Scottish Court of Session Decisions

[1] On 18 June 1999, the City of Glasgow Licensing Board refused an application by Safeway Stores plc for the provisional grant of a new off-sales licence for premises at 631/675 Paisley Road West, Glasgow. On the same day, the Board refused an application by the same applicants for the provisional grant of a new off-sales licence for premises at 1057 Great Western Road, Glasgow. On 8 October 1999, the Board refused a further application by the same applicants for the provisional grant of a new off-sales licence relating to the same premises at 1057 Great Western Road, Glasgow. By three summary applications to the sheriff at Glasgow, Safeway craved the court to reverse these three refusals, and to grant the three applications. By interlocutor of 22 June 2000, the sheriff allowed all three appeals, reversed the decision in respect of the premises at 631/675 Paisley Road West, reversed the second decision (of 8 October 1999) in respect of the premises at 1057 Great Western Road, found it unnecessary to make any further order regarding the first decision in respect of these latter premises, and granted the applications for a provisional grant of a new off-sales licence in respect of both the premises at Paisley Road West and the premises at 1057 Great Western Road. The Board now appeal to the Court of Session against that interlocutor.

[2] Each of the refusals on 18 June 1999 was on the basis of section 17(1)(b) of the Licensing (Scotland) Act 1976. In each case, a statement of the Board's reasons for refusal was sent to Safeway on 22 July 1999. In each case, the Board granted a motion for a direction in terms of section 14 of the Act; and as permitted by that direction, Safeway made the application in relation to the premises at Great Western Road which was refused on 8 October 1999. The basis of refusal was again section 17(1)(b) of the Act, and a statement of the Board's reasons for this refusal was sent on 15 November 1999. On this occasion, the Board refused to make a direction under section 14.

[3] The premises at the two locations are effectively identical in layout and character, and it was not suggested to the sheriff that there were any specialities affecting one of them which could be used to distinguish it from the other. It is moreover to be noted that no objections were lodged in respect of either of the two locations. In these circumstances, when the matter was before the sheriff, counsel for Safeway chose to use the second application relating to Great Western Road as the "lead" case, upon the basis that if that appeal to the sheriff were to be successful, that would effectively supersede the appeal against the earlier refusal in relation to the same premises, and moreover that the submissions made in relation to those subjects would apply, mutatis mutandis, to the subjects at Paisley Road West. In the presentation of the Board's appeal to this court, the same approach was adopted by counsel, and in general we proceed upon the basis of the second application relating to Great Western Road. It will, however, be necessary to make some reference to the history of the two original applications, which were heard on 8 June 1999, but were continued for the holding of a site inspection before the matters were disposed of on 18 June.

[4] Section 17(1) of the Licensing (Scotland) Act 1976 provides as follows:

Grounds (a), (c) and (d) are not in point. The present applications are of a type covered by subsection (2). In these circumstances, therefore, the Board were bound to refuse these applications if they found that ground (b) applied, but otherwise were bound to grant the applications.

[5] At each of the sites in question, there is both a petrol filling station run by BP, which is clearly marked with their corporate livery, and a convenience shop, run by Safeway, likewise clearly marked with their corporate livery. The sheriff describes the shops involved in these applications as very large, and as substantial operations by any definition. It was not disputed that the shop premises extended to over 2,000 square feet, and carried some 2,500 items, representing every single item that one could purchase in a full Safeway supermarket. The anticipated turnover for a shop of this type would be between £50,000 and £60,000 per week, or £21/2 to £3m. in annual turnover. The premises would remain open on a 24 hour basis, although of course in relation to liquor sales, licensing hours would apply. Speaking generally, it is not suggested that there would be anything unusual or undesirable in a store of this type having an off-sales liquor licence. That would indeed now be seen as normal, and to be expected, not only in very large superstores, but in this kind of "mini-store".

[6] What led to the Board's refusal of these applications, putting the matter broadly at this stage, was the presence together, on each of the sites at Great Western Road and Paisley Road West, of the BP filling station as well as the Safeway store. It is of course commonplace to find two such facilities on a single site, with both being used on what may be called a single visit. There will of course be huge variations between what is found at one site, and what is found at another. At one end of the scale, there may be a very large supermarket, with a perhaps quite small "dedicated" filling station on-site. At the other end of the scale, the premises may consist of a filling station, with a small "shop" with a limited range of newspapers, sweets and the like. In the former case, it is not suggested that the presence of the dedicated filling station would afford any ground for refusing an off-sales licence to the supermarket. At the other extreme, with what is essentially a filling station and nothing else, with the sale of goods in a shop fulfilling a merely ancillary role, the policy or "message" of Central Government, against the combination of drinking with driving, has been regarded by certain local authorities as making such premises unsuitable for the sale of alcoholic liquor, and justifying refusal, as a matter of policy, in terms of section 17(1)(b) of the 1976 Act.

[7] It is worth emphasising that while there may be particular premises where a Board might be satisfied that the sale of alcohol would produce a materially increased risk of persons driving after having consumed alcohol, so that refusal would have that as its basis, that is a quite different matter from a policy refusal of the type we have described, on the basis that at premises which are primarily or essentially filling stations, with an ancillary shop, it is not suitable for that ancillary shop to include alcohol among the goods sold. In that connection, reference may be made to Texaco Limited v. North Lanarkshire Licensing Board 1998 S.L.T. 726; Texaco Limited v. West Fife Divisional Licensing Board 1998 S.L.T. 1059; and Texaco Limited v. City of Glasgow Licensing Board 1999 S.C. 131. While the first of these three cases is of some significance in illustrating certain general principles and approaches, the third case is particularly in point, as it involved a refusal by the same Board which refused the present applications. We shall return in due course to the primary/ancillary distinction, and the question of refusals on "policy" grounds. But before we do so, it is convenient to set out certain further material relating to the appeal subjects.

[8] We have already noted that the Safeway store would have a turnover of approximately £60,000 per week. For the purposes of comparison, one must exclude VAT and duty, but upon that basis, it appears that one might take the turnover of the shop as over £40,500 per week, and the turnover on fuel as slightly over £15,500 per week. In terms of people, as opposed to cash turnover, a variety of figures was provided; but it appears that at both sites, there were substantial numbers of pedestrian shoppers, the figures for Paisley Road West varying between 37% and 66% of the total number of shoppers, and there being a figure of over 43% at Great Western Road. The percentage of persons purchasing fuel and nothing else varied between about 21% and 26% of all customers. Of the remaining relatively small percentage of customers, who came by car and purchased goods at the store, the number who also bought petrol is not clear. But in broad terms, one may proceed upon the basis that approximately 25% of the total number of customers were coming to buy fuel only, and that of the remaining 75% who bought goods at the shop, half or more were on foot.

[9] Apart from the simple fact that the BP filling station and the Safeway store were on the same site, certain features of the connection between them are of some significance. First, their operations are described as a "joint venture": we shall return later to that matter. Secondly, it is clear that the facilities of the store were readily accessible to motorists stopping for petrol, who would thus be attracted to the store premises. Thirdly, there would be various parking possibilities for persons using the store, but these would at least include the possibility of a motorist who had bought petrol leaving his car somewhere on the filling station forecourt while going to the store to buy goods there. And fourthly, a driver who had taken petrol at the pumps would have to go to the shop to pay for it: this is of course familiar, when a filling station has a merely ancillary shop; but it plainly became a matter that was seen of some significance, in relation to the possibility of sales of alcohol, with the Board seeking and obtaining quite detailed information and undertakings as to how persons paying for petrol would be unable to purchase or pay for alcohol at the same till. It was this specific matter which lay at the heart of the second application in relation to Great Western Road.

[10] In the decision letters of 22 July 1999, and again in the decision letter of 15 November 1999, the reasons for the decision are initially stated as being that the premises

Such echoing of the statutory language no doubt identifies the ground of refusal as being section 17(1)(b). But it fails entirely to identify which of the many matters mentioned within ground (b) is being relied upon by the Board. As is clear from Texaco Limited v. West Fife Divisional Licensing Board, it is in the interests of the parties, the courts and indeed the Board itself that any further discussion of the reasoning should be in the context of, and carefully related to, those parts of ground (b) which the Board regard as being in point. In the July letters, the Board go a little way towards providing this more specific basis for their decision, saying that in determining to refuse the application in terms of section 17(1)(b) they

[11] In the letter of 15 November 1999, after certain observations in relation to the earlier application and refusal, and the fact that that refusal was under appeal, the Board again refer to section 17(1)(b), and give the same slightly more specific account of the matters to which they had regard. It is convenient to set out in full the remainder of the November letter:

[12] While the second Great Western Road application is being taken as the "lead" case, the November letter naturally takes into account an undertaking not previously available, and the decision letters of 22 July are somewhat different in their terms. We think it worth quoting certain passages from these July letters. It is there said that

The letters go on to refer to past decisions, and in particular to the refusal of applications "in circumstances where it considered that other premises were rendered unsuitable as the sale of alcohol was from a petrol filling station where in its view the principal use of the premises has been the sale of petrol with the sale of groceries ancillary to that use and where the customers would in the main be motorists, taking into account the current Government policy against drinking and driving and the potential for drinking and driving". The final paragraph of the July letters is in somewhat different terms from the final paragraph of the November letter, but is essentially similar, basing the refusal upon "insufficient separation within the premises of the sale of petrol and the sale of alcohol, and the creation of an association between drinking and driving which was not acceptable."

[13] In their submissions to the sheriff, and to this court, the parties were concerned to identify what the Board's policy had been, prior to the present cases, where petrol and groceries were to be sold from the same premises. It is apparent from the letters of July 1999 that the Board saw themselves as having been willing to permit the sale of both petrol and groceries where the sale of petrol was "ancillary" to the sale of groceries and other domestic products. And at the other end of the spectrum, it is apparent from the same letters that the Board had regarded premises as unsuitable for the sale of alcohol where the premises in question were a petrol station, with the sale of groceries ancillary to use for the sale of petrol. It is in that latter context that the Government policy against drinking and driving was regarded as relevant. At each of these two extremes, where premises are naturally and properly described in terms of a primary use, with another use which does not alter the overall nature of the premises and is merely ancillary to the principal or essential use of the premises, there does not appear to be any real dispute between the parties. If premises are essentially a supermarket or the like, with the supply of petrol being merely ancillary to that purpose, there does not appear to be any suggestion in this case, or indeed in other cases, that the ancillary petrol supply makes the premises unsuitable for the sale of alcohol, such sale of alcohol being an entirely ordinary feature of such premises. Equally, at the other end of the spectrum, where the primary or essential nature of the premises is that they are a petrol filling station, with the sale of other goods being merely ancillary to that essential nature and function, the inclusion of alcohol amongst the things sold in this way (that is to say, not as part of what is essentially a grocery enterprise, but as part of a supportive exercise, contributing to the sale of petrol), it has been seen as legitimate, in the light of Government policy, to regard what are essentially petrol filling stations as unsuitable premises for such an ancillary or supportive sale of alcohol.

[14] It requires no great thought or analysis to appreciate that the subjects in these present cases do not fall into either of these "extreme" categories. What one has is plainly neither a filling station including an ancillary shop, nor a major store with ancillary petrol pumps. Neither the Safeway store nor the BP filling station is merely ancillary to the other. The premises could not adequately or reasonably be described either as a store or as a filling station. Any proper description of the whole subjects would require to include reference to both of the two identifiable activities which are carried on there. That would, in our opinion, plainly be true even if both activities were under the sole control and operation of a single proprietor of the entire subjects. It is at least equally true if, as here, one has two otherwise independent national companies, each apparently running one of the two activities. What goes on at the subjects is described as a "joint venture", and in lay terms we see no reason for thinking that that description is inappropriate. But we would mention at this stage that counsel for the Board advanced an argument to us (not advanced to the sheriff) to the effect that since this was admittedly a joint venture, BP and Safeway were to be seen as having created a single persona in law, as in partnership, and that Safeway thus lacked title. The point is not one which in our view can properly be taken at this stage; but in any event, the precise relationship between the two companies is not discoverable from the material before us, and while there are obvious advantages to each in being able to carry on their own activities on shared subjects, there is no indication that either takes an interest in the profits of the other, or plays any part in the running of the other operation. The essential point is that there are two readily identifiable and quite different operations being carried on on the same subjects. That remains quite plainly true, notwithstanding the fact that a driver who has taken petrol at the pumps thereafter pays for it in the store.

[15] In cases such as this, some of the questions which arise in relation to a Board's "policy" relate to issues of fairness and notice: it will be important for applicants to know of any existing policies, so that they can prepare themselves and not be taken unawares. Such questions can be seen as having arisen in the present case, since the Board's policy leading to refusal apparently related to premises which were essentially filling stations, with a merely ancillary shop. Upon that basis, policy would afford no foundation for refusal in relation to premises not falling within that specific category. While the decision letters refer to the category at the other extreme, where the supply of petrol is merely ancillary to the operation of a store, it does not appear that the Board has ever formulated a policy, or indeed perhaps even considered having a policy, according to which all premises where petrol is sold would be regarded as unsuitable for the sale of alcohol unless they fell into this category in which the sale of petrol was merely ancillary to the store. In so far as the Board may have wished, in the present cases, to make a decision upon that basis, or to introduce a policy to that effect, questions of fairness and notice would in our opinion clearly arise.

[16] This aspect of the case is covered, from various angles, in the sheriff's opinion. However, we do not find it necessary to consider the matter in any detail. It is clear that when the first applications were dealt with, Safeway were told enough in the decision letters to know that what concerned the Board was an "insufficient separation within the premises of the sale of petrol and the sale of alcohol". When the second application was made, it is clear that what Safeway were trying to do was to meet that concern, with specific undertakings as to the detail of what would happen at the stage of payment. In these circumstances, we do not find it necessary to pursue the issue of notice, or unfairness resulting from the applicant being unaware of the Board's policy or approach. We therefore turn to the substantive question of what that policy or approach appears to have been.

[17] We have referred to the previous Texaco cases. And we have quoted what appear to be the decisive passages from the decision letters relating to the present applications. So far as the previous cases are concerned, those involving the North Lanarkshire and West Fife Licensing Boards do not appear to us to carry any implications beyond their own limits: what was in issue was the sale of alcohol at a petrol filling station, in a shop which was merely ancillary to the use of the subjects as a filling station. In the previous case involving this Board, while the decision had not been well expressed, it is clear that the crucial matter was the Board's view that "the principal use of the premises was the sale of petrol with the sale of groceries ancillary to that use". As in the present case, the Board in that case also expressed their views as to the other "extreme" situation, where the sale of petrol was ancillary to use as a mini-market or the like. But it does not appear to us that the justification for refusal was seen by the Board, far less by the court, as being the fact that the petrol facilities were not ancillary to those of a store. Both in terms of policy and in terms of the court decision, what was crucial was that the supply of alcohol would be in a shop which was a merely ancillary element of what was a petrol station. Whether a particular shop is thus merely ancillary will turn upon questions of size, range of products and the like. But the essential relevance of these matters is in relation to that question: is this essentially a filling station, with an ancillary shop?

[18] In the course of the submission to us, and indeed in the sheriff's opinion, the Board's views as expressed in the various decision letters have been considered in considerable detail. But we have come to the view that the letters quite simply fail to reveal any comprehensible reasons for the decision. Once one turns away from premises which are a filling station and nothing else, with a shop which is merely supportive of the filling station, the view that premises are unsuitable for the sale of alcohol would require explanation upon some other basis. Ex hypothesi, the sale of alcohol is not merely supportive of the sale of petrol. Selling alcohol at stores, to people who have come by car, is not generally or in itself regarded as an "association" between drinking and driving which runs counter in any way to Government policy. And it is difficult to see why the presence of customers who need petrol, along with those who do not, should be regarded as altering that position. A likelihood of drinking before driving would be another matter, but is conceded not to be the point. The Board speak generally of "association" and "separation". They use general expressions such as "border-line" and flying in the face of the Government message. But none of their reasoning is explained.

[19] It is clear that the Board took an interest in the movements of people between the petrol pumps and the shop, where cars might be parked, and in particular the layout of the points where people might pay for alcohol or petrol or both. Such matters can of course be seen as creating varying degrees of "separation" between buying alcohol and buying petrol, and one can no doubt say that the less the separation, the greater is the association. But it does not appear to us that the Board have in any way explained why such an association, be it greater or less, is to be regarded as having some connection with the Government's message that one should not drink and drive. We can understand, as is illustrated by the earlier cases, that where the sale of alcohol would be part of an ancillary or subsidiary exercise on premises which are essentially providing a service to motorists, it would not be irrational, and depending upon the circumstances might be justifiable, for a Board to conclude that of all the premises where drink may be obtained, such filling station premises were not an appropriate source for alcohol, with the implicit suggestion that supplying alcohol is a service, and an appropriate service, to motorists. But we can see no basis upon which the sale of alcohol at premises such as the present Safeway stores, with a substantial and indeed preponderant body of customers who have nothing to do with cars or with the filling station, could be seen as suggesting that the supply of alcohol is an appropriate service for motorists as such, or as weakening the Government's message in any way.

[20] As we have indicated, we do not understand the Board's reasoning, and that being so the decision cannot stand. The possibility of a remit to the Board, or perhaps to the sheriff was discussed. But we have come to the view not merely that the Board have failed to identify reasons for their decision, but that where the sale of alcohol carries no implication that such a sale in some way meets the needs of drivers as drivers, the Government's message is not really in point. In the whole circumstances, we see no need for a remit. While the detailed provisions as to sale points have been gone into, and are the subject of undertakings, we do not see these as necessary conditions for the grant of the applications, or as providing a useful test of what is required for the grant of such an application. The mere fact that petrol is paid for within the shop does not appear to us to be of any significance. There might of course be a case in which the sale of the alcohol and the sale of the petrol were so specifically linked that the situation could be seen as one in which the sale of the alcohol was indeed specifically ancillary to the sale of petrol, as opposed to being an ordinary element in the activities of the store. But there is no question here of that rather fanciful relationship.

[21] In the whole circumstances we are satisfied that there was no basis for refusal, and that the applications should have been granted by the Board in terms of section 17(1) of the Act, there being no basis upon which they could properly find head (b) to apply. There is no need to consider the sheriff's reasons in greater detail: we are satisfied that his decision should be upheld. The appeals are refused.