Off on the wrong track

On 28 November 2012, Lady Paton delivered the opinion of the Inner House in Freddie Williams Bookmakers v East Ayrshire Council & William Hill Organization Ltd [2012] CSIH 89. This case is understood to be first substantive appeal of its kind relating to betting premises in the UK under the Gambling Act 2005. The decision highlights the importance of following the strict requirements of the statute to the letter in progressing an appeal, in respect of both jurisdiction and the timing of lodging an appeal.

The background to the appeal is as follows. On 7 February 2012, the East Ayrshire Licensing Board granted a betting premises licence to William Hill Organization Ltd (“WHOL”) for premises in Cumnock. The appellants, Freddie Williams Bookmakers (“FWB”), had lodged representations to the board objecting to the grant of the application and had appeared at the meeting of the board on 7 February 2012. FWB operated a betting premises licence in another shop unit in Cumnock.

The board advised WHOL and FWB of their decision to grant the application orally at the meeting on 7 February 2012, and subsequently issued their formal notice of their decision under cover of a letter dated 2 March. Prior to issue of that formal notice, on 28 February 2012, FWB appealed the decision of the board by way of summary application to the sheriff at Kilmarnock.

At the hearing on the summary application and answers, WHOL argued that the appeal by FWB was incompetent on two bases. First, the appeal had been lodged in the wrong sheriffdom, and secondly, the appeal had been lodged prior to the commencement of the 21 day period following receipt of the formal notice of the board’s decision, under cover of the letter of 2 March 2012.

Sheriff McDonald dismissed the appeal as incompetent on the first ground but refused to do so on the second ground. FWB appealed to the Inner House against the sheriff’s decision on the first ground. WHOL cross appealed on the second ground regarding the time limit. The board took no part in either the hearing before the sheriff or the appeal before the Inner House.

In the opinion of the court, delivered on 28 November 2012, the appeal by FWB was refused and the cross appeal by WHOL was upheld. In upholding the cross appeal, the court determined that an appeal lodged “early” was incompetent, as the requirements of the 2005 Act were mandatory.

The decision of the court requires, therefore, to be considered under two separate headings, namely the jurisdiction issue and the timing issue.

The jurisdiction issue

Section 207 of the Gambling Act 2005 requires that an appeal in relation to premises must be instituted to a sheriff within whose sheriffdom the premises are wholly or partly situated.

The appeal to the sheriff taken by FWB was to the Sheriffdom of North Strathclyde at Kilmarnock, founding jurisdiction on the basis that Kilmarnock Sheriff Court is the seat of the board. The premises in respect of which the appeal was taken are located in Cumnock, which lies within the Sheriffdom of South Strathclyde, Dumfries & Galloway, with the relevant court being Ayr Sheriff Court.

At the hearing of the summary application, the sheriff accepted that the clear interpretation of s 207 of the 2005 Act was that the appeal must be raised in the correct jurisdiction, which in this matter was the Sheriffdom of South Strathclyde, Dumfries & Galloway. Accordingly, by reason that the appeal had been taken in a court that did not have the necessary jurisdiction, the appeal was incompetent and without effect.

The sheriff determined that she did not have discretion to dispense with this fatal error and therefore she could not remit the cause to the Sheriffdom of South Strathclyde, Dumfries & Galloway. The use of the word “must” sets out a mandatory requirement in the statute. Unlike cases referred to under the Licensing (Scotland) Act which contained a dispensing power “on cause shown”, the Gambling Act 2005 contained no such power.

The opinion of the court endorsed the sheriff’s reasoning, and added that whilst the Act of Sederunt (Summary Applications, Statutory Applications and Appeals) Rules 1999, as amended, contained a general dispensing power, there was no reference to said rules within the terms of the Gambling Act 2005. As such, secondary legislation (the 1999 Rules) could not affect or qualify primary legislation (the 2005 Act), as per Graham v John Tullis & Son (Plastics) Ltd (No 1) 1992 SLT 507.

The appeal was therefore incompetent and the decision of the sheriff at first instance was upheld.

The timing issue

As stated, the appeal by summary application was lodged on 28 February 2012, whereas the board issued its formal notice of decision, which included reasons for said decision, under cover of a letter on 2 March 2012.

Section 207(1)(c) provides that an appeal must be instituted “within the period of 21 days beginning with the day on which the appellant receives notice of the decision against which the appeal is brought”.

WHOL argued that the 21 day period referred to did not commence until the formal notice, issued under cover of the letter of 2 March 2012 was received by FWB and that the appeal must be taken during that period. The 21 day period could not therefore be running on 28 February when the appeal was lodged at Kilmarnock.

The sheriff had rejected this ground of challenge at first instance on the view that “notice” of the decision may mean the oral decision given at the board meeting on 7 February 2012. The sheriff expressed the view that Parliament did not intend to exclude parties that might lodge an appeal early.

The court disagreed with the sheriff and upheld WHOL’s cross appeal on this point. The court held that the meaning of the word “notice” must be read with s 164 of the 2005 Act, which provides for “notice” to be given in the form prescribed by Scottish ministers. It was more than a piece of paper. The prescribed notice included a note of the reasons of the board for the decision.

The court held, again, that the use of the word “must” is mandatory, not directory or permissive. The proper construction of the 2005 Act was that an appeal must be lodged at some time during the 21 day period following receipt of the notice – “neither before, nor after, but during it”. The court expressed the view that Parliament intended that the written reasons for the decision should be issued and known to everyone before any party is entitled to institute an appeal. This was considered to be a sensible and rational approach which will likely prevent unnecessary or misconceived appeals.

Therefore on the second issue, the appeal was also determined to be incompetent.

Comment

The effect of the judgment of the Inner House in this matter can be viewed on both a specific and more general basis. On a very specific basis, it is the first judgment in respect of the particular section of a particular statute, namely the Gambling Act 2005. It makes it abundantly clear that any appeal taken against a decision of a licensing board must be taken in the court having jurisdiction over the location of the application premises, regardless of whether or not that same court has jurisdiction over the seat of the licensing board itself.

On the other hand, the judgment has a wider application when it comes to considering the mandatory wording used in an Act. Civil court practitioners will be used to the wording of rules such as the rule of the Ordinary Cause Rules that allows for the sheriff to grant relief for non-compliance with another rule on cause shown. It is commonplace to hear motions for the court to prorogate certain time limits when one party has failed to do something, and on statement of a reasonable excuse, these motions are regular granted, thereby preventing one party from being in default. Such a rule also exists in the Summary Application Rules, along with the rule which allows for an application to be transferred to another court having jurisdiction (which is specifically referred to).

A key point to be taken from this judgment is that these rules allowing for relief to be granted are intended to deal with failure to comply with the rules themselves, and not the principal statute. In the absence of any specific reference in the particular statute to the rules of court, those rules cannot alter the application of the statute. Therefore in circumstances where the statute (in this case the Gambling Act 2005) provides a mandatory requirement, the rules in and of themselves cannot alter that requirement. The use of “must” in the statute, in reference to both the timescale for lodging of an appeal and the location of the court having jurisdiction to hear that appeal, cannot be read as “may” solely by reference to the court rules alone. The court expressed the view that such wording reflects the intention of Parliament and therefore requires to be given effect.

Therefore, obvious though it may seem, when dealing with an application or action under statute, it is critical, in the first instance, to have regard to the particular wording of the particular Act. Some statutes provide for exceptions to their own general rules. For example, s 19A of the Prescription and Limitation (Scotland) Act 1973 provides a specific exception to the general three year time bar for personal injury claims, for the court to adjudicate on where it is considered be equitable to do so. Others, such as the Gambling Act 2005, as seen, do not provide for any exceptions to such time limits.