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Judge quashes licensing decision after "serious procedural irregularity"

A council’s decision to refuse to renew a lap-dancing club’s sexual entertainment venue licence must be quashed because of a "serious procedural irregularity" which led to it being taken by the wrong persons, a High Court judge has ruled.

The case of Bridgerow Ltd, R (on the application of) v Cheshire West and Chester Borough Council [2014] EWHC 1187 (Admin) arose after the local authority refused to renew the licence for Platinum Lounge.

The club has operated in Chester’s city centre since 2005. On its first application under the new regime brought in under the Policing and Crime Act 2009, Bridgerow – owners of Platinum Lounge – was granted an SEV licence in April 2012. But when the company applied a year later for renewal, Cheshire West and Chester refused.

The company brought a judicial review challenge on a number of grounds. These were:

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  • A failure of the committee to follow its own policy;

  • A failure to consider making an exception to policy in the individual circumstances of the case;

  • A failure to give reasons;

  • A failure to have regard to the importance of consistency and a failure to give proper reasons for departing from the decision of the previous committee; and
  • A failure to consider Bridgerow's human rights.

By supplemental grounds Bridgerow also alleged that Cheshire West and Chester had acted in contravention of its constitution because the decision should have been taken by a panel of three but was in fact taken by 12 councillors.

It was also claimed that the panel was not politically proportionate, being comprised of seven Labour councillors and five Conservatives when there were more Conservatives than Labour councillors on the local authority overall.

An interim decision allowed the company to re-open the club pending the outcome of a full hearing.

Mr Justice Stuart-Smith this week upheld the claim in the High Court. He said: “To my mind it is 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. Equally clearly, that is not what happened.”

Mr Justice Stuart-Smith said:

  • He agreed that the purpose and effect of the process leading to the adoption of the constitution and its publication was "to require to be made publicly available the scheme of delegation of functions which are the responsibility of the executive, including delegations to individual portfolio holders." It was therefore important that the manner in which executive functions would be carried out (and to whom they were to be delegated) was published, transparent, and reliable.
  • Local authorities were corporate personalities established by statute and the process leading to the adoption and publication of the constitution was the statutory route for the delegation of functions.
  • It was plain that the power to make the decision in this case had been sub-delegated to a panel of three. “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.”
  • It could not be suggested that the fact that the decision was taken by 12 members of the licensing committee rather than a panel of three was negligible on the facts of this case.

On the latter point, which he said was of critical importance, the judge gave two reasons. “The first reason is that, since the panel of twelve was equally divided, it is theoretically possible that a panel of three could have voted 3-0 or 2-1 in either direction, depending upon which of the twelve (or other members of the licensing committee) was on the panel,” the judge said.

“The second is that the twelve who made the decision were not constituted on a politically proportionate basis in line with the political composition of the council. Although any suggestion of whipping is now abandoned, there can be no certainty how twelve members or a panel of three who were constituted in line with the political composition of the council would have voted.”

Mr Justice Stuart-Smith continued: “So, although 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. Seen in this light, the observation of Lord Bingham of Cornhill in Berkeley supports Bridgerow's position and not that of the council.”

The judge concluded for these reasons that the decision of 17 September 2013 had to be set aside “because it was taken by a group of people who had no power to take it”.

The lap-dancing club’s application for renewal of its SEV licence will now be heard by a properly constituted panel.

Mr Justice Stuart-Smith rejected the claimant company’s other main ground, namely the alleged failure to give due weight to or give adequate reasons for departing from the original 2012 decision to grant a licence.

He said if those deciding the application had been properly constituted, he would have refused to set the decision aside.

The judge found the committee’s reasoning to be clear, and that there were two reasons which affected their minds and led them to their conclusion in the knowledge that they were differing from that of the previous committee.

“The first was their assessment of the area: while being predominantly commercial it was regarded by the 2013 committee as being mixed in a way which gave greater prominence to the residential accommodation than had been accorded to it in 2012,” the judge said.

“The paragraph in which the members expressed their view that ‘the area has a mixture of commercial premises and residential properties’ also referred to the acceptance by Bridgerow's solicitor that it was open to the committee to take a fresh look. Taking the paragraph as a whole it is plain that the committee recognised that it was or might be taking a different view of the balance of the area and that it was doing so having looked at the information provided to them, including the evidence provided by Bridgerow.”

The second reason was the committee’s conclusion that the location of the premises in that area had an impact on the character of the locality.

Taken together these were sufficient reason to refuse to renew, the judge said.

Mr Justice Stuart-Smith said he accepted that the 2013 decision letter could have been fuller and could have been more clearly expressed. However, he did not accept that the essential reasoning was unclear.

“It is 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,” he said.

“It is also salutary at this point 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. 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 policy (and, in particular, paragraph 7.15 of that policy) it is neither necessary nor appropriate for the Court to accede to a reasons challenge on the facts of this case.”

Ian Callister, spokesman for Cheshire West and Chester, said: “The judged ruled in favour of the authority in regard to five of the substantive issues.

“He found against us on the sixth – a procedural matter – and counsel will be examining that decision.”

Richard Clayton QC and Sarah Clover of Kings Chambers were instructed by law firm Poppleston Allen on behalf of Platinum Lounge. The council was represented by James Rankin of Francis Taylor Building.

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