LICENSING CASELAW

Scott Blair, Advocate

Murray Stable

The current Legal 500 entry for Scott says that he has:-

“‘a great depth of knowledge’ in licensing matters, and his work is ‘diligent and timeous’”

INTRODUCTION

First of all, do not be alarmed at the size of this part of the paper! It is not my intention to go through it all. It represents an ongoing survey of developments in licensing case law generally and I hope you will find it useful if you get the time to look over it more fully. If not interesting, then it might still prove useful if you have difficulty in getting to sleep of an evening!

I will deal with some aspects of appeals procedure and I will also pick out some areas of substantive law which I think are of particular importance. I will talk to you in particular about a number of issues which in recent experience have come to the fore when considering the topic of appeals in liquor licensing. These include refusals based on inconsistency with licensing objectives secured by Section 4 of the Licensing (Scotland) Act 2005 and overprovision

As well as looking at some of the few Scottish cases decided so far, I will also look at some of the recent cases decided in England under the Licensing Act 2003 and will offer some observations on possible grounds of challenge under the 2005 Act. I will look at caselaw on civic government licensing under the Civic Government (Scotland) Act 1982.

2005 ACT APPEALS

Under the Licensing (Scotland) Act 1976 there were two main avenues of redress.

Where the Act allowed a specific right of appeal (e.g. refusal of grant, refusal of permanent transfer, suspension etc) - this was to the Sheriff and from there a further right of appeal to the Court of Session. The procedure in the Sheriff Court was by way of summary application.

Where no specific right was given in the Act challenge was by means of judicial review. The most important decision amenable to judicial review was the regular extension decision. The Licensing (Scotland) Act 2005 changes the appeal landscape. It makes important changes in respect of the continuation of a licence pending the appeal. Judicial review may become important in a range of contexts.

It is fair to say that the Stated Case procedure has attracted few supporters. It was the subject of criticism by Sheriff Powrie in the decision in Shafiq v. North Lanarkshire Licensing Board [2009] 42 SLLP 24 to which I will come and it has I understand also been the subject of comment from Sheriff Principal Taylor at Glasgow Sheriff Court.

In view of those concerns and other comments the Licensing Law Sub-Committee of the Law Society raised with the relevant Committee of the Scottish Parliament the possibility of reverting to the old form of Summary Application.

Happily as a result of that intervention there will be a reversion to summary application procedure. Section 194 of the Criminal Justice and Licensing (Scotland) Act 2010 deletes the reference to appeal by way of Stated Case. Section 194 came into effect as at 13 December 2010 as a result of Criminal Justice and Licensing (Scotland) Act 2010 (Commencement No. 6, Transitional and Savings Provisions) Order 2010.

We are back to summary application procedure for decisions made on or after 13 December 2010.

You have 21 days to lodge an appeal with the Sheriff Clerk, the time runs from the date of decision or if requested the date of any Statement of Reasons.

Beyond that procedure that will apply will be along the lines of the 1999 Act of Sederunt which governed appeals under the 1976 Act. See now for the new procedure paragraph 9 of the Act of Sederunt (Sheriff Court Rules) (Miscellaneous Amendments) (No. 2) 2010 SSI 2010/416.

There are some issues here. Is a late appeal competent? One has 21 days to lodge the appeal but it is not clear if one can extend that. It would probably depend on the view as to whether the time limit was mandatory or directory. I also have concerns over whether a strict deadline would be ECHR Article 6 compliant. The one case to date suggests, happily, that a late appeal might be competent-Ponton v. Edinburgh Licensing Board, 31 August 2010, a decision of Sheriff Principal Bowen QC.

Also there is nothing on intimating the appeal on objectors which was commonplace under the 1976 Act. As the 1999 Act of Sederunt still applies for “default matters” the Sheriff probably has a discretion on whom the summary application is to be intimated.

There is no special style of summary application to be used so one should have regard to existing styles and forms of averment and plea in law which are tried and tested!

Summary procedure is meant to be summary and most appeals will turn on the Statement of Reasons. Oral evidence will be required but rarely. Usually evidence arises where there is a dispute on incorrect material fact or allegations of bias (e.g. what a councillor said at the Board).

Appeals are not a forum for re-running the merits of a case and evidence cannot be used to improve on the merits of a submission! The grounds of appeal remain error of law, unreasonable exercise of discretion, breach of natural justice and incorrect material fact.

Incorrect material fact does not allow one to re-argue the merits. It is a more limited exercise.

What is the content of the power to uphold appeal based on incorrect material fact? Is a mistake as to material fact confined to mistake as to the evidence before the board? That is if they found X as a fact when no material before them to justify that finding, that was a mistake as to material fact.

Or is it an error as to a fact which can be shown to be wrong by later incontrovertible evidence. If two competing versions and Board plump for one that was not true, that may be an incorrect material fact. The Court of Appeal in England seemed to incline to this view - see E v. Secretary of State for the Home Department [2004] EWCA Civ 49. Provided that the later evidence is clearly correct then it can cast light on whether an earlier decision proceeded on an incorrect material fact.

An example might be an overprovision argument - if objectors came in and said “50 licensed premises within 300 metres of premises”. Applicant said “20 such premises”. If Board found that were 50 could that not challenge that before the Sheriff Principal? Number of premises is surely the sort of thing that could be established by later incontrovertible evidence. But one consequence of this is that for each hearing where there is dispute as to fact there may be two hearings of evidence.

For recent Shrieval consideration of the scope of appeal for incorrect material fact see the decision of Sheriff Holligan in Habib v. Central Fife Regulation Sub-Committee, 2008 SLT (Sh Ct) 57. This was an appeal under the Civic Government (Scotland) Act 1982. Error of material fact does not mean a chance to re-run the merits of the matter.

There the subcommittee of a licensing authority granted an application by local police to reduce the opening hours of fast food premises following alleged trading outside of the core hours. The licence holder of the premises appealed, submitting that the appeal proceeded pursuant to paragraphs 18(7) (b) and 18(8) of Schedule 1 to the 1982 Act.

The defenders opposed the leading of evidence maintaining that the correct approach was to look at their reasons and only allow such a process where the pursuer had shown that there was prima facie an incorrect material fact.
Sheriff Holligan held that the evidence had to relate to one of the grounds of appeal and that it was not a general right to lead evidence but a right which had to be relevant to a particular ground of appeal. It was that not only had there to be material fact but the respondents had to have reached their decision on the basis thereof, and the evidence did not truly relate to incorrect material fact before the defenders, but rather that the events themselves were other than what the respondents decided. Paragraph 18(7) (b) did not permit the appellant, in effect, to re-litigate the whole matter. This approach was followed in another 1982 Act case-Anderson v. Glasgow City Council, 10 May 2010, unreported.

Lastly the Sheriff has the power on upholding an appeal to substitute his own decision for that of the board under section 131(5) (c). Given the quasi political, local knowledge type of decision, may be unlikely that will be widely used – but that will depend on the particular decision maker and the facts of the case. For a recent examination of the power or remit and when it should be used see Sheriff Holligan (test purchase case) in Alldays Ltd v. Central Fife Divisional Licensing Board [2007] 37 SLLP 34. This was a 1976 Act appeal but I think what he says will be relevant to the 2005 Act as well. He said at paragraph 27 that:

It is axiomatic that section 39(6) can only come into operation when the appeal is allowed. The basis for allowing an appeal is set out in the four grounds in section 39(4). It is often the case, as it is here, that the facts may support one or more of the statutory grounds of appeal. The authorities establish quite clearly that, on upholding the appeal, the court then has a discretion as to whether to remit the matter to the Board for reconsideration (together with reasons) or whether to reverse or modify the decision. There is nothing in this subsection itself which gives guidance as to which of the two disposals should be followed. In my opinion, in determining which disposal to adopt the court will have regard to the basis upon which the appeal is allowed. There are dicta in Matchurban and Risky Business Ltd ("strong and compelling reasons"; "fairly unusual cases"; the Board is the "body upon which the function of deciding such matters is conferred") which might suggest there is some preference, or even a presumption, in favour of sending matters back to the Board for reconsideration. However, I do not think that is the case. In both William Hill (Scotland)Ltd and Matchurban, it appears that the Boards had information which they failed to impart to the appellants. The appellants had not the opportunity to comment on that information. The court held the Boards might or might not have granted the applications but that could only be determined when the Boards had the whole information before them. It is therefore not surprising that the matters went back to the Boards for reconsideration. Botterills was a case where a view was taken that the particular Board could not be sufficiently detached and thus the matter could not properly go back to the Board. In both Leisure Inns Ltd and Risky Business Ltd the court came to the conclusion that there was no material which would justify the Board in refusing the applications. Risky Business Ltd also involved an analysis of the reasons of the Board and whether it was just a question of reformulation of reasons. In both cases, a remit was not appropriate. I do not think that the reference to "unusual cases" in Risky Business Ltd means that the cases should normally be remitted back. It is perhaps more a reflection that there may be relatively few cases where it can be said that there is no material, and so on, which would entitle the Board to reach its conclusion.

There may even occasionally be the subject of an agreement between parties as to what is an appropriate alternative disposal although there may be issues as to whether parties can agree a disposal which can in any way bind the court.

There is a further appeal to the Court of Session on a point of law. There is a right of appeal on a point of law alone under section 132(6). Presumably any order recalling the Board’s decision continues. But if the full appeal proceeds with the suspension or revocation in place it may be possible to appeal to the Court of Session and seek an interim order ending this. It may be easier to do so if any stateable ground of appeal exists and also because the time delay in a Court of Session appeal would put even the most robust business under.

In a review case where a sanction has been imposed there is an additional basis of challenge in proportionality. For the grounds of appeal more generally see Section 131(3) (a) of the Act and on proportionality section 131(3) (b) and section 131(4).

If an appeal is upheld the Sheriff can reverse the decision, remit for reconsideration or reach any decision that the Board could have reached-see section 131(5).

More and more appeals are now coming through the system particularly as Boards are now hearing applications for reviews and the sanctions imposed as a result are challenged. There have only been a few appeals against refusal of applications to date, but that will probably change, especially as we begin to see more variation applications coming on stream. The legal issues arising from application appeals and variation appeals are likely to be similar, not least because the application procedure, hearing procedure and grounds of refusal are pretty similar.

Also given the limited rights of appeal available to objectors it is likely that we shall begin to see challenges being brought by judicial review as well. The recent overprovision case from Prestwick-“Buzzworks”- is an example.

LICENSING OBJECTIVES-EMERGING CASELAW

In the case of Kaur v. City of Glasgow Licensing Board, 26 February 2010, reported at page 14 of issue 44 of SLLP, Sheriff Scott overturned a decision of the Board to refuse an application to convert to a premises licence on the grounds of inconsistency of the crime and disorder and public nuisance objectives for off-sales premises. There the applicant sought hours between 10am and 10pm. This application was the subject of two objections directed at the grant of hours during the period from 8pm to 10pm. It was claimed that the premises when closed at the earlier time had operated well and that later opening had caused an increase in anti-social behaviour. However in his Anti-Social Behaviour Report the Chief Constable reported that since the premises had reverted back to remaining open at 10pm there had been no evidence for a corresponding rise in anti-social behaviour in the area.