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Cite as: [2005] CSIH 22, [2005] ScotCS CSIH_22

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Smith v. North Lanarkshire Licensing Board & Anor [2005] ScotCS CSIH_22 (03 March 2005)

EXTRA DIVISION, INNER HOUSE, COURT OF SESSION

Lord Marnoch

Lord Macfadyen

Lord Clarke

[2005CSIH22]

XA120/03

OPINION OF THE COURT

delivered by LORD MARNOCH

APPEAL

under section 39(8) of the Licensing (Scotland) Act 1976

in the cause

THOMAS SMITH

Pursuer and Appellant;

against

NORTH LANARKSHIRE LICENSING BOARD

First Defenders and Respondents;

and

THE CHIEF CONSTABLE OF STRATHCLYDE POLICE

Second Defender and Respondent:

_______

Act: R.W.J. Anderson, Q.C., Blair; HBM Sayers (John Batters & Co., Glasgow) (Pursuer and Appellant)

Alt: S.A.L. Wolffe; Shepherd & Wedderburn (First Defenders and Respondents)

3 March 2005

[1] This is an appeal under section 39(8) of the Licensing (Scotland) Act 1976. The appeal is taken against a decision of the sheriff upholding a decision of the Licensing Board to suspend for one month the appellant's public house licence for premises known as McCormick's Bar, 61 Hamilton Road, Bellshill.

[2] The proceedings as a whole have a rather unfortunate history. They were commenced by the following letter written on 5 October 2002 by the second respondent to the clerk to the first respondents:

"LICENSING (SCOTLAND) ACT 1976 SECT. 31

PREMISES OF McCORMICKS PUBLIC HOUSE

61 HAMILTON ROAD, BELLSHILL

I refer to the above premises which are the subject of a Public House Licence, the licence holder being Thomas Smith, 108 Glebe Street, Bellshill.

On behalf of the Chief Constable of Strathclyde Police being a person competent to do so in Terms of Section 16(1)(d) of the above Act, I make complaint to the Board in accordance with Section 31(1) of the said Act.

I respectfully invite the Board to suspend the licence for the above premises in accordance with Section 31(2)(a).

It is submitted that the licence holder is no longer a fit and proper person to be the holder of a licence being a ground for suspension in Terms of Section 31(2)(a).

In support of the above submission the Board's attention is drawn to the following incident which constitutes misconduct in the part of the licence holder in Terms of Section 31(3)(a).

About 1500 hours on Friday 20 September 2002 Officers from my Licensing Department attended at McCormick's Bar, 61 Hamilton Road, Bellshill, acting on information received regarding items of a sectarian nature being displayed within the premises.

On arrival they met and interviewed the licensee, Thomas Smith, regarding the display of these items. He freely admitted that he was fully aware of their display and that the items had been displayed for a number of years.

He was advised that he was in breach of the conditions of his licence and was allowed five days to have the items removed.

At 1415 hours on Tuesday 25 September Officers from my Licensing Department re-attended at McCormick's Public House and again spoke to the licensee Thomas Smith. Examination of the premises revealed that only one of the original items had been removed from the display.

The remaining items were photographed in situ before being removed for further enquiry. The following items were found to be displayed at the time.

1 Photograph - Daniel Breen Reward

2 Framed photograph - John Mitchell

3 Framed photograph - Thomas Ashe

4 Framed photograph - Thomas McSwinney

5 Framed photograph - Thomas J Clarke

6 Large framed painting depicting the siege at the GPO O'Connell

Street, Dublin, during the Easter Rising of 1916

7 1 x large framed photograph containing 3 photographs of IRA funerals:

(i) Francis Hughes

(ii) Martin Hurson

(iii) Tom McElwee

8. 1 picture frame containing carious photographs including IRA murals

9 1 framed photograph depicting executed 1916 leaders

10 1 laminated photograph depicting 10 IRA hunger strikers (1981)

11 1 scarf message, 'go on home'

12 1 scarf, message, 'Dan Breen'

13 1 framed photograph - Michael Gaughan

14 1 framed picture - Provisional government of the Irish Republic

15 1 green scarf - 'TIOCFAIDH' AR'LA.' Also stars and Phoenix

16 1 green scarf, message, 'TIOCFAIDH' AR'LA' Phoenix and a harp.

The premises were also found to have a Juke Box which contained various items of music with clear sectarian references. Although no music was being played at the time of the visit it may be assumed that if used the licence holder would also be in breach of the Conditions of his licence.

Taken together these items provided evidence of current support for the IRA which is an Irish Terrorist Organisation proscribed illegal by the Secretary of State and can be considered of a sectarian nature.

It is therefore submitted that Mr Smith is in breach of Conditions 7(c) and (d) of the Bylaws enacted by North Lanarkshire Licensing Board under Terms of Section 38 Licensing (Scotland) Act 1976.

It is therefore submitted that the conduct of Mr Smith in the opinion of the Chief Constable of Strathclyde Police is clearly an (sic) unambiguously incompatible with the notion that he can be regarded as fit and proper to be the holder of a licence.

It is also submitted that it would be in the public interest to suspend the licence for the premises.

Photographs of the items and the articles themselves will be made available for the attention of North Lanarkshire Council, Licensing Board (sic) in the event of a Hearing.

Should you require further assistance or information on this matter please do not hesitate to contact Sergeant Urban of my Licensing Department at Motherwell Police Office."

[3] From the above it will be seen that the police complaint was based on a number of assertions, express or implied, including, first, that the allegedly offensive items had been identified during the first visit of the police on 20 September 2002, second, that by displaying the material in question the appellant was in breach of certain conditions of his licence and, third, that, taken together, the items in question provided "evidence of current support for the IRA which is an Irish Terrorist Organisation proscribed illegal by the Secretary of State ... ".

[4] On 1 November 2002 the first respondents convened a Special Meeting to consider the foregoing complaint with the outcome referred to above. The appellant's representative at the hearing then requested a "Statement of Reasons" and that Statement is now before us. Rather unusually, before stating the actual reasons for the decision the Statement gives a very full narrative of what occurred at the hearing. That narrative discloses that, in the course of the hearing, what we have referred to above as a number of "assertions" by the second defender were largely, if not wholly, departed from.

[5] In the first place, it transpired that the items in question, having been present in the public house for 7 or 8 years, had in the early stages been expressly approved by the police. At least this was said by the appellant's representative and not contradicted by Chief Superintendent Buchan who represented the second respondent. It is also, we think, a fair reading of the narrative as a whole that on their first visit on 20 September the police left it to the appellant to decide which, of many, items displayed in the premises should then be removed.

[6] In the second place, it transpired that, while the first respondents had promulgated Byelaws entitling them to attach conditions anent the playing of sectarian music and/or the display of objects of a sectarian nature, no such conditions had, as matter of fact, been attached to the licence held by the appellant.

[7] And, lastly, the narrative records that, in the course of his summing up, Chief Superintendent Buchan stated that "he did not (our emphasis) allege that the material related to support for terrorism."

[8] In the result, although the motion passed by the Board was that "the Police complaint be upheld", it is clear that in the course of the hearing there had been considerable movement away from the written terms of that complaint. Against that background it is clearly right to look rather closely at the reasons ultimately given for the Board's decision. These reasons are themselves rather diffuse but, since any summary risks being selective, we set them out in full:

"The Board firstly decided that the licence holder was no longer a fit and proper person to be the holder of the licence. The Board were aware that in considering a matter of this nature in response to a complaint, they could have regard to any misconduct on the part of the holder of a licence which in their opinion had a bearing on his fitness to hold the licence. The Board after taking into account everything that had been said, the terms of the Police letter of complaint and the photographs produced, were of the view that the items in question were clearly of a sectarian nature and were being displayed at the licensee's premises. There appeared to the Board to be a significant degree of common ground between the parties since there was no factual dispute regarding the problematical items being on display. The overriding factors so far as the Board were concerned was that the display of the various pictures/photographs as detailed by the Police and the details given of the various items of music contained within the jukebox showed a high degree of irresponsibility on the part of the licence holder who in the opinion of the Board must have been aware that some or all of the items could have the potential to cause offence because of their sectarian implications. The Board appreciated that there had been a level of debate over what constituted a sectarian item but the Board formed the opinion that, taken together, the items in question could be regarded as having a sectarian theme of which the licence holder would, or should, have been aware. Whilst the Board were aware that the onus in law was on the Chief Constable to substantiate his case (there was no onus on the licence holder to prove he was fit and proper) the Board came to the fundamental conclusion that the Chief Constable was entitled in the circumstances to form the opinion that due to the various items detailed in his complaint letter being on display, the licensee's actions constituted misconduct can that he was to be regarded as unfit to continue to hold the licence and to suggest that the Board should reach the same conclusion, which the Board ultimately did. In the Board's view, as the regulating authority, it was entitled to expect a certain degree of responsibility on the part of the licence holder in the running and operation of his licensed premises and the conduct of the licensee (by having the various items clearly on display) fell short of that. The Board, as the regulating authority, in order that it can be satisfied that licensees have the requisite degree of responsibility have already promulgated a training policy whereby individual licence holders require to furnish appropriate certificates vouching for the fact they have attended training courses when applying for the grant, transfer or renewal of licences. On a similar theme, therefore, the Board as the regulating authority for licensed premises in their area, felt it was entitled to expect licensees to manage their licensed premises in an appropriate manner and the Board in essence deemed the various materials specified by the Police being on display as being inappropriate items due to their sectarian nature. The Board also noted that the licensee had failed to avail himself of the opportunity given by the Police some five days earlier to remove all items of a sectarian nature. In the Board's considered view, the licensee if he was willing to co-operate to any extent with the Police should have been able to assess the problematical items and arrange for their removal. The fact that an opportunity was given to the licensee by the Police was viewed by the Board as significant.

Although the Board have promulgated and had approved by the Secretary of State bylaws dealing with matters like sectarian items and the playing of sectarian music, the determining factor in the Board's view, in this case was the misconduct on the part of the licensee having on display the items in question and it was this misconduct which in the Board's view impacted on their adverse view regarding his fitness to hold the licence. The Board did not accept that the licence holder was so naïve that he did not appreciate, on any level, the undesirability or indeed potential dangers of such items being displayed in a public house, and the Board did not accept that the licensee could not have made a reasoned assessment of which items required to be removed as per the Police request. Overall the Board decided that the actings of the licensee amounted to misconduct.

In relation to the Board's decision to suspend the licence for one month, the Board were aware that, in this particular case, due to the licence having a currency until January 2004, that they could, in fact, suspend the licence for up to a year. The Board's considered view was that a period of one month was a sufficient punishment on the licence holder to show the Board's displeasure at the various items detailed in the Police letter being on display. The Board acknowledged that hardship would be caused to the licence holder by virtue of the one month's suspension but the Board felt it had a fundamental duty, acting in the public interest to dispose, when required, of cases by inflicting a degree of punishment on licence holders. The Board felt that a suspension of one month's duration was apposite in this case having regard to the overall circumstances. The Board carefully noted the Solicitor's submission regarding the premises being on the market but in the Board's view this had no bearing on its assessment of a one month suspension. The Board considered it was in the public interest to take firm, but fair, action against the licence holder in circumstances such as these in order that the licence holder, other licence holders and the general public were in no real substantial doubt as to the manner in which the Board viewed such misdemeanours. The Board's considered view was that a one month's suspension was appropriate when holding the public interest in just balance with the licence holder's personal circumstances."

[9] Counsel for the appellant commenced by submitting that the Board and the sheriff, in upholding the Board's decision, had erred in law, first, in finding that the appellant had been guilty of "misconduct" within the meaning of section 31(3)(a) of the 1976 Act and, second, and in any event, by failing to have proper regard to the purpose of suspending a licence in the public interest within the meaning of section 31(1) of that Act. In the latter respect Mr. Anderson went the length of submitting that "punishment" should never form any part of the Board's reasoning. As the debate progressed, however, it became apparent that what was really in issue between the parties was whether, in arriving at its decision, the Board had given adequate reasons for it. In that connection it was accepted on both sides of the Bar that the relevant test had been accurately enunciated by Lord President Emslie in the well-known case of Wordie Property Co. v. Secretary of State for Scotland 1984 S.L.T. 345 where, at p. 348, he said this:

"In order to comply with the statutory duty imposed upon him the Secretary of State must give proper and adequate reasons for his decision which deal with the substantial questions in issue in an intelligible way. The decision must, in short, leave the informed reader and the court in no real and substantial doubt as to what the reasons for it were and what were the material considerations which were taken into account in reaching it."

Indeed, this was the test applied in Mirza v. Glasgow District Licensing Board 1996 S.L.T. 1029 which was itself an appeal under the Licensing (Scotland) Act 1976. We pause to observe that these authorities and the argument emanating from them were before the sheriff, although, as is so often the case, the latter was developed rather differently before this court.

[10] Applying that test to the present case we encounter difficulty in a number of respects. Firstly, there is real difficulty in ascertaining what precisely was thought to constitute "misconduct" on the part of the appellant. Reference continues to be made to the "terms of the Police letter of complaint" without noticing the very material departures from these terms in the course of the hearing. Although the Board had not chosen to make it a condition of the appellant's licence that he did not display sectarian objects, such display was held nonetheless - without explanation - to amount to "misconduct". That is not an impossible conclusion but, at least in the absence of any ensuing public disorder, it is not self-evident. Although the first respondents did not accept that "the licensee could not have made a reasoned assessment of which items required to be removed as per the police request", no notice is taken of the fact that at the time that request was made in the context of an alleged breach of the conditions of the appellant's licence. But, most important of all, in our opinion there is a real lacuna in the reasoning of the first respondents in that at no point do they explain why they considered that the appellant was "no longer a fit and proper person to be the holder of a licence". It is, of course, true that in considering that matter they are entitled, in terms of section 31(3)(a), to "have regard" to misconduct on the part of the holder of a licence, but the finding of such misconduct does not of itself mean that the requirements of section 31(2)(a) of the Act are satisfied.

[11] Mrs. Woolf, advocate, for the first respondents, submitted that since the narrative in the "Statement of Reasons" contained reference to (1) the material in question having been present for 7 to 8 years, (2) to the fact that at one point it had been expressly authorised by the police, and (3) to the fact that the material ultimately deemed offensive had, in any event, been removed and that the appellant had undertaken not to replace it, it could be assumed that all these considerations had been part of the reasoning process. In our opinion, however, that is very far from clear and rather do we think that the first respondents may well have fallen into the trap of thinking that once "misconduct" was established (whatever precisely that was), the rest followed.

[12] In the result, we consider that the sheriff erred in law in holding, as he did, that the first respondents had given "full and proper reasons" for their decision. That being so, it is unnecessary to consider Mr. Anderson's further submission that it was in any event an error in law on the part of the respondents to impose suspension as a means of "punishment". We are inclined to think that the appropriateness of any punitive element in a decision taken by a Licensing Board under section 31 of the 1976 Act will depend very much on the particular circumstances of the case. However, we express no formal opinion on the matter.

[13] For the reasons we have given we shall uphold the appeal and remit back to the sheriff with the direction that he, in turn, quash the decision of the first respondents.