Cambridgeshire County Council v Kama

Whether a person has exercised all due diligence under section 169 A(3) of the Licensing Act 1964 depends on all the circumstances of the business. The statutory defence requires proof of all reasonable steps, but does not impose a fixed checklist of precautions. The adequacy of training, supervision, warnings and recording systems is a fact-sensitive question. Systems appropriate for a supermarket may not be reasonably expected in a small corner shop. A court may nevertheless find that particular safeguards are required where the evidence shows that they were advised or commonly used. Physical proximity of a manager to an unlawful sale does not, without evidence of awareness or involvement, by itself defeat the defence.

The Council appealed by way of case stated against the Cambridge Justices’ dismissal of an information alleging that Kama had sold intoxicating liquor to a person under 18, contrary to section 169 A of the Licensing Act 1964. Kama was the licensee but was absent when an employee sold vodka to a 15-year-old. The Justices found that he had taken references, given contractual and oral instructions, supervised and trained the employee, and displayed warnings. They concluded that he had exercised all due diligence. The central issue was whether that conclusion was legally open on the facts found.

1. Appeal refused. The question stated by the Justices was answered in the affirmative.
2. Section 169 A(3) places the burden on the defendant to prove, on the balance of probabilities, that he exercised all due diligence to avoid the offence. The expression requires all reasonable steps, assessed in the circumstances of the particular business. It remains a question of fact for the tribunal.
3. The court rejected the suggestion that the matters identified in Davies v Carmarthenshire County Council [2005] EWHC 464 Admin were mandatory requirements. That case identified matters which had not been considered on its own facts. It concerned a multi-branch supermarket-style retailer, whereas this case concerned a small corner shop.
4. The reasoning in Tesco Supermarkets v Nattrass [1972] AC 153 confirmed that reasonable steps may include proper instructions and supervision by a superior employee. Requiring every employee independently to exercise due diligence would make the statutory defence ineffective.
5. The manager’s physical presence near the sale did not defeat the defence. The facts contained no finding that he knew of, observed or was involved in the transaction.
6. The Justices were entitled to conclude that a small shop could not reasonably be expected to maintain every system used by a supermarket. The decision did not establish that refusals books, written training records or till prompts could never be required. Such safeguards might be necessary in another case, particularly where Trading Standards advice or evidence of common practice was available.

Lord Justice Waller agreed. The respondent was awarded the costs of the appeal out of Central Funds.

• High Court (Administrative Court): The appeal by way of case stated was refused, and the Justices’ answer was upheld.
• Cambridge Justices: On 24 May 2006, the information was dismissed after the Justices found that the defendant had exercised all due diligence.