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Cite as: [2002] ScotSC 204
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Camec v. City Glasgow Licensing Board Others [2002] ScotSC 204 (15 October 2002)
B978/01
GLASGOW, October 2002.
The Sheriff, having resumed consideration of the cause, sustains the pursuers' first plea-in-law and, in terms thereof, allows the appeal by the pursuers; remits the pursuers' application for a betting office licence for premises at 1110 Pollokshaws Road, Glasgow to the meeting of the first defenders on 25th October 2002 in order that it might be reconsidered; quoad ultra repels all other pleas-in-law; awards the expenses of the summary application in favour of the pursuers; allows an account of said expenses to be given in and remits the same, when lodged, to the Auditor of Court to tax and to report.
Sheriff
NOTE:-
I heard argument in this case on 29 August 2002. The pursuers were represented by Mr McKenzie, solicitor, the first defenders by Sir Crispin Agnew of Lochnaw, QC, the second defenders by Mr Campbell, QC and the third defenders by Mrs Stacey, QC.
Statutory Framework
In opening his submission on behalf of the pursuers, Mr McKenzie explained that this was an appeal, by way of summary application, against the first defenders' decision to refuse the pursuers' application for the grant of a betting office licence. At the licensing board hearing on 16 November 2001, the second and third defenders presented objections to the application. They both operate similar licensed premises within the relevant locality.
Reference was made to paragraph 24(1) of Schedule 1 to the Betting, Gaming and Lotteries Act 1963 which provides for an appeal to the Sheriff. Such an appeal is governed by the provisions of Section 39 of the Licensing (Scotland) Act 1976. Section 133(4) of the 1976 Act provides, inter alia, that "sub-sections (4) and (6) to (8) of Section 39 of this Act shall apply in relation to appeals under paragraph 24 of Schedule 1 to the Betting, Gaming and Lotteries Act 1963...as they apply in relation to appeals under any provision of this Act...". Mr McKenzie, accordingly, concluded that the grounds of appeal in the present case amount to those provided for under the liquor licensing legislation. He referred to Section 39(4) of the 1976 Act and, in that regard, highlighted the 2 pleas-in-law for the pursuers viz (1) that the first defenders had erred in law in refusing the application and (2) that they had exercised their discretion in an unreasonable manner.
Mr McKenzie indicated that no evidence would be led to support or contradict the appeal and that the issues involved could be disposed by way of legal argument alone.
As far as the first defenders were concerned, Mr McKenzie submitted that the starting point in relation to their consideration of the application lodged by the pursuers was paragraph 20 of Schedule 1 to the 1963 Act.
Paragraph 20(1) states that:
"Save as provided by paragraphs 15 to 19 of this Schedule, the appropriate authority shall not refuse any application for the grant or renewal of a bookmakers' permit, betting agency permit or betting office licence made, so far as lies within the control of the applicant, in accordance with the provisions of this Act, but shall grant or renew the permit or licence on payment by the applicant to the clerk to the authority of a fee...and if the authority refuse any such application they shall state the grounds of their refusal."
At this stage, Mr McKenzie suggested that the terms of paragraph 20(1) disclosed what he described as an "onus in favour of grant". However, it is manifest that paragraph 20 requires to be read in conjunction with, inter alia, paragraph 19 of the Schedule.
In the present context, Mr McKenzie observed that what might be described as the "mandatory" grounds of refusal at paragraph 19(a) were of no relevance. In contrast, the provisions of paragraph 19(b)(ii) were of acute relevance to the present case. Any refusal by a licensing board under paragraph 19(b) involved an exercise of discretion on the part of the board.
Pursuers' submissions (Camec)
In placing his approach to the appeal in context, it fell to Mr McKenzie to review certain of the authorities. He began by submitting that guidance as to the proper approach to be adopted under paragraph 19(b)(ii) was to be found in the case of Leake v Edinburgh Licensing Court 1962 SLT (Sh Ct) 67. In Leake, the Sheriff held that the licensing court had considered that there was an onus upon the applicant to prove that there was a demand for additional betting offices in the locality. The court considered that such an approach amounted to an error in law. An analysis of the preceding legislation which is in similar terms to the present statute, suggested to the Sheriff that "nothing there stated puts any onus on the applicant of proving demand."
In Din v City of Glasgow District Licensing Board 1996 SLT 363 an extra division of the Inner House had occasion to consider the question of onus and the contents of the licensing board's statement of reasons, albeit in a liquor licensing context.
The opinion of the court was delivered by Lord McCluskey and Mr McKenzie founded upon certain passages therein. The court held that the board's approach to the application was flawed due to an error made by them as to where the onus lay. It accepted counsel for the applicant's submission to the effect that there had been "a clear inversion of onus".
Aside from the question of onus, a further ground appeal in the Din case concerned over-provision in terms of Section 17(1)(d) of the 1976 Act. It was submitted on behalf of the applicant in that case that the board's approach to the issue of over-provision had been fallacious since it did not follow that were the existing number of premises held to be "sufficient" the addition of one further set of premises would result in over-provision. The attack on the board's reasoning also embraced criticism of the Section 18(2) letter which, it was submitted, "...simply made a bald statement that there was over-provision".
Mr McKenzie sought to highlight the court's comments at 367K to 368A. The passage concerned is worthy of repetition:
"In our opinion, the reason given by the board in relation to over-provision explains nothing at all. It is impossible to know what was in the mind of the board in asserting that there was over-provision. We agree that it is not possible to say that because the present facilities are "sufficient" it follows that the addition of one more such facility results inexorably and inevitably in over-provision. It is, of course, a possibility that such would be the result; but the board ought to have explained why it reached the conclusion that the addition of one off-sale facility would turn sufficiency into excess. There could have been no difficulty whatsoever in producing an explanation of the reasoning. We disapprove of the kind of bland, standard pro-forma reason which was offered in respect of this ground in this case. We are not satisfied that the board has offered any intelligible explanation whatsoever which would warrant its conclusion that this grant would have resulted in over-provision."
Mr McKenzie submitted that it followed from the court's remarks in Din that when drafting written reasons, licensing boards must be careful to identify precisely where the onus lies regarding any particular matter. He accepted that the test regarding over-provision in terms of Section 17 of the 1976 Act was expressed in terms dissimilar to those found in paragraph 19(b)(ii) of Schedule 1 to the 1963 Act. Nevertheless, Mr McKenzie submitted that considerable weight should be attached to the overall approach taken by the court in Din.
In the submission of the pursuers, the terms of paragraph 19(b)(ii) disclosed that the "key word" was inexpedient. It followed, therefore, that when giving reasons for a decision said to rest upon the issue of inexpediency, a licensing board had to explain why it would be inexpedient to grant the licence.
It was recognised that in their statement of reasons in the present case, the first defenders, in the penultimate sentence thereof, do indeed make reference to it being inexpedient to grant the application. However, Mr. McKenzie argued that the manner in which that particular sentence had been formulated simply served to identify an inversion of onus such as that criticised in the cases of Leake and Din.
The issue of inexpediency had been the subject of comment in the unreported case of William Hill (Strathclyde) Ltd v The Licensing Board for the City of Glasgow and Others 23 July 1992. The opinion of the court in that case had been delivered by Lord Murray. The case concerned an application at the instance of William Hill for a betting office licence in respect of premises in Main Street, Rutherglen. The licensing board refused the application on the grounds set out in paragraph 19(b)(ii) of Schedule 1 of the 1963 Act. Thereafter, William Hill appealed to the Sheriff. That appeal was refused and an appeal to the Court of Session followed.
Counsel for William Hill, inter alia, submitted that "the board's determination had 3 aspects: (1) a decision in fact as to demand and supply in the locality; (2) a decision whether or not, on the facts found under (1), it would or would not be inexpedient to grant a licence; and (3) a discretion whether or not in the foregoing circumstances to grant a licence."
Reference was made, in the course of the argument in the William Hill case, to the English textbook Smith and Monkcom on the Law of Betting, Gaming and Lotteries (1987). The authors of that work noted, at page 35 thereof, that the word "inexpedient" was not defined in the Act and that no criteria were laid down to help determine what was or was not expedient. The authors suggested that the provision required a finding that any additional imbalance between supply and demand would be positively harmful to the public interest. Moreover, they recognised that this was a question which would depend upon a number of factors which must be matters of local judgement for the likes of a licensing board or committee.
Mr McKenzie pointed to the fact that the Inner House had rejected the "threefold approach" referred to above. At page 16 of the court's opinion, the following was stated:
"We consider that Parliament intended licensing boards, when refusing an application, to make a single discretionary judgement of inexpediency on the footing of the facts presented to them as they assessed them."
Mr McKenzie associated himself with the "single discretionary" approach described by Lord Murray. He went on to deal with the case of McAllister v East Dunbartonshire Licensing Board 1998 SLT 713. Much of the appeal in McAllister related to the question of competency. However, Mr McKenzie focused upon a passage towards the end of the report at 719K to 720B. The court held that the question of any misplaced onus did not arise in the McAllister case and reaffirmed that there was no onus upon an applicant to take positive steps to establish demand. Nevertheless, where a specific objection had been taken on the ground of absence of demand for the creation of further betting office facilities and it had been placed before the board by objectors, the court expressed the view that it was appropriate for the board to approach the matter on the basis that "the applicant has to respond adequately to the submission...that the grant of a further licence would be inexpedient having regard to the demand for the time being in the locality for such facilities." Mr McKenzie went on to pose the question "How does an applicant respond to the issue of inexpediency?" In his submission, it was possible to do so in a number of ways and he contended that whether it would be inexpedient to grant a licence should, on no view, fall to be determined by the response of the applicant per se. Reference was made to the case of Tote Offices Limited v Ron Nagle (Turf Accountants)Ltd and Others which is the subject of a brief report in the 1968 Solicitors Journal at page 881. Mr McKenzie characterised this case as being a good example of the line of argument open to an applicant when regard was had to the question of inexpediency in contra-distinction to that of demand. In the Tote case, the court held that the justices ought to have given consideration to the fact that the applicants' profits were ultimately allocated to the improvement and prosperity of horse breeding and horse racing, whatever view they had arrived at in connection with the issue of demand.
The statement of reasons issued by the first defenders was analysed. In Mr. McKenzie's submission, the first defenders had proceeded upon the basis that 2 issues fell to be determined namely (1) whether there was demand in the locality for additional betting office facilities and (2) whether it was inexpedient to grant the application. Mr McKenzie argued that this was a wrong approach and that the first defenders' task was properly delineated by what Lord Murray and the other judges had to say regarding a "single discretionary judgement of inexpediency" in the 1992 William Hill case.
On the second page of the statement of reasons, Mr McKenzie drew the court's attention to a passage commencing in the sixth line of the first full paragraph on that page. In his submission, this passage demonstrated what might be described as the "two-fold approach" of the first defenders. The first part of that passage was also the subject of criticism on the basis that it disclosed an inversion of the onus. Moreover, Mr McKenzie stressed that the penultimate sentence in the statement of reasons was equally flawed. That sentence indicated that "there was no evidence of demand in the locality for additional facilities". That proposition, said Mr McKenzie, was wholly inaccurate as a matter of fact.
In presenting the application to the first defenders, the pursuers had relied upon a market research report which had been placed before the first defenders for their consideration. Whilst that report may have been the subject of scrutiny and adverse comment in the course of the various addresses made to the first defenders at their hearing in November of 2001, Mr McKenzie nevertheless submitted that it was plainly not correct to suggest, as the first defenders did, that there had been "no evidence" of demand.
It was argued that the penultimate sentence in the statement of reasons once again exposed the "inversion of onus" approach taken by the first defenders. Additionally, Mr. McKenzie submitted that what appeared in the penultimate sentence amounted to the only reason proffered by the first defenders as to why the grant of the application had been considered inexpedient. In that regard, apart from the single, erroneous reference to there being no evidence of demand, no explanation as to why the first defenders had considered the grant inexpedient was to be found within that sentence or, for that matter, within the remainder of the statement of reasons.
Mr McKenzie contended that the first defenders simply did not explain why it was inexpedient to grant the application. A similar issue had arisen in the case of William Hill (Caledonian) Ltd v City of Glasgow Licensing Board and Another (unreported) Glasgow Sheriff Court 8 October 2001 in which the sheriff had come to the view that the statement of reasons issued by the licensing board was inadequate. I was informed that Sheriff Taylor's decision was the subject of an appeal to the Court of Session. However, Mr McKenzie submitted that Sheriff Taylor's approach had been correct and he commended it to me as far as the present case was concerned. Reference was made to various passages within the note appended to Sheriff Taylor's interlocutor from pages 7 to 11.
In summary, Mr McKenzie presented the following submissions:
(a) The only reason proffered in support of the proposition that it was inexpedient to grant the application was wrong as a matter of law in respect that it suggested that some sort of onus lay upon the applicants to provide evidence of demand;
(b) The reason given was incorrect as a matter of fact since there was evidence of demand before the first defenders at the hearing; and
(c) No explanation was given within the statement of reasons as to why it was inexpedient or not in the public interest to grant the application. (This part of Mr McKenzie's submission referred back to a passage from Smith and Monkcom quoted in Lord Murray's opinion.)
As far as disposal of the appeal was concerned, Mr McKenzie pointed out that, were the appeal to be upheld, it was open to the court, in terms of Section 39(6)(b) of the 1976 Act to reverse the first defenders' decision. Alternatively, I might remit the case to the first defenders for reconsideration of their decision. The latter course was the disposal arrived at in Sheriff Taylor's case. Sheriff Taylor made it clear that the case before him fell to be distinguished from the approach taken by me in the case of Risky Business Ltd v City of Glasgow Licensing Board 2000 SLT 923 in which the Inner House subsequently confirmed that there was no material before the licensing board which any reasonable board could have held to constitute the necessary basis for a refusal in terms of Section 17(1)(b) of the 1976 Act.
Mr McKenzie founded upon one distinction as between the present case and that of Sheriff Taylor's. In Mr McKenzie's submission, the reason given in the present case could never amount to a reason as to why it was inexpedient to grant the application. Moreover, he argued that it was unclear that the application would be treated with due fairness were it to be remitted back to the first defenders for reconsideration. Despite what they claimed in terms of the statement of reasons, Mr McKenzie argued that it was plain from the sentence at the top of page 3 of the statement that the first defenders had not given careful consideration to the issues in the case. If they had done so, then they would not have indicated that there was no evidence of demand. Accordingly, Mr McKenzie submitted that it would, in these circumstances, be inappropriate to remit the case back to the first defenders were the appeal to be upheld.
First Defenders' Submissions - The Licensing Board
In responding on behalf of the first defenders, Sir Crispin Agnew submitted that they had been well entitled to refuse the application for the reasons given. He pointed out that the case of Din involved consideration of Section 17 of the 1976 Act and proceeded to draw a distinction between the terms of that section and those of paragraph 19 in Schedule 1 to the 1963 Act.
What was said in the McAllister case regarding the absence of any onus upon an applicant was readily accepted by Sir Crispin. Nevertheless, he maintained that in the context of an issue being raised by an applicant, it was incumbent upon them to meet that issue adequately. The passage in McAllister at 719L to 720A was revisited and Sir Crispin repeated the assertion that the first defenders could not be faulted for determining the matter of expediency on the basis of the material before them.
The court was referred to the case of Noble v City of Glasgow District Council 1995 SLT 1315 in which an extra division of the Inner House held that it was not necessary for a licensing authority, when giving reasons, to write something which resembled a judicial judgment of the kind appropriate to a contested litigation in the Sheriff Court or in the Court of Session. Nor was it necessary, according to their Lordships, that the letter containing the reasons should canvass each piece of evidence or each assertion and say specifically whether or not it had been accepted or what effect, if any, it had upon the deliberations of the licensing authority. "If the letter states that the authority have had regard to the evidence and to the productions it is not possible for this court to go behind such a statement, unless something else makes it clear that the authority have not had regard to such material." (1315I).
It was submitted that the approach taken by their Lordships in Noble fell to be adopted in the present case.
The case of Mecca Bookmakers (Scotland) Ltd v East Lothian District Licensing Board 1988 SLT 520 was also referred to and Sir Crispin invited consideration of Lord Jauncey's comments at 523A to B. It was suggested that Lord Jauncey's approach in that passage coincided with the decision in the Tote case.
It was contended on behalf of the first defenders that, in general, the matter in issue fell to be determined, one way or another, by having regard to the question of demand. Sir Crispin argued that it was clear from the transcript of the proceedings that demand was "the only point in issue" as he put it. The pursuers had not prayed in aid any other factors.
Sir Crispin went on to place before the court the cases of Hughes v Hamilton District Council 1991 SLT 628 and Robertson v City of Edinburgh District Licensing Board 1995 SLT 107. It seemed to me that any guidance to be obtained from the Hughes case, and in particular, the passage at 632D was of moderate value in the present context. Nevertheless, in Robertson, in the opinion of the court at 108I to J the following was stated:
"In our view it is necessary in a case of this kind that the informed reader, a person who knows what the proceedings are about and is perhaps a party to the proceedings, should be able to understand from the statement of reasons what the reasoning was that led to the decision. In this particular case we have no doubt at all that the reasons are both sufficient and intelligible."
As I understood his submission, Sir Crispin founded upon the above passage to highlight the fact that in addition to the terms of the statement of reasons, it must be recognised that those parties with an interest in the application and present at the hearing will inevitably understand the background to the application. Accordingly, the statement of reasons fell to be read on that basis.
It was also accepted, under reference to the 1992 William Hill case, that a "single discretionary judgment" was, indeed, what was required and Sir Crispin paused to observe that the passages from the board's statement of reasons in that case as set out at pages 6 and 7 in the opinion of the court were very similar in their terms to what was to be found within the first defenders' own statement of reasons.
The decision of the House of Lords in the case of Caledonian Nightclubs Ltd v Glasgow District Licensing Board 1996 SCLR 29 fell to be scrutinised by Sir Crispin with a view to supporting his argument that the present appeal should be rejected. It was submitted that their Lordships' decision in Caledonian Nightclubs, as set out in the speech given by Lord Jauncey, favoured the first defenders' approach. The statement of reasons had been accepted and the comments regarding the experience and expertise of a licensing board operating within its own area were worthy of note. Sir Crispin submitted that the terms of the statement of reasons in Caledonian Nightclubs were very similar to those criticised in the case of Din. Accordingly, he cautioned that Din required to be looked at with care in light of what had been said by Lord Jauncey in Caledonian Nightclubs.
The case of Hestview Ltd (unreported) QB Division 23 February 2001 involved an application for judicial review of the grant of a betting office licence. Hestview Ltd was the unsuccessful objector. Sir Crispin made reference to various passages but, in particular, drew the court's attention to paragraph 26 onward, paragraphs 50 and 53, and finally focused upon paragraph 66 in which Mr Justice Hooper said the following of the word "inexpedient":
"I take the view that the use of the word "inexpedient" alone or coupled with the word "may" leaves an authority with a discretion in deciding whether to grant or renew. The absence of demand "for the time being" must be an important factor but not decisive. In the absence of evidence of any sufficient unmet demand "for the time being" or in the future, it is much more difficult to envisage a situation where the discretion could be exercised at least in favour of an applicant for what is a new licence (rather than a transfer or renewal)."
Thereafter, Sir Crispin referred to the first defenders' inventory of productions. Number 6/1 of process was a letter from the third defenders objecting to the pursuers' application prior to the board meeting. Number 6/2 of process was a transcript of the proceedings from the board meeting on 16 November 2001. Sir Crispin took the court through the "sum and substance" of the transcript. Under reference to page 5, lines 11 and 12, it was suggested that the applicants' case turned upon the assertion that there was "plenty of scope for an additional licensed betting office in" the locality. Nowhere in the transcript, submitted Sir Crispin, was there to be found the suggestion that the application should be regarded as expedient for other reasons. Demand was the issue upon which the pursuers came to the board with their application and, in real terms, it was the sole issue. The situation fell to be contrasted with the Tote case where the applicants' submission had been based on reasons other than demand.
The terms of the first defenders' statement of reasons were then scrutinised by senior counsel.
Naturally, it was important to note exactly what had been said by the first defenders in the statement. From the final 4 or 5 lines on the first page of the statement and the first two lines on the second page, it was, contended Sir Crispin, apparent that the first defenders had indeed had regard to all the material placed before them. Accordingly, given what was said by the court in the Noble case, it was not possible for the court to attempt to go behind any such statement along these lines.
In Sir Crispin's submission, this passage in the statement, when properly read and construed, answered the pursuers' criticism to the effect that the first defenders had not had regard to the market research survey findings.
Furthermore, Mr McKenzie for the pursuers had criticised the passage commencing with the word "accordingly" where it appeared in line 6 of the first full paragraph on page 2 of the statement of reasons. Sir Crispin submitted that the first part of that passage was the very issue upon which he, Mr McKenzie, had invited the first defenders to deliberate, in the course of his submissions to them. Reference was made to page 22 in the transcript, No 6/2 of process, and, in particular, to lines 2 to 4 thereon.
In the submission of senior counsel, the first defenders had decided the factual issue regarding demand and thereafter had proceeded to consider the issue of inexpediency. The first defenders were a licensing board with knowledge and experience of matters relating to the question of demand. They also had general experience of betting shop licensing matters. The approach taken by them in the statement of reasons essentially involved them saying that "applying our knowledge of the locality we prefer the objectors' views."
Sir Crispin also responded to Mr McKenzie's criticism of the penultimate sentence in the statement of reasons. In his submission, the document fell to be read as a whole and it was clear that the first defenders were merely recording the fact that they were not satisfied that a demand for additional facilities had been made out.
He submitted that in the 2001 William Hill case, decided by Sheriff Taylor, the sheriff had simply erred. The sheriff had required more of a licensing board, as far as their statement of reasons was concerned, than one would normally expect them to provide. I was urged to adopt a different approach from that of Sheriff Taylor. It was submitted that he had misunderstood the significance of the Noble case and the way in which he had approached the decision in Din was also criticised.
Sir Crispin accepted that the decision in Risky Business properly fell to be distinguished. In all the circumstances, the court was invited to refuse the appeal.
Second Defenders' Submissions (Ladbrokes)
Mr Campbell, for the second defenders adopted the submission put forward by senior counsel for the first defenders. He stressed that it was important not to lose sight of the fact that, in the case of Glasgow, a transcript of proceedings was available and was readily capable of being understood and interpreted by the well-informed observer.
Mr Campbell highlighted certain passages within the transcript with a view to demonstrating that the whole question of demand was in issue in this case. That very issue had been raised on behalf of the pursuers at the outset of their presentation to the board meeting.
The passage in McAllister, at page 719, as referred to earlier in the course of the debate was revisited by Mr Campbell. In that case, he had appeared on behalf of objector and he made the point that the approach which formed his submission to the court was not criticised. He reiterated that it was for the board to assess the sufficiency and quality of any material founded upon by them and that it was for the board to determine the weight to be attached to any particular contention regarding demand whatever it may be.
In Mr Campbell's submission, it was the pursuers who had raised the issue of demand. If an applicant asserted that there was such a demand then, submitted Mr Campbell, they could not complain about any inversion of onus which followed.
In the McAllister case, the court had expressed the view that if demand was raised or placed in issue an applicant had an opportunity to respond. If the applicant did so the board then required to determine the issue. However, Mr Campbell argued that the present case was, in effect, a fortiori of that situation. In other words, it was not open to the present pursuer to found upon any apparent transfer of onus. Indeed, Mr Campbell went so far as to submit that onus was not really an issue in the present case.
Returning to the transcript of proceedings, Mr Campbell referred to pages 20 to 22. These pages covered part of Mr McKenzie's response to the objectors' presentations at the board meeting. At page 20, line 21, it was clear that the discussion had returned to the fundamental question of demand as it fell to be determined by the board. Moreover, at page 22, lines 1 to 4, Mr McKenzie's remarks were such as to "undercut" any argument on appeal regarding the way in which the board had treated the question of onus.
Lord Murray's comments in the 1992 William Hill case, at page 14, according to Mr Campbell, amounted to a clear signpost that, in the Glasgow circumstances, the transcript is open to scrutiny for the appellate court to satisfy itself regarding the board's approach to the matter. Mr Campbell sought to highlight the following passage at page 14:
"Having considered the submissions for the parties in light of the transcript of proceedings at the board's hearing, their decision letter and their statement of reasons for the decision we have reached the conclusion that the appellants have failed to demonstrate that the board erred in law in reaching their decision..."
The province of accepting or rejecting material and attaching weight to that material was, submitted Mr Campbell, essentially that of a licensing board.
In relation to the statement of reasons, it was, he argued, important to read it as a whole. That approach was consistent with the various passages in the Noble case. It should not be regarded as a conveyancing document and construed in that light. The penultimate sentence in the statement of reasons must, contended Mr Campbell, be considered in the context of the entire paragraph.
The court was invited to refuse the appeal. Were the appeal to be upheld, Mr Campbell's position was that the matter must be remitted back to the board for further consideration.
Third Defenders' Submissions (Hugh King)
At the outset of her submission, Mrs Stacey adopted the substantive submissions made by senior counsel for the first and second defenders. She accepted that were the appeal to succeed that a remit to the board must follow.
Addressing the merits of the appeal, Mrs Stacey first of all invited me to look at the matter in context. She returned to the terms of paragraph 19(b)(ii) of Schedule 1 to the 1963 Act. That sub-paragraph, she contended, disclosed discreet and separate reasons for refusal. Were the board to be informed solely that a demand existed for additional premises then it was still open to the board to reach the view that it would be inexpedient to grant the application. Mrs Stacey submitted that that approach mirrored the hypothesis upon which the application had been presented to the board in the present case.
She stressed that the board had not been called upon to deal with what she described as "a sharp conflict of fact". Under reference, once again, to the transcript of proceedings, Mrs Stacey noted certain of the factual contentions advanced in the course of the pursuers' presentation to the board. At page 5 of the transcript, certain assertions had been made regarding the turnover of the second and third defenders respectively. Further on in the transcript, Mr Campbell (who had appeared for the second defenders at the board meeting) and, thereafter, an agent for the third defenders, advanced statistics which, if accepted, indicated that the pursuers' figures were incorrect. Mrs Stacey submitted that the figures emanating from the 2 objectors' representatives, could not be contradicted by Mr McKenzie for the pursuers. Therefore, by way of example, in relation to the question of turnover, there were 2 competing versions; the pursuers own view of matters were in a position to contradict the objectors' versions since they must be taken to have a better insight into their own business affairs.
At pages 14-15 of the transcript, the third defenders' agent had informed the board that demand was not sufficient to justify staffing levels by which the third defenders were able to employ 2 full-time staff during the week and 3 on Saturdays.
In addition, it could be seen from the transcript that the pursuers' assertion that the volume of betting would increase due to a change in taxation had been met by the observation that the 6th of October weekend had been a very substantial weekend for betting purposes, aside from any change in taxation. Reference was made to page 10 of the transcript.
Mrs Stacey submitted that the pursuers knew what the terms of the 1963 Act amounted to. They knew that the issue of demand would be raised because, apart from anything else, the third defenders had lodged a written objection to the application (see No 6/1 of process). An objection had also been lodged through agents on behalf of the second defenders.
The transcript of proceedings disclosed what had been said on behalf of the pursuers by Mr McKenzie. Mrs Stacey argued that the statement of reasons clearly showed why the first defenders took the decision they did. It was all perfectly clear to the informed observer and there was no necessity for the first defenders to say anything more.
At page 2 of the statement of reasons, in line 12, was to be found a reference to what Mrs Stacey described as the undisputed assertion that till points within the objectors' premises were rarely, if ever, full. That, in itself, provided an obvious indication as to the thinking of the board.
For her part, Mrs Stacey submitted that Sheriff Taylor's approach as set out on page 7 of his Note in the 2001 William Hill case, was incorrect and that he had, essentially, overstated what was required of a licensing board in this context.
Mrs Stacey submitted that the court should exercise care in its reading and assessment of the decision in the Din case and she contrasted the approach taken by Lord Murray in the 1982 William Hill case.
Decision
I deal firstly with Mr McKenzie's argument to the effect that the first defenders failed to provide any explanation as to why they had considered the granting of the application to be inexpedient.
On the one hand, it was contended on behalf of the pursuers that the statement of reasons gave little or no insight into the actual basis upon which the first defenders arrived at their decision. On the other hand, the common thread running through the defenders' submissions was that the first defenders' decision- making process was quite transparent, particularly to any interested or informed observer, should regard be had to the transcript of proceedings taken along with the statement of reasons.
It is, of course, legitimate to expect that a licensing board will provide reasons for its decision to refuse an application. Boards are enjoined to do so under the 1976 Act. To my mind, at the very least, this must amount to the provision of a meaningful and understandable explanation or justification for the decision arrived at.
The main focus for Mr McKenzie's line of argument in this regard was the statement of reasons itself. The statement is appended hereto. It begins by acknowledging a number of formal details such as representation. It then records that:-
"After consideration of the objections as written, together with the submissions made on behalf of the pursuers and those objectors present at the meeting and such documentation as was lodged in support of these submissions, the Board determined to refuse the application on the ground that the grant would be inexpedient having regard to the demand for the time being in the locality for the facilities afforded by licensed betting offices and to the number of such offices for the time being available to meet that demand."
The foregoing passage simply regurgitates the terms of paragraph 19(b)(ii) insofar as it purports to state a reason for the first defenders' "determination" to refuse the application.
It would come as no surprise to any interested party that the first defenders considered what they say they did. That is their function. Equally, the second part of the passage quoted above, discloses no more than the result of the application (viz. refusal). The reference to the grant being "inexpedient" provides no greater insight as to how the result was achieved since the refusal flows from paragraph 19(b)(ii) of Schedule I to the 1963 Act, in terms whereof refusal can only follow a finding that the grant would be inexpedient.
The first full paragraph on page 2 of the statement of reasons reveals the first defenders' approach, in principle, to the issue of locality; it records what the first defenders regarded as the issues for consideration by them; it acknowledges the competing submissions noted by them together with certain facts; it states that "The Board carefully considered all submissions made on the question of locality, demand and the facilities offered."; and, finally, it states that the whole submissions are detailed in the transcript of the proceedings.
The penultimate paragraph in the statement commences at the foot of page 2.
"In reaching its decision to refuse the application, the Board balanced the arguments advanced by the pursuers and the objectors and after careful consideration, having regard also to its own knowledge of the locality, in the particular circumstances of this case, preferred to accept the views of the objectors on the question of demand and the location and the capacity of the existing betting office facilities within the stated locality to adequately meet that demand. On the basis that there was no evidence of demand in the locality for additional facilities in the Board's view it considered it inexpedient to grant the application."
The transcript of proceedings, contrary to what is said by the first defenders on page 2 of the statement of reasons, does not detail the "whole submissions". On no fewer than thirteen of the transcript pages it can be seen that certain parts of the discussion at the board meeting were not properly recorded by the equipment in place. To my mind, that in itself tends to undermine the proposition that one can look to the transcript to find a full and informed record of the proceedings.
However, it is, in any event, my opinion that what appears within the transcript produced in this case (putting aside the omissions referred to above) neither provides nor assists in providing a proper explanation for the first defenders' decision to refuse the application in terms of paragraph 19(b)(ii). The transcript is nothing more than a record of most, if not all, of what was said by each of the participants at the hearing. Whether all or any of its terms constitute a relevant guide as to the basis for the first defenders' decision can only be determined by what appears within the actual statement of reasons. A licensing board must provide reasons for its decision, in terms of Section 18 of the 1976 Act, when called upon to do so. The statement of reasons is, therefore, a statutory document. It constitutes the means by which the board is obliged to set out the explanation for reaching the decision arrived at. Until the statement of reasons has been framed and issued, an unsuccessful applicant does not know why the application has been refused. Having sight of the transcript of the proceedings does not assist the applicant. He or his representative (or both) would have been in attendance at the hearing. He knows what was said by all concerned. However, all he knows as far as the decision-making process is concerned, is that the convenor of the board moved that the application be refused and that this was seconded by another member of the board. Accordingly, the logical (and statutory) consequence is that a licensing board must, if legitimately required to do so, produce a statement setting out the reasons for its decision to refuse an application. In my view, the approach commended by senior counsel for each of the defenders is unsound. In the circumstances of this case, the "reasons" given by the first defenders are neither enhanced nor clarified by reference to the transcript.
That being so, the statement of reasons itself must be looked at to find out what the actual reasons for refusal were. Whilst it is obviously important to read the whole document, in my view, the only section of the statement in this case which discloses an attempt on the part of the first defenders to justify or explain their decision commences five lines from the foot of page 2. (viz. the passage quoted above in italics.)
There was no dispute in the course of the argument before me that even if a board were to take the view that there was no demand for a new betting office facility it still required to consider and determine the question of inexpediency.
It is apparent from the statement of reasons that the first defenders "...preferred to accept the views of the objectors on the question of demand..." and that these views embraced the proposition that existing betting office facilities adequately met (that) demand. It is not apparent why these views were preferred by the first defenders. To state that the arguments were "balanced" by the first defenders gives no insight as to the reason or reasons for attaching weight to one argument but not another. It is, of course, quite appropriate for the board to have "...regard also to its own knowledge of the locality". However, in my opinion, it must state what that "knowledge" amounts to, in the particular circumstances of the case and it must explain what it was about its "knowledge of the locality" that impacted upon the process of persuasion one way or another. A failure to do so simply serves to afflict the decision-making process with opacity rather than favouring it with clarity. I consider that the first defenders have failed in this way.
I accept Mr. Campbell's submission to the effect that it is for a licensing board to attach such weight as it considers appropriate to the material placed before it and to reject such material as it sees fit. However, in the final analysis, the board must be in a position to explain the manner in which they dealt with the material; the justification for holding that it was sufficient or insufficient; and the rationale behind any finding that the material presented was, for instance, poor in quality. It is, of course, correct to say that a licensing board is entitled to prefer certain material to other material but it must be in a position to say why it did so.
Moreover, I consider that the penultimate sentence in the statement of reasons is fundamentally flawed.
This sentence merely repeats what is contained in the preceding sentence. In other words, the first defenders had "preferred to accept the views of the objectors on the question of demand" etc. If the penultimate sentence in the statement of reasons be an attempt to express the rationale for the first defenders' conclusion regarding inexpediency, it fails, since it goes no further than the previous sentence.
Additionally, just because the existing facilities were held "to adequately meet...demand", in my opinion, it does not thereby follow, legally or logically, that the grant "...would be inexpedient having regard to the demand for the time being...". The first defenders have provided no explanation in the statement of reasons as to why, even if there were "no evidence of demand in the locality for additional facilities", it was inexpedient to grant the application. As senior counsel for the pursuers put it, in the 2001 William Hill case, "The judgement called for was not one based on supply and demand, it was based on inexpediency".
For these reasons, I consider that this aspect of the pursuers' argument is well-founded. The statement of reasons issued by the first defenders is inadequate. To that extent, at least, they erred in law in refusing the application.
In reaching this conclusion, I have taken full account of the various authorities referred to in the debate before me.
In the case of Noble, it must be recognised that the third and fourth grounds of appeal which formed the basis for the court's decision asserted that "...important evidence adduced on behalf of the appellant to the committee had either been ignored or brushed aside for what was said to be inadequate reasons." Accordingly, the court was concerned with an alleged failure on the part of the board to take into account material relevant to its decision. That, in my view, falls to be distinguished from the situation in the present case where, inter alia, the pursuers contend that the statement of reasons has been formulated in such a way as to deny them the satisfaction of knowing why it was that the grant of their application was held to be inexpedient. The statement of reasons in the present case is said to be sufficiently bereft of rationale as to obscure what material the first defenders did or did not take into account in arriving at their decision.
In any event, under reference to the 2001 William Hill case, I agree with and adopt Sheriff Taylor's analysis of the decisions in Noble and Din as it is to be found at pages 8 to 10 within his Note. In particular, I consider that the remarks made by the court in Noble do, indeed, fall to be looked at in the context alluded to by Sheriff Taylor and that the court's observations in Din are of significance as far as the present case is concerned. I join Sheriff Taylor in paraphrasing Lord McCluskey; I am not satisfied that the first defenders in this case have offered any intelligible explanation which would warrant the conclusion that it was inexpedient to grant the pursuers' application. Accordingly, they have erred in law. The first defenders ought to have explained why they determined that the mere adequacy of existing betting shop facilities thereby rendered the grant inexpedient.
Senior Counsel for the first defenders founded upon the Caledonian Nightclubs case and suggested that Din had to be looked at cautiously in light of Lord Jauncey's remarks. In my opinion, Lord Jauncey's observations, particularly at 33H to 34C, do not assist the defenders. The assumption referred to by Lord Allanbridge in Latif v Motherwell District Licensing Board, is a valid one. Nevertheless, to my mind, a licensing board still requires to explain any assessment so that an interested party can understand why an application has been refused and, if so advised, challenge the basis for the refusal. If the position adopted by the defenders in the present case were to be upheld, in my view, an unsuccessful applicant would find it very difficult to advance an appeal since the underlying explanation for a board's decision would never be properly disclosed.
It was also submitted on behalf of the defenders that the court should exercise care when considering the case of Din. It was a liquor licensing case. However, no argument was advanced as to why the views expressed by Lord McCluskey should not be regarded as apt in the context of an application for a bookmakers licence. The decision in Din was concerned with the approach taken by the court in respect of a statement of reasons provided by the licensing board and the adequacy of that statement. For present purposes, I can find no good reason in principle to refrain from proceeding upon any basis other than that adopted by the court in Din. The nature of the application may have been different, but the issue was the same, viz. upon what basis did the board reach its conclusion? In any event, the Caledonian Nightclubs case upon which Sir Crispin placed considerable reliance was itself concerned with liquor licensing.
I readily accept that a document akin to a judicial determination is not envisaged under section 18 of the 1976 Act. However, the statutory provisions would be rendered meaningless were licensing boards permitted to provide anything less than adequate and sufficient reasons for decisions. I agree with Sheriff Taylor's view that there must be "...an area of ground in the middle between the two extremes".
I turn now to the two other aspects of Mr. McKenzie's submission. Firstly, even allowing for omissions, the transcript makes it plain that there was evidence of demand. The quality of that evidence may have been in issue but it was unquestionably before the board. The penultimate sentence in the statement of reasons indicates clearly that the board could not have regarded that material in a proper manner. In purporting to conclude that it was inexpedient to grant the application on "...the basis that there was no evidence of demand in the locality for additional facilities...", in my opinion, the first defenders proceeded upon a factual hypothesis which was demonstrably incorrect. They appear to have ignored or left out of account what must be a relevant consideration. It follows that their decision in this respect was also tainted with error. It is not open to the court to attach anything other than its explicit meaning to the phrase "no evidence of demand".
Secondly, it is beyond doubt that no onus rests upon an applicant in relation to the existence of demand for additional betting shops within the locality under consideration (Leake v Edinburgh Licensing Court). The thrust of Mr. McKenzie's argument in this regard was that ex facie the penultimate sentence in the statement, the first defenders had, indeed, proceeded as if the pursuers were burdened with establishing demand as a condition precedent to the granting of the application. I agree with Mr. McKenzie's approach. Once again, in my view, the first defenders' approach is flawed. The manner in which the sentence is formulated clearly suggests that the first defenders considered it incumbent upon the pursuers to establish demand in the locality for additional facilities. There will undoubtedly be cases such as McAllister, where demand having been put in issue, an applicant requires to respond in adequate terms. That inevitably follows where there is a contested issue. However, it does not follow that the applicant thereby assumes the onus of satisfying the board in relation to demand or of persuading the board that the grant would be expedient. In my opinion, the position regarding onus remains the same whatever is or is not the subject of challenge by objectors. Having arrived at the view that the first defenders have failed to provide any intelligible explanation for their decision in the context of this application, ex facie the penultimate sentence in the statement of reasons, I can only conclude that the onus has been inverted. As a matter of law, that approach is incorrect.
In all the circumstances, therefore, I have sustained the pursuers' first plea-in-law. As I understood Mr. McKenzie's submission, the pursuers' second plea-in-law did not have any real bearing on the arguments presented in the course of the debate. As far as a disposal is concerned, I am satisfied that the present case falls to be distinguished from the case of Risky Business. There was material before the first defenders upon which a reasonable board might decide that refusal was appropriate in terms of paragraph 19(b)(ii), always assuming that the board were to proceed upon a correct view of the law. Accordingly, I have remitted the case back to the first defenders in order that they might reconsider the application.
I have also awarded the expenses of the summary application in favour of the pursuers. On balance, I would have certified the cause as suitable for the employment of senior counsel.
SHScott.LD.Camec