The Gazette 1987

GAZETTE

LY/AUGUST

1987

Licensed Premises for Sale

In t h is ar t i c le I propose t o exami ne cer t a in l i cens i ng

prob l ems wh i ch the general prac t i t i oner may encounter

in a conveyanc i ng t r ansac t i on i nvo l v i ng a l i censed

premi ses.

The identification of, and

restrictions attaching to, 'Hotel

Licences'

In general, a sight of the licence will

indicate what is on offer —

whether the licence is of a retail

character, authorises sales both on

and off the premises or off the

premises only, covers intoxicating

liquor generally or is restricted to

certain liquors (beer or wine), or

has any condition attached (six

days or early closing). This is not

so in the case of an 'hotel licence'.

The Licensing (Ir.) Act, 1902,

provided for the granting of a new

licence in respect of an hotel

"wh i ch expression shall refer to a

house containing at least ten apart-

ments set apart and used ex-

clusively

for

the

sleeping

accommodation of travellers, and

having no public bar for the sale of

intoxicating liquors" (section 2,

sub-section 2). The legislature did

not draw a distinction either in

substance or in desc r i p t i on

between a licence granted to

premises on the basis that they are

an hotel and other premises to

which a full on-licence is attached

and the licence issued by the

Revenue Commissioners is the

same in form in both cases —

"Publican's Licence (Ordinary)".

The possibility that this state of

affairs may give rise to confusion

or misunderstanding is acknowl-

edged to the extent that the

following note appears on the back

of the licence so issued:

"This form of licence is used for

both (1) public-house and (2)

certain hotels licensed under

Section 2(2) of the Licensing

(Ireland) Act, 1902. These hotel

licences are subject to certain

restrictions which do not apply

to public-houses."

A solicitor who undertakes the

legal business involved in the

purchase of licensed premises

owes a duty to his client to

exercise care in relation to the

identification of the type of licence

attached to the premises and he

also holds himself out as having

adequate skill and knowledge

properly to identify any restrictions

attaching to that licence. Conse-

quently , in the case of an 'hotel

licence', he will not discharge his

duty of care nor be aware of the

restrictions by a mere sight of the

licence.

James V. Woods, B.L.

Duty of Care

The duty to exercise care was

considered in

Taylor -v- Ryan and

Jones,

unreported judgment of

Finlay P. delivered on 10 March

1983, and again in

Kelly and Anor.

-v- Crowley,

unreported judgment

of Murphy J. delivered on 5 March

1985. The cases concerned

actions for negligence against

solicitors acting for the purchasers

of licensed premises. In both cases

it did not emerge until after the

sales had been completed that the

licences had been granted on the

grounds that the premises were

hotels. In

Taylor -v- Ryan

the

plaintiff intended to purchase a

certain residential licensed public-

house for one of his sons and

having entered into a contract for

that purpose he then instructed the

second-named defendant to carry

out the legal work concerning the

purchase of the premises. The

reply to a requisition requiring the

vendor to specify the exact type of

licence attached to the property

was " c o py licence furnished

ordinary licence". Prior to the

delivery and reply to the

requisitions on title the solicitor for

the vendor had furnished to the

defendant a photostatic copy of

the current licence. Shortly after

the signing of the contract the

plaintiff paid a special visit to the

defendant/solicitor to warn him

that he had been informed that

there was no licence attaching to

the premises or that there was

something wrong with the licence.

The defendant showed him the

copy licence which he had received

and reassured him that the

premises were licensed. A few

days later the plaintiff again voiced

his fears concerning the licence but

de f endant

reiterated

that

assurance. In the course of his

judgment the President stated: —

" I am driven to the conclusion

however

that

since

the

existence of a valid licence

attached to these premises was

a fundamental part of the reason

why the plaintiff was purchasing

them and since the plaintiff

himself put this defendant on

notice in a persistent fashion of

a doubt existing concerning the

validity of the licence that it was

not a sufficient precaution for

this defendant to take to rely on

his knowledge of the factual

situation or on the knowledge of

the plaintiff of the trading,

cus t om and habits of the

premises.

A f t er

events

established that a simple direct

enquiry to the District Court

office in Thurles which is the

appropriate area for

the

premises licensed in Dundrum

would have revealed that a

licence was recorded at all

material times as being what is

known as a hotel licence. In my

view in the particular circum-

stances of this case and on the

express warnings given such an

enquiry was a necessary

reasonable standard of pro-

fessional skill and care on

the part of this defendant. I

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