THE BOTTOM LINE
- A “look-back” period is not a blank check: Authorities cannot use old information to assess a manager’s character for a business permit unless there is a concrete, relevant incident within the recent past (in this case, five years).
- Guilt by association is not enough: A permit cannot be denied based on weak evidence, such as a manager’s mere presence at a location during a police raid, especially when a plausible explanation is provided and no charges are filed.
- Immediate relief is possible: Businesses facing potentially unlawful permit refusals can obtain urgent court intervention to suspend the decision, allowing operations to continue and preventing irreversible financial damage while the full legal process unfolds.
THE DETAILS
A Dutch court has provided a critical check on the power of local authorities to deny operating permits based on a manager’s alleged “bad character” (slecht levensgedrag). The case involved a restaurant that was effectively forced to cease its main operations after the local mayor refused to transfer its permit to the new corporate owner. The refusal was based on the assertion that the new manager, who held a 96% stake in the holding company, did not meet the required standards of good conduct due to past judicial and police information.
The core of the dispute rested on the municipality’s own policy for assessing character. This policy stipulated a five-year “look-back” period: to consider conduct older than five years, there must first be a qualifying negative incident within the last five years. The mayor argued that the manager’s presence at a police raid on an illegal gambling operation less than a year prior, where he was found with a large sum of cash, constituted such an incident. However, the manager explained he was simply visiting a friend, the cash was restaurant revenue awaiting deposit (supported by evidence), and he was never treated as a suspect by the police.
The District Court of Oost-Brabant sided with the business, granting a preliminary injunction that suspends the mayor’s decision. The judge found the evidence for the recent “incident” to be “very thin” and insufficiently substantiated by the mayor. Without a valid recent trigger event, the municipality’s own rules prohibited it from examining older information. The court concluded there were serious doubts about the lawfulness of the mayor’s decision. Balancing the interests, the judge found that the significant and immediate financial and personal harm to the business owner outweighed the municipality’s poorly supported concerns, allowing the restaurant to immediately resume full operations.
SOURCE
Source: Rechtbank Oost-Brabant
