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Barclay v. Renfrewshire Council


Extra Division


Ex Div


Lords Cameron of Lochbroom, Reed and Wheatley


3 April 2001

Licensing -- Taxicabs -- Taxi licence -- Application for renewal of licence -- Refusal on ground of "other good reason" -- Original application granted by default -- Authority considering that no significant unmet demand -- Whether relevant to application for renewal -- Time at which demand fell to be assessed -- Whether circumstances of grant a "good reason" to refuse renewal -- Civic Government (Scotland) Act 1982 (c 45), s 10 (3) and Sched 1, para 5 (3) (d).

Section 10 (3) of the Civic Government (Scotland) Act 1982, as amended, provides that without prejudice to the grounds of refusal in para 5 of Sched 1 to the Act, "the grant of a taxi licence may be refused by a licensing authority for the purpose of limiting the number of taxis ... if, but only if, they are satisfied that there is no significant demand for the services of taxis in their area which is unmet".

Paragraph 5 (3) of Sched 1 provides that an authority "shall refuse an application to grant or renew a licence if, in their opinion ... (d) there is other good reason for refusing the application; and otherwise shall grant the application".

An applicant for renewal of a taxi licence appealed against refusal of the application by the licensing authority. The applicant had become unconditionally entitled to the grant of a licence for one year in terms of s 3 (4) of the 1982 Act after the respondents had failed competently to apply for an extension of time to consider the application until they had reformulated their policy on issuing new licences.

When the application for renewal was considered, the respondents refused it for "good reason" under Sched 1, para 5 (3) (d) in that this was the first time it had been properly considered and but for a technicality it would not have been granted under the new policy. The sheriff refused the appeal and the applicant appealed to the Court of Session. The respondents argued that overprovision was a proper ground for refusing to renew as well as grant a taxi licence.

Held, (1) that the absence of significant unmet demand constituted a circumstance in which a licensing authority had a discretion to refuse to grant a new taxi licence under s 10 (3), but was not a reason for refusing to grant or renew a licence under para 5 (3) (pp 651H-K and 652C); (2) that the assessment under s 10 (3) had to be made in relation to the situation at the time an application fell to be considered, and the respondents were not entitled to have regard to a policy which they had not determined on at the time either when the application was received by them or at any time during the period when it ought to have been considered and a final decision reached (p 652D and F-G); (3) that the respondents' failure to obtain an extension for consideration of the application could not be used as the basis for a good reason under para 5 (3) (d) (p 652H); and appeal allowed.

Appeal from the sheriff court

Janet Barclay appealed against the sheriff's refusal of her appeal against a decision of Renfrewshire Council, refusing her application for renewal of her taxi licence.

Statutory provisions

The Civic Government (Scotland) Act 1982, as originally enacted, provided:

"10. (3) Without prejudice to paragraph 5 of Schedule 1 to this Act, a licensing authority shall refuse an application to grant a taxi licence if, in their opinion, granting it would have an adverse effect on the general availability to the public in their area of the services of taxis or the cost of providing these services."

The Act, as amended, provides:

"10. (3) Without prejudice to paragraph 5 of Schedule 1 to this Act, the grant of a taxi licence may be refused by a licensing authority for the purpose of limiting the number of taxis in respect of which licences are granted by them if, but only if, they are satisfied that there is no significant demand for the services of taxis in their area which is unmet. ...

"[Sched 1] 5. (1) Where an application for the grant or renewal of a licence has been made to a licensing authority they shall, in accordance with this paragraph (a) grant or renew the licence unconditionally; (b) grant or renew the licence subject to conditions; or (c) refuse to grant or renew the licence.

"(2) The conditions referred to in sub-paragraph (1) (b) above shall be such reasonable conditions ... as the licensing authority think fit and, without prejudice to that generality, may include-- (a) conditions restricting the validity of a licence to an area or areas specified in the licence; and (b) in relation to the grant of a licence, where that licence is intended to replace an existing licence, a condition requiring the holder of the existing licence to surrender it in accordance with paragraph 13 below.

"(3) A licensing authority shall refuse an application to grant or renew a licence if, in their opinion (d) there is other good reason for refusing the application; and otherwise shall grant the application."

Noble Organisation Ltd (The) v City of Glasgow District Council (No 3), 1991 SLT 213.

Noble Organisation Ltd (The) v Kilmarnock and Loudoun District Council, 1993 SLT 759.

Textbooks referred to de Smith, Judicial Review of Administrative Acts (5th ed), para 8-026.

The appeal was heard before an Extra Division on 9 March 2001.

On 3 April 2001 the court allowed the appeal and remitted the case to the sheriff to direct the respondents to consider the application further.
The following opinion of the court was delivered by Lord Cameron of Lochbroom:

OPINION OF THE COURT.

[1] This appeal concerns a decision of the respondents, as the licensing authority in terms of the Civic Government (Scotland) Act 1982 ("the 1982 Act"), taken on 19 August 1999 refusing an application by the appellant for renewal of a taxi licence. The appellant required the respondents to give reasons in writing for their decision in terms of para 17 of Sched 1 to the 1982 Act. Following the issue of reasons in writing by the respondents in a letter dated 27 August 1999, the appellant raised the present action in the sheriff court seeking to reverse the respondents' decision.

The appellant claimed that the respondents had erred in law in reaching their decision. The sheriff, having heard the parties, on 22 March 2000 pronounced an interlocutor in which he repelled the pleas in law for the appellant, sustained the respondents' first plea in law to the effect that the respondents had not erred in law and otherwise repelled the remaining pleas in law for the respondents and refused the appeal.

He held that neither the decision to refuse the appellant's application for renewal of a taxi licence nor the reasons set out in the letter of 27 August 1999 disclosed any error in law on the part of the respondents in refusing the appellant's application.

[2] Before we consider the submissions made to us, it is convenient to set out the admitted facts. In December 1997 the appellant applied for a taxi licence, conform to the provisions of the 1982 Act. In terms of s 3 (1) of the 1982 Act the respondents were, for the purpose of the discharge of their function as a licensing authority, required, within three months of the application having been made to them, to consider the application and, subject to certain other provisions of the section, to reach a final decision on the application within six months.

In terms of subs (4) it is provided that where the licensing authority have failed to reach a final decision on the application before the expiry of the six month period, the licence applied for "shall be deemed to have been granted unconditionally on the date of such expiry and shall remain in force for one year".

It is further provided that such grant is without prejudice to certain other powers given to a licensing authority to revoke, vary or suspend a licence.

Provision is made by s 3 (2) for the local authority to seek an extension of the six month period by way of summary application and for the sheriff, if it appears to him that there is good reason to do so, to extend the period as he thinks fit.

In the present case the sheriff in his note sets out that in 1998 the respondents were awaiting a report from the Fraser of Allander Institute in order to assist them in formulating policy in connection with the issue of taxi licences.

It appears that in the course of 1998 that report was received and considered by the respondents. On 3 December 1998 the respondents formulated a policy restricting the number of new taxi licences that they intended to issue. It further appears that the respondents had intended to continue consideration of the appellant's application, and certain other licence applications, until they had received the report and had formulated policy. However, their summary application to the court was incompetent in that it referred to an application by the appellant for a taxi driver's licence.

Accordingly, no application for continuation of consideration of the appellant's application was sought or obtained from the court. In the circumstances it was, and is, accepted that the appellant became entitled in terms of s 3 (4) of the 1982 Act to the grant of a taxi licence unconditionally on 18 June 1998 for a period of a year, that date being the date of the expiry of the six month period from the date of the submission of the appellant's application. In terms of s 3 (5) of the 1982 Act the respondents were thereupon bound to make out and deliver to the appellant a licence so granted.

It remains only to note that in terms of s 3 (4) such a grant is granted without prejudice to the respondents' powers of revocation, variation or suspension under the 1982 Act and that none of these powers was exercised at any time by the respondents in relation to the appellant's grant of a licence following the date when it was deemed to have been granted.

[3] As stated above the respondents formulated their policy on 3 December 1998. On 14 January 1999, apparently in ignorance of the fact that their application for an extension of time to the sheriff had been incompetent, the respondents purported to consider the appellant's application for grant of a taxi licence and to refuse it.

They purported to do so by reference to the restriction policy adopted by them on 3 December 1998 and under reference to s 10 (3) of the 1982 Act as amended by the Transport Act 1985. This section concerns taxi and private hire car licences. In terms of subs (2) it provides that a licensing authority shall not "grant or renew" a taxi licence unless satisfied that the vehicle to which the licence is to relate is suitable in type, size and design for use as a taxi and is safe for that use and that there is in force in relation to the vehicle a policy of insurance or such security as complies with Pt VI of the Road Traffic Act 1972.

Subsection (3) provides as follows: [his Lordship quoted its terms and continued:] It is also convenient at this juncture to note that this subsection, as originally enacted, was in the following terms: [his Lordship quoted its terms and continued:]

[4] In the event the respondents recognised that their decision was inept. We note that the sheriff states that the matter had been raised by the appellant's agents shortly before the date set down for the hearing of the appellant's application on 14 January *649 1999. However, recognising that their purported refusal was inept and that in fact the application must already be deemed to have been granted, the respondents wrote to the appellant's agent on 28 January 1999 enclosing the licence dated, as required by statute, to 18 June 1998.

[5] It appears that in the letter of 28 January 1999, and in a further letter written by the respondents to the appellant on 10 August 1999 upon receipt of her application for renewal of a licence, the respondents sought to make clear to the appellant that the appellant was not entitled to expect that the licensing authority would necessarily renew the licence in view of the adoption by them of a restriction on licence policy on 3 December 1998.

The sheriff records that the letter of 28 January 1999 sought to point out that the issue of the licence to the appellant took the number of taxi licences issued at that time beyond the limit of 212 set in terms of the policy and that the letter of 10 August 1999 also set out in more detail how the respondents intended to operate the s 10 (3) policy adopted.

We observe at this point that the appellant's licence was deemed to have been granted immediately upon expiry of the six month period from the date of submission of the application and that in June 1998 no policy existed which set down a limit of 212 licences for the respondents' area.

[6] The appellant required to apply for renewal of the licence as at 19 June 1999. As noted above, on 19 August 1999 at the hearing of that application the renewal was refused and the appellant applied to the respondents for a note of written reasons for the decision. These reasons were set out in the letter of 27 August 1999.

[7] It is convenient at this stage to take note of a further provision of the 1982 Act which is relevant to the debate before us. Schedule 1 to the Act makes further provisions as to the general system of licensing and in particular the procedural provisions to be followed, including the provisions to be followed in respect of applications for the grant and renewal of licences. Paragraph 5 reads as follows: [his Lordship quoted the terms of para 5 set out supra and continued:]

[8. It is accepted for the respondents in the present appeal that none of the matters referred to in para 5 (3) (a), (b) or (c) are relevant to their decision.

[9] We turn now to consider the terms of the respondents' letter of 27 August 1999. The letter bears to be headed:

"Civic Government (Scotland) Act 1982
Application for renewal of taxi licence
Janet Barclay, 14 Camps Crescent, Renfrew"
It continues:

"I refer to your letter of 19 August 1999 by which you requested a statement of reasons for the licensing authority's decision to refuse the above application.

"I would confirm that the application was refused by the Council's licensing sub-committee at a meeting held on Thursday 19 August 1999. The application was refused in terms of paragraph 5(3)(d) of Schedule 1 to the above Act i.e. on the basis that there was a 'good reason' for refusal of the application. "In reaching this decision the sub-committee took into account

"(a) the terms of the letter sent to you by the Council's head of legal services dated 28 January 1999;

"(b) the terms of the licensing authority's policy on the limitation on the number of taxi licences to be issued in Renfrewshire as adopted by the Council's Corporate Services Committee on 3 December 1998;

"(c) submissions made by your Mr Banks in support of the application at said meeting on 19 August 1999.

"In considering this application the licensing sub-committee were aware of the circumstances surrounding the 'deemed grant' of a taxi licence to your client, Janet Barclay, in January 1999."

The letter then goes on to set out the circumstances which gave rise to the grant of a taxi licence to the appellant in terms of the Act. In particular the letter states, after referring to the various matters to which we have alluded above:

"Accordingly no extension to the six month period had been properly obtained and Mrs Barclay was therefore entitled to a 'deemed grant' of a taxi licence in terms of section 3(4) of the above Act as from 18 June 1998."

[10] The letter then made reference to the terms of the council's head of legal services' letter dated 28 January 1999 in which it appears that it was stated that the licence which was being issued to the appellant was being issued "by virtue of a statutory requirement and not by virtue of a properly considered decision of the licensing authority".

The letter went on to state that the licensing subcommittee, in their decision taken on 14 January 1999, had decided to refuse the appellant's application "in order to maintain the new policy". The letter related that at the meeting of the licensing subcommittee on 19 August 1999 the appellant's representative had argued that, in seeking to take account of the policy determined upon in December 1998, the respondents were attempting to take a decision on the renewal of a licence in terms of s 10 (3) of the 1982 Act and that to do so was patently incompetent, as that subsection only applied to applications for new grants.

It appeared that he had thereafter declined to make any submissions on the merits of the application in relation to the respondents' restriction policy, notwithstanding that he had been referred to the respondents' power to refuse an application if satisfied that there was a "good reason" for doing so.

[11] The respondents' letter then continued as follows:

"The licensing authority retired to consider the application. Having done so it was decided that the application should be refused on the ground referred to above i.e. in terms of paragraph 5(3)(d) of Schedule 1 to the above Act as there was a 'good reason' for refusal of this application.

The good reason for refusal is that the licensing authority was not satisfied that a taxi licence would have been granted to Mrs Barclay in breach of the said policy had the licensing authority been in the position to determine the application.

This is supported by the fact that, in ignorance of the legal difficulties surrounding the failure to obtain a six month extension for consideration of the application, the subcommittee proceeded on 14 January 1999 to take a decision to refuse the application in terms of section 10(3) of the above Act in order to maintain a newly adopted policy on the number of taxi licences to be issued. Any policy adopted by a licensing authority must admit of possible exceptions based on the merits of particular applications.

The licence issued to Mrs Barclay was not issued following a considered decision of the licensing authority on the merits of the application. Indeed it was not granted by the licensing authority at all. Instead it was issued by virtue of legal process as a result of a mistake in the drafting of an application for an extension of time to the Sheriff which had been submitted to ensure that her application was considered against a policy to be applied fairly to each and every application for a new taxi licence.

Whilst this error may have been very fortuitous for Mrs Barclay in the short term, it was not an issue of a taxi licence based on merit. The licensing authority considered that the deemed grant of that licence should not continue in the face of a valid and well formulated policy on a limitation on the number of taxi licences to be issued.

Mrs Barclay was well aware of the likelihood of this approach by the licensing authority in view of the terms of the said letter of 28 January 1999 issued to you by the Head of Legal Services.

Although the holder of a licence is usually deemed to have a legitimate expectation that all being equal, her licence will be renewed, it is accepted that this expectation does not apply if she was forewarned that she should not necessarily expect a renewal (see de Smith Judicial Review of Administrative Acts 5th edition para. 8-026).

In particular this expectation would not apply in this case given that the 'deemed grant' was sent out with the covering letter of 28 January 1999 stating that as this was a deemed grant the applicant should not necessarily expect that it will be renewed, in view of the Council's policy to restrict taxi numbers to 212.

A covering letter of this type is clearly intended to preserve the position for the future in order to leave it open to the licensing authority to consider a refusal under paragraph 5(3)(d) of Schedule 1 as aforesaid. This is precisely what happened in this case. The application was refused simply because the licensing authority did not think that Mrs Barclay merited the grant of a taxi licence in the face of the new policy, and the hearing on 19 August 1999 was the first time the licensing authority could properly consider the matter.

"For the above reasons the application was refused."

[12] At the end of the day the issue is a short one. It is whether, in terms of para 5 (3) (d) of Sched 1 to the 1982 Act, the respondents were entitled, upon an application for renewal of a taxi licence, however that licence came to be granted, to take into account a policy for limiting the number of taxi licences to be granted which had been approved by them after the date on which the taxi licence was, in terms of the 1982 Act, deemed to have been granted.

Before us counsel for the respondents did not seek to suggest that it was legitimate for the respondents to found solely upon "the expectation", to which reference was made in the letter of 28 January 1999, to the effect that, as the grant was a deemed grant, the appellant should not necessarily expect that the licence would be renewed in view of the council's policy to restrict taxi numbers to 212.

He accepted that the proper question to be determined, and the only question to be determined, is whether a licensing authority is entitled to found upon a policy limiting the number of taxis to be licensed within their area as a reason for refusal only when an application for grant of a taxi licence has been submitted to them or whether that remains a reason for the purposes of para 5 (3) (d) as a good reason for refusal of an application for renewal of that grant.

[13] For the appellant, it was submitted that in determining what was the proper construction to be placed upon s 10 (3) of the 1982 Act it was necessary to have regard to the distinction between the powers of a licensing authority to grant or renew a taxi licence in terms of s 10 (2) and the restriction upon those powers in s 10 (3) which is imported by the phrase "the grant of a taxi licence may be refused by a licensing authority" for the stated purpose.

That being so, the opening words of s 10 (3), namely "without prejudice to paragraph 5 of Schedule 1 to this Act" were to be read as meaning that once a licence had been the subject of a grant by a licensing authority, then, when considering an application for renewal of that taxi licence, the licensing authority were not entitled to refuse the application on the ground that they had instituted a policy for the purpose of limiting the number of taxis in respect of which "licences are granted by them".

It was significant that throughout the subsection the words "grant" or "granted" were used and no reference was made to a renewal. This was consistent with the general purpose of the legislation, namely, that the holder of a licence should be protected in the livelihood which the existence of the licence provided to the holder, unless and until, for reasons other than a change in policy introduced after the grant of the licence was originally made, it would be appropriate to refuse an application for its renewal.

In these circumstances the fact of overprovision arising from the introduction of a policy adopted by the licensing authority following the original grant could not amount to a good reason for refusal of a renewal of such a licence. In the present case, it was plain that the respondents were doing no more than attempting to apply the provisions of s 10 (3) at a point where they were considering an application for renewal of a *651 licence.

The fact that the licence had been deemed to be granted and that the life of the licence was limited to one year, whereas in normal circumstances a grant made after full consideration of the application by the licensing authority was for three years, did not and could not affect the meaning to be given to the words "grant" and "granted" in s 10 (3) so as to restrict them to a grant made by the licensing authority as a final decision after full consideration of the original application for grant of a taxi licence.

At the time when the application came before the respondents, and throughout the time during which the respondents required to reach a decision in terms of s 3 of the Act, there was no policy in place to which they could refer for refusal of the grant of that licence.

Before the sheriff it was a matter of concession that there was no reason personal to the applicant for refusal of the application for renewal of the licence.

[14] The submission for the respondents was that the words "without prejudice to paragraph 5 of Schedule 1 to this Act" did not serve to suggest that overprovision might not be a good reason for refusal of an application for renewal of a taxi licence. Rather, s 10 (3) should be understood as providing a specific ground for the refusal of a taxi licence, additional to those set out in paras 5 (3) (a), (b) and (c) of the Schedule. Counsel accepted that it was of note that in para 5 (3) the words "shall refuse" appear in contradistinction to s 10 (3) where the words "may be refused" are used.

He also accepted that if it had been intended by Parliament that a reason for refusal on the ground of overprovision, by way of limiting the number of taxis in respect of which licences were granted, was to be a good reason for the purposes of para 5, it might have been expected that the provisions of s 10 (3), when they were amended in 1985, would have incorporated reference to grant or renewal of a taxi licence in a manner similar to the terms of s 10 (2). Counsel for the respondents made reference, in particular, to the decisions in the cases of Noble Organisation Ltd v City of Glasgow District Council (No 3) and Noble Organisation Ltd v Kilmarnock and Loudoun District Council.

In the former case, as the sheriff noted, in the context of refusal of an application for a public entertainment licence to operate an amusement centre, Lord Justice Clerk Ross, at 1991 SLT, p 216, expressed the opinion that in relation to the grant of such an application, overprovision could fall under para 5 (3) (d).

In the latter case, which also involved an application for a public entertainment licence, it appears to have been accepted by counsel for the applicants that overprovision of similar facilities as those with which the application was concerned, if established, could be regarded as a good reason for refusing an application for a public entertainment licence. Neither of these cases, in our opinion, is in point.

They were not concerned with the specific provisions of s 10 as applied to taxi and private hire car licences. Nor were they concerned with the general issue of the purpose to which s 10 is directed, so far as such licences are concerned. When one looks to the terms of s 10 (2) it is clear that at the time when application for grant of a licence is made, a licensing authority requires to be satisfied that the vehicle to which the licence is to relate is suitable.

It is reasonable to assume that the licensing authority would have satisfied itself on such matters within the initial period of three months for consideration of the application in terms of s 3 (1). If so satisfied, and the grant is made, it could not constitute good reason for refusal to renew that licence that since the grant of the licence the licensing authority had become satisfied that there was no significant demand for the services of taxis in their area which was unmet and for that reason they would refuse to renew the licence.

The policy of the Act so far as relating to safety of the public is clearly met by s 10 (2) and (4) of the Act. Once a licence has been granted, in our opinion, the scheme of the Act so far as it concerns the licensing and regulation of taxis and private hire cars, is to allow the licence holder to operate so long as the vehicle licensed is suitable for the purpose and that there is in force the appropriate policy of insurance or other security as complies with Pt VI of the Road Traffic Act 1972, subject always to such other reasonable conditions as may be imposed in terms of para 5 (2). Such reasonable conditions can be imposed even if the original grant, being a grant made in terms of s 3 (4), was unconditional.

Any matter of overprovision which may arise subsequent to the original grant, can be effectively dealt with by the licensing authority in two ways, first of all, by refusal of new applications for grant of a licence or, alternatively, by refusal of applications for new grants unless they are accompanied by surrender of an existing licence in favour of the new applicant in terms of para 5 (2) (b).

It is clear that "grant" in s 10 (3) does not include the renewal of an already existing taxi licence: indeed the Act is careful to distinguish between grant of a licence and renewal of a licence -- compare the references to both grant and renewal in para 5 (3) and s 10 (2) with the reference to grant alone in s 10 (3). Section 10 (3) comes into play as a ground of refusal if the licensing authority is "satisfied that there is no significant demand for the services of taxis in their area which is unmet" and thereafter determines to exercise its discretion in favour of refusal.

That is to say, the licensing authority can refuse the grant of a licence for the purpose of preventing overprovision only if there is no significant unmet demand. On the other hand, if para 5 (3) contemplated that the prevention of overprovision was an "other good reason", then s 10 (3) would have the effect of restricting, or at least defining more narrowly, the circumstances in which the grant of a licence could be refused under para 5. Such an effect would be incompatible with the opening words of s 10 (3) "Without prejudice to paragraph 5".

It could be avoided only if the requirement imposed by s 10 (3), that the licensing authority be satisfied that there is no significant unmet demand, were to be implicit in para 5 (3). But in that event s 10 (3) would be otiose. Counsel for the respondents acknowledged that, on his construction of s 10 (3), overprovision cannot constitute an "other good reason" (our emphasis) for the refusal to grant a taxi licence under para 5 (3) (d). Nevertheless, he said, since s 10 (3) does not cover applications for the renewal of a taxi licence, overprovision could constitute an "other good reason" for the refusal of such an application, even though it could not constitute such a reason for the refusal of an application for the grant of a licence.

But this approach would have the consequence that an applicant for renewal, who already holds a licence and who will have a valuable interest (even possibly his livelihood) at stake, would enjoy less protection than an aspiring entrant to the taxi trade, since only the latter would be covered by the requirement in s 10 (3) that there be no significant unmet demand.

We do not consider that this can have been the intention of Parliament. Rather, the purpose of the power granted by s 10 (3), as amended by the Transport Act 1985, is plainly to prevent a situation where it becomes impossible for licensed taxi operators to provide a proper service on economic or other grounds due to an excessive number of licences.

Thus, reading s 10 (3) together with para 5 (3), these provisions can be understood on the basis that while overprovision is not intended to constitute a reason compelling the licensing authority to refuse to grant or renew a taxi licence under para 5 (3), it constitutes a circumstance in which the licensing authority has a discretion to refuse to grant a taxi licence under s 10 (3), subject to the requirements of that provision.

Moreover, the assessment to be made in terms of s 10 (3) must be made in relation to the situation at the time when an application falls to be considered and not at some subsequent date. What the respondents have attempted to do in the present case is to do exactly that which they are prevented from doing, namely to exercise their power in terms of s 10 (3) at a time when it was no longer available to them, namely upon an application for renewal of an existing licence.

[15] In these circumstances, we are satisfied that the sheriff erred in his determination. It appears that he proceeded upon the view that there was no prohibition in substance or in form arising from the 1982 Act which prevented the respondents at the meeting on 19 August 1999 from considering matters in the way set out in their letter of 28 August 1999.

He did so on the basis that he distinguished a grant by operation of law from a considered grant by licensing authority, as being a form of compensation to the applicant for failure of the respondents to meet the statutory timetable. In our opinion, there is nothing in the Act which gives any countenance to such a proposition. The Act contemplates that the period of the licence granted in terms of s 3 (4) will be limited, in order that the licensing authority can thereafter give consideration in early course upon renewal to imposing such conditions which they might otherwise impose as conditions upon grant or renewal.

What they are not entitled to do, however, upon consideration of an application for renewal of that licence, is to have regard to a policy which they had not determined upon at the time either when the application for grant was received by them or indeed at any time during the period when it ought to have been considered, and a final decision reached, by them. In our opinion, what the respondents were truly doing was attempting to invoke s 10 (3) on an occasion when it was no longer open to them to do so.

This is quite apparent from the terms of the letter of 27 August 1999 and its referral throughout to the restriction policy which was put in place following upon the respondents' decision on 3 December 1998. The sheriff seems to have placed some emphasis on the fact that the initial grant had been "backdated to June 1998".

In fact, the provisions of s 3 of the Act required that in June 1998 the licence should be immediately issued upon the failure of the respondents to reach a final decision upon the application. The fact that their failure to do so arose from their own actings cannot, in our opinion, affect the matter or entitle them to use that failure as the basis for a good reason in terms of para 5 (3) (d).

More particularly is this so since counsel for the respondents before us did not seek to argue the matter upon the basis that the appellant was advised, prior to application for renewal, that the respondents intended to take account of their policy decision in December 1998 when considering the application for renewal.

[16] In the whole circumstances we are satisfied that the sheriff's decision is flawed. In his decision the sheriff erred in attempting to distinguish, for the purposes of what constituted the grant of a licence, between a grant which was secured after a final decision within a period of six months and a grant which arose by reason that the licensing authority had made no decision with six months.

Each is a grant for the purposes of the 1982 Act. Accordingly, when considering an application for renewal of that grant at the conclusion of the period for which the original grant was in force, the respondents were not entitled to take into account a policy which was determined upon during the period after the licence came into force.

For all these reasons we shall allow the appeal and in so doing, we shall recall the sheriff's interlocutor, sustain the first plea in law for the pursuer and appellant to the extent of holding that the defenders and respondents in arriving at their decision of 19 August 1999 erred in law, repel the remaining pleas in law for the pursuer and appellant, repel the first, second and fourth pleas in law for the defenders and respondents, and sustain the third plea in law for the defenders and respondents to the extent of remitting the case back to the sheriff to direct the defenders and respondents to consider further the application of the appellant for renewal of a taxi licence.

Representation

Counsel for Appellant, Ardrey; Solicitors, Drummond Miller, WS (for Banks Devlin & Co, Paisley) -- Counsel for Respondents, Agnew of Lochnaw, QC; Solicitors, Legal Services Department, Renfewshire Council.
(c) W. Green & Son Limited
*1 [2001] S.L.T. 647