Leicester Gaming Club Ltd, R (on the application of) v The Gambling Commission [2007] EWHC 531 (Admin)

[2007] EWHC 531 (Admin)

Case No CO/247/2007

IN THE HIGH COURT OF JUSTICE

QUEEN’S BENCH DIVISION

ADMINISTRATIVE COURT

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Date 23/03/2007

Before

THE HONOURABLE MR JUSTICE WYN WILLIAMS

Between

THE QUEEN on the application ofClaimant

LEICESTER GAMING CLUB LIMITEDClaimant

THE GAMBLING COMMISSIONDefendant

Mr Michael Fordham QC and Ms Jessica Simor

(instructed by Messrs Walker Morris Solicitors) for Claimant

Mr Christopher Moger QC

(instructed by Messrs Gregory Rowcliffe Milners Solicitors) for Defendant

Mr Philip Kolvin for “Interested Parties”

Hearing Hearing dates: 21 st February 2007

Judgment

[1]In these proceedings the Claimant seeks judicial review of a decision by the Defendant to refuse to amend a Certificate granted by the Defendant to the Claimant under provisions of the Gaming Act 1968. In the alternative, the Claimant seeks judicial review of the Defendant’s decision to refuse to issue a further certificate under that Act. On the 15th January 2007, Ouseley J considered whether permission to bring these proceedings should be granted. He ordered that the issue of permission should be considered at an oral hearing and that the substantive hearing should follow immediately if permission was granted.

[2]At the outset of the hearing before me and at the invitation of Mr. Fordham QC, Leading Counsel for the Claimant, I granted permission. That was not strenuously opposed, if opposed at all, by those who appeared to oppose the substantive application. Also at the commencement of the hearing Patmore Limited and Stanley Casinos Limited applied to be joined as interested parties. Mr. Fordham QC disputed that those companies were properly to be regarded as interested parties as defined in CPR 54.1. He did, however, concede that I should hear their representations pursuant to CPR 54.17. Thereafter their Counsel participated fully in the hearing. It will be necessary to say something more about their status at the end of this judgment. Factual and Legal Background

[3]The Claimant, Leicester Gaming Club Limited, is a wholly owned subsidiary of BIL Gaming Limited. BIL Gaming Ltd is a sister company of the Thistle Hotel Group and it is in the process of making applications for casino licences across the United Kingdom. Many of the casinos will be located in Thistle Hotels if appropriate licences are granted.

[4]The Defendant was established by Section 20 of the Gambling Act 2005. That Act came into force on the 1st October 2005. By virtue of Section 21(2) of the Act the Defendant took over the “functions rights and liabilities” of the Gaming Board under the Gaming Act 1968.

[5]At least at the time relevant to these proceedings, applications for casino licences were governed by the Gaming Act 1968. That Act conferred functions upon two separate bodies. One set of functions was conferred originally upon the Defendant’s predecessor, the Gaming Board, and then the Defendant as its successor. Other functions were conferred upon “the licensing authority” for the relevant area. The licensing authority was drawn from the local magistracy.

[6]Under the 1968 Act, it is a licensing authority which decides whether or not to grant a casino licence. However, before an application for such a licence can be made, the Gaming Act 1968 requires that a “certificate of consent” to such an application must be obtained from the Defendant.

[7]The statutory provisions dealing with the certificate of consent are to be found in Schedule 2 of the 1968 Act. Paragraph 3 of that Schedule reads as follows:

“3(1). An application for the grant of a licence under this Act in respect of any premises shall be of no effect unless – (a) the Board have issued to the applicant a certificate consenting to his applying for such a licence in respect of those premises, and that certificate is for the time being in force and the application is made within the period specified in the certificate, and (b) where a certificate is limited to a bingo club licence, the application is for the grant of a bingo club licence in respectof those premises. (2) In the following provisions of the Schedule any reference to an application for grant of a licence under this Act shall be construed as not including any application which by virtue of the preceding sub-paragraph is of no effect.”

Paragraph 4 of the Schedule governs applications for certificates of consent. It provides:

“4(1). The provisions of this paragraph shall have effect with respect to any application for a certificate of consent (in this paragraph refer to as a “consent application”) for the purposes of an application for the grant of a licence under this Act (in this paragraph referred to, in relation to a consent application, as “the relevant licence application”). (2). Any consent application should be made to the Board by the person proposing to make the relevant licence application, and shall (a) specify the premises in respect of which the relevant licence application is proposed to be made, and (b) state whether the relevant licence application will be for the grant of a bingo licence or for a licence under this Actother that a bingo club licence. (3) …….. (4). The Board shall not issue a certificate on a consent application if it appears to the Board that the applicant – (a) not being a body corporate, is under 21 years of age, or (b) not being a body corporate, is not resident in Great Britain or is not so resident throughout the period of 6 months immediately preceding the date on which the application was made, (c) being a body corporate, is not incorporated in Great Britain. (5) Subject to sub-paragraph (4) of this paragraph, in determining whether to issue to an applicant a certificate consenting to his applying for the grant of a licence under this Act in respect of any premises, the Board shall have regard only to the question whether, in their opinion, the applicant is likely to be capable of, and diligent in, securing that the provisions of this Act and of any regulations made under it will be complied with, that gaming on those premises will be fairly and properly conducted, and that the premises will be conducted without disorder or disturbance. (6) For the purpose of sub-paragraph (5) of this paragraph the Boardshall in particular take into consideration the character, reputation and financial standing – (a) of the applicant, and (b) of any person (other than the applicant) by whom, if a licence were granted on the relevant licence application [in respect of any club, that club] would be managed, or for whose benefit, if a licence were so granted, that club would be carried on. but may also take into consideration any other circumstances appearing to them to be relevant in determining whether the applicant is likely to be capable of, and diligent in, securing the matters mentioned in that sub-paragraph.”

[8]Paragraph 4(7) of the Schedule is at the heart of these proceedings. It provides: “(7) If on a consent application made to the Board in respect of any premises the Board issue to the applicant a certificate consenting to his applying for a grant of a licence under this Act in respect of those premises, the certificate shall –(a) specify the applicant and those premises;

(b) specify a period within which the relevant licence application can be made;

[9]The Claimant applied to the Defendant for a certificate of consent on the 24th of April 2006. On the 14th September 2006 the Defendant issued a Certificate. The Certificate of Consent is included in the Trial Bundle at page 94(a). It recites that the Defendant consents to an application being made for a licence by the Claimant in respect of premises which are identified within the certificate and it then specifies :

“This certificate is valid only in respect of an application for a licence made by 26th October 2006.”

[10]The next session of the relevant Justices Licensing Committee following the issue of the Certificate was fixed for the 5th of October 2006. It was not possible for the Claimant to apply to the Justices at that session and give the requisite period of notice. Accordingly, the first possible hearing date for an application was the 4th January 2007.

[11]Due to an error in the office of the Applicant’s solicitor the application for the licence was not made to the Licensing Committee by the 26th of October 2006. That error was discovered on the 3rd of November 2006. The Claimant’s solicitors immediately contacted the Defendant and asked them to extend the period specified in the Certificate of Consent for the making of an application for a licence.

[12]The Defendant’s stance was that it had no power to amend the certificate or revoke and re-issue the certificate. Accordingly these proceedings were issued. Discussion

[13]It is common ground that there is no express provision within Schedule 2 of the 1968 Act which permits the Defendant to extend the time specified in a certificate of consent for the making of an application for a licence. It is also common ground that the absence of such an express provision is not necessarily fatal to the existence of such a power. That is because the Claimant and Defendant (and for that matter the “Interested Parties”) acknowledge that the Defendant may be the recipient of an implied power.

[14]The parties also agree upon the test which this court should apply in deciding whether or not an implied power exists and, if it does, the extent of such a power. The question for the court is whether the alleged implied power may properly and reasonably be regarded as incidental to the relevant express power. If it can a power should be implied; if it cannot it should not. That test is very well established and it derives from the decision of the House of Lords in A-G The Great Eastern Railway Company

(1880) 5App Cas 473

[15]It is also worthy of note that the Defendant has not alleged that it has no implied power which is incidental to the express power conferred upon it under paragraphs (5) or (7) of the Schedule. It accepts that it has power to amend and re-issue a certificate which alters information contained on the face of the certificate if that is necessary to reflect an internal error made within the Defendant. An example given to illustrate the extent of the implied power is where the Defendant issues a certificate which, by reason of its own internal mistake, fails to describe accurately the premises to which the certificate is intended to relate.

[16]It seems to me, therefore, that I have to grapple with the extent of the implied power or powers which are incidental to the express powers contained within Schedule 2 of the 1968 Act. The Claimant’s case, as presented before me, is that there is an implied power to amend the time period specified in a certificate for the making of an application for a licence provided good reason is provided to support such an amendment. As a matter of mechanics such an amendment would be achieved by the issue of a second certificate. In substance, however, what would be occurring would be the amendment of a certificate already issued. The case for the Defendant is that it doubts the existence of such a wide implied power but accepts the existence of a limited power to correct its own mistakes. The “Third Parties” positively assert that the implied power for which the Claimant contends does not exist.

[17]Before dealing with the substance of the arguments I should mention one thing at the outset. There is nothing within Schedule 2 to the 1968 Act to prevent an applicant for a certificate of consent from making a number of applications. However by reason of the Gambling Act 2005 (Transitional Provisions) Order 2006 the Defendant is precluded from issuing a certificate of consent in relation to any application made after the 29th of April 2006. It follows that it is not now open to the Claimant to make a new application for a certificate.

[18]The Gambling Act 2005 (Transitional Provisions) Order 2006 can have no bearing upon the proper construction of Schedule 2 to the 1968 Act. Nonetheless, it is important that this court should not find an implied power to exist merely to avoid the provisions of the 2006 Order in factual circumstances where the avoidance of the provisions of the Order may seem meritorious. I make that point since it is agreed between the Claimant and Defendant that if the Defendant has the power to amend the certificate in the way envisaged by the Claimant it would wish to exercise that power in this case.

[19]The power given to the Defendant to issue a certificate of consent derives from paragraph 4 sub-paragraphs (2), (4), (5) and (6) of Schedule 2 to the 1968 Act. Sub-paragraphs 4(4) (a) and (b) prevent the issue of a certificate to certain categories of persons. Sub-paragraph 4(4) (c) prevents the issue of a certificate to a category of companies. As is obvious, therefore, paragraph 4(4) prescribes the categories of legal persons to whom or to which certificates can be issued.

[20]Paragraph 4(5) of Schedule 2 requires the Defendant to have regard to specific criteria when issuing a certificate. Paragraph (4)6 provides clear guidance to the Defendant as to how the criteria specified in sub-paragraph 5 are to be assessed. These paragraphs have the effect of limiting the Defendant’s discretion in relation to the issue of certificates.

[21]Paragraph 4(7) comes into play only after the Defendant has determined to issue a certificate of consent. Sub-paragraph 7(a) requires the Defendant to identify the applicant and the premises to which the certificate relates. Sub-paragraph (b) requires the Defendant to specify the period within which an application for a licence can be made. In relation to this sub-paragraph Parliament has provided no guidance to the Defendant about how it should exercise its discretion and no limitation upon the discretion of the Defendant in fixing an appropriate time period. Given that in sub-paragraphs 4 (4), (5) and (6) Parliament has decided to limit the discretion of the Defendant it must be the case, in my judgment, that in sub-paragraph 4(7) (b) Parliament has deliberately chosen to confer upon the Defendant a broad discretion. In my judgment that is consistent with the existence of an implied power to change the time period within which a licence application can be made. I can think of no sensible reason why Parliament has chosen to permit the Defendant to specify a time period of its choice in which an application can be made but yet it has also intended that the Defendant should have no power to alter that time period in circumstances in which it considers that step to be appropriate.

[22]Paragraph 3 of Schedule 2 provides, in terms, that an application for a grant of licence shall be “of no effect” unless – “the Board have issued to the applicant a certificate consenting to his applying for such a licence in respect of those premises, and that certificate is for the time being in force and the application is made within the period specified in the certificate,…..” Paragraph 3(1)(a) During the course of the hearing before me, there was a fierce debate about the phraseology of that paragraph. In particular there was a debate about whether the requirement that at the time of the application for a licence the “certificate is for the time being in force and the application is made within the period specified in the certificate” pointed towards or away from the existence of the implied power for which the Claimant contends.

[23]In my judgment paragraph 3(1) (a) contains two separate requirements which have to be satisfied before there is an effective application. The first is that the certificate is in force at the time of the application. The second is that the application is made within the period specified in the certificate. In my judgment, its language is consistent only with the conclusion that a certificate can be in force and yet the time specified in the certificate for the making of an application has expired. In my judgment the words “the application is made within the period specified in the certificate” would be wholly unnecessary if the effect of the period specified in the certificate for making an application expiring was that the certificate ceased to be in force.

[24]This point is of importance since its bears directly upon one of the central reasons why the Defendant submitted that the suggested implied power did not exist. In effect the Defendant submitted that once it had determined the application for a certificate of consent it had no further powers in relation to the application. Defendant’s Skeleton Argument Paragraph 16

[25]In my judgment it is very difficult to reconcile that proposition with the fact that a certificate may remain “in force” notwithstanding the expiry of the period specified to make an application for a licence and where the Defendant retains an expressed power to revoke a certificate of consent – see paragraph 35 Schedule 2 of the 1968 Act.

[26]Once it is acknowledged that a certificate of consent may be in force, yet the time specified within it for the making of an application for a licence has expired it seems to me to add further weight to the argument for the implication of the power for which the Claimant contends. Put shortly, if the certificate remains in force, what is the objection to changing the time within which an application for a licence can be made?

[27]In their Skeleton Arguments Mr Fordham QC and Ms Simor advanced five reasons why the implied power should exist. The first reason related to the broad discretion conferred upon the Defendant to fix the appropriate time period for an application for a licence. I have dealt with that point above. The second reason they advanced was that the specifying of a time frame is facilitatory. It permits the Defendant to make an application within a time scale. I ask myself, rhetorically, what good reason exists for concluding that the chosen time scale should be the only possible time scale whatever circumstances may arise? The answer to that rhetorical question, in my judgment, is that there is no such good reason.

[28]The third reason raised by the Claimant relates to the suggestion, again discussed above, that the Defendant somehow becomes “functus officio” once it has determined to issue an application. I agree with the Claimant that the Defendant’s function does not cease upon the issue of a certificate or upon the expiry of the time period specified for the making of an application for a licence. In my judgment its function ceases only when the certificate is no longer in force at all.

[29]The fourth reason why the Claimant submits the implied power exists is because it promotes reasonableness and fairness whereas the absence of such an implied power can produce effects which are unreasonable, unfair and work injustice. It is submitted that there is an established principle of construction that a statute should be interpreted as promoting and reflecting reasonableness and fairness. That was not a controversial proposition in the hearing before me. It is self evident that the existence of the alleged implied power would promote reasonableness and fairness whereas the absence of such a power would promote rigidity and might result in consequences which are unwanted.

[30]The final reason set out in the skeleton which, it is said, supports the existence of the implied power also relates to paragraph 3 of Schedule 2 of the 1968 Act. Counsels submit that since the Licensing Authority has no power to extend the time in which an application for licence can be made beyond that which is specified in the certificate of consent it makes sense for the Defendant to have power to change that time frame. With respect to Mr Fordham QC and Ms Simor it does not seem to me that this reason adds anything to those which I have identified previously. The issue for determination is whether the Defendant is to be clothed with an implied power which is incidental to its express powers. It does not seem to me to be correct to clothe it with an implied power simply because a licensing authority has neither an express nor an implied power to change the time for the making of an application for a licence as set out in the certificate of consent.

[31]In my judgment, with the exception of the point discussed in the preceding paragraph, the Claimant has advanced cogent reasons why the suggested implied power exists.

[32]The principal riposte of Mr Moger QC. Leading Counsel for the Defendant, is that the existence of such an implied power would, in reality, mean that the Defendant had a power to issue a “fresh” certificate. Such a power, he submits, was wholly unnecessary when the 1968 Act came into force for the obvious reason that the Act contained no bar to the making of successive applications for a certificate. The power conferred upon the Defendant by the 1968 Act is the power to issue a certificate and it cannot be said that a power to extend the time specified by the certificate for the making of a licensing application is incidental to the power to issue.

[33]It may be that in a sense the implied power is “unnecessary” in that in the absence of the 2006 Order successive applications could be made. However, it is difficult to see why there should be in place a regime which demanded the making of a further application (with the consequent need to consider it anew) when all that is sought is a change to one part of a certificate which has been issued. In my judgment, there is nothing obviously wrong about conferring upon a body such as the Defendant the power to alter that which it has previously determined to do.

[34]I accept, of course, that paragraph 4 confers upon the Defendant a power to issue the certificate. In my judgment, however, it confers upon the Defendant an additional power to specify a particular time period for the doing of a particular act. Whether that power is viewed as a distinct and separate power or one that is inextricably bound with the power to issue is, in my judgment, of academic interest alone. The plain fact is that the Defendant is empowered to fix a time period. Indeed it has a duty to exercise that power since, on any fair reading of paragraph 4(7), the requirement of fixing a time period is mandatory. In my judgment, therefore, the issue for consideration is whether the alleged implied power is incidental to the express power of fixing a time period.

[35]For the reasons set out above it seems to me that such an implied power exists.

[36]Once the conclusion is reached that the alleged implied power is incidental to an express power to specify a time period the stance of the Defendant and the “Interested Parties” becomes very difficult to sustain. At the forefront of Mr Kolvin’s submissions was the proposition that there was no express power to which the alleged implied power was incidental. See paragraphs 33 and 34 Although Mr Moger QC did not put the point in quite the same way he, too, would not accept that the alleged power was incidental to an express power to specify a time limit. As I have found, that is not the correct analysis and, in my judgment, a very important part of the opposition to the existence of the implied power is thereby removed.

[37]Finally, I return to the test which, it is common ground, I should apply in deciding whether the implied power exists. I quote from the Skeleton Argument of Mr Moger QC. “It seems to be common ground that the question for the court is whether the implied power may properly and reasonably be regarded as incidental to the relevant expressed power.” See paragraph 22 In the present context I stress the words “may properly and reasonably be regarded”. I do so since some of the submissions advanced to me, in particular, by Mr Kolvin, came close to suggesting that a more rigorous standard than that which was reasonable should be applied. To repeat, I have to determine whether an implied power to extend a time limit is properly and reasonably to be regarded as incidental to an express power to fix such a limit. The reality is that no good reason has been advanced why such a power should not exist whereas the Claimant has advanced cogent reasons why it should.

[38]I turn finally to a debate about the scope of the alleged implied term. As I have said the Claimant contends that I should find that a power to extend time exists “for good reason.” Mr Moger QC quite rightly points out that that phrase carries with it a degree of imprecision and, to that extent, may provide fertile ground for future debate as between applicants for certificates and the Defendant.

[39]I acknowledge that possibility but I do not think it is a reason why the power should not exist. The Defendant is a hugely experienced body well-equipped to determine whether or not it should exercise the implied power which I have found that it possesses. Its decision about whether to extend time limits will be susceptible to review by this court only upon well established principles of judicial review. It does not seem to me that my decision in this case is likely to stir up “a hornet’s nest” as was hinted at during the course of the oral submissions.

[40]I turn finally to the status of Mr. Kolvin’s clients. I accept that they are not “interested parties” as defined if CPR 54.1(2) (f). I simply do not see how they can be said to be directly affected by the claim. They are trading rivals of the Claimant. However, they cannot be affected directly by the decision under challenge. It may even be open to some doubt whether they are indirectly affected but I need not decide that since to repeat it seems clear that they are not directly affected. I refuse their application to be joined as interested parties although, of course, it was wholly proper that they participated in the proceedings.

[41]If the parties can agree upon a minute of order prior to handing down there need be no representation when this judgment is handed down. If, however, there is to be a debate about the form of the order or any consequential issue I would be grateful if the parties would liaise with my clerk to arrange a suitable date (with appropriate time estimate) for handing down.