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How do you prove that you have the consent of the outgoing licensee when you transfer a Premises Licence?

I’ve had an interesting set of circumstances this week where two parties attempted to fight out their dispute over some premises using the licensing process.

Those of you who have been involved in licensing long enough will remember that there was case law under the previous Licensing Act where the Courts held that the licensing process should not be used to fight out property or employment issues.

In the case I was involved with this week I was advising the Licensing Authority in a sticky set of circumstances.

Sections 42-46 of the Licensing Act 2003 deal with transfers of Premises Licences.

Section 42(4) states that an application must also be accompanied by the Premises Licence or, if that is not practicable, a statement of the reasons for the failure to provide it.

Section 43 gives the applicant the ability to apply for the transfer to have interim effect. This has to be requested on the application form and if the Section is complied with, this means that the Premises Licence has effect during the application period as if the applicant were the holder of the Licence – Section 43(1)(b).

In an application such as this, i.e. where the applicant wants the transfer to have immediate effect, the application can only be made where the outgoing licence holder has consented to the application being made – Section 43(3).

The provisions of this part of the Act are therefore clear. However, there are circumstances where the applicant for the transfer of a Premises Licence is unable to get the consent of the outgoing licensee. In those circumstances, Section 43(5) provides that:

“The relevant Licensing Authority must exempt the applicant from the requirement to obtain the holder’s consent if the applicant shows to the authority’s satisfaction

(a) that he has taken all reasonable steps to obtain that consent, and

(b) that if the application were one to which Section (1) applied, he would be in a position to use the premises during the application period for the licensable activity or activities authorised by the Premises Licence.”

The issue we had in our case was whether the applicant, asking for the application to be dealt with immediately, could satisfy the Licensing Authority that he had taken “all reasonable steps to obtain consent”.

The threshold for “all reasonable steps” is a question of fact and varies from authority to authority.

I have always taken the view that this is quite a high threshold to achieve in order to demonstrate that all reasonable steps have been taken.

Certainly, when we act for someone who is making a transfer application in these circumstances, we will detail in very clear terms in a supporting letter the precise steps that we have taken to gain the outgoing licensee’s consent. This is often difficult if the outgoing licensee has gone into some form of insolvent position, been in dispute with the landholder or has simply absented himself from the premises without paying any rent which is due.

This happens quite frequently, so we go to significant lengths on behalf of the applicant to try and effect a consent to transfer, detail in a supporting letter the steps that we have taken and confirm that in the circumstances we have done everything that one might reasonably be expected to do in those circumstances to gain the consent.

If a Licensing Authority forms the view that insufficient steps have been taken and that therefore they are not going to grant the transfer with immediate effect, then under Section 43(6) the Licensing Authority needs to give reasons why they are of the view.

This is a good example of processes in the Licensing Act which are completely open to interpretation but it is important to have a consistent approach when you are dealing with these applications from the perspective of the Licensing Authority. If you are acting for the applicant who is asking for immediate effect of the transfer, then there needs to be a significant level of effort made to secure the consent to transfer, exhibited as part of the application.