Regina v Warrington Crown Court; Chief Constable of Cheshire Constabulary ex parte RBNB (a Company)

The primary legal question was whether the Crown Court could lawfully refuse to transfer a justices' licence on the ground that the ultimate beneficial owners of the applicant's employing company would not be identified. The House held that the proper inquiry under section 3(1) of the Licensing Act 1964 is whether the applicant is personally a "fit and proper person" to hold the licence for the particular premises, judged by his ability and integrity in running those premises.

The court concluded that the Crown Court had taken into account considerations irrelevant to that inquiry — namely, speculation about the motives of the secret shareholders — when the facts found showed that the applicant, his area manager and managing director were each fit and proper and there was no evidence that the undisclosed owners influenced the running of the premises. Accordingly the Crown Court's decision could not stand.

This case concerned an application to transfer an existing justices' licence in respect of the Weavers Hotel, Runcorn, to Mr Kehoe, who was employed as manager by an unlimited company, RBNB. The company declined to disclose the identity of its ultimate beneficial shareholders. The Halton licensing justices refused the transfer; the Crown Court upheld that refusal. Sedley J quashed the Crown Court's first decision and remitted the matter. On rehearing the Crown Court again refused the transfer. RBNB (as an interested party) obtained a declaration from Newman J that the Crown Court had erred; the Court of Appeal dismissed the Chief Constable's further appeal at [2001] 1 WLR 2239. The Chief Constable appealed to the House of Lords.

Nature of the claim: challenge to the lawfulness of a Crown Court decision refusing to transfer a justices' licence on the basis that the identity of a company's beneficial owners was undisclosed.

Issues framed by the court:

• Whether the lawful test under section 3(1) of the Licensing Act 1964 required inquiry into the identity and fitness of a company's undisclosed beneficial owners when assessing the applicant's fitness.
• Whether the Crown Court had taken into account irrelevant considerations and so misdirected itself in refusing the licence transfer.

Facts and procedural posture: the Crown Court found that Mr Kehoe, his Area Manager and the company's Managing Director were fit and proper persons; that the shareholders did not participate in day-to-day management; and that the shareholders had deliberately withheld their identities. The licensing committee had a policy (paragraph 4(1)) permitting inquiry into persons who might influence the licensee. The Crown Court refused transfer because it could not satisfy itself about the fitness of the undisclosed shareholders.

Reasoning: the House emphasised that the statutory test is focused on whether the particular applicant is fit and proper to run the particular premises. The withholding of shareholder identity, and speculation about their motives, is only relevant to the extent that it casts doubt on the applicant's ability or integrity in running the premises. Where the factual findings established that the applicant and his immediate supervisors were fit and proper and there was no evidence of improper influence by the shareholders, the Crown Court erred in giving decisive weight to the non-disclosure of shareholders. The Crown Court had taken into account considerations irrelevant to the statutory test, and the appeal by the Chief Constable was dismissed.

Appeal dismissed. The House held that the proper question under section 3(1) of the Licensing Act 1964 is whether the applicant personally is a fit and proper person to be the licensee of the particular premises. The Crown Court had taken into account irrelevant considerations by treating the refusal of the company's beneficial owners to disclose themselves as sufficient to deny the transfer despite factual findings that the applicant and his immediate managers were fit and proper and there was no evidence they would be improperly influenced.

First instance: Halton Licensing Justices refused transfer (5 March 1997). Crown Court (His Honour Judge Clarke) upheld refusal (10 October 1997). Sedley J quashed that Crown Court decision and remitted the matter (3 April 1998). Rehearing at Crown Court again refused transfer (9 October 1998). Newman J granted declaratory relief to RBNB (15 December 1999). Court of Appeal dismissed the Chief Constable's appeal ([2001] 1 WLR 2239). Appeal to the House of Lords decided [2002] UKHL 24 (this judgment).