Scottish Court of Session Decisions

SECOND DIVISION, INNER HOUSE, COURT OF SESSION

[2015] CSIH 5

XA48/14

Lord Justice Clerk

Lady Dorrian

Lord Drummond Young

OPINION OF THE COURT

delivered by LORD CARLOWAY, the LORD JUSTICE CLERK

in the APPEAL

by

TRUST INNS LTD

Appellants;

against

CITY OF GLASGOW LICENSING BOARD

Respondents:

Act:  Skinner; Drummond Miller LLP (for Miller Campbell, Solicitors, Glasgow)

Alt:  Dewar QC, Blair; Glasgow City Council

5 December 2014

Introduction

[1]        This is an appeal under section 132(6) of the Licensing (Scotland) Act 2005 against the revocation of a premises licence in respect of “The Scotch”, Summerston, Glasgow.  On 12 June 2013, a premises licence review application was submitted to the respondents by Police Scotland under section 36 of the Act.  The grounds detailed several incidents in the premises during the period January 2012 to March 2013.  There were: 9 episodes involving drug (cocaine) misuse; 5 incidents of public disorder; 5 occasions where staff had not co‒operated with the police in the investigation of crime; 1 occasion of operating outwith permitted hours; 1 failure to produce documents; and 1 suspected copyright breach.  During this period, there had been 3 “interventions” at which the police, representatives of the appellants, the Licensing Standards Officer (LSO) and others had met and discussed various mechanisms designed to resolve the perceived problems.  However, further incidents had occurred despite recommended actions having been agreed. 

[2]        The police sought a review on the basis that the appellants were either unable or unwilling to operate the premises in line with certain of the licensing objectives set out in section 4 of the Act, namely: preventing crime and disorder; securing public safety; and preventing public nuisance. 

[3]        The respondents intimated the application to the local LSO under section 38(3) of the Act.  The required statutory report (s 38(4)) provided by the LSO was as follows:

“… the above application has been examined and I can advise you that the details given regarding the involvement of Licensing Standards Officers concurs with the information held in our records.” 

[4]        At the review hearing on 28 June 2013, the respondents revoked the licence under section 39(2)(d) with immediate effect.  The appeal raises issues concerning the validity of the procedures adopted by the respondents in connection with the LSO’s report.

The respondents’ reasons
[5]        On 19 July 2013, the respondents issued a detailed statement of reasons.  This did not rely upon the non‒drug related incidents.  It considered that the continued pattern of drugs misuse within the premises was serious, significant and demonstrated a clear and considerable departure from the reasonable and proper standards to be expected in the operation of licensed premises.  The police had deemed it necessary to make 170 visits to the premises over an 18 month period.  Premises should not be operated in such a way as to require such a degree of police supervision and intervention over such a sustained period.

[6]        The lack of more robust action by management, particularly in relation to the exclusion of patrons, indicated an unwillingness or inability to tackle properly the association of the premises with drugs misuse.  The character of the patrons, given the pattern of misuse, had the potential to compromise seriously the safety and wellbeing of the public.  For the same reasons, the respondents considered that the premises were being operated in such a way as to cause a nuisance not only to other law abiding patrons but also to the public generally, and to the police.

[7]        There were additional concerns, which had not been referred to in the application, about the safety of children accessing the premises.  The fact that children were allowed into the premises had been mentioned by the appellants at the review hearing.  The premises did not represent a safe environment for children due to potential harm from drugs paraphernalia.  The respondents had accordingly had regard to the additional licensing objective of protecting children from harm.

[8]        The respondents considered that the situation would not substantially improve, notwithstanding that a new tenant had recently been introduced.  The seriousness of the circumstances, in which the premises were “the biggest problem to the police” in the local area, meant that anything short of revocation of the licence would continue to compromise severely the licensing objectives identified.

The appeal to the sheriff
[9]        The appellants appealed to the sheriff principal.  On 6 August 2013, on the appellants’ motion, the respondents’ decision was suspended ad interim.  The appeal was heard by the sheriff, under delegated authority (s 132(4)), on 21 November 2013.  It was maintained that, in terms of section 38(4)(b) of the 2005 Act, the respondents had been obliged to take the LSO report into account.  They had not done so and had thus erred in law.  They had exercised their discretion unreasonably by failing to have regard to relevant material (ie the report).  By way of amendment, it was also said that, if the respondents had taken the report into account, they had breached the principles of natural justice by failing to disclose this to the appellants.

[10]      The appellants attempted to introduce a new submission that the LSO report was not a valid one.  The sheriff disallowed this line of argument on the basis of lack of record.  “The submission was the antithesis of the … averred position.”

[11]      On 22 January 20104, the sheriff refused the appeal.  He reasoned as follows:

“[63]    … The LSO report is brief and uninformative.  It merely confirms the LSO’s attendance at two of the recorded police interventions.  The report can reasonably be concluded to have been of little probative value (beyond corroborating two of the interventions referred to in the review application) and to have been of no material significance to the [respondents’] decision.  … Merely because statute requires that the LSO must prepare and submit a report to the licensing board, and that the licensing board must take the report into account at the review hearing … does not mean that the content of the report in any particular case is of any material evidential value or determinative significance.

[64] Further, in fulfilling its duty to give proper and adequate reasons, a decision-maker, such as the [respondents], need not engage in an elaborate and detailed evaluation of each and every point that has arisen at the hearing (Ritchie v Aberdeen City Council 2011 SC 570).  The statement of reasons must identify what the defender had decided to be the material considerations; it must clearly and concisely set out its evaluation of them; and it must set out the essence of the reasoning that has led the defender to its decision (Ritchie, supra).”

[12]      Similarly, the appellants’ submissions regarding disclosure were said not to be well-founded:

“[65] …While the 2005 Act makes no explicit provision for the disclosure of the LSO report to the premises licence holder, nevertheless, in compliance with principles of natural justice, the content of the report would require to be divulged to the premises licence holder, if requested…  The [appellants] (in this case represented by an experienced solicitor) knew or ought to have known that the LSO was obliged, under statute, to submit a report on the review application…  It is artificial to suggest…that, in some sense, the report was withheld from the pursuer…”.

Submissions

Appellants

[13]      The appellants argued, first, that the respondents had failed to take account of the LSO report and had thereby erred in law.  Secondly, they maintained that the respondents had failed to disclose the LSO report to the appellants.  In other words, esto the respondents had taken the LSO report into account, they had breached natural justice in so doing because it was material upon which the appellants had not been given the opportunity to comment.

[14]      It was evident that the respondents had failed to take account of the LSO report because they had not mentioned it in their statement of reasons.  The respondents had been required to take account of the report (2005 Act, s 38(4)) and, as a matter of form, that meant that they had to state that they had done so.  On the face of the statement of reasons, the only material that had been available to the respondents had been the review application itself.  This had been the only material intimated to the appellants. 

[15]      The LSO report had been “entirely neutral” and supported neither the review application nor a continuation of the licence.  The report could be said to contain nothing that contradicted the police, in which case little weight could be placed on it.  Alternatively, the lack of positive support for the application could be said to indicate that the LSO did not support it.  If the respondents had taken account of the report, it was not clear how it had been interpreted.  The sheriff’s view on the import of the report was unclear.  The fact that the report had been “brief and uninformative” could mean either that it did not matter that the respondents had not taken it into account or, if they had taken it into account, it did not matter that they had not recorded the fact that they had done so.  In either case, the sheriff had erred.

[16]      Although there was no express statutory obligation on the respondents to intimate the LSO report to the appellants, such an obligation was to be implied.  The LSO had a supervisory role under statute and his independent views were important.  The lack of disclosure had meant that the appellants had been denied the opportunity of making a submission that the LSO report did not support the review application. 

[17]      The appellants sought disposal by way of a remit to the respondents (section 131(5), 2005 Act) with guidance that the respondents ought to take account of the up to date circumstances (Lidl UK v City of Glasgow Licensing Board 2013 SC 442, at para [35]).  The premises had traded for some 16 months under a new tenant.  The circumstances had improved and it had been indicated that a new licence application would be viewed favourably by the police.

Respondents
[18]      It was accepted that there was no reference to the LSO report in the respondents’ statement of reasons.  However, there had been no duty upon the respondents to make any specific findings about the report, or to give any particular weight to it.  Whilst it may have been preferable for the respondents to have referred to it, it was necessary to have regard to the substance of the decision rather than matters of pure form.  The report had been before the respondents and its terms had been taken into account.  However, its content had been of no real substance or materiality.  It had not been favourable to the appellants.  There was no obligation on the respondents to provide reasoning on matters that were insignificant (City of Edinburgh Council v Secretary of State for Scotland 1998 SC 33, Lord Clyde at 49).  Ultimately, the report had no material bearing on the respondents’ decision (Malloch v Aberdeen Corporation 1971 SC (HL) 85, Lord Wilberforce at 118).  The sheriff had been correct to reject the appellants’ argument for the reasons given (Ritchie v Aberdeen City Council (supra)).

[19]      There was no substance in the ground regarding disclosure.  The LSO report was dated 26 June 2013, which was two days prior to the review hearing.  There had been no obligation on the respondents to disclose the LSO report to the appellants.  No such duty could be implied, albeit that the report would have been made available on request.  The appellants had suffered no prejudice.  The LSO report had not formed part of the case against the appellants.  It did not add anything to the review application.  The circumstances leading to the review application had been more obviously within the province of the police.  It was difficult to imagine what else the LSO could have contributed.  It was immaterial that the report had not been made available to the appellants.  The appellants had been represented by an experienced licensing practitioner, who ought to have known that the LSO report could be requested, or who could have indicated that there was no material of a supportive nature from the LSO.  The appellants had not been ambushed (Catscratch v City of Glasgow Licensing Board (No. 2), 2002 SLT 503, Lord Johnston at para [13]).  In any event, the precise allegation, upon the pleadings, was that the respondents had failed to disclose the fact that they were taking the LSO report into account, which was not the same as suggesting that the appellants had been unaware of the content of the report. 

[20]      On the question of disposal, if the appeal were successful, matters should be remitted to the respondents for reconsideration (Brightcrew v City of Glasgow Licensing Board 2012 SC 67).  In that event, however, it would be for the respondents to determine the extent to which the Lidl case (supra) might apply.

Decision

[21]      For the purposes of a hearing on the review application, the respondents were required to give notice of the hearing and to intimate a copy of the application to the appellants as the licence holder (2005 Act, s 38(3)(b)).  Notwithstanding that the respondents have wide powers to obtain and take account of any information that may be relevant to the grounds for review (2005 Act, s 38(5) and (6)), there is no statutory duty on them to give notice to an appellant of anything other than the hearing and the application (2005 Act, s 38(3)(b)).  The Licensing Standards Officer must, “before the review hearing”, prepare and submit to the respondents a report on the application (2005 Act, s 38(4)).  He is not required to give notice of the report to any other person.  The respondents are not expressly required to do so either.  That being so, the respondents have not failed in respect of any statutory duty of disclosure to the appellants in respect of the LSO report.

[22]      The way in which the ground of appeal has developed is interesting.  The original contention was that, if the respondents had taken the LSO report into account, they had failed to tell the appellants that they had done so.  There was no allegation that the appellants, through their solicitor, had not been aware of the content of the report.  Indeed it may seem surprising that the solicitor, who was experienced in licensing matters, was not aware of the content of the report, even if she had not been given a hard copy.  However, the ground as presented is that she did not have knowledge of that content.  This was not contradicted, beyond the statement that she certainly ought to have known about it.

[23]      In the particular circumstances of the present case, there was no duty on the respondents to disclose the report as a matter of fairness or natural justice.  The report did not raise any substantive matters that were not already contained in the application itself.  It merely confirmed the accuracy of the application, insofar as the latter described the limited involvement of the LSO.  That involvement included the attendance of the LSO at certain “intervention” meetings in respect of the premises, as described in the application.  No further information could be gleaned from the report’s terms.  There is no basis upon which it could be said that the appellants suffered any form of prejudice as a consequence of lack of disclosure. 

[24]      It is tolerably clear that the LSO report was taken into account by the respondents, in the formal sense required by statute (2005 Act, s 38(4)(b)).  The report was produced at the review hearing.  The respondents are required to “take the report into account at the hearing”.  This must be taken as a reference to the substance of any report produced.  It is the substance of the report, and not its form, which is relevant.  Subject to its terms, it may or not be a material consideration.  In the present case, the LSO reported nothing beyond confirming the accuracy of the record of events in the review application regarding the LSO’s limited involvement.  Ultimately, it did not form a material part of the respondents’ decision. 

[25]      The respondents’ duty “to give a statement of reasons for the decision” arises only following upon a request (section 39A(5)); otherwise, the respondents are required only to give notice of the decision itself.  That being so, the purpose for which reasons are given is relatively narrow.  The adequacy of the reasons given must be analysed in that context (Uprichard v Scottish Ministers 2013 SC (UKSC) 219, Lord Reed at paras [44] and [48]).  No formal requirements are prescribed (section 39A(6)), albeit that the reasons in the present case were issued in a form prescribed for other purposes (Licensing (Procedure) (Scotland) Regulations 2007 (SSI No. 453) sch 4, para 1). 

[25]      Whether a statement of reasons is inadequate, on the basis that it fails to deal sufficiently with the submissions of the parties, will depend on the materiality of these submissions.  A properly reasoned decision need only address the material or substantial points that arise for determination, and thereby form the basis of the decision reached (Wordie Property Co Ltd v Secretary of State for Scotland 1984 SLT 345, LP (Emslie) at 348, applied in City of Edinburgh Council v Secretary of State for Scotland 1998 SC 33 and Ritchie v Aberdeen City Council 2011 SC 570).  Such an analysis demonstrates the difficulty with the appellants’ argument.  The fact that the LSO report is not mentioned in the respondents’ statement of reasons is merely demonstrative of the fact that no material or substantive points could be discerned from its terms. 

[27]      Even if the report were to be considered in some way material, such as in either of the senses submitted by the appellants, it need not necessarily be expressly mentioned (Bolton Metropolitan District Council v Secretary of State for the Environment (1995) 71 P & CR 309 at 313, cited in City of Edinburgh Council v Secretary of State for Scotland (supra), Lord Clyde at 49).  The statutory requirement is that the respondents must take the report into account.  Where it has done so, the report itself may feature in the statement of reasons only where it has been the vehicle by which substantive issues are uniquely raised.  In the present case, the report merely supported certain facts which were set out elsewhere and were not, in any event, in dispute.  It did not raise any distinct facts or other matters in controversy.  The respondents had regard to the material facts, and there was no purpose to be served by making a specific reference to the report itself. 

[28]      Accordingly, the appellants’ contentions concerning disclosure and any failure to take proper or explicit account of the report’s terms are rejected.  The sheriff’s reasoning in this regard was clear and sound.  The appeal is accordingly refused.