Taxi Driver Online

This is an interesting case for our Scottish subscribers before the imposition of the civic Government scotland act 1982. I don't think you will find the case anywhere else except TDO, so enjoy it.
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*258 Baker v Glasgow District CouncilNo. 26

First Division

13 May 1981

1981 S.C. 258 Lord Allanbridge

May 13, 1981

Representation ARTHUR JAMES BAKER, Pursuer (Respondent).—Dean of Faculty (Davidson, Q.C.)—C. M. Campbell.

CITY OF GLASGOW DISTRICT COUNCIL, Defenders (Reclaimers).—Cullen, Q.C.—M'Gregor.

Statute—Bye-laws—Regulation of traffic—Regulation of hackney carriages—Licence of taxi cabs—Bye-laws for transfer of licences in discretion of council—Council resolved that new licences issued to be non-transferable—Whether ultra vires—Glasgow Corporation Consolidation (General Powers) Order Confirmation Act 1960 (cap. iii), sec. 86—Glasgow Bye-laws 1952 (as amended)—Glasgow Corporation Consolidation (General Powers) Order Confirmation Act 1960 (Application of Provisions) Order 1978 (S.I. 1978 No. 1934).

In January 1979 an Order was promulgated providing that certain provisions of the Glasgow Corporation Consolidation (General Powers) Order Confirmation Act 1960 and the Glasgow Bye-laws of August 1952, as amended, should be extended to cover an area including Rutherglen as a result of local government reorganisation. Sec. 86 of the 1960 Act provided that “A licence shall be in such form as the magistrates committee may determine and may be granted subject to such terms and conditions … as may be specified in the licence.” Bye-law 11 of the Glasgow Bye-laws provided that “In the case of death, retiral or resignation of any licensee during the currency of the licence the district council may, in their discretion, transfer the licence to …”

At a meeting of the licensing committee of the district council in February 1979 the committee resolved to approve 50 new taxi cab operators' licences to be issued to replace those in force in Rutherglen and that the new licences would be “non-transferable.” A taxi-driver in Rutherglen who held a licence sought a declarator that the district council had no power to issue new licences which were non-transferable. The Lord Ordinary (Allanbridge) held after a procedure roll debate (1) that sec. 86 fell to be read together with the Glasgow Bye-laws and that the district council could not disregard the provisions of the Bye-laws made under the 1960 Order by relying on a wider provision in sec. 86; and (2) that by resolving that the replacement licences were to be “non-transferable” the district council were acting ultra vires of Bye-law 11. The defenders reclaimed.

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Held (aff. interlocutor of Lord Allanbridge) that the licensing committee could not competently impose under sec. 86 a condition prohibiting any transfer of a particular licence during its currency and thus avoid performing the duty under Bye-law 11 of entertaining an application for such transfer; and reclaiming motion refused.

Arthur James Baker raised an action against the City of Glasgow District Council for declarator and interdict. The conclusions were in the following terms:—“1. For declarator that the imposition on the granting by the defenders to the pursuer of a licence for the operation of a taxi-cab of a condition purporting to render such licence incapable of transfer from the pursuer to any other person is unlawful. 2. For interdict against the defenders from imposing or making, on the granting by them to the pursuer of a licence for the operation of a taxi-cab, of a condition purporting to render such licence incapable of transfer from the pursuer to any other person: and for interdict ad interim.”

The declarator and interdict were sought in respect of a resolution of the licensing committee of Glasgow District Council held on 27th February 1979, at which the committee resolved to approve a recommendation by a special sub-committee that 50 new City of Glasgow District taxi-cab operators' licences be issued to replace those in Rutherglen and all of the new licences were to be non-transferable.

The further facts appear from the opinion of the Lord President.

The pursuer pleaded:—“(1) The defenders' averments in answer being irrelevant et separatim lacking in specification, decree de plano should be granted as concluded for.”

The defenders pleaded:—“(1) The pursuer's averments being irrelevant et separatim lacking in specification, the action should be dismissed.”

The case was heard on procedure roll on 9th May 1980 before the Lord Ordinary (Allanbridge).

On 11th June 1980 Lord Allanbridge sustained the pursuer's first plea-in-law, repelled the defenders' first plea-in-law and granted decree de plano.

Lord Allanbridge's— opinion.—

I heard a procedure roll debate in this case on 9th May 1980. The pursuer was represented by the Dean of Faculty and Mr C. M. Campbell and the defenders were represented by Mr M'Gregor. Counsel were agreed that I could decide the case at this stage as there was no real dispute on the facts and whilst the defenders maintained the action should be dismissed, the pursuer maintained decree de plano should be granted now.

In opening the debate Mr M'Gregor outlined the history of the case. Put briefly, it is that the pursuer held a licence to operate a taxi-cab in the Rutherglen area of the defenders' district. That licence was due to expire on 15th May 1979. On 19th January 1979 the Glasgow Corporation Consolidation (General Powers) Order Confirmation Act 1960 (Application of Provisions) Order 1978 came into operation. Article 3 of that order provided inter alia that sections 83 to 88 and 90 to 95 inclusive and the Second Schedule (of the said 1960 Order) so far as relating to cab-drivers' licences and cab-operators' licences shall be extended throughout the district. Article 6 similarly extended to the whole of the said district the Bye-laws made by the former Glasgow Corporation dated 12th August 1952 and confirmed by the Sheriff of Lanarkshire on 23rd March 1953. Article 7 provided that the provisions of sections 270 and 271 of the Burgh Police (Scotland) Act 1892 (cap. 55) should cease to have effect within the district.

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The effect of this legislation was that as from 19th January 1979 the licensing of cab-drivers' licences and cab-operators' licences throughout the whole district was subject to certain provisions of the 1960 Glasgow Order contained in the Schedule to the 1960 Act and also the then existing Glasgow Corporation Bye-laws. As far as licences in the Rutherglen area were concerned, they ceased to be administered in terms of the Rutherglen Bye-laws made in terms of sections 270 and 271 of the 1892 Act but in common with all other areas within the district were now administered in terms of the 1960 Glasgow Order and the Glasgow Bye-laws.

Section 86 of the 1960 Order states: “A licence shall be in such form as the magistrates committee may determine and may be granted subject to such terms and conditions (including without prejudice to that generality conditions restricting its validity to specified localities or periods) as may be specified in the licence.” According to the pursuers' averments on record, which were not disputed by the defenders, Bye-law 11 of the Glasgow Bye-laws (as amended and as confirmed by the Sheriff of Glasgow on 8th October 1974 and as further amended by the said statutory instrument) provides:—“In the case of death, retiral or resignation of any licensee during the currency of the licence, the district council may, in their discretion, transfer the licence to the Executor, Trustee or other representative of the deceased or the partner or successor in office of the Secretary or Manager of the Company or Firm as the case may be or in the case of the resignation of the licensee to any person nominated by him, always provided that such Executor, Trustee, Representative, Partner, Secretary or Manager as aforesaid or any person nominated by the licensee shall possess the necessary qualification to hold a licence. In the event of licensee desiring to transfer his licence to a person nominated by him, if the district council refuse to transfer the licence to the person nominated then the licence shall be reissued to the licensee …”

At a meeting of the licensing committee of the defenders held on 27th February 1979, the committee resolved to approve of recommendations made by a special sub-committee of that committee that inter alia 50 new City of Glasgow District taxi-cab operators' licences be issued to replace those in force in Rutherglen, and that all of the said new licences be “non-transferable.” The pursuer in this case was one of the taxi-cab operators who then held a licence in Rutherglen. The question at issue between the parties in this case is whether the defenders had power in February 1979 to issue new licences which were “non-transferable.”

Mr M'Gregor for the defenders argued that a licensing body is entitled to lay down a general policy which it proposes to follow in coming to its individual decisions provided it is a reasonable policy which it is fair and just to apply. He referred to the observations of Lord Denning M.R. at page 626 of Sagnata Investments Ltd. v. Norwich Corporation [1971] 2 Q.B. 614. He also referred to Short v. Poole Corporation [1926] Ch. 66 and Stringer v. Minister of Housing and Local Government and Another [1970] 1 W.L.R. 1281. He then referred to Cumings v. Birkenhead Corporation [1972] Ch. 12 where Lord Denning, at page 37, had said it was perfectly legitimate for an administrative body to lay down a general policy which it proposes to adopt in the cases coming before it. Mr M'Gregor finally referred to British Oxygen Co. Ltd. v. Minister of Technology [1971] A.C. 610 *261 in which Lord Reid, at page 624, had said that an unqualified discretion must not be exercised in bad faith or so unreasonably exercised as to show that there cannot have been any real or geniune exercise of the discretion.

On the basis of these authorities Mr M'Gregor argued that the defenders were entitled to have a general policy as to the transfer of taxi-cab licences and until the pursuer actually made an application for transfer it could not be said that they had wrongly exercised their discretion as to whether or not to transfer it. It could not be said at present that an application for transfer was bound to be refused and therefore, as stated in the pursuer's pleadings at page 11C of the Closed Record, it could not be said that the defenders would not entertain or, in any event, will not grant his application. His fear was therefore hypothetical and the present action was thus premature and irrelevant. In terms of Bye-law 11 he could make an application for transfer of his licence but there was an element of delectus personae and prima facie it was non-transferable. No such application had yet been made and the pursuer had still had a right to apply for transfer. There had thus been no unlawfulness in the actings of the defenders and the action should be dismissed.

Finally, Mr M'Gregor argued that in terms of section 86 of the 1960 Act the defenders had unqualified power to determine the terms and conditions of any licence. If a term to the effect that the licence was “non-transferable” was in conflict with the discretion to transfer contained in Bye-law 11 or the Court thought it was non-transferable, then the terms of section 86 should prevail as it was contained in an Act of Parliament in contrast to local Bye-laws.

In reply Mr Campbell for the pursuer said that he accepted the pursuer had no right to a transfer of a licence but he had a right to a licence which might be transferred in terms of Bye-law 11. There was no conflict between the terms of section 86 and Bye-law 11. They should be read together if at all possible and the proper reading was to give the defenders the discretion to insert any terms in the licence which were not in conflict with the Bye-law.

Mr Campbell submitted that the defenders' resolution of 27th February 1979 in effect amounted to an ab ante determination not to consider any application under Bye-law 11. The defenders' resolution to render 50 licences non-transferable differed materially from a policy decision laying down guidelines for the future exercise of that discretion. In the latter case there is no question of disabling the future exercise of discretion and such action is therefore lawful. The present resolution prevented any exercise of Bye-law 11 and was unlawful. He referred to de Smith, Judicial Review of Administrative Action (3rd Ed.), at page 274, where it was stated “A tribunal entrusted with a discretion must not, by the adoption of a fixed rule of policy, disable itself from exercising its discretion in individual cases.” He also referred to R. v. London County Council [1918] 1 K.B. 68 at page 73, Brock v. Forth Pilotage Authority 1947 S.N. 41 at page 42 where Lord Keith had held the Authority could not restrict the rights of river pilots contrary to their Bye-laws, R. v. Barry District Council (1900) 16 T.L.R. 565, R. v. Port of London Authority [1919] 1 K.B. 176 where, at page 184, Bankes L.J. drew a distinction between a policy decision which would *262 be applied unless there was something exceptional in the case and a decision not to hear any application of a particular character by whomsoever made. Mr Campbell finally referred to the case of Magistrates of Kilmarnock v. Secretary of State for Scotland 1961 S.C. 350 where Lord Cameron, at page 362, held the defender was in the exercise of an administrative discretion entitled to pursue a course of action in line with a policy determined by him.

On the basis of these authorities Mr Campbell submitted that whilst the defenders were entitled to lay down a policy to be applied in individual cases which came before it, it must not apply that policy so rigidly as to reject an applicant without hearing what he has to say and “shut its ears to an application.” In the present case by resolving that the new licences were “non-transferable” the defenders had in effect decided that no application for transfer of a policy could ever be heard and this was contrary to the terms of Bye-law 11. They had therefore acted unlawfully and decree should be granted de plano.

In his second speech for the defenders Mr M'Gregor said he did not disagree with the general proposition that a local authority must not disable itself from exercising its discretion. The question was whether it had done so in this case. It was premature to decide that question now before an application for a transfer of the pursuer's licence had ever been made. All the reported cases occurred after an application had been made and a real and not a hypothetical question then arose.

In the fourth and final speech the Dean of Faculty submitted that the resolution was perfectly clear in its terms. The new licences were to be “non-transferable” and that meant no application for transfer could ever be heard. The resolution was thus in conflict with Bye-law 11 and unlawful and it was pointless to await an application. There could be no application for transfer of a “non-transferable” licence. The correct test was laid down by Bankes L.J. in the Port of London Authority case in 1919 and approved by Lord Reid in the House of Lords in the British Oxygen case in 1971. Applying that test to the defenders' resolution in the present case the effect of it was that they could not hear any application for transfer of the pursuers' licence. The case of Brock in the Court of Session in 1947 was an example of a case where interdict was pronounced following on an unlawful resolution which was contrary to the authority's Bye-laws. He asked me in conclusion to sustain the pursuer's first plea-in-law and grant decree for declarator and interdict.

I had the advantage of a very helpful and detailed examination of the law by all counsel in this case. In the present case the defenders have a discretion in terms of their Bye-law 11 to decide whether to grant or refuse applications for transfer of taxi operators' licences. It was argued in his opening speech by Mr M'Gregor for the defenders that in view of the wide powers contained in section 86 of the Order contained in the Schedule to the Glasgow Corporation Consolidation (General Powers) Order Confirmation Act 1960 the defenders could disregard that Bye-law if it was in conflict with section 86 which stated such licences could be granted “subject to such terms and conditions … as may be specified in the licence.” Mr M'Gregor did not pursue this argument in his second speech. In my view the wide powers contained in section 86 must be read together with the defenders' *263 own Bye-law passed by them and confirmed by the Sheriff-Principal. I do not consider that section 86 is in conflict with their Bye-laws and in particular Bye-law 11. The effect, however, of their Bye-laws is to restrict the defenders' powers under section 86. They are, of course, entitled to alter their Bye-laws in accordance with the appropriate procedure, but what they cannot do is to treat section 86 as giving them power to disregard or repeal by implication their own Bye-laws still in force. In fact in this case the statutory instrument which came into effect on 19th January 1979, namely, The Glasgow Corporation Consolidation (General Powers) Order Confirmation Act 1960 (Application of Provisions) Order 1978 , expressly extended inter alia section 86 and also these Bye-laws throughout the whole district in terms of Articles 3 and 6 thereof. I therefore reject this subsidiary argument by the defenders.

The main argument between the parties is whether the defenders were acting lawfully in view of the terms of Bye-law 11 in resolving to issue 50 new licences to replace those in force in Rutherglen which would be “non-transferable.” There is no doubt that in terms of Bye-law 11 the defenders were bound to consider whether they should exercise their discretion to transfer a licence to one of a number of possible persons detailed in that Bye-law if an application for transfer was made to them. The question at issue is whether the defenders' resolution of 27th February 1979 amounted only to a policy decision as to the future exercise of their discretion or to a determination not to hear any application for any transfer of a licence.

Having read the cases cited to me and referred to earlier in this opinion, I consider the law on this matter is clearly summarised and stated by Bankes L.J. at page 184 of R. v. Port of London Authority [1919] 1 K.B. 176 where he said: “There are on the one hand cases where a tribunal in the honest exercise of its discretion has adopted a policy, and, without refusing to hear an applicant, intimates to him what its policy is, and that after hearing him it will in accordance with its policy decide against him, unless there is something exceptional in his case. I think counsel for the applicants would admit that, if the policy has been adopted for reasons which the tribunal may legitimately entertain, no objection could be taken to such a course. On the other hand there are cases where a tribunal has passed a rule, or come to a determination, not to hear any application of a particular character by whomsoever made. There is a wide distinction between these two classes.”

These words were quoted by Lord Reid with approval at page 625 of British Oxygen Co. v. Board of Trade [1971] A.C. 610. Lord Reid went on to say that the circumstances in which discretions are exercised vary enormously and that passage cannot be applied literally in every case. The general rule is that anyone who has to exercise a statutory discretion must not “shut his ears to an application.” What an authority must not do is to refuse to listen at all.

Applying that legal test to the circumstances in this case I am quite satisfied that by resolving that the new licences were to be “non-transferable” the defenders were in effect deciding that they would not, and indeed could not, hear any applications for the transfer of such licences in terms of Bye-law 11. If the new licences were made “non-transferable” without any qualification of these words then they could not be transferred in the future by *264 anyone at any time. This was not a policy decision regarding how and in what circumstances licences might be transferred. It was a decision to replace existing licences with new licences which could never under any circumstances be transferred. In this situation the resolution fell within the second of the two classes defined by Bankes L.J. and was unlawful. Being unlawful, the resolution cannot be allowed by the Court to have effect because it deprives the pursuer of the opportunity of having an application for transfer of his licence considered by the defenders in terms of Bye-law 11. I therefore consider the pursuer is entitled to decree for declarator and interdict as concluded for by him. No objection was taken by counsel for the defenders to the terms of the conclusions for declarator and interdict and I think they are suitable for the protection of the pursuer in this case.

On the whole matter I therefore sustain the pursuer's first plea-in-law, repel the defenders' first plea-in-law and grant decree de plano.

The defenders reclaimed and the reclaiming motion was heard before the First Division.

The arguments for the parties appear from the opinion of the Court.

At advising on 13th May 1981, the opinion of the Court was delivered by the Lord President.

Lord President (Emslie)—.—

The pursuer held a cab-operator's licence granted to him by the defenders (the City of Glasgow District Council). This licence authorised him to operate a cab in the Rutherglen area of the district until its expiry date—15th May 1979. It was subject to the provisions of certain Bye-laws made by the former Royal Burgh of Rutherglen.

On 19th January 1979 there came into operation the Glasgow Corporation Consolidation (General Powers) Order Confirmation Act 1960 (Application of Provisions) Order 1978 (S.I. 1978 No. 1934). It provided inter alia that certain sections of that Act dealing with the licensing of cabs should apply throughout the entire district. It was also declared that the provisions of Bye-laws relating to cab-operators' licences, made by the former Glasgow Corporation, should extend to the whole of that district, including the Rutherglen area. After 19th January 1979, accordingly, the law relating to the licensing of cab-operators throughout the district, including the Rutherglen area, is to be found in the Act and the Bye-laws which we have just mentioned, subject to an amending provision whereby, in any reference therein to the magistrates' committee, the district council is substituted therefor.

Section 41 (1) of the Act provides: “Subject to the provisions of this Part of this Order the magistrates committee may grant a licence to any person whom they think fit to operate as a cab such vehicle as may be specified in the licence.” Bye-law 11 of the former Glasgow Corporation in its amended form provides: “In the case of death, retiral or resignation of any Licensee during the currency of the Licence, the Magistrates Committee may, in their discretion, transfer the Licence to the Executor, Trustee or other representative of the deceased, or to the Partner or successor in office of the Secretary or Manager of the Company or Firm, as the case may be or in the case of the resignation of the Licensee to any person nominated *265 by him, always provided that such Executor, Trustee, Representative, Partner, Secretary or Manager as aforesaid or any person nominated by the Licensee shall possess the necessary qualifications to hold a Licence.” Section 86 of the Act is in these terms: “A licence shall be in such form as the magistrates committee may determine and may be granted subject to such terms and conditions (including without prejudice to that generality conditions restricting its validity to specified localities or periods) as may be specified in the licence.”

On 27th February 1979 the defenders' licensing committee resolved (approving a recommendation of a sub-committee) that 50 new city of Glasgow district taxi-cab operators' licences be issued to replace those in force in Rutherglen, and that all of the said new licences be “non-transferable.” The minute recording this resolution was duly approved by the council and the defenders thereafter intimated the resolution to the pursuer's solicitors.

The pursuer at the time this action was brought was an applicant for a cab-operator's licence to come into effect on 15th May 1979, and it is accepted that he was entitled to get one. In light of the resolution of the licensing committee it was clear, however, that the licence which he would receive would be one subject to the condition that it was “non-transferable.” In these circumstances the pursuer's first and second conclusions were in these terms: “1. For declarator that the imposition on the granting by the defenders to the pursuer of a licence for the operation of a taxi-cab of a condition purporting to render such licence incapable of transfer from the pursuer to any other person is unlawful. 2. For interdict against the defenders from imposing or making, on the granting by them to the pursuer of a licence for the operation of a taxi-cab, of a condition purporting to render such licence incapable of transfer from the pursuer to any other person: and for interdict ad interim.” Interim interdict was granted in his favour at an early stage in the process and after debate in procedure roll the Lord Ordinary upheld the pursuer's submission that the defenders were not (as they maintained) entitled to impose a condition making the licence which they would grant to him “non-transferable.” He thereupon repelled the defences as irrelevant and granted decree de plano.

In this reclaiming motion by the defenders counsel sought to renew only one of the arguments which had been presented on the defenders' behalf to the Lord Ordinary—the argument which the Lord Ordinary in his opinion describes as a subsidiary argument. It was briefly to this effect. The purpose of Bye-law 11 is to define, in general, the scope of the authority granted by a licence to its holder. Under the wide powers conferred by section 86 it is perfectly competent for the defenders to restrict, by a condition, what would otherwise be comprehended by such a licence, namely, the right of recourse to Bye-law 11 if any of the events specified in that Bye-law should occur during its currency. The condition which the defenders intend to impose upon the grant of the new licence to the pursuer will, in effect, rule out any question of access to Bye-law 11, should any of the specified events happen before it has run its full term.

We entertain no doubt that the vital premise on which, as counsel for the defenders conceded, this short submission essentially depended, is quite unsound. Bye-law 11 does not purport to define in general the scope of the *266 authority granted by a cab operator's licence. It is a Bye-law which provides in effect that on the death, retiral or resignation of “any licensee” the magistrates' committee (now the district council's licensing committee) shall entertain an application for transfer of the licence for its unexpired term which they may grant or refuse in their discretion. It is concerned only to prescribe what is to happen if any of the defined events should occur during the currency of any licence. What it does is to impose upon the committee a duty, on the occurrence of one or other of these events, to exercise a discretion to permit or to refuse transfer of the licence concerned. The question is whether, standing the existence of the provisions of Bye-law 11, which no one contends was ultra vires of the defenders or their statutory predecessors, the licensing committee of the defenders can competently impose under section 86 of the Act, a condition prohibiting any transfer of a particular licence during its currency and thus avoid performing the duty imposed upon them by that Bye-law to entertain an application for transfer of that licence, for disposal in its discretion, in any of the defined circumstances. The answer to that question is, clearly, no. Section 86 of the Act and Bye-law 11 co-exist, and the former must, accordingly, be construed subject to the latter. Putting the matter in another way, where the defenders have made provisions applicable to all licences by exercising one relevant statutory power the licensing committee may not by exercising another relevant power contradict these provisions in respect of all or even some licences. Under section 86 the licensing committee may impose upon the grant of a licence any condition which is not inconsistent with Bye-law 11. What the committee may not do, however, is to impose, ab ante under section 86, a condition which, in the case of the licence concerned, will deny the giving of any effect to that Bye-law. The clear assumption of Bye-law 11 is the existence of a licence in respect of which the power given in that Bye-law can be exercised. That is a current licence which must therefore by definition be one which is in such terms that it is susceptible to the exercise of the power conferred on the committee by the Bye-law. We are told that the licensing committee is concerned to bring about a situation in which, in all circumstances, the person who shall succeed to a vacant licence shall be the qualified applicant at the top of their waiting list. This is an objective which may be secured by the repeal or amendment of the Bye-law by the defenders but not by the device of imposing a condition in licences in accordance with the resolution of the licensing committee.

Upon the whole matter the reclaiming motion fails and we shall affirm the interlocutor of the Lord Ordinary dated 11th June 1980.

RepresentationDrummond & Co., W.S., for Flowers & Co., Glasgow—Simpson & Marwick, W.S.

The Court refused the reclaiming motion.
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