Scottish Sheriff Court Decisions

B1665/09

 

SHERIFFDOM OF GLASGOW AND STRATHKELVIN AT GLASGOW

 

J U D G M E N T

by

C A L SCOTT, Advocate, Sheriff of Glasgow and Strathkelvin

in causa

BRIGHTCREW LIMITED a company incorporated under the Companies Act and having its registered office at 161 Tottenham Court Road, London W1T 7NN

APPELLANTS

against

THE CITY OF GLASGOW LICENSING BOARD, City Chambers, Glasgow

RESPONDENTS

 

GLASGOW, 12 May 2010. The Sheriff, having resumed consideration of the appeal, answers both of the questions posed in the stated case in the negative and refuses the appeal; finds the appellants liable to the respondents in the expenses of the appeal; allows an account thereof to be given in and remits same, when lodged, to the auditor of court to tax and to report thereon; and certifies the appeal as being suitable for the employment of senior counsel.

 

 

 

 

 

SHERIFF

 

 

NOTE:

Introduction

[1] This is an appeal under the Licensing (Scotland) Act 2005 against a decision of the City of Glasgow Licensing Board (hereinafter referred to as "the board") dated 15 May 2005. In terms of their decision, the board refused an application for a premises licence (conversion) in respect of premises at 24 Drury Street, Glasgow.

[2] The application was refused on the grounds specified in section 23(5)(c) of the 2005 Act having regard to the licensing objectives of (i) preventing crime and disorder and (ii) protecting and improving public health. Separately, the application was refused under section 23(5)(d) of the Act, on the basis that the premises were considered unsuitable for use for the sale of alcohol.

[3] The premises in question are known as "Spearmint Rhino". Counsel for the appellants stated that they had operated for a number of years as an adult entertainment venue known as the Truffle Club. It was stated that the premises had never been the subject of any form of complaint whether by the police or anyone else. These assertions were not challenged by senior counsel for the board.

[4] At the outset of the appeal hearing, a preliminary dispute arose in relation to the scope of the arguments to be presented on behalf of the appellants. At an earlier stage in the appeal procedure, they had sought to lodge a second note of adjustments to the stated case encompassing a series of additional questions for consideration by the court. After a hearing in chambers, the note was refused as incompetent.

[5] Counsel for the appellants, nevertheless, maintained that he should be allowed to raise the issues identified in the foregoing note of adjustments during the course of the appeal hearing. Senior counsel for the board objected to that approach. In the event, the court decided to exercise its discretion in favour of the appellants in terms of rule 3.34.7(2) of the Act of Sederunt (Summary Applications, Statutory Applications and Appeals etc Rules) Amendment (Licensing (Scotland) Act 2005) 2008. That provision allows any party to raise questions of law in the hearing of an appeal and the court took the view that what the appellants were, in reality, seeking to do, was to raise questions of law in the course of argument.

[6] Senior counsel for the board sought an adjournment to consider her position. When the court reconvened, she indicated that, whilst she did not seek to have the appeal hearing discharged, she reserved her position on such a recourse, depending upon the extent to which the appellants' submissions were developed in argument. Accordingly, counsel for the appellants commenced his submissions in support of the appeal.

 

Appellants' submissions

[7] Those submissions had been committed to writing and, for ease of reference, a copy thereof is appended hereto, as is a copy of the appellants' written submissions presented on the third day of the appeal and prepared in response to the submissions advanced by senior counsel for the board.

[8] Counsel for the appellants submitted that the board had erred in law et separatim exercised their discretion in an unreasonable manner in that they (a) applied the wrong tests to the consideration of the application for a premises licence and (b) took account of material which did not properly support the refusal of the application. He submitted that the board "thereby reached a decision for which there was no proper basis in fact".

[9] Separately, in the event that the material relied upon by the board did provide a proper basis for refusal of the application, counsel argued that there was no adequate reasoning to justify why it was said that the particular material supported the decision to refuse the application.

[10] Counsel for the appellants made reference to the transcript of the hearing, a report from Licensing Standard Officers and the board's statement of reasons. He visited certain of the 2005 Act provisions and went on to analyse the incidents which he submitted, had been taken into account by the board in determining to refuse the application under reference to section 23(5)(c) of the Act. Insofar as the board's decision to refuse the application was based upon any suggested inconsistency with the named licensing objectives, counsel submitted that it should not be allowed to stand.

[11] Counsel also attacked the second ground of refusal under section 23(5)(d). He argued that, in effect, the board had introduced a non-statutory basis for refusal of the application, namely, unsuitability of premises for use for the sale of alcohol because of non-compliance with a policy. Counsel observed, in that connection, that it was not the function of the board to act as "unpaid members of the health and safety executive". He submitted that the board were wrong to lay down compliance with their policy or code of practice as being a requisite of a licence being granted. The basis for determination of a premises licence application was set out in section 23 of the Act. Nowhere within that section was any reference made to compliance or otherwise with a licensing board's policy or code of practice.

 

Board's submissions

[12] The response by senior counsel for the board was coloured by the view that the appellants' submissions had evolved into an "ultra vires" challenge to the board's determination of the application. The court expressed some doubt about that proposition and it also appeared that counsel for the appellants distanced himself from that line of argument. Nevertheless, senior counsel persisted in developing her submissions to meet such an argument. For the record, having had the opportunity to reflect upon matters, I have concluded that an ultra vires challenge did not properly form part of the appellants' submissions in the appeal. (I shall go on to discuss the actual scope of the argument presented on behalf of the appellants at a later stage in this note).

[13] Senior counsel for the board pointed out that the policies which now formed the subject of challenge by the appellants had been specifically accepted by them. Such acceptance gave rise to questions of acquiescence or waiver. Certain undertakings regarding compliance with the board's code of practice had been given on behalf of the appellants. Under reference to the work on Judicial Review by the late Lord Clyde and Denis J Edwards together with the case of Hanlon v Traffic Commissioners 1988 SLT 802, senior counsel submitted that the effect was to preclude any challenge, at this stage, to the vires of the board's policy or to an absence of justification or to the existence of inadequate reasons within the stated case explaining the rationale of the policy. She ultimately characterised the appellants' approach as "an impermissible, collateral attack" but maintained that the board did not require to provide an underlying rationale for their policy. It was argued that all they required to do was to apply the policy.

[14] Aside from issues of acquiescence or waiver, senior counsel's core submission was founded upon the notion that the board now operated within a new, tripartite legislative scheme involving the 2005 Act itself, ministerial guidance and the board's own statement of policy. The policy document was said to be integral to that scheme. Senior counsel embarked upon a consideration of various sections within the 2005 Act. She focused on section 4 of the Act which dealt with the licensing objectives. This demonstrated that the new 2005 Act regime was "policy imbued". There was, submitted senior counsel, a greater and pro-active role for the licensing authority when compared to the 1976 Act approach.

[15] It was submitted that the matters to which the board were obliged to have regard carried with them a "wider reach" as senior counsel put it and that there was a "wider remit" in the objectives which the board were enjoined to pursue. Senior counsel referred to the significance of an operating plan as defined within section 20 of the 2005 Act. Such a plan was required to contain, inter alia, a description of the activities to be carried on in the premises and, in terms of section 20(4)(h) "such other information in relation to the premises and the activities to be carried on there as may be prescribed."

[16] Reference was made to section 23 of the Act dealing with the determination of an application and section 27 concerning every premises licence being subject to conditions, especially those specified in schedule 3 to the Act. The conditions in schedule 3 were mandatory. Senior counsel referred, in particular, to paragraphs 2, 3, 7 and 8 dealing, inter alia, with the pricing of alcohol and irresponsible drinks promotions. Additionally, the Scottish ministers might, by regulations, "add such further conditions as they consider necessary or expedient for the purposes of any of the licensing objectives". It was open to a premises licence holder to apply for variation of any of the licensing conditions (section 29) or to any person to seek a review of the premises licence on certain grounds (section 36(3)). It was, submitted senior counsel, plain that the board's policy was incorporated by way of these licence conditions and that there had been what senior counsel described as a "classic breach" of the licence by the appellants.

[17] Senior counsel then turned to the guidance issued by Scottish ministers at parts 1, 2 and 4. She stressed that, in terms of section 142 of the 2005 Act, each licensing board was required to have regard to the guidance. The board were obliged to produce a statement of licensing policy. A consultation exercise had been undertaken prior to the articulation of the board's policy. The appellants, therefore, had been availed of the opportunity to participate in that consultation process. Senior counsel suggested that all statements of licensing policy were required to promote the five licensing objectives to be found in section 4 of the Act. She concluded that the creation, by a licensing board, of a policy, thereby attained the licensing objectives.

[18] Senior counsel submitted that having regard to the activities sought to be authorised by a premises licence, if such activities could be carried on in a manner consistent with the licensing objectives then the licence fell to be granted. If, on the other hand, the activities were inconsistent with the objectives, the application for a licence would be refused. Senior counsel argued that part of testing the consistency or inconsistency of activities involved assessing compliance with the statutory policies which the board produced to secure furtherance of the licensing objectives. She stressed that the board were obliged to produce a section 6 policy statement.

[19] Insofar as the appellants asserted that the board had erred in looking at their code of practice and thereby misdirected themselves, that was, senior counsel maintained, yet another misapprehension on their part as to the nature and effect of the interlocking parts of the legislative scheme. Reference was made to p 11 within the appellants' written submissions where counsel had suggested that the board's approach was along the lines that the incidents were to be tested against compliance with the code of practice not against the statutory grounds for refusal themselves. Senior counsel contended that, in no sense, was it an error of law for the board to have regard to its code of practice. It was wrong to suggest that that constituted a failure to apply the correct statutory test.

[20] Senior counsel further submitted that the court was dealing with the issue of administrative decision making. When a board was making a decision as to whether an application for a premises licence was or was not consistent with the licensing objectives, it was, argued senior counsel, making a qualitative assessment which, principally, involved consideration of questions of fact. In such a case, the appropriate challenge to the decision ought to take the form of a Wednesbury type challenge which amounted to determining whether the assessment made by the board was one that no reasonable board properly directing itself could have made. In this connection, senior counsel for the board referred to the cases of Cashley v City of Dundee District Council 1993 SC 543, R (on the application of 4 Wins Leisure Ltd v Licensing Committee for Blackpool Council [2007] EWHC 2213 (Admin), 31 August 2007 and Puhlhofer & Anr v Hillingdon London Borough Council [1986] 1 AC 484.

[21] In applying the principles set out in those cases to the determination of the board in this case, senior counsel reiterated that, in her submission, whether a step or policy was to be determined as promoting a licensing objective was a qualitative assessment of the very kind considered in the three cases referred to. It was, essentially, a factual determination. In the present context, it was particularly qualitative because of the general and broad way in which the licensing objectives were expressed in the statute. Senior counsel described the use of the word "objectives" as "open-ended language". The qualitative nature of the exercise was emphasised when one had regard to the articulation and application of "policies" which, by their very nature, would be "more open-textured" than, for instance, anything to be found within the four walls of a statutory definition. Accordingly, senior counsel maintained that this all led to a licensing board being vested with a greater or wider discretion when it came to making these qualitative assessments and, in this case, the assessment whether a particular step or policy would further a particular licensing objective. A licensing board benefited from an exceptional wide vires.

 

Decision

[22] Whilst the appeal, as argued, on both sides of the bar, provoked discussion of a variety of issues, the central proposition advanced on behalf of the appellants was that, when a licensing board came to give consideration to an application for a premises licence under section 20 of the 2005 Act, it ought to be solely concerned with issues directly related to the sale of alcohol. That sort of approach is readily understandable. Section 20 itself is imbued with that particular consideration. Therefore, the thrust of the appellants' attack upon the board's decision was directed at the reliance upon those aspects of the board's licensing policy statement which, it was argued, bore no true relevance to the sale of alcohol.

[23] In my view, in relation to the board's refusal of the application under section 23(5)(c), the challenge to that decision is in the nature of what has become known as a Wednesbury challenge. That is confirmed under reference to p 7 of the appellants' written submissions and whilst senior counsel for the board's position was, on occasions, difficult to follow, (at one stage, she submitted that there was "no real, separate Wednesbury challenge") she, ultimately, confronted the appellants' argument, on that very basis, under reference to the cases of Cashley et al to which I shall return.

[24] I should place on record that the broad position adopted on behalf of the appellants did, indeed, appear to be favoured with a significant portion of common sense. Counsel for the appellants submitted that the board had to focus on whether there were "good reasons grounded in the statute as to why alcohol should not be sold from the premises". He argued that the invocation of policy considerations without any regard to the question of "cause and effect" was capable of producing absurd results. For instance, had no kettle been provided for the use of dancers on the premises that would give rise to a breach of the board's code of practice and, in turn, might be used to found a refusal of an application.

[25] The preamble to the 2005 Act, in my opinion, undermines the appellants' central proposition regarding the need to focus upon the sale of alcohol and not beyond. The Act is said "...to make provision for regulating the sale of alcohol, and for regulating licensed premises and other premises on which alcohol is sold; and for connected purposes." The preamble is, in effect, replicated at paragraph 15 of the ministerial guidance document. Therefore, the Act itself is not merely "about regulating the sale of alcohol". It is, additionally, designed to make provision "...for regulating licensed premises and other premises on which alcohol is sold."

[26] The analysis of the way in which the 2005 Act operates requires to be taken further. The Act itself makes it obligatory for every licensing board to publish a licensing policy statement (see section 6); section 142 of the Act provides for the issue of ministerial guidance to licensing boards and obliges each board to have regard to such guidance; and certain conditions can be attached to premises licences (see section 27). Senior counsel for the board in the present appeal referred to all of these features as substantiating her submission to the effect that the 2005 Act had created an interlocking, schematic arrangement with a far broader impact than the old 1976 Act legislation. In my view, it is, impossible to escape that conclusion.

[27] Turning to the way in which the board actually dealt with the application, for the purpose of their refusal under section 23(5)(c), they relied upon the proposition that the granting of the application would be inconsistent with the licensing objectives of protecting and improving public health and preventing crime and disorder. The board's licensing policy statement had been formulated in direct compliance with its statutory duty. In particular, the board were obliged to ensure that the stated policy sought to promote the licensing objectives set out in section 4 of the Act. (There was no suggestion on the part of the appellants that, in publishing their policy statement, the board had done anything other than comply with section 6 of the Act.)

[28] Against that statutory background, it cannot be said that the board's consideration of the incidents highlighted by the Licensing Standards Officers, with specific reference to the board's policy, was anything other than legitimate in the circumstances. Senior counsel for the board argued that they could not be criticised for simply applying that policy. As a matter of legal principle, I consider that proposition to be too stark; the existence of a policy can never exclude the free and proper exercise of a discretionary power. However, I find views such as those expressed by Lord Prosser at p 413D-H in the case of Texaco Ltd v North Lanarkshire Licensing Board 1998 SC 408 to be highly persuasive in the context of the present appeal.

[29] Indeed, Lord Prosser described the discretion vested in a licensing board by way of section 17(1)(b) of the 1976 Act as being "wide". Whilst it may be a matter of degree, I have the impression that the test for refusal under section 23(5)(c) viz. inconsistency "with one or more of the licensing objectives", involves an even wider discretion being conferred upon licensing boards under the 2005 Act. The licensing objectives are, themselves, very broad in nature and, when taken along with the use of the adjective "inconsistent" in section 23(5)(c), what emerges, as senior counsel for the board submitted, is an exceptionally wide vires.

[30] I agree with the board's argument that they were, in effect, being called upon to arrive at a qualitative assessment of the material before them including the fact that there were admitted breaches of the code of practice. All that being so, the passages referred to by senior counsel for the board in the cases of Cashley, 4 Winds Leisure and Puhlhofer are of particular relevance. It was, in my opinion, for the board to make its own assessment of the material before it. Equally, the significance to be attached to breaches of the board's code of practice was a matter for the board. The code of practice being specifically designed to promote the licensing objectives, in determining whether the granting of an application would be inconsistent with one or more of those objectives, the board were perfectly entitled to reflect upon breaches of that code. Moreover, it was for the board to decide what weight should be attached to those breaches whether taken in isolation or cumulatively. There is clear authority for the proposition that those types of decision fall to be left to the administrative body to whom, in this case, the Scottish Parliament had entrusted the decision making power, viz. the licensing board.

[31] One exception to the principle of non-interference by the courts would be where, as Lord Brightman put it in the Puhlhofer case, there is "unreasonableness verging on an absurdity". I am satisfied that, in the present case, the board's approach under section 23(5)(c) cannot be so characterised. The stated case, which largely encapsulates the original statement of reasons, to my mind, provides a tenable foundation for the board's determination of the application. Whilst, for instance, the court might have reached a different view on a member of staff's apparent lack of awareness regarding a risk assessment that is of no moment for present purposes. (See the cases of Ranachan v Renfrew District Council 1991 SLT 625 and Hughes v Hamilton District Council 1991 SC 251). In my judgment, it cannot be said that the licensing board in this case had taken a decision under section 23(5)(c) of the 2005 Act which was so unreasonable that no properly directed licensing authority could have arrived at it. Accordingly, that aspect of its decision requires to be upheld and the appeal must fail.

[32] However, with regard to the board's reliance upon section 23(5)(d), I consider that the appellants' argument does have merit. In that subsection, consideration of consistency or otherwise with licensing objectives is of no relevance. Accordingly, in my opinion, the board's reliance upon its policy or code of practice is, in that context, illegitimate. Indeed, the final paragraph of the stated case exposes the inherent difficulty with the board's position. Read shortly, the board considered that the premises were unsuitable for use for the sale of alcohol having regard to the nature of the activities proposed to be carried on there. The board expressed the view that the premises could only be considered suitable were the board satisfied that its policy on adult entertainment would be complied with. [33] Insofar as the board's policy or code of practice was founded upon for the determination of the appellants' application, I agree with counsel for the appellants' submission to the effect that it was palpably irrelevant to the test under section 23(5)(d). The proper application of this statutory test, in my opinion, ought to have resulted in the conclusion that the nature of the activities proposed to be carried on in the premises did not render them unsuitable for use for the sale of alcohol. There was no material before the board from which they could infer that the premises were unsuitable for use for the sale of alcohol, the health and safety of dancers, for instance, being an entirely separate area of responsibility when it comes to the grounds of refusal under section 23(5)(d). In my judgment, the way in which the board relied upon section 23(5)(d) constituted a decision which was unreasonable in the Wednesbury sense.

[34] For completeness, I do not agree with senior counsel for the board's submissions regarding waiver or acquiescence. It seems to me that the appellants' acceptance of the board's policy does not thereby prevent the application of that policy (as justification for refusal) being challenged on appeal. It is not difficult to imagine circumstances in which an applicant might feel compelled to offer compliance with a board's policy rather than prejudice what might be a perfectly sound application for a licence.

[35] Similarly, I was not persuaded by the appellants' argument to the effect that the board had failed to provide proper reasons for their decision. The reasons given were adequate. The issue for the court to determine was whether the stated reasoning was flawed.

[36] In the course of his submissions, counsel for the appellants read out passages from the transcript of proceedings. The tenor of remarks made by the chairman of the board is to be deprecated. The transcript disclosed the clear possibility that the board had "set its face" against applications of this nature for reasons which appeared to have no direct bearing upon the sale of alcohol. Whilst the impartiality or otherwise of the board did not feature as a substantive ground of appeal, it is only right that the court should expressly discourage decision making which might be founded upon preconceptions. The function of a licensing board is to determine applications under the 2005 Act. Should that involve consideration of its own policy or code of practice, the board's approach must nevertheless be a balanced one.

[37] For the reasons set out above, the appeal has been refused. The board are, therefore, entitled to the expenses. I have also certified the appeal as being suitable for the employment of senior counsel.