The Court of Appeal has ruled that a franchisor could not use its franchisees as nominees in applications for interim transfers of two off-licences at Spar premises in County Westmeath.
In a judgment delivered on 15 November 2018, the court allowed an appeal by Superintendent Alan Murray, a notice party, against a High Court order answering a District Court judge’s question in the negative. The question was whether the franchise agreements presented to the District Court prevented the proposed transfers. The Court of Appeal answered it in the affirmative.
Triode Newhill LHP Ltd held leasehold interests in the premises and applied for the transfers, naming Campus Retail Management Ltd and MKP Stores Ltd as its nominees. Under the agreements, the franchisees could use the premises to run the businesses, but had no estate or interest in them. They sold liquor on their own account, were responsible for the businesses’ debts and were expressly not Triode’s agents. Triode was not the occupier or the entity selling the liquor.
The court accepted that a company may hold an intoxicating liquor licence through a nominee, and that the nominee may itself be a company. But it held that a nominee must be the licence holder’s servant or agent, under its command and control. The franchise agreements did not create that relationship. The court said the tax-clearance rules relied on by Triode did not change this licensing-law requirement, and that a longstanding administrative practice could not determine the law.
The proposed applications named Triode as the applicant and sought to meet the licensing requirements by naming the franchisees as nominees. The court held that this arrangement could not overcome the fact that Triode would not carry on the licensed trade. It said the applicant must hold the lowest estate or tenancy in the premises and be the party carrying on the trade. Under the agreements presented, the franchisees could not satisfy the first requirement, while Triode could not satisfy the second.
The court did not decide whether the agreements gave the franchisees only a licence to use the premises or, in substance, a tenancy. Nor did it decide whether a franchisee in lawful occupation could apply for a licence in its own name. Those questions were hypothetical in this appeal and were left for a case in which they arise directly.