Scottish Court of Session Decisions

This action was raised by William Henderson, wine and spirit merchant at Straiton, in the county of Midlothian, against the Lord Advocate, as representing the Commissioners of Inland Revenue. The sum sued for was £4, 5s. 9d., being part of the sum paid by the pursuer to the defenders as licence-duty, and to which extent he maintained he had been overcharged by them.

Section 49 of 35 and 36 Vict. cap. 94, dealing with Sunday trading, enacts that “where on the occasion of an application for a new licence or transfer or renewal of a licence which authorises the sale of any intoxicating liquor for consumption on the premises, the applicant at the time of his application applies to the licensing justices to insert in his licence a condition that he shall keep the premises in respect of which such licence is or is to be granted closed during the whole, of Sunday, the justices shall insert the said condition in such licence. The holder of a licence in which such condition is inserted (in this Act referred to as a six-day licence) shall keep his premises closed during the whole of Sunday, and the provisions of this Act with respect to the closing of licensed premises during certain hours on Sunday shall apply to the premises in respect of which a six-day licence is granted as if the whole of Sunday were mentioned in those provisions instead of certain hours only. The holder of a six-day licence may obtain from the Commissioners of Inland Revenue any licence granted by such Commissioners which he is entitled to obtain in pursuance of such six-day licence, upon payment of six-seventh parts of the duty which would otherwise be payable by him for a similar licence not limited to six days; and if he sell any intoxicating liquor on Sunday, he shall be deemed to be selling intoxicating liquor without a licence.”

By section 7 of 37 and 38 Vict. cap. 49, it is enacted that “where on the occasion of any application for a new licence, or the removal or renewal of a licence which authorises the sale of any intoxicating liquor for consumption on the premises, the applicant applies to the licensing justices to insert in his licence a condition that he shall close the premises, in respect of which such licence is or is to be granted, one hour earlier at night than that at which such premises would otherwise have to be closed, the justices shall insert the said condition in such license. The holder of an early closing licence in which such condition is inserted (in this Act referred to as an early closing licence) shall close his premises at night one hour earlier than the ordinary hour at which such premises would be closed under the provisions of this Act.” It is further enacted “that the holder of an early closing licence may obtain from the Commissioners of Inland Revenue any licence granted by such Commissioners which he is entitled to obtain in pursuance of such early closing licence, upon payment of a sum representing six-sevenths of the duty which would otherwise be payable by him for a similar licence not limited

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to such early closing as aforesaid.”

Section 8 further enacts that “a person who takes out a licence containing conditions rendering such licence a six-day licence, as well as an early closing licence, shall be entitled to a remission of two-sevenths of the duty.”

By the 44th section of the Inland Revenue Act 1880 (43 and 44 Vict. cap. 20) the provisions contained in the sections of the Acts above quoted were made applicable to Scotland.

After the passing of the Inland Revenue Act 1880, the Commissioners of Inland Revenue recognised the right of Scottish publicans to a remission of one-seventh of the total licence-duty, as the holders of six-day licences, in virtue of the fact that they could not open their premises on Sunday.

In Scotland the hour of opening and closing were fixed by the form of certificate contained in Schedule B of the Public-Houses Acts Amendment Act 1862 (25 and 26 Vict. cap. 35), which provided that a publican should not “keep open house, or permit or suffer any drinking in any part of the premises belonging thereto, or sell or give out therefrom any liquors, before eight of the clock in the morning, or after eleven of the clock at night of any day,” or “open his house for the sale of any liquors, or permit or suffer any drinking therein, or on the premises thereto belonging, or sell or give out the same, or any other goods or commodities on Sunday.”

Section 2 of the same Act contained a proviso that “in any particular locality within any county or district or burgh, requiring other hours for opening or closing inns and hotels and public-houses than those specified in the forms of certificates in said schedule applicable thereto,” it shall be lawful for the justices or magistrates respectively “to insert in such certificates such other hours, not being earlier than six of the clock or later than eight of the clock in the morning for opening, or earlier than nine of the clock or later than eleven of the clock in the evening for closing the same, as they shall think fit.”

By the 4th section of the Act 50 and 51 Vict. cap. 38 (which does not apply to any town, burgh, or populous place containing 50,000 inhabitants), the form of certificate was materially altered, for it enacts—( b) The form of certificate for public-houses set forth in schedule A of the Public-Houses (Scotland) Acts Amendment Act 1862, shall be amended as follows—‘The words “and do not keep open house, or permit or suffer any drinking in any part of the premises belonging thereto, or sell or give out therefrom any liquors before eight of the clock in the morning or after eleven o'clock at night of any day,” shall be omitted from the said certificate, and there shall be inserted in place thereof these words, “and do not keep open house, or permit or suffer any drinking in any part of the premises belonging thereto, or sell or give out therefrom any liquors before eight of the clock in the morning, or after such hour at night of any day not earlier than ten, and not later than eleven, as the licensing authority may direct.”’

Acting under the powers thus conferred upon them, the Justices of the county of Midlothian resolved that all licensed houses within the county should be closed at ten o'clock at night. In virtue, however, of the special powers reserved to them by section 7 of this last mentioned Act, they gave a special exemption to the keeper of the Granton Hotel to keep open house till eleven o'clock at night.

In consequence of the resolution of the Justices above mentioned the following special endorsement was made upon the pursuer's correct certificate—“The licensing authority, at a meeting held on 14th March 1888, resolved that from and after Whitsunday next, and until the licensing authority shall otherwise determine, all licensed houses within the county of Midlothian shall be closed at ten o'clock at night.”

The pursuer claimed a deduction of two-sevenths from the total licence-duty as calculated on his rental in terms of secs. 7 and 8 of 37 and 38 Vict. c. 49. The Commissioners granted the established deduction of one-seventh for a six-day licence, but refused the deduction of another seventh claimed by the pursuer as the holder of an early closing licence.

The pursuer pleaded—“(1) The pursuer is, in law and within the meaning of the Inland Revenue Act 1880, the holder of an early closing licence for the current year, and he is therefore entitled to a deduction of one-seventh from the licence-duty imposed by the said statute.”

The Lord Ordinary ( Fraser) on 27th October 1888 assoilzied the defender from the conclusions of the summons.

Opinion.—The sum sued for in this action is only £4, 5s. 9d., but it is stated on the record that the action is brought by agreement in order to settle an important point on the construction of the Revenue Laws as to publicans' licences. It is necessary, in disposing of the questions raised, to consider not merely the statutes relative to public-houses applicable exclusively to Scotland, but also certain Inland Revenue Acts which are applicable to the United Kingdom:

The first statute (1872) requiring attention is the Act 35 and 36 Vict. cap. 94, which by the second section is declared not to extend to Scotland, but which in part by a subsequent enactment was so extended. The 49th section of this Act, dealing with Sunday trading, enacts as follows—‘Where on the occasion of an application for a new licence or transfer, or renewal of a licence which authorises the sale of any intoxicating liquor for consumption on the premises, the applicant at the time of his application applies to the licensing justices to insert in his licence a condition that he shall keep the premises in respect of which such licence is or is to be granted closed during the whole of Sunday, the justices shall insert the said condition in such licence. The holder of a licence in which such condition is inserted (in this Act referred to as a six-day licence) shall keep his premises closed during the whole of Sunday, and the provisions of this Act with respect to the closing of licensed premises during certain hours on Sunday shall apply to the premises in respect of which a six-day licence is granted as if the whole of Sunday were mentioned in those provisions instead of certain hours only. The holder of a six-day licence may obtain from the Commissioners of Inland Revenue any licence granted by such Commissioners which he is entitled to obtain in pursuance of such six-day licence, upon payment of six-seventh parts of the duty which would otherwise be payable by him for

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similar licence not limited to six days; and if he sell any intoxicating liquor on Sunday he shall be deemed to be selling intoxicating liquor without a licence.’

“The next statute (1874) is 37 and 38 Vict. cap. 49, which the defender says is not exclusively applicable to England, and there is no express declaration in the statute, as there is in the Act of 1872, that it is not to extend to Scotland. It is of no consequence to determine the point, because by a subsequent enactment the two sections bearing upon the present question have been made applicable to the United Kingdom. The seventh section of this statute enacts that when an application is made for a licence, and the applicant applies to the justices to insert in the licence a condition ‘that he shall close the premises in respect of which such licence is or is to be granted one hour earlier at night than that at which such premises would otherwise have to be closed, the justices shall insert the said condition in such licence.’ And then it is enacted that ‘the holder of an early closing licence in which such condition is inserted (in this Act referred to as an early closing licence) shall close his premises at night one hour earlier than the ordinary hour at which such premises would be closed under the provisions of this Act.’ It is next enacted that the holder of such early closing licence shall obtain from the Commissioners of Inland Revenue the licence granted by such Commissioners upon payment of six-sevenths of the duty which would otherwise be payable by him for a licence not limited to such early closing. And the 8th section enacts that ‘a person who takes out a licence containing conditions rendering such licence a six-day licence as well as an early closing licence, shall be entitled to a remission of two-sevenths of the duty,’ that is to say, an English publican who takes a licence with the condition that he shall not open his house on Sunday, and who agrees to shut it an hour earlier on other days of the week, gets a deduction of two-sevenths of the duty.

These two statutes apparently were held to be applicable only to England, because by the Inland Revenue Act of 1880 (43 and 44 Vict. cap. 20, sec 44), it is enacted ‘that the provisions regarding six-day licences and early closing licences, contained in section 49 of the Licensing Act 1872, and sections 7 and 8 of the Licensing Act 1874, shall be deemed to apply throughout the United Kingdom.’

The Commissioners of Inland Revenue have recognised the right of the Scottish publican to a remission of duty by reason that he is by the Scottish law restricted to a six-day licence in respect that he cannot open his premises on Sunday, but they have refused to recognise his right to demand remission of duty on account of his being restrained by the regulation of the justices acting under the recent ‘Public-Houses Hours of Closing (Scotland) Act 1887,’ from carrying on his trade beyond ten o'clock at night. The pursuer contends that he is thus forced to an early closing, and is entitled in consequence to remission of another one-seventh of the duty.

It is therefore necessary now to see what is the course of legislation in reference to this matter of early closing in Scotland. The English practice of the applicant applying to the justices to insert in his license from them (in Scotland called a certificate) a condition that he will close his premises one hour earlier than the ordinary hour for closing, is not in accordance with the Scottish practice. It is not necessary to have such an application in order to limit the publicans' business hours. The certificate which he. received from the justices peremptorily stated, until the passing of the Act of 1887, hereafter mentioned, what is the hour of closing without the intervention of the applicant at all. It is unnecessary to refer to the earlier statutes, because this subject, until last year, was regulated by the Act of 1862 (25 and 26 Vict. cap. 35). The second section of this Act enacts that ‘the forms of certificates contained in Schedule A to this Act annexed shall come in place of the forms of certificates provided by the recited Acts, or either of them.’ Now Schedule A contains a form of certificate for public-houses in which there is this enactment, ‘and do not keep open house, or permit or suffer any drinking in any part of the premises belonging thereto, or sell or give out therefrom any liquor before eight of the clock in the morning or after eleven of the clock at night of any day; and do not open his house for the sale of any liquors, or permit or suffer any drinking therein, or on the premises thereto belonging, or sell or give out the same or any other goods or commodities on Sunday.’ There is in the body of the statute itself no provision enacting any rule as to the hour of closing. It rests simply on this certificate. This clause in the certificate was a repetition of the form contained in the Act of 1853 (16 and 17 Vict. cap. 67), called ‘The Forbes Mackenzie Act,’ where it appears for the first time. In the Home Drum-mond Act, 9 Geo. IV. cap. 58, the condition in the certificate is merely that the publican shall not suffer any drinking in the premises ‘during the hours of divine service on Sundays, or other days set aside for public worship by lawful authority, nor keep the same open at unseasonable hours.’

“A further step in the way of restriction, or in the power of restraining the publican, was taken in the Act of 1887 (50 and 51 Vict. cap. 38), which does not apply to any town, burgh, or other populous place containing 50,000 inhabitants. It is not disputed that it applies to the premises held by the pursuer. Now the 4th section of this Act materially alters the terms of the certificate, for it enacts ‘(b) the form of certificate for public-houses set forth in Schedule A of the Public-Houses (Scotland) Acts Amendment Act 1862, shall be amended as follows:—The words “and do not keep open house, or permit or suffer any drinking in any part of the premises belonging thereto, or sell or give out therefrom any liquors before eight of the clock in the morning or after eleven o'clock at night of any day,” shall be omitted from the said certificate, and there shall be inserted in the said certificate in place thereof these words—“And do not keep open house, or permit or suffer any drinking in any part of the premises belonging thereto, or sell or give out therefrom any liquors before eight of the clock in the morning, or after such hour at night of any day not earlier than ten and not later than eleven, as the licensing authority may direct.”’ Acting under the powers thus conferred upon them, the Justices of Midlothian,

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at a meeting held on the 14th of March 1888, resolved—‘That from and after Whitsunday next, until the licensing authority shall otherwise determine, all licensed houses within the county of Midlothian shall be closed at ten o'clock at night.’ The pursuer does not state that in defiance of this resolution of the Justices he has kept his premises open, and the remedy he seeks is a return of duty, in consequence of the loss he sustains by the restriction of the hours of business. It was suggested that the Justices had no power to pass a general resolution applicable to the whole county of Midlothian, but that they must deal with each man's certificate by itself if they choose to restrict the business hours. The Lord Ordinary is not called upon in this process to deal with any such question. All that he has to determine is, whether there is a good claim in law here for the return of one-seventh of the duty in addition to the one-seventh at present allowed for the Sunday closing.

The case of the pursuer is simply this, that the ordinary hour of closing was eleven o'clock, and if he must now close at ten, then his license is an ‘early closing licence,’ and he is entitled to a return of the duty. Now, the assumption here made is quite unfounded. Eleven o'clock no doubt was the hour mentioned in the form of certificate in the Act of 1853 and the Act of 1862, but it can be carried no further back, and it rests upon the condition inserted in the certificates granted under these statutes. Now, when the Act of 1887 expressly declares that the condition fixing the hour of closing at eleven o'clock shall be deleted from the certificate and another form of condition inserted, viz., an hour to be fixed by the justices, the hour so fixed by them becomes the ordinary hour of closing for the district to which the resolution applies. Eleven o'clock is entirely blotted out of the regulations as to business hours, and a substitute put in its place. There is now no ‘ordinary’ hour for closing except the hour so fixed; and there is no early closing at an hour other than the ordinary one. The result consequently must be that this action fails.

“The pursuer complains that the Justices have extended the time to the Granton Hotel for closing. This they did in virtue of powers specially reserved to them by the Act of 1887, the seventh section of which enacts that ‘nothing contained in this Act shall affect the provisions of the sixth section of the Act 25 and 26 Victoria, chapter 35, respecting the granting of special permissions.’ Now this sixth section of the Act of 1862 gives power to the chief magistrate and to the justices of any county respectively to grant permission to extend the time for supplying liquors in regard to any public or special entertainment, or in any other place or premises during any particular time beyond the time prescribed by the certificate for closing. It was under this power that privilege was granted to the Granton Hotel. And it is further enacted by the Act of 1862 that it shall be lawful for the justices or for the magistrates ‘to make such general regulations touching such permissions as they shall think fit, and such special permissions shall be subject to such general regulations.’ The power therefore to pass general regulations by the justices, as was done by the Justices of Midlothian in 1888, seems to be thus recognised.”

The pursuer reclaimed, and argued—The 44th section of the Act of 1880 was not meant to introduce into Scotland any new system as to licences, but to give the Scottish publican certain financial benefits enjoyed by publicans in England and Ireland. After the passing of the Act the Commissioners of Inland Revenue had allowed Scottish publicans a deduction of one-seventh from the total duty payable as being holders of six-day licences, in respect that they could not keep open house on Sunday. Sec. 2 of 25 and 26 Vict. c. 35, gave the justices power to close public-houses earlier in particular localities than eleven, which was the general hour of closing— Macbeth v. Ashley, 11 Macph. 708 (H. of L.), 1 R. 14. Suppose the Justices had exercised this power in any particular locality, could it have been said that the publicans who were obliged to close earlier that the general hour were not entitled to a deduction of duty as the holders of early closing licences in virtue of 37 and 38 Vict., secs. 7 and 8? The case here was almost the same. The Justices had exercised the powers conferred on them by sec. 4 of 50 and 51 Vict. cap. 38, and as a consequence the pursuer had been obliged to close his premises one hour sooner than what had before been the ordinary hour of closing. There was no statutory enactment fixing another hour of closing than eleven, but the pursuer was compelled to close at ten. He was therefore entitled to a deduction of a seventh from the licence-duty as the holder of an early closing licence. The indulgences granted in particular cases, such as the Granton Hotel, and the fact that in Edinburgh and Leith the closing hour was still eleven, emphasised the hardship to which he would be subjected were the benefit of the deduction claimed not granted.

The respondent was not called upon.

At advising—