SHERIFFDOM OF GRAMPIAN HIGHLAND AND ISLANDS AT ABERDEEN

B731/09

JUDGEMENT   of   SHERIFF PRINCIPAL SIR STEPHEN S T YOUNG Bt QC   in the cause   TESCO STORES LIMITED   Appellants   against   ABERDEEN CITY LICENSING BOARD   Respondents

 

 

 

Act: Dean of Faculty (Keen QC) and R G Skinner, advocate, instructed by R & J M Hill Brown & Co, Glasgow

Alt: Charles M Smith, solicitor, Aberdeen City Council

 

 

 

Aberdeen: 24 June 2010

The sheriff principal, having resumed consideration of the cause, answers the questions of law in the stated case in the affirmative, allows the appeal and remits the case back to the respondents and directs them to grant a provisional premises licence for consumption of alcohol off the premises only in respect of the appellants' premises at 393/395 North Deeside Road, Cults, Aberdeen AB15 9SX; finds the respondents liable to the appellants in the expenses of the appeal and allows an account thereof to be given in and remits the same, when lodged, to the auditor of court to tax and to report; certifies the appeal as suitable for the employment by the appellants of junior counsel.

 

 

 

 

 

 

 

Note

 

[1] In this case the appellants applied to the respondents, namely the Aberdeen City Licensing Board, under sections 20 and 45 of the Licensing (Scotland) Act 2005 ("the Act") for a provisional premises licence in respect of premises in North Deeside Road, Cults, Aberdeen. The premises were to be operated as a small "Tesco Express" supermarket, and it was proposed that alcohol should be sold for consumption off the premises only. In addition, according to the operating plan which accompanied the application, the premises were to be used for the "sale of food, non-food items and other household goods and the provision of ancillary consumer services within and outwith licensed hours". Again according to this plan it was indicated that the alcohol display area would extend to 27.94 square metres.

 

[2] One letter of objection to the application was received from a firm of solicitors representing a named individual and Kelly of Cults Ltd. The material parts of this letter read as follows:

 

The first ground of objection is that if the application were to be granted there would as a result be overprovision of licensed premises and licensed premises of that description in the locality. The store in the course of construction is to trade as a Tesco Express Convenience Store, selling a wide range of products under a standard business model that is used throughout the UK by Tesco. Such stores sell food, non-food, soft and alcoholic drinks and other associated products. That is exactly the type of operation that currently exists at Kelly of Cults Limited shop within 100 metres of the subjects of this application. Kelly of Cults, as the Board will know, is a long established family run and operated store, selling a wide range of quality products. It has a highly regarded large off sales section. Our clients believe that the requirements in the locality for an operation such as the Tesco Express business model is already completely satisfied for by the existing Kelly of Cults operation.

 

In addition to the Kelly of Cults licensed premises there are a number of other licensed premises within a radius of at most 200 metres. Specifically, on the North Deeside Road row of shops there is an Oddbins off sales store, selling a wide range of alcoholic products. Even closer to the site in question there is the Happy Uncle take away on North Deeside Road, which benefits from an off sales licence at present as does the Cults Newsmarket, close to the subjects of application in Kirk Brae. Other licensed premises in the area are the Cults Hotel which has served the Cults community for many years. It has public and lounge bars as well as a function suite and a busy restaurant trade.

 

Having regard to the emphasis placed by the provisions of the Licensing (Scotland) Act 2005 on overprovision, the objectors submit that if the application were to be granted by the Licensing Board it would result in substantial overprovision for the above reasons in terms of section 23(5) of that Act.

 

................

 

Our clients feel that their objections are well founded in law, having regard to the terms of the new legislation and its increased emphasis on Licensing Boards requiring to have regard to matters of overprovision. The licensing policy document of Aberdeen City Council also pays particular regard to its determination to avoid overprovision of licensed premises in localities.

 

(In the letter a separate ground of objection was advanced on the basis of the lack of suitable parking in the vicinity of the premises. As will be seen, this was rejected by the Board and it is unnecessary therefore to set it out here).

 

[3] The application was considered and in due course refused by the Board on 25 August 2009. The submissions made to the Board, and the reasons for its decision to refuse the application, are set out in the stated case as follows (and here I have omitted the references in the summary of the submissions by the appellants' solicitor to the parking issue and also to a letter from the Chief Constable about the appellants' previous convictions which were said to be minimal in light of the size of their operations):

 

In the proceedings before the Licensing Board the following submissions were made on behalf of the appellant by his solicitor, and included in the Statement of Reasons paragraphs 9-11 of which are replicated in full below.

 

9. Summary of submissions made

 

The proposed premises are a small "Tesco Express" supermarket to be located at 393/395 North Deeside Road, Cults, Aberdeen, AB15 9SX.

 

Mr Dawson on behalf of the objector addressed the Board indicating that he had nothing to add to the terms of his client's letter of objection. He asked that the Board consider the grounds of objection contained in the letter in making their decision.

 

Mr Wood described Tesco as a major UK supermarket retailer. He explained that the proposed premises are under construction and it was anticipated that they will open in early December 2009. The premises are located in a parade of shops in the main street in Cults. The proposed opening hours of the shop are 06:00 - 23:00 Monday to Saturday with their Sunday hours still to be decided. The intended off-consumption sales capacity is 27.94m². He pointed out that the public had not objected and expressed the opinion that the public would actually welcome the store. Mr Wood confirmed that the applicant had received a copy of the objection letter which he noted was from "a member of the grocers' trade".

 

Mr Wood accepted the locality as defined by the Board, which was defined as (sic) licensed premises with a Cults address. He agreed that the relevant premises for an overprovision assessment would be off-consumption (sic) premises. He was of the view that only Kelly's of Cults was similar to the applicant's store and advised the Board that it should consider the "type, size and shape" of premises when assessing overprovision in a certain locality.

 

He went on to discuss the number of such premises in Cults. These were: Cults Store, which Mr Wood considered could be differentiated from the applicant's premises as it is a smaller store. Happy Uncle, which is a Chinese takeaway and therefore (sic) a similar distinction could be drawn and Oddbins, which can also be distinguished as they are a specialist wine merchant and their premises have a much greater capacity. He therefore concluded that the only "like premises" (i.e. in type, size and capacity) is Kelly of Cults (the objector's store). Mr Wood stated that because Kelly of Cults was the only "like premises" it would be the only premises in the locality directly in competition with Tesco for alcohol sales.

 

Mr Wood stated the opinion that "the objection was not based on the Licensing Objectives but rather was an objection in restraint of trade and as such was not something the Board should consider". "Rather the Board should consider the nature of the premises in line with its Statement of Licensing Policy at paragraph 9.4".

 

Mr Wood told the Board that the concept of overprovision was no longer arithmetical. He added that as the premises is located in the "city suburbs and not the city centre there should be no concerns over 'public order'".

 

...............

 

Mr Wood asked that the Board reject the objection letter because it was a "trade objection" and no other concerns had been registered from other parties. The "public interest would be well served" by provision of a Tesco Express store in that location.

 

10. Decision

 

The Board retired to discuss the application in private. The Board considered that the objection relating to traffic matters and parking was a planning issue and did not take that into account. The Board also noted the relevant convictions and accepted the applicant's response in that regard. Upon its return the Board voted by 5 votes to 4 to refuse the application using the power conferred on them under section 23(5)(e) of the Licensing (Scotland) Act 2005 (the "Act").

 

10.a) Reasons for the decision

 

In considering overprovision, the Board relied on the guidance contained in paragraphs 58 to 60 of the Scottish Government's Guidance for Licensing Boards and Local Authorities. These paragraphs explain how a Board should assess overprovision during the transition period.

 

With regard to the definition of a locality which could be used in assessing overprovision for Cults, both the applicant and objector accepted that only premises with an off consumption (sic) capacity should be taken into account. They also agreed with the Board that the suburban village of Cults itself should be the locality.

 

The Board considered the question of the type and capacity of the premises as it was aware that the assessment of overprovision was no longer 'purely an arithmetical exercise'. The Board was aware of its Statement of Licensing Policy where it had indicated that it would look at the "type ... and capacity" of the premises in a locality. In that policy statement it was explained that the Board would also consider the 'particular descriptions' of premises and the 'distinct styles of operating' when assessing which premises would count in an overprovision assessment in a given locality.

 

The relevant premises to be taken into account in the assessment of overprovision were those premises in the locality which sold alcohol for off-consumption only. These premises were: Kelly of Cults (capacity 30m²); Cults Store (capacity 10.69m²); Happy Uncle (capacity 7.6m²); and Oddbins (capacity 82m²). That gave a total capacity for the locality of 130.29m². Board Members noted that the addition of 27.94m² would equate to a 21% increase in the capacity. Some Board Members considered this to be a significant increase in the overall capacity of premises of this type in the locality.

 

The Board concluded that it should balance "type, capacity and number" when considering overprovision. However, although the Members were aware that some of these premises operated differently from the proposed premises, the Members who voted against the application were convinced the number and capacity of premises outweighed consideration of type of premises when reaching their decision. The Board therefore decided, on the evidence available before it, that the addition of the applicant's premises would lead to overprovision.

 

11. Legal powers used to come to decision

 

Section 23(5)(e), Licensing (Scotland) Act 2005

Paragraphs 58-60 Guidance for Licensing Boards and Local Authorities - Licensing (Scotland) Act 2005

Paragraph 9.4 Aberdeen City Licensing Board, Statement of Licensing Policy

 

[4] The Board's statement of reasons was issued on 14 September 2009 - see section 51(3) of the Act - and on 23 September 2009 a note of appeal was lodged on behalf of the appellants. In this it was stated that the appellants appealed against the decision on the following grounds:

 

1.      The Board erred in law et separatim exercised its decision in an unreasonable manner in refusing the application.

2.      In particular they erred in the application of the test under Section 23(5)(e) of the Act. They sought to balance "type, capacity and number" of licensed premises in the locality when considering the question of overprovision and concluded that "number and capacity of premises outweighed consideration of type of premises when reaching their decision." Such approach was erroneous.

3.      Separatim the Board erred in regarding as relevant to their consideration that the granting of the application would result in "a significant increase in the overall capacity of premises of this type".

4.      Separatim, they exercised their discretion in an unreasonable manner in that they failed to provide adequate reasons for their decision. The reasons leave the informed reader in real and substantial doubt as to what the reasons for it were and the material considerations taken into account in reaching it. In particular they failed to specify which premises "operated differently" from the application premises, the criteria they applied to the determination of "type of premises" and the number and capacity of the premises which operated in the same or similar way to the application premises. They also failed to explain why those Licensing Board members who opposed the grant of the application "were convinced" that the "number and capacity" of premises within the locality overrode consideration of "type of premises".

 

After setting out the grounds of appeal the stated case continued:

 

Reasons with reference to Grounds of Appeal

 

The Board reached its decision based on its interpretation of Section 23(5)(e) of the Act. This provides two alternative tests for making an overprovision assessment. These are s.23(5)(e) "having regard to the number and capacity of - (i) licensed premises, or (ii) licensed premises of the same or similar description as the subject premises, in the locality...The Board was of the opinion that these terms gave it a wide discretion in assessing overprovision and choose to adopt s.23(5)(e)(ii).

 

In its use of the expression "type" in the Statement of Reasons the Board was assessing "same or similar" premises. The Board had to look at "types" of premises first. In this case "type" meant on consumption, off consumption or on and off consumption. Consideration of "type" was a prerequisite of considering "same or similar". In identifying premises of a same or similar type the Board did not also have to identify the premises it excluded from its consideration.

 

The Board considered that there was no issue in identifying the locality as both applicant and objector accepted the Board's suggestion that a) this would be the suburban village of Cults (i.e. those premises with a Cults address) and b) licensed premises with only an off consumption capacity should be taken into account.

 

The applicant had invited the Board, when making its assessment, to restrict its consideration of the existing premises to Kelly of Cults as those premises where the only "like premises" (i.e. in type , size and capacity) in the locality. The Board however preferred to follow the terms of s.23(5)(e)(ii) which gave it a wider discretion and allowed it to consider "same or similar" licensed premises which sold alcohol for off consumption only.

 

The reason for exercising its discretion in this manner was that the Act identified capacity for off sale facilities in terms of the extent of the alcohol display areas. The Board therefore considered it to be important not to exclude any of the other premises with those facilities, irrespective of whether or not they were a close match to the applicant premises. The capacities of the premises selling alcohol for off consumption only in the locality are identified by the Board in square metres. Although there is nothing in the Act to assist the Board in its deliberations on how to assess overprovision for this type of premises, the Board was of the view that it was not unreasonable to total the capacities in the locality and then consider if an increase to that total, by granting the application, would result in overprovision. It also noted that granting this licence would lead to an increase of about 21% of the total capacity of this type of premises in the locality. The Board was of the view that this increase in a suburban locality could have a greater effect, because of the nature of the locality than, for example in an urban or city centre location. The Board therefore determined that the granting of the application would lead to overprovision in the locality.

The Board therefore made its decision to refuse the application based on its interpretation of s.23(5)(e).

The Board produced a statement of reasons, the relevant sections of which are reproduced above (9-11). The Board, in its reasons, explained which premises it would take into account and why. The Board in following s23(5)(e)(ii) considered number and capacity of off consumption premises to be the most important factors in assessing overprovision in this case. The Board therefore gave adequate reasons for the decision.

Questions in Law

1. Did the Board:-

 

a) err in law in its application of the test under Section 23(5)(e) of the Act;

b) err in law et separatim exercise its discretion in an unreasonable manner in refusing the application;

c) fail to provide proper and adequate reasons for its decision and thereby err in law et separatim exercise its discretion in an unreasonable manner?

 

[5] For the purposes of this appeal the relevant sections of the Act provide as follows:

 

4 The licensing objectives

(1) For the purposes of this Act, the licensing objectives are-

(a) preventing crime and disorder,

(b) securing public safety,

(c) preventing public nuisance,

(d) protecting and improving public health, and

(e) protecting children from harm.

(2) In this Act, references to the "crime prevention objective" are references to the licensing objective mentioned in subsection (1)(a).

 

6 Statements of licensing policy

(1) Every Licensing Board must, before the beginning of each 3 year period, publish a statement of their policy with respect to the exercise of their functions under this Act during that period (referred to in this Act as a "licensing policy statement").

(3) In preparing a licensing policy statement or a supplementary licensing policy statement, a Licensing Board must-

(a) ensure that the policy stated in the statement seeks to promote the licensing

objectives, ......

(4) In exercising their functions under this Act during each 3 year period, a Licensing Board must have regard to the licensing policy statement, and any supplementary licensing policy statement, published by the Board in relation to that period.

 

7 Duty to assess overprovision

(1) Each licensing policy statement published by a Licensing Board must, in particular, include a statement as to the extent to which the Board considers there to be overprovision of-

(a) licensed premises, or

(b) licensed premises of a particular description,

in any locality within the Board's area.

(2) It is for the Licensing Board to determine the "localities" within the Board's area for the purposes of this Act.

(3) In considering whether there is overprovision for the purposes of subsection (1) in any locality, the Board must-

(a) have regard to the number and capacity of licensed premises in the locality, and

(b) consult the persons specified in subsection (4).

(4) Those persons are-

(a) the appropriate chief constable,

(b) such persons as appear to the Board to be representative of the interests of-

(i) holders of premises licences in respect of premises within the locality,

(ii) persons resident in the locality, and

(c) such other persons as the Board thinks fit.

 

20 Application for premises licence

(1) Any person, other than an individual under the age of 18, may apply to the appropriate Licensing Board for a premises licence in respect of any premises.

(2) An application under subsection (1) must-

(a) contain a description of the subject premises, and

(b) be accompanied by-

(i) an operating plan for the subject premises ......

(4) An "operating plan" in relation to any premises is a document in the prescribed form containing-

(a) a description of the activities to be carried on in the premises,

(b) a statement of the times during which it is proposed that alcohol be sold on the premises,

(c) a statement as to whether the alcohol is to be sold for consumption on the

premises, off the premises or both .......

 

23 Determination of premises licence application

(1) A premises licence application received by a Licensing Board is to be determined in accordance with this section.

(2) The Licensing Board must hold a hearing for the purpose of considering and determining the application.

(3) In considering and determining the application, the Board must take account of the documents accompanying the application under section 20(2)(b).

(4) The Board must, in considering and determining the application, consider whether any of the grounds for refusal applies and-

(a) if none of them applies, the Board must grant the application, or

(b) if any of them applies, the Board must refuse the application.

(5) The grounds for refusal are-

(e) that, having regard to the number and capacity of-

(i) licensed premises, or

(ii) licensed premises of the same or similar description as the subject

premises,

in the locality in which the subject premises are situated, the Board considers that, if the application were to be granted, there would, as a result, be overprovision of licensed premises, or licensed premises of that description, in the locality.

 

131 Appeals

(1) A decision of a Licensing Board specified in the left-hand column of schedule 5 may be appealed by the person specified in the right-hand column of that schedule.

(2) An appeal under this section is to be made by way of stated case .....

(3) The grounds on which a Licensing Board's decision may be appealed under this section are-

(a) that, in reaching the decision, the Licensing Board-

(i) erred in law,

(ii) based their decision on an incorrect material fact,

(iii) acted contrary to natural justice, or

(iv) exercised their discretion in an unreasonable manner, .....

(5) Where the sheriff principal or, as the case may be, sheriff upholds an appeal against a Licensing Board's decision under this section, the sheriff principal or sheriff may-

(a) remit the case back to the Licensing Board for reconsideration of the decision,

(b) reverse the decision, or

(c) make, in substitution for the decision, such other decision as the sheriff principal or sheriff considers appropriate, being a decision of such nature as the Licensing Board could have made.

 

132 Appeals: supplementary provision

(1) A Licensing Board whose decision is appealed under section 131 may be a party to the appeal.

(2) In considering the appeal, the sheriff principal or, as the case may be, sheriff may hear evidence.

(3) On determining the appeal, the sheriff principal or sheriff may make such ancillary order (including an order as to the expenses of the appeal) as the sheriff principal or sheriff thinks fit.

 

142 Guidance

(1) The Scottish Ministers may issue guidance to Licensing Boards as to the exercise of their functions under this Act.

(2) The Scottish Ministers may modify any guidance issued by them under subsection (1).

(3) Each Licensing Board must, in the exercise of their functions under this Act, have regard to any guidance issued to them under subsection (1).

 

[6] In pursuance of section 142(1) the Scottish Ministers duly issued guidance to the Licensing Boards as to the exercise of their functions under the Act. This was done under cover of a letter dated 4 April 2007 from an official of the then Scottish Executive. Part 3 of the guidance is headed "The Overprovision Assessment", and it incorporates paragraphs 29 to 62 of the document. Paragraphs 33 and 34 read as follows:

 

33. The Act sets out a new approach to licensing and overprovision. In particular it:

·         ends the seven fixed categories of licences;

·         introduces a single premises licence, based on an operating plan which gives a clear outline of an applicant's intentions and which may be modified and/or subjected to conditions;

·         requires Licensing Boards to take a pro-active position on overprovision and identify those localities in which it would not propose to grant new licences or licences for premises of a particular description;

·         allows Licensing Boards to take account of the "particular description" of premises (that is to say, their styles of operation) when assessing overprovision; and;

·         directs Licensing Boards to have regard to the number and the capacity of licensed premises in localities.

34. This approach:

·         allows Licensing Boards to take account of changing market trends, such as the development of so-called "hybrid" premises;

·         provides potential entrants to the market with a clear signal that they may incur abortive costs if they intend to apply for a licence in a locality which the Licensing Board has declared to have reached overprovision;

·         improves public and licensed trade confidence in a system by setting out clearly the grounds on which overprovision should be determined.

·         recognises that halting the growth of licensed premises in localities is not intended to restrict trade but may be required to preserve public order, protect the amenity of local communities, and mitigate the adverse health effects of increased alcohol consumption resulting from growing outlet density.

 

Paragraphs 35 and 36 then set out the material parts of section 7 of the Act and these are followed immediately by a paragraph numbered (for some unexplained reason) 41 which draws attention to the fact that section 6(3) of the Act requires a policy statement to seek to promote the five licensing objectives which are then specified. These paragraphs 35, 36 and 41 and the succeeding paragraphs numbered 37 to 39 all come under a subheading in Part 3 of the guidance entitled "A policy on overprovision". It seems to me that it is plain from the terms of the Act itself and from these paragraphs in the guidance that any assessment of overprovision must be made by a Licensing Board having regard to the licensing objectives.

 

[7] It appears that there was to be a transition period after the Act was brought into force, and paragraphs 58 to 60 of the guidance set out the arrangements for dealing with overprovision during this period. They read as follows:

 

58. Ministers have decided that the duty under section 7 of the Act to carry out an assessment of licensed premises to determine whether or not there is overprovision of licensed premises in a locality should not be brought into force until completion of the transition period. During transition the guidance set out above will apply but Boards are not required to have regard to the number and capacity of all licensed premises within their area.

59. Set out below is how the Executive expects Boards to deal with overprovision during the transition period.

Arrangements for transition

Step 1 - Boards should determine localities or a locality in their area based on their local knowledge and understanding of their areas and in consultation with their Local Licensing Forum where they are aware of problems caused by the density of licensed premises;

Step 2 - Boards should use the services of local authority Building Standards Managers to determine capacity of licensed premises in those localities using the methodology for calculating capacity set out in the guidance on overprovision;

Step 3 - Boards should provide a statement in their Policy Statement (although Boards are not under a statutory duty to do so for the first Policy Statement) setting out a clear indication that a locality or localities have been deemed to be overprovided for. As such, it should be assumed that no more applications would be accepted in relation to that area or those areas. Boards will then be in a position to refuse licenses in a locality deemed to be overprovided for "having regard to the number and capacity of licensed premises", as provided for in section 23, (the capacity of premises having been determined by the Building Standards Officers).

60. This is not a statutory duty for the first Policy Statement but it would be good practice for Licensing Boards to undertake this work so as to provide licensees and the local communities with a clear indication of how they will implement their statutory ability to refuse applications on the grounds of overprovision.

 

[8] In pursuance of section 6(1) of the Act the Board published its licensing policy statement for the three years from 30 November 2007. Section 9 of this deals with overprovision. Paragraph 9.3 explains that in assessing overprovision the Board will take into account the guidance issued under section 142 of the Act and will consult the persons listed in section 7(4). It further specifies how it will identify persons representative of the various interests referred to in section 7(4)(b) and (c). Paragraph 9.7 explains that in considering the question of locality the Board will distinguish the city centre from other areas of the city, and refers to an attached map of what it considers to be the city centre. Here it may be noted that Cults is not in the city centre of Aberdeen.

 

[9] It will be recalled that in the Board's statement of reasons reference was made in particular to paragraph 9.4. But paragraphs 9.1, 9.2, 9.5 and 9.6 also appear to be of some significance in the context of this appeal, and I therefore set them all out in full:

 

9.1 The Board is under a duty in terms of section 7 of the Act to publish in this policy, a statement on the extent to which it considers there to be overprovision of licensed premises or overprovision of licensed premises of a particular description, in any locality within the Board's jurisdiction.

9.2 Recognising that the Board's duty to make this declaration will not be commenced until the main provisions of the Act come into force in 2009, the Board is nevertheless minded to register its intentions in this regard. The Board will undertake the overprovision assessment during the transition period.

9.4 Account will be taken of the type, size and capacity of premises and the Board will pay close attention to licensed premises of particular descriptions, which have distinct styles of operation, recognising that they may have a greater impact on a local community. The Board registers its current concern at the number of premises providing adult entertainment and will scrutinise very seriously any applications for more such licences in light of the licensing objectives. Building standards and environmental health officers will advise the Board on capacity, seating and other overprovision issues.

9.5 The Board acknowledges that public nuisance and overall levels of disturbance arising from the density of licensed premises in a locality are likely to be increased, where particular premises are of a size enabling a very large number of patrons to be inside at one time. The Board will pay particular attention to applications for so called vertical drinking establishments, which have exceptionally high capacities and are used primarily for the sale and consumption of alcohol and provide little or no seating for patrons. These are recognised as potentially having a significant bearing on the likelihood of crime and disorder.

 

9.6 In particular the Board will have regard to the number of evidenced complaints it receives, associated with the following:

•                 noise and disturbance on the streets

•                 noise from premises

•                 the level of bad behaviour in public places, particularly at night, with much of it being associated with excessive drinking of alcohol

•                 high numbers of pedestrians on the pavements who spill on to the roads

•                 fouling of doorways, alleys and private gardens by urination and vomiting

•                 difficulty in providing and maintaining adequate street cleaning and refuse collection services

•                 traffic congestion caused by dropping off and picking up patrons at licensed premises

•                 long queues and long waiting times at taxi ranks which contribute to nuisance, disorder and crimes of violence

•                 the views of a significant proportion of the public who avoid areas because of the fear of crime and disorder

 

[10] It will be noted that in the first sentence of paragraph 9.4 it is stated that "Account will be taken of the type, size and capacity of premises and the Board will pay close attention to licensed premises of particular descriptions, which have distinct styles of operation, recognising that they may have a greater impact on a local community". It seems to me that on its own this particular sentence is at best of very limited assistance since no guidance is given as to what particular descriptions of premises, or what distinct styles of operations, were thought by the Board to have a greater impact on a local community. Presumably what the Board had in mind here were either premises providing adult entertainment as specified in the second sentence of paragraph 9.4 or premises of a size enabling a very large number of patrons to be inside at one time, including in particular so-called vertical drinking establishments as specified in paragraph 9.5. Needless to say, there has been no suggestion that the premises which are the subject of this appeal fall into either of these categories. Nor has there been any suggestion either that there have been any complaints in relation to any of the matters narrated in paragraph 9.6 or that there are reasonable grounds for supposing that such complaints might be made in the future which might support the conclusion that to have granted the present application would have resulted in overprovision for the purposes of section 23(5)(e) of the Act.

 

[11] Opening the appeal, the Dean of Faculty submitted that the Board's statement of reasons required to be intelligible and to leave the informed reader in no real and substantial doubt as to the reasons for the Board's decision. He submitted that the statement of reasons did not do this and further that the difficulties which emerged from it had been compounded by the attempt by the Board in the stated case to give additional reasons for the decision. He referred here to Mirza v City of Glasgow Licensing Board 1996 SLT 1029, and in particular a passage in the opinion of the court delivered by the Lord Justice Clerk (Ross) 1034 which reads:

 

Dealing first with the appeal at the instance of the board, we are of opinion that the submissions on behalf of the board are to be preferred. Where a challenge is made as to the adequacy of reasons given for a decision, we are satisfied that the test to be applied is that referred to in Wordie v Secretary of State for Scotland. That case was a planning case and Lord President Emslie, at 1984 SLT p. 348 said: "So far as para 11(1) is concerned all that requires to be said is that in order to comply with the statutory duty imposed upon him the Secretary of State must give proper and adequate reasons for his decision which deal with the substantial questions in issue in an intelligible way. The decision must, in short, leave the informed reader and the court in no real and substantial doubt as to what the reasons for it were and what were the material considerations which were taken into account in reaching it".

 

[12] The Dean of Faculty submitted that much of the difficulty in the present case stemmed from the Board's use of the term "type" or "type of premises". It was clear that this term had not been employed consistently or logically by the Board. It was not a term which appeared either in the Act or the Government's guidance to the Act. But it did appear in the Board's own policy statement, and this might be the source of the confusion which had infected the Board's analysis and reasoning. Referring to the statement of reasons, the Dean of Faculty pointed out that no indication had been given in this as to whether the Board, in refusing the application, had relied on paragraph (i) or (ii) of section 23(5)(e) and it was only in the stated case itself that it had become apparent that the Board had relied on paragraph (ii). The Dean of Faculty drew attention to the proposition in the statement of reasons that the addition of 27.94 square metres in respect of the appellants' premises would equate to a 21% increase in the capacity in the locality. He submitted that this was meaningless in itself since it depended upon what the Board's view was of the starting point upon the basis of which the percentage increase had been calculated. The object of the Act was not to restrict trade or to impose an artificial limit on the number of licensed premises in a particular area. On the contrary, in deciding the issue of overprovision the Board required to have regard to the licensing objectives set out in section 4 of the Act. Moreover, under paragraph (ii) of section 23(5)(e) the Board required to have regard to licensed premises of the same or similar description as the subject premises. The Board had wrongly assumed that all off consumption premises could be regarded as having a particular description. And even if this was correct, this could not justify the statement in the final paragraph of the statement of reasons to the effect that the members who had "voted against the application had been convinced that the number and capacity of premises outweighed consideration of type of premises when reaching their decision". Consideration of the type of premises was the very matter that they should have had in mind under paragraph (ii). In addition, in the same paragraph it had been said that the members were aware that some of premises in question operated differently from the appellants' premises. This would not have mattered if the application had been refused under paragraph (i). But, since the Board had proceeded under paragraph (ii), those premises which operated differently should have been left out of account.

 

[13] The Dean of Faculty further submitted that, in addressing the issue of overprovision under section 23(5)(e), the Board had to decide whether it would have regard to all licensed premises in terms of paragraph (i) or whether it would consider in terms of paragraph (ii) only those licensed premises which were of the same or similar description as the subject premises. If it decided to proceed under paragraph (ii), it then had to determine upon what basis other premises were to be adjudged to be of the same or similar description as the subject premises and, having done so, it had to identify those premises in the locality which were of the same or similar description as the subject premises. At the same time, if proceeding under paragraph (ii), it had to leave out of account those premises which were not of the same or similar description as the subject premises. And, having identified those premises which were of the same or similar description as the subject premises, the Board had to determine whether granting additional capacity in respect of these premises would result in overprovision having regard to the licensing objectives set out in section 4 of the Act. This the Board had not done. It had thus erred in law, and in any event it had failed to provide proper and adequate reasons for its decision and, in so far as it was possible at all to discern what these reasons were, it had exercised its discretion in an unreasonable manner.

 

[14] Referring to section 131(5) of the Act, the Dean of Faculty submitted that, if this had merely been a case of the Board having failed to state adequate reasons for its decision, it might have been appropriate to remit the case back to the Board for reconsideration of its decision. But here the Board had erred in law. Under section 23(4)(a) of the Act it had been obliged to grant the application unless there had existed a relevant ground for refusing it. No such ground having been identified by the Board, the appeal should be sustained and the case remitted to the Board with a direction that it should grant the licence for which the appellants had applied.

 

[15] In response, the Board's solicitor submitted that it had made a perfectly good and reasonable decision with no error of law whatsoever. The Board had been entitled to regard all those premises in the locality where alcohol was sold for consumption off the premises as being of the same or similar description as the premises which were the subject of the present appeal. The appellants were proposing to sell alcohol from a shop in Cults, and there were already a number of shops there which were doing this. The question for the Board had been whether there would be overprovision in the context of these existing shops. It was accepted that the Board's statement of reasons required to be intelligible to an informed reader and that, in assessing overprovision, the Board had to have regard to the licensing objectives in the Act. The Board had been aware that in assessing overprovision it had to have regard not merely to the number of premises in the locality but only to those of the same type (meaning in this case "off sales") as the subject premises. There was nothing unclear about the Board's statement of reasons and the people of Cults would understand why the appellant's application for a licence had been refused. The Board had exercised its discretion in a reasonable manner and it was not open to the court to change this. All that the Board had had to do in the present case, having considered the type of premises involved in the locality, had been to look at the number and capacity of these. The Board had taken an intelligible and sensible approach in considering the number off sales premises in Cults and had provided sound reasons for its decision. It had identified that to have granted the present application would have resulted in a substantial addition to the existing capacity in the off sales premises in the locality, and had accordingly refused the application. It had not erred in law in doing so and its decision should therefore be upheld and the appeal dismissed. Reference was made here to Cummins on Licensing Law at paragraph 23.16, Latif v Motherwell District Licensing Board 1994 SLT 414, Caledonian Nightclubs Ltd v City of Glasgow District Licensing Board 1996 SLT 451, Chung v Wigtown District Licensing Board 1993 SLT 1118 and Lazerdale Ltd v City of Glasgow Licensing Board 1996 4 SLLP 16.

 

[16] In my opinion the submissions for the appellants are to be preferred. Having opted to proceed under paragraph (ii) of section 23(5)(e), what the Board had to do was to identify firstly those premises in the locality (in this case Cults) which were of the same or similar description as the premises which were the subject of the present application. It then had to have regard to the number and capacity of these premises. For present purposes (and without expressing a concluded opinion on the point) I am prepared to assume that the Board was entitled to regard all the existing premises in the locality which were licensed for the sale of alcohol for consumption off the premises (that is, off consumption premises) as being of the same or similar description as the subject premises. It is clear from the Board's statement of reasons that it duly identified these existing premises and it evidently had regard to the number and capacity of them. On the assumption stated, so far so good. What the Board then had to do was to consider whether, if the application were to be granted, there would as a result be overprovision of licensed premises of that description in the locality. In so doing it had to have regard to the licensing objectives set out in section 4 of the Act. So far as I can judge, it did not do this. On the contrary, it does not appear from either the statement of reasons or the elaboration of these in the stated case that the Board had any regard at all to the licensing objectives as it ought to have done. Instead it simply concluded, without reference to these objectives, that the addition of the 27.94 square metres attributable to the appellants' premises, equating as it did to a 21% increase in the capacity of off consumption premises in the locality, would constitute a significant increase in the overall capacity of premises of this type in the locality and hence that the addition of the appellants' premises would lead to overprovision. It might have been a different matter if it had been explained, for example, that to have granted the present application would have resulted in a number and capacity of off consumption premises in the locality of Cults which would in turn have created a risk of public nuisance or harm to children - see paragraphs (c) and (e) of section 4(1) of the Act. But nothing of this kind is said in either the Board's statement of reasons or the elaboration of these in the stated case. It follows in my opinion that the Board fell into error with the result that this appeal must be allowed.

 

[17] The remaining question is whether I should remit the case back to the Board for reconsideration of its decision or whether I should reverse this without further ado. That part of the letter of objection to the appellants' application which I have quoted in paragraph [2] above seems to me to be no more than an attempt by the objectors to restrict the competition to their own operation. Needless to say, the prevention or elimination of such commercial competition does not feature among the licensing objectives set out in section 4 of the Act, and so far as I can ascertain from what is said in the stated case there does not appear to have been any other material before the Board which would justify the conclusion that to have granted the present application would have resulted in overprovision having regard to these objectives. In this situation I consider that the Board ought to have granted the application, and I have therefore remitted the case back to it with a direction that it should now do so.

 

[18] It was not in dispute that the expenses of the appeal should follow success. The Dean of Faculty invited me to certify the appeal as suitable for the employment of senior counsel, and he pointed out that this was one of the first appeals in which the issue of overprovision under the Act had arisen, and he submitted further that the issue was of some importance to the appellants. This motion was opposed by the Board's solicitor. For my part, I am satisfied that it was appropriate that the appellants should have engaged the services of counsel to present the appeal. But I intend no discourtesy to the Dean of Faculty when I say that I am not persuaded that it was necessary that the appellants should have employed senior counsel for this purpose. In my opinion a competent junior counsel would have been well able to present the appeal, and I have therefore certified it as suitable for the employment of junior counsel only.