London Borough of Haringey & Anor v Marks & Spencer PLC & Anor

LORD JUSTICE MAURICE KAY: There are before the court two appeals by case stated, each raising essentially the same point of law. In each case the appellant is a local authority acting as prosecutor and the respondent is a company which operates supermarkets. The appeals are not fact sensitive.

In each case the prosecution related to the sale of alcohol to a person under the age of 18. The premises were licensed under the Licensing Act, the licensees being named employees of the respondent companies, Marks & Spencer and Somerfield. The sales were carried out by employees of the respondent companies - in the Marks & Spencer case by a check-out operator, and in the Somerfield case by a manager who was also one of the licensees.

On 5th August 2003 a district judge sitting at Haringey Magistrates' Court considered a summons against Marks & Spencer PLC, and on 27th November 2003 a district judge in Liverpool considered a summons against Somerfield Stores Limited. In both cases the summonses were dismissed on the ground that the defendant was not a "person" within the meaning of section 169A of the Licensing Act 1964.

In the Somerfield case the employee in question was also prosecuted. He pleaded guilty and was dealt with appropriately. In the Marks & Spencer case no individual employee was prosecuted. Moreover the district judge made it clear that even if he had been satisfied that Marks & Spencer was a "person" for the purpose of section 169A, the company would have been acquitted because it had established the due diligence defence.

Section 169A was inserted into the 1964 Act by the Licensing (Young Persons) Act 2000. In its previous form section 169(1) of the 1964 Act provided:

It was clear that the offences under section 164 could only be committed by the licensee or his employees. There was clear authority to that effect in Brandish v Poole [1968] 2 ALL E.R. 31, Boucher v Director of Public Prosecutions [1996] 160 JP 650 and Russell v Director of Public Prosecutions [1996] 161 JP 185.

It was also common knowledge that in practice licences are customarily granted to named employees of off-licence and supermarket companies, not as a result of any desire on the part of the companies to avoid the responsibilities of a licensee, but because justices insist on those responsibilities being vested in named individuals. Although the business is that of the ultimate employer the licence relates to specific premises and is issued locally to one or more named employees. Experienced counsel in this case know of no example of a licence of this kind having been granted to a corporate body. Indeed the editors of Paterson's Licensing Act, current edition, state in volume 1, paragraph 2.464:

By section 1 of the Act of 2000 it is provided:

This gives rise to the question at the heart of these appeals. Is Marks & Spencer PLC or Somerfield Stores Limited "a person" for the purposes of section 169A? On behalf of the appellant prosecuting authorities, it is submitted by Mr Butler and Mr Knapp that the answer is clear: "a person" means "any person", whether natural or corporate, whether employer or employee, and whether or not he, she or it is the licensee. Where the consequences would otherwise be unfair, a person charged by reason of the act or default of some other person may avail himself of the due diligence defence referred to in subsection (3).

It is suggested that that conclusion flows from the language of the new provision, assisted, if necessary, by the Interpretation Act 1978, section 5 of which provides that in any Act, unless the contrary intention appears, words and expressions listed in schedule 1 are to be construed in accordance with that schedule. Schedule 1 defines "a person" as including a body of persons corporate or unincorporated.

Mr Haggan QC, on behalf of Marks & Spencer, and Mr Light on behalf of Somerfield, submit that the new statutory provision lacks clarity. They say it is ambiguous. If construed as the appellant suggests it would lead to absurd results. They refer to section 160(1) whereby it is an offence for "a person" to sell or expose for sale any intoxicating liquor without holding a justices' licence. They submit that "a person" in section 160 cannot refer to persons in the position of Marks & Spencer and Somerfield because, if it did, they would commit the offence under section 160 every time intoxicating liquor is sold in their shops. It would be absurd if "a person" were given different meanings in section 160 and the new section 169A. Indeed they make a similar point by reference to section 3, the basic licensing provision, which refers to a "fit and proper person", but in a context which has always been understood to be limited to natural persons.

In my judgment these submissions of Mr Haggan and Mr Light are correct. It is essential to read section 169A in the context into which it has been inserted. That context certainly includes section 160 and for that matter section 3. Given that context, the results which would follow from differential meanings being accorded to "a person" in sections 160 and 169A can properly be described as absurd.

It can also be said that when considered in that context section 169A is inherently ambiguous because "a person who sells" may refer to one or more of the contractual seller (in the sense of the person with title to the goods), the licensee or the sales assistant or check-out operator.

On this basis I consider that the threshold delineated in Pepper v Hart [1993] AC 593 has been crossed and it is appropriate for us to consider what was said in Parliament during the passage of the Bill in 1999 and 2000. It is necessary to approach that task in a disciplined way, focusing on what was said by the promoter of what was a private members bill and on clear and unequivocal statements. The Bill was introduced by Mr Paul Truswell, Member of Parliament for Pudsey, following a tragic incident in his constituency. A 14 year old boy had paid two visits to an off-licence which was part of a national chain. He bought alcohol on both occasions and proceeded to drink much of what he had bought on the second visit. Not longer after so doing he ran across a dual carriageway and was struck by a passing vehicle, receiving injuries from which he sadly died.

Following public concern about the apparent ease with which he had bought the alcohol, an attempt was made to prosecute the two sales assistants who had sold the alcohol. Neither was the licensee, nor were they employed by the licensee, who was a managerial employee of the national chain. They were employed by the national chain too. In the event the prosecution did not proceed to trial in the light of the decision in Russell v Director of Public Prosecutions to which I have already referred.

It is abundantly clear from the many extracts from Hansard to which we have been referred, that the Bill had "a narrow remit." That quotation is from the debate on 12th May 2000 to be found in volume 349 of Hansard at column 1141. The "narrow remit" was to end the distinction which the 1964 Act had been found to draw between employees of a licensee and employees of a proprietor, whether incorporated or not, who was not the licensee.

The passages to which we have been referred show unequivocally that the target was previously omitted employees, without, of course, removing responsibility from the licensee. There is nothing to support the proposition that the proprietor/employer, who is not a licence holder, was within the contemplation of the promoter of the bill or indeed his parliamentary colleagues. Availing myself of this material I conclude that the purpose of section 169A was the limited one contended for by Mr Haggan and Mr Light, and that the provision can and should be construed so as to give effect to that purpose.

There is nothing in the authorities which requires this court to take a different view. Our attention has been drawn to Nottingham City Council v Wolverhampton & Dudley Breweries plc EWHC [2003] 2847 (Admin). That case was concerned with the sale of alcohol, "which was not of the substance demanded." The offence charged was under section 14 of the Food Safety Act 1990 which is drafted in terms of "any person who sells." The Divisional Court held that the brewery, which was the corporate proprietor of the public house in question and the employer of the licensee, could itself commit the offence under the Food Safety Act.

However, in my judgment, the decision does not help the appellants in the present case. Kennedy LJ expressly referred to the difference between the Food Safety Act and the Licensing Act in this passage at paragraph 19:

He later added at paragraph 26:

It is true that in Allied Domecq Leisure Limited v Cooper unreported, 9th October 1998, which concerned a prosecution under the Weights and Measures Act 1985, Sedley J expressed obiter reservations about the position under the Licensing Act in its unamended form. But that, with respect, takes the present case no further.

The striking thing about the present case is that the new provision has been slotted into the traditional regime of the licensing legislation which has for centuries concentrated its control on the licence holder and those under his direction. The amendment provides a limited extension to that structure. However, Parliament has yet to put the legislation on a footing which truly reflects modern patterns of retailing. Rightly or wrongly, and the policy arguments are not all one way. The proprietor, whether incorporated or not, is beyond the reach of the statutory offences.

Mr Butler and Mr Knapp have referred to other consumer protection legislation and its ambit, but the simple fact is that in every case the context is not one which focuses on the licensing of suitable premises and fit and proper persons. I gain no assistance from it.

For my part I would dismiss both appeals. In so doing I would answer the questions possessed by the stated cases as follows. In the Marks & Spencer's case the question is: "Does 'a person' in Section 169A(1) of the Licensing Act 1964 include the owner of the business or employer where that person is not the licence holder and/or the actual individual involved in the sale?" The answer is "No".

In the Somerfield case the question is: "Whether a sale of alcohol for the purpose of Section 169A(1) of the Licensing Act 1964 can be made by a non-licensed owner of the alcohol, where that person (whether an individual, corporate or unincorporated body) owns the premises from which the alcohol was sold and employs the licensee of those premises?" Again I would answer in the negative.

Finally, before leaving the case, I wish to pay tribute to the decisions and cases stated by both district judges; District Judge Wiles in the Marks & Spencer case and District Judge Lomax in the Somerfield case.

MRS JUSTICE RAFFERTY: I agree.

LORD JUSTICE MAURICE KAY: Mr Haggan?

MR HAGGAN: My Lord, we would apply for our costs of the hearing of the appeal. A defendant's costs order was made in the lower court in favour of the company that I represent. Of course in this court the court has power either to make a defendant's costs order or to order that the local authority should pay the costs of the appeal.

My Lords, in arriving at a decision, I would respectfully draw to the court's attention the fact that this point was taken in a skeleton argument served before the hearing in the lower court on 21st July 2003. So the local authority have been aware of the way in which we would put the case for some very considerable time, and we would submit that the outcome of the appeal was, with great respect, fairly clear. For those reasons we would submit that it would be appropriate that the local authority should pay the company's costs. But if the court is against us on that application, we would ask for a defendant's costs order to be taxed in the usual way.

LORD JUSTICE MAURICE KAY: Yes. Mr Light?

MR LIGHT: My Lord, my argument is the same. I make the same points.

LORD JUSTICE MAURICE KAY: Yes. Mr Butler?

MR BUTLER: My Lord, the position of Haringey: they issued a number of cases within the local Magistrates' Court and, of course, they have sought to clarify the situation and the interpretation of that particular provision. I think there has to be some fairness, of course, because it was the appellant who brought the respondent here today on a point of law and there is no question of an actual defence of due diligence. However, it did, respectfully, raise a point of public importance as far as local authorities are concerned, throughout England, who were querying the actual interpretation of that provision and issuing proceedings against companies.

LORD JUSTICE MAURICE KAY: As a matter of interest, have any Magistrates' Courts anywhere in the country decided the case in the way that you would wish them to?

MR BUTLER: I get an indication from my learned friend that there is, yes. Those behind me thought that the answer is "no", because we have not enforced them as a result of the Haringey decision and pending the decision of this court.

LORD JUSTICE MAURICE KAY: Yes.

MR BUTLER: I am afraid I cannot speak, but my learned friend has indicated "yes". In those circumstances I would gratefully --

LORD JUSTICE MAURICE KAY: What you are saying is that you responsibly wanted a ruling, and in those circumstances costs ought to be from central funds?

MR BUTLER: Yes.

LORD JUSTICE MAURICE KAY: Mr Knapp, anything to add to that?

MR KNAPP: My comment is similar. There were a number of prosecutions stayed pending a decision in this court. I believe, actually, there has been one case in the south. I could not quote it now, but I am instructed - and was instructed in the course of proceedings - that there was and some companies, I understand, may have pleaded guilty. Those are my instructions. But on the same point, we have taken the case to clarify the issue.

LORD JUSTICE MAURICE KAY: Yes, thank you. (Pause) We think the appropriate order is a defendant's costs order in both cases to be assessed.

MR HAGGAN: Thank you, my Lord.

MR KNAPP: I have been specifically instructed to ask this court to consider this: whether the court is prepared to certify a point of law, namely the point in the case stated, because it is, on my instructions, something about which the Trading Standards, nationally, are concerned, and your Lordships' ruling will have ramifications in the conduct of the prosecutions of this type of offence. So I ask the court to consider certifying a point of law and leave to appeal.

LORD JUSTICE MAURICE KAY: Thank you. Mr Haggan, do you want to say anything about that?

MR HAGGAN: My Lord, we would oppose that. We say that the law is entirely clear. The ruling of this court leaves no room for ambiguity and indeed there is nothing to support the application that is made. We would respectfully submit that the case should never have been brought to this court in the first place. So we do resist the application that is made.

LORD JUSTICE MAURICE KAY: Mr Light is nodding powerfully.

MR LIGHT: I agree.

LORD JUSTICE MAURICE KAY: No, we think that to any extent to which a ruling was required it has now been given and the matter should lie there.

Thank you all very much