Business premises – Shadow licence – Section 16(1)(a) of the Licensing Act 2003 – Defendant local authority refusing to grant shadow licences to claimants – Claimants applying for judicial review – Whether defendants properly finding failure to satisfy threshold criteria for licences – Whether defendants lawfully delegating decision to licensing services manager – Applications granted
The second claimant was the freehold owner of two nightclub premises in Guildford covered by licences granted in respect of licensable activities under the Licensing Act 2003. The tenant of the clubs and holder of the licences was L Ltd. The two club premises, although run as distinct undertakings, were within the same building. The first claimant was the trading company of second claimant and ran one club prior to L Ltd taking over in May 2012. The first claimant continued to be an active trading company, employing staff and receiving rent from the second claimant and paying all its running costs and expenses.
In May 2012, the claimants applied to the defendant local authority for shadow licences in respect of the two premises. The term shadow licence was not defined by statute or regulation but was a licence obtained by one party in respect of premises in relation to which another licence had already been granted to someone else. The claimants wished, for commercial reasons, to have the benefit of licences operating in parallel to those held by L Ltd.
The defendants refused the claimants’ applications on the basis that they had failed to satisfy the terms of section 16 of the 2003 Act, compliance with which was a pre-condition of the consideration of any application for a premises licence. Section 16(1)(a) provided that the persons who might apply for a premises licence was one who carried on, or proposed to carry on, a business which involved the use of the premises for the licensable activities to which the application related.
The claimants applied for judicial review of the defendants’ decisions. The defendants accepted that circumstances might arise in which a shadow licence could lawfully be granted but contended that such circumstances did not arise on the facts of the present case. The questions for the court were: (i) whether the defendants had erred in finding that the claimants had not satisfied the section 16(1)(a) threshold criteria; and (ii) whether delegation of the decision whether to allow the applications to the defendants’ licensing services manager had been unlawful.
Held: The applications were granted.
(1) A wider approach to the interpretation of section 16(1)(a) facilitated the policy aims of the 2003 Act which was intended to provide a more efficient, responsive and flexible system of licensing which did not interfere unnecessarily. It aimed to give business greater freedom and flexibility to meet the expectations of customers and to provide greater choice for consumers whilst protecting local residents from disturbance and anti-social behaviour. The applicant for a shadow licence might have legitimate business, or other, reasons to include some details of the relevant licensable activity not included in the original primary licence and the automatic exclusion of such applications from further consideration under section 16(1)(a) would celebrate the triumph of bureaucracy over common sense. The proper control mechanism for such applications should involve the considered application of policy rather than the operation of a mechanistically applied threshold condition. The parameters of a broader interpretation were contained in section 1(1) of the 2003 Act which categorised licensable activities. In order to satisfy section 16(1)(a), the applicant had to be a person who carried on a business involving the use of the premises to which the application related for licensed activities as listed under section 1(1) for which the premises were used: R (on the application of Daniel Thwaites plc) v Wirral Borough Magistrates’ Court [2008] EWHC 838 (Admin); [2008] PLSCS 138 applied.
(2) Applying that approach to the present case, in relation to the second claimant, the defendants had been wrong to decide that section 16(1)(a) of the Act applied so as to exclude the second application from further consideration. The differences that had been relied on had not related to the categories of licensable activity, but merely to details such as the provision of doormen etc. The discrepant area with respect to the first application still fell within premises used by the second claimant as landlord, but was merely covered by a different primary licence held by L Ltd. It mattered not, for the purposes of the application of section 16(1)(a), whether the shadow licence application covered an area entirely co-incident with any given primary licence. So long as the extent of the shadow licence application did not stray beyond the parameters of the premises used by the claimant as a business and that the matching categories of licensable activities were carried out under the primary licenses relating thereto, the threshold of section 16(1)(a) was surmounted. Therefore, the defendants had been wrong to conclude that section 16(1)(a) precluded the first application from further consideration. Accordingly, the defendants would be ordered to proceed with the two applications on the basis that they passed through the section 16(1)(a) gateway.
(3) The first claimant was not the landlord of the premises and arguably operated at a further stage removed from the business which actually used the premises for the licensable activities to which the application related but that did not mean that its applications had to be automatically excluded from consideration by the operation of section 16(1)(a). That was an issue upon which the decision maker and not the court had to be the final arbiter acting within the constraints of public law. However, the reasons given for finding that it had not satisfied the threshold criteria of section 16(1)(a) were flawed. The decision whether the first claimant had been carrying on a business which involved the use of the premises for the licensable activities to which the application related had been wrongly based on the assumption that there had to be virtual equivalence between the scope of the activities actually carried out and those in respect of which the application had been made. The decisions relating to the first claimant’s applications, therefore, had to be quashed and considered afresh.
(4) The defendants would not have acted in breach of the provisions of section 10 of the Act, which dealt with the sub-delegation of the functions of the licensing committee, if they had actually authorised the committee to arrange for the relevant function to be delegated to an officer of the licensing authority and the committee was entitled to permit a determination under section 18(3) where no representations had been made. However, they had failed to authorise the single officer to determine issues arising under section 16(1). Accordingly, the decision on section 16 ought not to have been determined by the manager alone and had to be quashed on that further basis.
James Rankin (instructed by Direct Access) appeared for the claimants; James Findlay QC (instructed by Guildford Borough Council) appeared for the defendants.
Eileen O’Grady, barrister
