R (Rehman) v The Council of the City of Wakefield [2019] EWHC 2166 (Admin)

R (on the application of Abdul Rehman, on behalf of the Wakefield District Hackney Carriage and Private Hire Association) v The Council of the City of Wakefield [2019] EWCA Civ 2166 was an appeal by the local authority from a decision of His Honour Judge Saffman, sitting as a High Court judge, which had quashed the Council’s decision to include certain costs in its fees for hackney carriage and private hire vehicle licences under Part II of the Local Government (Miscellaneous Provisions) Act 1976.

On 24 January 2018 the Council’s Licensing Committee resolved to approve fees from 1 February 2018 for vehicle licences and operators’ licences in respect of taxis and private hire vehicles. In setting the fee for vehicle licences under section 70 of the 1976 Act, the Council had taken into account the costs it incurred in monitoring and undertaking enforcement action against drivers for matters such as speeding, smoking in the vehicle, inappropriate dress, bad parking, mobile phone use, carrying excess passengers, not permitting assistance dogs, and various other uncivil and illegal conduct. The Council had quantified the fee in that way on the basis of legal advice that such costs could not lawfully be recovered through the driver’s licence fee under section 53(2) of the 1976 Act but that the licensing regime should be self-financing and the costs should therefore be recovered through the vehicle licence fee rather than from general council tax payers.

Mr Rehman, chairman of the Wakefield District Hackney Carriage and Private Hire Association, which represented proprietors, drivers and operators, sought judicial review. The Association claimed that the fees decision was unlawful on two bases: the Council had failed to take into account previous surpluses and deficits, and the Council had wrongly attributed costs arising from the licensing of drivers to the costs of vehicles. Males J granted permission limited to the first ground. The Council accepted before the judge that separate accounts must be kept for different regimes and different licence types with no cross-subsidy, and there was no appeal against the judge’s finding on that issue.

His Honour Judge Saffman rejected the Council’s submission that there was a general principle entitling local authority licensing schemes to be self-funding. He said the authorities relied upon, namely R v Westminster City Council ex parte Hutton (1985) 83 LGR 461, Liverpool City Council v Kelly [2003] EWCA Civ 197 and R (Hemming) v Westminster City Council [2015] UKSC 25 and [2017] UKSC 50, did not support that proposition. The judge declined to extend the hearing to determine definitively whether enforcement costs could be taken into account under section 53 in fixing the driver’s licence fee, as drivers were not represented. He held he could not accept that such costs could fall within the phrase “the control and supervision of hackney carriages and private hire vehicles” in section 70(1)(c), because they inevitably related to the activities of drivers rather than vehicles. He quashed the decision fixing the vehicle licence fee because it incorporated expenses it ought not to have incorporated.

The Council appealed. Its written grounds were, first, that the judge had erred in refusing to consider whether driver enforcement costs were recoverable under either section 53(2) or section 70, and secondly, that the judge had incorrectly concluded that there was no general principle that the taxi licensing fee regime should be self-financing. There was no appeal against the finding that there could be no cross-subsidy between different licences. Counsel for the Council, Ms Sarah Clover, confirmed at the outset of oral argument that the appeal was in substance that the costs of enforcing driver behaviour should be recoverable either under section 53 or under section 70, interpreting the provisions purposively, and that the alleged self-financing principle was properly approached as an aspect of purposive interpretation. The reliance on section 53 in the alternative was a departure from the Council’s primary case below, which had been that the cost was recoverable under section 70; it had been Mr Rehman’s counsel, Mr Gerald Gouriet QC, who had suggested before the judge that section 53 might permit the recovery of such costs, though he expressed that view with caution because his instructions were not on behalf of drivers. The Local Government Association intervened and made written submissions broadly supportive of the Council’s appeal.

The Master of the Rolls, Lady Justice King and Mr Justice Lavender held that the cost of monitoring and enforcing driver conduct could not be taken into account in fixing the vehicle licence fee under section 70, but that such cost could be included in the driver’s licence fee under section 53. The court considered that the wording of section 70 in the context of the structure of the 1976 Act led clearly to the conclusion that driver enforcement costs fell outside its scope.

The court set out the detailed structure of Part II of the 1976 Act. Section 46 prohibited the use of a private hire vehicle without a vehicle licence. Section 47 enabled a district council to attach conditions to the grant of a taxi licence under the Town Police Clauses Act 1847, including as to design, appearance and distinguishing marks. Section 48 set out suitability requirements for a private hire vehicle and empowered the council to attach conditions. Section 50 required proprietors to present vehicles for inspection and testing. Section 51 imposed minimum requirements for the driver of a private hire vehicle, including that the applicant be a fit and proper person, and allowed conditions to be attached to a driver’s licence. Section 53(1) specified the duration of a driver’s licence and section 53(2) provided that the fee should be such as the council considered reasonable with a view to recovering the costs of issue and administration. Section 55 concerned operators’ licences, imposed fit-and-proper-person requirements, and permitted conditions to be attached. Section 59 imposed minimum requirements for the grant of a taxi driver’s licence. Section 60 provided for suspension or revocation of vehicle licences. Section 61 provided for suspension or revocation of drivers’ licences on various grounds. Section 62 provided for suspension and revocation of operators’ licences. Section 68 gave authorised officers and constables power to inspect and test vehicles. Section 70(1) specified the fee chargeable for vehicle and operators’ licences, providing that it could cover the reasonable cost of vehicle inspections, the cost of providing taxi stands, and any reasonable administrative or other costs in connection with the control and supervision of hackney carriages and private hire vehicles.

The court observed that each of the three types of licence had a comprehensive and self-contained statutory regime addressing grant, terms, suspension, revocation and fee, with no cross-referencing in relation to any of those matters. The notion that the fee for one type of licence could reflect costs involved in another was entirely contrary to that structure. At the same time, the court noted the similarity in the statutory treatment of the three licence categories: the qualifying requirements for each licence involved matters relevant throughout the duration of the licence, whether as to design, condition and insurance for vehicles, or fitness and immigration status for drivers and operators. The continuing relevance of at least some of those matters was reflected in the provisions for suspension and revocation, and the district council’s power to attach further conditions indicated that Parliament envisaged additional requirements to be observed after grant. Plainly the council would need to monitor compliance, which would inevitably involve expense beyond the cost of the original grant.

The court rejected the Council’s argument that the costs of enforcing driver conduct fell within the words “control and supervision of hackney carriages and private hire vehicles” in section 70(1)(c). The Council contended that, because the driver controls the vehicle, enforcement of the driver’s conduct fell within control and supervision of the vehicle. The court held that the control and supervision in section 70(1)(c) were clearly control and supervision by the district council, not by the driver. If the argument was that by controlling the driver the council controlled the vehicle, that was a very strained and artificial interpretation. Moreover, in the context of the framework of Part II, the words in section 70(1)(c) could not have been intended by Parliament to authorise something entirely alien to the structure of the Act, which had a comprehensive self-contained regime for each category of licence.

The court acknowledged the importance of public safety and confidence and the need to monitor and enforce driver behaviour, but held that the issue was not whether such monitoring was desirable but who should pay for it and how. General resource considerations and the limited resources available to local authorities could not affect the proper interpretation of the legislation. The court agreed with the judge that the authorities relied upon by the Council did not establish any general principle that licensing schemes must be self-funding. Each case turned on the particular statutory scheme in question. R v Westminster City Council ex parte Hutton provided no support for such a proposition and, like R (Hemming) v Westminster City Council, concerned the very different statutory provisions for licensing sex establishments. Liverpool City Council v Kelly did concern section 70 of the 1976 Act but the issue was whether the council could charge for vehicle inspections which failed and did not result in the grant of a licence; that threw no light on whether costs related to drivers’ licences could be included in vehicle licence fees.

The court held that the costs of enforcing the behaviour of licensed drivers could be recovered through the driver’s licence fee under section 53(2). The relevant words were “the costs of issue and administration”. The costs of administration must be something other than, and in addition to, the costs of issue. There was no difficulty in interpreting administration in its statutory context as extending to administration of the licence after it had been issued. It naturally included the costs of suspension and revocation, which were events expressly mentioned in Part II. Suspension and revocation rested on non-compliance with the requirements and conditions for continuing to hold the licence. It would therefore have been obvious to Parliament that costs would be incurred by the district council in monitoring compliance with such requirements and conditions.

The court further observed that there appeared to be no obvious reason why, as was plain, the costs of monitoring and enforcing the conditions and requirements for vehicle and operators’ licences were recoverable under section 70, but those for monitoring and enforcing the conditions and requirements for drivers’ licences were not recoverable under section 53. In the case of all three categories of licence there were conditions which would have to be satisfied so long as the licence subsisted, there would be additional conditions the council would wish to attach, and there were changed circumstances which could result in suspension or revocation. It was notable that when section 46 of the 1847 Act was amended by the Local Government, Planning and Land Act 1980 to permit the charging of fees for a hackney carriage driver’s licence, Parliament did not consider it necessary to amend section 53(2) of the 1976 Act.

The court concluded that, both on the literal wording of section 53(2) and, if and so far as necessary, applying a purposive interpretation, the costs of monitoring and enforcing the behaviour of licensed drivers could be recovered through the fee under section 53(2). The court accordingly dismissed the appeal. In short, the Council had acted unlawfully in including driver enforcement costs within the vehicle licence fee under section 70, but such costs were properly recoverable through the driver’s licence fee under section 53.

Ltd v Newcastle Upon Tyne City Council [2012] EWHC 2599
R (Cummings) v Cardiff City Council [2014] EWHC 2544
R v Westminster City Council ex p Hutton [1985] 83 LGR 461
Liverpool City Council v Kelly [2003] EWCA Civ 197; [2003] LLR 258
Rehman/Wakefield & PH Association v Wakefield Council [2018] EWHC 3664 (Admin)

YSA (anonymity of barristers) [2023] UKUT 74 (IAC)