London, WC2A 2LL
B e f o r e :
MR JUSTICE ROYCE
| Nottingham City Council
|- and -
|Wolverhampton and Dudley Breweries
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)
Ian Wise (instructed by John Gaunt & Partners) for the Respondent
Crown Copyright ©
Lord Justice Kennedy:
(a) the Slug and Fiddle public house is owned by the respondent company.
(b) The licensee of the public house on the day in question was employed by the respondent.
(c) On the 16th August 2001 Trading Standards officers employed by the appellant made a routine inspection at the premises.
(d) The officers tested the contents of the four bottles referred to in the informations, three of which were on display and one of which was produced by the licensee.
(e) There was in each case a deficiency in the declared volume of alcohol, such that it fell below the tolerance allowed by Food Labelling Regulations.
(f) No test purchases were made before or after the contents of the bottles were tested.
(g) All the bottles were the property of the respondent.
For the respondent it was contended that only the licensee or the servant of the licensee could lawfully sell intoxicating liquor, and therefore only the licensee could be prosecuted if there was a sale. Reliance was placed on the decision of this court in Goodfellow v Johnson  1 QB 83. The appellant submitted that for various reasons that decision could be distinguished, including the fact that it related to a Licensing Act, and not to the Food Safety Act.
Whether a sale of alcoholic beverages for the purposes of section 14 of the Food Safety Act 1990 can be made only by the licensee authorised under the Licensing Act 1964, or whether it can also be made by the owner of the alcoholic beverages, where such a person also owns the premises from which they are sold and employs the licensee?
Submissions in this Court.
The impact of Goodfellow.
"If the magistrates find the existence of the intent and the commission of the act, … the person doing the act must be dealt with as a principal, even though he is a servant. It cannot be his duty to break the law and if he knowingly commits the act he is guilty."
The Chief Justice then turned to section 6, and said of it –
"In my opinion a person who takes the article in his hand, and performs the physical act of transferring the adulterated thing to the purchaser, is a person who sells within this section."
As Mr MacDonald points out, the Chief Justice used the indefinite article. He did not say that only the person who handed over the adulterated thing could be a seller within the section, and indeed he went on to say at 187 –
"If, therefore, any person transgresses against the provisions of section 6, be he principal or agent, he falls within that section."
Mathew J agreed, and added at 189 –
"It would be an extraordinary interpretation of the Act to hold that even when it was shown that the person who did the act was guilty, his employer alone could be liable to be convicted."
Mr MacDonald invites our attention to the word "alone" and Mathew J went on to point out that if the appellant were right under section 25 "the result might be that while the guilty person would escape, his innocent employer might be convicted."
"In our judgment it was clearly the intention of the Legislature to make the master criminally liable for such acts, unless he was able to rebut the prima facie presumption of guilt by one or other of the methods pointed out in the Act. Take the facts here, and apply the Act to them. To begin with, it cannot be doubted that the appellant sold the ham in question, although the transaction was carried out by his servants. In other words, he was the seller, although not the actual salesman."
As Mr Wise pointed out, the facts of Coppen v Moore are unrelated to licensing, but they do show that in general the ordinary principles of law apply to statutory provisions designed to protect the consumer.
"No person shall sell ... any intoxicating liquor without being duly licensed to sell the same, or at any place where he is not authorised by his licence to sell the same."
In this court Lord Russell CJ said at 13 –
"On reading that section I think it is impossible not to see that, in order to bring the innocent act of a waiter or a barman within the penal clause, it is necessary to put a strong gloss on the words of the section. I am of opinion that the true meaning of the section is that the sale which is prohibited must be a sale by the person who ought to be licensed. Everyone knows that a barman or a waiter is not a person licensed. The sales struck at is a sale by the master or the principal. It is contended for the appellant that section 3 ought to be read as if the words 'without being duly licensed' were ' without being protected by a licence'; but that would be putting a violent gloss upon the words, and to do so is not necessary for the purpose of giving effect to the Act."
Wills J agreed, saying at 14 –
"The construction contended for by the appellant requires that 'authorised by his licence' should be read as equivalent to 'acting under the authority of someone else having a licence'. It is a great straining of language."
The statutory wording was different from that considered by the court in Hotchin v Hindmarsh where the question of whether the person who handed over the goods ought to be licensed did not arise.
"…shall not sell… any intoxicating liquor unless he holds a justices licence…"
The appeal was allowed, but there were five judgments and their reasons differed. Lord Reading CJ at 1152 said –
"On behalf of the appellants it was contended that there had been no sale by them within the meaning of the words in section 65, and that in any event their servant, for whose act it was sought to make them responsible under the statute, was the holder of a justices licence, and, therefore, that the requirements of the statute had been met."
At 1153 he said –
"If it were right to construe the section as if we were determining the rights and obligations of the parties to a contract of sale it could not be doubted, as a general principle of law, that a sale by a servant authorised in that behalf is a sale by the principal, at least to the extent of imposing upon the latter the burdens and advantages of the contract. But I cannot think that when the Legislature enacted that a justices licence should be required as a condition precedent to the right of selling intoxicating liquor by retail on the licensed premises it intended that every person who might be made liable as a contracting party to a contract of sale must hold a justices licence for such sale notwithstanding that he took no part in the actual conduct of the sale on the premises."
The Chief Justice went on to deal with the object of licensing – to make the person who conducts and manages the business on site responsible to the licensing justice. He referred to Williamson v Norris as showing that the barman under the control of the licence holder does not commit an offence contrary to section 65, and at 1154 he continued –
"In the present case, the question is whether the appellants can be said to have sold the liquor under section 65. There has been only one sale, and that was the sale actually conducted by Henry Smith, who is the licence holder. In my judgment there cannot be under this section one sale physically made by him for which a licence is required and another, arising out of his acts, by the appellants as a firm and by each of the members of the firm. If the sale was not by him but by the appellants, it would mean that the person placed by the appellants on the premises to manage and conduct the business there did not require to hold a licence. For the reasons I have already given, I think he is the person aimed at by Parliament in this section, who requires the protection of a justices licence. As he held a licence, the appellants have not aided or abetted him in committing an offence under this section. I am therefore of opinion that the appellants did not sell the liquor to the respondent within the meaning of the section and have therefore not committed the offence of which they have been convicted."
The approach adopted by Darling J was different. At 1155 he said –
"Smith, being the manager for the appellants of the whole business conducted on their premises, did undoubtedly sell liquor there within the meaning of the Act, and therefore he needs the protection of a justices licence. Of course there was a sale by, or at least on behalf of, the appellants of whatever liquor of theirs was by their managing agent sold, but such a sale by them is not necessarily a selling of the kind for which they require a licence. The whole of the transaction may be regarded thus: the appellants did sell their goods on the licensed premises, but merely through and by means of Smith, their fully authorised agent or manager, knowingly licensed to act in this manner on his principals' behalf. This selling was by a licensed person of goods to which the licence properly applied, and was entirely within the contemplation of the justices who granted it. But there was no complete and perfect sale without the concurrence of the principal and agent alike, and so the person conducting the sale was the alter ego of the appellants."
Bankes J at 1157 said –
"It is no doubt true … that Smith's act was in the ordinary commercial sense a sale by the appellants because it was a sale by their authorised agent of liquor which was their property. This, however, does not decide the question. I agree .. that we ought not , in construing section 65 to exclude the ordinary meaning of the word 'sell', unless there is something in the statute which renders it necessary to do so, or unless to include the ordinary meaning would result in an absurdity"
A little later he said –
"In my opinion any construction of section 65 which results in the act of Smith in serving the respondent with intoxicating liquor being treated as being between the respondent and Smith as an authorised and lawful act, and the same act as between the respondent and the principal for whom he, Smith was acting in so serving the respondent being treated as an unauthorised and illegal act, is absurd and must be rejected."
He therefore concluded that –
"No person can be convicted of selling intoxicating liquor without a licence under this section where the act complained of is an act done by such person's duly appointed manager, who holds a licence authorising him to do the act."
Avory J focussed on the sale, saying at 1159 –
"The sale in question here was therefore authorised by the licence, and whether the sale was by Mellors Limited, as I think it was, within the meaning of section 65 of the Act of 1910, or by Smith their agent or servant, as I also think it was, the sale was not unlawful, but was a sale by a person holding a licence in the name of his agent or servant in the one case, and by the actual holder of the licence in the other case."
Lush J said that there was only one sale, and it was either by the manager or by the appellants. The section was one of a group of sections which had "nothing to do with defining contractual rights or contractual obligations". Their object is to manage the business of selling intoxicating liquor on licensed premises so, he said at 1160 –
"The seller contemplated by the section is the person who actually sells, the person who is in charge and who makes the contracts and generally conducts the business of selling. The person who does that is Mr Smith, not the appellants, and although he sells for the appellants benefit, it is he who sells and not the appellants themselves."
"The language of the Order contains nothing which excludes the real principal, i.e. the owner of the public house, from being made liable notwithstanding that he was not the licensee. It is said that the licensee alone is liable. Nothing in the language of the Order indicates that."
He went on to say that Mellor v Lydiate was decided upon the meaning of certain words in the Act of 1910. Avory J agreed. He rejected the contention that the offence against the Order could only be committed by the holder of the licence, saying –
"It seems to me to be clear that although the offence may be committed by the person who holds the licence it was in the present instance committed also by the persons who were employing the servant who in fact carried out the transaction of sale."
He went on to say that the real effect of Mellor's case is that section 65 of the 1910 Act "imposes a penalty upon any person who sells intoxicating liquor except under the authority of a licence."
"If a person sells to the prejudice of the purchaser any food … which is not…of the substance … demanded by the purchaser he shall … be guilty of an offence."
Lord Parker CJ referred to that statutory provision as an absolute offence which was not correct – see sections 3, 113 and 115, and at 88F he said –
"The forbidden act is the selling to the prejudice of the purchaser, and it has long been held that a person who has done the forbidden thing through somebody else like a servant or agent is himself liable. Further, as long ago as 1891 it was held in Hotchin v Hindmarsh that the forbidden act in a provision such as this is not the parting with the title by the owner but is the physical handling and handing over of the goods by way of sale: in other words the shop assistant, or in this case the barmaid, is liable, and accordingly in view of the general principle to which I have already referred any person on whose behalf that act of handling and handing over is done is also liable."
Mr MacDonald submits, and I accept, that in that passage the effect of Hotchins case seems to have been misunderstood. It decided no more than that the wording of the 1875 Act was such as to render liable the person who handed over the adulterated milk. He was a seller for the purposes of section 6 of that Act, but it was unnecessary to go further than that. Mr MacDonald also invited our attention to what Lord Parker said at the end of the passage I have cited. Surely, he submits, the act of handling and handing over was done on behalf of the owner of the goods, the brewery company. Lord Parker decided otherwise. He said that the acts of the barmaid were not those of the company, but of the licensee. At 90B he said –
"The company as opposed to the defendant licensee could not lawfully perform the acts on those premises through their servant, Mrs Wright; the only person who could do so was the defendant."
"Rather it is a fact that licensed houses are, by the necessity of the licensing legislation, organised on that footing, and here the act of selling complained of was an act … which could only have been done in that house by the defendant licensee. In those circumstances it seems to me inevitable to conclude that Mrs Wright's act of selling was in law the act of the licensee and he should be responsible for it."
I accept that the licensing legislation is organised on the basis that the licensee is the person primarily responsible and answerable to the licensing justices for all that happens in the licensed premises, but I do not see why that responsibility cast upon the licensee should, in relation to legislation not confined to licensing, relieve product vendors of responsibilities which in relation to every product other than alcohol they are required to bear.
"I do not, as at present advised, see any reason to doubt the correctness of these two decisions. They establish the proposition that, where a licensee of licensed premises, who is alone permitted under the Licensing Acts to handle and hand over intoxicating liquor to a customer at such premises, chooses to perform those acts through the agency of another person, such as a barmaid employed by the same company or other organisation as he is employed by, he is under the same criminal liability for such other person's acts as he would be if he had performed them himself."
As Mr Wise accepts, the approval was a little tentative, and it was not central to the decision, but it is obviously of some assistance to his case.
"I have been concerned whether it follows from the proposition that only a licensee may sell beer that the company which owns the premises provides the beer and employs the licensee to sell is not equally selling the beer. I have also asked myself whether the decision in Hotchin v Hindmarsh on which the Divisional Court founded in Goodfellow v Johnson and which holds that the forbidden act in this context is the parting with possession and not with title, truly negatives this possibility.
If the true position were that a company in the appellant's position is selling beer through the licensee, then the only relevant question would be under section 34 whether each had exercised due diligence in order to prevent the bar tender giving short measure."
It was in relation to that case that Professor Smith wrote the note in the Criminal Law Review to which I referred earlier in this judgment  CLR 230. He submitted that the conventional view was wrong. Hotchin decided that the physical handling of goods may constitute the offence, but it did not decide that the owner on whose behalf the sale is made is not also guilty of committing it. Some offences under the Licensing Acts can only be committed by a licensee, but a contravention of section 2 of the Food and Drugs Act 1955 was not such an offence.
Mr Justice Royce:
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LORD JUSTICE KENNEDY: In this case, for the reasons which have been set out in the judgment which has been handed down, the appeal will be allowed. In paragraph 27 of the judgment which has been landed down it says that the case will be remitted to the District Judge with a direction to continue the hearing. In fact, the prosecutor does not seek such a direction and accordingly that sentence will be deleted.
The form of order therefore will be that the application is allowed, that the appellant's costs, limited to £5,000, be borne by the defendant, Wolverhampton Dudley Breweries Limited, and that the following question be certified as a question of general public importance pursuant to section 1(2) of the Administration of Justice Act 1960, namely: whether a sale of alcoholic beverages for the purposes of section 14 of the Food Safety Act 1990 can be made only by the licensee authorised under the licensing Act 1964 or whether it can also be made by the owner of the alcoholic beverages where such a person also owns the premises from which they are sold and employ the licensee?
We are asked to grant permission to appeal to the House of Lords, we decline to do so. We take the view that that must be a matter for the their Lordship's House.