Testing times

licensing portrait1Paddy Whur looks at who can be liable for committing an offence under s. 146 of the Licensing Act in relation to underage sales, as well as the defences under this section.

It was only when I was preparing a training package for Yorkshire Trading Standards and then a skeleton argument to defend a premises licence holder against prosecution under Section 146, that I realised that assessing liability is not as straightforward as one would think.

Section 146 (1) states as follows: A person commits an offence if he sells alcohol to an individual aged under 18.

Straightforward, I thought, as I was preparing my skeleton argument...mmm, not so!

In my case, the premises licence holder was suggesting he was in real terms nothing more than a landlord of the premises and had rented them to a tenant who was now operating them as a convenience store.

The premises licence holder lived and worked in London and the premises were in the North of England.

He said that he had no contact with the day to day management of the premises and his tenant bought the alcohol and other goods selling them on to people who came into the premises. He received a monthly rent and no profit from the premises.

On the night of the failed test purchase, the tenant was in the premises, but his shop assistant made the sale.

Pretty quickly, we could assess that the physical seller, who made the sale was guilty of the offence under Section 146(1). He accepted his culpability and received a fixed penalty fine for this offence.

However, on the instructions of the premises licence holder, he wished to deny liability as he had, he said:

  • No day to day contact with the premises;
  • Had leased the premises under a tenancy agreement to the tenant;
  • Had not bought the alcohol, the subject of the test purchase;
  • Had no day to day control/management of the premises;
  • Was not in the premises on the night of the sale.

I immediately saw that there were significant crucial issues in relation to this offence being charged against the premises licence holder, i.e. Was he a “person” who “sells” alcohol to the individual?

It became very clear that this was not a straightforward position.

As always, my first point of call was to Colin Manchester’s book Alcohol and Entertainment Licensing Law 3rd Edition. The section contained in pages 601 to 614 gives a very clear exposition of the current state of the law. It is clear that this is an issue which has troubled the Magistrates’ Courts around the country. Colin sets out a number of decisions of Magistrates’ Courts and one Crown Court decision on appeal.

Unfortunately, we have not had an authoritative High Court decision which has firmly established the correct interpretation of this section of the Act leaving the interpretation a little blurred around the edges.

Colin highlights the elements of “alcohol” which is defined by section 191, and “an individual aged under 18” present little difficulty, but the same cannot be said of the elements of a “person” and “sells”.

I formed the conclusion when reading this section and in particularly the summary at paragraph 11.7.10.6 of Colin’s book that the following situation appears to be accurate.

  1. The individual who physically sells the alcohol to a test purchaser is guilty of the offence and usually would receive a fixed penalty.
  2. The owner of the alcohol “whether a corporate body, unincorporated association or an individual” (who will very often be the premises licence holder) can sell either personally or vicariously where the sale is physically transacted by another person, i.e. one of his employees.
  3. A personal licence holder (could be the DPS) who has authorised another physically to make a sale can sell by making the sale on behalf of the owner.
  4. The premises licence holder is not liable just by holding that position – you need to move on to analysing whether he is a person who ‘sells’, judging the circumstances in the case.

So what of the situation in my case?

I formed the conclusion that if the true and accurate position was as my client had told me, then he had a defence to the offence under Section 146(1), as he was not a “person” who “sells” the alcohol. If he was never in ownership of the alcohol, absented himself as a premise licence holder, from any day-to-day running of the business and had just held a premises licence, then he would not be liable under section 146(1) of the Act. There could be a need to review the premises licence on the facts of the case as there seemed to be no interaction by the premises licence holder or designated premises supervisor in the running of the business – but this would not directly lead to criminal liability.

If that is the position, it is vitally important that this is set out to the investigating Trading Standards Officers at interview. If this is not set out immediately, then considerable doubt will be placed on the premises licence holder’s version of events, as it could be suggested that he was concocting a defence after the event.

However, if he can establish the position that he alleges -- that in real terms, he is purely a landlord and holds the premises licence – as many corporate structures follow this route – then there is a defence under this particular section.

It will be important to investigate whether:

  • There is a valid tenancy agreement;
  • Who is registered to pay business rates at the premises;
  • Can detailed accounts be produced to show that the tenant is buying the alcohol and selling for profit;
  • Can detailed accounts be produced to show that the landlord is only receiving rental income from the premises;
  • Are there accounts set up with the alcohol cash and carry in the name of the tenant.

The more information which can verify the suggested relationship the better. Clearly the premises licence holder would lose his potential defence under section 146(4), i.e. the due diligence defence, because it could not be argued that he had taken all reasonable steps to establish the individual’s age at the time of the sale.

This is a particularly interesting section of the law and until we receive a High Court decision, we are stuck with assessing each particular case on its facts to see whether there is either a potential defence or whether there is a need to plead guilty and mitigate.

From a Trading Standards’ perspective, I have been asked at a number of training events – who should we prosecute?

In my view, as I have highlighted at training events, Trading Standards should look to prosecute anyone who appears to have criminal liability for the offence. This can and very often will be more than one person in each particular case.

I would suggest an investigatory approach similar to what is outlined above would be helpful and I am more than happy to discuss individual circumstances.

Paddy Whur is a partner at Woods Whur. He can be contacted on 0113 234 3055 or byThis email address is being protected from spambots. You need JavaScript enabled to view it..

Colin Manchester’s book Alcohol and Entertainment Licensing Law 3rd Edition is published by Woods Whur. To read reviews of the book and order a copy, click here.