Neutral Citation no. [2001] NICA 34	Ref:     	NICC3466	
 	 	 	
Judgment: approved by the Court for handing down	Delivered:	29.06.2001	
(subject to editorial corrections)	 	 	

IN HER MAJESTY’S COURT OF APPEAL IN NORTHERN IRELAND
 
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BETWEEN:
 
LIDL UK GMBH
 
Applicant/Appellant
 
and
 
CURLEYS (DUNGANNON) LIMITED AND
SEAMUS KEARNEY (VINTAGE WINES)
 
Objectors/Respondents
 
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NICHOLSON LJ
 
This is an appeal from the decision of His Honour Judge Lockie dated 6 October 2000, whereby an application for the provisional grant of an intoxicating liquor licence for premises situated at Unit 1, Station Square, Cookstown, Co Tyrone was refused.
            I hope that the parties will forgive me if my judgment is brief.
            Many county court judges take the trouble to write careful and well-reasoned judgments in these cases and in the present appeal I have had the pleasure of reading such a judgment.  I have listened, as he did, to three senior counsel, Mr Deeny QC, Mr McSparran QC and Mr Dermot Fee QC, exercising their forensic skills.  I have also listened to a significant number of witnesses who gave evidence for and against the Applicant.
            I regret that Mr Cosgrove gave evidence and, apart from factual evidence which he gave, I have ignored any expression of opinion by him.  No expert witness should have placed himself in the position which he did.  He has a commercial interest in the outcome of the case and should not have given evidence in the lower court or in this Court.
            The issue in this appeal, as in so many of these cases, arises from Article 7(4) of the Licensing (Northern Ireland) Order 1996 which reads:-
“A court shall refuse an application for the grant of a licence unless it is satisfied … that the number of licensed premises of the kind specified in the Application which are in the vicinity of the premises is, and having regard to any licences provisionally granted under Article 9 or any sites approved under Article 10, will be inadequate.”
 
            If the number of licensed premises of the kind specified in the Application is shown to be inadequate, the Court has a discretion to refuse an applications, otherwise the Article would read:
“A court shall grant an application for a licence if it is satisfied that the number of licensed premises … is … inadequate.”
 
Normally a licence will be granted if it is established that the number of licensed premises is inadequate.  But there are exceptions.
            For example, there are a number of public houses or on/off licensed premises in Cookstown with off-licence facilities of a kind which, in my opinion, should not be taken into account, when one is considering inadequacy.  If one of these on/off licensed premises sought to separate the off-licence in order to increase artificially the number of off-licence premises, the court would be entitled to exercise its discretion to refuse the application.
            A court is also entitled to take in to account premises of a similar kind which are not in the vicinity, when exercising its discretion.  For example, in the case of the application for the off-licence at Safeways, it seems to me that the court would have been entitled to take into account the off-licence at Winemarket, if the court took the view that the vicinity of Safeway’s off-licence premises has its northern boundary at Cemetery Street/Fountain Road.
            In the present case, I consider that Cookstown may well be one locality for the purposes of bookmaking applications but that there are premises in Cookstown which could not be said to be in the vicinity of other premises.  I must respectfully differ from His Honour Judge Smyth QC who, in 1991, held that the whole area of Cookstown constituted “the vicinity” for licensing premises.  I have not seen the judgment but it is important to recognise the difference in wording between the Betting legislation and the Licensing legislation in regard to “locality”.  There is no such thing as a “vicinity” in licensing law.  Article 7(4) refers to “… premises … in the vicinity of the premises.”
            I have read the submissions of Counsel which I found very helpful.  If I may start with those of Mr Deeny QC and Mr Beattie for the Applicant/Appellant.  I accept that the Applicant is a subsidiary of a very large European business.  It aims at a section of the market, offering discounted goods at highly competitive prices consistent with quality.  Unlike the larger superstore operators (Tesco, Sainsburys, Safeway) the Applicant stocks a much narrower range of convenience food items, 800-900 compared to 15,000 plus.  The Applicant’s objective is to achieve savings of scale and space, thereby significantly undercutting the competition in the retail sector.
            The Cookstown supermarket opened for trading on 20 May 1999 and attracts 4,500 people per week drawn from Cookstown, the surrounding area and from other parts of Northern Ireland outside the Cookstown area.
            The statutory proofs are in order.  The subsisting licence which is proposed to be surrendered is valid.  The title to the Applicant’s premises is in order.  No objection is taken or could be taken to the fitness of the Applicant company to hold a liquor licence or to conduct the proposed business under the licence.  The premises would be suitable.
            The word “vicinity” is discussed in all three sets of submissions and the relevant principles and authorities are discussed in Donnelly v Regency Hotel Ltd[1985] NI 144.  I propose to set out the off-licences which I consider to be in the vicinity of the Applicant’s proposed premises but not to define a “vicinity”.
In my view Curley (Dungannon) Ltd’s premises, Seamus Kearney’s premises (Vintage Wines) and Stewart’s Wine Barrel, which it is proposed to move (by way of provisional grant) to premises close to the Baptist Church and, therefore, significantly nearer to Tesco’s, are in the vicinity of Lidl’s proposed premises.  The premises known as the Wine Market are just outside the vicinity of the proposed premises but for the purposes of exercising discretion as to whether I would grant an application for an off-licence in the vicinity of Lidl’s proposed premises, I would take it into account.  It is arguable whether the southern line of Cemetery Road and Fountain Road is in the vicinity of the proposed premises, but on balance I hold that it is just outside and that the southern line of Convent Road and the Coolnafranny Estate is within the vicinity of the proposed premises.  I do not consider that it is appropriate to consider the Dunleath premises or the Safeway off-licence in exercising my discretion to grant or refuse a licence.
            It is unnecessary to say anything more about off-licences but Milty’s on/off premises has an off sales department and I take it into account as it is in the vicinity of the proposed premises.
            It will be apparent that, although this is a rehearing, I support Lockie J in his view that there is “force in the proposition that a division of Cookstown into two areas divided by east/west axis could be a satisfactory and fair solution”.  But in every case one has to have regard, first of all, to the siting of the proposed premises before deciding what premises are in the vicinity of it.  If the proposed premises were just to the north of the courthouse, for example, relevant premises in the vicinity of it would be different from the relevant premises in the vicinity of Lidl’s proposed premises.
            The written submissions of Lidl at paragraph 15, included the contentions that there is a change of character as one moves from William Street and James Street down towards Chapel Street, south of Convent Road.  The line of schools and fields at Convent Road is “a clear boundary” on the eastern part of the town.  The Cookstown area plan shows the town centre to end at Convent Road/Coolnafranny estate.  This was also the proposal in the draft Cookstown area plan considered at the Public Inquiry in December 2000.  I took these matters into account in determining the relevant premises in the vicinity of Lidl’s proposed premises.
            I rejected the submissions on behalf of Curleys based on the evidence of Mr Declan Cosgrove.  The town of Cookstown should not be divided simply into two vicinities for the reasons which I have stated.  In another case the southern boundary might well be Cemetery Road and Fountain Road or the area of Cookstown included in the town centre and stretching between the two brows of the hills shown in the Applicant’s photograph, but not in this case.  I venture to refer to Re Hegarty’s Application [1991] NI 172 and repeat what I said there as to the factors to be taken into account.
            There is force in the contention made on behalf of Seamus Kearney that the line of schools and playing fields are not visible to anyone making use of the main arterial routes of the town and provide no greater physical barrier than the number of streets heading west of the main street.  I have taken this into account but rejected it.
            Are the number of licensed premises of the kind specified in the Application inadequate?  MacDermott J (as he then was) stated in Belfast Co-Operative Society Limited v Tohill[1975] NIJB No. 2 pp 5-7:
“… I think inadequate means in the context of the subsection, inadequate to meet the requirements of the public.  Put another way one has to assess what the public requirements in the vicinity are and enquire whether or not the number of existing off licence premises is adequate to meet that demand and in answering that question regard is to be had to off-sales facilities in premises covered by an on/off licence.
 
Before turning to the issue in this case, I would make three general observations:
 
1)                 I am concerned with the public at large – not with one particular section of it.  In granting this licence the learned county court judge in large measure based his discussion on the fact that such a licence would be appreciated by and a benefit to the members of the society.  I am sure this is so, but with respect I believe he erred in law in emphasising the requirements and benefits of the society members as distinct from the public at large.
 
2)                 In referring to the requirements of the public I have regard to the reasonable requirements of the pubic …
 
3)                 The concept of the reasonable requirements of the public is not met simply by the existence of a number of off licence premises in a particular area.  For the number of premises to be adequate the public must have reasonable opportunities.  A selection and purchase at competitive prices … in addition to considerations of choice and price, service and situation could be relevant matters.”
 
This judgment was cited on behalf of Lidl as was F A Wellworth & Co v Philip Russell & Others[1997] NI 175 at 188d.
It was submitted on behalf of Lidl that in terms of intoxicating liquor prices, Lidl was on average 21% cheaper than Curleys, Vintage Wines and Milty’s on/off licensed premises.
In response it was submitted on behalf of Curleys that the Applicant seeks to establish inadequacy by showing that some of the restricted range of drinks available in other off-licences of the Applicant are cheaper than prices of similar drinks in off-sales outlets in the vicinity.  That is not so, they contended.  Curley’s provide a vastly more extensive range at comparable prices.  In addition they have a very wide range of cheaper wines.  Even if such was the case the Applicant’s range of drinks is so limited that lower prices for some of their selection would not, by itself, be a valid ground for holding existing off-licence facilities to be inadequate.
They cited Stewarts Supermarkets Ltd v Winemark The Wine Merchants Limited (1990) 8 NIJB 1 at 5 and Tesco Stores v Winemark The Winemerchants(Unreported: Burgess J 1999) and In the Application of Philip Russell Ltd (Unreported:  Kerr J).
At p 20 Kerr J said:
“It is simply not sufficient to choose a number of wines which are common to both and to compare the price between both outlets.  A reasonably detailed analysis of the overall range of drinks, facilities and service available from a competitor and contrasted with those which it is said will be provided by the Applicant is the minimum which, in my opinion, will be required before this could constitute an argument of substance on the issue of adequacy”.
 
	It was submitted on behalf of Lidl, that the Licensing (Mixed Trading) Regulations 1997 should be taken into account.  They indicate recognition on the part of the legislature that it is proper and reasonable for the public to be able to buy alcohol when doing their other shopping.  If supermarkets can establish a substantial trade at their premises and there is no off-licence in their own shop or immediately adjacent to it, that is strong evidence that the existing provision is not adequate for those resorting to the vicinity, they contended.  There are numbers of people now choosing to do “one-stop shopping” whether at this Lidl store or any other large supermarket.  
	In response it was submitted on behalf of Curleys, that there has been no evidence from persons shopping in the vicinity criticising the range of selection and prices in the existing outlets.  It is not disputed that the off-sales existing in the vicinity have a wide selection of wines, beers and spirits.
	They contended that Curley’s premises, 291m from the Applicant’s premises, provide a very wide range of wines, spirits, beers and lagers at very competitive prices.  There is a wide selection of wines from all recognised wine growing areas in the world.  All recognised and popular beers and lagers are available.  Special offers are made at regular and frequent intervals.  The management and full-time staff are trained in the sale and recognition of wine and are in a position to give advice to customers.  The Applicant’s staff have no knowledge or training in the sale or recognition of wine.
	The Applicant’s premises will not be open after 9.00 pm on Fridays and 6.00 pm on Saturdays.  The evidence is that a very considerable proportion of weekend business is conducted between these hours and 11.00 pm.
	There was survey evidence, which was summarised in the submission on behalf of Lidl, as follows:  In a survey carried out in March 2001 at Lidl’s premises, 32% purchased alcohol at Curley, 1% used the Vintage or Miltys and 56% purchased alcohol elsewhere.  72% felt that there was a need for an off-licence at Lidl’s of whom 52% wanted competition on prices and 21% wanted a one-stop shop.  In the Town Centre Survey, carried out in March 2001, 42% used Curleys, 3% used the Vintage and no one used Milty’s.  13% used Tescos and 42% used an off-licence elsewhere  (“elsewhere” would include Safeways and the Wine Market.)  59% stated that there was a need for another off-licence and this rose to 66% when shown the Lidl product list.  Of these 69% gave “more competition on prices” as a reason for need.  83% of those surveyed at Lidls and in the Town Centre found the Lidl product list adequate.  On the issue of quality Mrs Myra Greer gave evidence in favour of Lidl’s.
	The Survey evidence was criticised in submissions on behalf of Curleys and Kearney (a) as to the form and nature of the questions; (b) on the failure to explain adequately to the persons interviewed that the proposed off-licence would not carry the usual range of wines, beers and spirits found in the normal off-licence; (c) because the product list was shown near the end of the interview and no evidence was adduced as to the care taken to read and understand it; (d) because there was no opportunity of cross-examining the interviewers; (e) because many of those interviewed would have assumed that the proposed off-licence would offer a similar range of drinks to the normal off-licence; (f) 52% of people using the Lidl shopping facility also used the shopping area in the main street; (g) 72% of shoppers at Lidl were carrying out top-up shopping.
	In addition it was submitted that neither the bus station nor the now closed livestock market, on which reliance was placed by Lidl, was an attraction to persons to resort to the area.  There was no evidence that Lidl had created an influx of new shoppers to the area.  The car parking facilities at Lidl’s premises were matched by car parking facilities close to the other off-licences, not least Tesco’s.   The population of Cookstown showed no significant increase.  The question of adequacy could not be decided on the basis of price competition.  In certain circumstances, where it could be shown that existing off-licences were charging such unreasonable prices that they did not meet the requirements of the public, then an argument for inadequacy could be made out.
	As to the legal test there is clearly a slight conflict between judges.  One must not displace “inadequacy” as the determining criterion, as Kerr J said in The Matter of an Application by Philip Russell Limited for Provisional Grant of a Licence.  In Crazy Prices v Stewarts Supermarkets [1977] NI 123 it was stated that the primary duty of the court was to apply the test stated in the statute and not to apply the test whether the proposed off-licence is reasonably required by the public.
	But in order to decide whether an applicant has proved that the number of off-licences is inadequate, a number of factors must be taken into account, none of which is decisive, but one of these is “the reasonable requirements of the public”.  “Convenience” is another but would rank low in any list that I made of factors to be taken into account.  Kerr J mentioned change in drinking habits, the nature of the services provided and the range of goods available.  MacDermott LJ referred in Stewarts Supermarket Ltd v The Wine Markets Ltd to “selection” (which I take to be equivalent to “range of goods available”) and “competition”.  Demand created by buyers coming from outside the vicinity, especially to a supermarket, is another factor, not least if the supermarket provides a “one-stop shopping location”.  Price is another factor.  I do not intend to make a list nor are the factors which I have mentioned intended to be the most important factors to be taken into account.  A significant increase in the population would obviously be very important, for example.  I do not consider that there is evidence of a growing residential population to the east of Lidl’s premises.
	I have no doubt that those who shop at Lidl’s would welcome an off-licence there, but I remind myself that I am concerned with the requirements of the public as a whole.  I do not regard Lidl’s as a one-stop supermarket and I do not consider it inconvenient or unreasonable that those who shop at Lidl’s should go to Curleys to purchase alcohol, a distance of less than 300 metres.
	If the case had been made out that Lidl’s would cater for the less well-off customers, by significantly discounted prices for beer, wine and spirits, this would have been a strong point in its favour.  On the evidence it does so in respect of other goods. And it may do so in other parts of Northern Ireland.  But when a comparison was made between cheap beer, wine and spirits in Curleys and the prices proposed at Lidl’s, “I was not satisfied that there was any significant disparity in the usual lower price range products sold at Curleys and the Applicant’s comparable products”.  I am quoting with approval the findings of Lockie J because I independently reached the same conclusion.  
	An argument was advanced on behalf of Lidl that Article 7(4)(e)(i) of the 1996 Order is contrary to Article 30 of the Treaty and Allen & Hanbury’s Ltd v Generies (UK) Ltd [1988] 3 All ER 454 was relied on in support of the argument.
	Article 30 provides:
“Quantitive restrictions on imports and all measures having equivalent effect shall, without prejudice to the following provisions, be prohibited between member states.”
 
            Lidl is a UK company, although a subsidiary of a German company.  As a company it is on the same footing and subject to the same company law provisions as other UK companies.  Article 7(4)(e)(i) controls  the number of off-licences in Northern Ireland.  It does not impose quantitive restrictions on imports.  It regulates the amount of alcohol available for consumption as a result of sales in off-licence premises in Northern Ireland.  So far as beers and spirits are concerned, it is much more regulatory of beers and spirits produced in the UK than elsewhere.  So far as wines are concerned it regulates the consumption of wines on a world-wide basis.  There is nothing to prevent the Applicant from importing alcohol products from Member States in Europe, so long as they are sold through licensed premises.  Article 7(4)(e)(i) applies to all relevant traders operating within Northern Ireland and affects in the same manner, in law and in fact, the marketing of domestic products and of those from other Member States.  Accordingly I reject this argument.
	I propose, in fact, to make no finding about inadequacy in general but to exercise my discretion in refusing the application on the grounds that the Applicant’s very limited range of “own label” products, the manner in which it is proposed to set them out (in cartons), the lack of trained staff to offer advice to customers on alcoholic produce purchases, the terms of opening and the failure to undercut significantly other off-licences, when one compares their cheaper but equally drinkable products, render this Application inappropriate.  To add the proposed premises at Lidl’s Unit 1, Station Square, to the number of off-licence premises in Cookstown would, in my view, be a disservice to Cookstown.
	If I am wrong in exercising my discretion as I have done, I would have found in favour of the objectors on the issue of inadequacy, having regard to the very limited range of products proposed to be provided at Unit 1 and the other reasons which I have given for exercising my discretion.  The Winemarket premises are not a factor on which I would rely in the exercise of discretion.

IN HER MAJESTY’S COURT OF APPEAL IN NORTHERN IRELAND
 
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BETWEEN:
 
LIDL UK GMBH
 
Applicant/Appellant
 
and
 
CURLEYS (DUNGANNON) LIMITED AND
SEAMUS KEARNEY (VINTAGE WINES)
 
Objectors/Respondents
 
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JUDGMENT
 
OF
 
NICHOLSON LJ
 
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