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Scottish Court of Session Decisions |
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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> London and Edinburgh Inns Ltd, Re Petition for Judicial Review [2004] ScotCS 109 (27 April 2004) URL: http://www.bailii.org/scot/cases/ScotCS/2004/109.html Cite as: 2005 SCLR 193, [2004] ScotCS 109 |
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OUTER HOUSE, COURT OF SESSION |
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P408/04
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OPINION OF LORD BRODIE in Petition of LONDON AND EDINBURGH INNS LIMITED Petitioners; for Judicial Review of a decision of the North Ayrshire Licensing Board dated 15 March 2004
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Petitioner: Sir Crispin Agnew of Lochnaw, Q.C.; Biggart Baillie
Respondent: Blair; Lindsays, W.S.
27 April 2004
Introduction
[1] The petitioners are a company incorporated under the Companies Acts and having their registered office at 4 Clarendon Place, King Street, Maidstone, Kent. They carry on business as owners and tenants of licensed premises. The respondents are the North Ayrshire Licensing Board. In this application for judicial review the petitioners seek: (a) reduction of a decision of the respondents dated 15 March 2004 refusing, as incompetent, an application by the petitioners, in terms of section 25(1A) of the Licensing (Scotland) Act 1976 ("the Act"), to transfer to the petitioners the public house licence in respect of premises known as "Trisha's", 69A Princes Street, Ardrossan ("the Premises"), on a temporary basis; and (b) an order ordaining the respondents to convene a licensing board meeting within 7 days of the order reducing the decision of 15 March 2004 and thereat to consider the petitioner's application for temporary transfer on its merits.[2] The petition came before me for a first hearing on 21 April 2004. Answers had been lodged on behalf of the respondents on 20 April. At the hearing Sir Crispin Agnew Q.C. appeared for the petitioners. Mr Blair, Advocate, appeared for the respondents. I heard argument which continued on 22 April. It was explained that, from the perspective of the petitioners, the matter was of considerable urgency in that they could not currently trade from the Premises. I accordingly announced my decision on 27 April 2004. My reasons are contained in this opinion.
Summary of the statutory provisions
[3] In terms of section 9 of the Act a licensing board may, in accordance with the provisions of part II of the Act, grant a licence to any person for the sale by retail or supply of alcoholic liquor by that person. One of the types of licence that may be granted is a public house licence. There are other types of licence. In terms of Schedule 1 to the Act a public house licence is a licence granted in respect of a public house specified therein which authorises the holder thereof to sell by retail alcoholic liquor for consumption on or off the premises. An effect of holding a licence is that it permits the holder to traffic in alcoholic liquor in the premises. This would otherwise be prohibited by section 90 of the Act. On applying for a new licence the applicant is required by section 10(2)(a) of the Act to lodge with the clerk to the board a plan of the premises in respect of which the application is made. That plan serves to identify what are the premises in respect of which the licence is granted. An application for a licence may be made by an applicant who is not an individual natural person (section 11(1) of the Act) but in that case the application shall name both the applicant and the employee or agent of the applicant whom the applicant intends should have the responsibility for the day to day running of the premises to which the application relates. Such employee or agent may be referred to as a section 11 nominee. In terms of section 30(1) of the Act, subject to exceptions, a new licence shall come into effect on being granted by a licensing board and, in terms of section 30(3), shall have effect until the quarterly meeting of the licensing board three years after the meeting at which the licence was granted by the board. A licence holder may apply for a renewal of the licence. In terms of section 30(2) of the Act, a renewed licence shall come into effect on being renewed by the licensing board and, in terms of section 30(3), shall have effect until the quarterly meeting of the licensing board three years after the meeting at which it was renewed. In terms of section 25(1) a licensing board may transfer to a new tenant or to a new or existing occupant of any licensed premises the licence then subsisting in respect of the premises. This is referred to as a permanent transfer. In terms of section 25(1A) a board may make such a transfer on a temporary basis. Section 17 of the Act sets out the grounds upon which a licensing board shall refuse an application. Section 17(2) discriminates as to the grounds on which an application may be refused among three types of application: for a new licence, including a provisional grant of such a licence; for the renewal of a licence; and for a permanent transfer of a licence. It may be taken to be the case that the sole ground upon which a permanent transfer may be refused: that the applicant, employee or agent named in the application is not a fit and proper person to the holder of a licence, applies equally to a transfer on a temporary basis - J & J (Inns) Ltd v Angus District Licensing Board 1992 SLT 930 at 933L to 934D.[4] Holding a licence is onerous as well as beneficial. For example, the consent of the licensing board is required for the reconstruction, extension or alteration of licensed premises - section 35(1); bylaws may prohibit holders of licences from residing in their licensed premises - section 38(1)(b); conditions may be attached to licences as provided by byelaws, a breach of which may render the licence holder guilty of an offence - section 38(1)(f) and (4); there are a number of offences which can only be committed by a licence holder, his employee or agent - section 69(1) and (5), section 76, section 77, section 78(2); a drunk person shall be guilty of an offence if he attempts to enter any licensed premises, unless he resides there - section 74(1) and the licence holder his employee or agent shall be guilty of an offence if in the premises while drunk - section 77.
[5] In Docherty v Leitch 1998 SLT 374 Lord Bonomy held, on a construction of 139(1) of the Act, that there cannot be in force in direct competition with each other two similar licences for the same premises (supra at 376E). It may be, however, that there are different types of licence (a public house licence and an entertainment licence, for example) contemporaneously in force in respect of the same premises, which was the situation disclosed in WGR Trading Ltd v Highland Licensing Board 2003 SLT 1019.
The facts
[6] On 17 March 2003 the respondents granted a public house licence in respect of the Premises (described as Trishas Place, 69/71 Princes Street, Ardrossan). In the petition it is averred that this was a renewal. The licence holder was Ms Patricia Payne. A copy of this licence is lodged as 6/8 of process. The licence bears to be effective until the quarterly meeting of the licensing Board in March 2006. Ms Payne is named as licence holder.[7] Ms Payne's entitlement to occupy the premises depended on a Licence Agreement between her and Kingdom Taverns Limited, dated 16 December 2002 and 15 January 2003 and registered in the Books of Council and Session on 14 February 2003. A copy of the Licence Agreement is lodged as 6/2 of process. The petitioners became interposed between Ms Payne and the proprietors of the Premises in terms of Lease between Abacus Estates Limited, as landlord, and the Petitioners, as tenant, registered on 17 September 2003, a copy of which is lodged as 6/1 of process. Counsel for the petitioners characterised the position of the petitioners as mid-landlords and that of Ms Payne as sub-tenant and licence holder. The petitioners aver that they are the persons entitled to take possession of the Premises when Ms Payne vacated them. In the Answers that averment is not known and not admitted but I did not understand it to be challenged and I proceed on the basis that it is accurate.
[8] On 12 February 2004 Ms Payne attended at the respondents' offices. She met with Mr Kevin Walsh, Solicitor, Depute Clerk to the respondents. Mr Walsh
narrates what then occurred in an affidavit which is 7/3 of process. Mr Walsh
understood from Ms Payne that she wished to surrender her licence. He asked her to
confirm this in writing. Ms Payne wrote a letter in the following terms:
"To whom it may concern
I am writing to confirm that I have handed back my Public bar licence to the licensing board as I am no longer trading for business at 69 Princes Street.
Yours
P. Payne
12/2/04"
A copy of that letter is 6/3 of process. Ms Payne handed over the letter to Mr Walsh, together with the licence, 6/8 of process. It is averred on behalf of the respondents, in Answer 6(a), that in the whole circumstances of Ms Payne's discussions with Mr Walsh and the terms of her letter, the respondents were entitled to conclude that the premises had been vacated or abandoned with the effect that the licence had been surrendered.
[9] The petitioners completed a pro forma Application for Temporary or Permanent Transfer of a Licence in their favour, dated 20 February 2004, a copy of which is 6/4 of process. This they submitted under cover of letter of the same date. A copy of the letter is 6/5 of process. Mr Walsh replied to the petitioner's letter on behalf of the respondents by letter of 5 March 2004. A copy of Mr Walsh's letter is 6/6 of process. It states, as the position of the respondents' officers, that the licence for the Premises had been surrendered by the sole licensee, and accordingly it must be deemed to have lapsed and no longer be in effect, but that a decision on the competency of the petitioners' application for a transfer on a temporary basis was outwith officers' powers and that therefore the petitioners' application would be heard by the respondents on 15 March 2004.[10] On 15 March 2004 the respondents, having received advice from their clerk to the effect that the licence was capable of surrender, had been surrendered and therefore had fallen, determined to refuse to consider the petitioners' application for a transfer of the licence on a temporary basis on the ground that the application was incompetent. A transcript of the proceedings before the respondents on 15 March 2004 is lodged as 7/1 of process.
Submissions of counsel
Counsel for the Petitioners
[11] Counsel for the petitioners outlined his submissions in support of his contention that the respondents had erred in law in holding the application incompetent as follows. (1) There was no provision in the Act for surrender of a licence. Purported surrender was therefore incompetent. (2) The scheme of the Act was to continue the licence so that a new tenant or occupier could it take up. (3) If, contrary to the principal submission, surrender is competent, it is only competent in two situations: (i) in order to permit the grant of a different licence for the same premises; and (ii) in order to substitute alternative premises for the existing premises. (4) If surrender is competent, it requires to be accepted by the licensing board (and not simply by its officers). Surrender cannot be a unilateral act. (5) In any event, even if surrender is competent, the letter, 6/3 of process, does not amount to a surrender. It is no more than a notification that Ms Payne was no longer trading. (6) In that, in terms of section 3 of the Human Rights Act 1998, to the extent that it was possible to do so, the Act had to be read and given effect in a way which was compatible with the rights set out in, inter alia, article 1 of the First Protocol to the European Convention on Human Rights, the court should construe the Act in a way that avoids the petitioners being deprived of their entitlement, in terms of section 25, to apply for a transfer of the licence.[12] Counsel for the petitioners reviewed the relevant provisions of the Act. He emphasised that section 30 provided that the currency of a new or renewed licence was three years. He examined the transfer provisions now contained in section 25 of the Act. These were a re-enactment of what had appeared in section 31(1) of the Licensing (Scotland) Act 1903 and section 47(1) of the Licensing (Scotland) Act 1959. Provision had been made, by amendment to the Act, for transfer to an existing occupant of licensed premises following the decision in Chief Constable of Tayside v Angus District Licensing Board 1980 SLT (Sh Ct) 31. The scheme, it was submitted, was that the licence subsists and is available for transfer to the new occupier. The licensing board can be taken to have satisfied itself as to matters relating to the premises at the stage of the grant of a new licence or a renewal, leaving for consideration only the question as to whether the transferee was a fit and proper person. There was a legitimate expectation on the part of a new occupant of the premises that he be able to apply for a transfer.
[13] As far as surrender was concerned, there was no clear case-law in Scotland. Counsel did not accept as accurate the statement in Cummins Licensing Laws in Scotland (2nd edit) at page 164 to the effect that the practice of surrender had been homologated, in the sense of being affirmed as legally competent, by the sheriff, in D & A Haddow Ltd v City of Glasgow Licensing Board 1983 SLT (Sh Ct) 5. It was counsel's position that surrender, in the sense of bringing a licence to an end prior to the expiry of three years following grant or renewal, was incompetent. Counsel accepted that licensing boards talked of "surrender" when a new licence superseded an old licence (either in respect of the same or different premises) but such situations fell to be analysed as instances where an undertaking was given by the old licence holder not to operate the old licence during its currency in the event of being granted a new licence and, if necessary, any successor occupier of the premises in respect of which the old licence had been granted was bound not to operate the old licence.
[14] If, contrary to his principal submission, surrender is competent it was the submission of counsel for the petitioners that it was only competent in the two situations which he had identified and which, he accepted, in practice are described as surrenders: firstly, in order to permit the grant of a different licence for the same premises; and, secondly, in order to substitute alternative premises for the existing premises. Counsel further submitted that this could only be done where the licence holder was the only person affected or potentially affected by the surrender, but not where the interest of the new occupier might be prejudiced. It was counsel's submission that once a licence holder ceded possession, all his rights ceased, including any right he might have to "surrender" the licence. He found support in the opinion of Lord Kinnear in Campbell v Neilson (1897) 24 R (J) 28 at 31, and the decision of Sheriff Lilley in West Wemyss United Services Club Applicants 1948 SLT (Sh Ct) 33 at 35. There was a public interest in premises that had been licensed continuing to be operated as licensed premises - Tominey v City of Glasgow Licensing Board 1984 SLT (Sh Ct) 2. This was not to be defeated by the unilateral act of the outgoing licence holder.
[15] If surrender was to be regarded as competent, it was counsel's submission that to be effective it must be accepted by the licensing board and not just by an officer. In the absence of any Scottish authority, counsel pointed to two English decisions: Drury v Scunthorpe Licensing Justices (1993) [12] Licensing Review 13 and Carter v Pickering [1949] All ER 340 as supporting his proposition that it was necessary that the board accept an offer of surrender, having heard all the relevant facts, including whether there was a new occupier prepared to take the licence on (whose rights, I understood counsel to submit, the licensing board had a duty to have regard to).
[16] Counsel finally argued that if there was thought to be dubiety in the interpretation to be given to the Act, section 3 of the Human Rights Act 1998 required it to be read and given effect in a way in which was compatible with Convention rights. That approach (explained by the Court of Appeal in Wilson v First County Ltd [2002] QB 74 at 96) supported the Petitioners' construction. A licence was to be regarded as a possession for the purposes of article 1 of the First Protocol to the Convention - Tre Traktorer Aktiebolag v Sweden (1989) 13 EHRR 309. The petitioners' economic interests included their interest as mid-landlord of the premises but also their interest in being able to make an application for a transfer. At the very least, the petitioners had a legitimate expectation of having their application considered - Di Ciacca v The Scottish Ministers 2003 SLT 1031 at 1044B; Pine Valley Developments Ltd v Ireland (1991) 14 EHRR 319, paragraph 51 at 354. So far as it was possible to do, the Act was to be interpreted in such a way as to avoid the petitioners being deprived of the entitlement to apply for a transfer of the licence which was conferred by section 25(1).
[17] The final fallback position adopted by counsel for the petitioners was that, when one considered its terms, the letter written by Ms Payne, 6/3 of process, did not constitute a surrender. It was no more than an intimation by Ms Payne to the respondents that she was no longer trading.
Counsel for the Respondents
[18] Counsel for the respondents had five submissions: (1) It was competent to surrender a licence; (2) In this case the licence had been surrendered by Ms Payne; (3) There was no need for the surrender of a licence to be made to the licensing board; (4) The effect of the surrender was to prevent transfer to the new tenant or occupant; and (5) The Petitioners' position was not advanced by the Human Rights Act 1998.[19] In developing his submissions counsel suggested that a conclusion that it was not competent to surrender a licence would have odd consequences. He reminded me that a licence brings with it responsibilities as well as rights. He referred, in particular, to sections 35, 69(2), 74(1) and (2), 78(2), 77, and 79 of the Act. It would be odd if a licensee could not release himself from the responsibilities which brought with them liability to prosecution in certain events. There was nothing in a plain reading of section 25 to suggest that its purpose was to prevent a capricious licence holder frustrating the acquisition of a licence by a subsequent occupier of the premises, as counsel for the petitioners had argued. Section 25 was simply an administrative mechanism for facilitating the transfer of a licence in circumstances where the licence holder was no longer in a position to make decisions in relation to the premises. Counsel accepted that it was a consequence of his argument in the present case that Ms Payne had, by her actions, deprived the petitioners of what would otherwise have been their statutory right to apply for a transfer of the licence. However, regard also had to be had to Ms Payne's rights, including the rights guaranteed by article 1 of the First Protocol to the Convention. In construing the Act there is a presumption, which is reinforced by article 1 of the First Protocol, that Parliament does not intend to interfere with property rights. If one accepts that a licence is a possession for the purposes of article 1 of the First Protocol, which the respondents admit in their Answers, to prevent the licence holder surrendering her licence, possibly with the intention of frustrating the plans of a potential trade competitor, would seem to be a disproportionate control of the possession which is represented by the licence and therefore contrary to the Convention - Tre Traktorer Aktiebolag v Sweden supra and Sporrong and Lonnroth v Sweden (1986) 8 EHRR 329.
[20] Counsel for the respondents turned to the consequences if the petitioners were correct in saying that a licence holder could not get rid of the responsibilities imposed by the grant or renewal of a licence. In that event, the conditions attaching to the licence and the criminal sanctions available in the event of certain behaviour would continue to apply notwithstanding, for example, the licence holder giving up the sale of liquor in the premises in favour of the sale of non-alcoholic beverages or food. What was the compelling interest that required a licence holder to remain vested with the licence when he did not want this? If a licence was to be seen as a bundle of rights and liabilities the licence holder must be able to divest himself of it. The licence holder has something of value but he may not wish another person to acquire it. In the absence of an explicit prohibition on surrender in the Act it should not be interpreted as containing such a prohibition. There was recognition of the competency of surrender in the case-law and in a principal textbook. The analysis of situations commonly described as surrenders which had been offered by counsel for the petitioners was inadequate. It did not meet the construction of section 139 adopted by Lord Bonomy in Docherty v Leitch supra which was that there could never be two of the same type of licences in force in respect of the same premises at the same time. How, in any event, could an outgoing licence holder bind a subsequent occupier not to seek a transfer?
[21] Turning to whether there had been a surrender in the present case, counsel submitted that the matter was to be taken in the round. It did not depend simply upon the terms of the letter, 6/3 of process. The analysis adopted in Drury v Scunthorpe Licensing Justices supra was not accepted. In recognising what amounted to a surrender, assistance was provided by the opinion of Lord Kinnear in Campbell v Neilson supra. There must be an unequivocal communication of intention to the licensing board. It was therefore not unilateral in the sense that the licence holder was to be taken to have surrendered the licence simply by walking out of the premises, but once the intention had been communicated to the board that was enough, it need not be accepted by the board. Communication could be effected by intimation to an officer of the board as had occurred here. Counsel did not accept that there was any obligation on the licensing board to enquire whether there were potential applicants for a transfer of the licence or to have regard to their interests. Looking to Drury v Scunthorpe Licensing Justices it appeared that the court had there erected a superstructure over and above what was required by the Licensing Act 1964. This is not a route which the Scottish courts should embark upon. What form would the equivalent superstructure take? If notice should be given to potential applicants for a transfer, to whom should notice be given, it being remembered that there might be a number of potential transferees? How should it be done? In the event of conflicts, how were they to be resolved?
[22] It was counsel's submission that surrender of the licence by the licence holder prevented transfer of the licence. On surrender the licence no longer existed. To use the language that had been used by Lord Cameron in Edward Barrett Ltd v Dundee District Licensing Board 1992 SLT 962, the licence ceased to have effect. It was therefore no longer a subsisting licence which was available for transfer in terms of section 25. Counsel contrasted the position under section 25 of the Act with the position under the equivalent provision of the statute which was under consideration in Campbell v Neilson (section 19 of the Act 9 Geo IV (the Home Drummond Act)).
[23] Counsel for the respondents finally submitted that section 3 of the Human Rights Act 1998 did not advance the petitioners' position. Article 1 of the First Protocol related to existing not future rights - Di Ciacca v The Scottish Ministers supra at 1043B. Whereas a legitimate expectation can be a possession for the purposes of article 1, the present case was in very different territory from Pine Valley Developments v Ireland. Here the expectation was not substantive but procedural. All section 25 provides is a procedure relative to a property right. It is not a property right in itself.
Discussion
[24] A licence may expire if no application is made for its renewal - section 30(4) of the Act. A licence may cease to have effect. For example, in terms of section 11(4) of the Act, unless a licence which is held by a section 11 nominee is transferred to another employee or agent within eight weeks from the time when the section 11 nominee ceases to be responsible for the day to day running of the premises to which the licence relates, the licence shall cease to have effect. In the event of a licence being suspended in terms of section 31, it shall cease to have effect during the period of the suspension. A licence may be declared to be forfeited in the event of the premises being reconstructed, extended or altered without the consent of the licensing board - section 35(4) of the Act. In terms of section 25, a licence may be transferred. The word "surrender", on the other hand, is not to be found anywhere in the Act. Notwithstanding that, it is clear from what I was told and what I was referred to, that the word, and the practice it describes, have currency in Scottish practice. There is reference to surrender in D & A Haddow Ltd v City of Glasgow Licensing Board supra (where the sheriff made it a condition of the grant of licence in respect of particular premises that a licence for other premises "is surrendered"), in Tominey v City of Glasgow Licensing Board 1984 SLT (Sh Ct) 2 and in Docherty v Leitch supra. Cummins Licensing Laws in Scotland (2nd edit) at page 164 describes the practice of surrender as well established. Counsel for the Petitioners identified two situations where it is usual to proceed by way of "surrender": first, in order to permit the grant of a different licence for the same premises by a surrender of the original licence and the grant of a licence, in different terms, in substitution for what has been surrendered; second, in order to substitute alternative premises for the existing premises; although he argued that what was happening in these situations might properly be characterised in terms which did not involve the notion of a surrender of the licence. However, he did not shrink from accepting that these situations are commonly described as surrenders in practice and, indeed, as an alternative argument, he suggested that surrender might be competent, albeit only in the two situations that he had identified (as was decided, in relation to England, in Drury v Scunthorpe Licensing Justices supra). What I take from this is that the concept of surrender has been found to be a useful one by Scottish licensing boards and those applying to them for licences. For that reason alone, I am of the opinion that the court should consider a submission that surrender is incompetent with some care, and only uphold it if it is necessary to do so, having regard to the licensing scheme established by the Act. I do not see the absence of the word "surrender" from the text of the Act to be, of itself, determinative. In Edward Barrett Ltd v City of Dundee District Licensing Board supra Lord Cameron of Lochbroom was considering the terms of the Betting, Gaming and Lotteries Act 1963, and the position of a betting office licence granted under that Act. The 1963 Act is in materially different terms from the Licensing (Scotland) Act 1976, but, like the Act, it contains no specific provision for surrender of a licence. On that matter Lord Cameron observed that there was nothing in the 1963 Act which prevented the surrender of a betting office licence while it was in force. He referred to two cases in the Sheriff Court where the sheriff, in appeals against refusals of applications for betting office licences, granted a licence on condition that another licence be surrendered: Connelly v Glasgow Licensing Authority 1964 SLT (Sh Ct) 77 and W & S Murphy Ltd v Alloa Burgh Licensing Authority 1973 SLT (Sh Ct) 2. Lord Cameron expressed the opinion that in such events the licence ceases to have effect upon surrender. I do not forget that it was the submission by counsel for the respondents that it was competent to surrender a licence granted under the Act. It seemed to me that there was force in counsel's submission that it would appear anomalous if the Act had to be construed as preventing a licence holder from divesting himself of his licence with all its possibly onerous associated obligations for a period which might be as long as three years, even in circumstances where the licensing board, which is the body charged with protecting the public interest, is entirely content that he do so. I would add that I find the proposition that a licence holder cannot surrender (in the sense of divesting himself of) his licence to be inconsistent with the opinions of the Lord Justice-General and Lord Kinnear in Campbell v Neilson and the decision of Sheriff Lilley in West Wemyss United Services Club Applicants. These cases, of course, relate to legislation which preceded the Act and to previous licensing schemes but it may be asked what is it about the current scheme that is inimical to a licence holder giving up his licence?[25] I am accordingly by no means persuaded that the holder of a licence granted in terms of the Act cannot surrender that licence (in the sense of effectively renouncing or divesting himself of the rights and obligations consequent on the grant). However, that may not be a question that I need decide. I only require to determine upon the question of the competency of surrender and, indeed, the further questions as to what a licence holder requires to do, for his part, to constitute an effective offer of surrender, and whether, and how such an offer of surrender requires to be accepted by the licensing board, if the necessary consequence of a surrender which is effectual to divest the then licence holder of his whole right, title and interest to and in the licence, is to prevent a new tenant or new or existing occupant of the premises from making an application to the licensing board in terms of section 25(1A) for a transfer of the licence then subsisting. The further questions are no doubt interesting, and I heard submissions on them, but their answers are academic, as far as this petition is concerned, unless surrender of a then subsisting licence by the former tenant or occupant has the result of depriving a new tenant or occupant of what would otherwise be his statutory entitlement to make an application in terms of section 25 and, equally, the result of depriving the licensing board of what otherwise would be its power to transfer. The function of the court is not to answer academic questions, however interesting they may be. Where, as here, parties wish a decision as a matter of urgency, there is particular reason to avoid taking up time in answering what may be unnecessary questions. What I propose to do therefore, is to assume, for the moment, that it was competent for Ms Payne, having unequivocally and permanently given up possession of the premises, to surrender the licence of which she was the licence holder and that, by giving up possession and then giving the information that she gave to Mr Walsh verbally and in writing, she effectually did so. When I use the expression "surrender the licence" I mean renounce all right title and interest to and in the licence with the result that the licensing board no longer considers the person who has surrendered the licence to be the licence holder and no longer looks to that person to fulfil such onerous obligations as may be consequent on the licence. To use the expression used by counsel for the respondents during his submissions, on "surrender" I would take the former licence holder to be divested of the licence.
[26] I turn to consider whether a surrender, so defined, by a former tenant or occupier, makes it incompetent for a new tenant or occupier to apply for transfer or a licensing board to transfer the licence then subsisting in respect of the premises.
[27] Section 25 of the Act provides, inter alia, as follows:
"25. - (1) A licensing board may, on an application made to the board in that behalf transfer to a new tenant or to a new or existing occupant of any licensed premises the licence then subsisting in respect of these premises.
(1A) At any time, a licensing board may make such a transfer on a temporary basis and the licence so transferred shall have effect until the appropriate meeting of the board, which shall be -
(1C) Where a board refuses to make a permanent transfer of a licence which has been temporarily transferred under subsection (1A) above, the licence so transferred shall have effect until the time within which an appeal may be made has elapsed or, if an appeal has been lodged, until the appeal has been abandoned or determined."
[29] In their respective submissions, both counsel referred to the opinions in Campbell v Neilson supra. That was an appeal by John Campbell who had been convicted in the City Police Court, Glasgow, with having on 14 November 1896 trafficked in excisable liquors in premises occupied or possessed by him at No 11 Back Wynd, Glasgow, without having obtained a certificate in that behalf, in terms of the Public Houses Act Amendment (Scotland) Act 1862. He had been fined ten shillings. The circumstances were as follows. John Campbell had been granted a renewal of his then existing public-house certificate for the premises on 14 April 1896. The renewed certificate was to be in force from 15 May 1896 until 15 May 1897. On 11 August 1896 John Campbell's father, Bernard Campbell, by arrangement with John, applied for a transfer of the certificate. On 19 August 1896 Bernard obtained from the magistrates, in exercise of their powers under sections 19 and 20 of the Act 9 Geo IV (the Home Drummond Act), a transfer of the certificate. The transfer certificate bore to be conditional on being presented for registration at the excise office within six days "otherwise the [certificate] to be null and void and to all intents and purposes" (a then apparently standard condition). Bernard uplifted the transfer certificate from the magistrates but he did not present it for registration at the excise office and it was accordingly not registered. Bernard nevertheless applied to the magistrates for a renewal of the transferred certificate. This application was refused on 20 October 1896. John thereupon reopened the premises, having given notice to the Chief Constable, and resumed the sale of excisable liquor. John contended that in the circumstances he was entitled to do so by virtue of the certificate that had been renewed on 14 April 1896. It was argued on his behalf in the appeal that as the transfer of the certificate to Bernard was conditional on Bernard presenting it at the excise office and as Bernard had not done so, the transfer made on 19 August 1896 became null and void. The result was that the certificate that had been renewed on 14 April 1896 and which had thus never been effectually transferred, revived and John was entitled to trade under it. This argument was rejected and John's appeal was dismissed. Lord Justice-General Robertson accepted that what he described as the transfer of the certificate had become void but, for him, the true ground of judgement was to be found in section 19 of the Home Drummond Act under which transfers of certificates were granted. That section provided:
"That if any person duly authorised to keep a common inn, alehouse, or victualling house ...shall remove from or yield up possession of the house and premises for which such certificate shall have been granted, it shall be lawful for two or more ... Magistrates ... to grant to any new tenant or occupier of such house and premises upon such removal, a transfer of the certificate to keep such house and premises as a common inn, alehouse, or victualling house as before such removal, until the next general or district meeting to be held under the authority of this Act."
It was the opinion of the Lord Justice-General that irrespective of the transfer becoming null and void "nothing that can happen to the transfer or transferee will ever revive the right of a man who, ex hypothesi, has removed or yielded up possession of the premises to which the certificate relates. He can resume business only on a new certificate" (supra at 30). Lord Adam saw the transfer by the magistrates as being what it was that divested John of "any right or title to the certificate" (my emphasis) (supra at 31) but, in a passage to which both counsel drew my attention, Lord Kinnear said (supra at 31):
"I think the right of the original holder of the certificate is absolutely determined when he has removed from his premises and placed the assignee of his business in a position to apply to the magistrates for a transfer of the certificate, which the magistrates have granted. After that it appears to me that no right remains vested in the original holder."
Thus, according to the Lord Justice-General and Lord Kinnear, under the licensing scheme which the Home Drummond Act had in part established, the licence holder lost his right in respect of the licence on his removal from the premises. After that, at least according to Lord Kinnear, no right remained vested in him: the situation of Ms Payne, as posited by counsel for the respondents, after she had surrendered the licence in respect of the Premises. Nevertheless, it was open to the magistrates, in the language of section 19 of the Home Drummond Act, to grant "a transfer of the certificate" (my emphasis). If it is proper to draw an analogy as between the licensing scheme under the Home Drummond Act and that under the Licensing (Scotland) Act 1976, then the full transaction described in Mr Walsh's affidavit was unnecessary in order that Ms Payne surrender her licence. She did so simply by giving up possession of the premises in respect of which the licence had been renewed. Be that as it may, of particular interest in the present case is the opinion of Lord Kinnear shared, as I read the decision, by the Lord Justice-General, that the public-house certificate survived as available for transfer notwithstanding the complete and final extinction of any right to it on the part of the former licence holder. That this was the effect of the provisions of the Home Drummond Act was expressly accepted by counsel for the respondents in the present case. However, he sought to distinguish the terms of section 19 of the Home Drummond Act which, he said, protected the certificate from what otherwise would be the consequence of surrender, from those of section 25 of the Licensing (Scotland) Act 1976 which permitted the transfer only of a licence which was "then subsisting". I have expressed my view as to what is meant by "the licence then subsisting" in the immediately foregoing paragraph of this opinion. Clearly, section 19 of the Home Drummond Act is in different terms from the provision which is applicable here. Nevertheless, I have been fortified by what was said by the Lord Justice-General and Lord Kinnear in Campbell v Neilson, under reference to the Home Drummond Act, in my conclusion that a divestiture of the whole rights of a licence holder under the Licensing (Scotland) Act 1976 does not make it incompetent for the successor of that licence holder as occupant of the premises to apply for a transfer of the licence under section 25.
[30] In arguing against the conclusion that the petitioners' application had been competent, counsel for Respondents pointed to the interest or possible interest of Ms Payne in preventing a transfer to, for example, a potential trade competitor. I accept that there may be circumstances where an outgoing licence holder might, for understandable reasons relating to the securing of commercial advantage or simply for spite, wish to delay or prevent the premises being used as licensed premises. If counsel for the respondents was correct in his submissions, that objective could be achieved by the outgoing licence holder surrendering the licence, in the sense discussed above. If, on the other hand, he was not correct, that objective cannot be achieved by that means. For the reasons given above, I consider that counsel for the respondents was not correct in his submissions. That means, if I am correct, that it is not an incident of a licence granted under the Act that the licence holder can, on giving up the premises and all right, title and interest in the licence, deprive a successor occupant of the premises of the entitlement conferred by section 25 to apply for a transfer or deprive the licensing board of the power to make a transfer conferred on it by the same section. That the outgoing licence holder might wish it were otherwise, seems to me neither here nor there. He or she simply does not have that incidental right. There has been no failure to provide the protection guaranteed by article 1 of the First Protocol. I would accept that, among other considerations, the Act is to be interpreted in a way which is consistent with the policy which can be discerned from the statutory licensing scheme and, to the extent that this is different, in a way which will make practical sense in the context of that scheme - Docherty v Leitch supra at 376E. In that regard I agree with counsel for the petitioners that the policy of the Act is to facilitate transfer of licences with a view to protecting the legitimate private interest of proprietors and tenants in maintaining the value of licensed premises and protecting the public interest in there being an adequate provision in the locality for the retail of liquor. I fail to discern any policy which favours allowing the outgoing licence holder who, ex hypothesi, is giving up all his responsibilities in respect of the premises, preventing their early use in the way in which the licensing board has determined they should be used for the currency of the licence. It is accordingly my opinion that the interpretation that I have adopted is consistent with the policy of the Act.
Decision
[31] In my opinion the respondents erred in law in deciding, on 15 March 2004, to refuse to consider the petitioners' application for the temporary transfer of the licence in respect of the Premises on the grounds that it was incompetent.
Remedy
[32] At the beginning of his submission, counsel for the respondents drew attention to the practical difficulties facing the respondents in convening a quorate board at short notice. He also reminded me that the respondents might require time to consider whether the petitioners and their section 11 nominee were fit and proper persons. This might be a real issue in relation to the proposed section 11 nominee because of his responsibilities as a section 11 nominee in respect of other premises. However, when I announced my decision on 27 April 2004, counsel for the respondents indicated that the respondents had arranged matters so that they would be able to convene a meeting within 7 days of the court's order, at which meeting they would anticipate being in a position to consider the application on its merits. I would respectfully commend the respondents for what I would see as a properly co-operative and responsible approach in responding to the court and discharging their statutory duties.[33] I shall grant the orders sought by the petitioners in statement 3 of the petition, these being reduction of the decision of 15 March 2004 and an order to convene the licensing board within 7 days in order to consider the application. Counsel for the petitioners moved for the expenses of the petition. His motion was not opposed. I shall award the expenses of the petition in favour of the petitioners.
