Clockfair Ltd v Sandwell Metropolitan Borough Council & Anor [2012] EWHC 1857 (Admin)

[2012] EWHC 1857 (Admin)Case No CO/11687/2011
IN THE HIGH COURT OF JUSTICE
QUEEN’S BENCH DIVISION
ADMINISTRATIVE COURT
Venue Royal Courts of JusticeDate 09/07/2012
Strand. London. WC2A 2LL
Before
THE HONOURABLE MR JUSTICE LLOYD JONES
Between
Clockfair LimitedAppellant(1) Sandwell Metropolitan Borough CouncilRespondents(2) Grosvenor Casinos LimitedRespondent
Mr. Philip Kolvin QC (instructed by William Wright and Son) for AppellantNaomi Gilchrist (instructed by Sandwell MBC) for First RespondentStephen Walsh QC (instructed by Joelson Wilson) for Second RespondentHearing Hearing date: 14 th June 2012
JudgmentThe Hon Mr. Justice Lloyd Jones:
[1]This is a statutory appeal by Clockfair Limited (“the Appellant”) pursuant to section 209, Gambling Act 2005 (“the Act”) against the dismissal by District Judge Graham Wilkinson of the Appellant’s appeal against the decision of the First Respondent made on 12th May 2011:(1) to take no action on the Appellant’s application for a review of the casino premises licence of the Second Respondent at 50, Halesowen Road, Oldbury (“the premises”), whereby the Appellant had sought revocation of the licence;(2) to grant the Second Respondent’s application to vary the premises licence so that it related to land adjacent to the northbound slip road of Junction 2 of the M5 motorway at Birchley Island.[2]The Respondents to the appeal are the licensing authority, Sandwell Metropolitan Borough Council (“the First Respondent”) and Grosvenor Casinos Limited (“the Second Respondent”).[3]An appeal lies to this court on a point of law. The Appellant submits that the District Judge erred in two main respects:(1) in construing the Act as permitting two licences to co-exist in respect of the same premises, when this is contrary to a direct and express prohibition in the Act;(2) in holding that the existence of two licences, contrary to both to the said prohibition and policy of the Act, was immaterial to an express statutory discretion to revoke one of them. At the heart of the Appellant’s case is the proposition that the second licence should not have been issued. The Appellant submits that the Act prohibited its issue because there was already a bingo licence in existence in respect of the premises. Background[4]The Second Respondent has for some 16 years operated a bingo hall known as Mecca Bingo at the premises, first under a bingo gaming licence pursuant to the Gaming Act 1968 and more recently, following the coming into force of the Gambling Act 2005, under a bingo premises licence pursuant to that legislation. In 2004 the Second Respondent applied for a gaming licence so as to permit the premises to be used as a casino. That application was made under the Gaming Act 1968 and was granted by the Warley Justices on 9th June 2005. The casino licence was renewed in 2006 and again in 2007.[5]Upon the transition from the Gaming Act 1968 to the Gambling Act 2005, and the transfer of the gaming jurisdiction from the local justices to local authorities, the Second Respondent applied to the First Respondent to convert the bingo licence and the casino licence into licences under the Gambling Act 2005, pursuant to the Gambling Act 2005 (Commencement No. 6 and Transitional Provisions) Order 2006 (“the Order”). In February 2008 both licences were converted into licences under the 2005 Act. The First Respondent issued first a bingo licence and subsequently a casino licence in respect of the same premises.[6]No challenge was made to the issue of the new licences in respect of the premises. The Second Respondent continued to operate a bingo hall at the premises. At the same time it was in negotiation with the landlords of the premises and the developers of the new site at Birchley Island for the purpose of opening a casino. In November 2010 the Second Respondent submitted a planning application in respect of the Birchley Island site.[7]On 11th November 2010 the Appellant applied to the licensing authority pursuant to section 197 of the 2005 Act to review and revoke the casino premises licence on the following grounds:
“(1) that the licensee has not used the licence since it was first granted on 7th June 2005; and (2) that the continued existence of the licence is legally incompatible with the bingo licence that exists in respect of part of the same premises.”
[8]On 13th December 2010 the Second Respondent applied to the licensing authority to vary the casino premises licence so that it related to the Birchley Island site i.e. effectively transfer it to a different premises. The Appellant opposed the transfer of the licence inter alia on the grounds that it should never have been issued in the first place.[9]On 16th December 2010 the Second Respondent filed written representations in which it stated that the issue of the casino premises licence had been ultra vires and should be considered void ab initio but submitted that the grant (as opposed to the issue) of the licence was not void ab initio. On 7th January 2011 the Appellant filed written representations in relation to the application to transfer in which the Appellant submitted that the issue of the licence had been unlawful. On 27th April 2011 the Second Respondent filed further written representations. It now maintained that the licence had been lawfully issued and retained legal effect in the absence of any timely challenge by way of judicial review.[10]On 3rd May 2011 the First Respondent’s legal advisor, Mr. James Button of James Button & Co., Solicitors, wrote to the parties. He stated that section 152(1)(b) of the Act conferred a discretion as to whether or not to issue a premises licence where another premises licence already existed and that this was over-ridden by an obligation under section 164 to issue a licence. Accordingly he considered that the casino licence was validly issued. On 4th May 2011 the Appellant filed further written submissions taking issue with that advice and maintaining that section 152(1)(b) clearly prohibited the issue of a second premises licence in respect of the same premises. By letter dated 9th May 2011 to the parties Mr. Button repeated that it was his advice that there was a converted casino licence in existence. As a result the licensing panel would not consider any representations concerning the existence of the licence. Accordingly he asked the parties not to make oral representations in relation to the existence of the casino licence. He also considered that the point was not within the jurisdiction of the licensing panel.[11]Two licensing panels met on 12th May 2011 to consider the Appellant’s application for review and the Second Respondent’s application for variation, respectively. The first panel met in the morning to hear the review application. It decided not to reject that application summarily on any of the grounds set out in section 198. It granted the application to review and proceeded to review the licence. On the review it decided to take no action. This left the licence extant and able to be transferred.[12]The second panel, which met in the afternoon, decided to grant the Second Respondent’s variation application to transfer the casino licence to Birchley Island.[13]At the hearing before me Ms. Gilchrist, who appeared on behalf of the First Respondent, informed the court that while the licensing panel had received a report which referred to the submission that concurrent licences could not be issued in respect of the same premises, it had been advised by the legal advisor that no consideration should be given to that issue.[14]The Appellant appealed against these decisions to the Warley Magistrates’ Court where the appeals were heard by District Judge Wilkinson on 24th and 25th October 2011. On behalf of the Appellant it was submitted that the issue of the casino licence was unlawful in that it directly contravened section 152(1)(b) of the Act and that that was a material fact that ought to have been considered by the licensing committee. In dismissing the appeals the District Judge held as follows: “(1) Contrary to the submission of the First Respondent the words “may not” in section 152(1)(b) cannot be construed as meaning “may”. (2) The First Respondent in issuing the casino licence correctly applied the transitional provisions in the Order. In this regard the District Judge concluded that section 152(1)(b) and section 164(1)(b) were irreconcilable. He could not find any support for the view that the transitional guarantees were in any way subservient to the provisions in section 152(1)(b). (3) If the licensing authority were to conclude that the casino licence had been unlawfully issued, they would feel bound to revoke it. Therefore, this was in substance an impermissible collateral challenge. The licensing authority was not required to have regard to these matters and had no option but to proceed on the basis that the licence was correctly granted and issued.[15]The Appellant now appeals to this court. Statutory framework.[16]“Premises licence” is defined by section 150(1):
“(1) A premises licence is a licence which states that it authorises premises to be used for—” (a) the operation of a casino (a “casino premises licence”), (b) the provision of facilities for the playing of bingo (a “bingo premises licence”), (c) ..., (d) ..., or (e) ...” (a) the operation of a casino (a “casino premises licence”), (b) the provision of facilities for the playing of bingo (a “bingo premises licence”), (c) ..., (d) ..., or (e) ...”
[17]A premises licence must specify the premises to which it relates and the activities for which it authorises the premises to be used. (Section 151(1).)[18]Section 152 provides:
“(1) A premises licence — (a) may not authorise the use of premises for activities of more than one of the kinds specified in section 150(a) to (e) (subject to sections 172 to 174 and subsection (2) below), and (b) may not be issued in respect of premises if a premises licence already has effect in relation to the premises (subject to subsection (3)).” (a) may not authorise the use of premises for activities of more than one of the kinds specified in section 150(a) to (e) (subject to sections 172 to 174 and subsection (2) below), and (b) may not be issued in respect of premises if a premises licence already has effect in relation to the premises (subject to subsection (3)).”
[19]In exercising their functions under Part 8 a licensing authority shall aim to permit the use of premises for gambling insofar as the authority thinks it, inter alia, in accordance with any relevant code of practice and any relevant guidance issued by the Gambling Commission under section 25. (Section 153(1)).[20]Section 158 defines an “interested party” in relation to a premises licence or application for or in respect of a premises licence as including a person which in the opinion of the licensing authority has business interests that might be affected by the authorised activities. It was common ground before me that this includes the Appellant.[21]Section 163 provides that on considering an application for a premises licence a licensing authority shall grant it or reject it.[22]Section 164(1) provides in relevant part:
“(1) Where a licensing authority grant an application for a premises licence they shall as soon as is reasonably practicable— (a) give notice of the grant to — (i) the applicant, (ii) the Commission, (b) issue a premises licence to the applicant, and (c) give the applicant a summary of the terms and conditions of the licence in the prescribed form.” (a) give notice of the grant to — (i) the applicant, (ii) the Commission, (b) issue a premises licence to the applicant, and (c) give the applicant a summary of the terms and conditions of the licence in the prescribed form.”
[23]Section 166 provides in relevant part: “(1) A licensing authority may resolve not to issue casino premises licences. (2) In passing a resolution under subsection (1) a licensing authority may have regard to any principle or matter. (3) A resolution under subsection (1)—(a) must apply to the issue of casino premises licences generally,(b) must specify the date on which it takes effect,(c) may be revoked by a further resolution, and(d) shall lapse at the end of the period of three years beginning with the date on which it takes effect (without prejudice to the ability to pass a new resolution). (4) A resolution under subsection (1)— (a) may be passed whether or not the licensing authority has already issued casino premises licences, (b) shall have no effect in relation to a casino premises licence issued before the resolution takes effect, (c) shall have no effect in relation to premises in respect of which a provisional statement relating to the operation of a casino is in force when the resolution takes effect, (d) shall have no effect in relation to anything converted into a casino premises licence by virtue of Schedule 18,(e) shall not affect the issuing of a casino premises licence in accordance with a requirement by virtue of Schedule 18, and(f) may not be taken into account in conducting a review of a casino premises licence under section 201. (5) ... (6) Section 153 is subject to this section. (a) must apply to the issue of casino premises licences generally, (b) must specify the date on which it takes effect, (c) may be revoked by a further resolution, and (d) shall lapse at the end of the period of three years beginning with the date on which it takes effect (without prejudice to the ability to pass a new resolution). (a) may be passed whether or not the licensing authority has already issued casino premises licences, (b) shall have no effect in relation to a casino premises licence issued before the resolution takes effect, (c) shall have no effect in relation to premises in respect of which a provisional statement relating to the operation of a casino is in force when the resolution takes effect, (d) shall have no effect in relation to anything converted into a casino premises licence by virtue of Schedule 18, (e) shall not affect the issuing of a casino premises licence in accordance with a requirement by virtue of Schedule 18, and (f) may not be taken into account in conducting a review of a casino premises licence under section 201.[24]The conversion of licences into licences under the 2005 Act is provided for by the Order which is made pursuant to Schedule 18 of the Act. Paragraph 54 provides in relevant part:
“(2) An application to which this paragraph applies is referred to in this Part as a conversion application. (3) Part 8 of the 2005 Act is to have effect in relation to the making and determination of a conversion application subject to the following provisions of this Part. (4) Subject to paragraphs 55(2) and (3), 58(1), 59(4) and (5) and 60(2), the licensing authority must grant the application.”
[25]Paragraph 65(3) provides that Part 8 of the Act is to have effect subject to the modifications specified in the following provisions of paragraph 65 which include that in subparagraph (12):
“(12) The licence holder may apply under section 187 to vary a converted casino premises licence so that it relates to premises which are different from those to which it previously related, and subsection (2) of that section (which prohibits a premises licence from being varied so as to relate to premises to which it did not previously relate) is accordingly not to have effect in relation to a converted casino premises licence.”
[26]Section 197 provides that a responsible authority or interested party may apply to the licensing authority for a review by the authority of a premises licence.[27]Section 198 establishes a procedure by which an application may be summarily rejected.[28]Section 198 provides: “(1) A licensing authority may reject an application under section 197 for the review of a premises licence if they think that the grounds on which the review is sought—(a) do not raise an issue relevant to the principles to be applied in accordance with section 153,(b) are frivolous,(c) are vexatious,(d) will certainly not cause the authority to wish to take action of a kind specified in section 202(1),(e) are substantially the same as the grounds specified in an earlier application under section 197 in respect of the premises licence, or(f) are substantially the same as representations made under section 161 in relation to the application for the premises licence. (2) In determining whether to exercise the power to reject an application under section 197 in accordance with subsection (e) or (f), a licensing authority shall consider the length of time that has elapsed since the making of the earlier application or since the making of the representations under section 161. (3) If a licensing authority consider that paragraphs (a) to (f) apply to some but not all of the grounds on which a review is sought, they may reject the application in so far as it relies on grounds to which those paragraphs apply. (4) In this section a reference to section 161 includes a reference to that section as applied by section 187(3).” (a) do not raise an issue relevant to the principles to be applied in accordance with section 153, (b) are frivolous, (c) are vexatious, (d) will certainly not cause the authority to wish to take action of a kind specified in section 202(1), (e) are substantially the same as the grounds specified in an earlier application under section 197 in respect of the premises licence, or (f) are substantially the same as representations made under section 161 in relation to the application for the premises licence.[29]If or insofar as the licensing authority do not reject the application under section 198 they are required to grant it. (Section 199(2)).[30]Section 201 governs the review. Section 201(5) provides:
“(5) In considering whether to take action of a kind specified in section 202(1) the licensing authority shall have regard (in addition to the matters specified in section 153) to— (a) any representations made in accordance with section 197(6) or 200(5), (b) any representations made at the hearing of the review (if there is one), and (c) in the case of a review held in response to an application under section 197, the grounds specified in the application for the review (apart from any in relation to which the application was rejected under section 198(3)).” (a) any representations made in accordance with section 197(6) or 200(5), (b) any representations made at the hearing of the review (if there is one), and (c) in the case of a review held in response to an application under section 197, the grounds specified in the application for the review (apart from any in relation to which the application was rejected under section 198(3)).”
[31]The powers of a licensing authority on a review are set out in section 202: “(1) As a result of a review of a premises licence under section 201 a licensing authority may—(a) revoke the licence;(b) suspend the licence for a specified period not exceeding three months;(c) exclude a condition attached to the licence under section 168 or remove or amend an exclusion;(d) add, remove or amend a condition under section 169. (2) If the licensing authority decide to take action of a kind specified in subsection (1) they shall specify the time at which the action shall take effect. (3) A licensing authority may, in particular, take action under subsection (1) on the grounds that the licensee has not used the licence.” (a) revoke the licence; (b) suspend the licence for a specified period not exceeding three months; (c) exclude a condition attached to the licence under section 168 or remove or amend an exclusion; (d) add, remove or amend a condition under section 169. The issues on this appeal.[32]Two principal issues arise for consideration on this appeal. First, does section 152(1)(b) of the Act prohibit the issue of a licence in respect of premises where a premises licence already has effect in relation to the premises in the case of converted licences? Secondly, if so, was this a relevant matter which should have been taken into consideration by the First Respondent authority on the application for review? Issue 1: Does section 152(1)(b) of the Act prohibit the issue of a licence in respect of premises where a premises licence already has effect in relation to the premises in the case of converted licences? Does section 152(1)(b) impose a prohibition?[33]Mr. Button, the legal advisor to the licensing panel, advised the panel that the effect of the words “may not be issued” in section 152(1)(b) was not to impose a prohibition and that in those circumstances the licensing authority had a discretion as to whether or not to issue a licence. On the appeal to the magistrates’ court Mr. Button submitted on behalf of the First Respondent that the words “may not” in section 152(1)(b) should be construed as “may” and that therefore the conversion, grant and issue of a second licence was entirely lawful. That submission was rejected by the District Judge and the Respondents before me both accept that the District Judge was right to reject it. That concession was correctly made. The words used are clearly prohibitive and prevent the issue of more than one licence in respect of the same premises, subject to the statutory exceptions. The relationship of section 152(1)(b) and section 164(1)(b).[34]It was common ground before me that under the Gaming Act 1968, while it was possible to hold concurrently more than one licence in respect of the same premises, the operation of more than one licence concurrently in respect of the same premises was prohibited.[35]It is convenient to consider the relationship of section 152(1)(b) and section 164(1)(b) of the 2005 Act in cases not involving the conversion of licences before turning to consider their application to converted licences. The scheme of Part 8 distinguishes between the grant and the issue of a licence. Section 159 provides that a person may apply to a licensing authority for a premises licence to be issued to him authorising the use of premises to carry on a specified activity. Section 163 provides that on considering an application for a premises licence the licensing authority shall grant it or reject it. Section 164(1) imposes certain obligations on the licensing authority where it has granted an application for a licence. These include the obligation under section 164(1)(b) to issue a licence to the applicant as soon as reasonably practicable. However, I consider that this general obligation under section 164(1)(b) has to be read subject to section 152(1)(b) which prohibits the issue of a licence in respect of premises if a premises licence already has effect in relation to those premises, subject to certain stated exceptions which have no application to the present case. Section 152(1)(b) addresses a specific situation and creates an exception to the general obligation in section 164(1)(b).[36]The question then arises as to how Part 8 operates in a case of converted licences. The Respondents submit that section 152(1)(b) does not prohibit the issue of a second licence where the second licence is granted under the provisions governing conversion. In particular it is said that this reading is necessary to give effect to assurances given by the Department for Culture, Media and Sport that those holding a premises-based permission under the previous legislation would be guaranteed the equivalent premises licence under the new legislation.[37]Paragraph 54 of the Order makes provision for the conversion of existing licences to premises licences in cases of advance application. Paragraph 54(3) provides that Part 8 of the 2005 Act is to have effect in relation to the making and termination of a conversion application subject to the provisions of that Part of the Order. Paragraph 54(4) provides that subject to certain provisions, the licensing authority must grant the application. It was common ground before me that the Order is concerned with the grant of a licence but that the issue of a licence is left to be dealt with by Part 8 of the Act.[38]The Respondents are correct in their submission that the Order modifies the application of Part 8 in certain respects in the case of converted licences. Thus, for example, paragraph 65(12) of the Order provides that a licence holder may apply under section 187 to vary a converted casino premises licence so that it relates to premises which are different from those to which it previously related. In this way the prohibition in section 187(2) is disapplied in the case of converted licences. Furthermore, the Respondents point to section 166(4)(d) of the Act which provides that section 166(1) (which empowers a licensing authority to resolve not to issue casino licences) shall have no effect in relation to anything converted into a casino premises licence by virtue of Schedule 18 (the Schedule under which the Order was made). Similarly section 166(4)(e) provides that such a resolution should not affect the issuing of a casino premises licence in accordance with a requirement by virtue of schedule 18. The Respondents submit that these and similar provisions demonstrate that converted licences are to be treated differently and that existing rights are to be preserved. Similarly, they submit, the prohibition in section 152(1)(b) must be disapplied in the case of converted licences in order to preserve rights in pre-existing licences. The difficulty with this submission, to my mind, is that in each instance in which different treatment is accorded to converted licences under the statutory scheme, this is achieved by express provision either in Part 8 of the statute or in the Order. By contrast, there is no provision modifying the application of section 152(1)(b) in the case of converted licences. If this had been the intention a provision corresponding to section 166(4)(d) or (e) could have achieved that result. I attach particular weight to the absence of such a provision. This leads me to conclude that the prohibition in section 152(1)(b) was intended to apply in the same way in the case of converted licences. The relationship between section 152(1)(b) and section 164(1)(b) must be constant in all cases to which those provisions apply, subject to any statutory modification. Here there is none.[39]The Respondents rely on guidance published by the Department for Culture, Media and Sport in relation to the transitional provisions of the Gambling Act 2005. It states that it is intended to be “a user friendly guide to the transitional arrangements for the implementation of the Gambling Act 2005”. It includes the following passages:
“4.9 Will I qualify for grandfather rights? The Government has guaranteed that the premises aspects of current permissions will be grandfathered. This means that if you hold a premises-based permission under the existing law (for a casino, betting shop, bingo hall or arcade), you will be guaranteed the equivalent premises licence under the new Act...” “Will I qualify for grandfather rights? Yes. If you are an existing operator and you apply for your premises licence before 1 September 2007, you will be guaranteed a premises licence (except in the circumstances described in the next question). You will be issued with a converted premises licence which will mean that: (i) The casino will not be subject to the minimum size requirements which will otherwise apply under the 2005 Act; (ii) The converted casino premises licence will not count towards the limit specified in section 175 of the Act (the so- called 1-8-8 formula); (iii) The gaming machine entitlement under the 2005 Act will be modified so that it authorises the casino to make available 20 category B gaming machines, or an unlimited number of category C or D gaming machines - in line with the entitlements of casinos under the 1968 Act. 4.13 Are there any circumstances in which the licensing authority can refuse my application? The licensing authority could only refuse your application for a premises licence if: • You have failed to submit any information that the licensing authority needs to process your application; or, • It is obvious to the licensing authority from the plan of your premises that you will be unable to comply with any condition attached to the category of premises licence for which you are applying...” (i) The casino will not be subject to the minimum size requirements which will otherwise apply under the 2005 Act; (ii) The converted casino premises licence will not count towards the limit specified in section 175 of the Act (the so- called 1-8-8 formula); (iii) The gaming machine entitlement under the 2005 Act will be modified so that it authorises the casino to make available 20 category B gaming machines, or an unlimited number of category C or D gaming machines - in line with the entitlements of casinos under the 1968 Act. • You have failed to submit any information that the licensing authority needs to process your application; or, • It is obvious to the licensing authority from the plan of your premises that you will be unable to comply with any condition attached to the category of premises licence for which you are applying...”
[40]To my mind this guidance does not address the situation in which a licence holder held concurrent licences in respect of the same premises under the old legislation. This is, perhaps, not surprising given that while it was possible under the 1968 Act to hold concurrent licences it was not possible to operate concurrent licences in respect of the same premises. The guidance simply addresses the straightforward situation in which a single licence in respect of any given premises is to be converted. It provides no support for the Respondents’ contention.[41]In any event, I am doubtful as to the extent to which such non-statutory guidance can assist in the interpretation of the statutory provisions applicable in this case. (R (4 Wins Leisure Limited) v The Licensing Committee for Blackpool Council) [2007] EWHC 2213 (Admin) at para. 15; R (Betting Shop Services Limited) v Southend-on- Sea Borough Council[2007] EWHC 105 (Admin) at para. 26; R (TC Projects Limited) v Newcastle Licensing Justices[2008] EWCA Civ. 428 at para. 51).[42]I am not persuaded by the Second Respondent’s submissions that absurd results could follow from the reading for which the Appellant contends. In circumstances where a person has previously held concurrent licences it may be possible, if the requirements of the legislation are otherwise met, for a second converted licence to be issued under the Act if the first converted licence ceases to have effect in relation to the premises. However it is the clear policy of the Act that premises should not be subject to more than one licence at a time and the provision by which that is achieved is section 152(1)(b).[43]This policy is apparent not only from the scheme of the statute but also from the Explanatory Notes of the Gambling Act 2005 to which I consider I am entitled to have regard for this purpose. (See, generally, R (Westminster City Council) v National Asylum Service[2002] 1 WLR 2956 per Lord Steyn at paragraphs 2-6). Paragraph 413 of the Explanatory Notes states:
“413. The general position for premises licensing is the premises may only be subject to one premises licence at a time. Subsection (1) provides for this. The effect of this requirement is to limit the principal activity on the premises to the provision of facilities for a particular type of gambling activity. Similarly the Guidance to Licensing Authorities published by the Gambling Commission, to which a local authority is required to have regard by virtue of section 25(2) states: “7.6 ...the Act does not permit premises to be licensed for more than one of the above activities...” 7.12 ...section 152 therefore prevents more than one premises licence applying to any place.”
[44]It is this policy which is given effect by the prohibition on the issue of licences in section 152(1)(b) (and notably not by a prohibition on the grant of licences). I consider therefore that my conclusion is consistent with the policy of the legislation.[45]For these reasons I conclude that the First Respondent should not have issued a second concurrent licence in relation to the premises. Issue 2: Was the issue of a second licence in respect of the premises in contravention of ection 152(1)(b) a relevant matter which should have been taken into consideration by the licensing authority on the application for review?[46]The statutory provisions governing an application for review are set out in sections 197 and following, within Part 8 of the Act.(1) A responsible authority or an interested party may apply to the licensing authority for a review by the authority of a premises licence (section 197(1)).(2) A licensing authority may reject an application summarily under section 198 on the grounds there stated. If the application is not rejected the licensing authority must grant the application and proceed to the review. (Section 199).(3) The powers of a licensing authority following a review include the power to revoke the licence. (Section 202). Section 202(3) expressly permits a licensing authority to take action under section 202(1) on the grounds that the licensee has not used the licence.(4) In considering whether to take action of the kind specified in section 202(1) the licensing authority is required to have regard to the grounds specified in the application for the review. (Section 201(5)(c)).(5) There is no time limit within which the application for review must be made.[47]In the present case the Appellant had standing as an interested party to make such an application. The grounds of the application included the ground that the continued existence of the licence was legally incompatible with the bingo licence that already existed in respect of the same premises. The relief sought was the revocation of the licence.[48]On this appeal the Appellant submits that the question whether the second licence was lawfully issued at all was obviously relevant to the issues the licensing authority had to decide on the review and, furthermore, that there was a mandatory duty under section 201(5)(c) to have regard to this ground.[49]We have seen that, on the advice of Mr. Button, the legal advisor to the licensing authority, the First Respondent failed to consider the question whether the second licence was lawfully issued. This came about because of the advice given as to the effect of the words in section 152(1)(b), a position which is no longer maintained by the First Respondent and which is not advanced by the Second Respondent and which in my judgment was clearly incorrect. However on appeal before the District Judge it was maintained by the First and Second Respondents that the licensing authority was precluded from considering whether the second licence was lawfully issued because the time for challenge by judicial review had long passed and to permit such an argument to be advanced at this stage would constitute an impermissible collateral challenge. That argument was accepted by the District Judge.[50]Mr. Walsh QC on behalf of the Second Respondent and Ms. Gilchrist on behalf of the First Respondent rely on the well established principle that public law decisions are presumed to be valid until set aside or otherwise held invalid by a court of competent jurisdiction (Smith v East Elloe Rural District Council and Others[1956] AC 736). Furthermore they submit that, in reality, on the review application the licensing authority was being asked to strike down the decision to issue the second licence. Here they rely on the judgment of the Court of Appeal in R (Noble Organisation Limited) v Thanet District Council[2005] EWCA Civ. 782 and in particular on the following passage: “42. As Ms. Robinson and Mr. Katkowski submitted, the domestic law principle is clear, and was correctly applied by the judge, namely that administrative acts are valid unless and until quashed by a court: ... If the time has passed for them to be challenged by way of judicial review they stand notwithstanding that the reasoning on which they are based may have been flawed ... 43. As Mr. Katkowski observed, the principle does not remove the possibility of challenge; rather, it allows for the regulation of challenge in respect of forum, standing and timing, all in the interests of efficient administrative decision-making. The principle, as he observed, is of fundamental importance and is representative of a broader legal concern, that of legal certainty. In the exercise of powers by public authorities, it is clearly in the public interest that their decisions cannot be open to challenge long after they have been taken and acted upon.” (original emphasis)[51]The Respondents submit that the licensing authority had no power to declare its own decision unlawful or to hold that it should have no effect. Furthermore, they submit that the review was being used as a means of seeking to bring a challenge to the decision to issue the second licence long out of time for any judicial review.[52]It appears from the Appellant’s Notice of Appeal to the Magistrates’ Court that the Appellant’s position included the submission that the decision was a nullity. It stated that the Complainant was aggrieved, inter alia because “the respondent failed to take into account that the [second licence] should not have been issued and/or was a nullity.” However it is clear from that statement and from the grounds of the application for review, quoted above, that this was only one element of the Appellant’s case and that it also included the more general ground that there had been a failure to take account of the fact that the second licence should not have been issued. Certainly before me the position of the Appellant was considerably more refined. It is accepted that the second licence remains a valid licence and the Appellant’s submissions have been advanced on the basis that the licensing authority failed to take account of a relevant consideration, namely that the second licence was issued in breach of a statutory prohibition. This is reflected in the acceptance by Mr. Kolvin QC on behalf of the Appellant that if he succeeds on this ground and the matter is remitted to the licensing authority for reconsideration, revocation of the second licence would not necessarily be the inevitable outcome of the proper consideration of the application to revoke the licence.[53]I readily accept that the principle of legal certainty requires that collateral challenges to public law decisions after the expiry of the permitted time for judicial review should not normally be permitted. Nobleis a striking example. There, outline planning permissions had been granted in 1997 and 2002, the council having decided that an environmental impact assessment was not required. The claimant later sought to challenge the council’s decision on reserved matters made in 2004 on the ground that the decision not to require an environmental impact assessment in relation to the outline planning permission was itself unlawful. Richards J. and the Court of Appeal considered this was an impermissible collateral challenge and that the earlier consents must be given all the effects in law of valid decisions. The claimants were not to be permitted to challenge directly or indirectly the outline planning permissions or the screening decision in respect of them.[54]What serves to distinguish the present case from cases such as Nobleis the existence as an essential part of the statutory scheme of a system of review of licences. (By contrast, in Noblethe consideration of reserved matters was not intended to operate as a review of matters decided on the application for outline permissions). As Mr. Kolvin QC put it, the rule against collateral challenge does not extend to preventing a statutory body with express statutory power to revoke or modify that authorisation from examining the pedigree of the authorisation.[55]Corbett v Restormel Borough Council[2001] EWCA Civ. 330 provides an example of a power of review being exercised to modify a grant of planning permission on the basis that previous grants of planning permission were “grossly wrong” in law because they conflicted with the relevant planning policies, because there was no evidence to show that there were material considerations taken into account which would outweigh conflict with the development plan policies and because the applications were not referred to the Secretary of State as involving a departure from the development plan. While the validity of that decision on review was not directly in issue in those proceedings, the Court of Appeal proceeded on the basis that it was a lawful decision and declined to grant further relief which would have subverted the effect of the decision on review. (See Sedley L.J. at para 33).[56]Derwent Holdings Limited v Liverpool City Council[2008] EWHC 3023 (Admin.) concerned a traffic regulation order which had been made without the required notice having been given to an interested party. The applicable legislation provided that any challenge to the validity of the order must be made within six weeks from the date of the order and that otherwise the validity of the order “shall not ... be questioned in any legal proceedings whatever”. An application was made to the High Court out of time to challenge the order. Collins J considered that, given the wide effects of such orders, it was important that unless challenged within a limited time their validity should not be able to be impugned. Thus, he did not consider that even bad faith, if established, could overcome the ouster clause consistently with the approach of the House of Lords in Smith v East Elloe.Nevertheless he considered that the claimant was not without remedy. In particular, he considered that a declaration that procedural requirements had not been complied with would not be a challenge to the validity of the order and would enable the claimant to apply to the defendant to modify the order and, in effect, to consider the objections that would have been made (at paragraph 42). I consider that this is an example of a situation in which an error of law in decision making may subsequently be invoked in the context of an independent statutory procedure without infringing the rule against collateral challenge.[57]A further example is provided by R (Haworth) v Northumbria Police Authority [2012] EWHC 1225 (Admin.) where King J. held that it was not open to the police authority to refuse a retired officer its consent to refer a final decision on pension entitlement to a medical authority for reconsideration under a statutory provision which expressly provided for such reconsideration purely on the ground of delay because the challenge could have been made to the original decision. This seems to me to be closely analogous to the present case, in particular bearing in mind the existence of an independent system of review of licences under Part 8 of the Act.[58]The decision to issue the second licence has not been challenged by judicial review and it remains a valid licence. However, I consider that the principle prohibiting collateral challenge does not preclude the licensing authority when exercising its powers of review of licences under Part 8 from considering the provenance of the licence or the fact that its issue is in contravention of section 152(l)(b).[59]I consider that in the present case these matters are clearly relevant to the review and should therefore have been taken into account. This is reinforced by section 201(5)(c) which expressly requires the licensing authority to have regard to the grounds specified in the application for the review. It is clear from the history which I have narrated that both the licensing authority and the District Judge, for different reasons, failed to take account of this relevant consideration. I conclude therefore that there has been an error of law and I propose to allow the appeal. In doing so, however, I emphasise that the weight to be given to this consideration is a matter for the licensing authority. (Tesco Stores Limited v Secretary of State for the Environment[1995] 1 WLR 759 per Lord Hoffmann at p 780 f-g.)

Relief

[60]Mr. Kolvin QC on behalf of the Appellant submits that if the appeal is allowed the appropriate course is to remit the matter for reconsideration by the licensing authority. That is not opposed and I agree it is the appropriate course.[61]During the course of argument before me it was suggested by counsel for the First and Second Respondents that any reconsideration by the licensing authority should be limited to the question whether the second licence should have been issued, the licensing authority having considered in depth a failure to use the licence and having come to its conclusions on that ground. I am unable to accept this submission. It will be necessary for the licensing authority to consider the application on its merits in the round having regard to all relevant matters. It is not possible to distinguish between these different grounds in the manner suggested and their inter-relationship may well be important. Furthermore, I am told that the relevant panel will be differently constituted when the matter is reconsidered. Finally I note the acceptance by the Appellant that on reconsideration it would be open to the Second Respondent to adduce evidence and to make submissions on any change of position as a result of the issue of the second licence. I consider that all of these matters should be canvassed before the licensing authority on reconsideration.