Agenda item

The licensing officer presented their report.  Members had questions for the licensing officer.

 

The representative for the applicant addressed the sub-committee.  Members had questions for the applicant’s representative.

 

The Metropolitan Police Service officer addressed the sub-committee.  Members had questions for the police officer.

 

All parties were given up to five minutes for summing up.

 

The meeting adjourned at 11.15am for the sub-committee to consider its decision.

 

The meeting reconvened at 11.40am and the chair advised everyone of the decision.

 

RESOLVED:

 

The Licensing Sub-Committee having considered the objection notice submitted by the Southwark Police Licensing Office relating to the application submitted by Eddie Hanson to transfer a premises licence under section 42 of the Licensing Act 2003 in respect of the premises known Club 701 Basement & Ground Floors, 516 Old Kent Road, London SE1 5BA has refused the transfer application.

 

Reasons

 

This was an application for the transfer of the premises licence in respect of Club 701 Basement & Ground Floors, 516 Old Kent Road, London SE1 5BA to the Applicant.

 

The Licensing Sub-Committee heard from the legal representative for the Applicant who summarised the background of the premises.  Following an allegation of rape on 2 January 2024 the Metropolitan Police submitted a summary review application and the premises licence was suspended as an interim step on 19 January 2024.  The final review of the licence was considered on 8 February 2024 when the decision was made to revoke premises licence.  The suspension of the licence continued as interim steps. 

 

Both the decision to revoke and the interim steps were appealed to the Magistrates’ Court.  The basis of the Appeal was that the premises were in the process of being sold to a third party.  At the Appeal of the interim steps on 18 April 2024, it was suggested by Southwark’s Counsel that the appeal in relation to the suspension as interim steps should be withdrawn due to the dissatisfaction of the documentation presented about the sale of the premises, and a transfer application, a DPS variation and review of the interim steps be submitted. 

 

Since 19 January 2024 the premises has not traded and until the premises licence is transferred (and licence suspension lifted), the Applicant is unable to trade. Despite this, the Applicant was responsible for the Club’s utilities. The Applicant was keen to commence trading.  The police were not against a nightclub in the location and the allegation of 2 January 2024 had been a standalone incident, coupled with non-compliance of the licence by Eric Doe (the current licensee).  The premises did not have a history of violence. 

 

The Applicant was a councillor for the London Borough of Camden, who was also the Chair of Licensing Sub-Committee D.  He was a regulator, aware of his duties and obligations, with ten years’ experience as an operator.  He was a champion of the community and who interacted easily with the relevant responsible authorities, neighbourhood groups and faith groups, and was of impeccable character. 

 

The representative for the Applicant stated that an undertaking could be given to the sub-committee of Eric Doe having no future involvement, having no role in the management of the premises, and that he be excluded from them.  A minor variation to the license could then be made in the future to confirm this undertaking. 

 

The Applicant addressed the sub-committee and stated that he would be running the premises himself and did not want the current licensee to have any involvement in Club 701.  The current licensee was the owner and licencee of the Kent Restaurant and Lounge, which was upstairs from the Club. The two would only come into contact outside, regarding queue management, the smoking area or security patrol.  The current licensee would not have any part in the Club’s business. The Applicant had a solid experience of running licensed premises that operated.  He worked well and collaboratively with local authorities to ensure premises as safe and sustainable.  Any variations that needed to be added to give reassurance to the Police would be made. The Applicant wanted the premises to be a model venue, to be an example venue in Southwark; providing internships, apprenticeships etc. In return, he would ensure the premises was well run, welcoming to everyone and a place people could feel safe.  Anyone who had ever worked at the premises previously would not be employed, including marketeers, promoters and the like.

 

There would be renovations/refit of the premises that would take approximately a month and until they were completed the venue would be closed. 

 

The Applicant confirmed to members that he had paid a £5,000 “up front” and the balance would be paid over 30 months.  Members noted that it was unusual for a seller to agree such a small deposit, with the rest to be paid over a two and a half year period, in view of the current position with the climate of the hospitality industry. 

 

Members enquired whether the premises could revert to the current licensee if the balance of the purchase price could not be made.  To this, the Applicant stated that the premises would not revert to him based on his projected revenue and the conditions put in place.

 

The legal representative for the Applicant explained that it would be easier to apply for the transfer of the old licence (rather than wait for the outcome of the Appeal) because only the Police needed to be consulted; the conditions on the current license contained good conditions, they just need to be complied with.

 

The Applicant had not envisaged it would take until August for the transfer to be determined.  Notwithstanding his ownership of the neighbouring premises, the current licensee was unable to pay for legal representation, which had delayed matters.

 

There was discussion of the access between Club 701 and the neighbouring premises, Kent Restaurant and Lounge which was operated by the current licensee, it was clarified that there was no way that one could leave Kent Restaurant and Lounge to reach Club 701.  The club had one entry and two emergency exits on the Old Kent Road side with an exit into the courtyard; there were two staircases into the Kent Restaurant and Lounge with, one emergency exit, with a shutter locked all the time. 

 

The Applicant stated that he would look at the Club’s existing database in terms of the local community and ensure patrons were well behaved, and if individuals fit the right criteria they would be allowed into the premises.  An ID scanner was already a condition on the licence and would be used. 

 

The Licensing Sub-Committee then heard from the legal representative for the Metropolitan Police Service who advised that the Police opposed the transfer application.  The Police were less concerned with the current licensee purchasing the premises back, but more worried that the terms of the lease meant that the lease would revert back to him in default of payment.  It was unclear how the balance of the purchase price would be raised over 30 months.

 

The Police also disagreed that the transfer application of a revoked premises license route would be easier than applying for a fresh premises licence. 

 

It was the position of the Police that it was more appropriate to wait for the Magistrates’ Court hearing (on 24 September 2024), which would allow the Applicant more time to ensure his financial projections were in place so the current licensee was not put back in ownership by default (as per clause 3.1 of the Contract for Sale). If that should occur, then the sub-committee may inadvertently permit the premises licence to revert back to the current licensee by default, thus undermining the 8 February 2024 Licensing Sub-Committee’s decision.  The current licensee was not a fit and proper person to hold the premises licence to Club 701, after repeatedly breached the licence conditions.  This was pertinent since there were on-going issues with the current licensee interfering with the on-going police investigation (into the allegation from 2 January 2024), but also allegations of intimidating witnesses by accessing witness details from the premises ID scanner.

 

The legal representative for the Police confirmed that the Applicant was clearly a man of good character. The bone of contention for the Police was the terms of the lease and the possibility of the current licensee obtaining control of the premises again. If the 30 month proviso was not in the contract of sale, there would be no objection from the Police. It was felt that the transfer application had also been made prematurely.  There was still six weeks before the Appeal hearing at the Magistrates’ Court, so there was no commercial urgency for the transfer.  The Applicant had stated he required a month for renovations/refit before the premises reopen, leaving only two weeks at best that the premises could trade. 

 

This was an application for the transfer of a premises licence, submitted under Section 42 of the Licensing Act 2003 in respect of Club 701, Basement & Ground Floors, 516 Old Kent Road, London SE1 5BA. 

 

In considering the application, the Licensing Sub-Committee noted paragraphs 8.100 and 8.101 of the Revised Home Office guidance issued under s.182 of the Licensing Act 2003 that in the majority of cases, transfer applications should be a simple administrative process. Unless the Police raise an objection, a licensing authority must transfer the premises licence.  As provided for in paragraph 8.101 of the Guidance, objections from the Police should only be made in exceptional circumstances where the Police believes the transfer may undermine the crime prevention objective.

 

Southwark’s Statement of Licensing Policy 2021-2026 (SoLP) details one such exceptional circumstance that would undermine the crime prevention objective:

 

“94.  This Authority is concerned over the frequently observed practice of an application for a transfer of a premises licence being made following an application for a review of that same licence being lodged.

 

95.   Where, such applications are made, this Authority will require documented proof of transfer of the business / lawful occupancy of the premises (such as a lease), to the new proposed licence holder to support the contention that the business is now under new management control”.

 

The premises has a history in terms of violence and compliance, notably, the indents that resulted in the Police instigating summary reviews on 5 November 2019 and 17 January 2024.

 

Members were extremely concerned that the Contact for Sale allowed for the Applicant to pay “to the seller within thirty (30) months of the alcohol licence being secured, and otherwise this agreement/contract becomes invalid” (clauses 2.5 and 3.1). In view of the many different types of funding for the start-up of nightclub (business loans, merchant cash advances, crowdfunding, angel investors) coupled with the sentiment within paragraphs 94 and 95 of the SoLP, the sub-committee’s serious concerns should be of no surprise to the Applicant.

 

In addition, the Contract for Sale provides:

 

“7.1 For the purpose of assuring to the Buyer the full benefit of the Business the Seller shall not:

 

a.  ……

b.  ……

c.  for a period of two years after the Completion Date, either on its own account or through any other person directly or indirectly operate or take part in the management of a business which competes with the Business within a radius of one mile of the Property”. (clause 7.1.c)

 

The members of the sub-committee were also of the view that the current licensee would be in breach of this non-competing clause given that he already owns a licensed premises next door.

 

Although the two licensed premises would be operating the same building, namely, Club701 and Kent Restaurant and Lounge, it was suggested that there would be limited contact between the Applicant and the current licensee. The Chair of the Licensing Sub-Committee for this application also chaired the Licensing Sub-Committee when the Kent Restaurant Lounge was determined.On that occasion, the current licensee stated that despite there being no immediate access between the premises, due to the limited size of the kitchen in the Kent Restaurant and Lounge, the Club 701 kitchen would be utilised. In the absence of any evidence to the contrary, this arrangement would likely continue.

 

The sub-committee are aware that each licensing application should be considered on its own merits.  However, on this occasion, it has found evidence from the Police compelling.

 

The skeleton argument produced by the legal representative for the Applicant makes reference to the DPS variation.  It is understood that the application was put on hold pending the outcome of the transfer application.  In light of sub-committee’s decision to refuse the premises licence the DPS variation falls away.  However, this sub-committee wish to stress the Applicant’s credentials as being faultless.

 

The Licensing Sub-Committee is satisfied that the evidence presented provides sufficient exceptional circumstances to reject this application and consider it necessary for the promotion of the crime prevention objective to do so. It is on this basis the application was refused.

 

In making this decision the sub-committee had regard to the relevant notice and considered this decision was appropriate for the promotion of crime prevention objective.

 

Appeal Rights

 

The applicant may appeal against any decision:

 

a)  To refuse the application to transfer the premises licence

b)  To refuse the application to specify a person as premises supervisor.

 

Any person who submitted a relevant objection in relation to the application who desire to contend that:

 

a)  That the application to transfer the premises licence ought not to be been granted or

b)  That the application specify a person as premises supervisor ought not to be been granted

 

May appeal against the decision.

 

Any appeal must be made to the magistrates’ court for the area in which the premises are situated. Any appeal must be commenced by notice of appeal given by the appellant to the justices’ clerk for the magistrates’ court within the period of 21 days beginning with the day on which the appellant was notified by the licensing authority of the decision appealed against.

 

Following this resolution, the applicant requested that the licensing sub-committee lift the interim steps on the premises. It was

 

RESOLVED:

 

That the interim steps imposed on 19 January 2024 in respect of the premises licence to Club 701 Basement & Ground Floors, 516 Old Kent Road, London SE1 5BA to suspend the premises licence continues. 

 

It is not appropriate for the promotion of the licensing objectives to lift the suspension.

 

Reasons

 

At the conclusion of the transfer application (the Notice of Decision for which is attached to this decision), an application was made for the review of the interim steps imposed in respect of the premises licence in respect of Club 701 Basement & Ground Floors, 516 Old Kent Road, London SE1 5BA.

 

The detail of the application for the review of the interim steps was identical to the transfer application.

 

Following an allegation of rape on 2 January 2024 the Metropolitan Police submitted a summary review application and the premises licence was suspended as an interim step on 19 January 2024.  The final review of the licence was considered on 8 February when the decision was made to revoke the premises licence.  The interim steps were reviewed and the Licensing Sub-Committee determined that to promote all of the licensing objectives, it was in the public interest that the suspension of the licence continue as an interim step. 

 

The decision to revoke the premises licence and the interim steps were appealed to the Magistrates’ Court.  The basis of both Appeals were that the premises were in the process of being sold to a third party, namely, Eddie Hanson.  The interim steps Appeal was listed at the Magistrates’ Court hearing on 18 April 2024.  That Appeal was withdrawn, due to dissatisfaction concerning the sale of the premises.  The Appeal of the interim steps was also withdrawn to allow Mr Hanson to submit a transfer application and a DPS variation.

 

The premises has not traded since 19 January 2024 when the licence was initially suspended.

 

The Licensing Sub-Committee was not satisfied with the documentation produced as part of the transfer application which showed a payment of £5,000 had been made “up front” and the balance would be paid to Enrico Entertainment Limited over 30 months.  Members noted that it was unusual for a seller to agree such a small deposit, with the rest to be paid over a two and a half year period, in view of the current position with climate in the hospitality industry. 

 

Non-payment of balance meant in default ownership of the premises would revert back to current owner of the premises Enrico Entertainment Limited (clauses 2.5 and 3.1 of the Contract for Sale).  This clause undermined paragraphs 94 and 95 of Southwark’s Statement of Licensing Policy 2021-2026 (SoLP).

 

If that should occur, then the sub-committee may inadvertently permit the premises licence to revert back to the current licensee by default, thus undermining the 8 February Licensing Sub-Committee’s decision. 

 

The operational history of the Club 701 licence argued that the current licensee was not a fit and proper person to hold the premises licence to Club 701 with repeated breaches of the licence conditions and the incidents of violence that resulted in the Police submitting summary reviews on 5 November 2019 and 17 January 2024.  There were also on-going issues with the current licensee interfering with the on-going police investigation (into the allegation from 2 January), with allegations of intimidating witnesses by accessing witness details from the premises ID scanner.

 

In light of the Licensing Sub-Committee’s decision on 8 February to revoke the premises licence and its previous decision to refuse the transfer of premises licence to Mr Hanson, to lift the suspension at this stage would allow Enrico Entertainment Limited to trade, thus subverting the sub-committee’s previous decisions.

 

On this basis, the application is refused and the Licensing Sub-Committee were satisfied that the interim steps to suspend the premises licence was necessary and proportionate to promote the crime prevention licensing objective.

 

In reaching this decision the sub-committee had regard to all the relevant considerations and the four licensing objectives and considered that this decision was appropriate and proportionate.

 

Appeal rights

 

An appeal against this decision may be made by:

 

a.  the chief officer of police for the police area (or each police area) in which the premises are situated, or

b.  the holder of the premises licence.

c.  Any other person who made relevant representations in relation to the application

 

Any appeal must be heard by the magistrates' court within the period of 28 days beginning with the day on which the appellant commenced the appeal.

 

The holder of the premises licence may only make further representations if there has been a material change in circumstances since the authority made its determination.  Any representation should be in writing and cannot be received outside of normal office hours.