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EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
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Lord Osborne
Lord Kingarth
Sir David Edward, Q.C.
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[2008] CSIH 43
XA172/07
OPINION OF THE COURT
delivered by LORD OSBORNE
in
APPEAL
From the Sheriffdom of
Tayside, Central and Fife at Dundee
in the cause
DR. CHRISTOPHER ROBERT
JAMES KILLEN and MRS. ALISON KILLEN
Pursuers and Appellants;
against
DUNDEE CITY COUNCIL
Defenders and Respondents:
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Act: R.G. Skinner,
Advocate; Balfour & Manson (Blackadders,
Dundee) (Pursuers and Appellants)
Alt: S.L. Stuart; Dundee City
Council (Defenders and Respondents) - Gillespie McAndrew
15 July 2008
The background
circumstances
[1] The
appellants are proprietors of residential premises at 30 Constitution Crescent, Dundee.
The respondents are the local authority having responsibility in the
City of Dundee and, as such, in terms of section 2(2) of the Civic
(Government) (Scotland) Act 1982, "the 1982 Act", are the
licensing authority for the administration of licensing in relation to
activities in connection with which licences are required under Part II of that
Act. In particular, the respondents are
responsible for the administration of licences for houses in multiple
occupation, as required by section 44 of the 1982 Act and the provisions of the
Civic Government (Scotland) Act 1982 (Licensing of Houses in Multiple
Occupation) Order 2000 (S.S.I. 2000/177).
[2] In or about
June 2006, the appellants submitted an application to the respondents seeking a
licence for the premises at 30 Constitution Crescent, Dundee, as a house in multiple occupation
for occupancy by four tenants. The
position in relation to that property was that it had been purchased by the
appellants, primarily as the main residence for their daughter, who was a
student at Dundee University undertaking a five-year course. It was intended that she would reside in the
property along with two of her friends as tenants; it was hoped that a further tenant could be
attracted. Several letters of objection
were submitted to the respondents shortly after the making of their application
by the appellants.
[3] The
appellants' application came before the respondents' Licensing Committee at
their meeting on 14 June 2007.
On that occasion, the appellants' application was presented by a
solicitor acting on their behalf. A
number of persons who had objected to the grant of the application appeared in
person. It was explained to the
Licensing Committee that Constitution Crescent was a development of some 39
properties of which three currently were licensed as houses in multiple
occupation. The various letters of
objection, which had been submitted in June and July 2006, shortly after the
making of the appellants' application related to historic events prior to that
time. The property of the appellants itself
had not been occupied until September 2006.
Thus none of the objections that had been lodged related to the
particular property which was the subject of the application, nor did any
objection relate to the activities of the appellants' daughter, or her
friends. The property was well
maintained in good condition.
[4] At the
meeting on 14 June 2007, the Licensing Committee decided to
refuse the appellants' application.
Subsequently the appellants requested a statement of reasons for that
decision, in terms of paragraph 17 of Schedule 1 to the 1982 Act. The reasons for the decision were set out in
a letter, dated 2 July 2007, from the solicitor acting for the
respondents to the appellants' solicitors.
That letter gave full details of the submissions that were made to the
Licensing Committee in relation to the application. Thereafter, in the final paragraph of the
letter, the Committee's reasons for refusal of the application were set
out. That paragraph is in the following
terms:
"After considering the comments of
Mr. McCrae, the submissions by the objectors and Mr. Glass and the contents of
the letters of objection, the Committee decided unanimously that the premises
are not suitable for use as an HMO having regard to their location, in terms of
paragraph 5(3)(c)(i) of Schedule 1 to the Civic Government (Scotland) Act
1982. The Committee readily accepted
that none of the problems referred to in the letters of objection relate to
your clients' premises. Rather, the main
issue here is the designation of this development as a 'Home Zone'. This is not a suitable area for HMOs. There is more to the concept of a 'Home Zone'
than just pedestrianisation and measures to control traffic. The purpose of developments such as these is
also to provide a quiet, safe and stable environment for the likes of retired
people and families. This cannot be
achieved if there are HMOs in the midst of such an area. The Committee recognised that it had granted
applications in the past, but it is not bound by its previous decisions and,
indeed, the various matters referred to in the letters of objection indicate
the sort of difficulties which have been caused in the development by the
existence of HMOs already. For these
reasons, the Committee decided to refuse the application."
[5] Thereafter,
the appellants appealed to the sheriff against the decision of the Licensing
Committee, in terms of paragraph 18(1) of Schedule 1 to the 1982 Act. Paragraph 18(7) of Schedule 1 to that Act
provides:
"(7) The
sheriff may uphold an appeal under this paragraph only if he considers that the
licensing authority, in arriving at their decision -
(a) erred
in law;
(b) based
their decision on any incorrect material fact;
(c) acted
contrary to natural justice; or
(d) exercised
their discretion in an unreasonable manner."
It is provided by paragraph 18(9) of Schedule 1 to the 1982
Act that:
"(9) On
upholding an appeal under this paragraph, the sheriff may -
(a) remit
the case with the reasons for his decision to the licensing
authority for reconsideration of
their decision; or
(b) reverse
or modify the decision of the authority, ... ".
[6] In their
appeal to the sheriff, the appellants sought the reversal of the decision taken
by the Licensing Committee on 14 June 2007 and also a finding that they were
entitled to the licence sought. By
interlocutor dated 17 October 2007, the sheriff refused the
appeal. Thereafter, the appellants
appealed his decision to this court.
[7] In supporting
their appeal, the appellants have lodged three grounds of appeal in the
following terms:
"(1) The
learned sheriff erred in refusing the appeal.
In particular he erred in holding that the respondents were entitled to
refuse the application on the ground that the premises were unsuitable having
regard to their location. This was on
the basis that 'this development' had been designated 'as a Home Zone ... The purpose of developments such as these is
also to provide a quiet, safe and stable environment for the likes of retired
people and families. This cannot be
achieved if there are HMOs in the midst of such an area.' The Transport (Scotland) Act 2001 gave a local traffic
authority power to designated as a Home Zone any road for which they are the
traffic authority. Such designation was
to be for the purposes laid down in section 74(2) of the 2001 Act. The designation or otherwise of a road as a
Home Zone was irrelevant to the issue of whether the premises were suitable for
use as an HMO.
(2) The
learned sheriff erred in holding that 'it was reasonable and responsible for
the respondents to have the view that Home Zones are primarily for families and
older people and that HMOs do not fall within the desired ethos or makeup of a
Home Zone.' A Home Zone is a road
designated as such by a local traffic authority for the purposes of safety,
improvement or preservation of the environment, improving the facilities
provided on or near the road, or the implementation of their transport
policies. It is a tool for use by
transport authorities. Its purpose is to
create benefits for all persons using or in the area of the road; not to create an area the 'ethos or makeup'
of which was primarily for families and older people.
(3) The
learned sheriff erred in refusing the appeal.
Having held that there was no basis for a finding of lack of suitability
due to possible problems with tenants, he should have held that there was no
basis for refusal under paragraph 5(3)(c) of the first Schedule to the Civil
Government (Scotland) Act 1982 and should have reversed the respondents'
decision."
Submissions of the
appellants
[8] Counsel for
the appellants moved the court to uphold the appeal and to remit the case to
the sheriff with a direction to remit it to the respondents ordaining them to
grant the application; failing which,
the matter should be remitted to the sheriff with a direction that he should
remit it to the respondents for reconsideration of their decision. Counsel then outlined the factual background
to the matter, to which we have already referred. Thereafter he drew our attention to the
statutory framework within which the application of the appellants had had to
be considered. The licensing of houses
in multiple occupation had been the result of the provisions of section 44 of
the 1982 Act and the Civic Government (Scotland) Act 1982 (Licensing of Houses in
Multiple Occupation) Order 2000. In
practical terms, if a house were to be occupied by three or more persons who
were not of the same family, or two or more families, then a licence was
required. The main licensing provisions
were to be found in Schedule 1 to the 1982 Act.
Paragraph 5(1) of the Schedule set out the options which were available
to the licensing authority. Paragraph
5(3) set forth the basis upon which an application should be refused. It provided that the licensing authority
should refuse an application if, in their opinion, one or more of four sets of
circumstances existed. Otherwise they
were under a duty to grant the application.
The only part of paragraph 5(3) relevant to the present case was sub-paragraph
(c). It provided:
"(c) where
the licence applied for relates to an activity consisting of or
including the use of premises or a
vehicle or vessel, those premises are not or, as the case may be, that vehicle
or vessel is not suitable or convenient for the conduct of the activity having
regard to -
(i) the
location, character or condition of the premises or the
character or condition of the vehicle
or vessel;
... ".
[9] Counsel went
on to draw our attention to the provisions of the Transport (Scotland) Act 2001, "the 2001 Act", section
74 of which provided for Home Zones. It
was important to note that section 74(1) gave a local traffic authority
power to designate, as a Home Zone, any "road" for which they were the traffic
authority, "with a view to implementing measures for securing any of the
purposes mentioned" in section 74(2). It
was important to note the purposes referred to in section 74(2) of the 2001
Act. They were:
"(a) to
improve the safety of persons using the road or any area in the
vicinity of the road;
(b) to
improve or preserve the environment through which the road runs;
(c) to
improve the facilities provided on, or in the vicinity of, the road in
such a way as to bring benefits to
any persons using the road (not being persons using motor vehicles); and
(d) to
any extent to implement their transport policies".
It was interesting to see that when the 2001 Act was passed,
no amendment was made to paragraph 5(3) of Schedule 1 to the 1982 Act,
entitling or requiring the licensing authority to refuse an application for a
house in multiple occupation on the basis that the premises were situated in
the vicinity of a Home Zone.
[10] Turning to the
particular circumstances of this case, counsel submitted that the sheriff had
erred in law in that he had failed to recognise that the Licensing Committee
had itself erred in law et separatim
exercised its discretion in an unreasonable manner in refusing to grant the
application solely because the premises were situated in a Home Zone area. In this connection he relied upon Leisure Inns (UK) Limited v Perth & Kinross District Licensing Board
1993 S.L.T. 796, particularly the observations of Lord Justice Clerk Ross at
page 798I-J, where he said that behind every ground for refusal there had to be
adequate reasons and for those reasons there had to be a proper basis in
fact. The Committee's reasons could be
found in he last paragraph of the letter, dated 2 July 2007.
It was obvious from its terms that the reasons given for refusal had to
be seen as an invocation of paragraph 5(3)(c)(i) of Schedule 1 to the 1982
Act. There were no findings of fact in
relation to any other possible basis for refusal. However, it was not even said that the particular
premises involved were unsuitable for use as a house in multiple
occupation. It appeared that it was the
location of the premises which were seen as the problem. The error of the sheriff was in failing to
recognise that the Licensing Committee had erred in the manner described. In particular, he had failed to appreciate
that the fact that a house was situated in an area in which there were roads
designated as Home Zones was not ipso
facto, or even prima facie a
ground for it being deemed an unsuitable location for a house in multiple
occupation. The fact that such a house
was situated in a Home Zone was neutral.
[11] Looking at the
provisions of section 74 of the 2001 Act it was evident that the purposes for
the securing of which a Home Zone might be designated were limited. Looking at those purposes, it could be said
that Home Zones might be a tool used by the local transport authority to create
safe, or safer, areas for those using the roads in a particular location, in
order to preserve the environment, by implementing traffic measures. The kind of purposes that might be served
might be the slowing down of traffic at or near a school or in a densely
populated area. No doubt, if appropriate
traffic calming measures were introduced in a particular area, that would
benefit, among others, the children and the elderly living in that area, but
that benefit would be available equally to all other sections of society. The purposes of a Home Zone were not confined
to children or the elderly. The sheriff
had erred in agreeing that the Licensing Committee were entitled to hold that
premises with HMO licences did not fall "within the desired ethos or makeup of
a Home Zone". In concluding that houses
in multiple occupation were unsuited to being in Home Zones, the Committee
itself had erred and the sheriff had erred in supporting their decision. No connection had been established by the
respondents between what had been done to the particular roads designated as
Home Zones in the area in question and the suitability of the particular
premises as a house in multiple occupation.
The Licensing Committee had made certain unwarranted assumptions about
the nature of Home Zones, first, that they were populated by "the likes of
retired people and families"; and, second, that a quiet, safe and stable
environment would necessarily be prejudiced by the grant of a licence for a
house in multiple occupation. Such
assumptions were quite unwarranted.
Furthermore, the Licensing Committee had no basis for their assumption
that the particular premises in question would be likely to cause any
disturbance or nuisance, if the licence were granted. Indeed, the sheriff had specifically found at
paragraph 21 of his decision that nuisance and disorder were not the reason for
the refusal and that if such things had been found, there would have been no
basis for such a finding. It was
therefore impossible to see how he had concluded that the Licensing Committee
were entitled to hold that "a quiet safe and stable environment for the likes
of retired people and families ... cannot be achieved if there are HMOs in the
midst of such an area." Since there was
no proper basis for refusal of the application, the Licensing Committee had
been bound to grant it. No other point
was involved in the case. Hence there
was no purpose in remitting the matter to them for reconsideration.
Submissions of the
respondents
[12] Counsel for
the respondents moved the court to refuse the appeal and affirm the decision of
the sheriff. The ground of decision of
the Licensing Committee was the ground of refusal enshrined in paragraph
5(3)(c)(i) of Schedule 1 to the 1982 Act.
What was in issue was the location of the premises in Constitution Crescent, Dundee.
It was important to take into account section 74(2)(b) of the 2001 Act,
which enacted that one of the purposes which might justify the designation of a
Home Zone was the improvement or preservation of the environment through which
the relevant road ran. It should be
understood that the designation of a road as a Home Zone did not confer extra
powers upon the local traffic authority;
the general statutory powers of such an authority continued to be
available. It was acknowledged that the
Licensing Committee had given a very particular reason for the refusal of the
application. Counsel submitted that that
reason reflected the inconsistency between the purpose of the Home Zone and the
existence of housing in multiple occupation.
Counsel drew attention to material published by the Scottish Executive relating
to Home Zones, which was available in the appendix from page 40 onwards. That material showed that a designation would
normally be made in a residential area.
[13] Counsel
accepted that a Home Zone might be enhanced by the creation of a house in multiple
occupation, in particular circumstances.
The letter dated 2 July 2007, he accepted, contained a very
general statement, but it had to be read in the particular context. He agreed that there was nothing specific to
this particular proposed house in multiple occupation that could be identified
as objectionable in a Home Zone. The
respondents had been entitled to have regard to the purpose of the designation
in deciding the suitability of the location of the relevant premises. The location of the premises concerned was
simply not suitable having regard to the objectives of the Home Zone. That view was based on the possibility of
problems emerging from the use of the premises as a house in multiple
occupation, although no particular adverse consequences had been
envisaged. The Licensing Committee had
perceived a general incompatibility between houses in multiple occupation and a
Home Zone. The Committee had been
entitled to come to the conclusion they did, having regard to their past
experience. If that were the position,
then the sheriff himself had not erred in upholding the Committee's decision.
[14] As regards
remedy, if the court were of the view that the appeal should be allowed, there
would require to be a remit to the sheriff to grant the licence sought. Having regard to the reason given by the
Committee for their refusal, it was agreed that it would not be appropriate for
there to be a remit to them for reconsideration.
The decision
[15] In considering
whether the licensing authority and subsequently the sheriff erred in law,
which was the sole contention before us, it is necessary to examine the reason
given by the Licensing Committee for their decision to refuse the
application. That reason is to be found
in the last paragraph of the letter, dated 2 July 2007.
The reason is stated very generally.
It is said:
"Rather, the main issue here is the
designation of this development as a 'Home Zone'. This is not a suitable area for HMOs. There is more to the concept of a 'Home Zone'
than just pedestrianisation and measures to control traffic. The purpose of developments such as these is also
to provide a quiet, safe and stable environment for the likes of retired people
and families. This cannot be achieved if
there are HMOs in the midst of such an area....."
It is quite evident from the language used in the formulation
of the Committee's reason for refusal that they perceived there to be a necessary
fundamental conflict between the designation of a Home Zone and the
authorisation of a house in multiple occupation.
[16] In examining
that reason, in our view, it is necessary to consider the nature of Home
Zones. Section 74 of the 2001 Act provides:
"(1) A
local traffic authority may, with a view to implementing measures for securing
any of the purposes mentioned in subsection (2) below, designate as a Home Zone
any road for which they are the traffic authority.
(2) The
purposes mentioned in subsection (1) above are -
(a) to
improve the safety of persons using the road or any area in the
vicinity of the road;
(b) to
improve or preserve the environment through which the road runs;
(c) to
improve the facilities provided on, or in the vicinity of, the road in
such a way as to bring benefits to
any persons using the road (not being persons using motor vehicles); and
(d) to
any extent to implement their transport policies."
The reference to "transport policies" in that provision is
defined in subsection (5) of section 74.
It provides:
"In this section 'transport
policies', in relation to a local traffic authority, means the policies
formulated from time to time under section 63(2)(b) of the (Transport Act 1985)
by the local authority who are the local traffic authority."
[17] Having regard
to the range of possible statutory purposes, which are said to be the purposes
for which a Home Zone may be designated, it is unclear what was the underlying
purpose or purposes sought to be achieved by the designation of this particular
Home Zone. There was no evidence before
the Committee as to, and we simply do not know, what was the particular purpose
or purposes that the local traffic authority in fact had in view, in
designating the roads in the particular area in question as a Home Zone. It may have been that one or more of the
purposes referred to in section 74(2) of the 2001 Act, other than "to improve
or preserve the environment through which the road runs", constituted the
reason for the designation. In any
event, the benefit of any of these purposes is contemplated by the legislation
as being available for all members of the community, not just "retired people
and families". Further, it has to be
borne in mind that the designation is to be "with a view to implementing
measures for securing" any of the relevant purposes. Those measures are to be measures taken by a
local traffic authority. Having regard
to the nature and functions of a local traffic authority, the measures will
plainly be the kind of measures which a local traffic authority might be
expected to take with a view securing any of the relevant purposes, as opposed
to more general measures.
[18] Having regard
to all these considerations, the question is whether the existence of such a
designation can be seen as necessarily inconsistent with the grant of a licence
for a house in multiple occupation. We
have no hesitation in reaching the conclusion that there is no such necessary
inconsistency, even where the designation is to achieve a quiet
environment. A house in multiple
occupation may be premises in which, for example, several elderly or retired
persons, who desire to live together in a quiet environment, may live. On the other hand, such a house might be
occupied by students, or other young people, whose lifestyles might not be
conducive to the attainment of a quiet environment. However, the point which must be kept in view
is that there is nothing about the licensing of a house for multiple occupation
and its subsequent use as such which would, in itself, necessarily be destructive
of a quiet environment. Thus we conclude
that the necessary inconsistency perceived by the Licensing Committee
represents an error of law on their part, both as to the nature and purposes of
Home Zones and also as to the characteristics of houses in multiple
occupation. In refusing the appellants'
appeal to him, the sheriff, in turn, erred in law in failing to identify the
error of law on the part of the Licensing Committee. Had it been the case that the Licensing
Committee had concluded, as a fact, that the granting of this particular
application in respect of these particular premises would have led with a
reasonable degree of probability, to activities jeopardising the environment of
the area, the position would have been different. However, in this case, the Committee
expressly stated that it "readily accepted that none of the problems referred
to in the letters of objection relate to [the appellants'] premises".
[19] For all of
these reasons, we conclude that this appeal must be allowed, We shall remit the case to the sheriff, with
a direction to him to allow the appeal from the Licensing Committee. Since there is no relevant reason for the
refusal of the licence, in consequence of the obligation in paragraph 5(3) of
Schedule 1 to the 1998 Act, the Licensing Authority will therefore be under an
obligation to grant the application.
[20] It was a
matter of agreement before us that the issue of the expenses in this court and
in the Sheriff Court should be determined following
success. Accordingly, we shall find the
respondents liable to the appellants in the expenses of the proceedings in this
court and in the Sheriff Court.
