Whose decision is it anyway?

Decision iStock 000000174789XSmall 146x219A decision to refuse to renew a sexual entertainment venue licence was recently scuppered by a constitutional issue. Nicholas Dobson explains why.

Why would a properly reasoned licensing decision be sent down the tubes? Answer a constitutional delegation problem.

For although local government lawyers, nurtured on the functional discharge arrangements in section 101 of the Local Government Act 1972, expect delegations to sub-committees etc not to prejudice the decision-making power of the relevant parent body (see section 101(4)), Stuart-Smith J recently quashed a Licensing Committee decision that should have been taken by a panel of three of its members.

The case in question was R (Bridgerow Limited) v. Cheshire West and Chester Borough Council and another [2014] EWHC 1187 (Admin).

Background

The issue concerned the renewal of a sexual entertainment venue (SEV) licence for a lap and table dancing venue in Chester City Centre following the council’s adoption of the SEV licence provisions in the Local Government (Miscellaneous Provisions) Act 1982. The original licence to the claimant proprietor, Bridgerow, had been granted in April 2012 but in September 2013 the council refused to renew the licence which led to the instant challenge.

The grounds originally formulated were: (i) failure by the Committee to follow its own policy; (ii) failure to consider making a policy exception in the individual circumstances of the case; (iii) failure to give reasons; (iv) failure to have regard to the importance of consistency and failure to give proper reasons for departing from the decision of the previous Committee and (v) failure to consider Bridgerow’s human rights. Of these Bridgerow submitted that its most powerful point was the alleged failure in 2013 to give due weight to the fact of the 2012 decision combined with a failure to articulate its reasons for reaching a different conclusion.

However, significantly, Bridgerow additionally alleged that the council contravened its constitution because the decision should have been taken by a panel of three but was in fact taken by twelve councillors.

The Court noted that the site venue was near to an area whose residents were vocal in their opposition to the proposed renewal of the SEV licence. Furthermore there had been recent residential development in the area.

The council’s Statement of Licensing Policy for Sex Establishments included the following:

  • The character of the locality was given prominence as a matter specified to be taken into account on application for renewal;
  • Applications would not normally be granted where the premises are located near residential accommodation.

The 2012 decision was close, being heard by 10 members, five voting in favour, four against and one abstaining. However, the council policy provision that applications would not normally be granted where the premises were located near residential accommodation was not addressed.

In 2013 (where there were eight written objections including from local businesses and Chester residents as well as material in support) twelve councillors heard the renewal application. Although the Conservatives had more councillors than Labour, there were seven Labour members and five Conservatives participating. In the event the meeting was evenly divided, the decision being taken on the casting vote of the Chair.

The Committee noted that "there was a significant presence of residents in the locality and that there is a trend continuing to increase the number of residents in the area near the premises". As to the policy issue of impact on locality (after having heard objections that the location of the premises was detrimental to the character of the locality) the Committee concluded that "the historic Rows gave the locality a special significance and is therefore an area unsuitable for the activity". This refers to what the judge described as "the celebrated 'Rows' of half-timbered galleries, reached by steps, which form a second row of shops above those at street level".

Legal and constitutional issues

The Court noted, following its decision in Bean Leisure & Ruby May v Leeds City Council [2014] EWHC 878 (Admin), that the relevant discretionary ground for refusal here was (per paragraph 12(3)(d) of Schedule 3 to the 1982 Act) that "the grant or renewal of the licence would be inappropriate, having regard (i) to the character of the relevant locality; or (ii) to the use to which any premises in the vicinity are put; or (iii) to the layout, character or condition of the premises . . . in respect of which the application is made".

As to reasons, decision letters "must enable the reader to understand why the matter was decided as it was and what conclusions were reached on the principal important controversial issues". And whilst a committee is entitled to take a fresh look at a matter and to reach a decision different from that taken previously by another committee, "the later committee must give due weight to the previous decision, though it is not in any way bound by it". ‘Due weight’ is fact sensitive and "will be the weight that is appropriate in all the circumstances".

Stuart-Smith J noted that the revised constitutional arrangements brought in by the Local Government Act 2000 were designed to provide "efficient, transparent and accountable decision making" and that the scheme of executive functional delegation was required to be publicly available.

The council’s constitution specifies that certain functions shall be undertaken by panels rather than by the full Committee and the instant decision under challenge was required to have been taken by a panel comprising three members drawn from the full Licensing Committee on a politically proportionate basis.

Court decision

Stuart-Smith said that to his mind it was "clear beyond argument that the Constitution said and meant that Bridgerow's renewal application should have been decided by a panel of three members drawn from the full Committee on a politically proportionate basis". However, "Equally clearly, that is not what happened".

The Court rejected the council’s submission that there were no grounds for complaint on the constitutional issue since it "is better in a case such as this to have more people sitting rather than fewer". Apart from the requirements for publication, transparency and reliability concerning executive functions, it was "plain that the power to make the decision in this case has been sub-delegated to a panel of three". For, significantly:

"That is not a delegation by the Licensing Committee as such: rather, the executive function is delegated by the Constitution to the panel. It is not therefore open to the full Licensing Committee to arrogate the delegated power to itself."

In addition, a twelve-member panel was open to being evenly divided (and was so in the event) whereas a three-member panel by its nature would have achieved a decisive outcome. And the twelve who made the decision were not constituted on a politically proportionate basis in line with the political composition of the council.

So although, as the Court indicated, "there is a superficial attraction in the submission that having the decision taken by more than three was an advantage, what matters is that the decision should have been taken by three and it cannot be said that a panel of three would have reached the same result as the twelve who in fact made the decision". The decision therefore was "set aside because it was taken by a group of people who had no power to take it".

In the circumstances, the Court dealt fairly shortly with the other avenues of complaint. Stuart-Smith J said that if those deciding the application had been properly constituted, he would have refused to have set the decision aside.

The two matters affecting the minds of Committee members were (i) their assessment of the area where residential accommodation was more prominent than in 2012 and (ii) the conclusion that the location of the premises in that area had an impact on the character of the locality. Taken together, said the judge, "these were sufficient reason to refuse to renew".  The Committee had carried out a balancing exercise where the fact that the premises had previously been licensed was set against the considerations which the Committee ultimately concluded should lead to refusal.

And whilst the 2013 decision letter "could have been fuller. . .and . . .more clearly expressed" the essential reasoning was not unclear. It is, said Stuart-Smith J, "positively unhelpful to engage in minute textual analysis when the overall meaning is clear and it is common ground that Decision Letters are not to be interpreted as if they were statutes". It is also, he continued "salutary . . . for the Court to remind itself that licensing and planning functions are paradigm examples of matters that are matters for local policy and local knowledge to determine, subject to intervention by the Courts only where necessary."

So once "it is clear that the committee carried out a balancing exercise giving weight to the fact of the previous committee's decision on one side and to rational policy-led considerations on the other, and that they came to a conclusion that was more obviously in conformity with the council's. . . it is neither necessary nor appropriate for the Court to accede to a reasons challenge on the facts of this case".

Comment

This case is interesting for two reasons. Firstly it is essential that local authority decision making bodies adhere strictly to their constitutional source. In this case, as the judge pointed out, the panel was a creature of the constitution and not the Licensing Committee. And, importantly, the political proportionality requirement was not met.  Secondly, as the judge earlier noted, "Parliament's intention was to give primacy to the evaluative judgment of local authorities who have the advantage of local knowledge, the responsibility vested in them by election and the accountability to their constituents imposed by the local democratic process".

The Courts should therefore "respect that primacy and not interfere unless necessary". For where the overall meaning of a decision is clear, minute textual analysis is "positively unhelpful". But in the circumstances the decision failed not because of its reasoning but "because of the serious procedural irregularity which led to it being taken by the wrong persons".

Dr Nicholas Dobson is a Consultant with Freeth Cartwright LLP specialising in local and public law. He is also Communications Officer for Lawyers in Local Government.

© Nicholas Dobson

See also: Keep it simple! The court's message to licensing authorities – Tim Briton, LLG's Deputy Lead Officer for Litigation and Licensing, sets out the key lessons from the Bridgerow case for local government lawyers specialising in licensing.