Jersey Unreported Judgments

Licensing Assembly - representation to the Assembly to revisit decision of 15th June 1995 regarding breaches of 7th category licence.

[2017]JRC206

Licensing Assembly

(Samedi)

8 December 2017

IN THE MATTER OF THE REPRESENTATION OF HER MAJESTY'S ATTORNEY GENERAL

AND IN THE MATTER OF THE LICENCE HELD BY THE HAVANA CLUB AS FIRST RESPONDENT

AND IN THE MATTER OF AN APPLICATION UNDER ARTICLE 9 OF THE LICENSING (JERSEY) LAW 1974 ("THE Law").

HM Solicitor General for the Representor.

Advocate O. A. Blakeley for the Respondents.

judgment

the bailiff:

1.        On 20^th June, 2017, HM Solicitor General on behalf of the Attorney brought a representation to the Assembly concerning the 7th Category licence granted to the Representor on 15^th June, 1995, in respect of premises known as the Havana Club, Bath Street, St Helier.  The Respondent has the benefit of designated nightclub status for the purposes of Article 72 of the Law, and accordingly the permitted hours enable the premises to be open until 2am every day except the eve of Good Friday, Christmas Eve and Good Friday and Christmas Day.  There is attached to the licence a condition that the playing of music shall cease at 2am. 

2.        The Second Respondent was registered as manager of the licence on 18^th March, 2016.  He was also at the time of the representation a director of the First Respondent.  He was replaced as manager of the licence by a Mr John Young by Act of the Royal Court of 8^th September, 2017. 

3.        The representation was brought because the Attorney had received a report from the States of Jersey Police Licensing Unit ("the Licensing Unit") referring to a number of incidents or cases that had involved the consumption of alcohol and attendance at the Havana Club.  It was said that on Friday and Saturday nights a disproportionate amount of police resources had to be detailed to the Havana Club to provide an almost permanent presence to deter anti-social behaviour and disorder.  Known trouble-makers were permitted entry time and again, some of whom even boasted in interview about receiving special treatment at the premises.  The Licensing Unit considered that the mix of music types - drum and bass on the one hand and European pop on the other - attracted two very different crowds which regularly resulted in problems at closing.  The report contains statistics that supported concerns that the number of crimes involving patrons of the Havana Club was higher than that of any other nightclub during the relevant period.  This was so despite the fact that the capacity of the Havana Club is significantly lower than that of other nightclubs which had lower crime statistics.  The report detailed twelve incidents between 22^nd May, 2016, and 25^th March, 2017, which suggested drunk and disorderly behaviour by patrons of the Havana Club. 

4.        The representation also referred to a warning given to the First Respondent by the former Solicitor General in correspondence on 30^th March, 2015, in relation to an incident of excessive drinking at the Havana Club following which the two men involved left the premises heavily intoxicated, and having collapsed to the ground in the street because they were too drunk to stand, were then attacked by two other men in a serious assault that resulted in prosecutions and significant prison sentences.  The then Solicitor General had indicated to the licence holder that he was giving consideration to whether or not to refer the matter to the Assembly with a view to the licence being revoked, and the letter concluded with a warning that the police had been instructed to refer any further incidents of excessive drinking at the Havana Club to the Law Officer's Department.  The warning was then repeated in a further letter to the licensee on 7^th May, 2015. 

5.        The prayer of the representation sought orders that the 7th Category licence granted to the First Respondent and its status as a designated nightclub be revoked, suspended or made subject to such conditions as the Assembly considered fit, and a request that the First Respondent, the licence holder, pay the Attorney General's costs. 

6.        The Licensing Unit held a meeting with the Second Respondent on 16^th March, 2017, when the various incidents to that date were discussed together with the other concerns which the Licensing Unit had.  The fact that further incidents took place at the club two days later, and then another incident on 25^th March, 2017, suggested that the meeting between the Second Respondent and the Licensing Unit had not been taken seriously by the Respondents.  That was denied in both the pleadings filed by the Respondents and in an affidavit in support filed by Mr Barry John McKenna, a director and as we understood it at least a part owner of the First Respondent.  The approach taken by the Respondents before us was that the facts asserted by the Representor were not disputed, save that they denied strenuously that the Licensing Unit's concerns expressed on 16^th March had been disregarded and not taken seriously. 

7.        The thrust of the submissions from Advocate Blakeley was that following the meeting with the Licensing Unit in March, some steps were taken by the First Respondent, and further steps were taken following the issue of the representation on 20^th June.  He agreed that some penalty should be imposed in respect of the matters referred to us, but that the licence should not be suspended or revoked given the changes which had been made.  His submission was that the club introduced body worn cameras, improved outside lighting and had a staff meeting prior to the representation being issued, and after its issue, the First Respondent had obtained a report from Mr Young, who has considerable experience in the trade, and had implemented the changes which he had recommended - the dress code had changed, the style of music had changed, and the door staff had been replaced.  The CCTV had been serviced and all the current fifteen cameras worked.  Management took the complaints very seriously, and agreed to go on any courses the Licensing Unit recommended.  We were shown two reports from Mr Young to Mr McKenna, the first dated 3^rd July and the second dated 2^nd October.  The Assembly considers that those reports do show a different approach to management, and it seems that that is reflected in the conduct of the business since Mr Young's arrival in July, albeit he was not appointed as manager until September.  We have the benefit of an updated report from the Licensing Unit which shows that there were three incidents in July, one in August and one in September where there is an established connection to the Havana Club.  We saw CCTV footage of the August incident - we understand that a charge of grave and criminal assault has been brought against one of the men involved in the incident and that is making its way through the court system at present.  It was not obvious to the Assembly that the Havana Club could necessarily be blamed for what had taken place on that occasion. 

8.        The statistical evidence produced in the updated report however, shows that from July to October, the Havana Club is no longer the worst performing nightclub in terms of arrests, and for the period from August to October, it is no worse than the majority of the island clubs.  We are satisfied that Mr Young's arrival at the Havana Club, and his appointment as manager, has indeed led to a considerable improvement. 

9.        In Re Club Dragon [2013] JRC 069, the Assembly was faced with a representation where there had been six occasions of violence on the licenced premises.  Then, as is the case with the present reference, there was no dispute that there had been mismanagement.  The Assembly referred to two previous cases, AG v Mont Felard Hotel Limited [2005] JLC 104 and AG v Le Hocq Inn Limited [2006] JRC 078.  In both cases there had been a suspension of the licence, on the former occasion for one week and on the latter occasion for four weeks.  The Assembly noted that it should strive for consistency in handling matters of this kind.  Reference was made in Re Club Dragon to Article 6 (9) and Article 12 of the Law - the provisions of Article 6 (9) requiring the Assembly to have regard to whether or not to grant a licence, and in Article 12, provisions as to the general conditions on licences.  At paragraph 28 we said this:-

"....The mandatory conditions imposed by Article 12 and the offences which the Law contains do point up the general interest of the public in preventing drunkenness where possible.  The Assembly considers that there is a real problem concerning the level of consumption of alcohol in this island.  In the first place, there is the health aspect emphasised so clearly in announcements made by the Medical Officer of Health.  Secondly, there is the contribution which the excessive consumption of             alcohol makes to violence and disorder.  Time after time, the Royal Court is faced with violence committed by a person who is very drunk and yet who has apparently been served with alcohol in a public house or nightclub despite his drunkenness.  Similarly there is a problem with alcohol being served to young people who acquire the habit of drinking.  We make these points because they are the background against which the present reference by the Attorney General is considered."

10.      Having endorsed the comments of Birt DB in Mont Felard Hotel Limited at paragraph 19 of the judgment in that case, we went on to say this:-

"30.    Not only do we endorse those comments, but we emphasise that in future references to this Assembly, we will be considering more serious penalties than have been imposed in the instant case and the licensing trade is given a warning accordingly.  This Assembly will not condone a culture of encouraging excessive consumption of alcohol.  The licensees, whoever they are, can contemplate lengthy suspensions of the licence or its complete revocation if such conduct were to be established.  The Licensing Unit is requested to keep a careful watch on those licensing outlets which appear to have been the regular drinking places for those who have committed criminal offences through drink immediately thereafter.  It is no excuse to say that the licence holder cannot be responsible for what happens after the patron has left the premises.  The licence holder is responsible if it is his conduct in serving alcohol to those who have already consumed too much which has any impact on the patron's misconduct."

11.      In that case the licence was suspended for two months.  Our understanding is that the suspension effectively had the result that the business under that management ceased to be viable and did not reopen, or if it did reopen, did not survive.  We will return to that later. 

12.      In AG-v-MFA Licensing Ltd re Jersey Bowl [2015] JRC 048, the Assembly was faced with a representation that there had been a disregard of various provisions of the Law, mostly regarding the holding of events without appropriate authorisation, although the case also involved over occupancy, selling alcohol after hours, permitting persons to go on the licensed premises after hours and permitted drunkenness.  The Assembly did not suspend the licence, noting that Jersey Bowl was then a successful business and the Licensing Unit accepted that the premises were generally very well run and it had no difficulty with the management.  The Assembly took the view in those circumstances that the revocation or suspension of the licences would cause the employees of what was otherwise a well-run business, its patrons and indeed the public at large some damage, in the case of the public, because there would be a loss of a useful island facility.  Taking those features into account, the Assembly imposed a fine of £25,000 and ordered the respondent to pay the costs of the reference. 

13.      In the instant case we noted that the Second Respondent made a report to Mr McKenna following the meeting with the Licensing Unit on 16^th March.  We have read that report carefully.  In our view, it demonstrates that the Second Respondent simply did not appreciate what was being said to him - the report does reveal that the Second Respondent was aware of the Licensing Unit's concerns, but it is more focused upon the economic success of the club compared with its competitors, and with setting out to Mr McKenna a defence of the management policy.  It is a common theme when considering particular incidents that the Second Respondent's report comments that the incidents did not take place on club premises, at least for the most part.  The report contains the statement that many of the other clubs or bars on the list which he had seen were licenced only until 1am (and some earlier) - as the Second Respondent put it, this "means they miss the last hour of operating which we don't.  Likely this is the hour where more incidents occur, especially when incidents after closure are being listed".  The Second Respondent noted that other nightclubs were aimed at clientele of a higher socio-economic status, with commercial music policies, over 21s in some instances, whereas the Havana Club represented the normal young people in Jersey and he thought the younger demographic was more likely to be involved in incidents. 

14.      In our view the Second Respondent's approach showed a lack of appreciation of the obligations of a manager.  Although no sanction has been sought against him, we make these comments because the appointment of a manager requires the Court to be satisfied that the person concerned is a fit and proper person to hold the licence.  If the Second Respondent is proposed as a manager of licenced premises in the future, the Connétable of the Parish concerned should make special enquiry as to whether the parochial authorities are satisfied that the lessons of this particular case have been learned. 

15.      The Assembly gave very careful consideration as to its options - these seemed to be suspension, a temporary removal of the designated nightclub status coupled with a fine, or a larger fine.  We note that suspension and the removal of a designated nightclub status will both have a financial impact on a licensee.  It therefore is relevant that the Assembly considers what advantage is to be obtained from suspension or the removal of designated nightclub status as opposed to a purely pecuniary penalty.  In cases where there has been any significant improvement in the management of the business, then the better course is probably to impose a fine rather than to suspend or revoke the licence.  If there is any doubt about whether the lesson has really been learned and/or a lack of any convincing evidence that things will change in the future, then suspension or the removal of designated nightclub status might be relevant, depending upon all the circumstances of the case including in particular the complaints which are raised at the time.  We considered whether the suspension would have an impact on the clientele, who in some cases of course are as responsible as the licensee for their conduct - while the licensee is at fault for serving alcohol to those who can no longer take it, it is also true that the patrons should not get themselves into the position where they order alcohol they cannot cope with.  On balance however, we think that in most cases the patrons will simply go somewhere else, and the suspension would be unlikely to have a major impact upon them.  The better course, where there is clear evidence of an improvement in the management of the premises, is to impose a fine to reflect a financial penalty for the wrongdoing which has taken place, and to ensure as far as possible that the improved standards are long lasting. 

16.      One of the difficulties which the First Respondent faces here is that the Havana Club exits upon a precinct where it is easy for large crowds to gather.  The smoking area is part of that precinct, and inevitably at any given time, there are therefore a number of people gathered outside the club.  Because it has designated nightclub status, many patrons will come to the club late in the evening when other establishments are closed or closing.  It may be necessary to consider further the question of dedicated nightclub status for this licence holder, and at one stage we were minded to remove it for a trial period.  Advocate Blakeley persuaded us that it would be inappropriate to do so until we can identify whether the improved management of the premises has had a significant effect, and indeed made the submission that if we were to remove the designated nightclub status at this stage, the real risk was that it would never be reinstated because it would be impossible to show that even though management had made the conduct of the business better, the reduction in incidents outside the club was not down to the removal of the designated nightclub status.  We have accepted that submission, and, given the improvements which have been made in the management of the premises since July, we are proceeding only by way of fine.  However, we wish to make it plain that if there should be a significant number of further incidents, the question of designated nightclub status may have to be reconsidered, and we direct the Attorney General to produce a report from the Licensing Unit for consideration by the Assembly at its Ordinary Meeting in March 2018.  If the management has concentrated on ensuring that people who are already significantly under the influence of drink are not admitted, or if admitted are not served alcohol, and if management is able to demonstrate that those who are subject to an exclusion order are not permitted entry, then it would seem that any link between patrons' misconduct on or off the premises and the designated nightclub status would be unproven, and if so, there would be no reason to remove it. 

17.      When it came to consideration of the amount of the fine, the Assembly recognised the total number of incidents referred to in the representation and took into account the contents of the reports of the Licensing Unit.  We also have had close regard to the reaction of the Second Respondent and indeed of Mr McKenna whose affidavit demonstrates that although his role is the day-to-day running of the company, and although he takes an active interest in the running of the business of the Havana Club, he does not generally work in the club and is not usually there when it is open.  It seems to us that if he is responsible for the day-to-day running of the company that will involve a regular and proper oversight of the performance of the registered manager.  The Assembly looks to the manager to ensure that the business is properly run, but any owner will want to be sure as far as he can that his business is not the subject of a reference such as this. 

18.      The fine which the Assembly considered was appropriate was £50,000.  We then had to consider whether the licensee could afford that payment.  In that connection, the only financial information provided is that of an associated company of the First Respondent, where financial statements were provided to 31^st December, 2015.  The evidence of those financial statements suggest that during that year, after payment of all expenses, the company paid directors' fees of £51,050.  The company made a loss for the year of £37,548, but the accounts demonstrate that that loss was reached by having regard to, inter alia, £29,000 of amortization and depreciation.  We asked Advocate Blakeley whether there were any further financial statements which might be produced to assist us, but he said that there were not - and added that management accounts would be of no assistance because they would not demonstrate profit.  We asked whether an adjournment would be necessary for such statements to be produced, and we were told that it would not be helpful.  We indicated that we were minded to grant the First Respondent one month to pay, and we were told that that would be sufficient.  In the circumstances, our view is that there is nothing in the financial arrangements of the First Respondent to reduce what would otherwise be a proper fine. 

19.      Accordingly the First Respondent was fined £50,000 on this reference.  In the light of that fine, we have not thought it appropriate on this occasion to add an order for costs.  The present judgment sets out the detailed reasons for the decision. 

Authorities

Re Club Dragon [2013] JRC 069.

AG v Mont Felard Hotel Limited [2005] JRC 104.

AG v Le Hocq Inn Limited [2006] JRC 078.

AG-v-MFA Licensing Ltd re Jersey Bowl Ltd [2015] JRC 048.