Can you have a beer garden without a licence?

At the moment the press is full of various different articles on the Top 10 or Top 20 beer gardens in different local areas and it is worth making sure that you appear in those listings so that you can capitalise on any good weather.

Since the reform of the Licensing Act back in 2005, I have come across various types of plans which attach to premises licences. Some vary from sketch plans showing barely any of the premises at all, let alone the beer garden, to others which feature the full premises and substantial beer gardens. Some of those beer gardens are licensed while others are not.

This has caused confusion for a number of clients and, more significantly, for a number of licensing authorities across the country.

Licensable?

The legal position is that provided you are not having any regulated entertainment or selling alcohol from an external bar, your beer garden does not necessarily need to be licensed as consumption of alcohol is not a licensable activity.

However, we have noticed that there has been an increase in licensing authorities who insist upon external areas being licensed. This is either because they deem the sale of alcohol to take place outside the premises at the time the order was placed or because an application has been made for a pavement licence to permit tables and chairs on the highway, eg, for an area of seating to the front of the premises, and the local authority has insisted upon a variation to incorporate that area into the licensed area.
This can obviously bring substantial expense to an operator, and it is also particularly sensitive with residents.

The majority of local residents would be nervous about seeing a blue notice outside a premises or in a local newspaper, which states that an operator was looking to licence an entire external area particularly if this is an extensive area very close to their properties. Licensing such an area can mean there will be an external bar, which will in turn potentially attract more people or that the operators may even be playing music outside.

Confusion

In relation to the actual sale of alcohol, many people are confused about where the sale actually takes place and whether it is necessary to license a beer garden.

A sale is not defined under the Licensing Act 2003 and therefore we have to look at the Sale of Goods Act 1979. In a nutshell, this states that a sale takes place when the transfer of property in goods occurs from the seller to the buyer, ie, when the alcohol is ‘appropriated to the contract’.

There is very little case law that assists in defining when the sale takes place, however, a case heard in 2002 known as ‘Valpack’ centred around packaging regulations but addressed the issue of when a bottle of beer was purchased. The judge held that the purchase of a bottle of beer was a contract for the sale of unascertained goods.

Waiting

This therefore meant that when the beer was selected to be given to the customer, the bottle was unconditionally appropriated to the contract and at that moment, the property in the bottle passed to the buyer.

There is a common misconception that if a waiter or waitress takes an order from the customer in an external area and takes payment at the table, the sale has actually taken place outside the premises.

Obviously, this can cause concerns for licensing authorities if they believe that unlicensed activities are taking place in your beer garden.

In actual fact, the sale takes place when the waiter or waitress goes into the premises and selects either a bottle of beer, bottle of wine etc, from the stock at the premises and identifies it as being for the buyer.

Up until that point, the goods are unascertained, ie, have not been set aside for that particular buyer and, therefore, the property in the goods is not transferred.
It is, therefore, perfectly acceptable to have a beer garden on your plan, which is unlicensed, if your staff take orders in that area and then specifically select the alcohol or ‘appropriate it to the contract’ within the licensed premises.

Disconcerting

Obviously it is disconcerting to receive a warning from the licensing authority that you are carrying on unlicensed activities in your beer garden, but in the event that this does occur, it is worth considering where the orders are actually put together by your staff and discussing this with the licensing authority.

It can mean the difference between carrying on trading in the manner you have always done or potentially facing a costly variation to your premises licence, which could result in the added expense of a hearing before the licensing authority.