'Hemmings' Loses - Supreme Court Judgement Delivered

A long awaited Judgment has now been delivered this morning (29^th April 2015) by the Supreme  Court in the matter of R (on the application of Hemming (t/a Simply Pleasure Ltd) and others) v Westminster City Council.

The Court ruled against Mr. Hemming’s stating:

“there is no reason why it [the fee levied] should not be set at a level enabling the authority to recover from licensed operators the full cost of running and enforcing the licensing scheme, including the costs of enforcement and proceedings against those operating sex establishments without licences.”

Mr Hemming runs sex shops in the Westminster area under the name Simply Pleasure.  Westminster has charged such operators substantial sums in connection to these licences; in 2011/12 the costs were £29,435.  This figure was made up of 2 lesser sums - £2,667 for the processing of the application and £26,435 for the administration and enforcement of the licensing regime as a whole.

Although a complex case, the main thrust of the Hemming’s case against Westminster was that following the introduction of the Provision of Services Regulations 2009, Westminster were no longer entitled to include within their set fees the cost of enforcing the licensing system (£26,345).

Although lower Courts appear to have sympathy with Mr. Hemming’s case, the Supreme Court disagreed that the regulations had such an effect.  The Supreme Court acknowledged that they had received the benefit of not only fuller and more refined arguments from the parties. It has also had the benefit of interventions by HM Treasury and a considerable number of regulatory or professional bodies, concerned about their ability to recover fees for enforcing other regulatory schemes, which might be regarded as similar to that presently under consideration.

A second question was posed regarding how the fee was demanded and whether this was in contravention to the relevant Regulations.  The Court considered 2 scenarios:

Option A:

I. on making the application, the costs of the authorisation procedures and formalities, and

II. on the application being successful, a further fee to cover the costs of the running and enforcement of the licensing scheme.

Option B (as operated by Westminster historically)

I. on making the application, the costs of the authorisation procedures and formalities

II. at the same time, but on the basis that it is refundable if the application is unsuccessful, a further fee to cover the costs of the running and enforcement of the licensing scheme

The Court believed that Option A was clearly within the terms of the Regulations and required Westminster to operate in this manner until the legality of ‘Option B’ was ruled upon by the Court of Justice in Luxemborg, to whom they referred the issue.

A copy of the full Judgement has been published online or you can watch the decision being delivered this morning on the Court’s YouTube channel.