Court dismisses hotel liquor licence renewal application as premises fall outside statutory renewal category.

Neutral Citation Number: [2010] IEHC 261

THE HIGH COURT

NORTHERN CIRCUIT

COUNTY DONEGAL

IN THE MATTER OF THE LICENSING (IRELAND) ACT 1902 TO 2000 AND IN THE MATTER SECTION 2 OF THE LICENSING

(IRELAND) ACT 1902 AND SECTIONS 19 AND 23 OF THE INTOXICATING ACT 1960

AND IN THE MATTER OF AN APPLICATION BY NICHOLAS BROWN, THE PERSON NOMINATED BY:

McCLOSKEY AND O'KANE BUILDING COMPANY LIMITED

Judgment of Mr. Justice Michael Peart delivered on the 28th day of June 2010:

The applicant is a limited liability company which by Indenture of Conveyance dated 1st October, 2004 purchased an hotel premises

known as Greencastle Fort Hotel in Co. Donegal, together with about seven acres of adjoining land, and the licence and goodwill for a

consideration of €2,775,000. According to the evidence which I have heard on this appeal, it appears never to have been the

intention of the purchaser to operate the premises as a hotel. Upon the completion of the purchase the hotel premises was boarded

up, and has not since traded. Rather, the premises appears to have been purchased with a view to developing the lands attached to

the hotel, as the purchasing company is a building development company with, according to the evidence before me, a turnover of

some €10 million per annum.

The hotel's intoxicating liquor licence last expired on the 30th September, 2005. It has not subsequently been renewed at any Annual

Licensing District Court, and has therefore lapsed. The applicant is anxious to revive it, and seeks to do so by means of the provisions

of s. 2(1) of the Act of 1902 which (as amended by s. 23 of the Act of 1960) provides:

"2.- From and after the passing of this Act, no licence shall be granted for the sale of intoxicating liquors, whether for

consumption on or off the premises, except: -

(1) For premises (not being premises which were licensed by virtue of paragraph (2) of this section) which were licensed

at any time during the period of five nears immediately before the day on which notice of an application for the grant of

a certificate entitling the holder to receive a licence in respect of the premises is given, pursuant to rules of court, to

the appropriate County Registrar or to the appropriate District Court Clerk, as the case may be; ...”

As I have said, the said licence expired on the 30th September, 2005, and the applicant filed a Notice of Application to the Circuit

Court on the 25th September, 2009 seeking to renew the licence on the basis that it is in respect of a premises which were licensed

within the previous five years.

According to the evidence which I have heard, the reason why the applicant company wishes to revive this licence for the hotel

premises is because, with the downturn in the national economy since the date of purchase of the premises, the plans for developing

the lands attached to the hotel have not come to fruition, and the company wishes now to keep all its options open, which

presumably include the possibility that it may reopen the hotel, though it is accepted that same would require the expenditure of a

considerable amount of money in order to restore same to an acceptable standard and condition. It appears that following the closing

and boarding up of the premises they have become gradually vandalised and dilapidated, though the structure is still sound, and would

require significant reconstruction and refurbishment before they could operate as an hotel of any kind.

This application is opposed by the local Fire Officer since, in his view, the premises are not in a fit state to be used as a licensed

premises. Indeed, there is no dispute about that fact. The applicant on the other hand is prepared to undertake that if the licence is

revived, the premises will not trade under that licence until such time as the Fire Officer is satisfied that it is safe and appropriate to

do so.

The application to renew the licence was refused by order of the Circuit Court on the 30th January, 2010, and the present application

is by way of appeal from that order.

At first glance, and it is on this basis that the present application is made, this licence could be renewed since the premises were

licensed within a period of five years prior to the notice of application herein being lodged on the 25th September, 2009, and

therefore come within the first exception to the general prohibition on the granting of intoxicating liquor licences contained in s. 2 of

the Act of 1902, namely in respect of "premises ....which were licensed at any time during the period of five ears immediately

before the day on which notice of an application for the grant of a certificate entitling the holder to receive a licence in respect of

the premises is given..”.

But the question is whether these premises are in fact a premises coming within that subsection, as the words in parenthesis in the

subsection are centrally important. They state that subs. (1) applies to “premises (other than premises which were licensed by virtue

of paragraph (2) of this section)”.

Section 2, subsection (2) (as amended by s. 21 of the Act of 1960) provides for a second exception to the general prohibition on the

granting of intoxicating liquor licences, as follows:

“(2) For an hotel, which expression shall refer to a house containing at least ten, or, if situate in a county borough

(which expression shall be deemed, for the purposes of this section, to include the Dublin Metropolitan District) twenty

apartments set aside and used exclusively for the sleeping accommodation of travellers, and having no public bar for the

sale of intoxicating liquors;….”

This exception, historically, allowed an hotel, as defined, to be granted a licence which permitted the guests staying in the hotel to

be served intoxicating liquor, but did not permit a public bar in the hotel. This was what became known as an hotel licence, though

that expression finds no statutory expression as such.

The situation is therefore that a hotel which was in existence prior to the passing of the Act of 1902 will already have had a full

publicans' licence granted under earlier legislation, and this enabled such an hotel premises to have operate a public bar, and not

confined to serving guests of the hotel. Such licences are renewed annually and continue to survive to the present day. Those

premises are the premises referred to in s. 2(1) of the Act of 1902, and where such a licence is allowed for whatever reason to lapse

by not being renewed annually, a new such licence may be granted by the Circuit Court provided that the notice of application in that

regard is lodged not later than five years from the date of last expiry.

However, it is necessary to appreciate the distinction between such pre-1902 hotels trading with the benefit of such a full publicans'

licence, and hotels which came into existence after the passing of the Act of 1902, and who trade with the benefit of a licence

granted pursuant to s. 2(2) of the Act of 1902. Following the passing of that Act, an `hotel licence' entitled the owner to serve

intoxication liquors to its guests but no public bar was permitted to exist in the hotel. That situation existed up to the passing of the

Act of 1960, which provided in s. 19 thereof that a s. 2(2) hotel licence holder under the Act of 1902 could, by obtaining in the

District Court an order extinguishing an ordinary seven day licence, have a public bar in the hotel, thus entitling the owner to serve

intoxicating liquors to persons other than hotel guests. Such a hotel was therefore for all practical purposes in the same position as a

hotel owner whose premises had the benefit of a pre-1902 seven day ordinary licence.

However, it seems to me clear that s. 2(1) of the Act of 1902, which enables a lapsed licence to be renewed provided that

application in that regard is made within five years of its last expiry, applies only to a premises which enjoys the benefit of a pre-1902

ordinary publicans' licence, and not to an hotel premises which, prior to the Act of 1960, could have no public bar thereon but which

following the passing of the Act of 1960, made an application for the extinguishment of an ordinary publican's licence, which

thereafter entitled it to have a public bar, as provided for in s. 2(2) of the Act of 1960.

The question in the present application is simply whether the present application is one relating to a premises to which s. 2(1) of the

Act of 1902 applies, or whether it is an hotel premises to which s. 2(2) of the Act of 1902 applies. If the latter, then the fact that

the present application is being made within five years of the date of expiry of the licence is irrelevant, and the question is simply

whether there is any provision for the revival or renewal of the licence which lapsed after the 30th September, 2005, and where the

premises to which it formerly attached are dilapidated and not capable of being used until such time as a considerable amount of

money expended on its refurbishment.

The available evidence points clearly to this premises being one which enjoys a licence obtained under s. 2(2) of the Act of 1902, and

benefiting after the passing of the Act of 1960 from an order under s. 19 of the Act of 1960 whereby a seven day ordinary licence

was extinguished. That evidence is in the form of a copy of the actual licence attaching to the applicant's premises which was last

renewed in September 2004. Under the name of the licence holder at that time, namely the vendors to the present applicant

company, the following appears: "Sec 2(2) 1902 Act & Sec. 19 Act of 1960”. On its face that seems to clearly indicate the category

of licence which it is.

Such a licence, granted under s. 2(2) of the Act of 1902, operates only for so long as the premises to which it relates continues to

fulfil the definition of an hotel and operate as such. While the licence so granted has all the hall-marks of a full publican's seven day

ordinary licence, it is nevertheless different in character. For example, it is not one capable of being transferred and extinguished by

another hotel owner for the purpose of an application under s. 19 of the Act of 1960. This distinction is described in Woods - Liquor

Licensing Laws of Ireland, third edition, 2001 at p. 339 as follows:

"The licence attached to premises licensed as an hotel under the Act of 1902 entitles the licensee, whilst such premises

are within the definition of an hotel given in that Act, to sell to the general public, including persons who are not either

travellers or lodgers, but if and when such premises cease to answer such definition (e.g. by not having the required

accommodation set apart and used exclusively for sleeping accommodation), the licensee is not entitled to sell to any

person whatever and "the licence would cease to be a protection to the holder" (Quinn v. Burke (1906) 2 I.R. 94; 39

I.L.TR. 253). Accordingly an hotel licence exists so long only as such premises function as an hotel and the granting of an

order for a public bar in such premises pursuant to section 19 of the Act of 1960 does not alter this situation. Licences

granted in respect of hotel premises prior to the passing of the Act of 1902 are not so restricted, being in effect

ordinary publicans' licences.”

If the present applicant is not the owner therefore of a premises coming within s. 2(1) of the Act of 1902, then what form of

application for renewal of the licence granted under s. 2(2) can be made and what conditions would need to be fulfilled? One must

also bear in mind in this regard the fact that a licence under s. 2(2) of the Act of 1902 alone is insufficient to enable a public bar to

exist in a hotel, even though an order for extinguishment of an ordinary seven day licence had previously been made after the Act of

1960 came into force, on the basis of an existing licence under s. 2(2) of the Act of 1902. A question may arise as to whether the

order for extinguishment made under s. 19 of the Act of 1960 continues in effect even though the underlying intoxicating liquor

licence has lapsed, or would a person whose lapsed licence has been renewed be required to extinguish a further ordinary seven day

licence for the purpose of once again having a public bar in the hotel. However, it is unnecessary to address that question on the

present application.

At any rate, the applicant would have to proceed by way of an application for a certificate entitling him to a new hotel licence, and

such a new licence would now have to be considered in the context of s. 4 (9) of the Courts (No. 2) Act, 1986 which provides:

"Notwithstanding subsection (2) of this section, a licence for an hotel, being a licence

(a) in respect of which effect was given to section 42 (1) of the Act of 1952, or

(b) which was granted after the passing o the Act of 1960, by virtue of paragraph (2) of section 2 of the Act of 1902,

shall not be renewable on expiry without the production to the Revenue Commissioners of a certificate that the hotel in

respect of which the licence was granted is registered in the register of hotels kept by Bord Failte Eireann.” (My

emphasis)

One can immediately appreciate the difficulty facing the present applicant if not entitled to a renewal under s. 2(1) of the Act of

1902, given the present state of dilapidation of the premises. Without the production of a Bord Failte Certificate a new licence cannot

issue. The judgment of Barron J. in a case stated, and upheld by Finlay C.J. in the Supreme Court, in Re Application of Declan

Bannerton [1986] I.R. 758 makes this clear, if any clarification was needed, even though that case was dealing with the very similar

provisions of s. 20 of the Act of 1960, which was repealed by the Act of 1986 and effectively replaced by section 4 (9) thereof.

In addition to that obstacle, the applicant would have to survive a possible objection being made to the Court under s. 32(1) of the

Act of 1960 "on the grounds of the unfitness of the premises to be licensed ... ... ... [and] if the Court is satisfied that the premises

are unfit to be licensed, it may refuse to grant the certificate provided for by section 4 (7) or 4 (8) (as the case may be) of the

Courts (No. 2) Act, 1986”.

In my view there is no jurisdiction to revive by way of renewal the intoxicating liquor licence which formerly attached to these

premises and which has lapsed, since the premises are premises coming within s. 2(2) of the Act of 1902 and not within subs. (1)

thereof, even though this present application has been lodged within five years from the date of expiry, and I am satisfied that no

undertaking that if the licence were to be renewed no trading would take place until the Fire Officer was satisfied, is adequate to

overcome the difficulty facing the applicant.

For all these reasons set forth above I affirm the order of the Circuit Court Judge made on the 30th January, 2010.