Taxi Driver Online

Aberdeen Councillors who put themselves above the law.
_____________________________
Christie v Aberdeen City Council Licensing Committee

Sheriffdom of Grampian, Highland and Islands at Aberdeen

13 September 2001

Sheriff K A Mclernan

13 September 2001

Licensing — Taxicabs — Taxi licence — Application for renewal of licence — Refusal to renew licence on ground that holder not fit and proper person to hold licence by reason of failure to comply with licence condition — Belief that condition was not enforced — Civic Government (Scotland) Act 1982 (c 45), Sched 1, para 5 (3) (a) (ii) and (d).

Licensing — Taxicabs — Taxi licence — Conditions of licence — Whether court empowered to review reasonableness of conditions — Civic Government (Scotland) Act 1982 (c 45), Sched 1, para 5 (2).

A taxi licence holder appealed against a licensing committee's refusal of his application for renewal of the licence. By condition 29 of the licence the holder was not to hire the taxi to the holder of a taxi driver licence or to any other person. The committee held that the applicant was not a fit and proper person to be the holder of a licence in terms of the Civic Government (Scotland) Act 1982, Sched 1, para 5 (3) (a) (ii), or that there was “other good reason for refusing the application” in terms of para 5 (3) (d), as evidenced by the applicant's knowing and persistent breaches of condition 29. The applicant had openly disclosed the hirer as a person with an interest in the running of his business. He understood that it was a common practice and had been acquiesced in by the committee for many years. He argued that condition 29 was a restraint of trade, a restriction of a licence holder's right to use his taxi as he chose and an *168 unwarranted limitation on the commercial choices available in the use of that asset. The respondents argued that they had the sole discretion to determine the reasonableness of conditions imposed on granting a licence under para 5 (1).

Held, (1) that by para 5 (2) the conditions were required to be “reasonable” and the court had the power to consider whether condition 29 was within the band which might be so classed (p 169A-C); (2) that a breach of a condition did not by itself make the appellant no longer a fit and proper person, and there was nothing to show that he had sought to defy the licensing committee (p 169J-K); (3) that the appellant's intention was crucial to the committee's argument but they had not sought to ascertain that and had based their decision on incorrect and obviously material fact (pp 169L-170A); (4) that it was not appropriate to alter condition 29 and grant the application (p 170I); and appeal allowed and case remitted to the licensing committee.

(1) that for the committee to restrict attention to some consequences of imposing a condition and ignore others was plainly not a process of reasoning which could be seen to produce a rational conclusion (p 170E); (2) that under Sched 1, para 5 (2) the committee had to be able to show why any particular conditions were reasonable (p 170H).
Appeal from a decision of a licensing committee
Richard James Christie appealed against a refusal of his application for renewal of his taxi licence by Aberdeen City Council Licensing Committee.
On 13 September 2001 the sheriff allowed the appeal and remitted the case to the licensing committee for further consideration.

THE SHERIFF (K A McLERNAN).—

This is an appeal against the refusal of an application for renewal by the holder of a taxi licence.

The application had been opposed by the chief constable and a hearing on 18 December 2000 had been postponed to a special meeting on 19 February 2001 by the Aberdeen City Council Licensing Committee (hereafter referred to as “the committee”).

The committee having been addressed at length by the appellant's counsel and the objector, voted to refuse the application. The appellant asked for a statement of reasons in terms of para 17 of Sched 1 to the Civic Government (Scotland) Act 1982 and that was issued dated 28 February 2001.

Appeal against that decision was lodged in terms of para 18 of said Sched 1 to the 1982 Act. In terms of para 18 (7): “The sheriff may uphold an appeal under this paragraph only if he considers that the local authority, in arriving at their decision — (a) erred in law; (b) based their decision on an incorrect material fact; (c) acted contrary to natural justice; or (d) exercised their discretion in an unreasonable manner.”

At the hearing before me counsel for the appellant based his appeal on subparas (a), (b) and (d) above.

Counsel submitted, for the appellant, that the primary issue was that condition 29 of the standard conditions affecting all taxi licences was unreasonable and therefore need not be complied with. Condition 29 is as follows: “The holder of the licence shall not hire the taxi to the holder of a Taxi Driver Licence or to any other person”.

The appellant admitted that during the currency of his previous licence he had breached condition 29 by hiring out his taxi. In his application for renewal he had intimated the hirer as a person who had an interest in the running of his business. He had openly disclosed that because he understood that the practice of hiring out was widespread in the city taxi trade and was by inference acquiesced in by the licensing authorities.

There appeared to be two lines of argument which became intertwined. The first was that the condition was unreasonable and therefore beyond the power of the committee to impose. Paragraph 5 of Sched 1 reads as follows:

“(1) Where an application for the grant or renewal of a licence has been made … 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” (my emphasis).

The second intertwining line of argument seemed to be that the licensing authority recognised the unreasonableness of the condition and acquiesced in its obvious breach by a large number of licence holders. The acquiescence was to be found from the inevitable inference from no action being taken to prevent very many licence holders hiring out their taxis to taxi firms over many years.

Although I was addressed at some length on the unreasonableness of condition 29 it does not appear to me to be the primary issue before this court.

The respondents in this appeal argued that the appellant's approach was wholly misconceived and that this court has no right to consider whether condition 29 was reasonable or not.

They argued that the committee have the sole discretion to determine reasonableness, and if an applicant felt that any condition of the standard conditions was unreasonable he had the remedy of judicial review. While they accepted that the objector before the committee had argued that condition 29 was reasonable, the objector, they submitted, had no locus to do so and any arguments for or against the reasonableness of condition 29 should be ignored by this court.

I shall deal with that submission first. It would seem to me that submission must be repelled. There is no doubt that the committee are entitled to impose such reasonable condition as they see fit. The powers conferred by para 5 (2) do not give the licensing authority unfettered power. The power is qualified by the use of the word “reasonable” and I do not accept the argument that the court should ignore that qualification.

The argument is perhaps best tested by a reductio ad absurdum. On a hypothesis that a committee decided to impose a condition that all members of the families of a committee should have free taxi transport around the city, the proposition that the court could not rule on the reasonableness of such a condition seems to me to be absurd. The power of the court is set out in para 18 (7), and if a licensing authority has misinterpreted its powers then clearly there is an error in law. The purpose of an appeal procedure is to allow review of decisions which may be tainted by error. Accordingly, I reject the submission that the court has no power to consider the question whether condition 29 is within the band of decisions which may be classed as reasonable.

It does not follow, however, that I can deal with that issue in this appeal. I require to examine the reasons stated for the committee decision. The statement of reasons issued runs to seven pages (and reads more like a record of meeting than the distillation of the reasons for arriving at the decision) and concludes with the following: “On the basis of all the information presented the Committee unanimously resolved to refuse the application … in that by knowingly and … persistently breaching condition 29 the applicant was not a fit and proper person to be the holder of a licence … and if the renewal of the licence was to be granted the applicant would admittedly continue to breach condition 29”.

Paragraph 5 (3) of the Schedule provides that “A licensing authority shall refuse an application to grant or renew a licence if, in their opinion— (a) the applicant … is … (ii) not a fit and proper person to be the holder of the licence … (d) there is other good reason for refusing the application; and otherwise shall grant the application.”

The committee clearly base their decision on the terms of para 5 (3) (a) (ii) and 5 (3) (d).

The committee require to leave the informed reader and the court in no real and substantial doubt as to what the reasons for the decision were and what were the material considerations which were taken into account in reaching it (cf Wordie Property Co Ltd v Secretary of State for Scotland, 1984 SLT 345, at p 348).

It seems to me therefore that the court requires to find the material consideration on which the committee relied in order to reach the conclusion that the appellant was not a fit and proper person. The only fact which emerges from the statement of reasons is that the appellant admitted breaching condition 29. In my view a breach of a condition does not on its own make a person cease to be a fit and proper person: it may do so but much depends on the nature of the breach and the nature of the condition. In this case the appellant explains the breach by saying that he followed a widespread practice which he understood to be condoned by the licensing authority by their tacit acquiescence to it.

The committee admit awareness of the practice and that they do react to complaints. “On occasion the licence holder desisted with [sic] the practice without the need for further action … and this was considered to be sufficient”. There is no suggestion in the case that this appellant was ever asked to desist and refused or failed to comply with an undertaking to desist. It would seem to me to be a reasonable inference from the committee's own statement that they do not regard mere breach as sufficient to justify removal of the designation “fit and proper person” from a licence holder. What was there in addition to justify an additional level of culpability? I find nothing in the statement of reasons beyond the breach which was persisted in, in ignorance that the practice would be liable to disapproval.

In reply to the applicant's submission before the committee that the condition was never enforced the objector is reported to have said “It is being enforced now”. In the absence of any other information it is possible to conclude that that response (by the objector and not expressly by the committee) is indeed an explanation for the committee's decision. A decision has been taken to enforce without prior warning a condition which was not previously enforced by sanction.

The committee must base its decision on disclosed factors which reasonably lead to the conclusion that the applicant is not a fit and proper person. In my view there is no satisfactorily disclosed basis for reaching that conclusion in this case. Persistent breach might have been a good reason but not if the level of culpability is nil. There is nothing to show that the applicant has in effect sought to defy the committee or to deviously avoid compliance with the condition. Indeed, the contrary could reasonably be inferred.

The second basis for the decision is that there is “other good reason” for refusing the application. There is no specification of the grounds for that conclusion. There is an inference that the committee have decided that because he failed to comply with the condition in the previous licence he will continue to do so in the currency of any new licence. The appellant says the matter was never raised at any stage in the hearing before the committee. If that is the basis for the decision it is not a good one. The intention of the applicant is crucial to the committee's argument. If they have not sought to ascertain the appellant's intention it cannot be said that the committee have based their decision on correct material fact. By simply assuming a refusal to abide by condition 29 the *170 committee have based the decision on incorrect and obviously material fact.
It cannot be the case that the second basis is justified by reference to the disagreement over whether condition 29 is reasonable. The committee do consider that issue but expressly exclude that as a basis for the decision. The committee therefore have in my opinion erred in law and failed to base their decision on correct material facts and the appeal therefore must succeed.

However, as the issue of reasonableness of condition 29 is raised at great length by the appellant and is also referred to in the statement of reasons it is appropriate that I deal to some extent with that argument.
The appellant's argument is that condition 29 is a restraint of trade, a restriction of a licence holder's right to use his taxi as he chooses, and an unwarranted limitation on the commercial choices available to him in the use of his asset. That argument is not countered by the respondent. The respondent argues that the issue of reasonableness is not up for discussion and when the matter was argued before the committee it was argued by the objector who had no locus to argue the point on behalf of the committee. Thus the appellant's argument is uncontradicted.

The committee have stated in the statement of reasons why they consider that the imposition of condition 29 is reasonable. The committee also state that “freedom of choice was not an issue for it to consider”. If it is correct that the effect of condition 29 is to interfere with the right of a licence holder to make such commercial arrangements for the operation of his taxi as he chooses it is difficult to see the justification for the committee implying that they are entitled to disregard the consequences of condition 29. The committee are in my view not entitled to set their own terms by which reasonableness is to be judged. It is not a reasonable exercise of discretion to ignore factors which may, objectively, be regarded as inevitable consequences, and which consequences may be regarded as an unreasonable imposition on a licence holder.

It would seem to me that the committee must have regard to the consequences of the imposition of a condition, otherwise there is no point having conditions. To restrict attention to some consequences and ignore others is plainly not a process of reasoning which can be seen to produce rational conclusion.

Finally, I look at the reasons advanced by the committee to justify their assertion that condition 29 is reasonable.

There appears to be five elements in para 4 of p 6 of the statement of reasons. I summarise them as follows: (a) long established; (b) protection of the independent taxi driver from the larger operator — who may impose high rental charges; (c) facilitation of identification of drivers; (d) keeping working hours within reasonable limits of an employee; and (e) general discouragement from working long hours.

The criticism advanced by the appellant of those five reasons is that they are illogical. I do not consider it appropriate to deal with each in turn despite the urgings of the appellant's counsel. Because of the approach by the committee the factual basis underlying each element has not been examined and the respondent has not argued the issues. Although the illogicality of the argument might seem plain, it is not appropriate to deal with the significant argument by the appellant when the argument is submitted without the benefit of a contradictor.

The committee is quite entitled to impose conditions but in my interpretation of para 5 (2) of Sched 1 the committee must be able to show why any particular condition (which must by law be reasonable) is reasonable.

I was invited to alter the condition 29 and thereafter grant the application. I do not think that is appropriate. In terms of para 18 (9) of Sched 1: “On upholding an appeal under this paragraph, the sheriff may — (a) remit the case with reasons for his decision to the licensing authority for reconsideration of their decision; or (b) reverse or modify the decision”.
In this case where the committee have failed to take proper account of all the facts and have excluded from their consideration matters which they ought to have included it is more appropriate that they have the opportunity to reconsider the issues raised.

I shall uphold this appeal and remit for further consideration.
If on further consideration it appears that there is no factual basis for the flawed finding that the applicant is not a fit and proper person to be a licence holder then that reason for refusal flies off.

If the board after reconsideration are faced with making a decision on a proper finding that the applicant has disclosed an intention to continue “hiring out” because any prohibition is unreasonable then the real issue underlying this case can be exposed and argued. In my view the committee cannot avoid considering the actual and anticipated effects of condition 29 and the applicant and the court are entitled to see whether the condition can be seen to be within the ambit of the licensing authority's powers. [/b]

Representation

• Counsel for Applicant and Appellant, Cullen, QC; Solicitors, Lefevre Litigation, Aberdeen —
• Solicitor for Respondents, C M Smith, Legal Services, Aberdeen City Council.

[On the same day the sheriff issued an identical opinion in a similar appeal by Stuart Douglas Daun.]
______________________