times when the sale or supply 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 or magistrates' court are satisfied that the ground of the application is made out they may revoke the certificate.
"83.—(1) In sections 76 to 81 of this Act "music and dancing licence" means a licence granted by the licensing authority under the statutory regulations for music and dancing and authorising the keeping or using of any premises for public dancing, singing, music or other public entertainment.
(2) References in those sections to providing music and dancing and refreshment shall be construed as references to providing them on every weekday or on particular weekdays in every week, subject to any break for a period or periods not exceeding two weeks in any twelve successive months or on any special occasion or by reason of any emergency; and references in those sections to providing dancing shall be construed as references to providing facilities for dancing that are adequate having regard to the number of persons for whose reception in the premises or part of premises in question provision is made."
The findings of the Crown Court
"- The large curving dual purpose bar – for the ordering and taking away of alcoholic and other beverages and for the ordering of food:
- The raised and railed off 'restaurant' area, part of which was clearly signed 'Diners Only'
- The small dance floor – small in relation to the drinking areas as a whole and in relation to the number of people likely to resort to the premises at busy times:
- That the preponderance of the tables etc. away from the 'restaurant' area was of a suitable height for eating meals although there were also a substantial number at coffee table height:
- That there was much open space available for occupation by standing drinkers.
- That there were a number of plasma screens displaying moving images linked to constantly playing music so places as to make it possible for virtually any customer so inclined to watch."
"8. The irresistible conclusion is that the motivation for seeking an SHC in this case is a desire to tap into the late night drinking market. The provision of facilities for eating, the opening up of the small dance floor and the linked continuing playing of music and images are intended because it is seen that the making of such provision is a condition precedent to the grant of an SHC. The reality is that there will be very little eating and not much dancing during the extra opening hour that will be the practical outcome of success in this appeal. The music and screens will play on. That said having provided the facilities – in particular the substantial refreshment – the Appellant will have every incentive to wish to see them used."
"10. There being no issue as to the provisions of s77(a) it is to s77(b) that we turn. Bearing in mind that in accordance with company policy the café-bar has not sought to use its PEL pending grant of an SHC the effect of our findings of fact can be expressed as follows. We are satisfied that Lloyds No 1, Riverside, Norwich is structurally adapted, and bona fide intended to be used, for the purpose of providing for persons resorting to the premises music whether they want it or not and, for those wishing to dance and/or have a meal, dancing and substantial refreshment. Those dancing, if any, are likely to be but a very small proportion of those present in the premises at any one time. On the basis that those who choose to dance are unlikely to spend their whole time in the premises dancing, dancers are likely to form a somewhat larger, but still small, proportion of those resorting to the premises. In relation to demand the facilities for dancing are ample. The revenue profile indicates that at times those having a meal will form a significant proportion, on occasions a majority, of those on the premises but that at other times, including the extra hour which is the practical objective of this appeal or indeed any time after 9.30 pm, they will, if any be present at all, form but a tiny proportion of those present. Again in relation to demand the facilities are ample.
11. It is established that the requirement to provide music and dancing and substantial refreshment is a requirement to provide facilities and not a requirement that customers use them - (Richards v Bloxham (Binks)). It follows, at the least, that something less than an exclusive use of the premises is envisaged. It is clear that the structural adaptation, good faith and intent in s 77 must relate to the facilities so provided.
12. Do the concluding words of subsection (b) '…to which the sale of intoxicating liquor is ancillary' likewise relate to that provision of facilities? We conclude that as a matter of construction those words do relate to the facilities intended to be provided.
13. We have been referred to a number of authorities including Richards v Bloxham (Binks) 1968, Young v O'Connell 1985, R v Stafford Crown Court ex p. Shipley  1 WLR 1438 and Northern Leisure plc v Schofield (2000). In the light of those authorities we have considered the facilities to be provided and the use of the premises on a whole day basis, placed little emphasis on the relative significance of the provision for food and that for music and dancing, and have considered with care the important aspect of the ration between food sales and drink sales. That aspect has fallen to be considered on two levels – narrowly and by reference to those using the facilities provided when reaching a conclusion as to whether the statutory preconditions have been satisfied and broadly and in relation to all customers when considering the exercise of discretion.
14. On that basis, and distinguishing between bona fide intent and the underlying commercial motivation for that intent, we are satisfied that the sale of liquor to the relevant customers would be ancillary, in the full sense, to the provision for food and music and dancing and that the statutory preconditions are fulfilled."
"16. We have borne in mind the provisions of s81 of the Act the scheme of which is to provide; for mandatory revocation of an SHC in the event of a failure to fulfil or to continue to fulfil the requirements of s77(a) of the Act; for mandatory revocation in the event of the justices being satisfied upon the (discretionary) application of a chief officer of police that revocation is expedient by reason of disorderly or indecent conduct; but for a discretion to revoke in the event of a (discretionary) application by the chief officer of police leading them to be satisfied that on the whole the persons resorting to the premises were doing so for the purpose of obtaining refreshments other than intoxicating liquor. We find it difficult to envisage that a discretion should have been conferred to permit the continuance of a use which should not have been authorised in the first place whether such use was the product of an initially impermissible grant or of a subsequent change in the use of the premises. This leads us to the conclusion that, in itself, a likelihood that at times the bulk of an SHC holders' customers will not avail themselves of those facilities that lead to the grant of the SHC is not a bar to a favourable exercise of discretion.
17. In our approach to the exercise of our discretion we are entitled to reflect society as it now is. There have been many changes over the years and, whilst it would not be proper for us to flout the policy of the Act, it is entirely appropriate for us to exercise our discretion in a manner that reflects today's society even if it may well be the case that a court exercising a like discretion under the Act would have exercised it differently a quarter of a century ago. For good or ill leisure developments such as that at Riverside and late night drinking and clubbing are part of the 21st century scene. Both Appellant and Respondent trade in such provision on a national basis and are the beneficiaries of SHCs granted by licensing justices up and down the country. Both it would seem would be a risk of revocation of their licences, at least in some instances, should their operations or the consequences of those operations, become of concern to chief officers of police.
18. The four experienced Licensing Justices at this appeal having heard the evidence and inspected the premises were unanimously of the view that, but for Mr Gouriet's submissions to the effect that the s77(b) preconditions had not been fulfilled, they would have unhesitatingly granted this application. In the event for the reasons we have given we have decided that the statutory pre-conditions are satisfied.
19. We have concluded that it would be in the proper exercise of discretion to grant a Special Hours Certificate and accordingly we allow this appeal."
(The italics in paragraph 10 of the judgment and the emboldening in paragraph 16 are in the original.)
The contentions of the parties
i) The Crown Court had properly directed itself on the law in paragraphs 13 and 14 of its judgment. The Crown Court found that the premises were structurally adapted for music and dancing and substantial refreshment. The facilities were provided throughout the trading hours of the premises.
ii) The Crown Court had found that the licensee had the required bona fide intention that the premises would be used for the purpose of providing music and dancing and food to which the sale of intoxicating liquor would be ancillary. The statutory requirement relates to the use of the premises by the licensee, not by the customers. Accordingly, an SHC should not be refused on the grounds that all those resorting to the premises will not in fact make use of both facilities or that some will make use of neither.
iii) However, if "on the whole" people go to the premises primarily to drink that will be a ground for revocation of the SHC under section 81(2) of the Act.
iv) In determining whether or not an applicant possesses the required intent, it is necessary to look at the operation as a whole (Schofield). The licensee's intention to provide the relevant facilities to which the sale of the liquor would be ancillary must be considered in the context of the whole of the trading day rather than the comparatively short extended period effected by the substitution of the SHC hours.
v) On the question of discretion, if the preconditions for the grant of a certificate were satisfied, the grant of an SHC could not be said to have frustrated the policy and objects of the 1964 Act.
"Pausing there, I should have thought as a matter of ordinary language that that is enabling justices to grant a special hours certificate where there is a music and dancing licence in force, and the bona fide intention is to provide facilities, namely to provide for persons resorting to the premises music and dancing and substantial refreshment to which the sale of intoxicating liquor is ancillary. It does not there appear, in any clear words at any rate, that the certificate is only complied with if in fact people do take substantial refreshment, or dance and take substantial refreshment in connection with which as an ancillary they are supplied with intoxicating liquor. In other words it is dealing entirely with the provision of facilities and not with user. The words 'bona fide used or intended to be used' appear, but the purpose thereafter stated is the purpose of providing facilities."
Lord Parker then referred to section 81, and continued:
"In other words that is dealing with the user, how in that the facilities which have been provided, have been used, and if it is found that on the whole people go there to consume intoxicating liquor and not either to dance or to have substantial refreshment, then that is a ground upon which the justices in their discretion may revoke the licence.
Mr. Nowell has argued at considerable length that section 77 is dealing not merely with facilities but with user, and he says that section 77 has not been complied with if, though facilities are provided, drink is provided for somebody who has not partaken of substantial refreshment, or it may be, has not danced. The answer, as it seems to me, is that the section on its natural construction is only dealing with facilities. This becomes perfectly clear when one compares the wording of section 77 with the provisions in sections 68 and 70 for the extension of hours. Section 68, for instance, is dealing with the one hour extension for restaurants, and section 68(2) specifically says that the addition, that is the extended hour, shall be for the purpose of the sale or supply to persons taking meals in the premises and the consumptions of intoxicating liquor which is supplied not only in premises set apart, but for consumption by such persons in that part of the premises as an ancillary to his meal, in other words the hour's extension depends upon user and not facilities."
"(o) that it is possible that some of those present consumed intoxicating liquor and neither danced nor partook of sandwiches or a meal, but that such persons were a very small proportions of the total number of persons at the premises… That the premises were at all material times used primarily as a dance hall, and that the majority of those present went there to dance; that a small proportion of those there purchased sandwiches; and only a very limited number purchased cooked meals."
They came to the conclusion:
"That the evidence did not satisfy us that on the whole persons were resorting to the premises to obtain intoxicating liquor rather than to dance or obtain other refreshment, so that ground (b) of the application of the appellant was not made out."
Those facts are very different from the present.
"What both those authorities establish is that where there is the provision of both music and dancing and substantial refreshment, that is to say food, to which the supply of intoxicating liquor is ancillary, the relative priorities as between music and dancing and food does not matter. That is precisely what the first sentence of the report in the Plaos case in the Times says. But it is not authority for the proposition that priority as between music and dancing and food on the one hand and liquor on the other hand does not matter.
In my judgment, in considering whether to grant a special hours certificate, a comparison of the relevant importance of the sale of liquor to the provision of music and dancing and food does matter. Indeed it is essential to make that comparison, in my judgment, in order to decide whether the sale of liquor will be ancillary. As I pointed out in argument, the root of the English word 'ancillary' is the Latin word 'ancilla', which means a maidservant. The dictionary meaning of ancillary in the Shorter Oxford Dictionary is subservient or subordinate. In my judgment in its meaning in this Act that is the sense in which the word must be understood."
"Nothing in [section 76] 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."
The Divisional Court held that the sales in that case had taken place at a bar within the meaning of section 76(5). In the course of his judgment, Widgery LCJ said, at 671-2:
"I think it must be remembered that the consumption of liquor in the special hours period, for want of a better phrase, is liquor which is to be ancillary to dancing, music, refreshment or all of those things. It is an ancillary service, and one has to regard Parliament I think as expecting that the provision of liquor shall be suitable for service as an ancillary and no more. It is I think a matter of common sense and general experience that anybody who is taking advantage of section 77 facilities, who goes for music, dancing and refreshment, with liquor incidental, can perfectly well be served in his requirements without there being a bar counter at all. If he is having dinner or pretty substantial refreshment, what more simple than that his drink be brought to his table with his meal. If he is dancing, what more simple than that his drink be brought to the table at which he sits out when not dancing. If, as may well happen, he is contemplating all those pleasures, again he has, as it were, a base or table to which his drinks can be bought, and the facility of what may be properly called a cocktail bar or a bar counter of the kind which I have described is not a necessary feature of providing the service for which there is a special hours certificate. On the other hand, it must be plain to anyone that the presence of a bar counter with someone serving behind it, and stools and service, is likely to attract into the premises people who come to drink only. …"
"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."
The provisions referred to did not include section 76(5), to which Viscount Dilhorne referred later in his speech.
"Therefore, it is clear to me that at all times when the special hours certificate is in operation, the licensee cannot rely on a combination of his on-licence and section 60 to make any non-ancillary sale of liquor compliant with the law."
Auld and Simon Brown LJJ agreed. The latter added, at 1456:
"During whatever hours of trading are permitted by the special hours certificate the drinking must 'on the whole' be ancillary to the provision of food and/or entertainment; a special hours certificate should not be granted to an ordinary public house so as to turn it into a 'late night pub.'"
The origin of the words "on the whole", of course, is section 81(2) of the Act.
"17. (a) The premises are located in the town centre area of Loughborough and have the benefit of a Justices' On-Licence.
(b) Since the transfer of the licence in 1992, the first respondents had refurbished and sound-proofed the premises with a view to promoting entertainment for their customers.
(c) General permitted hours applied to the premises, but as a rule, they opened from 7pm on Monday to Thursday inclusive, with the main bar opening during the daytime on Friday, Saturday and Sunday.
(d) The premises comprised three separate bar areas on three levels, each having a DJ console providing music aimed at different age groups from 7pm every evening.
(e) The bar to the rear on the ground floor had a small raised dance floor and the furniture in all areas had been arranged to facilitate and encourage dancing.
(h) In the past, food had not been generally available, but in future a limited range of bar meals would be available throughout opening hours.
18. (i) A significant percentage of 'wet' sales was attributable to non-alcoholic beverages."
"42. The first respondent's basic submission is that section 77 requires only that the premises are used or intended to be used for the purpose of providing music and dancing and substantial refreshment, and that this requirement relates to the use or intended use of the premises by the licensee, not by the customers. This submission appears to involve the artificiality of the court's concluding that provision is made for a facility which is not in fact provided during part of the permitted hours, and I have noted that Mr Beckett's response to it is at first sight a compelling one. But, aided by the indication given in section 76(2) and accepting the submission that the concern of the statute, particularly in the case of an intended use, is with the overall aggregate rather than the position in individual cases, I have, on balance, concluded that the first respondent's basic submission is correct. Although it may seem artificial to say that a licensee is providing music and dancing and substantial refreshment at times when they are not in fact available at a particular moment, if one assesses the position by considering the overall use of the premises by the licensee during the permitted hours it is not in fact artificial.
43. There remains the submission that the practical effect of this construction of section 77 would be to negate the decision in ex parte Shipley, which, of course, I am bound by. I have referred to the factual differences between this case and ex parte Shipley. I do not consider that the practical effect of this construction of section 77 would be to negate the decision in that case that SHCs were not to be used to licence late night pubs, that the SHC regime operates in substitution for the general licensing hours and that when trading under the SHC the drinking must 'on the whole' be ancillary to the provision of food and entertainment. This is because in cases such as this, it will be necessary for the justices to conclude, as the justices did in this case, that the purpose for which the applicant for an SHC intends persons to resort to the premises is to take advantage of the catering and entertainment facilities to which the sale of liquor is ancillary. This will be a question of fact and degree for licensing committees to determine in individual cases. Clearly, in cases where there are large periods when all three are not available, there will be difficult cases at the border line.
44. In this case the Justices made this finding and I conclude that in circumstances in which the justices find that the purpose for which an applicant for an SHC intends persons to resort to the premises is to take advantage of the catering and entertainment facilities to which the sale of liquor is ancillary, music and dancing and substantial refreshment do not have to be provided at the same time throughout the permitted licensing hours of the SHC. The Loughborough Committee's decision was accordingly correct in law."