Government guidance on fate of interim steps is wrong, says district judge

Interim steps ordered on a summary review die when the final determination of the review is made, a district judge has ruled.

In making her ruling, District Judge Knight at Halton Magistrates’ Court concluded that government guidance on the issue was wrong.

Leading licensing lawyers described the judgment as significant but only persuasive, and expressed the hope that greater clarity would be provided by higher courts.

The case of Chief Constable of Cheshire v Gary Oates related to a nightclub called Chambers in Runcorn that is run by Mr Oates. In August 2011 Cheshire Police applied for a summary review of the premises licence.

As an interim step Halton Borough Council suspended the licence. The authority refused to remove that suspension at a subsequent hearing. At a final hearing of the review application Halton suspended the licence for three months.

Mr Oates appealed. It was common ground that – under s. 53C(11) of the Licensing Act 2003 – the final order of suspension did not come into effect until the appeal was disposed of.

At issue in the case was whether the interim steps continued to have effect during the appeal proceedings.

Guidance issued by the Department of Culture, Media and Sport on expedited and summary reviews advises that where an appeal is lodged, the interim steps continue until the appeal is disposed of.

But Mr Oates, acting on the advice of Philip Kolvin QC of Cornerstone Chambers that the guidance was wrong, re-opened the premises pending the appeal.

Cheshire Police disagreed with that position and issued three closure notices against Mr Oates under section 19 of the Criminal Justice and Police Act 2001. The force then applied for a closure order, alleging that the premises were being used for the unauthorised sale of alcohol.

Mr Oates defended the proceedings, arguing amongst other things that there had not been unauthorised sale of alcohol within the meaning of section 21 of the 2001 Act.

As a result the Court had to determine whether the interim step of suspension survived the final determination.

District Judge Knight heard the application for the closure order on 19 December 2011.

The police argued that where, as here, an order for suspension had been made three times, the statute clearly contemplated that the suspension should endure through to the end of the appeal proceedings; otherwise the purpose of the summary review provisions would be defeated.

But the judge rejected that argument. She held that the interim steps had ceased to be effective once the final determination had been made.

This was on the basis that Section 53B was expressly entitled “interim steps pending review”, while section 53B(1) made it clear that interim steps are steps pending the determination of the review applied for. The only provision that could possibly prolong the life of such steps was section 53C(2)(c), but the district judge criticised the drafting in that section.

District Judge Knight accepted the argument put forward by Kolvin that both the common law principle against doubtful penalisation and section 3 of the Human Rights Act 1998 entailed that the statute should not be taken to remove the rights of the licensee to trade unless such deprivation was clearly expressed, and that any ambiguity should be resolved in favour of the licensee.

She also held that the fact that no right of appeal had been conferred by Parliament against the imposition of interim steps reinforced the interpretation that such steps were taken to be short-lived, interim arrangements pending the more mature consideration of the overall position at the final hearing.

In the light of her ruling, Cheshire Police also withdrew its prosecution of Mr Oates for unlicensed trading under section 136 of the Licensing Act 2003.

An appeal against the decision at the final review hearing is expected to take place in March 2012.

Andy Grimsey, a solicitor at licensing firm Poppleston Allen, said: “This is a very important decision, and whilst only persuasive due to it being a decision at Magistrates' Court level, flies directly in the face of the DCMS guidance.

“It means that, in theory, a licence that has been suspended for what are probably quite serious allegations at an Interim stage can reopen following a final Review, even if the licence is revoked at that final Review, pending an Appeal.”

Grimsey said the case also raised interesting questions about the extent to which Interim Steps die at the final Review. “If the Interim Step had not been suspension, but the imposition of onerous and expensive conditions (for example extra door staff or CCTV) which the licensee could not afford and therefore in effect meant that he had to shut anyway, do these also die?”

He added: “If the disapplication of Interim Steps is total, then no doubt licensees will be arguing for as early a hearing date of the final Review as possible, in the knowledge that any onerous Interim Steps shall cease to have effect the moment the Licensing Committee reaches its determination.”

The Poppleston Allen lawyer expressed the hope that – given the serious implications of licensees continuing to trade when there was an express decision stating that the premises licence was suspended – the issue would come before the higher courts “sooner rather than later for clarification”.

He added: “In the meantime, it is a little piece of good news for operators who fear an overreaction by Licensing Committees at the Interim Steps stage.”