Scottish Sheriff Court Decisions

(B892/09)

JUDGMENT OF

SHERIFF PRINCIPAL EDWARD F BOWEN QC

in the appeal

in the cause

ROC UK LIMITED

Appellants

against

CITY of edinburgh licensing board

Act: Skinner, Advocate, instructed by Lindsays

Alt: Armstrong, QC instructed by City of Edinburgh Council

EDINBURGH, 25 January 2010

The Sheriff Principal, having resumed consideration of the cause, answers the questions of law contained in the Stated Case in the affirmative and sustains the appeal; remits the case to the City of Edinburgh Licensing Board for re-consideration of its decision dated 24 November 2008 to refuse the appellants' application under section 20 of the Licensing (Scotland) Act 2005 for a premises licence in respect of premises at 23 Canonmills, Edinburgh: Finds the respondents liable to the appellants in the expenses occasioned by the appeal and remits the account thereof, when lodged, to the Auditor of Court for taxation; certifies the cause as suitable for the employment of counsel.

(signed) E Bowen

NOTE:

1. This is an appeal against a decision of the City of Edinburgh Licensing Board to refuse an application made under section 20 of the Licensing (Scotland) Act 2005 by ROC (UK) Limited (hereinafter referred to as "the appellants") for a "premises license" in respect of premises at 23 Canonmills, Edinburgh.

2. As is narrated in paragraph 3(a) of the Stated Case, the premises in question are operated as a small retail shop/petrol filling station as part of the ROC chain which is the retail division of ESSO petroleum company. Alcohol has hitherto been sold under an off-sales license granted by the Board under the provisions of the Licensing (Scotland) Act 1976 which conferred a discretion on licensing authorities to grant off-sales licenses to garage forecourt shops.

3. The Scottish Parliament in passing the 2005 Act determined that this discretion should be removed. Section 23 of the Act, read short, provides that a Licensing Board must refuse an application for a premises license if the premises which are the subject of the application are "excluded premises". Premises "used as a garage or which form part of premises so used" fall within the category of "excluded premises" in terms of section 123(2)(b). Sub-section (5) of section 123 is in the following terms: "Despite sub-section 2(b) premises used for the sale by retail of petrol or derv or which form part of premises so used are not excluded premises if persons resident in the locality in which the premises are situated are, or are likely to become, reliant to a significant extent on the premises as the principal source of - (a) petrol or derv or (b) groceries (where the premises are, or are to be, used also for the sale by retail of groceries)".

4. The application to which this appeal relates was presented to the Board, and determined, on 24 November 2008. Pursuant to section 51 of the Act the Board issued a Statement of the Reasons for refusal. The decision is stated in the following terms: "The Board, having considered all that had been said to them, determined that the premises are excluded premises as defined in section 123(2) of the Act. The Board were not satisfied on the information supplied that the premises are relied on to a significant extent by local residents as the principal source of petrol or groceries. The application therefore fell to be refused in terms of section 23(5)(a) of the Act".

5. Following the submission of detailed grounds of appeal the Board prepared a Stated Case. Paragraph 3 contains brief factual findings which are confined to the nature of the premises themselves, the hours of opening, and the operating plans. Paragraph 6 is in the following terms: "The agent for the applicants submitted inter alia (which submissions were not contradicted but were explored in questioning from the elected members and with regard to the locality of the premises were subject to the clerk's explanation that the members of the Board would be well acquainted with the locality of the premises):-

(1) That apart from petrol or derv the premises provided amongst other products a wide range of basic groceries.

(2) The premises are in a city location, have held a license since the 70s and are well used for petrol, derv and groceries by a wide customer base, including local residents.

(3) The (agent for the appellants) circulated to the Board a petition and maps suggesting that these indicated that the premises were relied upon to a significant extent by local residents as the principal source of petrol and groceries. The petition which took the form of a questionnaire had been signed by local residents.

(4) That this was the busiest food retailer petrol station in Scotland.

(5) Not only was it the only local petrol station; it may also be the only local store open in the north of the city after 10pm.

(6) 40% of their grocery and shop sales are from 10pm to 6am and this business peaks and possibly exceeds fuel sales on Friday, Saturday and Sunday nights after 10pm.

(7) Whilst there is a Tesco for groceries on Broughton Road it is only open from 8am to 9pm Monday to Friday and to 10pm Saturday and 9am to 10pm on Sunday and does not sell fuel.

(8) A Morrison store 3 miles away by car provided facilities for groceries and fuel and was open from 8am to 8pm on Mondays to Wednesdays and Saturdays; from 8am to 9pm on Thursdays and Fridays and on Sundays 9am to 8pm.

(9) There was also a BP garage with very limited store facilities at Ferry Road 1.2 miles away which was only open 7am to 10pm on Mondays to Saturdays and 7.30am to 10pm on Sundays. Neither of these premises, it was submitted, was in the locality.

(10) Given that there was nothing else in the locality or nearby that offers fuel and groceries and its overnight opening hour, it was submitted that the statutory test was satisfied.

(11) A Google map was produced which showed two circles with the premises at their centre."

6. Paragraph 8 of the Stated Case narrates that the application was refused by five votes to two votes. Paragraph 9 contains in effect the Board's determination which is stated as having been "on the basis of all the material placed before it by the agent and their local knowledge". It is stated: "(a) that the applicants' argument that the premises are relied on to a significant extent by persons resident in the locality as the principal source of petrol/derv and/or groceries could not be accepted. The questionnaire was of no assistance in determining this point. It referred to the premises "being a principal source of fuel or groceries". In the overall context of the area which was known to the Board and in respect of which there were alternative facilities it was inconceivable that the premises were not excluded premises: (b) The premises were excluded premises in terms of the Act and the application fell to be refused in terms of section 23(5)(a) of the Act".

7 Counsel for the appellants made three broad submissions. First, he argued that the Board erred in law in that it failed either in its Statement of Reasons or in the Stated Case to apply properly the statutory test laid down in section 123(5) in its consideration of the application. What the Board had to determine was whether persons in the locality in which the premises were situated are, or are likely to become, reliant to a significant extent on the premises as a principal source of fuel or groceries. That in turn necessitated addressing three questions: (1) What is the appropriate locality to be used in the determination of this application? (2) Were there persons resident in this locality? (3) Were there some persons resident in this locality who were reliant or were likely to become reliant on the application premises to a significant extent as the principal source of fuel or groceries". Counsel formulated the second and third of these questions by reference to the decision of Sheriff Principal Young in Co-operative Group Limited v Aberdeen Licensing Board (unreported 21 January 2009; "hereinafter referred to as the Aberdeen case"), and the decision of Sheriff Scott in BP Oil (UK) Limited v City of Glasgow Licensing Board (unreported 17 July 2009; hereinafter referred to as the "Glasgow case"). The view had been taken in these cases that the reference to persons resident in the locality in section 123(5) meant only some persons; there did not require to be a substantial body or a significant number of persons.

8. Counsel contended, and in respect of this ground of appeal confined himself, to the submission that nowhere in the Statement of Reasons or in the Stated Case had the Board attempted to define "locality". The nearest it had come was in paragraph 9 of the Stated Case where reference was made to "the overall context of the area which was known to the Board". Counsel observed that whilst the area and alternative facilities might have been known to the Board it had failed to make these known to anyone else. In support of his submissions counsel referred to Botterills of Blantyre v Hamilton District Licensing Board 1986 SLT 14 and Art Wells Limited (trading as Corals) v Glasgow District Licensing Board 1988 SCLR (Sh Ct) 48. Both of these cases were concerned with the question of "over provision" arising from the terms of section 17(1)(d) of the 1976 Act which enjoined a Licensing Board to grant an application for a license unless, having regard to the facilities of the same or similar kind already available in the locality, the grant of such an application would result in the over provision of such facilities. In each of these cases a proper determination of the "locality" was regarded as an essential step in the reasoning process.

9. Counsel's second and third submissions, which appeared to me to overlap, were that the Board erred in law in that it failed to provide proper and adequate reasons for its decision and further erred in law and exercised its discretion in an unreasonable manner in the apparent dismissal of the questionnaire as "of no assistance" at least without any explanation. The test for adequacy of a Board's reasons was to be found in the case of Mirza v Glasgow Licensing Board 1996 SC 450: "The decision must, in short, leave the informed reader and the Court in no real and substantial doubt as to what the reasons for it were and what were the material considerations which were taken into account when reaching it": per the Lord Justice Clerk (Ross) at page 457D. Examples of inadequate reasons were to be found in Leisure Inns (UK) Limited v Perth and Kinross District Licensing Board 1991 SC 224 and Strathclyde Passenger Executive v McGill Bus Service Limited 1984 SLT 377. Counsel contended that the Board had effectively said that because there were alternative facilities in the "area" it was "inconceivable" that residents in the locality of the application premises could be reliant to a significant extent on the premises as the principal source of fuel and groceries. It was not explained why that view had been reached. The Board had failed to deal with the submission presented to it that the application premises were the only premises open in the north of the city for a large portion of a 24hr period. It was quite "conceivable" that if the premises were the only ones from which fuel or groceries could be purchased between 10pm and 7am then it followed that some persons resident in the locality relied on them to a significant extent as the principal source of these commodities because it was the only source. So far as the questionnaire was concerned it was difficult to know why the Board rejected this as being "of no assistance" when no explanation was provided. It was possible that the Board took the view that there were signatories from persons who were not resident in the locality but this was not stated. If the Board considered that there had to be a significant number of persons and that this was not evidenced by the questionnaire that view was wrong as a matter of law. If there was a distinction drawn between a principal source rather than the principal source of fuel or groceries this point was raised for the first time in the Stated Case. Fundamentally the reason for refusal was not clear.

10. In response senior counsel for the Board emphasised that the Board was entitled to have regard to both the evidence before it and its own knowledge and experience: Paglioca v City of Glasgow District Licensing Board 1994 SC 561. Counsel also pointed to the distinct difference in application between section 123 of the 2005 Act and section 17(1) of the 1976 Act. There required to be a positive basis for premises meeting the exceptions set out in sub-section 5 of section 123, whereas the effect of section 17(1) was that a license had to be granted unless there was over provision of facilities in the locality. It was understandable that the determination of "the locality" by the Licensing Board was fundamental to determining questions of over provision as had arisen in the cases of Botterills of Blantyre and Art Wells. But in the present case it was only necessary for the Board to define "locality" if the applicants put forward a positive base for putting this in issue.

11. Counsel contended that the Board was entitled to reach the view that there was no positive basis for concluding that the section 123(5) exception applied. In substance all it had was the questionnaire and the submissions by the appellants' solicitors. The column on the questionnaire sought an indication from those completing it as to whether the premises were a "principal source" of fuel, groceries or both. It did not mention "reliance to a significant extent". The submissions presented by the appellants' agent to the Board made it clear that there was an alternative for groceries in Broughton Road which was open until 9pm on weekdays and until 10pm at weekends. That in itself undermined the suggestion of "reliance" on the appellants' premises for those commodities. Moreover the Board was entitled in its own knowledge as well as from the information provided in the submissions, to have regard to the presence of premises other than those in the locality in determining whether the appellants' premises were relied on to the necessary extent. Overall the "positive basis" for the exception did not exist.

12. As for the adequacy of reasons, it was only necessary for the Board to state a reason for refusal in terms that made the reason intelligible: Ranachan v Renfrew District Council 1991 SLT 625 at 628C. The Board was entitled to rely on the existence of alternative provision for the view expressed reasonably and intelligibly in paragraph 9(a) of the Stated Case as the basis of concluding that section 123(5) could not be founded on.

DISCUSSION

13. The nature of the test to determine whether to apply the exception contained in section 123(5) of the 2005 Act is neither wholly clear nor free from controversy. As counsel for the appellants pointed out in the Aberdeen case Sheriff Principal Young was of the view that: "All that is required here to satisfy the test is that there are some persons (for example elderly persons who are unable to drive or, as counsel suggested residents of a sheltered housing scheme) who as a matter of fact are, or are likely to become so reliant on the premises". That view was followed by Sheriff Scott in the Glasgow case. However, in the case of BP Oil (UK) Limited against the present respondents decided on 22 December 2009 I have preferred the view that the focus of section 123(5) is not on a handful of individuals but is on the premises, the question being whether there is a significant decree of reliance on them by persons resident in the locality when viewed as a group (see paragraph 33 of that judgment). That view necessarily undermines in part the first set of submissions advanced by counsel for the appellants in the present case.

14. I further accept the validity of the distinction commented on by counsel for the Board between questions which may have arisen under section 17(1) of the 1976 Act and those which arise under section 123(5) of the 2005 Act. If a Board is told that it must give a licence unless there is over provision in a locality it is obvious that the starting point for the task is to determine what the locality is. On the other hand in cases where section 123(5) is founded on it is not inconceivable that there will be situations where there is no evidence of any persons being reliant on the premises. Should that be the position there would be no need to seek to define "the locality" as a starting point. I accordingly agree with counsel for the Board that there requires to be a positive basis for the view that section 123(5) applies before it would be necessary for the Board to define "locality". I also tend to the view that it may not be necessary to define "locality" with the same degree of precision for the purposes of section 123(5) as it would be in a question of over provision, but in most cases it will be necessary for a Board to have at least a general view of what the relevant "locality" is.

15. Before turning to consider whether the "positive basis" for the application of section 123(5) existed, I turn to deal with the proposition that the Board failed to give proper and adequate reasons for its decision. The brief statement given in the statutory Statement of Reasons "The Board was not satisfied on the information supplied that the premises are relied on to a significant extent by local residents as the principal source of petrol and groceries" is intelligible as a conclusion in law, but goes nowhere to explaining why that conclusion was reached on the information provided. For that one has to turn to paragraph 9(a) of the Stated Case. So far as that is concerned I find most unsatisfactory the sentence which reads: "In the overall context of the area which was known to the Board and in respect of which there were alternative facilities it was inconceivable that the premises were not excluded premises". It is difficult to know what to make of this pronouncement. The premises were excluded premises, not because of the "area" or the existence of alternative facilities, but by operation of law. The question which the Board had to consider was whether it had been demonstrated that the exception contained in section 123(5) fell to be applied. This expression of the Board's position raises a question as to whether it asked itself the right question.

16. If the observation quoted above is to be taken as meaning that it was inconceivable that persons resident in the locality were reliant to a significant extent on the premises as a principal source of petrol or derv or groceries, I would regard it as both extreme and unwarranted. "Inconceivable" is a strong term to use in a situation where two members of the Board appear to have concluded that the provisions of section 123(5) are met. The view is unwarranted in a situation where there was evidence before the Board that this was a "local" petrol station and was the only "store" open in the north of the city after 10pm. Nothing is said to justify a rejection of these factors as providing a basis for the application of the section 123(5) exception.

17. It is not, I have to accept, easy to identify with precision the sort of factors which might lead a Licensing Board to conclude that persons resident in the locality of a garage shop are, or are likely to become, reliant to a significant extent on the premises in the sense which I perceive section 123(5) to mean. Determination of that may depend partly on impression, but inevitably on inferences to be drawn from all the circumstances presented. The question of whether premises are relied on to a significant extent by a group of persons is not one which can be decided by asking an individual if he or she is reliant on the premises "to a significant extent". Moreover, whatever "reliance" means, for the purpose of this section, it cannot mean total dependence; anyone in Scotland who lives within range of a Tesco home delivery service is not totally dependent on a garage shop for groceries. It follows that the mere existence of alternative facilities cannot exclude the operation of section 123(5); it is all a question of degree.

18. In my judgment the two factors I have mentioned in paragraph 16 above, and other factors such as the high volume of food retail sales at the application premises, were factors from which it might well have been inferred that there was a high degree of reliance on them. It was for the Board to determine whether this was as a result of passing trade or whether it should be attributed to "local" usage. In that respect the questionnaire presented to the Board appears to me to have been at the very least of relevance. The existence of alternative grocery facilities, as I have indicated, did not necessarily exclude the necessary degree of reliance for those commodities; but even if the Board concluded that it did, section 123(5) in terms contemplates the licensing of premises where these are relied on as a principal source of fuel. It would appear that these premises serve as the only fuel station in a significant part of the city. It is not clear that the Board had any regard to that or to what reliance local residents, as a group, might place on that.

19. The appellants having presented to the Board a positive basis for the application of section 123(5), it was in my judgment incumbent upon the Board to consider the question of locality. There is no clear indication that it did so. The position in this case is in contrast with that in the BP case which I decided previously. In that case the Board accepted as found facts that within a one mile radius of the premises there was one other petrol filling station, one supermarket and two grocers/convenience stores. It also accepted that 62 persons who were referred to in a market research report as relying on the premises as a principal source of petrol or derv or groceries were resident within that one mile radius. It was thus clear that the Board had regarded this as "the locality" and were justified in concluding that there was insufficient evidence of usage of the premises to a significant extent by persons resident in that locality.

20. In these circumstances I am satisfied that on any view the third question in the Stated Case "Did the Board exercise their discretion in an unreasonable manner by failing to provide adequate reasons for their decision to refuse the application?" requires to be answered in the affirmative. The fourth question in law which relates to rejection of the questionnaire as of being "no assistance" also falls to be answered similarly. I am not satisfied that the Board applied section 123(5) correctly, and questions 1 and 2 of the Stated Case also fall to be answered in the affirmative. I accordingly sustain the appeal.

21. In the event of the appeal being sustained counsel for the appellants urged me to exercise the discretion granted in terms of section 131(5) of the 2005 Act by granting the application rather than remitting it to a Licensing Board for reconsideration. He based this submission in part on the contention that the section 123(5) test was bound to be met because it was inevitable that some persons resident in the locality of the application premises would be reliant on them to a significant extent as these were the only premises open for a substantial proportion of the day. The test which that proposition embraces is one which as I have indicated, I do not accept. Secondly he indicated that the City of Edinburgh Licensing Board had set its face against garage premises within the City being granted licenses and had to date granted none. He referred to the remarks of the sheriff in Botterills of Blantyre (at page 16B) which met with approval from the Second Division where it is stated: "I would have thought it very difficult for the respondents with the best will in the world to re-examine this application with complete detachment; and if they were to refuse it again, as they well might, it would be supposed that such a decision was predictable. I do not therefore consider that it would be appropriate to ask the Board to re-consider the application, I am satisfied that the proper course is to remit back to the Board with a direction to issue a certificate to the applicants in the terms applied for."

22. Counsel for the Board referred to Matchurban Limited v Kyle and Carrick District Council 1995 SLT 505 and to the observations of the Court (at page 506I) to the effect that where Parliament had decided that decisions on licensing matters should be taken by a local licensing authority there would need to be "compelling reasons for removing from such an authority responsibility for taking such decisions". He accordingly invited me in the event of upholding the appeal to remit the matter to the Board for re-consideration.

23. With a measure of hesitation I have decided that it is appropriate to remit the matter to the Licensing Board as their counsel requested. I have determined that this is appropriate for two reasons. In the first place, on a strict reading of the Stated Case there are few facts on which I could base a decision to grant a license. As I have indicated all that is recorded as findings in fact are those contained in paragraph 3 of the Stated Case which relate to the nature of the premises themselves and the hours of opening. Whilst paragraph 6 refers to submissions which were "not contradicted" there is some doubt in my mind as to whether what is contained therein could be regarded as findings. Secondly, it does not appear to me that the matters which I consider to be significant could necessarily be regarded as conclusive of the requirements of section 123(5) having been established. The Board will no doubt wish to bear in mind my observations on the significance of various factors which appear to be relevant and to the fact that reliance on the premises as a principal source of fuel is a distinct basis upon which an application may be granted. The Board will also bear in mind that evidence of alternative facilities is not in itself conclusive. The matter is nevertheless one for the ultimate determination of the Licensing Authority.