Regina v Warrington Crown Court Chief Constable of Cheshsire Constabulary, Ex p RBNB (a Company)

Whether an applicant is a fit and proper person to hold a justices’ licence depends on the personal qualities and professional qualifications reasonably required to run the particular licensed premises. The inquiry focuses on the applicant’s ability to conduct those premises competently, lawfully and properly.

The identity, character or conduct of persons behind the applicant may be relevant where their control or influence casts doubt on that ability. Mere speculation about undisclosed beneficial owners is insufficient. Suspected wrongdoing unrelated to evils arising from the sale of intoxicating liquor is irrelevant unless it bears upon the applicant’s integrity or performance of the licensee’s duties.

Mr Kehoe, the manager of the Weavers Hotel, applied for the transfer of its justices’ licence. The licensing justices refused his application because the identities of the beneficial owners of his employer, RBNB, had not been disclosed. The Crown Court upheld the refusal, although it found Mr Kehoe, his area manager and RBNB’s managing director to be fit and proper and found no involvement by the owners in daily management.

Following an earlier remittal, the Crown Court again refused the application. Newman J declared that decision contrary to law. The Court of Appeal dismissed the Chief Constable’s appeal: [2001] 1 WLR 2239. The Chief Constable appealed to the House of Lords. The central issue was whether the Crown Court could lawfully conclude on its findings that Mr Kehoe was not, or might not be, a fit and proper person to hold the licence.

1. The appeal was dismissed unanimously, with costs. Lord Bingham of Cornhill delivered the leading speech. Lord Mustill, Lord Hutton, Lord Millett and Lord Rodger of Earlsferry agreed with his reasons.

2. Per Lord Bingham, section 3(1) of the Licensing Act 1964 gave licensing justices a discretion whether to grant a licence. The assessment whether the applicant satisfied the statutory criterion of being fit and proper was nevertheless an exercise of judgment, rather than discretion. Where no independent reason for refusal existed, a finding that the applicant was fit and proper required the licence to be granted. A finding, or genuine doubt, that the applicant was fit and proper required refusal.

3. The expression “fit and proper” takes its meaning from its statutory context. It requires the personal qualities and professional qualifications reasonably necessary for the activity for which permission is sought. In liquor licensing, the question concerns the particular applicant’s suitability to run the particular public house. The statutory scheme and the authorities accordingly direct attention to the applicant’s ability to manage the premises competently, lawfully and properly.

4. The justices could look beyond the applicant where another person’s control or influence might affect the management of the premises. Terms of employment, the character of those genuinely directing the enterprise, and evidence that the applicant was merely a stooge could therefore be relevant. Here, however, the findings established that Mr Kehoe and every manager to whom he answered were fit and proper. They also excluded any inference that he was a stooge or would be pressured to act improperly. The beneficial owners did not participate in daily management.

5. The owners’ refusal to disclose their identities invited speculation but was relevant only so far as it cast doubt on Mr Kehoe’s performance as licensee. Possible tax evasion or money laundering did not concern evils generated by liquor sales. Enforcement of fiscal and money-laundering law was not part of the licensing justices’ function. Such matters could affect licensing only where they bore upon the applicant’s integrity or lawful discharge of his duties.

6. The Court of Appeal had treated the Crown Court’s error as a failure to balance relevant considerations. Lord Bingham reached the same outcome on different reasoning: no balancing exercise was required. On the findings, the only rational conclusion was that Mr Kehoe was fit and proper. The Crown Court’s contrary decision rested on irrelevant considerations.

1. House of Lords: Dismissed the Chief Constable’s appeal unanimously and upheld the result reached by the Court of Appeal, although for somewhat different reasons: [2002] UKHL 24.
2. Court of Appeal: Dismissed the Chief Constable’s appeal from Newman J’s order: [2001] 1 WLR 2239.
3. High Court: Newman J allowed RBNB’s application for judicial review and declared the Crown Court’s second decision contrary to law.
4. Crown Court: On rehearing after remittal, again upheld the refusal to transfer the licence.
5. High Court: Sedley J quashed the Crown Court’s first decision because the licensing policy applied was unlawful and remitted the matter for rehearing.
6. Crown Court: Initially upheld the licensing justices’ refusal of Mr Kehoe’s appeal.
7. Licensing justices: Refused Mr Kehoe’s application for the transfer of the existing justices’ licence.