Cambridgeshire County Council v Kama [2006] EWHC 3148 (Admin)

Case No CO/7241/2006[2006] EWHC 3148 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
DIVISIONAL COURT
Venue Royal Courts of JusticeDate Tuesday, 21st November 2006
Strand
London WC2
B E F O R E:
LORD JUSTICE WALLER
MR JUSTICE TREACY
Between
CAMBRIDGESHIRE COUNTY COUNCILClaimant-v-
Between
KAMADefendant
Computer-Aided Transcript of the Stenograph Notes ofWordWave International LimitedA Merrill Communications Company190 Fleet Street London EC4A 2AGTel No: 020 7404 1400 Fax No: 020 7831 8838(Official Shorthand Writers to the Court)
MR M MAGEE (instructed by Cambridgeshire County Council) appeared for CLAIMANTMR N HOFFMAN (instructed by Thomson Webb & Cornfield) appeared for DEFENDANT
J U D G M E N T
[1]MR JUSTICE TREACY: This appellant appeals by way of case stated against a decision of the Cambridge Justices dated 24th May 2006 to dismiss the information against the respondent alleging a charge of selling intoxicating liquor to a minor. An information had been laid against the respondent alleging that on 5th August 2005 at the Adana Mini Market, 182 East Road, Cambridge, he had sold intoxicating liquor to a person under the age of 18 contrary to section 169A of the Licensing Act 1964, as amended. By section 169A(3) it is a defence where a person is charged by reason of the actual default of another for that person to prove that he exercised all due diligence to avoid the commission of the offence.[2]At the hearing, the Justices found the following facts. The respondent was the licensee of the premises, although he was not present on the premises at the date of sale. The purchaser of the alcohol was a 15 year old, who was plainly recognisable as such from her appearance. She had been given the money to purchase the alcohol by a Trading Standards Officer stationed outside the premises. The purchaser bought a bottle of vodka from a Mr Mehdipour who worked at the Adana Mini Market. The respondent's brother, who was the owner of the premises and was the manager of the shop for the day, was behind the counter area with Mr Mehdipour when he sold the alcohol to the young person.[3]The respondent had employed Mr Mehdipour on 5th July 2005, about five weeks before the date of the alleged offence. The respondent had taken up references from Mr Mehdipour's previous employer. Those references had stated that he had previous experience in the licensed trade, had full knowledge of the licensing laws and had previously been a good employee. Mr Mehdipour's contract, which was signed on 5th July, referred to the fact that it was illegal to sell alcohol to a minor. It also included a section indicating that he had read and accepted its terms. The Justices found that the respondent had gone through the terms of the contract orally with Mr Mehdipour.[4]The respondent, the Justices found, had closely supervised Mr Mehdipour at the start of his employment and had not permitted him to serve in the shop until he was satisfied that Mr Mehdipour had been fully trained and inducted. There were two signs in the shop, one positioned by the alcohol and the other positioned by the till. Each of them indicated that it was illegal to sell alcohol to a minor. The respondent had been interviewed by the appellant's Trading Standards Department on 30th August 2005. However, neither the manager in charge on the day nor Mr Mehdipour had been interviewed. Those were the findings which the Justices made.[5]The respondent contended that he had acted with all due diligence and had behaved reasonably in all the circumstances. The appellant contended that the respondent had not acted with all due diligence, and in particular pointed to certain matters. Firstly, it was asserted that Mr Mehdipour's understanding of English was limited and that it was therefore unclear as to how much he had understood of the contract into which he had entered. Further, it was said that the respondent did not have a system involving a refusals book or a log, which would be highly desirable in the case of premises selling liquor. Next, it was asserted that the respondent did not have written training records. It was further asserted that it would be helpful, if not customary, for premises selling intoxicating liquor to have a till prompt system, either electronic or manual, which would remind staff and thus ensure that persons purchasing such items were aged over 18. Moreover, it was said that there was no evidence of formal training courses having been given to Mr Mehdipour.[6]Those are the matters which the Justices have recorded that the appellant put forward at the hearing as representing a failure by the respondent to act with all due diligence. In addition, our attention today has been drawn to a matter which does not feature in that part of the case but which does feature in the Justices' findings of fact, namely the presence of the respondent's brother, who was the shop manager, in the counter area with Mr Mehdipour at the time Mr Mehdipour served the alcohol to the young person.[7]The Justices found that the respondent had in fact exercised all due diligence. They found that he had done so by taking up Mr Mehdipour's reference, by explaining the premises policy in relation to the sale of intoxicating liquor to under 18s, by ensuring that it was explicitly set out in the contract of employment which had been signed by Mr Mehdipour, and by displaying signs prominently in the shop reminding all persons of the shop's policy. The Justices also found that there had been a failure to show that Mr Mehdipour's understanding of English was limited, and they were also of the opinion that a small corner shop could not reasonably be expected to have in place all of the systems that, for example, a supermarket would have in place and consequently they dismissed the information.[8]It is submitted to us that the Justices erred in law in their finding that the respondent had exercised all due diligence in those circumstances. The question posed in the case in the Justices is as follows:
"Whether on the facts found we were right to conclude that the respondent had exercised all due diligence to avoid the commission of the offence."
[9]The appellant contends before us that section 169A places a high burden on all who sell alcohol for profit. The burden is upon them to ensure that they do not sell alcohol to young people and counsel emphasises that what is to be considered is not merely due diligence but all due diligence. The steps which the appellant submitted to the Magistrates should have been taken but which were not taken seem to echo those which are referred to in the case of Davies v Carmarthenshire County Council [2005] EWHC 464 Admin. However, in that case the court was not identifying steps which must be taken in order to satisfy due diligence, it was enumerating matters which the Justices had in that case failed to take into account in considering the defence in that particular case. Moreover, the Davies case is concerned with a multi-branch supermarket style retailer whereas this case involves a small corner shop. I am conscious that each case must be fact and circumstance specific in an evaluation of whether the defendant has discharged the burden of proving the defence under section 169A(3) on the balance of probabilities.[10]In this context, I am assisted by some observations of Lord Diplock in Tesco Supermarkets v Nattrass [1972] AC 153. Firstly, at page 197 G to H, he said:
"What amounts to the taking of all reasonable precautions and the exercise of all due diligence by a principal in order to satisfy the requirements of paragraph (b) of section 24(1) of the Act [I interpolate, Trade Descriptions Act 1968 whose provisions are identical for our purposes to those of the Licensing Act] depends upon all the circumstances of the business carried on by the principal. It is a question of fact for the Magistrates in summary proceedings or for the jury in proceedings on indictment."
There is further a passage at page 203 C to F which I have found of assistance:
"Where Parliament in creating an offence of 'strict liability' has also provided that it shall be a defence if the person upon whom the duty is imposed proves that he exercised all due diligence to avoid a breach of the duty, the clear intention of Parliament is to mitigate the injustice, which may be involved in an offence of strict liability, of subjecting to punishment a careful and conscientious person who is in no way morally to blame. To exercise due diligence to prevent something being done is to take all reasonable steps to prevent it. It may be a reasonable step for an employer to instruct a superior servant to supervise the activities of inferior servants whose physical acts may in the absence of supervision result in that being done which it is sought to prevent. This is not to delegate the employer's duty to exercise all due diligence; it is to perform it. To treat the duty of an employer to exercise due diligence as unperformed unless due diligence was also exercised by all his servants to whom he had reasonably given all proper instructions and upon whom he could reasonably rely to carry them out, would be to render the defence of due diligence nugatory and so thwart the clear intention of Parliament in providing it."
[11]This has not been an easy case to resolve. One matter which has troubled me has been the presence of the appellant's brother who was the owner and the manager of the business.

(e) of the case recites:

"Also behind the counter are with him [that is Mr Mehdipour] when he served the alcohol was the respondent's brother, who was the manager of the shop on the day. The Licensee of the premises was the respondent, who was not on the premises at that time."
The argument is made that the failure by the respondent's brother to intervene in the transaction involving the sale of alcohol to someone who was clearly under age is the clearest indication that the respondent had not properly instilled the necessary instructions in those working in the shop.[12]However, counsel for the respondent points outs to us that the facts found by the Justices which we have recited makes no finding that the brother manager was aware of the transaction or was supervising it in any way, or was conscious of the presence of a 15 year old buying alcohol. It is right to say that the manager brother was not interviewed by the Trading Standards authorities and we think that there is force in the point that there is insufficient evidence to show that the manager brother was in any way involved in, or conscious of, the transaction which was taking place. All that the Justices' finding amounts to is that the manager brother was in physical proximity to Mr Mehdipour at the time the sale took place. The evidence does not show that he was aware of what was happening or that he had observed the 15 year old during the course of purchase. Had there been evidence to that effect, then reliance on this particular aspect of the matter by the appellant would have been considerably stronger.[13]In those circumstances, and noting also that the presence of the manager brother does not feature in the list of matters which the Justices understood the appellant was submitting was indicative of a failure to act with all due diligence, I am not persuaded that that particular point about the manager brother is one which assists the appellant in this case. In particular, I do not consider that it is something which can, on the findings made by the Justices, negate the defence of due diligence advanced by the respondent.[14]In addition, I note that the Justices correctly directed themselves as to the test to be applied and as to where the burden of proof lay. A highly significant finding made by the Justices is to be found at paragraph 6 of the case where the Justices say this:
"We were of the opinion that a small corner shop could not reasonably be expected to have in place all the systems that, for example, a supermarket would have in place."
Plainly in that particular finding the Justices had in mind the criticisms as to systems which were made by the appellant in the court below. The Justices were plainly having regard to the question of whether matters such as the absence of a refusals book were indicative in this case of a failure to take all due diligence.[15]Their opinion was, in my judgment, a view which was consistent with the need to look at the individual circumstances of the case before them and was a view which the Justices were entitled to form. With some hesitation, I have come to the conclusion that the Justices' decision, whilst not one that every court would necessarily have come to, was one to which they were entitled to come in the particular circumstances of this case. This decision is not to be taken as one which gives a licence to small corner shops, for example, not to have a refusals book. There may well be other circumstances and other cases where a court could legitimately find that the keeping of such a record is a step which should be taken. It occurs to me, for example, that if there had been evidence before the court of advice or warning by a Trading Standards Officer of the desirability of keeping such a book, the case might well have been different. Or if indeed there had been evidence that the keeping of such a record in corner shops in Cambridge was common practice, again the Justices might have taken a different view of the case. However, such evidence was lacking in this particular case and I do not therefore feel that the findings which the Justices made can be criticised as having been in error.[16]Accordingly, this appeal must be refused and the question posed by the justices will be answered in the affirmative.

LORD JUSTICE WALLER: I agree.

[18]MR HOFFMAN: My Lord, there is only one application and that is for costs of today on behalf of the respondent out of Central Funds.

LORD JUSTICE WALLER: Central Funds?

[20]MR HOFFMAN: Yes.

LORD JUSTICE WALLER: You should have that. Thank you both.

Cited in 1 later judgment