Rehman/Wakefield & PH Association v Wakefield Council [2018] EWHC 3664 (Admin)
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R (Rehman/Wakefield & PH Association) v Wakefield Council [2018] EWHC 3664 (Admin) concerned a challenge by judicial review to a decision by Wakefield District Council on 24 January 2018 to approve licence fees for private hire vehicles and hackney carriages, which His Honour Judge Saffman, sitting as a deputy judge of the High Court, quashed.
Permission to seek judicial review on one of two grounds had been granted by Males J on 26 July 2018. The claimant contended that in setting the licence fee to be charged from 1 February 2018, the Council had taken into account costs which the law did not permit it to recover.
The challenge turned on the proper construction of section 70 of the Local Government (Miscellaneous Provisions) Act 1976. Section 70(1) permits a district council to charge fees sufficient to cover the reasonable cost of inspections of vehicles, the provision of hackney carriage stands, and any reasonable administrative or other costs “in connection with the control and supervision of hackney carriages and private hire vehicles”. It was not in dispute that the Council had included in the fee the costs incurred in enforcing action against drivers for speeding, smoking in taxis, inappropriate dress, use of mobile phones, carrying excess passengers, refusing assistance dogs, and other forms of uncivil or illegal conduct. The claimant argued that such enforcement costs related to the supervision and control of drivers rather than vehicles and could not be justified under section 70(1)(c).
Mr Gouriet QC, appearing with Mr Streeten for the claimant, submitted that there was no general principle entitling a local authority to administer a licensing scheme on a self‑funding basis save where specific legislation so provided. He identified four categories of statutory power to charge licensing fees, ranging from no power at all through fees fixed by regulation and fees limited to specified expenditure to fees subject to a wide discretion. The present case fell into the third category: statute permitted the recovery only of specified expenditure, which did not extend to enforcement costs relating to driver conduct. He referred to section 53 of the 1976 Act, which allows a council to charge such fee as it considers reasonable for a driver’s licence with a view to recovering “the cost of issue and administration”. He argued that if those enforcement costs could be recovered at all, it might be under section 53, but that did not make them recoverable under section 70.
Ms Clover, appearing with Mr Williams for the Council, drew attention to the difference in wording between section 53 and section 70. She argued that section 53, referring to “issue and administration”, meant the administration of the process of granting a licence, not post‑grant matters, whereas section 70(1)(c) referred to costs “in connection with the control and supervision” of vehicles, which must cover post‑grant matters. She submitted that because the vehicles were being driven by regulated drivers, the enforcement costs fell within “control and supervision” under section 70(1)(c). She cited R v Westminster City Council ex parte Hutton (1985) 83 LGR 461, Kelly v Liverpool City Council [2003] EWCA Civ 197 and R (Hemming) v Westminster City Council [2015] UKSC 25 and [2017] UKSC 50 as supporting a principle that licensing schemes might be self‑funding.
His Honour Judge Saffman held that the cases cited by Ms Clover did not establish a general principle that licensing schemes must or may be self‑funding. Hutton concerned sex shop licensing, which fell into a separate category; Kelly was concerned with section 70(1)(a) and the lawfulness of re‑inspection fees, not the scope of section 70(1)(c); and Hemming again concerned sex establishments under the Local Government (Miscellaneous Provisions) Act 1982. The judge was not persuaded that there was a general principle entitling local authority licensing schemes to be self‑funding in the absence of specific statutory provision.
The judge rejected the Council’s submission that the difference in language between section 53 and section 70 enabled enforcement costs relating to driver conduct to be recovered as costs of “control and supervision” of vehicles under section 70(1)(c). He held that it was not difficult to separate issues relating to the vehicle from issues relating to the driver. He accepted the reasoning of Males J when granting permission that it was at least arguable, indeed compelling, that many of the costs which the Council attributed to the licensing of vehicles should properly be attributed to the licensing of drivers. Enforcement steps relating to speeding, smoking, dress, mobile phone use, passenger numbers and similar matters clearly related to the activities of the driver, not the vehicle, even though it was the driver who drove the vehicle. To construe section 70(1)(c) as Ms Clover invited would be to stretch the ordinary meaning of the language beyond breaking point.
His Honour Judge Saffman noted the observation in Button (4th ed., chapter 4, page 154) that it did not seem possible for a local authority to recover general compliance or enforcement costs for hackney carriages or private hire vehicles via licence fees. He recorded that Paterson (127th ed., para. 2.54) left the matter uncertain, stating that opinion was far from unanimous and that resolution by the High Court was awaited. For the reasons given, the judge was satisfied that section 70(1)(c) related to the supervision and control of vehicles, not drivers, and that enforcement steps in relation to the activities in question related to the conduct of drivers. Accordingly, the Council had incorporated expenses which it ought not to have incorporated and the fee decision was quashed.
The judge turned briefly to a second issue arising from R (Cummings) v Cardiff City Council [2014] EWHC 2544 (Admin), which established that there can be no cross‑subsidy between different licensing regimes or between licence types within a regime. Mr Gouriet submitted that if the Council had unlawfully included driver‑related enforcement costs in the vehicle licence fees for a number of years, that amounted to cross‑subsidisation which required correction. Ms Clover accepted the principle but contended that it was impossible to make appropriate adjustments going back to 2005. The judgment concluded before any relief on this ground was determined, the judge having invited the parties to consider the appropriate remedy during a short adjournment. In short, the Council’s decision to set the licence fee was quashed because it unlawfully included enforcement costs relating to driver conduct which could not be recovered as costs of controlling and supervising vehicles under section 70 of the 1976 Act.
R v Westminster City Council ex parte Hutton [1985] 83 LGR 4
Kelly v Liverpool City Council [2003] EWCA Civ 197
R (on the application of Cummings ) v Cardiff City Council [2014] EWHC 2544