CO/4368/2004 
Neutral Citation Number: [2005] EWHC 464 (Admin)
IN THE HIGH COURT OF JUSTICE 
QUEEN'S BENCH DIVISION  
DIVISIONAL COURT 
Royal Courts of Justice 
Strand
London WC2 

Thursday, 3rd March 2005
 
B E F O R E:

LORD JUSTICE MAURICE KAY 

MR JUSTICE MOSES 

- - - - - - -
DAVIES
(CLAIMANT)

-v- 

CARMARTHENSHIRE COUNTY COUNCIL
(DEFENDANT) 
 - - - - - - -

Computer-Aided Transcript of the Stenograph Notes of 
Smith Bernal Wordwave Limited
190 Fleet Street  London EC4A 2AG
Tel No: 020 7404 1400 Fax No: 020 7831 8838
(Official Shorthand Writers to the Court)
 - - - - - - -

MR R KIMBLIN (instructed by Edwards Geldard) appeared on behalf of the CLAIMANT
MS C RICHARDS (instructed by Carmarthenshire County Council) appeared on behalf of the DEFENDANT
 - - - - - - -

J U D G M E N T 

1.	LORD JUSTICE MAURICE KAY:  This is an appeal by case stated coming from the Justices for the commission area of Dyfed Powys.  The appellant was prosecuted, the allegation being that on 16th July 2003 at the Spar Stores, Water Street, Kidwelly, she had sold in licensed premises intoxicating liquor, namely Red Square Red Vodka, to a person under the age of 18 years, namely 15 years, contrary to section 169 of the Licensing Act 1964.
2.	The background to the case was that the appellant was the manageress of the Spar Stores.  The stores were owned by a company of which the regional manager was a Mr Bailes, and both the appellant and Mr Bailes were joint licensees.  The sale effected on 16th July 2003 was actually effected by a young woman, Hayley Fisher, who was employed as a sales assistant.  The transaction was in the nature of a test purchase arranged by Trading Standards Officers using underage purchasers, including the 15-year old girl who purchased the particular liquor in this case.  
3.	The appellant, Mr Bailes and Hayley Fisher were all prosecuted.  Hayley Fisher pleaded guilty.  Mr Bailes and the appellant pleaded not guilty and sought to establish the due diligence defence.  At this stage it is appropriate to refer to the legislation.  By section 169(1) it is provided that, subject to another provision which is inapplicable in the present case: 
"In licensed premises the holder of the licence or his servant shall not ...sell intoxicating liquor to a person under 18."  
The statutory defence which was available to the appellant and Mr Bailes, but not to Hayley Fisher, is provided in subsection (4)(b) in these terms: 
"Where the person charged with an offence under subsection (1) of this section is the licence holder and he is charged by reason of the act or default of some other person, it shall be a defence for him to prove that he exercised all due diligence to avoid the commission of an offence under that subsection." 
4.	The evidence heard by the Magistrates resulted in these findings of fact that are set out in the case stated: 
"The appellant ... was at all material times the line manager of Hayley Fisher, and was the person responsible for her training and direction in her day to day duties.  The appellant was unable to prove to our satisfaction on a balance of probabilities that she exercised due diligence as the store manager to prevent the offence.  [The Company] had adequate systems in force designed to prevent sales of alcohol to persons under the age of 18.   
The systems included a looseleaf book called the 'Introduction to Convenience Retailing' which included in section 2 under the heading of 'Legalities' an explanation of the law in respect of underage sales.  The systems in place also included the provision of information by way of a staff handbook which explained the law in respect of underage sales.   
There was a 'due diligence' information sheet which was designed to ensure that employees have been updated with all current legal requirements, including those relating to the sale of alcohol.  The appellant did not act with sufficient authority or leadership to bring to bear the important provisions of the licensing laws and the need to ensure that persons under the age of 18 years were not sold intoxicating liquor."
5.	Having rehearsed the evidence of the various witnesses, the Justices concluded the case statement with these conclusions: 
"We were of the opinion --  
(a) That the appellant's employers had introduced adequate systems that, if properly implemented, would have been sufficient to prevent offences under the Licensing Act 1964 ... 
(b) That there was a breakdown in the procedures and systems designed to prevent offences, and that the appellant was responsible for such breakdowns. 
(c) That the company procedure for an 'exam' of Hayley Fisher's knowledge about the Licensing Act 1964 provisions was not implemented because the appellant was not sufficiently motivated to ensure that the importance of the provisions was properly understood by this employee for whom she had direct responsibility. 
(d) That the appellant, if she had any concerns in relation to the prevention of offending, was more concerned about escaping culpability for any offending rather than a real wish to act substantially to ensure that Hayley Fisher, a employee for whom she had responsibility, did not serve persons under the age of 18 years. 
(e) That the appellant permitted Hayley Fisher to undertake sales on the till before she had signed the 'due diligence' sheet on 7th November 2002, despite clear company policy that employees must not be permitted to undertake sales until they have signed this sheet as having understood the various legal provisions. 
(f) That the appellant was not sufficiently proactive as a supervisor or trainer to ensure that Hayley Fisher was at all stages properly supervised and trained. 
(g) That the appellant did not present as a reliable witness and could not be relied upon on crucial points to prevent the offence. 
(h) The company policy was that an information pack was left with new employees in regard to their responsibilities, particularly in relation to the statutory provisions in regard to the sale of alcohol, so as to prevent sales to persons under the age of 18 years, but that the witness could not be certain that she had left this paperwork with Hayley Fisher. 
(i) That had the information pack and the licensing provisions generally been afforded the proper weight and importance by the appellant, she would have been able to recall with certainty that this document had been left with the employee. 
(j) Had the appellant been sufficiently active, certain and strong with supervision and training in a small store, Hayley Fisher would not have undertaken the particular sale of intoxicating liquor to a person aged 15 years. 
(k) In all circumstances, the appellant cannot be afforded the defence that she used due diligence to prevent the offence of a sale of alcohol to a person aged 15 years.  She did not prove to the Justices' satisfaction on 'a balance of probabilities' that she, being a person charged by reason of the act or default of another, exercised all due diligence to avoid the commission of an offence . . . " 
The question posed for the opinion of this court is: 
"Whether the justices were entitled to reject the defence of due diligence in the circumstances". 
6.	It is clear from that recital of the findings and conclusions of the Justices that they were not impressed by the appellant as a witness.  One of the matters that troubles me about this case is the absence of reference in the findings and conclusions to material that had been placed before the Justices and which contained matters which might have been used favourably in the assessment of the due diligence defence.  Mr Kimblin has carefully taken us through that material.  Although there are oblique references to some of these matters within the case stated, the references are such that they are presented in a somewhat one-sided way.
7.	The document "Introduction to Convenience Retail" was plainly given to Hayley Fisher soon after she had commenced employment.  It drew her attention to "strict laws which control the sale of alcohol  . . . no one under 18 years of age can purchase alcohol".  It also contained sections which asked questions and expected the employee to complete answers in writing at some stage early in her employment.  No reference was made to this in the case stated.  The question is asked: "What are the five main risks which can lead to the loss of a licence?  Please list below."  Listed below are five such risks set out in the handwriting of Hayley Fisher.  The first was: "Selling alcohol to a person under 18".  Later on there was a further question and answer section headed: "Legalities".  There are ten questions there to be answered by the employee, again at an early stage of employment.  One is: "What age can people purchase alcohol?" to which Hayley Fisher replied: "18 or over".  Another asked: "What identification would you accept from a youth who was buying alcohol?"  Hayley Fisher replied: "ID card, passport, student card".
8.	We have also had our attention drawn to a staff notice which we are told is posted in the staff room, which in highly visible form reminds employees of the legal requirements for the sale of age-related products, referring to alcohol and 18 years and with the instruction: "If in doubt, refuse the sale.  All refusals must be recorded in the store refusal book".  At the till there were small documents positioned containing instructions such as these: "If in doubt, refuse the sale", "If in doubt, ask for proof of age (you can ask for a Prove It card, a validate card or a passport)" and on another similar document "Legal/Best Practice Age Limits: Alcohol:  18 years or over.  Company policy is to seek ID from anyone you think is under 21."
9.	In addition, the till was programmed so that whenever a customer presented an item for sale that is age controlled, the till beeped so as to make the cashier aware and a readily visible message then appeared on the till screen in these words: "Is the customer 18?  Latest acceptable birth date --" And there was there added in computerised form a birthday 18 years prior to the date of the transaction.  Before the transaction could be effected by the person operating the till, he or she had to press a command button saying "Yes" or "No" in answer to the question about the age of the customer.  
10.	We have also been shown other documents that were before the Justices, including a due diligence information sheet that was signed and confirmed as having been read by Hayley Fisher on 7th November 2002, just a few days after she commenced employment, and a later document called "due diligence instruction" that was signed by her and the appellant in June 2003, which is date-stamped 14th June 2003 as the date received at the regional office.  That date is of some significance because it is only some three weeks or so before the date of the offence.
11.	In my judgment, those undisputed matters and materials were of considerable importance in any assessment of the due diligence defence.  For my part, I place particular importance on the way in which the till worked in relation to each transaction.  
12.	There is another area of evidence which received no acknowledgment in the case stated.  There is a checklist diary headed "Store Standards" which appears to work in units of six months, and there is recorded in that diary, on pro forma sheets, documentation of underage refused sales.  There is one involving Hayley Fisher on 2nd November 2002 which appears to be the first or second day of her employment.  It involved her asking an awkward customer for identification.  He was curt when she did so.  We do not have copies of each and every daily record, but on 20th November there is a record of Hayley Fisher having refused to serve a young girl with an age prohibited product, Hayley Fisher adding the words in her own hand "I asked for ID, did not have, so I refused to serve her".  There is a similar record involving Hayley Fisher on 23rd November.  Again, there is a record to like effect on 24th November.  On 18th January 2003 there are three entries from Hayley Fisher, in her own handwriting, concerning her refusals to serve three young people with alcohol when they did not have identification to establish their age.  Of the documents we have, the next relevant one is on 26th May, again getting close to the date of the offence.
13.	All that material tends to show that the steps that had been taken through the appellant to train and supervise Hayley Fisher had, on many occasions, proved to be successful.  They also show that the appellant would have been aware of that and, of course, would have been aware of the mechanism which arose in relation to each transaction on the till screen.
14.	In my judgment, it is significant, and causes concern, that the Justices made scant and in many instances no reference to these potentially important matters.  I accept that for some reason they formed a negative view of the appellant.  They attach some significance to the fact that the first due diligence information sheet was not completed and signed until 7th November which was five or six days after the commencement of employment.  However, if that had any significance it was to some extent mitigated by the fact that Hayley Fisher had already made a refusal to serve entry in the running diary before that date, and within a day or two of commencing employment.  They also attached some significance to the fact that a multiple choice "exam" had not been completed by Hayley Fisher and they believed that this was because the appellant was not sufficiently motivated to ensure the provisions were properly understood by Hayley Fisher.  However, that again has to be seen in the context that Hayley Fisher plainly did have considerable understanding of the legal requirements and was regularly, indeed permanently, reminded of it not only by visible notices pinned to the wall but also by the working of the computer.
15.	I find myself uneasy that the positive matters to which I have referred were not considered to be of sufficient importance to merit mention in the case stated.  They did not depend on a face-to-face impression of the reliability of the appellant as a witness.  They were matters that established themselves through the agreed evidence at the trial.  Being troubled by the way in which the evidence is referred to in the case stated, and taking the view as I do that the positive material, as I have referred to it, ought to have gone a considerable way in helping to establish the due diligence defence, I do not feel able to answer the question posed by the case stated affirmatively. 
16.	In these circumstances I have come to the conclusion, not without hesitation and sympathy with the Justices in their somewhat difficult task, that that question must be answered in the negative.  For my part, therefore, I would allow this appeal. 
17.	MR JUSTICE MOSES:  So would I.
18.	MR KIMBLIN:  My Lord, there is an application, if I may, for costs of today and in the Magistrates' Court to be paid from central funds.
19.	LORD JUSTICE MAURICE KAY:  That is the appropriate order, is it not, Miss Richards? 
20.	MS RICHARDS:  Yes, my Lord.