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R v Knowsley Metropolitan Borough ex parte George Gawith (Taxis) Ltd
Queen's Bench Division (Crown Office List)
HEARING-DATES: 5 April 1990
COUNSEL:
G Wingate-Saul QC and A Edis for the Applicants; D Keene QC and W Braithwaite for the Respondents
PANEL: Kennedy J
JUDGMENTBY-1: KENNEDY J
JUDGMENT-1:
KENNEDY J: This is an application for judicial review of, first, the refusal of the Metropolitan Borough of Knowsley (hereinafter referred to simply as Knowsley) to grant 100 Hackney Carriage Proprietors licences to the applicant company on 24th May 1988; secondly, the constructive refusal of Knowsley to grant those licences at any time thereafter, and thirdly, the refusal of Knowsley to determine the applicant company's applications for such licences.
The applicants are a limited company which at all material times owned and operated a fleet of 100 London type FX4 taxi cabs in Liverpool. The company did not have any proprietors licences to operate taxis in nearby Knowsley. Prior to 1st January 1986 local authorities operated a restrictive policy in relation to the grant of Hackney Carriage Proprietors licences. That was in accordance with the provisions of section 37 of the Town Police Clauses Act 1847 which entitled local authorities to grant licences in such numbers as they thought fit.
However, with effect from 1st January 1986 that policy had to be changed as a result of the implementation of section 16 of the Transport Act 1985. The position then became that if a suitable applicant sought a licence in respect of a satisfactory vehicle, properly insured, unless the authority was satisfied that there was no significant demand which was unmet it had to issue a licence; in other words, the licensing authority still had a discretion to exercise but the ambit of the discretion was reduced. At the end of the hearing in the present case there was really no dispute as to what the law was which Knowsley had to apply. It has been considered in a number of cases, at first instance, and in the Court of Appeal. My attention was helpfully invited to some of them, including in particular R v Transport Committee of Great Yarmouth ex parte Dennis Frederick Sawyer [1987] LGR 617, R v Reading Borough Council ex parte Egan (11th June 1987, unreported) and R v Metropolitan Borough of Knowsley Ex parte John Francis Maguire & Ors. (31st July 1989, unreported). As there is now no dispute as to the relevant law I need not for the moment say any more about those authorities.
Knowsley Borough Council, like other authorities, was cautious about implementing the changes of policy required by section 16 of the 1985 Act. On 11th March 1988 the licensing sub-committee agreed to issue three licences per month "until there remained no significant unmet demand". An advertisement was then placed in the local press inviting applications for proprietors' licences. By 9th May 1988, 222 such applications had been received but no licences had been issued because the council's head of legal services had come to the conclusion that if the decision taken on 11th March 1988 was to be the subject of a legal challenge that challenge would succeed. On 12th May 1988 the policy and resources committee approved the issue of Hackney Carriage Proprietors licences to all suitable applicants, subject to their compliance with the council's established policy on vehicle specification. The committee also authorised the commissioning of a survey in the borough to establish if there was any significant unmet deman for Hackney Carriages.
In his affidavit of 9th March 1990 Mr Gawith, the managing director of the applicant company, states that he heard about the decision of the Policy and Resources Committee on the following day. He at once contacted Metro Cammell Weymann, the suppliers of FX4 cabs. Mr Gawith says he spoke again with Metro Cammell Weymann on 16th May 1988 and placed his order for 100 new cabs on 17th May 1988, being the day on which he received a letter from Knowsley, which is at page 16 of the bundle, and which in effect gave formal notice to taxi proprietors of the decision which had been taken by the policy and resources committee on 12th May 1988. The latter half of the letter is, to my mind, of some importance. It reads as follows:
"Until the results of a survey are known, or until my council is satisfied that the demand for Hackney Carriage Proprietors licences had been met then licences will be issued to any applicant who can meet the agreed criteria. The criteria provides that an applicant must (1) Present an FX4 type vehicle for inspection and (2) Be a fit and proper person as defined by the Local Government (Miscellaneous Provisions) Act 1976.
Should you wish to proceed with your application then I would inform you that you must present to this office either proof of ownership or a Bill of Sale in respect of the vehicle you wish to be licensed.
On payment of £13, an appointment will then be made for your vehicle to be inspected at Merseybus Testing Station. Provided that your vehicle meets the current conditions of fitness required by my council and that you can then present your vehicle to this office suitably fitted with an approved taximeter and with a valid certificate of insurance then you will be licensed accordingly."
The first thing to be noted is that the policy is not open-ended. It is only to operate until the results of a survey are known or until the council is satisfied that the demand for Hackney Carriage licences has been met. Before me it has been common ground that only the latter alternative would have been a legally sound justification for a change of policy, but for the moment that is not the point. The point is that from the outset the policy was one which was stated to have potentially a limited life. Also the letter made it clear that anyone who sought to take advantage of it had to satisfy a large number of requirements before he could expect his cab to be licensed and a separate licence was required for each cab.
The requirements, as set out in the letter are (1) the completion of an application form and the production to the Department of Central Services of (a) the application form; (b) proof of ownership or a Bill of Sale in respect of an FX4 type vehicle, being the vehicle which the applicant wished to be licensed, and (c) a testing fee of £13.
(2) Having received an appointment for testing, production of the vehicle at the testing station where the vehicle must meet the current conditions of fitness required by the council.
(3) Production of the tested vehicle to the Department of Central Services fitted with an approved taximeter by an applicant who is considered to be a fit and proper person and who is in possession of a valid certificate of insurance.
In the present case it has not been suggested that any of the requirements were unreasonable and, as the letter makes clear, it was only when all of the requirements were satisfied that the applicant could expect to receive a licence. The respondents still question whether Mr Gawith received his copy of this important letter before he ordered new taxis, if indeed he ordered them. On those issues I am prepared to accept his evidence but, as will emerge, that conclusion is not really fundamental to the resolution of this case.
On 23rd May 1988 Mr Dick, the company secretary of the applicant company, went to the department of central services to apply for 100 licences. He was seen by Miss Rheinlander, Knowsley's senior elections and licensing officer. There is some difference of recollection between them as to precisely what occurred. Undoubtedly Mr Dick had a multiple application form and a cheque for £1300. He also had a bundle of documents which, he said, comprised the registration documents for 100 FX4 type vehicles which showed the applicant company to be the registered keeper of each of those vehicles. Attached to each vehicle registration document, by means of a paper clip, was a piece of paper with a date on it, the dates ranging from May 1988 to June 1989. According to Miss Rheinlander, Mr Dick told her that the date was the date when the applicant company would like that vehicle tested. He then resubmitted the documentation in the form of photocopies with different dates written on them, ranging from July 1988 too mid-1989. Miss Rheinlander says that she discovered that all of the vehicles were currently operating as Hackney Carriages in Liverpool and that she told Mr Dick she could not accept any payment for test fees until bookings had been arranged.
Mr Gawith, in his second affidavit, says that on 23rd May 1988 Mr Dick went to the Knowsley office with vehicle registration documents and insurance certificates covering the 100 vehicles which were at that time operating in Liverpool, and that he, Mr Gawith, had provided Mr Dick with suggested dates for the vehicle inspections on a scheduled basis but only as a guide to assist Knowsley. Mr Gawith does not suggest that Miss Rheinlander is wrong in her recollection of the time span but he says that all of the vehicles could have been produced for testing at once if there had been facilities to deal with them. According to Mr Gawith, Miss Rheinlander told Mr Dick that his applications would take a long time to process and she asked him to leave the documents, other than the cheque, and to call back next day. He agreed and when he heard her tell the next person in the queue that the first available date for a test was 20th June he reported that fact to Mr Gawith, who revised his list of suggested testing dates. So it would seem to be common ground that ultimately Miss Rheinlander did receive a revised schedule of dates with the time span that she recalls.
On the same date, (23rd May 1988), after Mr Dick had been to the council's offices for the first time, the late McNeill J granted two taxi drivers, named McMahon and Hannah, leave to move for judicial review of Knowsley's decision of 12th May 1988. They also obtained an order that until the hearing of the application for judicial review or further order there be a stay in the implementation of the resolution to issue Hackney Carriage Proprietors' licences to all applicants who met Knowsley's criteria.
Before me it has been, I think, agreed on both sides that the application by McMahon and Hannah was probably misconceived. Basically it complained that on 12th May 1988 the committee had refused either to hear local taxi drivers attempt to demonstrate that there was no significant unmet demand, or to postpone its decision until the results of the survey which had been commissioned were available (cf the decision of Nolan J in ex parte Egan (unreported) supra). But whether or not the application was misconceived it resulted in an order, and so when Mr Dick returned to the council's offices, as arranged on 24th May 1988, Miss Rheinlander had to tell him that because of the order she could take no further steps in relation to his applications. She returned his registration documents to him and he reported back to Mr Gawith, who wrote to Knowsley the letter which is copied at page 17 in the bundle.
In that letter Mr Gawith simply records what had happened on those two days and asks to have his company's applications considered on a par with the others who had attended on 23rd May 1988 but who were not deferred because of their bulk. On 3rd June 1988 Knowsley replied to Mr Gawith's letter of 24th May 1988 and, as before me Mr Wingate Saul for the applicants had placed some reliance upon what Miss Rheinlander then said, it is right that I should quote the final paragraph of her letter. It reads:
"As your compnay secretary, Mr G Dick, presented the appropriate documentation to this office prior to notification of the injunction, I would inform you that should he wish to represent the documentation in the same manner as it was originally presented, then your applications will be kept on file until such time as the current situation has been resolved."
On 3rd june 1988 the respondents' director of central services reported to the licensing sub-committee that the injunction had been served on the council and that legal advice was currently being sought in relation to it. He also reported that he had obtained quotations from companies willing to undertake the proposed survey to establish if there was any significant unmet demand. On 14th June 1988 legal advice was obtained from Mr Braithwaite, who appeared before me as junior counsel for the respondents. On 27th June 1988 the licensing sub-committee authorised the director of central services to seek a revocation of the stay ordered by McNeill J. The council's application to remove the stay was served upon the solicitors acting for McMahon and Hannah under cover of a letter dated 13th July 1988, and the Crown Office was then asked to fix a date for hearing before the end of the legal term.
The matter came before Macpherson J on 27th July 1988 when there was no objection to the removal of the stay and it was removed with effect from 6.00 pm on 9th September 1988. It is clear from paragraph 10 of the affidavit, sworn by Mr Winstanley on behalf of the respondents, that the date for the removal of the stay was chosen because by that date it was anticipated that the licensing sub-committee would have heard evidence and representations as to whether there was significant unmet demand for Hackney Carriage services in Knowsley.
On 29th July 1988 Miss Rheinlander wrote to the present applicants to inform them of the meeting of the licensing sub-committee, which was due to be held on 9th September 1988 to discuss the results of the survey carried out by TM Economics. A copy of the conclusions of the survey was enclosed with the letter. It was said in the letter that the full survey report was available for inspection at Knowsley's Hackney Carriage office. Written and oral representations were invited and at the meeting on 9th September 1988 those representations were received. There is no complaint before me about the conduct of that meeting, at which it was resolved that there was no significant unmet demand and that for the time being no further licences would be issued. Arrangements were made for a further meeting to consider whether to issue licences to anyone who suffered hardship as a result of the resolutions of 12th May 1988.
On 14th September 1988 Mr Dick wrote to the respondents alleging that the applicant company would suffer considerable financial hardship as a result of not being able to obtain licences in view of the fact that it had entered into an agreement to purchase 100 new cabs. That allegations was expanded in a letter from the applicant's solicitors, which is copied at page 32 in the bundle, and the suggestion then was that the loss to the applicants could amount to £1.5 M. The respondents were understandably sceptical. They found surprising the paucity of documentation to support the applicant's contention that in mid-May the applicant company had become contractually bound to accept over a period 100 new cabs to replace its Liverpool fleet, which it hoped to have licenced cab by cab to operate in Knowsley. Matters then dragged on, with further information being sought and sometimes supplied, until 24th April 1989 when the applicants commenced these proceedings for judicial review. On 1st March 1990 Schiemann J ordered that the hearing proceed on the public law claim exclusive of any quantification of damages. Thus there is some limitation of the issues which I have to decide.
The applicants' principal submission is that at the date of the licence applications, as the respondents were satisfied that there was no significant unmet demand, they could not therefore refuse the applications, which were properly made. In so far as that somewhat comprehensive submission is asserting that in May 1988, until McNeill J made his order, it was not open to the respondents to refuse a licence on the basis that there was no significant unmet demand I agree with the submission, but that is of little assistance to the applicants, having regard to the facts of this case, because when McNeill J made his order the applicant company had got nowhere near to obtaining any of the licences which they sought. If the order had not been made it seems quite likely that on 24th May 1988, Miss Rheinlander would have arranged for the first of the applicant's vehicles to be tested in July 1988. If it passed the test and was then produced with an approved taximeter and valid certificate of insurance, and if the applicant at that time was considered to be a fit and proper person, no doubt a licence would have been issued. No right to receive 100 licences, or indeed any licences, can be said to have vested in these applicants on 23rd May 1988.
In ex parte Maguire (unreported) the position was quite different because there all the respondents' requirements were satisfied: the taxis had been tested, approved meters had been fitted, a valid certificate of insurance had been produced and all that remained was for the decisions to be taken as to whether or not the licences should be issued. In the present case matters had not progressed nearly so far. All that the applicants had was a right to have their applications considered in accordance with the law and in accordance with the policy which the respondents outlined in the undated letter, from which I quoted much earlier in this judgment. The terms of that letter were not such as to give the applicants any legitimate expectation of licences being issued to them such a could now be relied upon in proceedings for judicial review.
As a result of the injunction the situation drastically changed. The respondents could not give any further consideration to the applications until the stay was removed and, at least until 27th July 1988, I cannot fault the way in which Knowsley responded to the imposition of that stay. I think it is arguable that on 27th July 1988 the respondents should have asked Macpherson J to remove the stay forthwith, but it is quite clear that by then they had the report from the survey which they had commissioned. It indicated that there was no significant unmet demand. If the stay was removed before that report was considered and before a decision was made in relation to it a short period of chaos might well ensure, and so the judge was persuaded to leave the stay in place until the evening of 9th September 1988.
In my judgment, these respondents cannot be said to have been in breach of any statutory or other duty or to have been behaving unreasonably in the Wednesbury sense (Associated Provincial Picture Houses v Wednesbury Corporation [1948] 1 KB 223, [1947] 2 All ER 628) because they went along with, and perhaps even suggested, that course. By the evening of 9th September 1988 the die was cast. The relevant committee was satisfied that there was no significant unmet demand and the applicants could only obtain licences if they could prove hardship. Even if the injunction had been lifted on 27th July 1988 it seems unlikely that more than one or two of the applicant's cabs would have been tested before 9th September 1988. It is not for me to speculate as to whether those cabs would have passed the test, still less as to whether the respondents' other requirements could have been satisfied.
In attempting to prove hardship the main obstacle which lay in the applicants' path, in my judgment, was neither the paucity of evidence as to their contract with Metro-Cab nor the terms of the first letter from Miss Rheinlander which set out the resolutions passed on 12th May 1988 (although those obstacles were formidable enough) but the embryo state of their own applications for licences when the stay was imposed. Even on its own case the appellant company ordered 100 cabs on the strength of a council policy which it knew from the outset had a potentially limited life and it applied for licences in respect of 100 other cabs with suggested testing dates spread over many months. In offering to consider claims on the basis of hardship the respondents were clearly offering to exercise discretion and I cannot fault them for failing to date to exercise it in favour of these applicants.
I trust that in the course of what I have just said I have covered the various alternative ways in which Mr Wingate-Saul put his case. I accept the general thrust of the submissions made by Mr Keene on behalf of the respondents and, in particular, I accept his submission that when an application is made for a licence the authority which receives the application must deal with it on the basis of all relevant considerations known to it when it takes its decision, just as in a planning context the Secretary of State must take into account a circular which comes into existence after his inspector has reported and before he takes his decision: see for example JA Pye (Oxford) Estates Ltd v West Oxford District Council & Anr [1982] JPL 577, 264 EG 533. There is no artificial embargo which comes down prior to that decision date. At the end of the hearing it was suggested that if I found for the applicants I should grant a declaration rather than any other form of relief. In the circumstances I do not consider it appropriate to make any declaration.
This application fails and is dismissed.
DISPOSITION:
Application dismissed
SOLICITORS:
Hill Dickinson, Davis Campbell, Liverpool; Head of Legal and Administrative Services, Huyton
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