20 February 2019

Examples of incorrect refusal or withdrawal of business license

Category: Licenses

A refusal, a withdrawal of a business license in the Netherlands must not be disproportionate or otherwise contrary to principles of good administration. If a lighter sanction or measure than the withdrawal is available, the so-called principle of subsidiarity may mean that the least onerous sanction in the given circumstances will be chosen.

The regulations that facilitate the granting of licences also usually contain the rules for the revocation of the licences: the grounds for revocation. The General Administrative Law Act does not have any general regulations on the revocation of a decision or licence. In general, the following situations provide grounds for revocation of licences:

  • failure to comply with the conditions of the licence;
  • facts or circumstances that have arisen after the licence was granted (e.g. misuse of the licence, resulting in a ground relating to integrity, or failure to use a licence for a certain period of time);
  • change in policy or change in factual circumstances;
  • the information provided proves to be incorrect.
  • I give you some examples of revocations of licenses to show the Dutch practice. If you stille have a question on a Dutch business permit feel free to call me.
  • For information on the appeal procedure against an decision on a Dutch license, please read: Dutch business license and litigation.

Double punitive sanction is disproportionate

(Council of State, 29 March 2017, ECLI:NL:RVS:2017:863)

This court case concerned the revocation of an entrepreneur’s licence for a place on a market involving both a substantial administrative fine and the revocation of the licence. The entrepreneur was the money earner for his family, which consisted of a wife and three small children. He was a market trader whose licence was withdrawn and a fine subsequently imposed. According to the entrepreneur, it was not illegal employment, but favouritism. He pleaded infringement of the ne bis in idem principle and therefore of Article 50 of the Charter of Fundamental Rights of the European Union (the EU Charter). The ne bis in idem principle prohibits double jeopardy. This means that no two punitive sanctions may be imposed for a single violation. This is what could considered to be the case where there is both an administrative fine and withdrawal of a licence. In the appeal proceedings before the Council of State, the court held as follows.

In determining whether manifest unreasonableness occurs, it is important to consider, among other things, the facts and circumstances on account of which a breach of the Wav has been established, the consequences of the withdrawal in the specific case, as well as the other individual circumstances of the situation. The Council of State upheld the appeal, finding that there was a double punitive sanction. On appeal, the judgment under examination was set aside on the grounds that it violated the principle of proportionality laid down in Section 3:4(2) of the General Administrative Law Act (Awb), and the withdrawal of the licence was eligible for annulment.

Insufficient grounds for withdrawal Dutch license

(Court of North Holland, 18 September 2014, ECLI:NL:RBNHO:2014:13451)

Pursuant to the General Local Bye-Law (APV), the mayor could revoke all or part of the operating licence temporarily or for an indefinite period of time. The Catering Establishment licence granted in this case had been revoked because of nuisance on the street caused by visitors waiting to enter the Catering Establishment and nuisance caused by parked visitors’ bicycles, noise nuisance caused by electrically amplified music from the café, and a brawl in the café which – after the persons concerned had been evicted from the establishment – continued on the street and in which peace and quiet only returned after the involvement of police (the violent incident).

The owner and operator of the café did not agree with the revocation of the pub’s operating licence. In regards to the brawl, he stated that he had done, and was doing, everything possible to prevent fights in and around his catering business. He argued that he had not been negligent. Violation of noise standards was disputed by the operator and it was argued that this could not lead to the revocation of the operating licence of the catering establishment. The hotel and catering operator did not rule out the possibility that the results of the noise measurement were unreliable. The municipal supervisor found that the limit value of 40 dB(A) was exceeded by 14 dB(A) as a result of noise production by the hotel and catering establishment. The court stated that this could not be used to revoke the hospitality license.

According to the judge, the brawl in the Catering Establishment could not be regarded as a fact that justified the fear that staying open may cause danger to public order or pose a threat to the living environment in the vicinity of the Catering Establishment (as referred to in the General Municipal Bye-Law). The decision to revoke also failed because the Board of B&W had made the revocation decision, while the Mayor was the competent administrative body.

Breach of the principle of equal treatment taxi license

(General Court at First Instance of Aruba, 17 August 2015, LAR No 2782 of 2014)

In this case, the application for a taxi license was (once again) refused. According to the court, the notion that work as a taxi driver could not be one’s primary means of subsistence was insufficiently justified. Furthermore, the appeal on the basis of the principle of equality was successful. The mere assertion of the licensing authority that in the eight other cases referred to, where a taxi license was granted while those persons also had another job or own business, they were cases of improper conduct, and therefore could not be used to justify the decision. The court instructed the authority to issue the taxi license to the complainant.

The court found that the use of the principle of equality was successful. The complainant referred to eight specific cases in which the defendant did issue a taxi license while, in each of those cases, the person had a permanent job or their own business. The defendant did not comment on these cases, but only argued at the hearing that in those cases there was improper conduct, but that this improper conduct could not be continued indefinitely. This assertion was not valid. The public authority could not rely on the rule that it does not have to continue making a mistake that has been made in the past without any further explanation.