Scottish Court of Session Decisions

This appeal relates to a Late Hours Catering Licence in respect of premises known as "The Spice of Life" at 25 Hamilton Road, Bellshill. The Local Authority responsible for the grant of such licences in the area in question is North Lanarkshire Council. The proprietor of the business which is operated at the premises in question is Mr Mahmood Ahmed.

The background to the present appeal is that Mr Ahmed applied for renewal of a Late Hours Catering Licence which was held in respect of the premises. The proposed operating hours ran to 1.30am on Fridays, to 1.00am on Saturdays and otherwise to 12.30am. Certain correspondence ensued. The application was considered at a meeting of the General Purposes Licensing Sub-Committee of North Lanarkshire Council on 16 January 1997, and the Committee decided to grant the

application, but with a closing hour of 12.30am for all seven days of the week. It is worth noting that under the previous licence, which was being renewed, the closing hour was 12.30am each day except Friday, when the closing hour was 1.30am, and Sunday, when the closing hour was midnight.

Mr Ahmed appealed to the sheriff. By interlocutor of 30 March 1997, the sheriff reversed the decision of the Council, and granted a Late Hours Catering Licence in respect of the premises with the closing hours sought by Mr Ahmed in his application - i.e. until 1.30am each Friday, 1.00am each Saturday and otherwise 12.30am.

The Council appeal against that interlocutor, contending that their own decision should be restored. Mr Ahmed contends that the appeal should be refused, and that the grant should remain in the terms specified in the sheriff's interlocutor. Both parties acknowledged the possibility that what the sheriff ought to have done was to remit the matter back to the Council. If this court came to that view, the appropriate course would be a remit back to the sheriff, for him in turn to remit it to the Council for a new and proper exercise of their discretion.

The closing hour of 12.30am on all seven days of the week, specified in the Council's renewal of the licence for the premises, is in accordance with Council policy. The background is conveniently expressed in a letter written by the Council to Mr Ahmed on 2 December 1996, under reference to his application for renewal. What is said is this:

Agents for Mr Ahmed responded to this invitation with a letter dated 11 December. They say that they understand from their client that he has held the licence in question for approximately the past three years and "that the current and past licences have permitted our client to operate his business in respect of the hours sought by him in his application for renewal". (That appears to be a misunderstanding, as the application seeks an extra half hour beyond the previous closing hour, on each of Saturday and Sunday). The letter goes on to say:

After noting that the police have not received any complaints regarding disturbances at the shop, and that no complaints have been intimated by any neighbours in respect of the application for renewal, the letter goes on to say

We have quoted these letters quite fully, as no oral representations were sought or made before or at the meeting of the Sub-Committee on 16 January 1997, when the application was granted with the policy hours. In intimating that decision, by letter of 17 January 1997, the Council's head of legal services says that whilst the Committee carefully considered the content of the letter of 11 December 1996 "they were not persuaded that they should depart from the policy hours" as detailed in the letter of 2 December. A Statement of Reasons was subsequently issued by the Council.

Before the sheriff, the contentions advanced on behalf of Mr Ahmed centred on this Statement of Reasons. It was submitted to the sheriff inter alia that the respondents in arriving at their decision had erred in law, and also that they had proceeded to refuse the application in respect of the hours applied for by Mr Ahmed on the basis of an unreasonable exercise of their discretion. In his interlocutor of 30 March 1998, the sheriff sustains two pleas in law for Mr Ahmed expressing these contentions.

Nothing in this case appears to us to turn upon the general legal framework, or upon the fact that in this case the Council have a policy in the terms which we have described. There is no doubt that in granting or renewing a licence, they have the power to attach conditions of this type. And there is of course a significant body of case law containing decisions and observations as to the inter-relation between policy, discretion and the criteria for allowing exceptions to a policy, in various licensing situations. There is also much authority in relation to Statements of Reasons and what they must contain. No dispute as to principle arises in this case. That being so, there is no need here for any general statement or reconsideration of these authorities and principles.

The parties proceeded upon the basis that the question of whether an exception to the policy hours should be permitted for these premises was one for the local authority to assess; and that even if there were appropriate grounds for quashing their actual decision, it would only be appropriate for the sheriff to substitute his own decision as to closing hours (as he has done) if no reasonable authority, exercising this discretion, could have come to any other conclusion in the circumstances. Otherwise, if the decision required to be quashed, the appropriate course would be for the sheriff to remit the matter back to the Authority for reconsideration. While the primary position adopted by counsel for Mr Ahmed was that the sheriff's interlocutor could stand, no substantive argument was advanced in support of the view that no reasonable authority could have done otherwise than allow Mr Ahmed the hours for which he asked. We are satisfied that if the sheriff was right in treating the decision as flawed, he was nonetheless wrong in fixing closing hours himself, instead of remitting the matter back to the Council.

In allowing the appeal, the sheriff has treated the matter as one of error in law, as well as unreasonable exercise of the Council's discretion. There does not however appear to be a separate argument in relation to error in law; and parties were agreed that the relevant test, for the sheriff to be able to interfere with the Council's decision, was whether the decision was one to which no reasonable authority could have come. And while such unreasonableness could take the form of the eventual decision itself being one to which no reasonable authority could come, parties both proceeded upon the basis that one would require to look also at the reasons given for coming to the decision: even if the decision was one which in theory might have had good reasons, it was to be treated as unreasonable in the required sense if the stated reasons revealed no sufficient basis for the decision, so that it was unreasonable as being inadequately reasoned, or being unreasoned.

The Statement of Reasons is set out at some length, whereas the sheriff's criticisms and conclusions are set out quite briefly. After acknowledging that the Council was entitled to form a policy, and expressing the view that this could be based on factors not disclosed to the appellant, the sheriff continues as follows:

There would, of course, be nothing difficult, or indeed unusual, in a committee accepting that there were material factors which they concluded were not compelling reasons. It is the sheriff's description of the material factors as being factors "which would have entitled him to be treated as an exception to the policy" which produces a problem: if they would have entitled him to be treated as an exception to the policy, are they not compelling reasons for so treating him? But the description of the factors in the terms quoted is the sheriff's, not the Council's. It was accepted by counsel for Mr Ahmed that this was so, and that the Statement of Reasons contains no basis for thinking that the Council saw those material factors which they had identified as amounting to factors "which would have entitled him to be treated as an exception to the policy". Nor was it a matter for the sheriff to decide, whether particular factors would have entitled Mr Ahmed to be treated as an exception to the policy: that was a question for the Council, and the sheriff could only interfere if no reasonable Council could have come to the view that these factors fell short of entitling Mr Ahmed to be treated as an exception. In so far as the sheriff's upholding of the appeal turns upon this passage, it is unsound.

The sheriff goes on to say that the Council appeared to have taken into account matters about which there was no evidence:

It was again accepted by counsel for Mr Ahmed that this passage contains words of the sheriff's - "without operating to his detriment" - which on the basis of the Statement of Reasons cannot be said to have been part of the Committee's conclusions. The Council had apparently thought that the appellant's business would adjust to the new hours, and one could perhaps infer that they had thought that this would happen without substantial detriment to the business. Any question as to what evidence the Council would have to have before reaching any given conclusion would have to be considered upon this basis, rather than the sheriff's erroneous view of the Council's conclusions.

The final passage in the sheriff's Note which requires consideration is this:

He goes on to express his conclusion that the Council erred in law and unreasonably exercised their discretion when dealing with this matter. We shall come to the question of precedent; but in view of the errors which we have mentioned in the sheriff's Note, it is in practical terms a direct question for this court, de novo, to consider whether the Council's decision to allow only the policy hours was based upon error in law or an unreasonable exercise of discretion: looking at their reasoning and their conclusion, did they do something which no reasonable authority could have done?

Counsel for Mr Ahmed laid considerable emphasis on the particular characteristics of his business, and the history up to now. These were taken as the basis for a number of different arguments. It was submitted that the policy was not an end in itself: one must look at its aims. For this business to trade to the later hours sought would cause no harm to the general public, and would be catering for existing customers. The policy hours, in particular on Friday, represented a change. The effect of such a change on the particular business must be considered. Even on the correct view of what the Council's conclusion had been, they had decided, without evidence, that the business could absorb the loss of trade inherent in busy Friday hours. So far as precedent was concerned, allowing a business which had previously had longer hours to continue to operate to those later hours could not be invoked as a precedent by others with a different history. The Statement of Reasons effectively contained only two reasons: the fear that the later hours would create a precedent for non-comparable premises, and the unvouched view that the loss of business could be absorbed. So far as the past history was concerned, and indeed when stating their overall conclusion, the Council had merely stated that there was no compelling reason as to why policy hours should not apply, without explaining why they did not see these as compelling reasons. They could be regarded as having applied the policy rigidly and not reasonably, having stated no valid reason either for insisting on the policy hours, or for rejecting the considerations founded upon by Mr Ahmed, which showed that the hours sought by him would be consistent with policy aims.

We are not persuaded by these submissions. The general aims of a policy are of course important, and it is not an end in itself. But in laying down its policy, the Council has chosen, as it is entitled to do, a particular way of achieving these general aims. Even if some course of conduct inconsistent with the policy can also be regarded as consistent with, or likely to achieve, these aims, the Council remains entitled, in our opinion, to require conformity with the policy, in the absence of any positive or specific justification for departing from it. When a policy has been promulgated, the requirement not to apply it rigidly, and to consider each case on its merits, does not entitle those who are within the scope of the policy to have their cases considered in isolation and as if there were no policy. As was pointed out by counsel for the Council, the various points made on behalf of Mr Ahmed, in his agent's letter of 11 December, might go far, if there were no policy, towards justifying a renewal with closing hours either as previously enjoyed, or perhaps as sought in the application. But the letter effectively confines itself to what one may call the simple merits of the application, without in any way addressing the question of whether there is any justification for treating this particular case as exceptional, far less sufficiently exceptional as to justify a departure from the hours set out in the policy.

The Statement of Reasons sets out a number of reasons, in paragraphs (a) to (e). Paragraph (a) explains in some detail matters leading up to the adoption of the policy closing hours. It is in our view important to bear in mind, as counsel for the Council submitted, that the policy itself, as a policy, provides the basic reason for the decision to allow the present renewal with the policy closing hours. With that fundamental reason for the decision, it is misleading to portray the Council's reasons for their decision as limited to certain stated reasons for not agreeing to a departure from the policy closing hours in this particular case. At paragraph (b), the Committee expressed the view that whilst the past operation of the establishment until 1.30am on Friday was a material consideration, they were not persuaded that "in itself" this consideration should override the policy which had been introduced. They go on to say that they were of the view that if they agreed to the hours requested for Friday nights "then a precedent could be set which could be applied in many other parts of the new local authority area where such hours had never been permitted." In view of the history of different policy closing hours in different parts of the Council's area, and the policy's function of harmonising closing hours, the Council were in our view well entitled to decide that past operation until 1.30 on Fridays, while a material consideration, should not in itself override the policy. To permit a 1.30 closing hour, as an exception to the policy, to those premises which had previously enjoyed that closing hour, but to deny it to others, would re-introduce the differential which the policy was designed to overcome. And while there would no doubt be no precedent, in a precise legal sense, which those in other areas could invoke as indistinguishable, they could of course invoke the policy as one for harmonisation, and point to the grant of a 1.30 closing hour for these premises, if their own premises were otherwise indistinguishable. In practical terms, we can well understand the Council's fear of knock-on effects in other parts of their area.

In paragraph (c) the Council deal with the effect of the change of hours upon the business. They note, correctly, that imposition of the policy hours would result in only a one half hour reduction on the existing licence hours; and go on to express the view that "such a reduction could not amount to a substantial reduction in the amount of business conducted in the course of a week" and that "in any event members of the public would, when accustomed to the new hours, be able to accommodate their needs within the new permitted hours." The suggestion appeared to be that we would know (and that the Council had apparently overlooked) that the loss of an hour on a Friday would not be proportionately compensated by the half hour gained after midnight on Sunday. But it does not appear to us that in referring to the net loss of permitted hours, and moving on from the reduction in time to the question of a reduction in the amount of business, the Committee were making a precise accounting calculation. No precise assertions had been made in the letter written on behalf of Mr Ahmed; and in any event, the matter was in our view one capable of broad assessment, on the basis of experience and common-sense, to be applied by the Committee and not by us, and justifying the view expressed by the Committee, with no need for a basis in evidence, particularly in the absence of any evidence for Mr Ahmed to the contrary. On a similar basis, we are satisfied that the Committee were entitled to take the broad view that members of the public would, when accustomed to the new hours, be able to accommodate their needs within the new permitted hours.

With the policy as a prima facie basis for allowing only the policy closing hours, we see no defect in the reasoning of the Council either in these matters covered by paragraphs (b) and (c), or in their final comments, in paragraphs (d) and (e) as to the absence of a compelling reason as to why policy hours should not apply. On the material available, there is nothing to suggest that this is anything other than an ordinary, well run business, for which the curtailment of hours will be, at least for a time, a minus rather than a plus. But it is inherent in a policy such as this that harmonisation will produce such changes in certain cases. We see no basis in the material available to the Committee upon which they could have held that the position of these premises was unusual, far less so exceptional as to justify departure from policy. Nor do we see any defect in their reasoning. The appeal is allowed, with the sheriff's interlocutor being recalled and leaving the original decision standing.