House of Lords
|Session 2001- 02
Publications on the Internet|
Regina v. Warrington Crown Court, Chief Constable of Cheshire Constabulary
HOUSE OF LORDS
Lord Bingham of Cornhill Lord Mustill Lord Hutton Lord Millett Lord Rodger of Earlsferry
OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT
IN THE CAUSERegina v Warrington Crown Court Chief Constable of Cheshire Constabulary ex parte RBNB (a Company) (Respondents)
ON 20 JUNE 2002
 UKHL 24
LORD BINGHAM OF CORNHILL
1. The issue in this appeal is whether the Crown Court at Warrington could lawfully conclude on the facts found (as it did) that Mr Kehoe, an employee of an unlimited company named RBNB, was not or might not be a fit and proper person to hold a justices' licence to sell intoxicating liquor at the Weavers Hotel, Runcorn.
2. This apparently simple question has proved difficult to resolve. Mr Kehoe's application, in effect for transfer to him of an existing licence which he held under a protection order, was dismissed by the Halton Licensing Justices sitting in Widnes on 5 March 1997. Mr Kehoe appealed against that refusal to the Crown Court at Warrington, but the refusal was upheld by His Honour Judge Clarke, sitting with licensing justices, on 10 October 1997. Mr Kehoe sought judicial review of that decision and was successful: on 3 April 1998 Sedley J quashed the crown court's decision on the ground that the policy adopted by the justices was unlawful; the matter was remitted to the crown court for rehearing. At the rehearing in the crown court, again before Judge Clarke and licensing justices, the parties agreed to accept the findings of fact made by the crown court the year before, but on 9 October 1998 the crown court reached the same decision, adverse to Mr Kehoe, as it had done before. At this stage Mr Kehoe obtained other employment but his employer, RBNB, sought judicial review of the crown court's decision as an interested party and on 15 December 1999 Newman J allowed the company's application and declared that the crown court's decision had been contrary to law. The Chief Constable of Cheshire appealed against that order but on 31 July 2000 the Court of Appeal (Otton, Robert Walker LJJ and Sir Ronald Waterhouse) dismissed his appeal:  1 WLR 2239. The Chief Constable renews his attempt to reinstate the crown court's second decision on appeal to the House.
3. The critical findings of fact made by the crown court are very lucidly stated in the judgments of Judge Clarke and include the following:
It was explained to the House that the two shares in RBNB were held through a series of companies in such a way that the identity of the shareholders was not publicly ascertainable.
4. The ground upon which the justices and on two occasions the crown court ruled against Mr Kehoe's application was that since the identity of the ultimate beneficial owners of the shares in RBNB was deliberately withheld, they could not be sure that such owners were not engaged in some illegal or nefarious activity; and that in the circumstances they did not think Mr Kehoe a fit and proper person to hold the licence. In the first judgment of the crown court Judge Clarke observed:
5. In his second judgment Judge Clarke summarised the court's conclusion as follows:
6. Paragraph 4(1) of the Halton Licensing Committee's statement of policy, adopted after the judgment of Sedley J, was in these terms:
The licensing regime
7. The sale of intoxicating liquor in this country has been subject to a measure of statutory control for over 500 years. This statutory intervention has been prompted by the need to control the evils notoriously attendant upon such sale unless they are controlled: drunkenness; crime and disorder; brothel keeping; prostitution; unlawful gaming, and so on. An Act was passed in 1623 "for the better repressing of drunkenness, and restraining the inordinate haunting of inns, alehouses and other victualling houses". The Licensing Act 1872 was passed, according to its long title, for "the better prevention of drunkenness". The present regime of control, to be found in the Licensing Act 1964, reproducing many features of earlier statutes, rests (so far as relevant to this case) on six main pillars. First, it is a criminal offence punishable by imprisonment to sell intoxicating liquor without a licence (section 160) or in breach of the conditions of a licence (section 161). Thus the holding of a current licence is the effective instrument of control. Second, the power to grant or refuse licences is entrusted in the first instance to local licensing justices, who may be assumed to have a special knowledge of and insight into the needs of and conditions in their local area. Third, it is provided by section 3(1) of the Act that
Section 3(2) makes it plain that a justices' licence may be granted as a new licence or by way of renewal, transfer or removal. Fourth, a licence to sell intoxicating liquors of specified kinds, if granted, is not like a driving licence which, although limited to certain categories of vehicle, is a licence to drive at any place within the country at any time. A justices' licence is a licence to sell intoxicating liquor at specified premises, as the Act and the prescribed and recommended forms of justices' licence make clear: see Paterson's Licensing Acts 2002, 110th ed. Mehigan and Phillips 2001, at pp 779-780. Fifth, a licence if granted is for a limited period (section 26): the renewal of a licence may be opposed (section 7) and a licence may be revoked by the justices either of their own motion or on the application of any other person (section 20A). Sixth, an applicant or licence-holder aggrieved by the refusal, non-renewal or revocation of a licence may appeal to the crown court (section 21), where the judge or recorder will ordinarily sit, as happened here, with licensing justices able to contribute the benefit of their local knowledge and experience: Crown Court Rules 1982 (S1 1109/1982), rules 3(2) and 4(1).
8. Two features of this licensing regime are important for present purposes. First, the power of licensing justices to grant a justices' licence is discretionary. Section 3(1) uses the permissive "may". Licensing justices are not bound to grant a licence to an applicant even if they think him or her to be a fit and proper person. They may have other legitimate reasons for refusing. But in the present case, as Lord Carlile of Berriew QC for the Chief Constable accepted, there was no extraneous reason for refusing Mr Kehoe the transfer which he sought. It was not contended that no one should be licensed to sell intoxicating liquor at the Weavers Hotel. The only issue was whether Mr Kehoe was a fit and proper person to do so. In resolving that issue, the justices in the first instance and the crown court in the second were required to form a judgment, based of course on the evidence before the court. They either did or did not think Mr Kehoe satisfied the statutory criterion. But such judgment did not involve the exercise of a discretion. If they thought Mr Kehoe fit and proper, their duty was to grant a licence (in the absence of any reason at all for not doing so). If they did not think Mr Kehoe to be fit and proper, or if they were in doubt whether he was fit and proper or not, their duty was to refuse a licence. The crucial issue for decision was whether he was or was not or might not be a fit and proper person.
9. Secondly, some consideration must be given to the expression "fit and proper" person. This is a portmanteau expression, widely used in many contexts. It does not lend itself to semantic exegesis or paraphrase and takes its colour from the context in which it is used. It is an expression directed to ensuring that an applicant for permission to do something has the personal qualities and professional qualifications reasonably required of a person doing whatever it is that the applicant seeks permission to do. In a case such as the present an applicant for a justices' licence under the 1964 Act seeks permission to run a public house. Thus before granting a licence justices (or the crown court on appeal) must think the applicant has the personal qualities and professional qualifications reasonably required of a person seeking to run the particular public house for which he or she seeks a licence. The judgment must be made not only in relation to the particular applicant but also in relation to the particular premises. But the focus is on the particular applicant's suitability to run the particular public house.
10. This focus is made plain by the 1964 Act. In section 8(A)3 of the Act (dealing with approval of prospective licensees) it is provided:
In section 9(1) the reference to disqualification in section 3(1) of the Act is explained:
Further help is given by section 12(3) which permits licensing justices to refuse renewal of an old beerhouse licence on the ground
11. That the focus of the justices' inquiry, when considering whether an applicant is a fit and proper person to be granted a licence, is on the particular applicant's suitability to run a particular public house is made plain by authorities to which this House was referred. In R v Hyde Justices  1 KB 645 the application was for transfer of an old (ante-1869) beerhouse licence. Section 23(2)(b) of the Licensing (Consolidation) Act 1910 required that a transferee should be a fit and proper person in the opinion of the justices to be the holder of the licence. In approaching that question the licensing justices took into consideration the terms of the agreement under which the proposed licensee was to hold the premises. Lord Alverstone CJ held (at p 656) that the prima facie meaning of the words "fit and proper person" was that the applicant must be a fit and proper person to hold a licence and carry on the business of a licence holder, and that the justices had gone much further than the consideration of whether the applicant was personally a fit and proper person to hold the licence. At p 657 he said:
For that reason the justices were held to have erred. Hamilton J (at p 660) echoed the passage quoted from the judgment of the Lord Chief Justice. Bankes J (at pp 663-664) supported a broad approach to the expression "fit and proper person". But he added (at p 665):
Mellor v Lydiate  3 KB 1141 was largely concerned with determining the responsibility, as between employer and employee, for obtaining a licence in order to comply with the liquor licensing law. At p 1153 Lord Reading CJ, however, observed:
At p 1160 Lush J, referring to section 65 of the 1910 Act, which made it an offence to sell intoxicating liquor without a licence, said:
Both these dicta, as was rightly pointed out, were obiter; but they do not lack persuasive value.
13. The licensing justices who made the first instance decision in R v Holborn Licensing Justices, Ex p Stratford Catering Company Ltd (1926) 90 JP 159 made it a general (although flexible) rule to require the contracts of residential managers of public houses to provide for a minimum three month period of notice. The particular applicant to whom a transfer of a licence was sought was employed under a contract providing for notice of only four weeks. His application was accordingly refused. On appeal the justices' decision was upheld. It was considered prejudicial to recruitment of good candidates to afford so little security of employment, and the shortness of the notice was taken to indicate a lack of confidence by his employers in this applicant, who had had several changes of employment within a short time. The terms of his employment were held to be such as to render him indifferent whether he conducted the premises properly or not. In a public house which, for local reasons, was "difficult" and required "careful management", the justices were held to be entitled to regard the applicant as not meeting the statutory test of fitness and propriety. The decision was directed to the way in which the applicant would run the business if a licence were granted.
14. In R v Preston Crown Court Ex p Cooper (unreported) Queen's Bench Divisional Court, Mann L J and Rose J, 22 November 1989, the application for a licence was made by one Cooper. The lessee of the premises in question was a company which would effectively control the premises in which it would be the applicant's duty to observe the licensing laws. From the note of reasons given by the crown court, it is plain why the applicant's challenge to the dismissal of his application by the justices was dismissed:
Thus the application for judicial review of the crown court's decision was refused because, in the view of the divisional court, the applicant was a stooge acting on behalf of people who would be involved in running the premises, who lacked integrity, who were not law-abiding and who (as the divisional court also pointed out) lacked experience in the licensing trade.
15. Reference was made in the Chief Constable's written case, although not in oral argument, to R v London County Council, Ex p London and Provincial Electric Theatres Ltd  2 KB 466. In that case the council had refused music and cinematograph licences to a company on the ground that a large majority of its shares were held by alien enemies, namely persons resident in Germany. The refusal was upheld by a divisional court of the King's Bench and also by the Court of Appeal, both courts finding it possible to accept that the shareholders resident in Germany might use licences to influence the minds of the young and injure the interests of this country. It was not spelled out how they would achieve this ambitious result, and the finding may owe something to the hostilities prevailing at the time of the decisions. Three German directors had been removed on the outbreak of war, and there remained only three English directors. It is, however, plain that the ground of objection related directly to the function which the company was seeking permission to perform.