22 March 2017

Refusal of Dutch license: tips of Dutch lawyer

Category: Licenses

Refusal of a licence by the Dutch government may be a reason to engage the services of an administrative law lawyer. The refusal of the licence must be based on a ground for refusal. This applies to all licences, such as a catering permit, single permit, scarce permit, etc. A Dutch law lawyer can analyse the legality of the decision to refuse a permit. Objections and appeals may be lodged against the decision. What I have mentioned below also applies to a decision to revoke a permit. Read more about this in my book, Business Licences in the Netherlands

Tip 1: Prepare licence application well

The ground for refusal of a licence is regulated by law, regulation or policy rules or a combination thereof. It is therefore useful to make a proper inventory of the legal framework within which a decision on the application is made prior to the application. After all, the applicant can adjust his or her application accordingly. An administrative law lawyer can be of assistance in this regard. Grounds for refusal may or may not be an exhaustive list of grounds for refusing a specific application. It is known in advance to an applicant of the permit what the requirements are for the licence in question; the applicant will have to meet these requirements. This can sometimes be complex if an application also has to be assessed against environmental regulations; for example, noise standards when applying for an event permit. Grounds for refusal can be exhaustive without the municipality being authorised to lay down further rules. This applies, for example, to Article 26 of the Housing Act, in which the grounds for withdrawal are included exhaustively. In that case, there is no room for the municipality to include additional grounds for refusal in an ordinance. For example, when applying for an AFM licence, the requirements of a director’s suitability must be met.

Tip 2: Always submit an opinion against the intention to refuse a licence

On the basis of Sections 4:7 and 4:8 of the General Administrative Law Act, the licensing authority will first announce its intention to refuse the licence applied for, unless it is of a financial nature (determination of a fine), in which case there is the possibility of objection and appeal. If an intention to refuse a licence leads to a decision, the applicant for a licence may submit an opinion against an intention to refuse a licence. In the opinion against the intention, the applicant can explain why this decision would be unjustified. This can be done orally or in writing. An administrative law lawyer can also submit the opinion and provide the legal argumentation behind it. A refusal may be unjustified for several reasons: there could be a violation of the law (there is no ground for refusal) as well as a violation of various principles of good administration. If the intention results in a decision to refuse a licence that has legal consequences, the applicant can lodge an objection and appeal with a lawyer. Refusal of a licence can also be unlawful. This always depends on the facts and circumstances. The applicant for a licence must insist on a well-founded balancing of interests in the decision to be made about the licence. Read also: submitting an opinion against the intention to enforce (in Dutch).

Tip 3: Carefully check the grounds for the refusal of a licence

The refusal of a requested permit can only take place if there is a ground for refusal. The refusal is a decision against which an objection can be lodged within 6 weeks. It is important to check the ground for refusal (or have it checked) quickly because an objection can be lodged within 6 weeks if the ground for refusal is unjustified. For example: the (capacity of) the applicant may also be subject to requirements, such as that the applicant must be at least 21 years of age, and that the applicant (operator of a catering establishment) must be of good character as stipulated in Article 8 of the Drinks and Catering Act and generally also in the General Municipal Bye-Law. This will not be the case if the applicant has recently been convicted of a violent crime. No limitations have been set on the facts and circumstances that may be considered in the assessment of life conduct (Council of State, 31 October 2011, ECLI:NL:RVS:2007:BB6825). Moreover, the municipality does not have to limit itself to facts and circumstances related to the operation of an establishment (Council of State, 2 February 2011 ECLI:NL:RVS:2011:BP2763). The question in this assessment is whether the licensing authority can reasonably take the position that the appellant is no longer, in any way, of bad living behaviour.

Tip 4: Check whether the Bibob assessment in cases of refusal of a licence is thorough

A Bibob test can also take place. Bibob stands for the Act on the Promotion of Integrity Assessments by Public Administration. The Bibob Act stipulates, among other things, that the government may refuse or revoke licences, subsidies, tenders and real estate transactions if there is a risk of criminals abusing a permit. In doing so, the integrity of the applicant is examined. An assessment must be made as to whether there is a serious risk that the licence will (also) be used to commit criminal offences. This is done when applying for a licence for real estate, subsidy, (large) events such as martial arts galas, an operating licence for a hotel and catering company and games of chance such as a gaming halls. Testing under the Bibob Act is also possible if there is proof that the applicant or his business circle can be associated with criminal offences.

Refusal of hospitality license because of bad living behavior

A General Municipal Bye-Law or a Catering Bye-Law generally regulates the grounds for refusal of a Catering Permit. The general ground for refusal that managers are not in any way of bad living behaviour is regulated by Section 8(2)(b) of the Drinks and Catering Act (DHW). As soon as a manager no longer meets the requirements, there is a ground for revocation pursuant to section 31 DHW.

For events, this is usually also regulated in the local APV: an event licence can be refused in the interest of public order, the prevention of nuisance, road safety of persons or goods, morality or health. In addition, there may be a separate events policy that also includes rules that are important for the decision-making involved in the application.

Tip 5: Have a lawyer check the legality of a licence refusal

A lawyer will analyse whether the government has complied with the applicable legal framework, and the lawyer can also check whether any principle of good administration has been violated. Additionally, in situations where there is a decision to refuse a licence, the licensing authority must respect the principles of good administration. The principle of due care laid down in Article 3:2 of the General Administrative Law Act means that, when preparing a decision, the administrative body must acquire the necessary knowledge of the relevant facts and interests to be weighed up. Pursuant to the principle of proportionality (Article 3:4 of the AWB), the government must weigh up the interests directly involved in the decision, if this does not in itself derive from a statutory provision or from the nature of the power to be exercised. The adverse consequences of a decision for one or more interested parties must not be disproportionate to the objectives to be served by the decision. A decision to refuse a licence where there is no serious danger and where the requested permits will be granted – if necessary subject to conditions – may not be for the intended purpose of the Bibob Ac).

Tip 6: File an objection and appeal against a decision to refuse a licence in good time

An applicant for a licence who disagrees with the refusal of the licence may lodge an objection with the Licensing Office. This has to be done no later than 6 weeks after the decision. An administrative law lawyer can be called in as a specialist. If the objection is rejected, an appeal can be lodged with the court. In the proceedings, the administrative lawyer may also raise the (legality of the) regulations on which the decision is based. Exclusive review means that the court must disapply a rule that has not been given by the formal legislator if this rule is contrary to a higher rule. Rules or regulations may be disapplied on the grounds of conflict with a general principle of law if the public body concerned (taking into account the factual circumstances and interests known to that body at the time the regulation was drawn up, or ought to have been known on the basis of a proper investigation) could not reasonably have been expected to adopt that regulation. However, the value or social importance to be attached to the interests concerned is not up to the court. It is up to the licensing authority to weigh up the various interests and the facts and circumstances involved in making a decision containing generally binding regulations (Council of the State, 23 November 2016, ECLI:NL:RVS:2016:3130).

Review of refusal of licence in appeal proceedings

A decision by an administrative body to refuse or revoke a licence will continue to be subject to cautious review by a judge. The judge is not allowed to sit on the seat of the board. The judge assesses the legitimacy of the decision and checks whether the interests at stake have been carefully weighed up and whether the authority has been exercised in a reasonable manner. In doing so, the court also establishes whether the decision is disproportionate and whether there are special circumstances that should have been taken into account in deviation from the policy (inherent power of deviation under Section 4:84 of the General Administrative Law Act). This test is usually expressed in the following terms: the Court found no ground on which to base the opinion that the Mayor could not reasonably use his power to refuse the operating licence on account of the Mayor’s fear that the living environment and public order could be disturbed by the presence of the establishment in the future, which did not outweigh the applicant’s interest in granting the operating licence (Council of State, 2 February 2011, ECLI:NL:RVS:2011:BP2763). However, despite cautious review by a judge, decisions concerning a refusal of a licence are regularly overturned in the administrative courts.