Developing Retail Ltd, R (on the application of) v East Hampshire Magistrates' Court

THE DEPUTY JUDGE: The claimant company seeks judicial review of the decision of the East Hampshire Magistrates' Court to impose two additional conditions on the claimant's provisional statement of a licence following an appeal under the Licensing Act 2003 against the decision of the licensing sub-committee of the Portsmouth City Council to grant a provisional statement of licence subject to conditions in respect of premises at the site of the former Marina Cafe, Southsea Esplanade, Southsea. The site is situated on Southsea seafront. Permission to apply for judicial review was granted by His Honour Judge Cooke QC on 29th July 2010.

The first interested parties assert that the claim has become academic and should be struck out, since the contract under which the claimant has an interest in the premises has been rescinded by the second interested party, Portsmouth City Council. This has been confirmed by the City Council but the legal effectiveness of the purported rescission is denied by the claimant. It is not possible for me to resolve this dispute without further information, and I do not consider that it is in the interests of effective case management for me to seek to do so when the case has come before me listed for hearing. In any event, even if I were to conclude that the claimant had no continuing legal interest in the site, that would not necessarily deprive the claimant of standing to bring this claim as a matter of licensing law or as matter of public law.

If under the Licensing Act 2003 a provisional statement is issued in respect of any premises, then by virtue of section 32 an application for a premises licence in the same form as the licence described in the application for a provisional statement may not be the subject of objections that could and should have been raised on the application for a provisional statement, provided that there has been no material change in circumstances since the provisional statement was made. There is no requirement for the application for the premises licence to be made by the person who originally applied for the provisional statement. The purpose of the provisional statement procedure is to permit developers to ascertain whether a licence will be granted so that they may undertake any development with a degree of confidence about the commercial viability of the development, insofar as it depends upon the ultimate grant of a licence.

It is implicit in this statutory purpose that there is no expectation that the applicant for the provisional statement will retain an interest in the premises throughout the application or, indeed, after the development is completed. It is in my view sufficient under the Licensing Act if the applicant has an interest when the application is made and determined by the relevant licensing authority. It follows that I do not consider that the rescission of the contract, even if effective, necessarily prevents the claimant pursuing this application for judicial review, since the relevant time at which its interest in the property was required to subsist under the Licensing Act was at the time application was made and granted rather than after the application had been dealt with, albeit subject to the conditions that it now seeks to challenge.

In my view in any event the possible change of status of the claimant and its relationship to the site raises an issue of public rather than licensing law. As a matter of public law a claimant for judicial review must have and retain "a sufficient interest" in the subject matter. It is not necessary for that interest to be financial or proprietorial. In my judgment, even if the claimant retains only a contingent interest in the site, such as the right to claim against the Portsmouth City Council for wrongful rescission, it has a sufficient interest in correcting any error that materially affects the value of the provisional statement that would justify it in seeking a public law remedy.

I also doubt the ability in judicial review to make the application to summarily strike out the case that has been made by the first interested parties. Although the Administrative Court has applied the provisions of CPR 24 summarily to dispose of claims or issues in the context of judicial review, it only does so where the review is either obviously unarguable or plainly abusive. The power is only used in the clearest possible cases. This does not seem to me to be such a clear case as to justify striking out. The rationale for restricting the use of a striking out remedy in public law claims is that the procedural scheme of judicial review, with its requirement for permission, normally obviates the need for the exercise of a separate striking out jurisdiction.

The changes that led to the current form of CPR 54.13 were intended to prevent applications being made seeking to circumvent applications for judicial review after permission had been granted. CPR 54.13 provides that neither the defendant nor any other person served with the claim form may apply to set aside an order giving permission to proceed. In my judgment, the intention of this rule was to prevent the sort of collateral litigation which was formerly associated with applications to set aside leave to move for judicial review and that purpose would be frustrated if, instead of making an application to set aside, the defendant or the person interested could simply apply to strike out. Thus where the application to strike out is made after permission has been granted this will only be permitted in a truly exceptional case. For these reasons I do not consider it appropriate to strike out the claim on the application of first interested parties.

In addition to the application to strike out, on 8 February 2011 the first interested parties made an application for security for costs. It was said in support of the application that the claimant is a straw company. The first interested parties are not, however, represented before me and have not indicated the extent to which they assert that the claimant should or could be required to provide funds to secure their position. It is also unclear why no steps were taken to seek security for more than six months after the grant of permission, despite the fact that the financial statements relied on as showing the parlous financial state of the claimant company were available throughout that period. I consider that it would not be appropriate to make an order in the absence of any proper explanation as to why the application was not made earlier or detailing the costs likely to be sought by the first interested parties.

Finally, the first interested parties in the alternative sought an adjournment. Although I am sympathetic to their circumstances, they are merely concerned residents and not experienced litigants who have suffered the misfortune of the loss of the consultant who dealt with their case, it does not appear to me to be right to adjourn this matter, given its potential commercial significance; the fact that it has been substantially prepared for hearing; and that the first interested parties have not complied with any of the procedural orders made by His Honour Judge Cooke when he granted leave. In addition, I am concerned that there would be a significant delay if the case were not to proceed today. In those circumstances it is in the interests of justice that the matter is determined now rather than adjourned for the purpose of hearing further applications.

I turn therefore to the claim for judicial review which is concerned with the decision of the magistrates' court to impose two additional conditions:

It should be noted that the balcony condition was not wholly new since it involves a modification, albeit a significant one, to a condition imposed by the Council requiring the vacation of the external seating area about which no complaint is made.

The claimant applied on 13th September 2008 for a provisional statement. The application stated that the premises, once built, would be used to provide regulated entertainment, late night refreshment and to supply and sell alcohol. The hearing of the application took place before the licensing sub-committee on 12th November 2008. Before the hearing the claimant amended its application so that all licensable activities would take place inside the premises and not on the balcony or outside. The licensing sub-committee granted the application for a provisional statement subject to eight conditions. The following conditions are material for the purposes of this application:

I am informed and I accept that the marking in red excluded the balcony as an area in which licensable activities could be carried out.

On 22nd December 2008 the first interested parties appealed against this decision to the magistrates' court. Evidence was filed on their behalf. The evidence of Mr. Fraser-Harris is fairly typical. For example, at page 127, it drew attention to the effect of the condition in relation to the vacation of the external seating area not applying to the balcony, which, as was pointed out, meant that the balcony could therefore continue to be used until the premises closed, thus threatening a source of noise external to the building, notwithstanding the closure of the seating area. It was clear, even if not spelt out in these terms, that the residents were concerned that the condition affecting the external seating area and not the balcony meant that the licensing sub committee had failed to address the issue of noise generated in the open air outside the premises, which was of particular concern to the residents. Other witnesses also pointed out (pages 140 and 156) that the use of the balcony with windows and doors being opened onto the balcony might contribute to noise escaping from the premises. Each of the witnesses originally asked for a condition that no music should be audible outside the premises and that all windows and doors should be kept closed.

The rather narrower more focused conditions about which complaint is now made were proposed by the interested parties during their closing submissions. They appear to me to have been chosen so as to focus upon the issue of people outside making a noise after 2300 hours if they stood on the balcony and on the importance of ensuring that any noise from the entertainment to be provided at the site did not affect nearby residential premises.

In a decision dated 8th June 2009 the magistrates ordered that the conditions imposed in the original decision in relation to the vacation of the external seating area should be changed to read as I have set out earlier in the judgment, so as to cover the balcony which was also now to be required to be vacated by 2300 hours. In addition, the justices added the condition that all noise arising from regulated entertainment at the premises shall be inaudible one metre outside any noise sensitive premises. The reasons stated for the imposition of these conditions were as follows:

In reaching the conclusion we have taken into account the letters and evidence from concerned residents in the area."

Section 1 of the Licensing Act 2003 provides in section 1(6) that:

Finally section 193 of the Act provides the following material definitions:

The powers of the magistrates' court are set out in schedule 5, paragraph 3 of the Licensing Act 2003. By virtue of paragraph 3(1) the powers apply where a provisional statement is issued. The magistrates' court is required to exercise its powers in conformity with section 181 of the Act. Thus, on appeal against the decision of a licensing authority the magistrates' court may dismiss the appeal but under subsection (b) it may also substitute for the decision appealed any other decision which could have been made by the licensing authority.

So far as the guidance is concerned, at the material time the relevant guidance issued under section 182 of the Licensing Act 2003 was dated June 2007. In respect of conditions dealing with nuisance in particular, the following relevant guidance was provided. Paragraph 2.32:

Paragraph 2.33 deals with the definition of public nuisance and indicates that it retains its broad common law meaning and therefore it is important to remember the prevention of public nuisance could therefore include low level nuisance, perhaps affecting a few people living locally, as well as major disturbance affecting the whole community. It may also include in appropriate circumstances the reduction of the living and working immunity and environment of interested parties in the vicinity of the licensed premises.

The guidance continues:

Paragraph 10.4 dealt with the need for precision in conditions and indicated the particular importance that conditions "which are imprecise or difficult for a licence holder to observe should be avoided."

In addition, in relation to necessity and proportionality the Guidance provides

“10.11 The Licensing authority may not impose any conditions unless its discretion has been engaged following receipt of relevant representations and it has been satisfied at a hearing of the necessity to impose conditions. It may then only impose conditions that are necessary to promote one or more of the four licensing objectives. Such conditions must also be expressed in unequivocal and unambiguous terms to avoid legal dispute."

The guidelines go on to note at paragraph 10.18 that even in cases where general duties are imposed under legislation

The guidance also provides specific assistance as to the form of any conditions that may be imposed. Annex D contains in particular guidance as to conditions related to noise. Firstly, in relation to restrictions on drinking areas, it observes that restrictions on those areas may be relevant and necessary measures to prevent public nuisance. In relation to the question of noise nuisance, having referred to the fact that there is protection under the existing statutory regimes regulating noise nuisance, it makes the following observations:

The correct approach to be taken by a magistrates' court on appeal when it is being asked to consider a licensing decision made by a local authority has been considered recently in Hope and Glory Public House Limited v City of Westminster Magistrates' Court and Others [2010] EWCA (Civ) 707, where the court held that the magistrates' court must pay careful attention to any reasons given by the licensing authority for arriving at any decision under appeal, bearing in mind that Parliament has chosen to place primary responsibility for making such decisions on local authorities. The weight which magistrates should ultimately attach to those reasons is a matter for their judgment in all the circumstances, taking into account the fullness and clarity of any reasons provided, the nature of the issues and the evidence given on appeal. What the magistrates' court must do is consider whether, having taken the decision of the licensing authority into account, it is "wrong on the basis of the evidence put before the magistrates' court."

In deciding whether the decision of the licensing committee is wrong the magistrates' court is not considering any question of Wednesbury unreasonableness since it is not a process of judicial review, it is instead a fresh evidential hearing. This means that the task of the magistrates' court, having heard the evidence and specifically addressed the decision of the authority below, is to give a decision whether, because they disagree with the decision below in the light of the evidence, it is wrong. The magistrates therefore have power not merely to review the decision on the grounds of an error of law but also on its merits. It is however for the appellant before the magistrates court to persuade the court that it should reverse the order under appeal, and in cases where a statutory discretion to attach conditions has been exercised, the magistrates' court should normally consider whether the exercise of discretion was wrong in the light of the reasons given for that exercise and the form of the conditions, rather than considering the discretion afresh in the hearing of the appeal.

So far as the magistrates' obligation in relation to the wording of any conditions is concerned, the terms of any conditions to be attached to the licence or in this case the statement must be set out with clarity, so that all persons affected know what is required of them. This is for the reason identified in the judgment of Scott Baker J in Crawley Borough Council v Attenborough [2006] 1 70 JPR 593,594, where he indicated:

Scott Baker J went on to explain that his observations to the importance of clarity and specificity applied equally for the benefit of the licence holder, those charged with enforcing the terms of the licence, and in appropriate cases other people who may be affected by the conditions, such as neighbours. He concluded that terms that are so vague and unclear as to be, in effect, unenforceable are liable to be quashed.

Ground 1, the noise condition is vague and imprecise.

The claimant argues that the noise condition is vague, imprecise and arbitrary. Complaint is made that there is no indication as to what is meant by "noise sensitive premises" and complaint is also made that there is no clarity as to the meaning to the phrase noise must be "inaudible".

The magistrates have not been represented in these proceedings and therefore there is no explanation as to why they chose the terminology that they adopted. It appears to me to be based upon the condition referred to in the guidance set out above which suggests that a licensee may be required to take measures to ensure that music will not be audible above background level at the nearest noise sensitive location. However, without clarity as to the premises or location intended to be protected by this condition, and without some degree of specificity as to what is meant by inaudibility, the condition is in my judgment so vague as to be unenforceable. In those circumstances I consider that the noise condition is liable to be quashed.

There was, however, clear evidence before the magistrates' court that would have justified the imposition of a condition protecting nearby residential properties from noise generated by licensed activities on the site. This could lawfully have been prevented by the imposition of a condition that specified the particular nearby locations (presumably residential premises) intended to be protected, and required that noise from the licensable activities did not exceed a specified level of decibels measured at a particular location over a particular period.

In the circumstances I do not consider that it is appropriate simply to quash the decision without remitting the matter to the magistrates for them to reconsider what condition if any may be appropriate having regard to the terms of this judgment.

I turn to consider the claim insofar as it affects the balcony condition.

Ground 2: the Court had no jurisdiction to extend the condition to the balcony
The first complaint in relation to the balcony condition is that the court had no jurisdiction to extend any conditions to the balcony. The claimants argue that a premises licence is the only basis upon which licensable activities can be lawfully carried out on or from the premises. It is therefore said that if no licensable activities are carried out from a place, the provisions of the Act do not bite and conditions may not be imposed in respect of that place.

In my judgment this argument involves a misreading of the Licensing Act 2003. There is nothing in the Act that suggests that the power to impose conditions is limited to conditions having effect only in areas where licensable activities are permitted. The definition of premises clearly refers to the relevant building as a whole and not merely the areas used within those premises designated for licensable activities. The power to impose conditions is that contained in section 19. By section 19(10) it is clear that

In my judgment the reference to different parts of the premises includes any part of the premises as a whole, whether within the area marked as being designated for licensable activities or otherwise.

This then disposes of the point in relation to this case since it is clear that the balcony forms part of the premises, and thus in my judgment would clearly fall within the language of section 19(10)(a). However, I should add, although it does not arise for decision in this case, that in my view, having regard to the purpose of the Licensing Act 2003, the provisions of section 19 should be read as permitting conditions to be imposed even if those conditions extend beyond areas that are physically part of the premises and require activities to be carried out outside the premises. Thus, for example, a requirement that door supervisors are present outside particular premises and regulate access to it is clearly a lawful condition which may be imposed under the Act even though it requires activity to be carried out outside premises. It follows that the fact that the licensing sub-committee defined the boundary of the licensable areas so as to exclude the balcony is irrelevant, as indeed is the absence of an appeal against the demarcation of the boundary in that way. On my analysis of the Act the magistrates' court were perfectly entitled to impose a condition in relation to the balcony.

The second argument raised is an argument that contends that the balcony condition was neither necessary nor proportionate. It is said that the balcony sub-condition should not have been imposed as its effect is to duplicate other legislative regimes which regulate noise emitting from the premises so as to be a nuisance. However, in my judgment the magistrates' court was entitled to regard the condition proposed as being preventative, not reactive.

It is additionally claimed that the condition was disproportionate and unnecessary. However, I regard this as being unarguable. The balcony condition was clearly and proportionately tailored to the size, style, characteristics and activities taking place at the site. It applied only in the period after 2300 hours and was clearly targeted to prevent noise being generated in the open air on the balcony late at noise. It is to be noted that the licensing sub-committee apparently shared the magistrates' concern that after 2300 hours people gathering in the open air at or near the site, particularly in the external seating, might generate a good deal of noise. This was obviously the rationale that lay behind the requirement that the external seating area should be vacated at 2300 hours.

This appreciation by the licensing committee of the need to prevent late night noise outdoors seems to me to be relevant in considering the final argument which was deployed in support of the claim for judicial review, namely that the magistrates' court did not give sufficient weight to the decision of the licensing committee and did not accord due deference to their decision to impose the condition in relation to the external seating area but not in relation to the balcony. Whilst, as I have indicated, the magistrates were required to give weight to the exercise of the discretion that excluded the balcony from the condition imposed by the licensing sub-committee, the magistrates were also entitled to regard as inexplicable the decision to exclude the balcony from this requirement. Whether or not licensable activities were being carried out on the balcony, it was highly likely on any view to be a source of open air noise. In my judgment, it was entirely reasonable for the magistrates to take the view that the licensing sub-committee had acted unreasonably in permitting it to continue to be occupied after 2300 hours, given the approach that it had taken generally to reducing the amount of noise generated outside the premises after that time.

It is also to be noted that the claimant clearly accepted the principle that conditions could be imposed to prevent noise being generated in the open air, given that it did not appeal a condition in relation to the vacation of the external seating area. I consider that it is plain that, whilst the magistrates court had regard to the decision of the elected local authority, no reasoning was provided by that authority that explained why it considered it necessary to exclude the balcony area from the condition that the external seating area be vacated from 2300 hours. The magistrates' decision to introduce the condition requiring the balcony area as well as the external seating area be vacated seems to me to be justified on the evidence and one that was permitted to them, given that they would have been entitled to consider that the condition as imposed by the licensing sub-committee was anomalous and unreasonable.

In those circumstances I regard the remainder of the claim is not being made out and I would dismiss it.

MISS S HANIF: There is no application for costs.