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	England and Wales High Court (Administrative Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Administrative Court) Decisions >> Merlot 73 Ltd, R (on the application of) v City of Westminster Magistrates Court & Anor [2013] EWHC 3416 (Admin) (08 November 2013) URL: http://www.bailii.org/ew/cases/EWHC/Admin/2013/3416.html Cite as: [2013] EWHC 3416 (Admin)

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IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		08/11/2013

Mr Justice Blair:

1. These proceedings arise out of licensing conditions imposed on Aura, which is a nightclub in St James' Street, London SW1. Pursuant to an order made on 20 August 2013 by Nicola Davies J, two matters arise for decision. The first is the claimant's application for permission to apply for judicial review of a decision of District Judge Fanning given in the Westminster Magistrates Court on 9 April 2013. The application for permission has been ordered to be heard at the same time as an application by the interested party, Westminster City Council, to discharge a stay of the district judge's decision granted on the papers by Silber J on 13 May 2013 pending determination of the permission application.
2. The facts are as follows. Aura was acquired by the claimant company in 2010. The club is run by Mr Alberto Barbieri who has a financial stake in the business, and who has given several statements in support of the company's application. On 16 August 2012, the Licensing Sub-Committee of Westminster City Council ("the Committee") reviewed the club's licence at the instigation of the police who were concerned about incidents of crime and disorder associated with the club. The police application was supported by Westminster City Council as licensing authority, the Environmental Health Authority (again Westminster City Council), a local resident, and the St James Conservation Trust.
3. The police were seeking revocation of the licence, but the Committee did not go so far as to take that step. What it did was to impose eighteen additional conditions, most of which were proposed by the club. None of these are in dispute. However the Committee also imposed three other conditions to which the claimant company took (and continues to take) objection. These are:

1. No drinks shall be served in glass containers at any time;

2. Recorded music may be played 0900 to 0300 Monday to Sunday;

3. There shall be no admittance to the premises after 0000 (in other words midnight).

4. By s.181 and schedule 5 of the Licensing Act 2003, an appeal lies from decisions of a licensing authority to the magistrates' court. Pending appeal, the decision does not come into effect. The claimant company brought an appeal which was heard by the district judge over eight days. The judge heard evidence, viewed a considerable volume of CCTV footage, visited the premises, and had lengthy written and oral submissions from counsel for the company and Westminster respectively. On 9 April 2013, he handed down a judgment in writing dismissing the appeal.

The notice issue

5. On 8 and 9 May 2013, the claimant's lawyer told the council's lawyer of its intention to bring judicial review proceedings. It is not suggested that there was any mention of its intention to apply for a stay. On 10 May 2013, the claimant company began these proceedings. The claim form was filed at the Administrative Court Office at about 3.45pm on 10 May 2013, which was a Friday. As well as the Claim Form, there was an application for urgent consideration by which the claimant sought interim relief in the form of a stay of the decision of the magistrates' court so far as it related to the three conditions. The application was made on the basis that if a stay was not granted, the claim would become academic, because the claimant company would become insolvent.
6. At 16.33pm that Friday afternoon, the claimant's lawyer emailed the lawyer at Westminster City Council who was dealing with the matter. It said that an application for judicial review was being lodged, and that a hard copy would be sent by courier. However, no mention was made of the application for interim relief, and a copy of the claim was not attached to the email. The papers arrived at the council's offices at 5.28pm, and were signed for by someone at the desk.
7. The matter came to the attention of those responsible at the council on 13 May 2013, which was a Monday. A representative contacted the Administrative Court Office asking that it was not determined for seven days to allow the council time to respond. The claimant says that in those circumstances, no harm was done by the earlier lack of notice because the council had the opportunity to make representations. I do not accept that submission. Had the application for interim relief been drawn to the council's attention on Friday, or earlier when it was being prepared, the council would have had a proper opportunity to put its objections into writing, or otherwise made sure that they got to the judge.
8. The stay that was granted had the usual provision enabling the defendant to apply to vary or discharge the order. Normally, this should have enabled the matter to be brought promptly back to court on an inter partes basis. However, as explained in the evidence of Mr Peter Large, Head of Legal Services at the council, no doubt because of the pressure of work in the Administrative Court, it has taken a considerable time for this matter to come on for hearing. In sum, the council submits that by failing to give it proper notice of the application for interim relief, the claimant company has in effect obtained six months free of conditions imposed on the operation of the club because of concerns as to crime and disorder. Nor, it is submitted, was there any particular urgency in the application, a month having gone by since the decision of the district judge dismissing the appeal.
9. Where a claimant makes an application for interim relief, it must be served on the defendant and interested parties (Practice Direction [2002] 1 WLR 811). As regards urgent applications, CPR PD25A paragraph 4.3(3) provides that except in cases where secrecy is essential (which is not the case here) the applicant should take steps to notify the respondent informally of the application. An obvious way to do that is by phone or email to the person dealing with the matter if known (as it was here). In this case, that did not happen. The email that was sent mentioned only the judicial review proceedings, with no mention of the application for interim relief, and without attaching the relevant documents to the email. The fact that they arrived in hard copy at the desk of the council offices later on the Friday evening was no substitute. The point of giving notice is to give the defendant or interested party a proper opportunity to make effective representations to the contrary (see National Commercial Bank Jamaica Ltd v Olint Corpn Ltd [2009] 1 WLR 1405 at [13], and Fordham, Judicial Review Handbook, 6^th ed, para 20.1.8 where the cases are usefully collected). On behalf of the claimant, Mr Philip Kolvin QC rightly apologised for what had happened, and said that there had been no intention to proceed in an underhand manner. I accept that, but it is regrettable that PD25A was not followed in this case.

The continuation of the stay

10. So far as the stay is concerned, the question at this hearing is whether the stay granted on 13 May 2013 should be continued. Pending determination of the application for permission, or further order, the order stays the decision of the district judge given on 9 April 2013 dismissing the claimant's appeal against the imposition of the conditions imposed by the licensing sub-committee on 16 August 2012. The effect is that the license continues without the three conditions that the claimant company objects to. In determining whether the stay should be continued, the parties were agreed that the question is whether the claim for judicial review raises a serious issue to be tried, and if so, where the balance of convenience, including the wider public interest, lies. In a case like this, the public interest also plays its part in determining the balance of convenience (see R v Ministry of Agriculture ex parte Monsanto plc [1999] QB 1161 at 1173E). The question whether damages would be an adequate remedy does not arise in this case.
11. The essence of the claimant's argument is that the effect of the conditions is to render the business unviable as a night club. The imposition of the conditions will cause the business to close with the consequent loss of jobs and the investment that has been made in it. Although it accepts that crime and disorder have been associated with the club in the past, it submits that steps have been taken to address the problem, which is a diminishing one. It submits that the evidence shows no deterioration since 13 May 2013 since the stay was imposed. Accordingly, it submits, the balance of convenience is strongly in favour of continuing the stay until the judicial review is determined.
12. The council contends that the situation is serious and has continued to cause concern. It has produced evidence from a police officer detailing three incidents in June and July 2013—that is, since the stay was imposed—at least one of which was a serious one. Further, it submits that the only evidence that the business would be rendered unviable is assertion on the part of Mr Barbieri. No evidence has been placed before the court to substantiate the allegations of the asserted financial loss. Taking into account the public interest in cases of crime and disorder, it submits that the balance of convenience strongly favours the discharge of the stay.
13. The council submits that the undertakings offered by the claimant company in support of the stay are of no real utility. It undertakes that the last new entry to the premises would be at 3am. However, the issue is whether the last new entry should be at midnight, so that this simply preserves the club's position. The undertaking that drinking containers will be polycarbonate does not apply to bottles of spirits, wine or champagne. But it is the fact that bottles of spirits (vodka in particular) are left on tables so that people can drink direct from the bottle that has been identified as a particular cause of drunkenness. The undertaking that recorded music for the last half hour would be played at a reduced tempo and volume nullifies the condition that was imposed that all music should stop at 3 am.
14. In my view, there is force in these points, and also in the council's criticisms of the figures as to loss put forward by the claimant. Whereas the district judge was told that the claimant had invested £1m in the club, the figure given in support of the application is £2m. I appreciate that an explanation has been given in this respect, but there are no figures by way of accounts or other supporting evidence as to financial loss as one would expect. I further agree that there is a significant public interest in bringing into effect the conditions imposed by the licensing sub-committee in a case in which concern has been identified as to the operation of this night club unless it can be shown that the decision of the district judge is subject to public law challenge.
15. However in the circumstances, the determinative factor seems to me to be whether there is a serious issue to be tried. That in turn depends on whether the claimant company succeeds in its application for permission to bring judicial review proceedings. If it does not, then these proceedings go no further, and the stay goes as well. If it obtains permission, it will by definition have satisfied the serious issue to be tried threshold. Indeed, this is what the order for the stay contemplates. I shall therefore proceed to consider the application for permission, which is the main substance of the questions I have to decide.

The permission issue

16. In summary, the claimant company argues as follows. It accepts that there was crime and disorder associated with the night club. It was, it suggests, much worse in 2011, but it still existed in 2012, and was unquestionably alcohol related. The key point, it submits, is the steps that were proportionate in addressing the problem. The council, it says, never gave reasons for the three disputed conditions. No officers were called to explain them. The claimant's case is that the existing conditions together with those it proposed constituted a proportionate response. The three disputed conditions were disproportionate because (1) they were not targeted at an identified problem, and (2) went further than necessary (de Freitas v Permanent Secretary of Ministry of Agriculture [1999] 1 AC 69).
17. The judicial review is, of course, directed at the decision of the district judge of 9 April 2013. A number of factual criticisms of the decision were raised by the claimant, but these were not pursued at the permission hearing. The claimant's counsel recognised that if it could not make out an arguable case on the applicable test, it could not succeed on a factual challenge. As made clear in oral submissions, its case is that there are four grounds on which it is entitled to permission to bring these judicial review proceedings. The first is that the district judge applied the wrong test, the second goes to what was called "weight of reasons", the third concerns the question of proportionality, and the fourth concerns the council's policy (this was restricted to the condition as to turning off of the music at 3am).
18. In making these points, the claimant correctly emphasises that the test at this stage is one of arguability. The council submits that there is no properly arguable ground on which the decision of the Magistrates Court can be impugned.

The decision of the district judge

19. The judgment of the district judge set out the relevant provisions of the Licensing Act 2003, in particular the licensing objectives in s.4. These are (a) the prevention of crime and disorder (which is what is primarily at issue in this case), (b) public safety, (c) the prevention of public nuisance, and (d) the protection of children from harm. He set out the principles to be applied as appear in the recent decision of the Court of Appeal as to the approach to be adopted on an appeal from a Licensing authority: see R (Hope and Glory Public House Limited) v City of Westminster Magistrates Court [2011] EWCA Civ 31.
20. The judge analysed the incidents of crime and disorder which were documented before him. These were numerous: there were 32 in evidence up to the date of the review hearing in front of the Committee, though the last one was not proved. There were a further 12 incidents between the decision of the Committee and the appeal hearing. As has been noted, the effect of bringing an appeal is to stay the disputed conditions imposed by the licensing authority, so that the disputed conditions had not come into force at the time of the hearing.
21. The judge dealt at some length with the evidence, and no challenge is made to his findings in that regard on this application. It is plain that some of the evidence was graphic, including an incident on 25 December 2012 where, as the judge put it, "members of the door supervision team ranged their way up Piccadilly". Whilst he did not accept that Mr Barbieri had sought to frustrate the investigation of crimes, he did "…find a tendency on his part to minimise the criticisms levelled at him and at events that took place at the premises. I found his assertions that there were adequate controls to prevent over intoxication unrealistic".
22. The judge concluded that there was abundant evidence that crime and disorder associated with the premises was, in 2011, unacceptably high, and that the decision of the police to seek a license review was a reasonable one. The claimant company conceded that, and still does concede it. The judge noted that the police had sought revocation of the license or a reduction to core licensing hours. He said:

"Revisiting afresh such evidence before me as was placed before the Committee, I am satisfied that the frequency and seriousness of incidents of crime and disorder was such as would justify a decision to revoke the license, or at the least, reduce the operation of the Premises to core hours. The Committee, being an experienced one familiar with the licensing environment in its geographical area, did neither of those things, but took a lesser step – albeit imposing conditions that would, if implemented, affect the existing operation of the Premises."

23. The judge said that in statistical terms there was a significant drop in the number of incidents of crime and disorder recorded, but that since the hearing before the Committee, "… rather than maintain the incident free period either side of it, crime and disorder associated with the Premises has re-emerged".
24. He agreed with the assessment of DS Knight that, "the premises continues to present an unacceptable risk to public safety. The premises continues to be a significant crime generator. The licensing objectives are not being supported. Without a significant change in the operation, these events will inevitably continue".
25. The judge went through the three disputed conditions. Applying the test in Hope and Glory, he rejected the claimant company's case that the conditions were wrong. He said, "Standing back and looking at the evidence in the round, the Premises are correctly labelled as the epicentre for crime and disorder in their immediate environs. The licensing objectives are not being met".
26. He concluded that the claimant company "…has not persuaded me that the Committee should not have exercised its discretion in the way that it did. The conditions are necessary and proportionate to the promotion of the statutory licensing objectives". He therefore dismissed the appeal.

The claimant's case: (1) wrong test

27. The claimant company submits that the district judge applied the wrong test. It bases this contention on paragraph 36 of the judgment where the judge says: "The real issue is whether crime and disorder was, at the time of the review, and still is at the time of this Appeal, reducing such as to render the decision of the Committee to modify the license as it did wrong".
28. The ultimate issue, the claimant submits, is about the type and level of intervention by way of conditions. The test adumbrated by the judge does not deal with that. It does not deal with proportionality, but it is a crude test which deflected the judge from a proper analysis.
29. It is clear however that the judge carefully followed the decision in the Hope and Glory case. That case decides that although an appeal from the decision of a licensing authority to a magistrates court is a full rehearing on the evidence, and the court has to make its decision on the material before it, the licensing authority's decision is a relevant matter to be taken into consideration, and should only be reversed if the magistrates' court is satisfied that the original decision was wrong. In this respect, the Hope and Glory case applies and explains earlier authority. It is clear in my view that the judge applied the correct test.
30. I agree with Mr David Matthias QC for the council that the claimant's submission confuses what the judge identified as the real issue with what he applied as the test. I am satisfied that the reason he expressed himself as he did in paragraph 36 was that this reflected how the case had been put to him. That appears clearly from paragraph 60 of the judgment in which he quoted the claimant's closing as summarising the claimant's position "… essentially as an improving one – so much so that, in the light of that continued pattern of improvement both before and after the Committee review, the decision to impose the modifications to the License is wrong". He was not purporting to apply this as a test, and this ground is not arguable in my view.

(2) Weight of reasons

31. The claimant says, and the district judge pointed out in his judgment, that the conditions relating to the service of drinks in glass containers, and the limit on playing recorded music to 0300, were imposed without any discussion and without any reasons given. (This was not the case as regards the condition as to no admittance after midnight.) In those circumstances, the claimant contends that the judge accorded weight to the decision of the Committee which it did not merit.
32. This issue was dealt with authoritatively in the Hope and Glory case. At [47] Toulson LJ (giving the judgment of the court with Laws LJ and Sir Nicholas Wall P) refers to earlier authority to the effect that the magistrate should pay "… great attention to the decision of the elected local authority and should only reverse it if he was satisfied that it was wrong". However, as the court also pointed out, the weight which magistrates should ultimately attach to the reasons given by the authority "… must be a matter for their judgment in all the circumstances, taking into account the fullness and clarity of the reasons, the nature of the issues and the evidence given on the appeal". As the court put it, the fuller and clearer the reasons, the more force they are likely to carry ([43]).
33. The district judge cited the relevant passages from the Hope and Glory case in paragraph 15 of his judgment, and it is plain that he applied them throughout. Where the authority gave reasons (as it did in relation to the last entry condition), he took those reasons into account. Where no reasons were given, he equally took their absence into account. His approach in this regard cannot in my view be criticised.

(3) Proportionality

34. The claimant company's submission is that where the question is what (if any) steps are to be taken to meet identified concerns regarding crime and disorder, the nature and level of intervention must be considered by asking whether the intervention is appropriately targeted at the identified issue, whether a lesser, or less intrusive, measure would achieve the identified aim, and whether the measure would have an excessive or disproportionate effect on the licensee.
35. The claimant submits that the nature of the proportionality test was of acute concern in this case because it was the claimant's case that the conditions imposed were not properly directed at and/or went further than was necessary to meet identified concerns. This was because it says that there was no evidence that persons arriving at the club after midnight were causing disorder in the street, no evidence of any incident involving champagne, wine or spirit bottles, and no evidence that the playing of exit music between 3am and 3.30am was the source of any harm to the licensing objectives. It is submitted that it is unclear from the judgment what approach to proportionality was adopted by the district judge.
36. The issue between the parties was whether the correct approach required an examination of whether some lesser measure may have sufficed than the conditions imposed, or whether the correct approach was to ask whether the conditions struck a fair balance (see Samaroo v SSHD [2001] EWCA Civ 1139, and Lough v First Secretary of State [2004] 1 WLR 2557). The claimant argued for the first approach, and the council argued for the second approach.
37. The parties' submissions were succinct and helpful, but there does not seem to be much of a difference of substance between these approaches as applied by the district judge. This is consistent with authority, since striking a fair balance lies at the heart of proportionality, as Dyson LJ said in Samaroo at [26]. The same point was made by the ECHR in Tre Traktörer Aktiebolag v Sweden (1990) 12 E.H.R.R. CD 128 at paragraph 114 (and see (1991) 13 EHRR 309).
38. The district judge referred to the decision of the Committee as seeking to balance the conflicting interests of the parties (paragraph 94). It is clear that he addressed the claimant's case that the three conditions were disproportionate as compared to the identified concerns and the evidence (paragraph 61 and following where he sets the case out and the concluding section of the judgment).
39. Having heard the evidence, his conclusion was that the frequency and seriousness of crime and disorder was such as would have justified a decision to revoke the licence, or at least, reduce the operation of the premises to core hours. But the Committee being, as he said, an experienced one, it did neither of those things. He found that the lesser step which it took, albeit affecting the operation of the premises, was a proportionate response.
40. In doing so, he considered the condition in question against the licensing objectives and the evidence. He cited the reason given by the Committee for the imposition of the condition as to final entry: "As a late night destination venue, and with the serious incidents occurring after midnight spread across the week, a last entry at midnight condition was considered an appropriate measure to promote the licensing objectives. The Sub-committee wanted to maintain good order in the area and to give the premises the opportunity to improve further." The district judge was satisfied that this condition would reduce the numbers of people congregating outside the venue between midnight and the venue closing, and would thereby reduce the propensity for crime and disorder.
41. As regards the ban on serving drinks in glass containers, he pointed to the problems caused by handing over large bottles of spirits for free pouring, considering that the fact that the condition caught wine as well as spirits did not mean that it was wrong. There was no reason, he concluded, why the playing of exit music could not coincide with the cessation of alcohol sales.
42. By the time of the appeal, there was (as I have explained) a subsequent record of incidents to take into account. The thrust of the district judge's decision was that whilst outright closure would have been justified, a lesser and more targeted approach was proportionate in the circumstances. He specifically referred to proportionality in his conclusion, saying that the "… conditions were necessary and proportionate to the promotion of the statutory licensing objectives". I agree with the council that the decision is unimpeachable in this respect.

(4) Policy

43. The factual position is that the playing of recorded music was originally unrestricted. At the review hearing, the Committee imposed a time limit to 0300. The claimant submits that it (and the district judge) thereby failed to have proper regard to the council's own policy in that regard. The 2011 version of that policy says that the "benefits of 'winding down' periods (after the last sales of alcoholic drinks, while food and non alcoholic drinks are still available, when the volume and tempo of music is reduced and the levels of lighting are increased)" are "very widely recognised as helping to reduce crime and disorder and public nuisance". The claimant's case is that the last sale of alcohol is at 3am, and to require music to stop at the same time failed to have regard to the policy.
44. The council's response is that the policy is dealing with the situation where there is no restriction on recorded music, or where it may be played later than the last time at which alcohol may be sold. The policy does not deal with the situation where the terminal hour for music accords with that for the service of alcohol.
45. The district judge said that all the evidence suggested that a wind down period towards the end of the evening was appropriate. It seems plain that he had regard to the policy. He said however that there was no real reason why wind down periods should not commence so as to coincide with the cessation of alcohol sales. Fairly read, it appears to me that he considered that the Committee's condition was consistent with the policy. As the council had submitted, it was open to the licensee to begin a wind down period at 2.30 am. In any case, I do not think that this is a conclusion which is open to challenge.

Conclusion

46. I appreciate that this will be a difficult decision for Mr Barbieri, just as the decision of the Licensing Sub-committee and the district judge were difficult for him. Both clearly recognised his experience, and the efforts he has made on a personal level. However, the fact remains that these premises were causing a serious crime and disorder problem, which has not fully abated even now. The district judge's decision was a careful one, reflecting the considerable volume of evidence and submissions that he heard. For the reasons I have stated, I do not consider that the claimant company has shown arguable grounds so as to justify permission to bring this claim for judicial review to challenge it. In accordance with the terms of the order of 13 May 2013, the stay thereby ceases to have effect. I am grateful to the parties for their assistance, and will hear them as to any consequential matters arising from this judgment.