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Cite as: [2005] ScotCS CSIH_61, [2005] CSIH 61

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BP Express Shopping Ltd v. Perth And Kinross Licensing Board [2005] ScotCS CSIH_61 (12 August 2005)

FIRST DIVISION, INNER HOUSE, COURT OF SESSION

Lord President

Lord Penrose

Sir David Edward Q.C.

[2005CSIH61]

XA128/04

OPINION OF THE COURT

delivered by THE LORD PRESIDENT

APPEAL

from the Sheriffdom of South Strathclyde, Dumfries and Galloway

in the cause

BP EXPRESS SHOPPING LTD

Pursuers and Respondents;

against

PERTH AND KINROSS LICENSING BOARD

Defender and Appellant:

_______

Act: Skinner; Biggart Baillie (Pursuers and Respondents)

Alt: Hajducki, Q.C.; Anderson Strathern (Defender and Appellant)

12 August 2005

[1] The respondents ("BP") applied to the appellant ("the Board") for an off-sales licence for premises at Bullionfield, Invergowrie. In the application form the address of the premises was given as "Bullionfield Filling Station, Invergowrie". At that location BP operate a BP Connect shop and café which adjoin the filling station. The premises lie on the south side of the trunk road from Dundee to Perth, and about half a mile to the west of the outskirts of Invergowrie.

[2] At the hearing of the application before the Board the legal representative of BP stated, according to paragraph 3 of the statement of reasons given by the Board, that "the application was for BP Connect premises which should be considered to be a small supermarket, not a filling station". She described the premises as "a small convenience store". She informed the Board that the 51.92% of the transactions were non-fuel (shop) only; that 18.11% of the transactions were shop and fuel; and that fuel only transactions amounted to 29.6%. After a number of questions were put to her, she added that 215,000 litres of fuel were sold per week, as compared with £30,000 of non-fuel sales per week (equivalent to £1.5m per annum). Vehicle passengers purchasing non-fuel items were included in the non-fuel transaction figures. She accepted that fuel sales income was much higher than non-fuel sales income; and that persons were drawn into the premises by the filling station.

[3] The Board refused the application on the ground that the premises fell within the terms of section 17(1)(b) of the Licensing (Scotland) Act 1976, under which a licensing board is to refuse an application if it finds

"that the premises to which the application relates are not suitable or convenient for the sale of alcoholic liquor, having regard to their location, their character and condition, the nature and extent of the proposed use of the premises, and the persons likely to resort to the premises".

[4] In paragraph 4 of the statement of reasons for its decision the Board stated:

"In respect of the nature of the premises the Board was of the view that it was predominantly a filling station and not a small supermarket. Given that the weekly average value of fuel sales was significantly higher than non-fuel sales; that there was no pedestrian access to the local community to the premises; and that the premises served traffic travelling along a major trunk road, the Board considered the sale of non-fuel items was ancillary and subsidiary to the petrol filling station use".

[5] In paragraph 6 the Board stated:

"Taking into account the various arguments which were submitted, the Board concluded as follows:-

The nature of the premises were predominantly a filling station and not a supermarket. The premises do not serve a local community. They serve traffic travelling on a major trunk road.

(ii) The premises being a filling station, in the Board's opinion they were unsuitable for the sale of alcohol. Having regard to the Government's drink and drive message, it was inappropriate to license premises whose main purpose is to cater for petrol purchases by motorists. In the Board's view this would create a link between alcohol and driving which would prejudice the Government's policy against drinking and driving and the public perception of the risks of drinking and driving".

[6] In their appeal to the sheriff BP argued that the Board had been in error in holding that the premises were predominantly a filling station. The primary purpose of the shop was not to provide a service for motorists as motorists. The premises could not be adequately described as a store only or as a filling station only. The proper description of the subjects would require to include reference to each of these activities. The sheriff allowed the BP's appeal and granted their application. The Board has appealed to the court.

[7] In paragraph 18 of his note the sheriff remarked that it was difficult to say that a shop which had a turnover of at least £1.25 million per annum was not a substantial operation in his view. Nor could it be said that the shop should be categorised as merely ancillary to the petrol station. In paragraph 20 he stated:

"In my view it is clear from the information which was put before the board and not challenged in any way that it cannot be said that the premises were merely a filling station with ancillary shop in the sense described at the lower end of the scale in Safeway Stores plc v Glasgow Licensing Board [2001 S.L.T. 1115]. In the circumstances it would be necessary for the board to give an explanation as to why they were unsuitable for the sale of alcohol. The only reason given is that the premises were a filling station. No reason was given for rejecting or ignoring the evidence of the turnover for non-fuel goods or the evidence relating to the number of persons who use to (sic) shop but do not buy fuel. If that evidence was not rejected in my opinion it cannot be said that the shop is merely ancillary to the filling station".

[8] In paragraph 22 the sheriff stated that he recognised that it was not appropriate for him simply to disagree with the Board and substitute his opinion for theirs. However, he concluded that the information would not allow a board acting reasonably to come to the conclusion that the premises were predominantly a filling station. That was a material fact, because it was clear that, if the Board had been aware that the premises were not merely a filling station with an ancillary shop but were in fact premises consisting of both the filling station and a shop, it would have come to a different conclusion about the question of weakening the Government's message. In paragraph 24 he stated that he considered that it was unreasonable for the Board simply to say in its reasons that the premises were predominantly a filling station and not a supermarket and that being such they were unsuitable for the sale of alcohol.

[9] In this court, it was not in dispute that, if the Board were entitled to conclude that the premises were predominantly a filling station, it could rely on the government's policy against drinking and driving. That this is a relevant consideration may be seen from the decision in Texaco Ltd v North Lanarkshire Licensing Board 1998 S.C. 408. As the sheriff appears to have recognised, the question for him was whether the Board were entitled to conclude that the premises were predominantly a filling station. In Safeway Stores Plc v Glasgow Licensing Board the court sustained the sheriff's decision to allow the appeals against the decisions of the board. At paragraph 17 the court observed that there could be a range of possible situations. At one "extreme" a shop was merely ancillary to the use of the subjects as a filling station, as in the Texaco case. At the other end of the range the sale of fuel was ancillary to the use of the subjects as a mini-market or the like. In the case before the court there were a number of sites where there were joint ventures between the applicants and a petrol company. At each site there was a petrol station run by the petrol company and a convenience shop run by the applicants. The shop was a substantial operation, carrying every item which could be purchased in a full supermarket operated by them. There were substantial numbers of pedestrian shoppers. The stores had a preponderant body of customers who had nothing to do with cars or the filling stations. At paragraph 18 the court concluded that the board had failed to give any comprehensible reasons for its decisions. The court observed:

"Once one turns away from premises which are a filling station and nothing else, with a shop which is merely supportive of a filling station, the view that premises are unsuitable for the sale of alcohol would require explanation on some other basis".

[10] For the Board, Mr Hajducki submitted that, despite his disavowal of doing so, the sheriff had substituted his opinion for that of the Board in regard to the question of whether the premises were predominantly a filling station. There was no true parallel between the present case and Safeway Stores plc. In the present case there was not a major supermarket. The vast majority of items catered for passing motorists. As had been accepted before the Board, people were drawn into the premises by a filling station. The Board had been entitled to conclude that viewed overall the premises were predominantly a filling station. It was evident that the sales figures for fuel were a number of times greater than those for non-fuel items. The main purpose of the premises was to cater for petrol purchases by motorists. Motorists' visits might generate more than one type of transaction.

[11] For BP, Mr Skinner pointed out that, in order to justify a board's refusal of an application, there required to be a proper basis for such a refusal. Under section 17 a board had to grant an application where it did not find that any of the competent grounds of objection applied. The important point was not the fact that persons visited the premises by car, but what they did when they were there. They did not visit them merely to meet their needs as drivers. Mr Skinner did not dispute the relevance of a comparison of sales figures. However, there were no comparative figures for fuel sales, and the position in regard to duty and VAT was not clear. The price of petrol could fluctuate substantially. There was no comparison of the number of people who bought different items. Mr Skinner complained that there was no basis for the Board's finding that there was no pedestrian access for the local community. However, he accepted that on any view persons who came from that community were mainly motorists. The board had failed to consider the breakdown of purchases. In reliance on what was said in Safeway Stores Ltd at paragraph 18, he maintained that there was an absence of explanation as to why these premises should be regarded as unsuitable for sale of alcohol.

[12] The issue which was raised by BP in their submissions to the Board was as to the predominant use of the premises. The outcome of this appeal turns on whether the Board was or was not entitled to conclude that the premises were predominantly a filling station. If they were so entitled, the passage in Safeway Stores Ltd on which the sheriff and Mr Skinner relied is not of relevance since it assumed a situation which a shop is not subordinate to a filling station. The reasoning of the sheriff appears to have been that the size of the turnover of the shop in non-fuel sales was in itself so great that it could not be said that the shop should be treated as merely ancillary to the filling station. However, this does not take account of the issue which was presented to the Board. It does not take account of the relative magnitude of the fuel and non-fuel sales, to which the Board evidently attached importance. It also assumes that there is no connection between individual fuel sales and non-fuel sales. We are unimpressed with Mr Skinner's complaint that there were no comparative figures for sales and that the position in regard to duty and VAT was not clear. These complaints come ill from BP who possessed the relevant information. Moreover, despite what was said by the court in Safeway Stores Ltd at paragraph 8, we are not convinced that duty and VAT should be excluded for the purposes of comparison. The motorist or the shopper is concerned with the actual price which he or she has to pay.

[13] We consider that the Board were entitled to come to the conclusion which they did. On the information which BP put before them they had to consider the relative significance of the use of the premises as a filling station and as a shop, against the background that the customers were very largely, if not entirely, motorists (or their passengers), drawn to the premises by the filling station.

[14] Accordingly we allow the appeal against the decision of the sheriff.