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I thought I had posted this but I can't locate it on TDO.
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R v Metropolitan Borough of Knowsley ex parte Maguire & Others
QUEEN'S BENCH DIVISION (CROWN OFFICE LIST)
OTTON J
31 July 1989
J Davies for the Applicants; TS Braithwaite for the Respondents
Nyland & Beattie, Widnes; Head of Legal Services, Metropolitan Borough of Knowsley, Kirkby.
OTTON J
By these proceedings the applicants seek judicial review of: (1) A resolution of the Metropolitan Borough of Knowsley acting by its Licensing Sub-Committee passed on 9 September 1988, that there was no significant unmet demand for hackney carriage vehicles under section 16 of the Transport Act 1984 and subsidiary decisions; (2) Decisions made by the Council through its sub-committee not to issue hackney carriage vehicle licences to the applicants, made on 4 November 1988 in the case of the third Applicant, and on 11 November 1988 in the case of the first, second and fourth applicants.
There is another application by Joseph Francis Mellor in the same terms as the first application.
The applicants are John Francis Maguire, Robert Joseph Maguire, John Murray and Ralph John Potts. They all hold current HCV licences and have considerable experience in driving hackney carriages or taxis. Each owns an FX4 taxi and seeks a licence for such vehicle so that he can operate on his own account as a hackney carriage owner and driver in the metropolitan district of Knowsley.
This Authority's area covers some 37 and a half square miles, has a population of approximately 170,000 spread over a number of towns and villages which include Kirkby in the north, Harewood in the south and Huyton and Prescot in the centre. It is served by the M57 which runs from Kirkby to Huyton and Tarbuck, where it joins the M62 which is the main motorway leading to Liverpool. Speke Airport lies just outside the south-west boundary of the metropolitan district.
Since the passing of the Transport Act 1985, which sought to remove restraints on the issue of hackney carriage licences and to allow free market forces to take their course, Knowsley Borough Council has experienced considerable conflict between those who already hold HCV proprietors' licences and those who seek to take advantage of the new legislation.
On 11 March 1988 the Licensing Sub-Committee considered a report of the Director of Central Services, which informed members of the present position and the number of HCV proprietors' licences issued by the Authority, and made recommendations to enable the Authority to comply with the requirements of the Act. It was resolved to issue three proprietors' licences per month commencing in May until there was no significant unmet demand; advertisements for applications for such new licences should be circulated, that Mr Hodgson, the Director of Central Services, should prepare a report on how the licences should be allocated, and that he should have discussions with various bodies capable of carrying out a survey to determine whether any significant unmet demand still existed. In the event each applicant applied for a proprietor's licence.
In his second report dated 9 May Mr Hodgson advised that the numerical limit could not be sustained in the light of decisions in the Divisional Court and that the only ground for refusing application was if the Council was satisfied that there was no significant unmet demand. At a meeting of the Policy and Resources Committee on 12 May it was resolved to issue proprietors' licences to all suitable (my emphasis) applicants, subject to their compliance with the Council's policy on vehicle specification, and the Director was authorised to commission a survey.
On 18 May there appeared the most important document in this case: the respondents wrote a letter to each of the applicants and other potential licensees outlining the declared policy. It also stated: "Until the results of a survey are known, or until my Council is satisfied that the demand for Hackney Carriage Proprietors Licences has 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."
The letter required an applicant to present proof of ownership of the vehicle he wished to be licensed, and on payment of £13 it would be inspected. The last sentence reads: "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 (my emphasis) you will be licensed accordingly."
Each applicant acquired an FX4 taxi, was able to produce proof of ownership of it. Each taxi passed inspection, and was thereafter fitted with an approved taxi meter, and a valid certificate of insurance was in force. This entailed a considerable financial outlay on the part of the applicants.
However, on 23 May two taxi drivers, who already possessed proprietors' licences, made an ex parte application to this court for judicial review of the respondents' decision of the 12 May. Mr Justice McNeill issued an injunction preventing the issue of any further licences. He also ordered that the respondents should have leave to move to strike out the injunction on seven days' notice. On the following day the applicants were informed of the injunction. However, it was not until the 27 July that the respondents applied for a removal of the stay, which was granted with effect from 6 pm on 9 September when, by that date, the respondents would have completed all their proposed consultations and received representations from all interested parties. No explanation is given on behalf of the respondents for their delay.
In June 1988 TM Economics delivered the survey on "Taxi Services in Knowsley", which had been commissioned by the Director. It concluded that there was no significant unmet demand. Copies were sent to each of the applicants and other interested parties.
On 22 July the Sub-Committee considered the report and resolved that it be received and noted; that there should be a consultation procedure, and that Mr Starkie, chairman of TM Economics, be invited to attend a special meeting of the Licensing Sub-Committee in order to comment on the survey report and answer the questions of members and other interested parties.
The applicants did not accept either the basis or the conclusion of the survey. Together with a number of other persons they decided to have the survey and its methodology scrutinised by an independent third party. Accordingly, the Public Administration Research Centre (PARC) was commissioned to examine the survey and to report. PARC produced a critique which was sent by hand to the Council well before the meeting of the 9 September 1988. In addition, solicitors acting on behalf of the applicants and others made strong and long written representations to the Council criticising the conclusion and the method in which it had been arrived at. There is before me a bundle of some 180 pages of representations and letters from many quarters, the overwhelming majority of which were against the conclusion.
On 29 August Mr Hodgson prepared a further report in anticipation of the meeting on 9 September. At paragraph 4 he stated: "It is apparent, from the report of TM Economics and the written representations received, that there is a divergence of opinion on the question of whether any sigifnicant unmet demand exists. The Sub-Committee will have to decide, having received all representations, whether it is satisfied that no significant unmet demand exists. If it is not, then it is not possible lawfully to issue further licences. In reaching the decision on that central issue, the Sub-Committee must only take into account considerations relevant to that issue and must not take any irrelevant considerations into account. Having done so, the Sub-Committee must reach a reasonable conclusion on the issue.
"4.2 There are a number of other factors which may potentially arise in this particular matter. Firstly, even if the Sub-Committee decides there is no significant unmet demand, the Council does then have a discretion to issue licences notwithstanding the lack of demand. Secondly, a number of potential licensees claim that they should be licensed in any event in view of the steps which they have had to take in pursuance of the resolution of the Policy and Resources Committee of 12 May 1988 . . .
"4.4 Bearing those factors in mind it is suggested that the Sub-Committee should approach the decision-making process in the following way.
"4.4.1 Determine, firstly whether there is any significant unmet demand.
"4.4.2 If the answer . . . is that there is no significant unmet demand, then the Sub-Committee will need to go on to consider whether in any event to issue further licences either generally or to those persons who had taken action pursuant to the 12 May 1988 resolution. It is suggested that those issues (if they arise) should be considered at a further meeting or meetings of the Sub-Committee. In considering those issues, the Sub-Committee would again need to give the opportunity to interested parties to make representations. Given the likelihood that representations today will perhaps touch on those matters (although they are not relevant to the question of demand as such), it is suggested that a written representation approach would be appropriate."
At Appendix A Mr Hodgson set out a brief summary, and at paragraph 2 stated concisely the nature of the objections to the survey and its conclusion. At Appendix B he set out a "suggested oral representation procedure" for the meeting, to which I shall return.
On 9 September the meeting started at 10 o'clock and went on until 5 o"clock. There were some 72 persons present. The manner of the conduct of the meeting is subject to criticism in these proceedings, and I shall return to it hereafter. It was resolved finally not to issue any further hackney carriage or private hire licences.
It is this decision that is now the subject of the first application for judicial review before this court.
On 13 September the applicants were informed of the decision of the Sub-Committee and of the resolution in terms:
"1. That the Sub-Committee are satisfied that there is no significant unmet demand;
2. That no licences be issued at this stage;
3. That consideration whether to issue further licences . . . be on the basis of written representation approach;
4. That such consideration take place at a meeting of the Sub-Committee to be held as soon as practicable and in any event before the end of September; and
5. That the Sub-Committee will of course give detailed and weighty consideration to the question of hardship as a result of the decision . . . " of the 12 May 1988.
I break at this stage in the narrative to consider the primary grounds for relief in the first application. By these proceedings the applicants seek orders of certiorari to quash the resolution of the 9 September and the decisions arising from it, and an order requiring the Council to hear and determine the applicants' respective applications for HCV licences according to law and the rules of natural justice.
Section 16 of the Transport Act 1985 provides: "The provisions of the Town Police Clauses Act 1847 with respect to hackney carriages, as incorporated in any enactment . . . shall have effect -- (a) as if in section 37, the words 'such number of' and 'as they think fit' were omitted; and (b) as if they provided that the grant of a licence may be refused, for the purpose of limiting the number of hackney carriages in respect of which licences are granted, if, but only if, the person authorised to grant licences is satisfied that there is no significant demand for the services of hackney carriges (within the area to which the licence would apply) which is unmet."
The effect of the amendment to sub-paragraph (b) is to transform the permissive "may" into a partial **mandatory** "must". Unless the Authority is "satisfied that there is no significant demand . . . which is unmet . . . it is obliged to issue a licence to an otherwise suitable applicant. Of particular significance in the present case is that they must be satisfied that there is no significant demand "for the services of hackney carriages".
This particular phrase determined the approach of the TM Economics report. At paragraph 2.1 it is stated: "A taxi (or hackney carriage) is a vehicle of limited size that is licensed to 'ply for hire', that is it has the right to be hired by members of the public on-the-street. It is this exclusive right that sets it apart from the other main provider of 'chauffeured' car services, the private hire car. The latter must be booked by customers through an office or an agency.
"2.2 The private hire car trade is not subject to restrictions on the number of licences issued. Because of this we would expect the number of private hire cars operating to be determined by the level of demand for pre-booked journeys; market forces will prevail. We are therefore of the view that s 16 of the 1985 Act is directed at (and is only capable of reasonable interpretation in relation to) that part of the market where restrictions apply, namely the demand for taxis on-the-street.
"2.3 There are two sources of on-the-street demand, hailing at the kerb side and hiring at ranks set aside for the exclusive use of hackney carriages."
Later at 2.5: "Because the predominant means of hiring a taxi is off-the-rank we are of the view that the case under s 16 must rest primarily, but not exclusively, with the quality of service provided from existing ranks . . . "
The authors of the PARC report addressed the same question. At paragraph 3.1 they state: "Private hire operators express very forcibly the view that virtually all requests for a taxi to be sent immediately . . . should be included as demands for hackney carriage services. The hackney trade are equally adamant that the law refers only to the distinctive services of hackney carriages, ie the plying for hire by picking up at designated ranks or from the street, generally known as pathwork.
"Since the law continues to distinguish between hackney and private hire licences, it seems quite clear that hackney carriage services is intended to bear the narrower meaning, and this view is taken throughout this report."
Thus, to put it shortly, whatever disagreements and divergences of approach and methodology exist, both TM Economics and PARC reports start from this fundamental understanding of the words "for the services of hackney carriages" within section 16. Many of the representations made by those seeking to criticise the survey made the point that it ignored, for example, (a) demands for taxi services made by telephone to a central taxi point and then provided by radio to the taxis, and (b) requests made in person to the taxi offices which were then provided through the radio system. They contended in short that these pre-booked journeys formed a significant part of the taxi trade.
At the hearing Mr Robson of PARC gave evidence. He amplified on the critique. He took the view that, as regards demand, it was failure to obtain a taxi when one wanted it. As regards the meaning of 'hackney carriage services' he took the view that this included pre-booked journeys. This was clearly inconsistent with the view that had been expressed in the critique at paragraph 3.1.
In an affidavit sworn a few days before the hearing, Mr Robson confirmed the view he had expressed when giving evidence and said: "Whilst business generated via telephone calls is not unique to hackney carriages it does form an important part of their work. It is and always has been my view that an account of that work should be included in any survey for the purpose of measuring demand and whether demand is unmet." There is thus an apparent divergence of opinion between Mr Robson and what is contained in the PARC critique. Whether he was an author of the report, or whether he merely had a different view from his colleagues at PARC is not clear. This divergence is, however, in my judgment, more apparent than real.
Mr Jonathan Winstanley is Head of Legal Services and the solicitor to the borough and has, since 1986, been actively involved in providing legal advice and assistance to the licensing officers and committees of this Council in all matters relating to the legalities of licensing public transport vehicles in the Borough of Knowsley, and in particular with regard to both hackney carriage vehicles and private hire vehicles. At paragraph 2(13) of his affidavit he states: "When the Sub-Committee started its deliberations I advised as follows in respect of the Law . . . (e) that the Sub-Committee had to consider the meaning of a number of elements:- (i) 'hackney carriage services' -- I advised that telephone bookings were irrelevant as this was the work of private hire as well as hackneys (see 3.1 of 'PARC critique')". In other words, he was adopting the narrower interpretation of section 16 which had been promulgated both by the authors of the survey and by the PARC critique.
Mr John Davies, who appears for the applicants, submits that this narrow interpretation is wrong in law. He submits that the survey was founded on a false and incorrect interpretation of section 16 and that on a proper interpretation the expression 'services of hackney carriges' should include all the services provided by hackney carriages (including pre-booked journeys) and not merely those which can lawfully be provided exclusively by hackney carriages on the street. If this is wrong, and it is only the exclusive services which can be looked at, one must still look at all those exclusive services, including kerb side hirings which were ignored.
Mr Braithwaite, on behalf of the respondents, contends that the narrow interpretation is correct, and thus Mr Winstanley did not fall into error.
I have come to the conclusion that I must reject Mr John Davies's submission. The answer, in my judgment, is to be found in the Town Police Clauses Act 1847. Section 16 is clearly an amendment and up-dating of section 37 of the old Act. This is not achieved by repeal of section 37 but by express amendment which still leaves the original section in force and is the dominant section. It provides (so far as relevant) as follows:- "The commissioners" -- (ie the licensing authority) -- "may from time to time license to ply for hire . . . such number of hackney coaches or carriages . . . as they think fit." The expression "ply for hire" covers plying for hire on a rank and at the kerb side. A taxi is not plying for hire when it is pre-booked. It must follow that the expression "the services of hackney carriages' must be read with the words "plying for hire" in the 1937 Act.
Thus it follows, in my judgment, that the interpretation by both sets of experts in the TM Economics and in the PARC critique were correct in their interpretation of section 16. It follows that I consider that Mr Winstanley correctly instructed the Sub-Committee and that they did not misdirect themselves if they approached the matter on the basis of this narrow interpretation.
However, in fairness to Mr Robson, I do not consider that his view necessarily conflicts with this interpretation that he and his colleagues originally expressed. I consider that the omission to take into account pre-booked journeys is part and parcel of the many criticisms that the critique levels against the methodology adopted by TM Economics. It is not and is not meant to be a dissenting interpretation of the law.
Mr Davies is also critical of other directions given by Mr Winstanley.
He suggests that the direction at sub-paragraph 2 of the word "area" that this was the whole area based upon observations of Woolf LJ in R v Great Yarmouth ex parte Sawyer 151 LGR 869, which I need not quote. Mr Davies submits that "area" means the area of the Licensing Authority as a whole, and it is even more important that the survey is comprehensive and does not ignore substantial geographic areas and/or a significant percentage of the population in the area as a whole. With respect to Mr Davies, I do not regard this as a misdirection, but a correct interpretation of what Woolf LJ said. The criticism again is part of the criticism of the methodology of TM Economics and not a misdirection in law.
He also joins issue with Mr Winstanley who stated at sub-paragraph (iii): "'demand' -- the desire of would be purchasers or users for a commodity (desire was an unsatisfied longing a feeling that one would derive pleasure or satisfaction from attaining or possessing something)", and then gave separate directions on the words "unmet" and "significant".
Mr Davies (correctly, in my view) submits that the phrase "no significant demand which is unmet" should be construed as a phrase.
The phrase truly connotes nothing more than that there is some excess demand over supply which has some measurable degree of extent and constancy. However, it cannot be said (in my judgment) that by breaking down the definition in the way that Mr Winstanley did, or by defining the word "demand" as he did, that he misdirected himself or the Committee in law.
In summary I am satisfied that there is no substance in the submission that the Committee misdirected itself in law.
Mr Braithwaite on behalf of the respondents commenced his submissions with a preliminary point that the application for judicial review was misconceived and inappropriate because an alternative remedy was available. Mr Davies conceded that there was an unfettered right of appeal to the Crown Court by way of re-hearing of any refusal to grant a licence.
Mr Braithwaite relied upon a passage in R v Great Yarmouth Borough Council by Bingham LJ: "But the discretion to restrict numbers only arose if a local authority were satisfied that there was no significant demand . . . which was unmet. So the discretion to restrict was conditional on the local authority being satisfied that a certain factual state of affairs existed. Whether that factual state of affairs did exist or not was itself a question subject to challenge in the Crown Court."
He also cited R v Epping ex parte Goldstraw [1983] 3 All ER 257, [1983] STC 697, and R v Inland Revenue Commissioners and Opman [1986] 1 All ER 328, [1986] 1 WLR 568.
I was originally attracted by this argument. The Crown Court would seem to be the appropriate forum in which to explore and test the evidence of the experts on both sides as to whether or not there is no significant unmet demand. However, having heard Mr Davies in reply on this argument, I am satisfied that I should not dismiss the application for judicial review on this ground. Once this court had granted the applicants leave to move for judicial review, it was immediately open to the respondents to apply ex parte or on notice to set aside the leave on this ground. The first time the point was raised was in argument on the substantive hearing. I regard this as too late. In any event there is already a well established history of applications for judicial review of section 16 decisions before the court. I cannot say that applicants acted unreasonably in seeking judicial review.
The next ground of criticism is contained in paragraph 9 of the grounds and centres on the conduct of the meeting of the Sub-Committee which it is said was in breach of the rules of natural justice in that: "(a) though they wished to do so neither the Applicants nor their Solicitors nor a representative of the Public Administration Research Centre were permitted to cross-examine or ask questions of the representative of TM Economics in attendance to present and promote the survey;
"(b) the procedure adopted enabled such representatives of TM Economics to give evidence for the second time and to sum up after the Applicants and their representatives had stated their cases, with the result that neither the Applicants nor their representatives had the opportunity of replying thereto."
This criticism has its genesis in that at the meeting of the Committee held on 22 July, the Sub-Committee considered the survey report and resolved that Mr D Starkie, chairman of TME, be invited to attend the special meeting on the 9 September: "in order to comment on the survey report and answer the questions of members and other interested parties." Thus Mr Davies contends it was envisaged that Mr Starkie and the report would be exposed to cross-examination by all interested parties, and he would be required to defend the conclusions under cross-examination. I do not accept that, by allowing interested parties to ask questions, it was necessarily envisaged that Mr Starkie was to be exposed to a full-blooded cross-examination by all and sundry.
Mr Hodgson's report of 29 August, Appendix B, provided: "Suggested Oral Representation Procedure. Mr D Starkie of TM Economics will be present to deal with the Survey.
The interested parties shown in alphabetical order in Appendix C have indicated that they wish to make oral representations.
1. The Chairman of the Sub-Committee will open the meeting at 10.00 am and briefly outline the procedure to be followed.
2. Mr Starkie will introduce his report and comment on it, with particular reference to the written representations which have been received.
3. The interested parties will then be called in alphabetical order to make their representations. So that such representations can be received in a co-ordinated way, each person should be asked to state his/her identity and interest briefly before making the representations. It will clearly assist a proper determination by the Sub-Committee if such representations are as concise as possible and avoid repetition of the written representations and any oral representations which have been given previously.
4. Following completion of representations by the interested parties, each person should be invited to sum up if he/she so wishes. The order for such summing-up should be:- (a) the interested parties at 3 above in reverse alphabetical order; (b) Mr Starkie. Such summing-up would include an opportunity to comment on any fresh point raised at stage 3 above by any individual after the person summing up had made his/her representations." At the meeting the only questions asked were by the chairman and members of the Committee.
Mr Davies contends that the applicants were immediately placed at a
disadvantage because they and other interested parties were denied the opportunity to cross-examine Mr Starkie at all, and to confront him with the details and reasons contained in the PARC critique. He also complains that there was an inherent unfairness in allowing Mr Starkie to speak on two occasions and the other interested parties only once, and in allowing Mr Starkie to have the last word. No explanation, he submits, was ever given as to why the earlier procedure was not followed.
I am satisfied that before the meeting the respondents had given all interested parties early notice of this meeting and had invited written represntations which many interested parties undoubtedly did. The members of the committee had been supplied with a copy of the survey and of the PARC response and critique.
Mr Winstanley gives a valuable insight as to what occurred on the 9 September. The whole day had been set aside for consideration of the survey, hearing representations, and arriving at the decision. "Upon arrival of all parties at the meeting on the 9 September 1988 a cup of tea was provided to all those present and the meeting commenced at about 10 am. By 10.50 am some seventy-two persons were present and the meeting lasted from 10.00 am until 5.00 pm that day . . .
"The author of that report, Mr Starkie . . . was heard between 10.30 am and 11.20 am. He introduced his report and commented on a number of the criticisms levelled in the written representations." He expanded some parts of his report. Then, "Mr Nyland, the Solicitor acting for the Applicants herein put his representations to the Committee from 11.20 am to 11.45 am and criticised a number of elements" which are now contained in the grounds of this allegation.
"Mr Nyland called Mr Robson of 'PARC' between 11.45 and 12.15 pm. He amplified on his 'critique' . . . Mr Murphy, Solicitor . . . made representations supporting Mr Nyland from 12.25 pm to 12.35 pm . . . Mr Georges of Counsel appeared for current owners of hackney carriage vehicles from 12.35 pm until luncheon at 1.00 pm . . . After lunch eleven individuals addressed the Sub-Committee, mainly supporting Mr Nyland's point of view. The Applicant Mr Mellor also addressed the Committee. The Applicant Mr Potts also contributed. The Applicant Hannah from the first Judicial Review Application gave evidence that he had difficulty obtaining work from late evening onwards.
"Summing up then followed by Messrs Georges, Murphy, Nyland and Starkie . . . The Sub-Committee started its deliberations at 3.40 pm."
Later in his affidavit Mr Winstanley, in answer to the applicants' affidavits, said as follows: "It is important to point out that the Respondents were not trying to provide a formalised Court Hearing setting but rather to provide a forum for a fair opportunity for all interested parties to make representations and this is why Mr Starkie presented his report at the outset which had been distributed well in advance of the said meeting to interested parties. The object of the entire exercise was to collect as much information as possible for Members of the Sub-Committee prior to the making of their decision."
Later he deals with the decision to allow Mr Starkie to speak twice: "It was vital in my view that as far as the Members were concerned they had to consider whether Mr Starkie had departed from his original views after the criticisms had been made in the course of the meeting, particularly whether or not he would have arrived at any different conclusions to those set out in his survey."
I have come to the conclusion that there is no substance in the applicants' criticisms of the conduct of the meeting. I accept Mr Davies's primary proposition that the Committee was under a duty to act fairly. This duty did not extend, in my judgment, to an obligation to conduct the meeting in accordance with the rules of procedure in a criminal trial, or the rules of the Supreme Court for civil proceedings, or the usual procedures in a public inquiry or planning inquiry. The Committee were masters of their own procedure. Their obligation was to provide a reasonable opportunity for all interested parties to present their case and the arguments and representations in support of it.
It is true that the applicants and other interested parties were not allowed the opportunity to cross-examine or to ask questions. However, I am satisfied that this was clearly impracticable. Such a procedure would have slowed down the day, and this would have compressed the time available for those who wished to be heard and, worst of all, compressed the time needed for deliberation and consideration of all the representations and arguments.
The fact that the Committee had read the survey and the critique before the hearing, and given the constraints of time, and the need to provide sufficient opportunity for deliberation and reaching the vital decision, no criticism can believed at the manner in which the meeting was conducted. I am not satisfied that the applicants were substantially prejudiced in any real sense by the procedure adopted.
I now turn to the general attack upon the TM Economics survey which forms the basis of criticism set out in paragraph 8 of the grounds, where it is said that: "The resolution was unlawful and/or a resolution no reasonable Council properly directing itself and giving due regard to the evidence and material available to it could or should have passed, in the following respects: (a) The resolution was or must have been based on the purported survey by TM Economics . . . (b) The Survey was founded on the false and incorrect premise that 'Section 16 of the 1985 Act is directed at (and is only capable of reasonable interpretation in relation to) that part of the market where restrictions apply, namely the demand for taxis on-the-street". I have dealt with this point and sub-paragraph (c).
Mr Davies has mounted a blistering attack, or sustained barrage, upon the TM Economics survey. He takes for ammunition the 180 pages of representations, most of which were critical, which were lodged in writing before the hearing, the submissions made by counsel and solicitors at the hearing, the evidence given on that occasion, in particular that of Mr Robson, and the detailed criticism set out in the PARC critique.
These are comprehensively summarised in the grounds of application as follows: "(d) The Survey failed to have any regard to or to acquire or consider information relating to the hiring of Hackney Carriage Vehicles at the kerb side; (e) The Survey was concentrated upon 5 Taxi Ranks in the Borough with only 'periodic' checking of the 16 other taxi ranks in the Borough; (f) The Survey failed to question any Members of the public (whether by telephone or otherwise) as to the difficulties, if any, they experienced in hiring Hackney Carriage vehicles at any or any particular times; (g) The Survey failed to seek or obtain any information in the form of drivers' logs from existing HCV Licence holders indicating the amount of work in fact undertaken by such persons and the rate at which it was reasonably practicable to work; (h) The Survey was only conducted during the hours of 10 am and 6 pm on 5 days (Monday, Tuesday, Wednesday, Saturday and Sunday) and 10 am and 8 pm on the remaining two days of one week in June save for insignificant periods of observations at 4 of the 'minor ranks' and consequently failed to have any regard to:-
"(i) evening demand; (ii) night time demand; (iii) demand during periods of the year all those concerned were busier for the Hackney Carriage trade in the Borough;
"(i) The Survey failed to have any or any adequate regard to the fact that all persons in the Hackney Carriage and Private Hire vehicle trade to whom TM Economics spoke agreed that Hackney carriage vehicles with HCV Licences were being traded for substantial sums of money in the region of £14,000 to £17,000 as indicating that there was perceived to be such a demand for services as justified the payment of prices greatly above the value of the vehicles themselves; (j) Neither the Survey nor the Sub-Committee had any or any sufficient regard to the overwhelming weight of evidence submitted both to the Survey and directly to the Council that there was a substantial amount of illegal plying for trade at the kerb side both by private hire drivers and Hackney vehicles licensed by other Councils and, accordingly not permitted to ply for hire at the kerb side in Knowsley; (k) The Sub-Committee failed to have any or any insufficient regard to evidence submitted to it inter alia by or on behalf of the Applicants that the existing HCV Licence holders intended to and did alert each other over their radio system when a particular rank or ranks were being surveyed so that the same could be 'flooded' with vehicles thus reducing waiting time for members of the public and making it appear that there was a lesser demand; (l) Neither the Survey or the Sub-Committee had any or any sufficient regard to the weight of evidence that there were in existence illegal 'ranks' of Private Hire Vehicles operating from at least the majority of Public House Car Parks in the Borough; (m) Neither the Survey nor the Sub-Committee had any or any sufficient regard to the weight of evidence that there were significant parts of the Borough (including Halewood with a population of 21,000) with no Hackney Carraige ranks and which were wholly catered for by the Private Hire trade; (n) Neither the Survey nor the Sub-Committee had any or any sufficient regard to the fact that whilst there were only about 145 Licensed Hackney Carriages there were approximately 440 licensed Private Hire vehicles in the Borough with a continuing flow of applications for Private Hire Vehicle Licences which were being granted by the Council without limitation; (o) the Sub-Committee failed to have any or any sufficient regard to the Critique of the Survey prepared inter alia on behalf of the Applicants by the Public Administration Research Centre commenting on the methodology employed by TM Economics in very similar terms to those set out at sub-paragraph (c) to (h) inclusive above".
I am totally unable to assess which of Mr Davies's salvos hit its target or missed, and if any damage was done to the survey and, if so, how much. In this court Mr Braithwaite, on behalf of the respondents, is not required to defend the survey or to counter attack. It is not open to me to arrive at any conclusions on these issues. I am not a court of appeal on the merits from the decision of the Sub-Committee.
I bear in mind the observations of Woolf LJ in Ex parte Sawyer, already cited, at page 626: "I would emphasise two matters. First of all, the role of the Judge was an extremely limited role, having regard to the provisions of the Act to which I have made reference. The Judge in coming to his conclusion was not purporting to express any views as to the merits of the decision of the Authority.
The Authority were given the responsibility, under the licensing legislation as amended, of coming to a decision with regard to whether or not they were prepared to maintain their previous policy. They came to that decision, and the courts can only intervene if it is shown that the Authority has gone about their task in a way which was unlawful." To which I would add, "or reached a decision which was irrational or perverse within the principles of Wednesbury unreasonableness."
As I have already indicated, there was no procedural impropriety, the rules of natural justice were not abrogated, the Committee had the advantage of the survey and the critique, and all the representations of all interested parties. They were fully aware that the issue they had to determine was whether there was no significant unmet demand. In my judgment they were correctly advised on the law by Mr Winstanley. It was for the Committee to determine what weight they attached to the PARC critique.
Having considered with great care all the evidence, the telling points made in the critique, and the powerful arguments presented by Mr Davies, I am still unable to conclude that the decision was perverse or irrational. The resolution was not unlawful, nor a resolution no reasonable Council properly directing itself, and giving due regard to the evidence and material available to it, could or should have passed. The first application is therefore dismissed.
I now turn to the second application, whereby the applicants seek judicial review of the decisions made by the Council through its Sub-Committee not to issue HCV licences to the applicants, made on the 4 November 1988 in the case of the third applicant, and on the 11 November 1988 in the case of the first, second and fourth applicants.
The starting point is the letter of the 18 May 1988, which the respondents wrote to each of the applicants, indicating that until the results of the survey were known, or until the respondents were satisfied that there was no significant unmet demand, HCV licences would be issued to any applicant who could meet agreed criteria, proof of ownership, and other conditions, and that they would be licensed accordingly. On the strength of this, each of the four applicants were able to satisfy the criteria, namely, ownership of an FX4 type vehicle, and each was a fit and proper person as defined by the relevant statute.
Following the meeting of the 9 September 1988, Mr Hodgson prepared a report for the meeting to be held on 30 September. This report was compiled "at the next stage in the procedure for considering the issue of Hackney Carriage Proprietor's Licences". He gave general advice and suggested that the applications which were being received should be classified in four categories.
The principal was Category 1: "Those applicants who have provided sufficient information to indicate that they have purchased a vehicle prior to the injunction of the 23 May 1988, with satisfactory supporting evidence indicating that the aforementioned purchase is factual and that the said vehicle meets the Council's required specification, and that such applicants have been deemed as being fit and proper persons to hold a Hackney Carriage Proprietor's Licence."
The respondents do not dispute that all four applicants satisfy these conditions and were fully qualified to be included in Category 1. In the meantime the applicants renewed their applications.
On 30 September the Sub-Committee considered the report which contained various options for the consideration for applications and the classifications into four categories and resolved: "That to enable thorough consideration to be given to the question of whether to issue Hackney Carriage Proprietors' Licences, the Director be requested to submit a further detailed report to the next special meeting of the Sub-Committee".
Mr Hodgson then prepared his further report. Somewhat surprisingly, this report was not disclosed in the bundle of documents and only came to light in the course of the hearing before me. It makes very interesting reading. Mr Hodgson was clearly concerned about "a situation of gross over supply". He raises the possibility of issuing licences generally, or alternatively, "as a restricted issue". If the latter course was chosen, then it would be necessary for the Sub-Committee to determine all the applications, or alternatively, it could be carried out at officer level. He continued: "Whichever decision-making alternative is chosen it is going to be imperative to ensure that licences are treated in the same way.
There is a right of appeal against each decision to the Crown Court. It will be difficult, if not impossible, to defend a refusal to issue if an identical application has been approved. It would therefore be sensible to establish a broad policy framework against which applications would be judged. It would still, of course, be necessary to consider each application individually to decide whether, notwithstanding the policy framework, a licence should be granted/refused."
There then follows a most significant passage: "The following process is suggested: (1) Applications from existing hackney carriage proprietors, from applicants who have previously sold a hackney carriage licensed by the Council, from those who have purchased a vehicle in reliance on the decison of the Policy and Resources Committee of 12 May 1988 and subsequently sold the vehicle and those who purchased a vehicle after 23 May 1988, ie after the stay of implementation -- to be considered by the Sub-Committee on individual merit but ensuring consistency of approach between applicants."
This was the first suggestion that an applicant who was otherwise fully qualified was in danger of being refused a licence on the basis that he had previously sold a licence issued by Knowsley Borough Council. Mr Hodgson has not sworn an affidavit to explain why or in what circumstances he came to suggest this modification to the policy contained in the resolution of 12 May. Mr Winstanley's affidavit contains many statistics but is silent on this aspect and whether he advised the Committee that they could (or would not) suddenly and without warning refuse an otherwise qualified applicant on this ground.
It is interesting to note that the respondents have not filed any affidavit evidence in which they seek to defend or justify the decision not to grant licences to these four applicants or to explain why they suddenly decided to adopt or modify the policy on the ground that these four men had previously sold licences.
At the meeting of 14 October -- it was a Friday at 5 o'clock which may be of some significance -- the Sub-Committee considered the latest report and resolved that it be noted, and resolved: "(ii) that licences be not issued generally; (iii) that the undermentioned applications shall be considered by the Sub-Committee on individual merit and ensuring a consistency of approach" -- (a) is not relevant -- "(b) applications from those persons who have previously sold a licensed hackney carriage vehicle".
It is to be noted that this meeting was held on a Friday at 5.00 pm and that the attendance was somewhat poor. The chairman was present with only four councillors. Apologies for absence were submitted on behalf of seven. The minute does not show whether Mr Winstanley was present. Mr Winstanley does not say in his affidavit whether he was.
There appears to have been no discussion as to whether this novel criterion could be justified in law. It is to be noted that the Committee also resolved that other applications be determined by the Director in consultation with the chairman applying "the following modified policy framework: (a) That Hackney Carriage Proprietor's Licences be issued to applicants who have provided sufficient satisfactory proof to indicate that an appropriate vehicle was purchased subsequent to and in reliance of the decision . . . on 12 May 1988 and prior to the stay of implementation imposed on this Council on 23 May 1988 . . . "
In the event therefore others falling within the latter category received their licences. The applicants learned that their applications had been referred to the Sub-Committee because they had previously owned and sold a licence. On 11 November their solicitors wrote to the Council pointing out that "it is not accepted that this is a valid reason for refusing to issue a licence . . . Without prejudice to that contention our client has asked us to write to you to set out the circumstances relating to his previous ownership and sale: -- which he duly did.
Then at the end of the letter there appears this postscript: "PS. We wish to adopt on behalf of Mr Maguire the points made in the letter on behalf of Mr Maguire the points made in the letter on behalf of Mr Potts with regard to the fact that licences have been issued to men who have owned and sold Hackney Vehicle licences in Skelmersdale and also with the licence issued to Mr Mulligan previously, an owner in Knowsley who sold a licensed vehicle before he became bankrupt. There must be equity in the Council's treatment of applicants."
The respondents do not appear to have replied to this letter, or, if they did, it is not disclosed in the bundle or annexed to Mr Winstanley's affidavit. Thus the respondents have never received an explanation as to how this modification of the policy was or is justified.
On 9 November Mr Murray was informed that the Committee had decided "not to grant you a licence due to you having previously sold a Hackney Carriage Vehicle licensed by this Council." His solicitors had previously written indicating that the reason why he had sold his vehicle was for health reasons. This was never challenged or queried by the Committee.
Mr Potts sold his vehicle in April 1988, at an inflated price because of the demand for plates and before the resolution of 12 May to deregulate. At paragraph 7 of his affidavit he says: "Almost immediately after I had sold the vehicle, I received a letter dated 8 April from the Council effectively inviting me to apply for a free issue plate.
My understanding is that Knowsley insist on applicants having no other source of income so I gave up my job when I decided to make application for a further HCV Licence. When I went in to apply for the Licence in the first place and before I had purchased an FX4 I asked Miss Rheinlander of the Council, whether I would be excluded because I had previously held and sold a Hackney Vehicle. She told me that I would not be. It was on this footing that I did give up my job and purchased an FX4 in May 1988."
This affidavit was sworn on 8 December 1988. The respondents had six months' notice of this allegation, but did not file any evidence to refute it or, more importantly, to explain it. I accept the truth of Mr Potts's version and I have no doubt that Miss Rheinlander (who was the responsible official whose name appeared on all the correspondence) genuinely believed what she said when she gave this assurance, and that it was to be the case. He, like the others, was refused his licence on the same ground.
Mr Davies submits that the four decisions are unlawful and/or in breach of natural justice in that: (a) there was no indication when applications were invited and accepted by the Council, or at any time thereafter until 14 October, that applicants who had previously sold licences would be treated in any different manner. (b) There was and is no warrant or statutory authority to distinguish between any of the persons who had purchased FX4 vehicles (including the applicants) in reliance upon the terms of the Council's resolution of 12 May 1988. (c) There was and is no warrant or statutory authority to distinguish between persons who had previously sold licences issued by the Council and persons who had previously sold licences issued by other local authorities.
By an addition to the Notice of Application Mr Davies at Ground 13 submits that, arising from Miss Rheinlander's representation and the representations contained in the letter of 17 May 1988, a legitimate or reasonable expectation was raised that the Council would not discriminate against those applicants (or any persons) on the basis that they had previously owned and sold hackney carriage vehicles which had been licensed by the Council. Thus in so acting the Council behaved irrationally and unreasonably, unfairly, and in breach of natural justice in that there was no, or no adequate, consultation.
Mr Braithwaite submitted that prior to the resolution of the 14 October the Council had not decided not to issue licences to those who previously sold their licences. There was no hard and fast policy arising out of the letter of 18 May, and the policy was emerging, as he put it, throughout the period from May until October. The Council could legitimately raise the pre-sale criterion at any stage once they were faced with a deluge of applications. It was a legitimate method of controlling the supply of licences.
The policy as it emerged still enabled the Committee to consider the circumstances of these applicants and to decide their applications on their merits. He rejects the legitimate expectation argument on the basis that it did not relate to the fact that licences would be granted, but related only to an expectation that the applicants would be heard, orally and in writing, before the final decision was taken, which in fact occurred. He did not seek to argue that this modification could be made within the scope of the legislation.
I have come to the conclusion that I must reject the respondents' arguments and prefer the arguments advanced on behalf of the applicants. In my judgment Mr Davies's primary contention is sound. I take as the starting point the passing of the Transport Act 1985, which sought to remove restraints on the issue of licences and to allow free market forces to take their course.
The decisions in this Court and the Court of Appeal show conclusively that licences must be issued until the Council is satisfied that there is no significant unmet demand. Knowsley Council recognised this correctly in May 1988. The decision of the 12 May was impeccable. The letter of 18 May was clearly drafted in pursuance of the policy enunciated in the decision. If the injunction had not been granted on 23 May, it seems to me that the Council would have had no ground at all for refusing any of these applicants on the basis of a pre-sale. The Council has never sought to argue before me that the fact of a pre-sale prevented them from being a suitable person within the Local Government Act. The decision letter does not so contend.
I have come to the conclusion that this modification and additional criterion cannot be justified by statute, or in any other way. It was an arbitrary ground for exclusion of these applicants' legal entitlement. Whether or not these men could sue for specific performance of contract, or whether any issue of estoppel arises seems to me to be entirely irrelevant in this context. In short, I am satisfied that by imposing such a condition the Council were acting ultra vires of the powers vested in them as the licensing authority, and in the execution of their duties under the Transport Act.
If I am wrong, I consider that the applicants are still entitled to relief on Wednesbury principles. I consider that in the circumstances, and on the evidence which has been placed before me -- or, indeed, the lack of it from the respondents -- and the history of licensing matters until October 1988, it was unreasonable for the Council to impose such a condition. It was irrational. It was an afterthought.
Finally, these applicants did have a reasonable or legitimate expectation that a licence would be issued to any applicant who could meet the agreed criteria. They presented an FX4 for inspection, and each was a fit and proper person as defined by the Act. They then took all the necessary steps to fulfil the conditions then in force, and they were assured in the last sentence of the letter: "you will be licensed accordingly". It is abundantly clear that the pre-sale condition was very much an afterthought, and it came after the results of the survey and after the Council were satisfied that the demand for licences had been met.
This seems to me to fall within what Lord Diplock had in mind in the GCHQ case (Council of Civil Service Unions and others v Minister for the Civil Service [1985] AC 374, [1984] 3 All ER 935), particularly at pages 408-9 of the former report. The Committee, although they considered the applications of these men on their merits after the modified policy was brought into being, never did consider whether or not, at the invitation of their solicitor, this modification was lawful or not.
Accordingly, the application for judicial review of the second application succeeds. An order for certiorari will issue to quash the four decisions to refuse the applicants their licences. There will also be an order of mandamus requiring the Council to hear and determine the applicants' respective applications according to law, and in particular without having regard to the fact that each of the applicants had previously sold a hackney carriage vehicle with the benefit of an HCV licence from the Council.
MR DAVIES: I am sure my learned friend and I are very grateful to your Lordship for the extreme care your Lordship has taken in the preparation of that long judgment.
OTTON J: I am sorry you have been waiting for it, Mr Davies and Mr Braithwaite. I know it has taken a long time to come.
MR DAVIES: My Lord, it was clearly always going to be a long judgment. It was a long hearing. My Lord, that leaves only two questions, the first of which is the subsidiary part. My Lord, there are three things. First of all, Mr Mellor's applicatioon was not in fact not pursued. Mr Mellor's application was only on the first ground where your Lordship has found for my learned friend Mr Braithwaite.
OTTON J: The reason I was not quite sure about that was that I noticed the record shows that there was a separate application with a separate serial number.
MR DAVIES: My Lord, there was a separate serial number. They were in fact ordered to be heard at the same time. In fact Mr Mellor's application related only to the first bases relating to the 9 September 1988 decision, so therefore I had not troubled your Lordship with the separate papers in that regard since they were only duplicative of those that are in the file.
OTTON J: They are in the file. What do you want on that order?
MR DAVIES: My Lord, the only further matter that there is is in the case where my clients were successful, that is the Maguire application under 1709. There is the request for compensation, more particularly described in the affidavits of the various individuals. So far as that is concerned, that to an extent depends upon what conclusion the respondents come to.
My Lord, I suppose it is conceivable, arguing for a moment against myself that the respondents might come to the conclusion anyway that there was some basis upon which they could resist these men. I wonder whether it might be most appropriate in those circumstances if your Lordship would adjourn over the question of whether there is any compensation.
My Lord, the alternative course would be to take it on the figures which are contained in my clients' affidavits, which are clearly more advantageous to my clients. I can see that the amount of money that they have expended, for example, in purchase of a vehicle, may certainly be recouped, or at least a large proportion of it may be recouped if they are in the event granted the licences that they seek, but they will in any event have continued to pay for a longer period.
OTTON J: Mr Braithwaite, the application is that that part of the relief should be adjourned. Have you any observations?
MR BRAITHWAITE: Only that I would respectfully ask that in addition you should make an order that that should be transferred under the provisions available as though commenced by writ, and then the matter could be dealt with simply and locally, possibly by the official referee.
OTTON J: Very well. The application to adjourn seems to be going through on the nod, but they want to add a modification to be transferred. I would have thought myself it was premature to do that, but I am open to your representation on it.
MR DAVIES: My Lord, one can certainly see advantages, if the matter is to be adjourned in a sense to abide the event of the Council's decision, because only then will one know perhaps precisely what it is that my clients have lost. My Lord, I can see that there might be advantage in transferring it, for example, from the local district registry of the High Court to an official referee. With respect, it would not necessarily seem as complicated as might justify an official referee, but is your Lordship going to be sitting in the Crown Office list next term?
OTTON J: No. I shall be sitting in liverpool. I think the best thing to do is just to adjourn it generally with liberty to apply, and then it gives everybody complete freedom.
MR DAVIES: If, as one hopes, the licences are granted, it may be possible for some sort of agreement to be reached. I throw that out as a possibility in the light of your Lordship's judgment.
OTTON J: I cannot say anything about that.
Judgment accordingly.
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