KAREN McCLUSKEY, STEPHEN KERR, PATRICIA HARDIE, ANN MARIE PRATT AND CAROLINE KANE AGAINST NORTH LANARKSHIRE COUNCIL

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SHERIFFDOM OF SOUTH STRATHCLYDE, DUMFRIES AND GALLOWAY AT HAMILTON

 

[2016] SC HAM 3

 

B898/14

JUDGMENT OF SHERIFF V SMITH

 

In the Summary Applications of

 

KAREN McCLUSKEY, STEPHEN KERR, PATRICIA HARDIE, ANN MARIE PRATT AND CAROLINE KANE

 

Pursuers;

 

Against

 

NORTH LANARKSHIRE COUNCIL

 

Defender:

 

 

Hamilton, 27 November 2015

The Sheriff, having resumed consideration of the cause, SUSTAINS the first, second, third and fourth pleas-in-law for the pursuers; quoad ultra repels the parties’ pleas; REVERSES the decision of the defender made on 20 August 2014 to vary the terms of the street trader licences issued to the pursuers; FINDS the defender liable to the pursuers in the expenses of the action; ALLOWS an account thereof to be given in and REMITS same, when lodged, to the Auditor of Court to tax and to report; CERTIFIES the cause as being suitable for the employment of junior counsel.

 

Introduction

[1]        The pursuers hold street trader licences granted by the defender which allow them, within set hours, to sell hot and cold food from snack vans placed on designated static sites at various locations within the local authority area of the defender. 

[2]        On 20 August 2014 the defender varied these licences to include the following condition (“the condition”):

“The street trader will be prohibited from operating within a distance of 250 metres from the defined perimeter, as constituted by the physical boundaries in place, of all secondary schools in the North Lanarkshire Area from 8.00 am to 5.00 pm on any school day during term time.  The prohibition will apply to snack vans selling or offering for sale hot or cold food, fish and chip vans and ice cream vans.”

 

[3]        All of the static sites where the pursuers trade are within 250 metres of a secondary school and the pursuers operate during these hours.

[4]        By way of summary applications the pursuers seek to reverse the defender’s decision to impose this condition in terms of schedule 1, paragraph 18(1) of the Civic Government (Scotland) Act 1982 (“the 1982 Act”). 

[5]        The matter called before me over 3 days. The pursuers were represented by Mr Blair, advocate and the defender by Mr Skinner, advocate.  It was agreed by the parties that no evidence was required to be led and that the matter could be dealt with by way of submissions. The factual averments were not in dispute.

 

Background to the imposition of the condition

[6]        The genesis of the condition can be found in two publications ,“The Hunger for Success Initiative” of the Scottish Executive, 2004 and the defender’s  “diet and nutrition policy 2013-14 revision”(sic) (item 6/15 of process). Inter alia the aims of both are to promote the benefits of healthy eating and healthy lifestyles for all children, to improve and promote the nutritional content and balance of food offered in schools and to influence the eating habits of children. 

[7]        At a council meeting on 27 March 2014 a motion was carried in the following terms:

“In accordance with the council’s Health and Wellbeing strategy, the council resolves to establish a policy excluding snack vans from parking and vending within 250 metres of North Lanarkshire schools”(6/10 page 209)(“the policy”).

 

[8]        The matter was referred to the acting head of legal services who prepared a report, dated 22 April 2014 (6/8), the purpose of which was to advise the defender’s corporate services committee of the issues associated with snack vans which trade within the vicinity of schools and to recommend a licensing policy to regulate them.

 

Report of 22 April 2014

[9]        The report referred to the defender’s commitment to the above aims and explained that a decision had been made to adopt an exclusion zone for snack vans trading in the vicinity of schools because the defender considered it had to deal with factors which “have been shown to contribute to child obesity. This is particularly so when considered against the duty imposed on the Council, as local education authority, under sec 53A of the Education (Scotland) Act 1980 to promote the availability of school lunches and to encourage pupils to use this facility” (para 2.2). Snack vans are seen as a significant challenge to the promotion of healthy eating in schools, offering less healthy alternatives to school meals (2.3). Other councils have imposed similar conditions (3.1).

[10]      The report recognised that the defender is limited in its ability to prevent fixed retail or food outlets near to schools from selling less healthy food but it had the power to regulate street traders by imposing the condition on their licences (4.1). Some street traders would be adversely affected by this condition and there would be financial implications (5.1 and 5.3). 

[11]      The report recommended that the condition be incorporated into all street trader licences. All licence holders would be invited to address a licensing sub-committee to state a case for an exemption from the condition (6.1). 

[12]      The recommendation was approved by the defender’s corporate services committee on 1 May 2014. 

 

Freedom of Information request and response

[13]      The pursuers became aware of the proposed condition and took legal advice. On 13 June 2014 their solicitor wrote to the defender seeking information in terms of the Freedom of Information (Scotland) Act 2002 (6/6).  This asked numerous questions including what scientific or nutritional material had been obtained that demonstrated that snack vans challenged the promotion of healthy eating or that the food sold was less healthy than school meals, what consultation had taken place, the basis for a radius of 250 metres, what alternative means of control had been considered, the number of pupils who can be accommodated for school meals and what assessment had been made of the financial impact upon street traders affected by the condition.

[14]      The defender’s response, dated 11 July 2014, explained there had been no analysis of the nutritional value of food sold by the pursuers but they would be invited to a hearing before a licensing sub-committee when this matter could be addressed (6/7). There had been no consultation or consideration of the financial impact upon traders but these could be discussed at the same hearing. A radius of 250 metres was adopted as being the apposite distance to be imposed taking into account the defender’s wishes that the benefits of healthy eating and healthy lifestyles for all children within schools ought to be promoted. No other radius was considered. No alternative means of control of licensing of street trading in food near secondary schools was considered.  In general schools can accommodate 30-40% of the school roll at a lunch sitting.

 

Hearing of 20 August 2014

[15]      On 4 August 2014 a letter was sent to each pursuer setting out the condition to be imposed on their licences (6/14). They were invited to attend a meeting on 20 August 2014 when they would be given the opportunity to argue for an exemption from the condition. The pursuers attended the meeting and were represented by Mr McGowan, solicitor. In short he argued inter alia that the condition was ultra vires of a licensing authority, breached natural justice, was incompatible with human rights law and the underlying policy was unfair and disproportionate. These arguments were rejected and the condition was imposed.

 

Statement of Reasons

[16]      After the hearing a statement of reasons was requested and received for each pursuer (6/1-6/5).

[17]      In response to the pursuers’ submissions the defender stated that, as a responsible licensing authority, it was acting intra vires by imposing the condition in order to further the aims of reducing obesity among young persons and to encourage healthier eating. The 1982 Act provides that a licensing authority can at any time vary a licence “on any grounds they think fit”. This allowed the committee a degree of latitude when considering whether a licence could be varied. It was also thought that the committee could consider, in terms of the 1982 Act, “any other good reason” when dealing with the grant or refusal of a licence and this could be extended to varying a licence.  The committee was receptive to considering exemption applications. With regard to convention rights the committee considered that any interference with property rights or possessions was of a limited nature. The licences were not being removed but varied to achieve a legitimate aim namely promoting healthy eating among school pupils. There is a general awareness of a problem with childhood obesity partly caused by the lack of healthy, nutritional, balanced diets.  This general awareness and the fact that other local authorities had adopted similar conditions provided a sufficient evidential basis for the defender to impose the condition.

[18]      I was referred to the following authorities and statutes in the course of the hearing:

Rossi v Edinburgh Corp. [1905] AC 21

Macbeth v Ashley (1874) 1 R (HL) 14

Stewart v Perth and Kinross Council 2004 SC (HL) 71

Mitchells and Butlers Retail Ltd. v Aberdeen City Licensing Board 2005 SLT 503

Brightcrew Ltd v City of Glasgow Licensing Board [2011] CSIH 46

L v Board of State Hospital 2011 SLT 233

Calderwood v Renfrewshire Council 2004 SC 691

Ahmed v North Lanarkshire Council 1999 SLT 1064

Elder v Ross and Cromarty Licensing Board 1990 SLT 307

Mixnam’s Properties Ltd v Chertsey Urban DC [1965] AC 735

R v Warwickshire County Council [1995] ELR 217

R v London Borough of Bexley [1995] ELR 42

R v The Secretary of State for the Environment [2011] EWHC 1975 (Admin)

 

 

Civic Government (Scotland) Act 1982

 

7 Offences, etc.S

(1) Any person who without reasonable excuse does anything for which a licence is required under Part II of this Act without having such a licence shall be guilty of an offence and liable, on summary conviction

(a) in a case where the licence so required is a public entertainment licence, to a fine not exceeding £20,000 or to imprisonment for a term not exceeding six months or to both; and

(b) in any other case, to a fine not exceeding level 4 on the standard scale.

(2) If a condition attached to a licence is not complied with, the holder of the licence shall, subject to subsection (3) below, be guilty of an offence and liable, on summary conviction

(a) in a case where the licence is a public entertainment licence and the condition is attached under section 41(3)(b) of this Act, to such fine or imprisonment as is mentioned in subsection (1)(a) above (or to both); and

(b) in any other case, to a fine not exceeding level 3 on the standard scale.

 

24 Second-hand dealers’ licences.S

(1) Subject to subsection (3) below, a licence, to be known as a “second-hand dealer’s licence”, shall be required for carrying on business as a second-hand dealer.

(2) In this section and in sections 25 to 27 and 36 of this Act “second-hand dealer” means a person carrying on a business as a dealer in second-hand goods or articles of any description.

[…]

(4) Without prejudice to paragraph 5 of Schedule 1 to this Act, a licensing authority may, after consultation with the chief constable, attach conditions to a second-hand dealer’s licence requiring the keeping of records in relation to the dealer’s stock-in-trade; and conditions so attached may, without prejudice to the authority’s power under this subsection, include provision as to—

(a) the information to be included in these records;

(b) their form;

(c) the premises where they are to be kept; and

(d )the period for which they are to be kept.

 

39 Street traders’ licences.S

(1) Subject to subsection (3) below, a licence, to be known as a “street trader’s licence”, shall be required for street trading by a person, whether on his own account or as an employee.

(2) In this section “street trading” means doing any of the following things in a public place—

(a) hawking, selling or offering or exposing for sale any article;

(b) offering to carry out or carrying out for money or money’s worth any service,

to any person in the public place and includes doing any of these things there in or from a vehicle or in or from a kiosk or moveable stall not entered in the valuation roll except where it is done in conjunction with or as part of a retail business being carried on in premises abutting the public place.

(4) Where an application for a street trader’s licence is made in respect of an activity which—

(a) consists of or includes food business within the meaning of sections 1(3) of the Food Safety Act 1990; and

(b) involves the use of a vehicle, kiosk or moveable stall,

the licensing authority shall, without prejudice to paragraph 5(3) of Schedule 1 to this Act, refuse the application unless there is produced to them a certificate by the food authority (for the purposes of section 5 of the Food Safety Act 1990) stating that the vehicle, kiosk or moveable stall complies with the requirements of any relevant regulations made under section 16 of the Food Safety Act 1990.

 

 

SCHEDULE 1S

 

5(1) Where an application for the grant or renewal of a licence has been made to a licensing authority they shall, in accordance with this paragraph—S

(a) grant or renew the licence unconditionally;

(b) grant or renew the licence subject to conditions; or

(c) refuse to grant or renew the licence.

(2) The conditions referred to in sub-paragraph (1)(b) above shall be such reasonable conditions as the licensing authority think fit and, without prejudice to that generality, may include—

(a) conditions restricting the validity of a licence to an area or areas specified in the licence; and

(b) in relation to the grant of a licence, where that licence is intended to replace an existing licence, a condition requiring the holder of the existing licence to surrender it in accordance with paragraph 13 below.

(3) A licensing authority shall refuse an application to grant or renew a licence if, in their opinion—

(a) the applicant or, where the applicant is not a natural person, any director of it or partner in it or any other person responsible for its management, is either—

(i) for the time being disqualified under section 7(6) of this Act, or

(ii) not a fit and proper person to be the holder of the licence;

(b) the activity to which it relates would be managed by or carried on for the benefit of a person, other than the applicant, who would be refused the grant or renewal of such a licence if he made the application himself;

(c) where the licence applied for relates to an activity consisting of or including the use of premises or a vehicle or vessel, those premises are not or, as the case may be, that vehicle or vessel is not suitable or convenient for the conduct of the activity having regard to—

(i) the location, character or condition of the premises or the character or condition of the vehicle or vessel;

(ii) the nature and extent of the proposed activity;

(iii) the kind of persons likely to be in the premises, vehicle or vessel;

(iv) the possibility of undue public nuisance; or

(v) public order or public safety; or

(d) there is other good reason for refusing the application;

and otherwise shall grant the application.

 

 

 

10(1) A licensing authority may, at any time, whether or not upon an application made to them by the holder of the licence, vary the terms of a licence on any grounds they think fit.S

(2) A licensing authority, before proceeding to vary the terms of a licence under sub-paragraph (1) above—

(a) shall, not later than 7 days before the day on which the proposed variation is to be considered, notify the holder of the licence, the chief constable and, where the licence relates to an activity wholly or mainly carried on in premises, the fire authority of the proposed variation; and

(b) shall give each of the persons mentioned in sub-sub-paragraph (a) above an opportunity to be heard by the authority on that day.

 

Education (Scotland) Act 1980

 

53 Provision of school meals.S

(1) An education authority—

(a) may provide milk, meals or other refreshment for pupils in attendance at public schools and other educational establishments under their management and may do so either on the premises or at any place other than the school premises where education is being provided; and

(b) shall provide such facilities as the authority consider appropriate for the consumption of any meals or other refreshment brought to the school or other educational establishment by such pupils.

(2) Subject to subsection (3) below, an authority must charge for anything provided by them under subsection (1)(a) above and must charge every pupil the same price for the same quantity of the same item.

(3) Subsection (3AA) below applies in relation to a pupil—

(a) whose parents are in receipt of—

(i) income support;

(ii) an income-based jobseeker’s allowance (payable under the Jobseekers Act 1995); or

(iii) support provided under Part VI of the Immigration and Asylum Act 1999; or

(b) who is himself in receipt of income support or an income-based jobseeker’s allowance.

(3AA) An authority shall so exercise the power conferred by subsection (1)(a) above as to ensure that such provision is made for the pupil in the middle of the day as appears to the authority to be requisite and shall make that provision for him free of charge.

53A Promotion of school lunches

(1) An education authority must—

(a) promote the availability of school lunches in public schools and other educational establishments under the authority's management, and

(b) encourage pupils in attendance at those schools and other educational establishments to consume school lunches.

(2) In particular, an education authority must take reasonable steps to ensure that every pupil who is entitled, by virtue of section 53(3), to receive school lunches free of charge, receives those lunches.

 

56A Food and drink: nutritional requirements

(1) Where subsection (2) applies in relation to food or drink provided for pupils in attendance at public schools, an education authority must ensure that the food or, as the case may be, drink complies with nutritional requirements specified by the Scottish Ministers by regulations.

(2) This subsection applies where—

(a) food or drink is provided under section 53(1)(a), or

(b) food or drink provided on the premises of a public school or on the premises of a hostel provided and maintained by the education authority for pupils—

(i) is not provided under section 53(1)(a), and

(ii) does not fall within subsection (3).

(3) Food or drink falls within this subsection if it is—

(a) brought onto the premises of the school or hostel by a pupil, or

(b) provided as part of a social, cultural or recreative activity (whether or not the activity is organised by an education authority).

 

 

Submissions of Pursuer

[19]      Mr Blair submitted that the decision to vary the licences was ultra vires and based upon an error in law, proceeded upon inadequate reasoning, was an unreasonable exercise of discretion, breached natural justice and in terms of the Human Rights Act was unlawful and disproportionate.  The decision ought to be reversed.  It would not be appropriate to remit the matter to the defender for further consideration.

[20]      Mr Blair concentrated on the case of the pursuer Karen McCluskey who has traded from the same site within an industrial estate for many years. Approximately 10% of her turnover is derived from school pupils. However, in general terms, his submissions were common to each pursuer.

[21]      He began by referring to the defender’s letter of 4 August 2014 (6/14) advising the pursuer of the condition to be attached to her licence. The defender considered it had to deal with factors which have been shown to contribute to childhood obesity. In addition it had a duty in terms of sec 53A of the Education (Scotland) Act 1980 (“the 1980 Act”) to promote and encourage the availability and the uptake of school lunches. Consequently a policy decision had been made to exclude snack vans trading in the vicinity of schools.

[22]      Counsel submitted that this decision was ultra vires. It is neither the function of a licensing authority to tackle obesity nor does its remit include enforcing obligations under the 1980 Act.  The defender can choose to license street traders. It is not compulsory. If it does and where the trade involves the sale of a lawful commodity then the content and quality of that commodity is a matter between the seller and the buyer.  The 1982 Act does not give the defender power to regulate the type, quality or nutritional value of food sold by a street trader. The defender’s published diet and nutrition policy did not suggest such a restrictive condition. Specifically the pursuer’s licence did not define the quality or type of food that could be sold.  It is for the defender as an education authority not as a licensing committee to promote school meals. 

[23]      Further the committee made decisions on complex matters without any material before it which would properly inform their decision. There was no consultation before the condition was attached which would have identified relevant issues such as the types of food sold by traders and schools, the number of children taking school meals or bringing in their own lunches, the number who go elsewhere, the number of adults affected by the condition and the impact upon the traders themselves. There was no evidence before the sub-committee that the food sold by the pursuer is less healthy than that sold within schools or that the condition will deliver what is sought. The sub-committee could only speculate that the sale of food within a certain distance of a school causes harm and is a less healthy alternative to school food.

[24]      The defender sought support from the fact that other councils have imposed a similar condition without any further detail being given or if it has been successful.

[25]      There was no reason given to justify a radius of 250 metres beyond saying it was an “apposite distance” in order to discourage pupils from buying items from nearby snack bars. It was an unexplained arbitrary figure and amounted to unfairness. 

[26]      It was unfair also that the condition could not apply to fixed retail premises near to schools.

[27]      Counsel submitted that no alternatives to the condition were put forward since the defender considered that the condition did not ban the pursuer from trading completely. This was unreasonable and disproportionate. The pursuer was unaware what was required to merit an exemption and this breached natural justice.

[28]      Counsel submitted that the licensing authority had to establish that the condition was necessary. In this it had failed and had inverted the onus by placing upon each pursuer the burden of proving why the condition should not apply to them.  That was an impossible task in the absence of the sub-committee knowing the nutritional value of school meals, what was sold by the pursuers and comparing them both.

[29]      Counsel then considered sec 39 of the 1982 Act which provides for the licensing of street traders by a local authority if it so wishes, otherwise the pursuers could trade at common law. Counsel submitted that the purpose of sec 39 is to regulate those trading in a public place as opposed to a private place such as a shop or a fast food takeaway. It is aimed at protecting the public from the consequences of street trading in a public place such as public order, congestion, safety or nuisance.  Parliament did not intend sec 39 to limit trade on the basis of nutritional standards of food. The only reference to food is to be found at sec 39(4) which provides that those who trade in food must have a health food certificate in terms of sec 16 of The Food and Safety Act 1990. That section details regulations such as hygiene and the labelling of food.  It does not concern itself with the nutritional value of the food.

[30]      Counsel then referred to guidance issued by government departments in respect of street trading.  Circulars 6/1983 and 28/1985 recognised difficulties which had arisen since the introduction of the 1982 Act. The latter circular set out the intention of the Secretary of State that licensing should be introduced where it is necessary to prevent crime, preserve public order or safety or to protect the environment. It emphasised that a local authority has no power to attach a condition to a licence with a view to limiting competition or restricting trade. Counsel submitted that the condition clearly restricted trade and limited competition. The defender provides food for payment in its schools and is in direct competition to the street trader. Neither circular suggests that a local authority has power to regulate quality standards.

[31]      If Parliament wished to give the defender the power to regulate the quality and nutritional value of food sold by a street trader then this would have been included in sec 39.  It did not do so because it was aware that quality standards are covered by other legislation including the Sale of Goods Act, the Environmental Health Act and the food hygiene provisions of the 1982 Act. 

[32]      Counsel considered sec 53A of the 1980 Act which is referred to in the letter to the pursuer of 4 August 2014 (6/14) as one of the reasons behind the condition.  It was submitted that the defender misunderstood the 1980 Act and consequently erred in law.  Section 53A obliges the defender as an education authority, not as a licensing authority, to promote and encourage the uptake of school lunches.  It does not prohibit the sale of a lawful commodity and was never intended to prevent pupils from exercising choice. The defender has created a situation where some pupils must buy or bring in food from elsewhere since the defender can provide lunch for approximately 30-40% of pupils only. In these circumstances it is unfair, unreasonable and arbitrary to impose the condition and to prevent the pursuer from filling this gap.

[33]      Elsewhere in the 1980 Act sec 53 states that an education authority may provide food for payment and is obliged to provide lunch in the middle of the day for certain pupils. Schools do not have a duty to provide lunch to all pupils nor are pupils obliged to take school lunches. It is recognised that pupils and parents have a choice, that pupils may bring in lunch and if they do facilities will be made available for its consumption (sec 53(1)(b)). School lunches must comply with nutritional requirements specified by the Scottish ministers (sec 56A(1)). Food brought into school by pupils is exempt (sec 56A(2) and (3)). The Act does not provide the defender with the power to impose nutritional requirements upon that food. Counsel submitted that the defender erred in law in failing to understand this important detail.

[34]      If Parliament considered that there was an evil arising from food brought into schools then it would have banned this activity or imposed certain standards upon it.  It did not do so. Indirectly the defender is imposing an unknown standard upon street traders through a licensing sub-committee which is an improper use of power. As was said by Lord Chelmsford in Macbeth:

“Now, the law will not allow that to be done indirectly which cannot lawfully be done directly”

 

[35]      It is an attempt to achieve an end beyond the aims of the 1980 Act. 

[36]      Counsel referred to a number of cases in support of his submissions.  In Rossi the Edinburgh Corporation Act 1900, as amended, provided that any person selling ice cream required a licence from the Edinburgh magistrates.  It was proposed by the magistrates that the appellant’s licence would include the provision that ice cream could not be sold on a Sunday or outwith certain hours.  The provision was appealed on the basis that such conditions were not authorised by the Act. The respondents argued that the sale of ice cream on a Sunday raised public order issues.  It was held that the conditions were more stringent than the statute allowed.  The Lord Chancellor (Halsbury) at page 26 said:

“The Magistrates, of course, are not only empowered but bound to give effect to legislation which has been passed; but when it is argued that because they are given the power to restrict, within certain hours, the sale of ice cream, therefore they have implied power to do all that might be desirable or expedient with reference to the times and circumstances under which ice cream shall be sold, it seems to me the argument entirely fails. What is sought to be done, whether directly by bye-laws, or indirectly by the language of the licence that is issued, is something that can only be done by the Legislature. It is a restraint of a common right which all His Majesty's subjects have—the right to open their shops and to sell what they please subject to legislative restriction—and, if there is no legislative restriction which is appropriate to the particular thing in dispute, it seems to me it would be a very serious inroad upon the liberty of the subject if it could be supposed that a mere single restriction which the Legislature has imposed could be enlarged and applied to things and circumstances other than that which the Legislature has contemplated.”

[37]      Counsel submitted that if there is to be a general restriction on the right to trade then this power has to be found in sec 39 of the 1982 Act.  That power cannot be found just because it seems desirable.

[38]      The case of Stewart involved second-hand car dealing in terms of the 1982 Act and the imposition of a condition on licences with regard to the keeping of records and the giving of information to purchasers. The Act states that a licensing authority may grant or renew a licence subject to “such reasonable conditions” as it thinks fit.  An application to renew a licence was refused as the applicant had failed to comply with a condition imposed by the local authority. The dealer appealed on the basis that the condition interfered with the parties’ freedom of contract since it required the dealer to make representations that had legal effect, that the purpose of the licensing scheme was the suppression of resetting stolen goods and the condition was not for a licensing purpose. The Extra Division held that the condition was ultra vires.  The local authority appealed to the House of Lords which affirmed the decision of the Extra Division stating that the effect of the condition was to require the dealer to make a series of representations upon which the pursuer was entitled to rely as forming part of the agreement thus providing the purchaser with a legal remedy in the event of fraud or whatever and the condition was liable to have a considerable impact on contracts between the dealer and his customer. The scope to be given to the words “such reasonable conditions” must be ascertained from their context and there was no indication that Parliament had intended to regulate dealers’ contracts with their customers. The principal mischief to which the legislation was directed was the handling of stolen property and a licensing system was not designed for the purpose of consumer protection as other primary and uniformly applicable legislation was enacted for that purpose.  Hence the condition was ultra vires. 

[39]      Counsel submitted that Stewart makes it clear that the purpose of the licensing system is not concerned with protecting persons from what they can buy.  There are other ways of addressing that through consumer protection and other legislation. Protectionism is not the purpose of licensing legislation.

[40]      At paragraph [26] Lord Hope said that where an authority orders something to be done and accompanies this with some sanction for failing to do it, this restricts the freedom of action by persons who are affected by it who would otherwise be free to do as they pleased. There is a sanction in the current case. If the pursuers trade within 250 metres of a school within certain hours during school terms they will commit a criminal offence in terms of sec 7 of the 1982 Act.  The defender cannot restrict the right to trade unless Parliament has made clear provision to that effect.

[41]      When Parliament wants to say something about the nutritional value of food it does so by way of detailed legislation.  The 1980 Act sets out standards that school lunches are to meet.  A licensing authority cannot rely on generic licensing powers to achieve an outcome where Parliament, if it wishes to achieve a particular outcome, uses specific detailed provision. 

[42]      Counsel submitted that it is an unreasonable condition.  It is difficult to think of a more unreasonable and fundamental infringement of the pursuer’s relationship with her customers in terms of freedom to trade. It is prohibition and not regulation. 

[43]      Schedule 1 para 10 of the 1982 Act provides that a licensing authority may at any time vary the terms of a licence on any grounds it thinks fit but counsel submitted that this did not give the defender greater power than it has already. Such a wide expression is subject to control.  It is not unlimited.  The exercise of such a power must be within the terms of the statute and reasonable. 

[44]      In Mitchell there was an attempt by a licensing board to impose a condition regulating the minimum price of alcohol. The board considered that there was a link between the availability of cheap alcohol and undesirable social consequences.  Lord Mackay of Drumadoon held that the underlying policy was unlawful and ultra vires. At paragraph [46] he said that the policy interfered with and regulated the terms of trade between the licence holders and their customers. No authority had been produced to support the contention that Parliament intended to give a licensing board such power. The imposition of such a condition may achieve a reduction in excessive drinking and may command wide support but these factors did not bring the policy within the scope of the statutory powers of the authority [47]. It does not matter if the policy is well intentioned. It has to relate to matters within the power of the licensing committee.

[45]      In Brightcrew a nightclub used for adult entertainment purposes held a licence under prior legislation and applied for the new form of licence under the Licensing (Scotland) Act 2005.  This was refused on the grounds of protecting and improving public health, preventing crime and disorder, that the premises were unsuitable for the sale of alcohol and several breaches of a non-statutory code of practice. An appeal was dismissed in the Sheriff court.  The matter went before an Extra Division which held that the principal function of a licensing board under the 2005 Act was that of licensing the sale of alcohol and its powers did not extend to indirectly imposing conditions upon a licensee by the insistence upon compliance with a published licensing policy statement. The board had misapplied the statutory test. Lord Eassie said the following at para [24]:

“It is, in our view, clear from what the 2005 Act terms its "core provisions" that the statute is concerned with the regulation of the sale of alcohol by means of the grant of licences. Of significance also, in our view, are the terms of sec 27(7) of the 2005 Act which limit the extent to which a licensing board may impose particular conditions. In particular, a licensing board may not impose such a condition which "relates to a matter (such as planning, building control or food hygiene) which is regulated by another enactment." Counsel for the Board accepted, in our view rightly, that by the means of including, and insisting in the observance of, provisions in its published licensing policy statement, a licensing board could not thereby indirectly impose conditions upon a licensee which it would not be empowered to impose under sec 27 in an individual case. Accordingly, the inclusion in a published policy statement of provisions purporting to regulate activities on, and off, licensed premises does not give those provisions any status going beyond the proper exercise by a licensing board of its function of licensing the sale of alcohol.”

 

[46]      When Parliament considers public health is the concern of a licensing authority it makes specific provision as it did in the Licensing (Scotland) Act 2005 with regard to the sale of alcohol.  Parliament takes the view that nuisance and safety are not the same as health concerns.

[47]      Counsel then turned to the issue of personal autonomy and submitted that freedom to choose what you eat is a basic right. The 1980 Act recognises this choice because it does not compel a pupil to take school lunch and recognises that pupils are entitled to bring food into school which does not have to meet any particular nutritional standard. Any restriction upon the type of food or where it is bought breaches this right. Support for this could be found in the case of L where inmates were banned from having food parcels delivered to them or ordering food from outside. Lady Dorrian said at para [26]:

“I have reached the conclusion that a person's right to choose what they eat and drink is a matter in respect of which art.8 is engaged. If that choice is interfered with, it must be justified.”

 

[48]      It may be undesirable that some pupils buy unhealthy food for their lunch but art.8 says one has a right to so act. Any interference with that right must be prescribed by law, necessary in a democratic society and proportionate. That was absent in the current case and the interference was unjustified.

[49]      Counsel submitted that a further aspect of the defender’s approach is its arbitrary effect. Some authorities have taken the view that there is a need to adopt such a condition and some have not. Baroness Hale in Stewart commented that if a licensing authority adopted measures which would lead to a patchwork approach throughout the country then this would point to it being unlikely that the licensing authority had such a power (paras [67] and [68]).  Pupils can buy food in takeaways or shops nearer to schools than snack vans which may sell food considered to be less healthy. The aim to improve diet is arbitrary against this background.

[50]      Turning to the question of natural justice counsel submitted that the pursuer needed to know the case that had to be answered and the right to be heard by a decision maker which had not closed its mind to argument.  The uniformity in the statement of reasons for each pursuer is quite striking.  When dealing with the merits of each case the defender employed a cut and paste exercise. For example it was submitted on behalf of the pursuer Karen McCluskey that her van is situated in an industrial estate where 90% of her customers are local workers and 10% pupils. The same reasoning for rejecting her application to be exempt from the condition is applied to other pursuers where a reasonable proportion of their customers are pupils.  The inference is that no trader will be granted an exemption regardless of the individual merit of each case. In theory an exemption may be granted but not in reality.  It is an inherently inflexible approach. To be lawful a policy must be flexible and cannot be imposed rigidly (Elder per Lord Weir at p 511).

[51]      The committee in effect said that in its opinion food in schools is healthier than that elsewhere without setting out the test to be applied. The pursuers are working in the dark as is a licensing committee unless it is informed on technical issues such as the health benefits or lack of benefits of types of food. The failure to ingather views and evidence from a range of sources is problematic. Any discussion on the matter was restricted to a hearing where it was for the pursuer to address the committee on standards unknown to all. The policy document on diet and nutrition does not provide assistance. Street trading is mentioned briefly at page 27.  There is no analysis that this condition is likely to have the desired effect of promoting and encouraging healthier eating habits.

[52]      The condition is not regulation but a prohibition of all food even if its nutritional value exceeds that of school food although no one knows the standard. The condition is too broad and unreasonable because it covers the period from 8am until 5pm and applies to all members of the public whether they are pupils or not. The condition commences long before the school days starts and long after it finishes and long after the time of school lunch.  No person can access a snack bar within 250 metres of a school.  There is no consideration of the adult customers and whether other measures or alternatives could be applied. 

 

Submissions of defender

[53]      Mr Skinner began by highlighting various parts of the defender’s publication “diet and nutrition policy 2013-14 revision” (6/15). The national agenda places local authorities at the heart of health improvement; the defender, with the support of the NHS, is committed to improving health and wellbeing with a key focus on improving the nutrition of young children; the intake of fat, sugar and salt is higher than is recommended (all at p2); increasing rates of childhood obesity pose a major public health problem in Scotland; obesity in childhood is likely to continue into adulthood increasing the likelihood of developing chronic diseases; a Scottish Health Survey in 2011 found 32% of boys and 28% of girls between the ages of 2-15 years are overweight or obese (all at p6); a healthy, balanced and varied diet can assist in the prevention of obesity (p7); The Schools (Health Promotion and Nutrition) (Scotland) Act 2007 requires local authorities to ensure that food and drink provided in schools comply with nutritional requirements (p15); the defender will promote the uptake and benefit of school meals and ensure lunch menus are nutritionally analysed (p16); the defender is aware that some pupils choose to leave school at lunchtime to use other food outlets including snack vans; the choice and availability of foods and drinks provided by some street traders is a growing concern; the defender is intent on  improving school meals and maximising their uptake in order that pupils benefit from healthy and nutritious food (all p27); the basis for the policy can be found in various references (p32-34).

[54]      He submitted that the report from the defender’s legal department to the corporate services committee of 22 April 2014, which gave rise to the condition, articulated these concerns (6/8 paras 2-4). The aims of the policy were intimated to the pursuer in the defender’s letter dated 4 August 2014 (6/14 paras 5-7). The statement of reasons makes it clear that it was considered by the sub-committee to be in the public interest that the diet of school children is improved (6/1 p5).

[55]      Snack vans such as those operated by the pursuers are generally viewed as selling food which is considered unhealthy and this contributes to obesity (6/15 p 27).  It is quite rational to consider that snack vans in the vicinity of schools might reasonably compromise or undermine the defender’s objectives since some children are more likely to choose unhealthy foods if that is readily available in the immediate vicinity. The removal of snack vans reduces this likelihood. It is one leg of an overall strategy to halt an epidemic.

[56]      Counsel referred to sched 1 paras 5 (1A)(b) and 5(2) of the 1982 Act which provide that when granting or renewing a street trader’s licence a licensing authority may impose such reasonable conditions on a licence as it thinks fit. Paragraph 5(3) provides that an application to grant or renew shall be refused if in its opinion the premises or vehicle to be used for the activity is not suitable or convenient for the conduct of the activity having regard to, inter alia, the location of the premises or vehicle, the nature and extent of the proposed activity, the kind of persons likely to be there, the possibility of undue public nuisance, public order or public safety or there is other good reason for refusing the application. Sched 1 para 10(1) provides that a licensing authority may, at any time, vary the terms of a licence on any grounds they think fit which counsel submitted included the location referred to in the licence and the persons who may use the service. The power to regulate street trading is very wide and permits the authority to vary the terms of a street trader’s licence by imposing conditions which it considers to be in the public interest (Stewart and Calderwood). The public interest includes regulating street trading with a view to improving the health of children in the face of evidence that there is a high incidence of overweight or obese children in North Lanarkshire.

[57]      Counsel submitted that the pursuer’s submissions on the condition being ultra vires proceeded upon a misunderstanding of the nature of the decision taken by the defenders and the supporting statutory basis.

[58]      Under the 1982 Act the defender has wide general powers to regulate in the public interest and that includes the circumstances under which and the places where street trading takes place. When considering an application to grant or renew a street trader licence it is obliged to consider the suitability of the location and the persons likely to be there (sched 1, para 5 (3)). Counsel repeated what was said by Lord Hope in Stewart at para [27]:

“The opening words of para 5(2) of sched 1 to the 1982 Act give power to the licensing authority to attach ‘such reasonable conditions’ to the licence as it may think fit. As I said earlier, it is to those words that one must go if one is to discover whether those parts of condition 2.5(a) which require information to be given to the purchaser are within the power to attach conditions that is given by the 1982 Act to the licensing authority. At first sight they give a wide discretion to the licensing authority. It requires a very strong case for a court to interfere with the discretion which has been vested in a body of that kind, which legislates in the interests of the community (Nicol v Magistrates of Aberdeen, per Lord President Inglis at p 308; Da Prato v Magistrates of Partick, per Lord Loreburn LC). As Lord Russell of Killowen CJ said in Kruse v Johnson (p 99), legislation of this kind ought to be supported if possible, looking to the character of the body which is legislating, the subject-matter and the nature and extent of the authority which is given to the body to legislate in matters of this kind.”

Baroness Hale at para [70] said:

“The general principles are well established. The courts are slow to interfere with what the local representative authority has decided for the benefit of the locality (see Kruse v Johnson). All regulatory activity involves some interference in the freedom to carry on whatever business one wants in the way that one wants.”

[59]      Counsel submitted that crucially the defender is not seeking to specify the quality or nutritional content of what the pursuers can sell. Rather it seeks to limit where sales can take place and the hours during which sales can be made in pursuit of a desirable social policy, namely to prevent possible harm to the health of children many of whom are already overweight.

[60]      The width of discretion of a local authority under the 1982 Act was emphasised in Calderwood where a well known flower seller, who had operated from the same site in Paisley town centre for many years, was required to leave her site because of a change in planning policy.

[61]      The suitability of the precise type of activity, the precise nature of the goods to be sold, cannot be divorced from its proposed location or the persons likely to be in that location. Sales of some perfectly lawful types of goods or types of lawful activities may be quite acceptable for one location but eminently unsuitable for another. Counsel provided some examples which included vans outside schools selling pornographic magazines or so called “legal highs” or an application for an adult entertainment licence relative to premises beside a convent. He submitted that if the pursuer’s analysis of the law is correct then a licensing authority would be powerless to prevent any of these examples because they are perfectly legal activities and what is on offer is lawful. The correct analysis is that a licensing committee, exercising its discretion under the 1982 Act, is entitled to decide that a trader may not carry out these activities in the immediate vicinity of a school given the potential harm to children. It is entitled to conclude that the precise activity is not a suitable one for that particular location or the persons likely to be there (para 5(3)).  Consequently a licensing committee, in the public interest and with the aim of improving the health of children and with the power to regulate, is entitled to look closely at the type of food on offer from snack vans. Some types of food may prejudice this aim while others may not. However the defender is entitled to conclude that the pursuers’ activity is not suitable for that precise location due to the persons who may attend there. The defender is not seeking to impose terms or regulations but is carrying out what the 1982 Act says it must do.

[62]      On the natural justice issue it was submitted by the pursuer that she needed to be told what standards applied to gain an exemption. The pursuer’s argument was wrong as a matter of law. The policy is clear and made for a legitimate purpose. It proscribes street trading in all foods within a limited radius. That is the starting point. Thereafter it was a perfectly legitimate approach to announce this policy and advise the pursuer that it would apply to her unless she could persuade the sub-committee that she was a special case. There is no requirement to set out exactly what the pursuer has to do to bring herself within the category of a special case (Calderwood page 701 para 18 et seq; Ahmed page 1067 C-D; 1067 D-E).  At the hearing the pursuer’s agent was specifically invited to address the committee on why she should be made an exception. It was not persuaded that the circumstances of any of the applicants were special enough to warrant an exception to the policy.

[63]      There was no merit in the argument that the 250 metre radius was irrational and without an evidential basis. A radius had to be chosen. There was no need to provide scientific data to show that this is the minimum necessary. The aim is to secure that such vans are not readily accessible to children attending school. It was a matter of broad judgement and common sense. Similarly common sense shows that children will arrive at school before core school hours and will leave after. An all day restriction was required since some pupils, particularly those in upper forms, have free periods and may leave the immediate confines of school within those hours. 

 

DISCUSSION

[64]      In dealing with this matter I will concentrate, as counsel did, primarily on the case of the pursuer Karen McCluskey on the understanding that my decision will apply equally to all of the pursuers.

[65]      That obesity among the general population and children especially is considered problematic is not in dispute.  That elected representatives wish to confront this problem and take steps to promote healthier lifestyles is to be commended.  Neither of these is the issue in this case.  The issue is whether the defender, as a licensing authority, has the power to impose this particular condition upon the licences of street traders. In my judgement it does not.

[66]      Guidance on the approach to be taken in addressing such an issue can be found in the case of Stewart. 

[67]      The pursuer Karen McCluskey has for 32 years carried on business as a licensed street trader.  She operates from a snack van on a designated static site which is situated in an industrial estate.  This estate is in an area where the defender is the local authority. The pursuer’s snack van is situated within 250 metres of Bellshill Academy. 

[68]      The defender is a licensing authority for the purposes of Part 2 of the 1982 Act which is headed “Licensing and Regulations – Particular Activities”.  Section 9 of the 1982 Act, which is contained within Part 2, provides that a local authority has the option to require that particular activities are to be licensed. The defender resolved to avail itself of this option with regard to street trading in its area and accordingly in terms of sec 39:

“(1) Subject to subsection (3) below, a licence, to be known as a “street trader’s licence”, shall be required for street trading by a person, whether on his own account or as an employee.

(2) In this section “street trading” means doing any of the following things in a public place—

(a) hawking, selling or offering or exposing for sale any article;

(b) offering to carry out or carrying out for money or money’s worth any service,

to any person in the public place and includes doing any of these things there in or from a vehicle or in or from a kiosk or moveable stall not entered in the valuation roll except where it is done in conjunction with or as part of a retail business being carried on in premises abutting the public place.”

 

[69]      Subsection 4 states that before you can trade in food a certificate must be produced in terms of the Food Safety Act 1990.  The pursuer has such a certificate.  In other words Parliament permits the defender to license the business of street trading, dealing in the sale of goods or articles of any description but it does not go on to regulate the way they are to carry on their trade unlike, for example, taxis (secs 14 to 19) and metal dealers (secs 28 to 37). No part of sec 39 specifically allows the local authority to attach conditions to a street trader’s licence requiring the trader to provide food that reaches a particular nutritional standard. 

[70]      The current licence that the pursuer holds is in the following terms (6/12):

“The above named, residing at the above address, is hereby authorised to act as a street trader within the North Lanarkshire area subject to the under noted specific conditions and the conditions contained in the attached schedule of conditions.

 

This licence will expire on 30 September 2017

 

                                CONDITIONS

 

a) The Street Trader shall be permitted to trade only in the following parts of the North Lanarkshire area, namely: Bruce St, Bellshill (across from Orthoworld)

 

b) The Trader shall be permitted to trade between the hours of

 

             Mon-Sat 8am – 4pm

 

c) The Trader is permitted to sell Hot and Cold snacks and no other commodities.

 

d) The Trader is permitted to use approved vehicle, kiosk or moveable stall –

 

8ft x 14ft Mobile snack van

 

e) Status of Applicant: Employer”

 

[71]      There is no attached schedule of conditions other than a map showing the designated site (6/13).

[72]      On 4 August 2014 a letter (6/14) was sent to the pursuer advising her that her licence was to be amended to include a condition which reads,

“The street trader will be prohibited from operating within a distance of 250 metres from the defined perimeter, as constituted by the physical boundaries in place, of all secondary schools in North Lanarkshire area from 8.00 am to 5.00 pm on any school day during term time.  The prohibition will apply to all snack vans selling or offering for sale hot or cold food, fish and chip vans and ice cream vans”. 

[73]      The condition is unqualified and amounts to a blanket ban. The letter contained an invitation to attend a meeting on 20 August 2014 of the defender’s corporate services (licensing) sub-committee when she would be given the opportunity to argue for an exemption from the condition.  The pursuer attended, made submissions for an exemption which were rejected and the condition was imposed on that date.

[74]      The pursuer’s principal submission is that the 1982 Act does not confer power upon the licensing authority to subject the pursuer’s licence to this condition. 

[75]      In the case of Stewart the court considered a condition attached to a second-hand dealer’s licence when it came to be renewed.  Within the 1982 Act a specific power was given to the licensing authorities to attach conditions to such a licence in terms of sec 24(4).  There is no similar power given to a licensing authority with regard to a street trader’s licence.  Paragraph 10(1) of schedule 1 of the Act, which covers various types of licences, provides that:

“The licensing authority may, at any time, whether or not upon an application made to them by the holder of the licence, vary the terms of a licence on any grounds they think fit”. 

[76]      This is the only power given to a licensing authority to attach conditions to an existing street trader’s licence. The critical question is the extent of this power.  At para [12] of Stewart Lord Hope said two questions have to be asked and answered.  The first requires a close analysis of the condition and its effect and the second an examination of the scope of the power which the Act gives to the licensing authority. If the effect of the condition is to require street traders to do more than a licensing authority is empowered to require of them the condition must be held to be ultra vires of the local authority. 

[77]      In analysing the condition the first question to be asked is what is the effect of the condition? This will depend upon what it requires the pursuer to do (para [13]).  The next question to be asked is what effect, if any, this has on the street trader’s contracts or dealings with her customers. 

[78]      The condition requires the pursuer to cease trading within the hours of 8am and 5pm during the school year.  The time period covers the normal working day with the result that the pursuer will not be able to trade with anyone, school pupils or not, for a significant part of the calendar year.  School term times are published by the defender and are accessible.  The current school year began on 18 August 2015 and ends on 29 June 2016.  After holidays are taken into account the school year lasts 39 weeks approximately.  This equates to 75% of the calendar year.  It was said the pursuer will be forced to cease trading as to continue will not be economically viable.  It has to be remembered that the licence of the pursuer is location specific and does not allow her to trade elsewhere. The defender has not offered an alternative site. It was suggested by counsel for the defender that she could apply for a licence for another location. That may be true but there is no guarantee such an application would be successful. In the case of the pursuer 90% of her turnover comes from workers and visitors to the industrial estate where her site is located or local residents.  Over 400 adult customers objected to this situation by signing a petition (6/11).  This included NHS employees, some from the local health clinic, a number of whom commented on the healthy food that is available from the pursuer’s snack van. 

[79]      In answer to the second question the condition has the effect of seeking to control what the pursuer may sell from her snack van to her customers and affects the contract between them. Her licence is quite clear in its terms what she can sell, hot and cold snacks.  There is now an attempt by the defender to impose standards upon the food that the pursuer sells whether to pupils or the general public.  This follows on from the defender’s objective to ensure that food is not available to pupils which it sees as an unhealthier alternative to school lunches.  The pursuer failed in her attempt to persuade the sub-committee that what she sold was a healthier alternative and that the condition should not apply to her. In the statement of reasons it is said that the committee felt justified in obstructing free trade since a legitimate aim was being pursued and that the national objective of promoting healthier eating was assisted by the imposition of the condition (reasons for repelling preliminary submissions p1 para3). It follows that the sub-committee ought to have had before it the nutritional standards that the pursuer had to meet before it could consider rejecting her argument. It also follows that if the pursuer had been able to persuade the committee that the food sold by her had reached that standard and was as healthy or healthier as food sold in schools then she would have gained an exemption. The defender in its response to the FOI request admits that no assessments had been carried out on the food sold by the pursuer and there is nothing to suggest that the sub-committee came to the meeting with such sufficient information to make an informed decision.

[80]      The question thereafter is whether a condition which has these effects requires the street trader to do more than the licensing authority is empowered to require the trader to do.  Does the 1982 Act permit the licensing authority to impose a condition on a street trader which regulates the terms on which she trades with her customers?  Lord Hope at para [26] of Stewart dealt with the question in the following way:

“This question raises an issue of statutory construction.  Where an authority which is clothed with statutory powers orders something to be done and accompanies this with some sanction or penalty for a failure to do it, this restricts the freedom of action by persons who are affected by it, who would otherwise be free to do as they pleased (Kruse v Johnston, per Lord Russell of Killowen CJ at p 96).  It is a general rule of construction that, while the legislature may make whatever changes to the law that it likes, subordinate legislative authorities can make only such changes in the law as Parliament has empowered them to make.  This rule was applied in Rossi v Magistrates of Edinburgh, where conditions in an ice cream vendors’ licence which restricted their right to open their shops when they liked and sell what they pleased were held to be ultra vires of the licensing authority (see also Spook Erection Ltd v City of Edinburgh District Council).  It was also applied in Mixnam’s Properties Limited v Chertsey Urban District Council, in which it was held that the local authority was not entitled under the Caravan Sites and Control Development Act 1960 to lay down conditions relating to the licensee’s powers of letting or licensing caravan spaces to its customers.  Lord Upjohn said that freedom to contract is a fundamental right, and that if Parliament intends to empower a third party to make conditions which regulate the terms of contract to be made between others then, even where there is an appeal to a court of law against such conditions it must do so in clear terms  (p763).  In the same case Lord Reid said that it appeared to him to be a fundamental difference between prescribing what must or must not be done on a caravan site and restricting the site owners ordinary freedom to contract with his licensees on matters that did not relate to the manner of use of the site (p 755).“

[81]      The pursuer trades and contracts with many customers on a daily basis, the majority of whom are not pupils.  In effect the defender is ordering the pursuer to meet nutritional standards with regard to the food she sells no matter who buys this food. It is said that the food sold is considered to be unhealthy when compared with food available in schools. No guidance is given on this but if the standard is not met the sanction is that the pursuer cannot trade for 75% of the calendar year and any attempt to do so is a criminal offence.

[82]      The words of para 10(1) of sched 1 of the 1982 Act give power to the licensing authority to “vary the terms of a licence on any grounds they think fit”.  These words are to be examined to discover whether the condition is within the defender’s power to attach conditions given by the 1982 Act to the licensing authority.  On the face of it para 10(1) would appear to give the licensing authority a wide discretion similar to para 5(2) of sched 1 which gives power to the licensing authority to attach “such reasonable conditions” to a licence as it sees fit.  It requires a very strong case for a court to interfere with that discretion (para [27]).  However at para [28] Lord Hope went on to say with regard to para 5(2):

“It is clear that the discretion which is vested in the licensing authority is not unlimited.  The authority is not at liberty to use it for an ulterior object, however desirable that object may seem to it to be in the public interest (Pyx Granite Co Ltd v Ministry of Housing and Local Government, per Lord Denning at p 572; Newbury District Council v Secretary of State for the Environment, per Viscount Dilhorne at  p599).  The scope to be given to the words “such reasonable conditions” must be ascertained from their context. “

 

[83]      The search is for some indication that it was the intention of Parliament that licensing authorities should be able to regulate the contracts which street traders entered into with their customers.  Moreover the condition attached to the licence must be for a licensing purpose and not for any ulterior purpose.

[84]      Para 10(1) of sched 1 relates to the licensing system in general and not just to the licensing of street traders so it includes such diverse activities as second-hand dealers, window cleaners and boat hirers.  In the case of Stewart it was said that the principal mischief to be addressed which resulted in the conditions set out in sec 24(4) of the 1982 Act is the handling of stolen goods.  There is no equivalent to sec 24(4) in respect of street traders and so it is to the 1982 Act that one would normally go to find the mischief which may require licensing this activity.  The introductory text to the 1982 Act begins:

“An Act to make provisions as regards Scotland for the licensing and regulation of certain activities; for the preservation of public order and safety and the prevention of crime;…”.

[85]      A number of other matters are mentioned thereafter which are not relevant to the current case. While it may be difficult at first to ascertain the mischief aimed at in licensing street trading it may be said that the preservation of public order and safety and prevention of crime could apply. This reflects the pursuer’s submission that street trading concerns itself in trading in a public place.  For instance counsel for the defender submitted that if the pursuer’s position is correct then a street trader could sell whatever they like so long as it is a lawful commodity.  Some extreme examples were given by him of street traders selling pornographic magazines or drugs known as legal highs outside schools and suggested that a local authority could do nothing about it. It would be surprising if these did not raise a public order issue once the parents of pupils or the general public became aware of what was being sold.  What can be said is that there is no indication in sec 39 or elsewhere in the 1982 Act that consumer protection is one of the objects of licensing street traders or that where they sell food it has to be of a certain nutritional value or to be at least as healthy as that provided in schools.

[86]      It is legitimate to look at other sources to see if it was the intention that power to regulate street traders’ contractual relations should be given to the licensing authorities (para [32]).  On 22 February 1983 the Scottish Development Department issued a departmental circular to all local authorities in Scotland providing some guidance on the 1982 Act (circular 6/1983).  There is a covering letter which deals with the 1982 Act in general terms followed by an appendix which deals with particular sections in more detail.

[87]      Para 2.5 of Appendix A is headed “Secretary of State views on the scope of the licensing”(sic).  Thereafter it is said:

“The Secretary of State shares the view expressed in Parliament that licensing for the “optional” activities should be introduced only where it is shown to be necessary to prevent crime, to preserve public order or safety, or protect the environment.  The purpose of licensing is not to restrict trade or competition. It follows that before introducing licensing authorities should pay particular attention to the views of the chief constable and the traders likely to be concerned before proceeding to the resolution, and they should be satisfied that the introduction of licensing under the Act will contribute to the amelioration of the nuisance complained of.”

[88]      Paras 2.94 to 2.98 deal with street trading. Para 2.98 deals with street traders who operate a food business but only to the extent that any vehicle must comply with food hygiene regulations.

[89]      At para 2.94 it is said:

“It should be noted that there are no powers for a licensing authority to refuse a licence on the grounds of limiting competition or protecting any other types of business, or to attach any conditions to the grant of a licence for such purposes.”

[90]      A further circular, 28/1985, dated 27 September 1985 deals solely with the licensing of street traders.  Therein at para 2 the Secretary of State’s view is repeated that licensing of the optional activities should be introduced only where it is shown to be necessary to prevent crime, to preserve public order or safety or protect the environment. A circular dealing with planning matters, 6/2011, stated:

“Circulars contain the Government’s policy on the implementation of legislation or procedures”.

[91]      From these it may be concluded that Parliament had in mind nothing other than the above when enacting the legislation and clearly did not seek to allow local authorities the power to interfere with contractual relations between parties. While the main purpose of the condition may not be aimed at limiting competition or protecting other businesses this is a consequence since, as counsel for the pursuer pointed out, schools are competing against snack vans for custom. Food in schools is not free with certain exceptions (sec 53(2) and (3) 1980 Act). It is clear from what is said that Parliament did not contemplate that the licensing system would be used by local authorities to involve itself in the running of businesses once a licence had been granted to carry out a particular activity whether in setting standards or regulating contracts.

[92]      At para [35] Lord Hope stated:

“The absence of any mention in this material of a wish to provide for the protection of consumers to the licensing system is not surprising, in view of the other ways that this need can be and is being met through primary legislation enacted by Parliament”.

 

[93]      In the current case the quality of the food that consumers buy from the pursuer is covered by legislation to be found elsewhere.  If Parliament had intended to provide for the protection of consumers by means of conditions under the licensing system then that would have been set out in the 1982 Act with regard to street traders.  That is where one would expect to find such a novel and far reaching condition as opposed to having to rely on a general power such as that contained in para 10(1) of sched 1 (para[36]). 

[94]      Attempts to achieve consumer protection by inserting conditions into licences may have effects for the customer which are entirely arbitrary.  The licensing system is not designed for this purpose (para [36]). 

[95]      Lord Rodger in Stewart also considered the imposition of conditions on a licence and at para [55] had this to say:

“The test is not in dispute.  Guidance can be found in the approach that Viscount Dilhorne summarised for conditions attached to planning permission in Newbury District Council v Secretary of State for the Environment (p 599):

 

‘It follows that the conditions imposed must be for a planning purpose and not for any ulterior one, and that they must fairly and reasonably relate to the development permitted.  Also they must not be so unreasonable that no reasonable planning authority could have imposed them.’ ”

 

[96]      The sub-committee had an ulterior purpose which was expressed at p4 of the statement of reasons where reference was made to “their general wish that they had to be seen to be taking measures, from a regulatory perspective, to address the issue of child obesity.” In addition there was a purpose to promote and encourage the uptake of school meals which involved the removal of snack vans which it considered traded in less healthy food than that to be found in a secondary school.   Imposing a condition because one has to be seen to be doing something is an ulterior purpose and not a licensing purpose. It is reminiscent of what is sometimes referred to as a knee jerk reaction. It is not the appropriate approach to take before imposing a condition. On the basis of the guidance given in the circulars child obesity is not a licensing purpose and neither is the promotion of school meals per sec 53 of the 1980 Act nor a ban on trading for the majority of the calendar year. These, in my judgement, are not matters for a licensing authority.

[97]      In Mixnam’s Properties Limited the defender imposed conditions which regulated the rent that a caravan site owner could charge caravan occupiers and the security of the occupiers’ tenure.  It was held that these conditions were ultra vires.  At page 752 Lord Reid stated:

“In the present case there appears to me to be a fundamental difference between prescribing what must or must not be done on a site and restricting the site owners’ ordinary freedom to contract with his licensees on matters which do not relate to the manner of use of the site.  Conditions can make the site owner responsible for the proper use of the site and it is then for him to make such contracts with licensees as the general law permits.  I can find nothing in the Act of 1960 suggesting any intention to authorise local authorities to go beyond laying down conditions relating to the use of sites, and in my opinion the general words in Section 5 cannot be read as entitling them to do so.”

 

[98]      At page 764 A to C Lord Upjohn stated:

“Secondly, freedom to contract between the subjects of this country is a fundamental right even today, and if Parliament intends to empower a third party to make conditions which regulate the terms of contracts to be made between others then even where there is an appeal to a court of law against such conditions, it must do so in quite clear terms.”

 

“There are no such terms in Section 5.  Indeed, although the ejusdem generis rule has no application I should have thought that had Parliament intended to empower local authorities to exercise such a right they would have done so in a clear sub-paragraph.  Nothing in my view could be more dangerous than to assume by inference that Parliament intended that a very large number of local authorities all over the country should be closed with such arbitrary and all-embracing powers unless it is giving them a clear mandate to do so.  I find no such clear mandate in the Act.”

 

[99]      Lord Rodger commented on these passages and extending what he said to para 10(1) it is not to be interpreted as conferring on the licensing authority an implied power to attach a condition that would interfere with the parties’ freedom to allow the pursuer to sell what she wishes and her customers to buy what they wish.  If Parliament had intended licensing authorities to have that power it would have said so expressly. 

[100]    I am satisfied that Parliament cannot have intended local licensing authorities to have the implied power to attach a condition with such a significant effect on the commercial contracts of street traders. 

[101]    As I indicated at the outset the aim of the condition cannot be criticised.  It may have public support and it may be the case that other authorities have introduced similar conditions into licences but all of that is not enough to make it legitimate.  It depends entirely on the intention of Parliament.  In my judgement Parliament did not intend the licensing of street traders to be used in this way. As Lord Hope said at para [38]:

“The practice of Parliament is to provide for the protection of consumers by means of primary legislation which can be applied uniformly across the country.  It is not its practice to delegate powers to legislate in this area to individual local authorities.”

 

[102]    In the light of all of the above I have concluded that the condition imposed by the defender is ultra vires. That being so it is not necessary to decide upon the remaining submissions of counsel but perhaps I should deal with some of these briefly.

[103]    I consider that the sub-committee adopted an inflexible approach to all applications for an exemption. In my judgement it is clear from the statement of reasons and the near uniformity of its reasons that the “general view” that the pursuers sold food considered to be unhealthy prevailed. The sub-committee was determined to impose the condition. It did not matter what was sold even though one of the pursuers was able to detail the homemade produce and nutritional foods prepared and sold by her. Nobody could present an exceptional case especially in the light of the defender deciding that it had to be seen to be doing something.  It is similar to the over-rigid application of the near “blanket policy” questioned by Judge J in R v Warwickshire County Council at 224–226,

“which while in theory admitting of exceptions, may not, in reality result in the proper consideration of each individual case on its merits.”

 

[104]    The comments of Leggatt LJ at p55 in R v London Borough of Bexley could equally apply to the sub-committee’s approach:

“It is … legitimate for a statutory body … to adopt a policy designed to ensure a rational and consistent approach to the exercise of a statutory discretion in particular types of case. But it can only do so provided that the policy fairly admits of exceptions to it. In my judgment, the respondents effectually disabled themselves from considering individual cases and there has been no convincing evidence that at any material time they had an exceptions procedure worth the name. There is no indication that there was a genuine willingness to consider individual cases”

 

[105]    I saw no merit in the submission that the defender inverted the onus and it was unreasonable or breached natural justice in doing so. The cases of Calderwood and Ahmed make it clear that no fault can be found in this approach.

[106]    Counsel for the defender submitted that the provisions relating to the grant or removal of a licence in terms of sched 1 para 5 applied equally to the defender’s power under para 10/1 to vary the terms of the pursuer’s licence at any time and on any grounds it thinks fit.  Counsel emphasised the specific duty to consider the location of the site and the kind of persons likely to be there in terms of para 5.  In my judgement Parliament considered that different considerations apply to different periods in the life of a licence.  Specific provisions apply to the grant or renewal of a licence and when a licence is already in existence.  If the same provisions applied throughout then Parliament would have said so.  It did not which leads me to conclude the provisions of sched 1 para 5 do not apply to the current case.  In any event when the 1982 Act mentions the kind of persons likely to be at a site in my opinion this is a reference to a public order issue and not pupils or members of the public going about their everyday business buying lunch or whatever. 

[107]    Circular 28/1985 spoke of some difficulties that arose with regard to the number of licenses a street trading business may require and another issue involving those who sell dairy produce. It was thought that these difficulties may force some traders out of business (paras 4-6). It goes on to say:

“Some changes in the legislation may be desirable, but any such change would have to be the subject of consultation and would have to await a suitable legislative opportunity.”

[108]    In Stewart Baroness Hale spoke of widespread local consultation before the imposition of the condition referred to in that case [66]. Counsel for the pursuer criticised the lack of consultation by the defender as unfair and a breach of natural justice. Counsel for the defender addressed this by reminding the court that there was no obligation to consult and in any event the pursuer was given the opportunity to put forward her position at the meeting to which she was invited. In the case of R v Secretary of State for the Environment the claimant criticised, inter alia, the lack of consultation before it was decided to withdraw funds from a particular project. At para [75] it was said by Langford J that in determining whether a lack of consultation amounts to unfairness is necessarily fact dependent and went on to say:

“Fairness is to be judged overall, and not examined purely from the perspective of the aggrieved. Here, DEFRA had reasons for not consulting. The evaluation of overall fairness must therefore take those reasons into account.”

 

[109]    At para [80] he continued

 

“I cannot accept Mr. Maurici's point that consultation, if it had occurred, would have been pointless, for two reasons. First, there is a value in consultation for its own sake: in a participative democracy, it involves those who may be affected by a decision. Though what is said by them or on their behalf may in the event effect no change in the policy or proposal about which there is consultation, there is greater assurance that their point of view has at least been listened to with respect by the decision maker. The process adds value to the way in which the final decision is likely to be received. Second, no decision maker should be so confident that he has considered all possibilities and angles that he refuses to consider even the risk that he might have overlooked some matter: experience teaches that those who are most confident in their views are often most at risk of being mistaken.”

 

[110]    In that case it was held that a lack of consultation did not amount to unfairness given the background of spending pressures, time pressures and a rational judgement that consultation would be counter-productive [86]. In the current case there were no spending or time pressures and it would appear that the only consultation was to take place at a meeting when the pursuer was to argue for an exemption. In its statement of reasons it is said that the criticism of a lack of consultation: 

“may have had some validity were it not for the fact that a noticeable number of other local authorities had already gone down the road of prohibiting street traders conducting business within a distance of schools during prescribed periods. The Council felt if it was the first local authority to go down this road, the comments made by Mr McGowan about a thorough consultation being conducted in advance and responses to that consultation being considered would have had greater validity.”

 

[111]    These comments would appear to be an admission that consultation would have been beneficial but the defender relies on the fact that other local authorities have imposed the condition to justify its failure to do so. Such a reliance, in my judgement, is without merit. There is no evidence that any of these other councils carried out a consultation and if they did the outcomes. Moreover if they did the particular condition and the circumstances in each local authority area may be very different. For example it was said in the course of submissions that the radius differed with each local authority. This points, once again, to the comments made by Baroness Hale in Stewart of the arbitrary effect of such a condition [68]. The consequences of this condition for the street traders merited more than one occasion to set out their position at a meeting where the condition had already been decided upon. Such consultation could have involved the street traders, teachers, local residents, local workers, parents and persons qualified to comment upon the nutritional standards of meals in schools and to be found elsewhere. Consideration could have been given to the fact that the defender accepts that it cannot provide school meals for all pupils, the numbers involved, the number of pupils who buy lunch elsewhere and what is sold in alternative fixed food outlets and takeaways nearby which cannot be subjected to the condition. In my judgement consultation ought to have taken place.

[112]    Both counsel conceded that if I found that the defender acted outwith its powers then the appropriate disposal is to reverse the decision of the defender to impose the condition. That is what I shall do. This decision will extend to all of the pursuers. It was further agreed that expenses would follow success and that being so I shall award expenses in favour of the pursuers. I shall sanction the employment of junior counsel in the cause.

[113]    There are some remaining matters which perhaps merit comment. Counsel for the defender continually referred to the pursuer’s vehicle not as a snack van but as a burger van.  This was expressed as if it was a pejorative term.  In passing perhaps it can be noted that in the defender’s diet and nutrition policy document (6/15) there is a sample school lunch menu for primary schools.  It recommends that primary school children enjoy a burger at least once a week (p 39). The document also recommends that those children who are resident within the defender’s care should be served burgers no more than twice per week (p17). 

[114]    This same document recognises that some pupils leave school at lunchtime to use other food outlets including mobile units and local shops (p27).  An undertaking is given that the defender will take steps to work in collaboration with food outlets outwith schools to ensure that young people receive consistent messages regarding healthy eating and have the opportunity to eat healthily when outside of school.  There was no suggestion that such an undertaking was fulfilled.  Instead the condition was imposed.