NOTE
1. This appeal is brought by Tesco Stores Limited by way of summary application in terms of section 131(2)(a) of the Licensing (Scotland) Act 2005 (As Amended) (hereinafter referred to as "the Act"). The appeal is brought against the decision of the Midlothian Licensing Board who are the defenders.
2. The decision appealed against was made on 15 December 2011 finding that grounds of review of the pursuers' premises licence in respect of Tesco, Bonnyrigg Road, Dalkeith were established and suspending the premises licence for a period of 48hrs commencing at midnight that same day.
3. I heard the appeal on 28 February 2012. Neither party led evidence. I heard submissions from Mr Skinner, Advocate for the pursuers and Mr Divers, Advocate for the defenders. They most helpfully provided written submissions which assisted greatly. Both counsel presented their argument orally based on these written submissions. I would wish to record that my task has been assisted by having these written submissions to refer to.
BACKGROUND AND CONTEXT TO THIS APPEAL
4. The lack of controversy relating to the background and context to this appeal may be obvious from the fact that neither party required to lead evidence.
5. The pursuers operate a national chain of supermarkets which retail food, non-food items and other household goods and provide ancillary consumer services. Their premises at Bonnyrigg Road, Dalkeith are licensed by the defenders for the sale of alcohol in accordance with the licence lodged on behalf of the pursuers. The date of commencement of the licence is 1 September 2009.
6. Lothian and Borders Police are authorised to take part in test purchase operations aimed at targeting the unlawful supply of alcoholic liquor to underage persons.
7. On 21 July 2011 a test purchase operation was carried out at the pursuers' Dalkeith premises resulting in a positive sale under test conditions to a young person aged 161/2. The test took place at approximately 8.50pm in the evening. The test purchaser was served by an adult member of staff with two 330ml bottles of beer. The test purchaser paid for the beer with cash. The pursuers' employee did not ask the test purchaser for identification of age. The pursuers' employee was subsequently cautioned and charged with a contravention of section 102(1) of the Licensing (Scotland) Act 2005 - Sale of Alcohol to a Child or Young Person.
8. On 10 October 2011 an Asst. Chief Constable of Lothian and Borders Police made application to the defenders for review of the premises licence following the sale of alcohol to the young person during the test purchase operation already referred to. That application was made in terms of section 36 of the Act. This has been lodged in process. The letter narrates events on 21 July 2011. It goes on to narrate that the pursuers' store adheres to a "think 25" policy whereby persons who appear to be under the age of 25 years are asked to provide identification. The check outs within the store have an electronic prompt that encourages all staff to check that persons are of suitable age when age-related products such as alcohol are scanned.
9. The letter concludes in the following manner:-
"In view of the foregoing, I request that the Licensing Board consider grounds for review under section 36(3)(b) of the Act, in that the illegal sale of alcohol taking place within the premises demonstrates a level of negligence and irresponsibility that is unacceptable and contradicts the following licensing objectives;
· Preventing crime and disorder
· Preventing public nuisance
· Protecting children from harm
In conclusion I would request that the Board consider the grounds for review as substantiated."
10. At the meeting of the Licensing Board held on 15 December 2011, the Board conducted a review of the premises' licence. The Board heard submission from the Chief Constable's representative and from a solicitor acting on behalf of the pursuers. The defenders found that a ground for review had been established relative to the licensing objective of "protecting children from harm". Having done so they then decided that it was necessary or appropriate to suspend the premises' licence for a period of 48hrs commencing at midnight that day.
11. The full statement of reasons for the decision is lodged as Production 1 of the Second Inventory of Productions for the pursuers and was issued on 19 January 2012.
12. On 16 December 2011 the pursuers lodged an appeal by way of summary application. They sought inter alia recall of the suspension of the premises' licence ad interim in terms of section 132(8) of the Act pending determination of the appeal. I granted recall ad interim during the afternoon of 16 December 2011 by which time the pursuers had been unable to trade in the sale of alcohol for some 5 hours.
PURSUERS' SUBMISSIONS
13. Mr Skinner Advocate, for the pursuers reminded me that section 131 of the Licensing (Scotland) Act 2005 conferred wide powers of review on the court hearing the appeal.
14. The 2005 Act provides the mechanism for review of a premises licence (section 36). Section 39 of the 2005 Act provides the test which the Board requires to meet in dealing with the review hearing. It provides:-
(1) At the review hearing in relating to any premises' licence, the Licensing Board may, if satisfied that a ground for review is established (whether or not on the basis of any circumstances alleged in the premises' licence review proposal or application review considered at the hearing) take such of the steps mentioned in sub-section (2) as the Board considers necessary or appropriate for the purposes of any of the licensing objectives.
(2) The steps set out at section 39(2) are
i. to issue a written warning to the licence holder;
ii. to make a variation of the licence;
iii. to suspend the licence for such period as the Board may determine;
iv. to revoke the licence.
15. The first ground of challenge to the decision of the Board relates to the Board -
"having made an error in law et separatim exercising its discretion in an unreasonable manner by holding that "the ground for review set out in the premises' licence review application had been established as the licensing objective of protecting children from harm had been engaged by the occurrence of the sale of alcohol to a person under 18 in the course of the test purchase".
16. This is the reason given for the ground of review having been established. This was the view of the Board notwithstanding that they were dealing with a single incident of a failed test purchase the purchaser being 161/2 years of age.
17. In support of this submission pursuers' counsel drew my attention to the definition section of the 2005 Act which defines "child" as a person under the age of 16 and a "young person" means a person aged 16 or 17. There is therefore a clear distinction to be drawn between the two classes due to age. There was no evidence before the Board to suggest that any child had ever been sold alcohol on the Pursuers' premises On the contrary, there was evidence that the follow up test purchase was met with an appropriate challenge and refusal and there was evidence of other test purchases by secret shoppers organised by the pursuers themselves which had been passed. Accordingly, there is no evidence to support the conclusion that the licensing objective of protecting children from harm had been engaged. The test purchaser was in the category of "young person" in terms of the Act.
18. Secondly, it was submitted that the Board erred in holding in the reasons that "the sale of alcohol to a child or young person under 18 would, per se cause harm to that child or young person." In support of that submission Mr Skinner again relied on the argument that harm to a young person has no relevance to the objective founded upon which was protecting children from harm. There was nothing to support or explain why a sale per se would cause harm to a young person or child. In this context the reasons referred to was the sale and not the consumption of alcohol. This statement can be contrasted with section 106 of the 2005 Act which recognises that a "young person" may consume beer, wine, cider and sherry along with a meal supplied in licensed premises. That would contradict the suggestion that sale of beer per se would harm a young person when the Licensing Act itself permits under certain controlled circumstances the consumption of beer by young people.
19. The second submission put forward by the pursuers is that the Board erred in law in that there was no proper basis or at least no properly articulated basis for holding that a ground for review had been established. The Board in their reasons appeared to suggest that the test to be applied is one of strict liability.
20. The background to the review hearing is the failure of one test purchase. The member of staff who conducted the sale had undertaken mandatory training in accordance with the legislation. He had undergone six years of training including the sale of alcohol and in particular had attended a Bronze for Everyone Course in 2009, Age Restricted Training in October 2010 and March 2011 as well as two "Think 25" training courses. The failure appears to have occurred due to inexplicable human error. The pursuers had robust and rigorous systems for training and invested heavily in staff training. They employed sophisticated technology to prompt staff at the till to consider if the customer was over 25 and if not to ask for identification. The pursuers provided elaborate training schemes; prominent floor signage and posters in the staff room to remind staff of their responsibilities. These policies and systems were not challenged before the Board.
21. In their reasons the Board have no criticism of the systems operated by the pursuers and against that background however, they take the view that "the policies and procedures in place both at the time of the first test purchase and thereafter should have been adequate in order to prevent the test purchase having been failed." That being so the Board concluded that the "failed test purchase, notwithstanding that the second test purchase was passed highlighted a failure at the premises to follow the Premises License Holder's own policies and procedures and therefore the Board considered it necessary and appropriate to take one or more of the steps outlined in section 39(2)".
22. I was referred to the Note of Sheriff Principal Kerr's decision in the Co-operative Group Food Limited v Inverclyde Licensing Board reported in No 2 of 2010 Scottish Licensing Law and Practice Journal. (No 7 of the pursuers' bundle of authorities.)
23. I was referred to other cases under the 2005 Act and older cases dealing with the suspension provisions under section 31 of the 1976 Act - Sohal v The City of Glasgow Licensing Board [1999] 13 SLLP 12; Hamid v The City of Glasgow Licensing Board [2001] 18 SLLP 8; Salem & Javed v The City of Glasgow Licensing Board (Sh Baird unreported April 2009); Mahmood v West Lothian Licensing Board reported at [2007] 17 SLLP 19. I was also referred to the recent decision of Sheriff J K Mitchell in Glasgow Lidl (UK) Gmb H v City of Glasgow Licensing Board - unreported and currently under appeal to the Inner House of the Court of Session.
24. In conclusion Mr Skinner submitted that the mere fact of a single isolated sale to a young person by a properly trained member of the staff at premises with high volumes of sale of alcohol, an excellent training system and a hitherto unblemished record, is not per se and in the absence of further explanation a proper basis for holding that the licensing objective of protecting children from harm had been established.
25. The third ground of appeal - esto the Board were entitled to hold that the grounds for review had been established the Board erred that there was no proper basis or at least no properly articulated basis in the reasons for holding that it was "necessary or appropriate" to suspend the licence for the purpose of protecting children from harm.
26. Mr Skinner suggested that any Licensing Board in determining a licensing review application had to undertake a four stage test as follows:-
(1) They had to decide whether they were satisfied that a ground or grounds of review existed relevant to one or more of the licensing objectives.
(2) If there were grounds for review the Board then required in terms of section 39(1) to consider whether it was "necessary or appropriate" for the purpose of the licensing objectives to take any of the steps laid down in section 39(2).
(3) Should they find that it was necessary or appropriate for the purpose of any of the licensing objectives they were entitled but not obliged to warn, vary, suspend or revoke.
(4) If they decided they should exercise any of the powers they had to determine which one to choose and if it was to be one of suspension they had to decide on a suitable period.
27. Since the failed test purchase the pursuers' premises had passed the second test purchase and numerous other mystery shopper tests. All staff had been re-trained. Accordingly, there seemed to be no basis other than the single failed test purchase upon which the Board can consider whether it was necessary or appropriate to suspend the licence.
28. The defenders give as reasons "in order to prevent a recurrence" however no explanation is given as to why it was necessary or appropriate to suspend in order to prevent a recurrence. A reoccurrence would only be prevented for the limited period of the suspension.
29. In their answers to the summary application the defenders raise the question of deterrence. It was observed by Mr Skinner that deterrence formed no part of the reasons and further it was difficult to see how the imposition of any period of suspension might deter the appellants standing the absence of any criticism of the system of training.
30. The legislation does not require suspension in the event of a sale to an under aged person or a test purchaser. Had there been a requirement to suspend in these circumstances the legislation would have made it mandatory. There is nothing in the reasons given by the board to explain how the public interest might be served by a short suspension of the licence in the present circumstances. Mr Skinner suggested that the Board appeared to place themselves under some required or mandatory suspension and posited the question that if suspension was necessary in the circumstances of this case it would be difficult to envisage any circumstances in which suspension would not be necessary.
31. The final ground of appeal arises from section 131(3)(b) where the decision to suspend is disproportionate.
32. Mr Skinner referred to the Note of Sheriff Principal Kerr's decision in the Co-operative Group Food Limited v Inverclyde Licensing Board when he made obiter remarks that a suspension for any length of time for a casual error leading to a first offence was disproportionate. Accordingly if a ground of review has been established a written warning would normally be appropriate.
33. Mr Skinner proposed that if he failed in the first three submissions then the court might substitute a decision which was open to the Board and that would properly in the circumstances be a decision to take no action or esto I thought that some action was appropriate then a written warning would be the most apt finding.
34. I was reminded of the wide powers given on appeal by section 131(5) of the Act. The principal submission however, was to uphold the appeal and reverse the decision of the Board made on 15 December 2011. I was asked to award expenses in favour of the pursuers in the event of success and that the cause was suitable for sanction of counsel.
DEFENDERS' SUBMISSIONS
35. Mr Diver's motion was that I refuse the appeal and dismiss the summary application.
36. Before turning to the sections of the Act dealing with the process of appeal I was asked to consider the more fundamental purposes and policy objectives set out in the legislation. I was reminded that section 4 of the Act states the licensing objectives as:-
i. Preventing crime and disorder
ii. Securing public safety
iii. Preventing public nuisance
iv. Protecting and improving public health and
v. Protecting children from harm.
37. Section 6 of the Act imposes a duty on the Licensing Board to publish a statement of their Licensing Policy which must promote the licensing objectives set out above. Furthermore, the Scottish Ministers may issue guidance to Licensing Boards as to the exercise of their functions under the Act (section 142 ) and each Licensing Board must have regard to any guidance issued to them. The policy statement and licensing objectives are an important innovation of the 2005 Act which can be contrasted with the old legislation the Licensing (Scotland) Act 1976. Accordingly care requires to be taken when considering cases based upon the previous legislation.
38. The sale of alcohol and in particular the sale of alcohol to under aged children and young people is a matter of importance for the Licensing Board and indeed for the Scottish Government in their guidance to Licensing Boards.
39. Turning to the issue of review (section 36 of the Act) the legislation sets out a three stage procedure that the Board must follow. Firstly, the Board must consider if the application for a review is vexatious or frivolous or does not disclose any matter relevant to a ground of review. (Section 36(6)); secondly, if the Board decides to fix a hearing, at that hearing the Board must decide whether a ground of review has been established; thirdly and finally the Board must decide if it is "necessary or appropriate" to take any of the steps mentioned in section 39(2) of the Act.
40. In terms of section 39(2) those steps are:-
(a) To issue a written warning to the licence holder,
(b) To make a variation of the licence,
(c) To suspend the licence for such period as the Board may determine,
(d) To revoke the licence.
41. With regard to the pursuers' first ground of appeal it was argued on behalf of the defenders that no error in law had been made by the Board. The circumstances surrounding the test purchase were entirely relevant to the licensing objective of protecting children from harm. There is no requirement that there should be a breach of any of the licensing objectives only that a ground is established which is "relevant" to the licensing objectives.
42. The test purchase related to a 161/2 year old. It was clear that the circumstances of that sale were relevant to the protection of children. A 161/2 year old is closer in age to a child than to an adult.
43. I was urged not to look at the particular parts of the decision complained of in isolation but to look at the statement of reasons as a whole. It was incorrect to classify the decision as one which sought to apply a strict liability test. There had been a failed test purchase in circumstances that were not capable of being explained by the pursuers. Despite the existence of a training policy and procedures there had still been a failure to follow these procedures. The procedures could not be relied upon. This was relevant irrespective of the age of the young person or child. Accordingly, there were circumstances relevant to the licensing objective of protection of children.
44. The next ground of appeal related to whether it was necessary or appropriate to suspend the licence for two days. That decision is a question for the Board exercising their discretion in the light of the licensing objectives. The Board have a wide discretion.
45. I was referred to the guidance published by the Scottish Government for Licensing Boards and Local Authorities in 2007. Section 10 paragraph 240 states: "A key objective of the new system is the protection of children from harm. The system itself must be tested against that licensing objective including whether or not it can, as proposed, adequately deliver that protection for children. Children need protection from environments which are wholly unsuitable and they need to be prevented from being placed in a position where it is easy for them to circumvent the law and obtain alcohol. The interests of communities would not be served by allowing any relaxation of controls which would undermine the Executive's extensive efforts to combat under age drinking."
46. Midlothian Licensing Board's own policy at paragraph 11.1 states as follows:-
"11.1 Children and Young Persons
The Board wishes to encourage family friendly premises within Midlothian and to ensure that such premises are run in such a way that they are suitable for children. In determining any application where the operating plan indicates that children are to be allowed on the premises, the Board will consider the need to protect children from harm as its paramount concern.
The Board has serious concerns about the prevalence of underage drinking in Midlothian and the links between excess consumption of alcohol and the commission of crimes, in particular crimes of public order and violence. Licence holders are reminded that they and their staff must comply with all legislation in relation to children and young persons and failure to do so will be treated extremely seriously by the Board.
The Board would recommend that all licence holders for off sales premises to ask for accredited photographic identification (eg passport, driving licence) from any person believed to be under the age of 21 years."
47. It was entirely within the discretion of the Board to consider it necessary and appropriate to invoke one of the sanctions in terms of section 39 and suspension was one of these sanctions. Promotion of the Board's own objectives and policy and the licensing objectives includes suspension for the purpose of deterrence both to this licence holder and other licence holders. It is a reasonable exercise of discretion to impose a suspension as a consequence of failure to adhere to licensing objectives and standards. There was no policy of strict liability. The pursuers' argument was flawed in the sense that they appeared to be suggesting that they were entitled to some form of indemnity against any punitive action by the Board if they had suitable procedures.
48. I was invited to follow the reasoning of Sheriff Mitchell in the case of Lidl UK GmbH v City of Glasgow Licensing Board (4 November 2011 unreported). That case dealt with the wide discretion which any Licensing Board has under the 2005 Act.
49. Finally, with regard to the pursuers' argument on proportionality Mr Divers relied upon Tre Traktorer Aktiebolag v Sweden 1991 13EHRR 309. Dealing with proportionality the European Court of Human Rights in that case stated inter alia: "There must be a reasonable relationship or proportionality between the means employed and the aims sought to be realised." In this case there was nothing disproportionate about the sanction of a two day suspension of the licence of the pursuers who were a very large multinational company given that the aim was the public interest and protecting children in Midlothian from the harm of alcohol. The case of Tesco Express v Birmingham City Council and Chief Constable of West Midlands Police 2007 70 LR 34 is a case involving discussion of the issue of proportionality again in a licensing matter where the suspension of a premises licence for six days was considered proportionate. Accordingly, the current decision under review displayed neither an error of law or unreasonable exercise of discretion and was entirely proportionate in all the circumstances. I was therefore invited to refuse the appeal and dismiss the application. Expenses should follow success. Mr Divers joined with Mr Skinner in seeking sanction for the employment of counsel.
DECISION
50. In my view, the starting point in deciding this appeal must be the legislation - the Licensing (Scotland) Act 2005 and the Statement of Reasons issued on behalf of the defenders following their decision on 15 December 2011. The statement of reasons was issued on 19 January 2011. The Act makes provision for regulating the sale of alcohol and sets out in Part 1 the core provisions and licensing objectives (section 4). Part 2 sets out the framework for Regulation - Licensing Boards, Licensing Forums and Licensing Officers and sets out their respective duties and obligations. Thereafter the Act deals with the provisions relating to premises and personal licences and the appropriate provisions for review, variation etc and the detailed provisions relating to offences. The interpretation section is section 147.
51. The licensing objectives in section 4 without doubt have the public interest as the prime consideration. Each Licensing Board comes under a duty to publish a statement of licensing policy which must promote the licensing objectives. The licensing objectives are thus the overarching principles which guide the defenders. Accordingly, it is not difficult to notice that the licensing regime of the Act is more concerned with the public interest objectives than the previous Licensing Act, the Act of 1976.
52. The decision complained of is set out at box 10 of the Statement of Reasons in the following terms:-
"10. Decision taken
The Licensing Board was satisfied that the (a) ground for review had been established and that it was necessary and appropriate for the purposes of the licensing objective of protecting children from harm that the premises licence be suspended as from 12 midnight on Thursday 15 December 2011 for a period of 48hrs in terms of section 39(2) of the Licensing (Scotland) Act 2005 ("the Act")."
There follows at section 10A the reasons for that decision. The procedure and argument presented to the Board are set out and the decision that the ground of review was established is set out on the third page of section 10A as follows:-
"Following a number of questions having been posed by members of the Board and after summing up by both parties, the Board thereafter considered the premises' licence review application in the light of all the submissions it had heard.
Having done so, the Board was of the view that the ground for review set out in the premises' licence review application had been established as the licensing objective of protecting children from harm had been engaged by the occurrence of the sale of alcohol to a person under 18 in the case of a test purchase."
53. Before proceeding on to look at the Board's reasoning it is perhaps worthwhile to consider at this stage the application for review that is the letter from the Assistant Chief Constable, Ian Livingstone (production 2 of the first inventory for the pursuers). This is a letter dated 10 October 2011. The first paragraph of the letter requests review; and the second paragraph provides information relating to the premises licence and Mr Nisbet's personal licence. The third paragraph explains the section which enables the Chief Constable to authorise test purchase operations and the fourth paragraph gives details of operation Epsilon launched on 1 August 2008 and which is aimed at targeting the unlawful supply of alcoholic liquor to under age persons by undertaking test purchase operations at premises within Midlothian. The following paragraph reports the positive sale or failed test purchase at the pursuers' premises on 21 July 2011 noting that the member of staff responsible for the sale is the subject of a report to the procurator fiscal. The appendix attached give details of the evidence which would be available to the procurator fiscal and concludes with the statement that the accused member of staff was cautioned and charged with a contravention of section 102(1) of the Licensing (Scotland) Act 2005 to which no reply was made. The letter goes on to note that further enquiries revealed there were training records on the premises for all staff including the employee responsible for the sale. The letter gives further details about the store's policy and systems and concludes with the following paragraphs "In view of the foregoing, I request that the Licensing Board consider grounds for review under section 36(3)(b) of the Act, in that the illegal sale of alcohol taking place within the premises demonstrates a level of negligence and irresponsibility that is unacceptable and contradicts the following licensing objectives:
· Preventing crime and disorder
· Preventing public nuisance
· Protecting children from harm.
In conclusion, I would request that the Board consider the grounds of review as substantiated."
54. I pause to observe that the concluding part of the Assistant Chief Constable's letter seeks to identify three of the licensing objectives which may be contradicted by the illegal sale of alcohol. It does not however, give any other specification as to the manner in which the licensing objectives are contradicted or any specific concerns that Lothian and Borders Police have regarding these premises in particular in connection with crime and disorder and public nuisance and protecting children from harm. It makes a somewhat sweeping statement that the illegal sale of alcohol taking place within the premises demonstrates a level of negligence and responsibility that is unacceptable. The only way of construing the paragraph is with reference to the single incident referred to in the body of the letter namely, the failed test purchase on 21 July 2011. There is no other information in the letter to suggest that the illegal sale of alcohol in the premises is an ongoing matter. Likewise there is no indication of the level of negligence and irresponsibility and whose negligence the Assistant Chief Constable is referring to (the pursuers or the pursuers' employee). Bearing in mind that the letter of 10 October 2011 requests a review of the premises licence due to a failed test purchase operation which had occurred several months prior it is unfortunate that the author of the letter fails to explain the link between the member of staff's failure to ask for ID and the assertion that this demonstrated an unacceptable level of negligence and irresponsibility. There is no attempt to distinguish the negligence of the individual employee and the premises licence holder being the pursuers. It may be that that part of the letter is standard in premises licence review applications made by the police following failed test purchase operations. A more discriminating approach would be helpful for the purpose of Licensing Boards identifying the gravamen of the review application. It is reasonable to assume that any Licensing Board will have due regard to applications from local police for review and accord some weight to what is said in the application and at any review hearing. It is therefore of considerable importance that the application identifies and specifies the nexus between the facts and the licensing objectives which are said to be contradicted with specific reference to the premises whose licence is to be reviewed.
55. Although the letter from the Assistant Chief Constable does not make it clear it appears to be common ground that the second or follow-up test purchase did not take place and the test purchaser was properly challenged. Accordingly, the failed test purchase of 21 July 2011 was the sole failure. It was not suggested either in the letter of application or before the Board that there had been other failures either prior to 21 July 2011 or since.
56. In determining that the first part of the test had been established namely, that the ground for review had been established the Licensing Board give reasons for that decision. These reasons can be found towards the bottom of the third page of section 10A. Reading short the Board are clearly well aware that the failure related to the actings of a member of the pursuers' staff rather than the pursuers' systems for training put in place to fulfil their obligations in terms of the premises licence. Nothing was said that contradicted the pursuers' representations and advice to the Board as to the pursuers' significant investment in staff training and check out systems to prevent sales of alcohol to under aged persons in general. There is nothing to gainsay the pursuers' assertion that they took all reasonable steps to avoid selling alcohol to persons under 18 and that the steps they took were above and well beyond the minimum prescribed by legislation, regulations and guidance.
57. Against that background it is not difficult to understand why the only explanation that was given to the Board by Mr Cummins solicitor for the pursuers, was "inexplicable human error" on the part of the employee working on the check out for whom Mr Cummins did not act and who had been already cautioned and charged with a contravention of section 102 of the Act.
58. It is clear to me that the reasons for the defenders determining that the ground for review was established relates to the pursuers' employee's failure to comply with the law and they go on to correctly state "In the view of the Board it would have been reasonable to have expected a member of staff who had undergone the necessary training to have asked the test purchaser for identification, which would have resulted in a pass of the test purchase." I doubt that the pursuers would disagree with that statement. When the Board go on to state that there had been a clear departure from the policies and procedures which had been outlined to the Board it is implicit given what they have already said that they mean a departure by the employee in question.
59. The board go on to state "The Board also considered that the sale of alcohol to a child or young person under 18 would, per se, cause harm to that child or young person." This passage is significant for two reasons. Firstly, it represents a departure from the terms of the actual decision taken which referred to the licensing objective of "protecting children from harm" when they refer to the sale of alcohol to a child or young person under 18. Indeed, it can be seen from the terms of the interpretation section (section 147) that for the purposes of the Act a child means a person under the age of 16 whereas a young person means a person 16 or 17. The failed test purchase related to a young person aged between 16 and 17. It matters not whether the test purchaser was 16 or 17 in terms of the Act he or she was a young person and not a child. Secondly, the statement indicates that the sale of alcohol to a child or young person per se (in itself) would cause harm. That statement is, in my view, both erroneous and confusing. There are of course, clear, well founded and legitimate concerns about the consumption of alcohol by children and young people especially when that is irresponsible and leads to criminal, nuisance or antisocial behaviour, not to mention, danger to health. The assertion, however, that the fact of sale of alcohol to a child or young person is in itself harmful relates not to the consumption of alcohol but to the purchase or sale of alcohol. This in itself would be directly contradicted by the terms of sections 106 and 107 of the Act which in certain circumstances permits the consumption of alcohol by a child or young person or indeed the sale of alcohol by a child or young person.
60. Indeed, it appears to me that the assertion made contradicts not only the legislation but the Board's own policy to which I have been referred. At 11.1 the Board emphasises the wish to encourage "family friendly premises". In this context the policy is referring to licensed premises such as bars and restaurants which serve alcohol and are suitable for children also. In determining any such application the Board will, of course, consider the need to protect children from harm.
61. The second part of the Board's policy relates to the prevalence of underage drinking in Midlothian and the links with crime. These are indeed very real and legitimate concerns and are encountered on a daily basis in the courts. However, although the application invokes the licensing objectives of preventing crime and disorder and prevent public nuisance, no facts are stated in support of these objectives and the Board does not suggest that these objectives have been established in the current review. Reference has been made to the guidance issued by the Scottish Government which states at Para 240 - "Children need protection from environments which are wholly unsuitable and they need to be prevented from being placed in a position where it is easy for them to circumvent the law and obtain alcohol". There is no suggestion that the Pursuers' premises are anything but suitable as it is well known as a supermarket where families do their shopping. Furthermore the Board in this case are dealing with one failed test purchase against the background of high volume sale of alcohol which suggests that it is far from easy to obtain alcohol at the Pursuers supermarket if under age. It would appear that this licensing objective is being met
62. Accordingly, having regard to the reasons and explanation set out by the Board themselves that, in my view, discloses errors of law in respect of the interpretation of the Act and furthermore, it is difficult to avoid the conclusion that the Board's assertion that the licensing objective of preventing children from harm has been correctly invoked by virtue of the single failed test purchase to a young person over the age of 16 is simply wrong.
63. I turn to consider the second ground of appeal that the Board erred in law in that there was no proper basis or no properly articulated basis for holding that a ground for review had been established. It is clear from a straightforward reading of the Board's reasons that the pursuers' systems for training went beyond the statutory requirements and were not criticised. The Licensing Standards Officer reported no adverse comment. The Board appeared to recognise that the failing was on the part of the employee and not the system but then the Board appears to contradict its own reasoning when it highlights that there was "a significant discrepancy between the sale of alcohol to a person aged 161/2 and the "challenge 21" and "think 25" policies then in force at the premises. It was clear to the Board that this significant discrepancy meant that the procedures in place could not be relied upon to prevent the sale to any person under 18, children as well as young persons." This statement entirely contradicts the statement made earlier that it would have been reasonable to have expected the member of staff (who had undergone training) to have asked for identification. Although the Board referred to the policies and procedures which are intended to reduce the risk of alcohol being sold to any person under the age of 18 it appears that the Board then proceed to conflate minimising of risk with elimination of risk of sale to persons under 18. The Board refer to the failure to take the reasonable step of requiring identification, which is a failure on the part of the employee, and then proceed to connect that with a failure to prevent sales to children and young persons. That, in my view, is a clear indication that the Board have fallen into error by requiring a system which is foolproof and prevents sales of alcohol to children and young persons under 18. That indicates that the Board adopted a test of strict liability to this application. Had the purpose of the legislation been to impose a penalty on any infringement of the prohibition against underage sales of alcohol then the legislators would no doubt have imposed a strict liability test and a mandatory penalty.
64. I accept that the 2005 Act adopts a broader public interest approach to the sale of alcohol than the 1976 Act did. That does not mean that the decisions based on the previous legislation are now entirely redundant. Whether one looks at the Act or the previous decisions under the 1976 Act one looks in vain to find a requirement of absolute or strict liability. It is my view that the Board, knowing that the circumstances of the application amount to a single failed test purchase to a young person due to fault on the part of the pursuers' employee erroneously found the ground of review established by virtue of the relevance to protection of children. There is no criticism whatsoever of the pursuers' system of training which was plainly more than adequate however the Board manage to contradict themselves in the course of their decision by conflating the error on the part of the employee with a failure on the part of the pursuers to ensure or prevent the sales of alcohol to under 18s. In the absence of any other reason this can only be the application of a strict liability test. Based on the uncontroversial evidence before the Board they were not entitled to find that a ground relevant to the statutory licensing objective of protecting children from harm was engaged. This is especially so as the failed test purchase related to a young person rather than a child.
65. It appears to me that the defenders have exercised their discretion unreasonably by seeking to impose a regime which infers strict liability in the event of a failed test purchase. That in essence means the closing of the Board's mind to the whole circumstances of the application before them. The weighing up of all relevant factors is the essential function of any decision making body. Reasons given by the Board in the present case indicate a failure on the part of the Board to have regard to all relevant factors and give them appropriate weight. This decision gives undue weight to the fact of a failed test purchase due to "inexplicable human error" and a lack of weight to the compelling facts which points to the pursuers' active and positive endorsement of their obligations under the legislation and guidance. They fail to take account of the Pursuers support of the objectives of protecting children from harm and the management of or minimising of the risk or opportunity for sale of alcohol to under aged persons. It is important to record that it was accepted that the Pursuers had very high volume annual sales of alcohol and no other instances of sales of alcohol to under age persons at these premises. In my view the defenders thereby fell into error in the exercise of discretion and in so far as there were no proper basis articulated for holding that a ground of review had been established.
66. Lest I be wrong in my view of the principal grounds of appeal I will now consider the next part or step of the test which the defenders required to address. That is having taken the view that the ground of review was established the Board had to consider whether it was "necessary or appropriate" for the purposes of the licensing objectives of protecting children from harm to take any of the steps laid down in section 39(2).
67. It is therefore necessary to look at the reasons given by the Board and these again can be found at section 10A (penultimate page of the reasons). What I have said about the application of a strict liability rule is equally relevant to this question. The Board state that the occurrence of a failed test purchase points to a defect in the Pursuers policies and procedures .The Board go on to state that the policies and procedures should be adequate to prevent the test purchase having been failed. They conclude that the failed test purchase in itself highlights the failure of the pursuers' procedures. Of course, this has been set in the context that the Board know, only too well, that the failure is a failure on the part of the employee and not inevitably a failure of the system. The words of the Board in this section also make it clear that they are looking for elimination of risk or strict liability. Finally, the Board consider it necessary and appropriate to take one of the steps "in order to prevent a recurrence".
68. The Board then proceed to consider the steps which" may" be taken by them but steps that they are not obliged to do to take. To prevent a recurrence they decide that a short period of suspension is necessary and appropriate. This will also promote the licensing objective of protecting children from harm.
69. This in my view discloses further confusion and error on the part of the Board. It is indeed difficult to see how a short period of suspension would prevent a recurrence other than for that very short period. Accordingly, it is difficult to see how a short period of suspension would prevent a recurrence. A short period of suspension will undoubtedly be a penalty for the pursuers. They are involved in a significant number of alcohol transactions on a daily and weekly basis. The loss of trading in alcohol over the weekend prior to Christmas would enhance the penalty. It would also inconvenience and in effect penalise the customers of the pursuers who would be denied an opportunity of buying all their requirements in respect of both food and alcohol on the same premises. The steps available to any Licensing Board in terms of section 39 of the Act do not include the power to impose a financial penalty however the suspension of a premises licence would clearly restrict the ability of the pursuers to trade over the period of the suspension. This would, in effect, be a significant financial penalty.
70. Having regard to the reasons given by the Board and accepting entirely that the Board enjoys a wide discretion it appears to me that it is a decision which discloses a further error in the reasoning of the Board.
71. The defenders in their answers to the Initial Writ state: "The defenders were entitled in the exercise of their discretion to take action to deter both the licence holder concerned and others from acting in a way that harmed the licensing objective of protecting children from harm. Such action promotes the licensing objective, as the defenders are obliged to do. Deterrence is a relevant consideration for the defenders in deciding what was necessary or appropriate for the purpose of promoting the licensing objective of protecting children from harm. It serves to remind and reinforce with licensing holders the importance of maintaining high standards and the possible consequences of a failure to adhere to them."
Of course this defence does not square with the reasons given by the Board. It is however proper to consider the matter of deterrence. I find myself returning to the fundamental difficulty for the defenders in this case - namely - that they have no basis on which to suggest that there is any ongoing problem with the premises; that there was any likelihood of further sales of alcohol to persons under age; that there was anything other than a good training regime. Standing these uncontroversial propositions it is difficult to know what the purpose of deterrence was or what the pursuers had to be deterred from doing. - From hiring staff who do not possess a reasonable level of intelligence and common sense; who do not have lapses of concentration and make careless errors; who are not malicious or mischievous? It would be quite absurd to make these suggestions however it is not easy to discern the purpose. On the other hand, where appropriate a suspension may deter other licence holders in the event of there being a clear and identifiable problem of sales to under age persons in a particular area. This however did not form part of the reasons and clearly in the circumstances of this case could not form part of the reasons.
72. Accordingly, I would agree with the submission made on behalf of the pursuers that it would be difficult to envisage when it would not be necessary to suspend if suspension is necessary in the circumstances of this case.
73. In the circumstances it is difficult to avoid the conclusion that the Board again fell into error when considering this part of the test. Likewise, it is difficult to avoid the conclusion that suspension was also disproportionate in the whole circumstances for the reasons I have already given. Suspension was indeed punitive and if that is the purpose of the licensing legislation then no doubt Parliament should have made that clear. If the aim is to protect children by preventing a recurrence of the test purchase one would expect the Board to have considered that it is necessary to encourage licence holders to remain supportive of the licensing objectives and to continue to maintain high standards of training .A warning as to the possible consequences in the event of a sale to a child would have been effective.
74. The decision to impose a short period of suspension with immediate effect was designed to achieve a variety of consequences for the pursuers. Firstly, the suspension began on the Friday beginning one of the busiest weekends in Christmas trading. It must have been clear to the defenders that the effect on the pursuers would have been significant especially as trading at that time of year is significantly busier than at other times. Secondly, the immediate suspension of the licence had the effect of denying the pursuers the opportunity to seek recall of the suspension prior to the suspension taking effect. Recall of the suspension may be granted ad interim in terms of section 132(8) of the Act. Due to a combination of speed and diligence on the part of the solicitors for the pursuers a hearing on the recall was arranged for 2pm on 16 December 2011 and recall of the suspension ad interim was granted prior to 3pm.
75. I find it difficult to understand why the defenders having made the decision that it was necessary or appropriate to impose a short term suspension decided to give immediate effect to the suspension bearing in mind that the failed test purchase had occurred on 21 July 2011 and the application for review made in October 2011. Where the need for such urgency arises is difficult to decern against that timetable. Immediate implementation of suspensions, particularly short term suspensions, creates a clear risk of denial of justice. Had the Board met on a Friday it would be less likely that the suspension would have been recalled ad interim or that there would have been a reasonable opportunity to present a motion for recall before a suspension was served. It would have been entirely academic to have heard any motion on recall on Monday 19 December 2011 as the suspension would have been served. I accept that there may be instances where an immediate suspension of the licence is necessary for the purpose of dealing with public protection and public order concerns, however these issues were entirely absent in the present case and are likely to be absent in a significant number of cases heard by the Board. The imposition of an immediate suspension places the premises licence holder in a position where he may be unable to avail himself of the remedy set down in the Act whereby the Sheriff Principal may allow recall of the suspension or revocation pending determination of the appeal. Furthermore, it appears to be conducive to fairness and the proper administration of justice to allow appellants an opportunity to make an application for recall with the benefit of written reasons for the Board's decision. Clearly, the Act allows a party to request written reasons and these will be provided on such a request. Section 39A deals with these matters. It would appear fair and reasonable that consideration should be given to deferring the implementation of any short term suspension variation or revocation until after the written statement of reasons is available to the parties.
76. I consider that the decision to impose a short suspension of 48hrs following a first failure due to error on the part of an employee who had been fully trained and in the course of his employment in modern, well equipped and properly run premises is indeed disproportionate. It must be the intention of the legislation to encourage licence holders to run their enterprise in such a way that is compatible with and supports the licensing objectives. The pursuers run such an enterprise and it is my view that it is entirely disproportionate that they should, in doing so, be harshly penalised due to behaviour on the part of their staff which could be characterised in a number of ways from carelessness or inattention to malicious or mischievous. This is not to say that it would still be disproportionate if there were to be repetitions of such failure due to staff negligence but certainly for a first default set against what has been described as a gold standard in terms of training it seems to me entirely disproportionate as it fails to promote any of the licensing objectives as set out in the Act.
77. I propose to allow the appeal and quash the finding that a ground for review had been established and quash the suspension.
78. Before I conclude I should add that I have had regard to the authorities cited. Most authorities are special on their own facts and circumstances. It was of significance that the decision of Sheriff Mitchell in Lidl v City of Glasgow Licensing Board was discussed in submissions. It appears that this is the first decision available dealing with a failed test purchase under the 2005 Act. I have considered that decision which I am told is to be appealed to the Inner House of the Court of Session with some interest. There are, however, important features relating to the facts of that case which distinguish it significantly from the present case. Firstly, the Chief Constable's letter seeking a review refers to the failed test purchase but in particular gives information to the Board relating to complaints within the local community regarding increased under age drinking and youth disorder. With regard to the under age drinking the intelligence indicated that persons under 18 years of age were consuming alcohol in the locality where the licensed premises are situated. In the current case there is no such information and the application for review relates solely to the failed test purchase albeit that the letter mentions three of the licensing objectives. Secondly, in the Glasgow case the person who served the test purchaser was the duty manager and the personal licence holder and in essence the person who was an important part of the licence holders' system for enforcing and implementing their training policy. That feature alone places the case decided by Sheriff Mitchell in a completely different category from the current case as there are clear and obvious concerns in that case about whether the systems operated effectively in the licensed premises which are entirely absent in the instant case. The sheriff says at paragraph 43 "When the considerably trained duty manager, who in the pursuers' system is meant to supervise other more junior staff, failed to ask someone who did not look more than 161/2 years of age for identification and then sold alcohol to him on licensed premises there was, in my judgment, sufficient material to entitle the defenders to conclude that there was a serious defect in the premises licence holders' system for preventing such sales which compromise the licensing objective of prevent crime and disorder. In my judgment, the defenders reasonably concluded that the failure of the pursuers' system on the occasion of the first test purchase was a serious one." Accordingly, I consider the facts and circumstances of that case very different and distinguishable from the facts of this case.
79. I will uphold the appeal and with regard to expenses I will award expenses in favour of the pursuers. I will certify the cause as suitable for the employment of junior counsel.