Neutral Citation Number: [2003] EWHC 485 Admin
IN THE HIGH COURT OF JUSTICE	CO/5669/2002
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT
	Royal Courts of Justice
	Strand
	London WC2

	Friday, 28th February 2003
B e f o r e :

MR JUSTICE MACKAY

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Appeal by way of Case Stated

THE LORD MAYOR AND CITIZENS OF THE CITY OF WESTMINSTER
	Appellants

-v-

HORSEFERRY ROAD JUSTICES AND OTHERS
Respondents

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Mr James Rankin (instructed by the Director of Legal Services, Westminster City Council, London SW1) appeared on behalf of the Appellants.

Mr J Saunders QC (instructed by Messrs Jeffrey Green Russell, London W1) appeared on behalf of the Respondents.

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J U D G M E N T
(As Approved by the Court)
©Crown Copyright

	MR JUSTICE MACKAY:
1.	Part of the Café Royal complex at Glasshouse Street, London W1, is known under the style “Elysium”. On the ground floor there is a reception area, bar and servery, and a kitchen. At the basement level there is a second kitchen, a restaurant and a lounge. Entrances to both floors are to be found at the level of the ground floor. There are two: one in Regent Street and one in Glasshouse Street itself. Access to the basement is internal; that is to say, through the ground floor. 
2.	The licensing history relating to Elysium is as follows. There was a provisional justices' on-licence in existence in respect of both ground and basement floors which was declared final on 4th May 2002. It is subject to certain conditions which are not material to this appeal. On 18th December 2001 the Licensing Committee for South Westminster granted a provisional Special Hours Certificate (“SHC”) pursuant to section 77A of the Licensing Act 1964, to which I will have to return. As they say in their case stated, that certificate covered both the basement and the ground floor, as were depicted in certain plans deposited with them. Also on that date a provisional Music and Dancing Licence (“MDL”) was granted by Westminster City Council (“Westminster”) under section 52 of the London Government Act 1963. One condition of the MDL, as granted, was that it allowed the premises to remain open till 1.00am. There was an appeal by the licensees to the Crown Court, which resulted in that terminal time limit being extended to 3.00am. The MDL was made the subject of a full grant on 7th May 2002, to expire after 31st October 2002. It said on its face that it licensed the use of the basement of the premises for music and dancing subject to certain conditions, not all of which are relevant for the purposes of this appeal. The first condition allowed the premises to remain open for the purpose of this licence up to 3.00am on Mondays to Saturdays. Mr Saunders QC, on behalf of the licensees, harbours reservations - indeed, I think he would put it higher than that - as to whether the restriction apparent on the face of the MDL as being to the basement only should have appeared on it, but realistically accepts, for the purpose of my task today, that I can only proceed on the basis that the MDL was issued with that restriction. 
3.	This is an appeal by way of case stated. The stated case discloses further facts which are relevant and which have required substantial amendment by consent in the light of further investigations undertaken after I granted a short adjournment of this appeal last week. All the references in the stated case to plans 105E and 106A as being the approved deposited plans are agreed to be wrong and should read as referring to plans 105F and 106D. The significance of that difference for the purposes of this appeal is that on the latter set of plans it was made plain that the area in respect of which the SHC was sought was both floors. Also there were physical modifications of the structure of the premises apparent in those plans and those were approved, all contrary to what was said in the case as stated by the justices. 
4.	Additionally, on 30th April 2002 the environmental health officer of Westminster wrote to the justices drawing their attention to the fact that the MDL related to the basement only; but other evidence before me is to the effect that the justices' clerk has now no record of that letter having been received. On 3rd May Westminster wrote again to the justices reiterating that position. The evidence from the justices' clerk is that after the hearing which is questioned in this appeal (that is to say, the hearing of 7th May) she found this letter attached to papers relevant to the application, but there was no file note to indicate that the letter had been brought to the attention of the justices at the hearing. Paragraph 4 of the stated case was to the effect that Westminster, among others, had raised no objection to the grant of the application at the hearing. That must now be read subject to further agreed amendments of the case to the effect that a representative of Westminster did attend the hearing and drew the attention of the justices to the content of the letter of 3rd May 2002. Whether that actually constituted an objection properly so called is a rather fine point and one not necessary to be decided, it seems to me, by me today. 
5.	This, therefore, is an appeal by way of case stated against the decision of the Licensing Committee, sitting at Horseferry Road Magistrates' Court on 7th May 2002, by which the provisional SHC granted on 18th December 2001 was confirmed and made final. As I have already stated, but should repeat, that related to both floors of Elysium, whereas the MDL covered the basement only. The justices expressed their conclusions in this way: 
“We were of the opinion that as the premises were licensed for intoxicating liquor, that a local authority Music and Dancing Licence was in force and that those parts of the premises to which the Special Hours Certificate was to apply had been completed in accordance with the approved deposited plans the Provisional Grant of the Special Hours Certificate should be declared Final in accordance with section 77A(3).”
6.	They framed the following question for the opinion of this court: 
“Whether we were correct in law in declaring the Provisional Special Hours Certificate under section 77A(3) of the Licensing Act 1964 final and thereby, an extension in the permitted hours until 3.00am in respect of a part of the premises for which there was no public entertainment licence in force.”
	The four persons named as the successful licensees in the final certificate are the respondents to this appeal. They support the justices' decision and would answer this question affirmatively. 
7.	At an earlier hearing it seemed that there was to be an argument by the respondents as to the lack of standing of Westminster to make this appeal under section 111 of the Magistrates' Courts Act 1980. But that no longer being pursued, it is necessary to look at the substantive issue in dispute. 
8.	The original section 77 of the Licensing Act 1964 allowed for the grant of an SHC in respect of licensed premises which were, among other things, structurally adapted and bona fide used, or intended to be used, for music and dancing and substantial refreshment. There was seen to be a disadvantage to this scheme in that the intending operator of premises who hoped to benefit from the grant of such a certificate had to take something of a gamble. He had to acquire and structurally adapt his premises in the hope that the justices would, in their discretion, grant him an SHC on completion. Though he could acquire a provisional justices' on-licence and a provisional MDL, he could not acquire a provisional SHC. So in 1996 there was added by amendment to the Act a new section 77A which provided for such a provisional grant. 
9.	As section 77A is at the heart of this appeal, I must read its relevant parts:
“(1)Where, on an application made by a person interested in any premises in respect of which a grant or provisional grant of a justices' licence has been made and which are to be, or are in the course of being, constructed, altered or extended, the licensing justices are satisfied -
(a)that the premises are ...
(ii)premises for which a music and dancing licence is in force,
(b)that the whole or any part of the premises is intended to be used, and, if completed in accordance with plans deposited with the licensing justices, will be structurally adapted, for the purpose of providing for persons resorting to the premises ...
(ii)... music and dancing and substantial refreshment,
to which the sale of intoxicating liquor is ancillary,
the licensing justices may make a provisional grant, with or without limitations, of a special hours certificate for the premises or, if they are satisfied that part only of the premises is intended to be used or will be adapted as mentioned in paragraph (b) of this subsection, for that part.”
10.	In this case, when such an application was made under this section and granted on 18th December 2001, the position was as follows. First, the whole of the premises known as Elysium (that is to say, the ground and basement floors) were licensed premises within the meaning of that section. Secondly, an MDL was in force, not for the whole of the premises, but for part of them, namely the basement only. Thirdly, that part of the premises, and not the whole of them, was intended to be used for, and was structurally adapted for providing, music, dancing and substantial refreshment, to which the sale of intoxicating liquor was ancillary. In the event the justices granted a provisional SHC in respect of the whole premises; that is to say, both floors. 
11.	Westminster argue that, as it is the case that the ground floor does not have the benefit of an MDL and it cannot be, or have been, the intention to provide music and dancing facilities on that floor, the justices had no power to grant an SHC, provisional or final, in respect of that floor. They only had power to grant an SHC of either kind in respect of the area covered by the MDL, namely the basement. 
12.	The respondents argue that there is nothing in the words of the statute or in logic which requires that the physical area of the building (to use a neutral term) covered by the SHC has to be coterminous with the area where music and dancing is permitted by licence, provided that such facilities are properly provided elsewhere on the premises.
13.	Putting more flesh on the bones of those respective arguments, Westminster's case starts from the point (which is not contentious) that the word “premises”, where it appears, as it does, in many parts of the statute, is a word which is flexible as to its meaning, even protean; that is to say, capable of bearing different meanings according to the context in which it finds itself. If authority were needed for that, they say, there is the authority of the Court of Appeal - in a very different kind of case - in Spring House (Freehold) Ltd v Mount Cook Land Ltd [2001] EWCA Civ 1833, where so much is stated at paragraph 28 of the judgment of the court. In Commissioners of Customs & Excise v Griffith [1924] 1 KB 735, at 746, Scrutton LJ, considering this problem in the specific context of licensed premises, said: 
“... I do not found anything in the Licensing Act which limits the word `premises' to an entire building. In my opinion any part of a building which is defined by metes and bounds is `premises' in respect of which a licence can be granted, provided it is in the justices' opinion structurally adapted for the sale of liquor.” 
	Hence the limitation of the MDL to part of the larger premises (which can be perceived, for example, in section 82 of the Licensing Act 1964), says Mr Rankin, shows how within a set of licensed premises one part of those larger premises can be treated for certain purposes as separate premises. 
14.	The governing principle (if there is one single principle) which must always be held in mind when considering SHCs, and section 77A in particular, was expressed by Simon Brown LJ, in R v Crown Court at Stafford, ex parte Shipley [1998] 2 All ER 465, at 482B, in this way: 
“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'.” 
	Westminster in this case fear that the result of the justices' order will be to do just that: to open the door to the creation, deliberate or otherwise, of a late night bar pure and simple on the ground floor of Elysium. 
15.	Looking at the words of section 77A itself, Mr Rankin argues that, for the respondents' opposition to his appeal to succeed, “premises”, where it appears at (1)(a)(ii), must be construed, not as the whole of the licensed premises, which is its meaning in the body of subsection (1), but as “the licensed premises or any part of them”. Secondly, he draws my attention particularly to the concluding words of the section empowering justices “if they are satisfied that part only of the premises is intended to be used or will be adapted as mentioned in paragraph (b) of this subsection, for that part” (Emphasis added). He says those word are apt to cover the facts of this case, where part only of the premises (that is to say, the basement) and not both floors was intended to be used or adapted for music and dancing and substantial refreshment. Therefore the discretion that was in the hands of the justices was restricted to granting, if all other matters were proved to their satisfaction, a provisional SHC “for that part”; that is to say, the basement. These, he says, are plain words and they mean quite simply what they say. 
16.	He says that the link between or the interdependence of the MDL and the SHC are well illustrated by section 81. In its relevant parts that section reads:
“(1)If at any time while a special hours certificate is in force there is not also in force for the premises to which or part of which the certificate relates ...
(b)where the special hours certificate is granted by virtue of section ... 77A(3)(b)(ii) of this Act, a music and dancing licence ...
the special hours 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 ... 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 ... 77A ...
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 an appropriate purpose ...”
	“Appropriate purpose” is defined as dancing and the obtaining of refreshments other than intoxicating liquor.
17.	So under the first subsection, if for any reason the MDL dies (expiry, revocation or whatever) and it was one which related to the premises or the part to which the SHC relates, the SHC dies with it and is automatically revoked. The SHC for the whole of the premises or part of the premises has no capacity for independent life unless underpinned by an MDL which has, says Mr Rankin, to cover the same area as it. The SHC can relate to a narrower area than the MDL, he argues, but the position cannot be reversed. So far as subsection (2) is concerned, the words in subsection (2)(a) “the premises have not, or the part has not, been used ...” give grounds to the police to make an application to revoke, as does the fact that, as a matter of fact, the premises as a whole have not, or the part in question has not, been used “on the whole” for appropriate purposes. 
18.	Mr Saunders points to this and says that this gives Westminster just the protection against the coming into being of a late night bar on the ground floor which it says it fears; and that is undoubtedly right. But Westminster say, for the purposes of construing section 77A, that its value is that it underlines how interrelated the SHC and the MDL are and that underpinning any premises or any part of any premises to which an SHC is attached must also be found an MDL. 
19.	The respondents' argument, as I have said, is that there is no reason in logic or law why the two sets of premises, that covered by the SHC and that covered by the MDL, must necessarily be coterminous. Just as, argues Mr Saunders, within premises which are undoubtedly covered by an MDL not every square metre will be intended to be, or capable of being, used, for example, for dancing over, or for eating at, or even for either, so it will be with premises used more widely: there will be separate areas; there will be bars and sitting out places where no question of dancing arises. If justices are otherwise satisfied that section 77A is met (and it is to be noted that the sale of intoxicating liquor has to be ancillary to the provision of music, dancing and substantial refreshment) and since section 81 exists to cope with cases of abuse, the resultant scheme is perfectly sensible, workable and appropriate. 
20.	He invites me to take this approach: to look at the premises as a whole, both floors, and answer the questions posed by 77A: are there sufficient facilities for dancing and sufficient facilities for eating, such that they evidence an intention by the would-be holder of an SHC that any drinking on the premises, viewed as a whole, can properly be viewed as likely to be ancillary to those purposes? Take, for example, a position where one had a basement entirely devoted to a dance floor and a ground floor entirely devoted to the provision of a restaurant and bar. Why should it be necessary, he argues, to have an MDL covering both floors, when there would have been no question of the ground floor being used for the dancing area, but that otherwise the project would easily fit within the structure and framework of 77A. So he argues, returning to what I might call his problems in section 77A, that I should view subsection (1)(a)(ii) as in effect asking this question of the justices: is there an MDL applicable to some part of these premises? The words in the concluding sentence of section (1) “part only of the premises” are there to cover a situation (which both sides accept as a possibility, if the facts were such as to demand it) where the SHC sought relates to some area which is in fact smaller than that covered by the MDL. 
21.	He reminds me of the classic and general authority in this case of Richards v Bloxham (1968) 66 LGR 739, at 744, which illustrates the principles on which a section 81(2) revocation may take place. Where on the whole customers resort to premises covered by the SHC, in the words of Lord Parker CJ, “to consume intoxicating liquor and not either to dance or have substantial refreshment”, then that is a ground on which the justices in their discretion may revoke the licence. 
22.	I have not found this an easy issue to resolve, free, as it is, of direct authority, despite the clear and helpful submissions from both counsel. But my conclusion is that I prefer the appellants' arguments for the following three main reasons. 
23.	The first is the reading of section 77A itself and the two problem areas, as I have called them and indicated. If, at (1)(a)(ii), “the premises” (a word which up to that point in the section, and after that point in the section, is plainly used to refer to the premises covered by the justices' liquor licence; that is to say, in this case both floors) was to have some different meaning, namely the whole premises or any part of them, then the simple answer, to my mind, is that the draftsman could have said so, and would have said so, as he did in two other places in this very section. 
24.	Secondly, the concluding words could indeed be apt to cover a situation where the part of the premises covered by the SHC was smaller rather than larger than the part covered by the MDL. Such a situation, while being far from impossible to envisage, must surely be, in relative terms, a rare occurrence. A much more likely interpretation of these words is that they are there to reinforce what the section has already said: that an SHC must not issue in respect of a physical area which is not itself covered by an MDL. I comfort myself in this conclusion by the realisation which I have reached that this would secure more effectively, in my judgment, the objectives of the section, while at the same time avoiding the risks of the “late night bar”, against the creation of which the justices have to be alive at all times. 
25.	Thirdly, while section 81(2) does indeed provide a mechanism for policing SHCs, that, in my judgment, is no sort of reason for opening the door any wider than is necessary to the possibility of abuse of them. By this I do not mean abuse by these licensees or, indeed, any licensees in general. It would be quite possible to envisage, as Mr Saunders effectively invites me to envisage, this ground floor of these premises being used as some kind of ancillary sitting out area by resting dancers and/or post-prandial eaters. But however sincere the intentions of the licensee, it would be equally possible to see the ground floor of these premises being regularly resorted to, on an off-the-street basis, by late night drinkers who might well be entirely indifferent to - perhaps even ignorant of - the facilities on offer below their feet. To leave that to be dealt with by police action, and burden the enforcement system with the task of disentangling whether “on the whole” the persons resorting are there for the purpose of drinking rather than an appropriate purpose, would be an undesirable result if its prospect can be lessened. The situation created by the present grant seems to me almost bound to lead to such problems. 
26.	In form this appeal lies against the justices' decision of 7th May 2002 in making the provisional grant a final one and therefore acting under section 77A(3). I have not set out the terms of that subsection. I do not think I need to do so. But they include a requirement for the justices to be “satisfied, in relation to the premises to which the certificate relates ... that they are, or are part of, premises for which a music and dancing licence is in force”. 
27.	It is accepted for the purposes of this appeal that if, in my judgment, the provisional grant was in error, as in my judgment it was, then the final grant too must be equally wrong in law. I would therefore answer the question asked in the negative. 
28.	The result is that, for the avoidance of doubt, I make a formal declaration that the Special Hours Certificate granted by the justices on 7th May 2002 applies to the basement floor only of the premises known as Elysium, Glasshouse Street, London W1, and to no other part. 
29.	To that extent, this appeal is allowed. 
30.	MR RANKIN: My Lord, I am very much obliged. There is an application for costs. I am unsure of the procedure. I do have an exact figure, which I have shown to my learned friend.
31.	MR JUSTICE MACKAY:You are asking for your costs?
32.	MR RANKIN: Yes, please.
33.	MR JUSTICE MACKAY: You have shown your friend the figure. Before we get to the figure, Mr Saunders, is there anything you want to say in principle about that? 
34.	MR SAUNDERS: No. 
35.	MR JUSTICE MACKAY: Is the figure one that is agreed?
36.	MR SAUNDERS: Yes, I do not dispute the sum. 
37.	MR JUSTICE MACKAY: I am grateful. If you tell me what it is, I can summarily assess it. Do you want me to say anything about it?
38.	MR RANKIN:No, my Lord, but I can give you the exact figure. 
39.	MR JUSTICE MACKAY: It is of no interest to me, is it? If I say that you shall have your costs in the amount agreed between the parties ----
40.	MR RANKIN: Thank you very much.
41.	MR JUSTICE MACKAY: I have not yet reached the stage where I have infinite curiosity to see how much people are charging. 
42.	MR RANKIN: I am grateful.
43.	MR SAUNDERS:Your Lordship will be aware that this has significant consequences for my clients and their employees, who may lose their jobs as a result. 
44.	MR JUSTICE MACKAY: Yes. You would like permission to appeal?
45.	MR SAUNDERS: Yes, please.
46.	MR JUSTICE MACKAY: You can have it. 
47.	MR SAUNDERS: May I also ask for a stay of your Lordship's order pending that, to maintain the status quo.
48.	MR RANKIN: My Lord, I would not resist that.
49.	MR JUSTICE MACKAY: Yes, you may.
50.	MR SAUNDERS: I am grateful.