TC Projects Ltd, R (on the application of) v Newcastle Licensing Justices

Under paragraph 18 of Schedule 2 to the Gaming Act 1968, failure to show existing unmet demand is a statutory ground for refusing a casino licence. It provides a reason supporting refusal, although the licensing authority retains a discretion to grant the licence.

The authority must undertake one overall evaluative exercise. It must weigh the absence of unmet demand against all other material considerations, including any demonstrated beneficial effect of competition. No special or heightened hurdle applies, but the applicant must identify positive reasons supporting a grant notwithstanding the absence of unmet demand.

An applicant sought judicial review of licensing justices’ refusal of a casino licence under Part II of the Gaming Act 1968. The justices found substantial demand for the proposed facilities but no existing unmet demand. They applied the approach in the Oasis Casino case and concluded that no other material consideration justified granting the licence.

The High Court refused permission to apply for judicial review. Permission was later granted, and the claim was retained in the Court of Appeal. The central issue was whether paragraph 18 gave the justices a discretion to grant a licence unless refusal was justified by a further public-interest reason, or instead made the absence of unmet demand a ground supporting refusal.

1. Disposition. The claim for judicial review was dismissed. The licensing justices had made no material error of law, and the applicant remained entitled to pursue its appeal to the Crown Court on the factual merits.
2. Construction of paragraph 18. Paragraph 18 of Schedule 2 to the Gaming Act 1968 appears in a section headed “Grounds for refusal to grant or renew licence”. Its wording, context, and relationship with paragraphs 19 to 21 show that failure to establish existing unmet demand is itself a ground for refusal. It is therefore a consideration favouring refusal, not merely a condition which activates an otherwise unrestricted discretion. This reading is consistent with the statutory policy of inhibiting the stimulation of fresh demand, while allowing licensing authorities to grant licences in appropriate cases.
3. Applicable exercise of discretion. An applicant who cannot show unmet demand must put forward positive reasons why a licence should nevertheless be granted. The authority must then consider all material considerations, both for and against the application, and decide where the overall balance lies. The exercise is one of judgment, not mathematical calculation. Competition may support a grant where it is shown likely to produce beneficial effects, rather than harmful or merely neutral effects. Local circumstances and local knowledge are central.
4. The approach in R v Manchester Crown Court, ex parte Cambos Enterprises Ltd supported a prima facie expectation of refusal where unmet demand was absent, while preserving the discretion to grant. The approach in R v Licensing Justices of the Brighton Crown Court, ex parte Sergeant Yorke Casino Limited confirmed that the desirability of competition could be considered by reference to local circumstances.
5. The court rejected an approach imposing a “residual” discretion, a presumption requiring “special considerations”, or a need for “sufficiently powerful reasons”. The absence of unmet demand gives the authority a starting point, but does not create a merely residual power to grant. The two-stage formulation in the Oasis Casino case was over-elaborate, but its application here caused no material error because the justices considered whether anything outweighed the reason for refusal constituted by the absence of unmet demand.
6. Sir Anthony Clarke MR agreed with the result and the essential construction. He emphasised that the discretion is broad and must be exercised by reference to present local circumstances, while expressing reservations about the weight given to later amendments and official statements concerning statutory policy.

• Court of Appeal (Civil Division) — The claim for judicial review was dismissed. The court upheld the legal approach taken by the licensing justices and left the applicant to pursue its appeal to the Crown Court on the factual merits: [2008] EWCA Civ 428.
• High Court of Justice, Administrative Court — Stanley Burnton J refused permission to apply for judicial review on oral renewal; permission was subsequently granted by Sir Henry Brooke: [2007] EWHC 2917 (Admin).
• Licensing justices — The application for a casino licence was refused on 16 January 2007 after the justices found substantial demand but no unmet demand.