Risky Business Ltd v City Of Glasgow Licensing Board

Factual and Procedural Background

On 12 March 1999, the City of Glasgow Licensing Board refused an application by Company A for the provisional grant of a new Entertainment Licence for premises at [Number] Main Street, The City. Company A appealed the refusal, and on 21 January 2000, the Sheriff upheld the appeal and reversed the Board's decision. The Sheriff purported to grant the licence himself, but it was acknowledged that he should have directed the Board to grant it instead. The Board had refused the application on the ground that the premises were not suitable or convenient for the sale of alcoholic liquor, under section 17(1)(b) of the Licensing (Scotland) Act 1976, as amended. The application sought to introduce "exotic dancing" (specifically "table dancing") to the premises, which had previously operated under a proprietary club entertainment licence since 1994, offering various forms of live entertainment excluding discotheque and dancing. The Board's refusal centered on concerns about the combination of alcohol sales and sexually explicit entertainment potentially leading to disturbances or violence, especially given the nature of "table dancing" proposed. The Sheriff found no adequate material before the Board to justify the refusal and described the Board's reasoning as speculative and nebulous. The case was then appealed to the Inner House of the Court of Session.

Legal Issues Presented

1. Whether the licensing board had a proper factual basis to refuse the application under section 17(1)(b) of the Licensing (Scotland) Act 1976, on grounds that the premises were not suitable or convenient for the sale of alcoholic liquor due to the proposed entertainment.
2. Whether the Board was entitled to rely on its background knowledge and experience in assessing the suitability of the premises without specific evidential material.
3. Whether the Board applied the correct legal test regarding the likelihood or probability of undesirable events arising from the combination of alcohol and the proposed entertainment.
4. Whether the Sheriff was correct in overturning the Board's refusal and directing the grant of the licence.

Arguments of the Parties

Appellant's Arguments

• The Board lacked a proper factual basis for refusing the application, relying on speculative possibilities rather than probabilities or likelihoods.
• The Board's reasons amounted to "mounting one possibility upon another" without direct factual links to the specific premises or proposed entertainment.
• The Board's concerns about violence, anti-social conduct, and sexual violence were not supported by evidence or material presented during proceedings.
• The combination of alcohol and sexually explicit entertainment was common elsewhere without the problems suggested by the Board.
• The Board failed to apply the correct test of likelihood or probability required under the statute.

Respondent's Arguments

• The Board was entitled to draw inferences based on its local knowledge and experience of licensing matters, even in the absence of specific evidential material.
• The Board's decision was based on concerns about the suitability and convenience of the premises given the combination of alcohol and exotic dancing.
• The Board's reasoning was consistent with established principles that public bodies have discretion in assessing facts ranging from obvious to debatable.
• The mere possibility of undesirable consequences was not sufficient for refusal; the Board had applied the proper test focusing on likelihood or probability.
• The decision raised a broader question about the limits of licensing boards' freedom to rely on background knowledge and experience.

Table of Precedents Cited

Court's Reasoning and Analysis

The court examined the Board's Statement of Reasons and found it fundamentally defective both in factual basis and legal reasoning. Although the Board invoked its background knowledge and experience, it failed to specify what knowledge or experience informed its conclusions. The Board's concerns rested on broad, unsubstantiated assertions couched in terms of possibility rather than likelihood or probability, contrary to the statutory test under section 17(1)(b). The Board did not demonstrate that the combination of alcohol sales and exotic dancing would likely generate disturbances or violence sufficient to render the premises unsuitable or inconvenient for the sale of alcohol. The court agreed with the Sheriff that the Board's reasoning amounted to speculation and nebulous assertions without proper evidential foundation. The court acknowledged established principles that licensing boards may rely on local knowledge and experience, but emphasized that such reliance must be identified and linked to the reasoning. Here, no such linkage was evident. The court considered whether the case should be remitted for reconsideration but concluded that no reasonable Board, properly applying the law and based on available material, could have refused the application. Accordingly, the only proper disposal was to grant the application, directing the Sheriff to remit the matter to the Board with instructions to grant the licence.

Holding and Implications

The appeal is allowed with instructions that the Sheriff remit the matter to the Licensing Board with directions to grant the application for the new entertainment licence.

The direct effect of this decision is that Company A's application for the new Entertainment Licence, including the proposed introduction of table dancing, must be granted. The court did not set any new precedent but reaffirmed the requirement that licensing boards must base refusals on a proper factual foundation demonstrating likelihood or probability of adverse effects, rather than mere possibilities. The decision underscores the necessity for licensing boards to clearly identify and explain any background knowledge or experience relied upon in their reasoning.