Graham Thompson v Liquor Licensing Bd

• Jurisdiction: Cayman Islands
• Judge: (Collett, C.J.)
• Judgment Date: 07 January 1988
• Court: Grand Court (Cayman Islands)
• Date: 07 January 1988

Grand Court

(Collett, C.J.)

GRAHAM THOMPSON AND ASSOCIATES LIMITED

and

LIQUOR LICENSING BOARD and ATTORNEY GENERAL

R.D. Alberga, Q.C. for the applicant;

R.W. Ground, Q.C., Attorney General, for the respondents.

Cases cited:

(1) Boyle (or Walsh) v. Wilson, [1907] A.C. 45.

(2) R. v. Haringey London Borough Council, ex p. SandhuUNK(1987), 86 L.G.R. 56, considered.

(3) R. v. Torbay Licensing JJ., ex p. White, [1980] 2 All E.R. 25.

(4) R. v. Torquay Licensing JJ., ex p. Brockman, [1951] 2 K.B. 784; [1951] 2 All E.R. 656.

(5) Ridge v. Baldwin, [1964] A.C. 40; [1963] 2 All E.R. 66, followed.

(6) Sharp v. Wakefield, [1891] A.C. 173; [1886–90] All E.R. Rep. 651, dictum of Lord Bramwell applied.

Liquor-licensing-Liquor Licensing Board-natural justice-applicant seeking approval of Board to transfer licence entitled to hearing and advance notification of objections

Liquor-licensing-Liquor Licensing Board-purpose of licensing control-maintenance of public order and not regulation of economic and social conditions, e.g. restriction of unfair competition

The applicant company applied for orders of certiorari and mandamus to quash a decision of the Liquor Licensing Board and to require the Board to reconsider its application for a transfer of a licence.

The applicant company had entered into an agreement for the purchase of a liquor store which was being operated by a receiver and manager in order to pay off debts owing to its creditors. Before the agreement of sale was completed, the receiver applied to the Chairman of the Liquor Licensing Board to have the licence, which had been taken out in his own name, transferred to the applicant. After the sale had been completed, the applicant took over the management of the store pending the Board”s approval of the transfer. It continued to operate the store for almost five months without a licence and in the meantime did not enquire about the progress of the application. At the end of this period it was informed of the Board”s rejection of the transfer. Before making its decision, the Board had received an objection from four retailers that the transfer of a liquor licence to a large wholesaler such as the applicant encouraged unfair competition. The applicant was not notified of the objection nor was it called upon to defend its case.

The applicant then sought the advice of the Secretary of the Board who advised that even though the licence was still in the receiver”s name the applicant could continue to operate the business pending the outcome of a second application. This application was refused for the same reasons as the first-that the applicant”s entry into the retail market would constitute unfair competition and that it had improperly been trading without a licence on the assumption that the Board would eventually approve the transfer. On this occasion, although the applicant was allowed representation at the hearing, it was given no advance information about the nature of the Board”s objections.

The applicant submitted that the Board”s decision should be quashed and the application reconsidered because (a) the Board had acted in breach of the rules of natural justice by not notifying it of the objections to the application and although it had been allowed representation at

the second hearing, there had still not been a fair opportunity to put its case as its representative remained ignorant of the nature of the Board”s objections; (b) although continuing to operate the store without a licence was unlawful, this was the result of the applicant”s erroneous belief that the Chairman, in failing to respond to the first application, had exercised his discretionary powers to approve the licence in principle and to rely on the recommendation of the Secretary of the Board pending the decision on the second application; and (c) the Board had extended its discretion beyond the scope of the Liquor Licensing Law, ss. 8 and 9 by basing its decision on economic considerations which were irrelevant to its function under the statute.

The respondent submitted in reply that although the rules of natural justice applied, the Board was under no obligation to grant a licence nor was it obliged to limit the exercise of its discretion to any specific requirements or qualifications, since the Liquor Licensing Law was restrictive of that discretion only so far as concerned the reasons for which the Board was not prepared to grant a licence.

Held, quashing the decision of the Board:

(1) The Board was obliged to observe the rules of natural justice and had acted in breach of those rules by (a) failing to notify the applicant of the objections to its application; and (b) not affording it a fair opportunity to defend itself, for although it allowed the applicant to be represented, it gave no information to his representative in advance of the hearing about the nature of the objections. Consequently, the Board”s decision could not stand and the application would be remitted to the Board for reconsideration (page 29, lines 5–15; page 29, line 33 – page 30, line 5).

(2) The Board”s discretion to grant and approve the transfer of licences, though wide, was derived from the Liquor Licensing Law and its exercise and function were confined to the maintenance of public order rather than extending to the regulation of economic and social conditions. It was therefore improper for it to have considered questions relating to unfair competition in reaching its decision and it should treat them as irrelevant when reconsidering the application. It was, however, entitled to take into account both the unfavourable and mitigating factors, such as the applicant”s unlawful conduct in operating the store without a licence and that the delay in following up its first application had been partially due to the recommendation of the Secretary of the Board and to its Chairman”s failure to respond to the application (page 31, lines 3–11; lines 18–37; page 32, lines 15–27).

COLLETT, C.J.: This was an application by Graham Thomp-
son & Associates Ltd., pursuant to leave, for the issue of orders
of certiorari and mandamus respectively to bring up and quash a
10	decision of the Liquor Licensing Board for Grand Cayman and to
require that Board to reconsider the

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