Scottish Court of Session Decisions

On 18 June 1999 the petitioners appeared, through an agent, at a meeting of the Licensing Board ("the respondents") in support of an application for the renewal of a licence under the Gaming Act 1968 in respect of premises in Possilpark, Glasgow. They had held such a licence for several years. In addition to applying for the licence, the applicants ("the petitioners") sought that a direction should be given under section 32 of the Gaming Act that the maximum number of gaming machines (being machines to which Part III of the Act applied) should be 50. After hearing the agent for the petitioners, the Board retired to consider the application. On returning, the Board granted renewal of the licence and made a section 32 direction (mistakenly referred to as section 34) in respect of a maximum of 37 such machines, not 50. When the result was announced, no reasons were given either for granting the renewal or for specifying the number 37. On 23 June 1999, agents acting for the petitioners wrote to the Clerk to the Licensing Board referring to the decision, reminding the Clerk that a request had been made for a direction under section 32 seeking a maximum of 50 AWP (amusements with prizes) machines and stating:

By letter dated 28 June 1999 the Clerk to the Board referred to the fact that there was no requirement of which he was aware on the Licensing Board to provide a statement of reasons for any decision to make or fail to make a direction under section 32 of the Act, adding, "Given that there is no such statutory provision at this stage to provide reasons, I am not in a position to comply with your request". In the second paragraph of the letter, the Clerk added that the Chairman of the Licensing Board had indicated that the Board was about to review its existing policy in relation to section 32 directions and that that would be done over the summer period prior to the October Licensing Board meeting.

In the present petition, the petitioners seek reduction of that part of the decision refusing the petitioners' request for a direction that the maximum number of machines be 50 and seeking an order upon the respondents to reconvene as soon as practicable "for the purpose of considering anew the petitioners' said request". A first order was made by the Lord Ordinary on 3 August 1999. The respondents lodged Answers to the Petition on Friday 24 September 1999. The first hearing had been fixed for 1 October 1999. On the eve of the first hearing the petitioners intimated to the respondents a Note of Adjustments referring in some detail to earlier proceedings in the Sheriff Court in Glasgow when the petitioners appealed against an earlier refusal of a direction under section 32 for 50 machines. The Note of Adjustments sought to incorporate by reference a Statement of Reasons produced by the respondents in the course of the Sheriff Court proceedings. That Statement of Reasons referred inter alia to the existing policy of the Licensing Board in respect of the use of AWP machines in bingo halls and stated:

The same document further stated:

The premises referred to in the Sheriff Court proceedings were the same premises. The Sheriff Court proceedings did not proceed to a determination as the petitioners (the pursuers in those proceedings) decided not to pursue that appeal.

When the agent for the petitioners appeared before the Board on 18 June 1999 she described the petitioners' premises in Possilpark and reminded the Board that there had been in existence since 1994a direction for 37 machines. She gave detailed information about the club itself, which was said to have a capacity of 2,053 seats. She stated:

She added:

After describing the circumstances obtaining in relation to the premises under consideration and under reference to the position in other clubs elsewhere in the United Kingdom she produced and referred to a petition signed by some 134 persons under the words, "If you would like to see an increase in the amount of machines or a bigger variety of machines please sign below". On this point she concluded:

Reference was also made to certain advice from the Gaming Board which has been lodged in the present process. Reference was made to the practice of other licensing boards elsewhere in Scotland. It is plain that the application in question was one of a number heard that day. The reference to "the policy which has been set out from the Clerk" is a reference to a document which appears on page 4 of No 6/2 of process. This document is in the following terms:

Against this background, Mr Small who appeared for the respondents objected to the late appearance of the Note of Adjustments notably because they appear to raise an issue not foreshadowed in the petition itself, namely the applicability and application in the particular case of the unwritten policy spelt out in the Statement of Reasons and containing and giving effect to an arithmetical calculation to ascertain the allowable number of machines, up to a maximum of 37. The submission was that this policy was not relevant to the matters in the petition. If, however, it was relevant, then it appeared to be changing the whole basis of the petitioners' case. Rule of Court 58.9 did not appear to allow for adjustment at the present stage. The adjustments had been intimated after 3.00pm on 30 September 1999 and although attempts had been made to discover the precise matters which were taken account of in arriving at the Board's decision on 18 June 1999 it had not been possible to obtain any answer because the relevant members of the Board were not available and the Clerk did not feel able, without consulting them, to draft for present purposes a Statement of Reasons. He said that the Clerk of the Board had played no part in the decision. If the adjustment were to be allowed then there could well arise a need to focus on the issue of the applicability and application of the unwritten policy on 18 June 1999 and that could not be done in time to allow the first hearing to determine all the matters raised by the petition.

For the petitioners, Lord Mackay of Drumadoon made it clear that it was not the petitioners' intention to assert that the unwritten policy and arithmetical formula provided the reason for the decision now complained of. The petitioners were in the unfortunate position that they simply did not know the reason for the decision, because no reason had been given at the time and (under reference to the letters written on 23 and 28 June 1999) the Board had refused to explain the reasons. There was no legal bar to producing the reasons and he invited the Court to consider all the material, including the said Statement of Reasons from the Sheriff Court proceedings. He specifically said that the respondents did not challenge the policy which was explained in the Sheriff Court Statement of Reasons. He would submit that, even if such a policy were properly applicable, the Board sitting on 18 June could not be bound by arbitrary figures but had to consider all the circumstances relevant to the particular application presented by the petitioners on that occasion.

In relation to this matter, it appeared to me that the material referred to in the adjustments could well be of assistance to the Court in determining the issues raised by the petition and answers. I consider that there was some importance to be attached to the fact that, only one week after the Board's decision, the petitioners' agents had sought reasons in writing and shortly thereafter the Clerk to the Board had refused to give such reasons. I was also conscious of the fact that the reference to the maximum figure of 37 could come as no surprise to anyone in the present proceedings because the transcript of the proceedings before the Board made it abundantly clear (see the passages quoted above) that it was notorious, and certainly known to the petitioners, that for some years the respondents had restricted the number of section 32 machines to 37. Indeed the express motion by the petitioners at the proceedings on 18 June 1999 was "to review the position" and to go above the current maximum figure. I considered that it would be unrealistic for me to adjudicate upon this matter by shutting my eyes to the material which had been placed before me and that I should hear the submissions of parties and only thereafter decide whether or not the respondents should be given an opportunity to place before the Court material relevant to the origins, applicability and application of the policy referred to in the said Statement of Reasons.

In opening his submissions, counsel for the petitioners submitted that it was the duty of a public authority to give reasons in circumstances of the kind which obtained in the present case. The authorities referred to in article 7 of the petition were quoted in support of that proposition. It was accepted that the English cases as to judicial review proceeded upon a different basis, because leave had to be granted before the petition could proceed. There was no similar leave provision in Scotland. It was also acknowledged that certain of the cases dealt with the reviewing of judicial or quasi-judicial decisions, not administrative decisions, and that therefore the dicta in those cases had to be treated with care. He did not submit that there was an absolute rule of law that an administrative body taking an administrative decision of the kind under consideration in this process had to give reasons. Reference was made to Purden v City of Glasgow District Licensing Board 1989 S.L.T. 201 and to Bass Taverns v Clydebank District Licensing Board 1995 S.L.T. 1275. He also accepted that the absence of reasons in this type of case could not of itself provide any support for the conclusion that the decision was irrational. It was clear, however, that there was a duty in the present case to give reasons. The Courts were moving towards a requirement for the giving or reasons in more and more cases. R. v Civil Service Appeals Board, ex parte Cunningham [1991] 4 All.E.R. 310. The test was fairness. Reference was made to Secretary of State for the Home Department, ex parte Doody [1993] 3 W.L.R. 154. The question of the public interest must also be uppermost and it was plainly in the public interest for a licensing board exercising its function in the circumstances where the petitioners' case had not been contradicted in any respect and the petitioners' application complied with all the known written requirements of the Board's policy that reasons for refusing to give the direction sought should be made public. Reference was also made to the principles applicable and set forth in R. v Ministry of Defence, ex parte Murphy, 15 December 1997 and to Lawrie v Commission for Local Authority Accounts in Scotland 1994 S.L.T. 1185. Against the background of the cases he founded upon the following factors: (1) in the absence of stated reasons, the petitioners had no means of knowing why the decision was taken adverse to the unopposed application; (2) there was no statutory provision to prevent the giving of reasons; (3) in appeals which were competent to the Sheriff Court the Board was required to give reasons and it was plainly practicable for them to do so in the present type of case; (4) it was not in the public interest to decline to give reasons; (5) it was clear that the public interest and fairness required the disclosing of reasons. Accordingly, there was procedural injustice and the petitioners were entitled to the remedy they sought, that of having the matter reconsidered by the Licensing Board. Furthermore, in the absence of reasons, the Court should infer that the refusal to allow 50 machines was manifestly irrational, i.e. so unreasonable that no licensing authority acting reasonably could have reached that decision. For anything that was disclosed in the proceedings on 18 June 1999 the figure of 37 was entirely arbitrary and related to an arithmetical calculation for which no justification was advanced. It was quite wrong that the discretion of the Board should be fettered by some formula, calculation or figure. It was not disputed that a licensing board might have a policy (Elder v Ross & Cromarty District Licensing Board 1990 S.L.T. 307) but the policy could not be applied blindly and without reference to the facts of the instant ca

In response to these submissions, Mr Small emphasised that it was agreed that there was no statutory requirement to give reasons. It was accepted that judicial review was the only appropriate way to review a decision of the Board in relation to section 32. In this type of case, however, the court did not act as a court of appeal. In order to hold a decision of the Board to be unreasonable it had to be shown that it was such that no reasonable body could have reached it, or was so outrageous that no right thinking person could support it: cf. the Opinion of Lord Clyde in Mecca Leisure Ltd v City of Glasgow D.L.B. 1987 S.L.T. 483 at page 485C. This, he submitted, was the test of Wednesbury unreasonableness; see also Wordie Property Co Ltd v Secretary of State for Scotland 1984 S.L.T. 345. In his submission, it was quite impossible to characterise this case as one in which wrong factors were taken into account or relevant facts left out of account. In the absence of any Statement of Reasons that would be simply guesswork; and it would be unwarrantable to conclude that some unspecified material consideration had been left out of account or some other unspecified immaterial consideration had been taken into account. Indeed article 8 of the petition made it plain that the petitioners were not seeking to specify whether the decision was flawed by an error of commission or an error of omission. The test had to be the traditional rest of irrationality or perverseness. It was noteworthy, however, that the application was in fact granted by the Licensing Board. Furthermore, the petitioners had sought a section 32 direction and such a direction was granted. It was manifest on the face of the written policy quoted earlier that there was no contradiction between what was there written and what the respondents had done. Both article 1 and article 4 of that written policy document indicated that the Board would exercise a judgement as to the number of AWP machines on the premises. That was exactly what had been done. The figure of 50 which the petitioners had sought was entirely arbitrary and no justification was shown for that figure at all. At best the petitioners had led some unsatisfactory evidence to the effect that something more than 37 machines was required. But there was no possible basis for suggesting that the imposing of a maximum of 37 in this case was perverse or irrational. It was interesting to note that at the time of the Mecca Leisure Ltd case, in 1985, the policy of the authority was to allow no such machines. Counsel founded in particular upon the speech of Lord Keith of Kinkel in R. v Secretary of State for Trade & Industry, ex parte Lonrho plc [1989] 1 W.L.R. 525 at page 539/40 where his Lordship said:

This dictum had been followed in Scotland in Bass Taverns (supra). Accordingly, even in the absence of any Statement of Reasons, the onus lay upon the petitioners to show that the facts and circumstances pointed overwhelmingly in favour of a different decision from the one made by the Board. None of the cases referred to in argument vouched the proposition that the failure of a licensing board to give reasons at the time of the decision or sometime later in response to a letter from the petitioners could be characterised as fatal to the decision. Reference was also made to the Opinion of Lord Donaldson M.R. in R. v Civil Service Appeal Board, ex parte Cunningham [1991] 4 All.E.R. 310 and the Opinion of Leggatt, L.J. at page 325. Counsel referred in detail to the submissions made by the agent on behalf of the petitioners to the Licensing Board on 18 June 1999 and to the productions, including the circular from the Gaming Board. The only relevant paragraphs of that document were paragraphs 55-57 which invited licensing authorities to consider carefully those applications in which directions were sought for "large number of machines". The Board expressed the view that there was a risk of altering the nature of the bingo club towards that of an amusement arcade and that this was a matter for concern. The siting of large numbers of machines in bingo clubs was a practice which the Board continued to watch carefully stating:

This guidance more fully set forth in the three paragraphs was plainly material which bore upon the decision and supported the reasonableness of a restriction. As the petitioners had not even led evidence to support any particular figure above 37 it could not be said that the Board's decision had been shown to be perverse, irrational or even wrong.

If this court considered it appropriate to take account of the policy stated in the Statement of Reasons produced in the Sheriff Court proceedings then it was appropriate to note that the agent for the petitioners was clearly aware of that policy when she addressed the Board on 18 June 1999. The Board did not then indicate that her statements as to the existence of that policy and its having been in force for some five years were in any way wrong. His submissions would proceed upon the basis, for this branch of the case, that this court should draw the inference that the Board had on 18 June 1999 applied the policy contained in the said Statement of Reasons. In this context, however, counsel referred to Ahmed v North Lanarkshire Council 1999 S.L.T. 1064, a decision which affirmed in the clearest terms the right of a licensing authority to lay down a general policy as a way of achieving its general aims, to require conformity with that policy in the absence of any positive or specific justification for departing from it and to apply it in the particular circumstances of the case before them. In the present instance, the petitioners showed only that they had complied with the written policy, which, it should be noted, did not specifically enshrine the unwritten policy in relation to the arithmetical computation and the maximum figure of 37. Accordingly, even upon the basis that the unwritten policy was relevant to the Court's decision, this was a case in which it was evident that the Licensing Board had adopted a policy whereby the number of AWP machines was to be proportionate to the numbers using the premises but restricted to a ceiling of 37. That policy itself was not under attack and had never been attacked by the petitioners. It was a policy that it could be assumed had been applied in other cases and the Board was entitled to apply it in the present circumstances. It could not be characterised as irrational to continue to apply a policy which they had applied to the petitioners and no doubt to others over a period of at least five years. In the circumstances the remedies sought should be refused.

I am satisfied that the petitioners are not entitled to succeed. I proceed upon the basis which counsel for both parties accepted that there was no statutory or common law obligation for the Board to give reasons at the time for a decision in relation to an application for a section 32 direction. The absence of a statutory right of appeal points against the need for giving reasons, though it does not determine the matter. The absence of any statutory requirement in any circumstances to give reasons point in the same direction. Perhaps more importantly, the absence of any statutory obligation for the Licensing Board to have regard to particular statutory criteria in determining what direction to make under section 32 also points towards the lack of need to produce reasons at the time. If written reasons or indeed oral reasons stated at the hearing are not required then it is difficult to see how the decision itself can be vitiated by a subsequent failure in response to a letter from agents to spell out the reasons in written form. No-one, of course, suggests that it would be impossible to create a Statement of Reasons weeks or months after the decision, but the mere absence of such reasons in the Judicial Review proceedings cannot of itself be regarded as a fatal flaw undermining the decision of 18 June 1999. I accept, on the basis of the authorities quoted to me on behalf of the petitioners, that the issue as to whether or not the body taking the decision has to give reasons, even if only for the purposes of judicial review, will depend upon the particular circumstances of each case; and the paramount considerations will be considerations of the public interest and the requirement of fairness and transparency in the taking of decision by public authorities. When I look, however, at the particular facts of this case, it is, in my opinion, quite evident that the existence of a policy restricting the number of AWP machines to a maximum of 37 was not only well known but had been known for years to, among others, the present petitioners. That cannot be denied, in the light of the transcript of the proceedings on 18 June 1999. It should also be noted that when the Chairman of the Board announced the decision, following a period when the members of the Board retired to consider the various applications, there was no oral request for an indication as to what the reasons were or what the decisive factors were. I consider that I am entitled on the basis of the material placed before me, including the Statement of Reasons referred to in the Sheriff Court proceedings, to infer that the Licensing Board was in June 1999 still applying the policy which produced a maximum number of AWP machines of 37 and that the petitioners were aware of that. I am entitled to infer, even although the answers to this petition are silent on the matter, that the intention to apply that policy was a material factor, possibly the most material factor, in granting the application with the same restriction for the new year as had been applicable for the previous five years. I am not in the least persuaded that the Board by proceeding in this way could be held to have acted in an irrational or perverse way or to have reached a decision which no reasonable board could have reached. I consider it to be clear that the Board were entitled to have such a policy, to reconsider and review it from time to time, and to apply in each case in a fairly uniform way the current policy. There is nothing to suggest that the policy was applied arbitrarily. There is nothing which persuades me that the figure of 37 or the arithmetical calculation that preceded it were themselves arbitrary exercises. If the petitioners wanted to challenge the policy itself then it would have been necessary to take steps to bring out into the open precisely what the policy was and the considerations upon which it was founded so that the policy itsel

In all the circumstances, I conclude that the petition fails. I shall sustain the respondents' pleas-in-law and repel the pleas-in-law for the petitioners.