Company director ordered to pay £73k in costs after failed licensing appeals
A local authority and the police have secured a £73,000 costs order against the director of a company which unsuccessfully appealed against an order for revocation of its premises licence.
Jon O’Malley was director of Combine Leisure Limited, which held a licence for the Panache nightclub in Bristol.
Bristol City Council revoked the licence in 2010 following an application for review brought by the Chief Constable. The company appealed, which suspended the revocation pending the appeal.
The Chief Constable then applied for a summary review of the licence, following an incident in which a serious assault went unreported. Bristol suspended the licence as an interim measure and then revoked it at the final hearing of the summary review application. The appellant appealed the revocation and the two appeals were conjoined.
Both appeals were dismissed by magistrates after a five-day hearing. The company had argued that the recorded incidents had been exaggerated, but the police provided 4,000 pages of original records.
At this stage, the appellant company appeared insolvent. Consequently an order for costs against the company would have been worthless.
Bristol City Council, with the support of the Chief Constable, applied for costs against Mr O’Malley, the sole director and shareholder.
The local authority argued that s. 181 of the Licensing Act 2003, which permits the court to make such order as to costs as it thinks fit, was sufficiently wide to permit orders against non-parties.
Bristol, whose counsel was Philip Kolvin QC of 2-3 Gray’s Inn Square, submitted that the case was analogous to appellate authorities in civil cases.
These authorities establish that the court may make costs against non-parties where it considers it just to do so, one such instance being where the non-party has pursued and controlled the litigation for his personal benefit. Cases cited included Dymocks Franchise Systems (NSW) Pty Ltd v Todd [2004] 1 WLR 2807 and Sims v Hawkins [2007] EWCA Civ 1175.
Bristol argued that there were a number of relevant circumstances:
- Mr O’Malley was the sole director and shareholder of the company
- he had a direct financial interest in the litigation both as director and shareholder and also as guarantor of the club’s lease
- the company appeared to be insolvent
- the Council had warned him in advance that it may apply for costs against him personally, and
- he had had access to advice during most if not all of the proceedings.
Mr O’Malley had also unsuccessfully challenged the interim steps hearing by way of judicial review, during which proceedings he told the High Court that if the club were not allowed to reopen he would be forced into bankruptcy.
Bristol argued that, assuming that what he had said was true, he would not suffer as a result of a costs order. Instead, the local authority would simply join with other creditors in his bankruptcy.
The council argued that Mr O’Malley had controlled the proceedings on behalf of the appellant. It was also submitted that by failing to accept the Police evidence at face value and instead requiring the Police to prove each and every incident relied upon, the appellant had caused costs to escalate unnecessarily.
Complementary arguments were made by the Police.
The Court ordered Mr O’Malley to pay £35,688 to Bristol and £37,431 to the Police.