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 and The Local Government Association (Intervening) [2019] EWCA Civ 2166 

Background

In December 2018, we reported on the ruling from the High Court following a challenge by the Wakefield District Private Hire and Hackney Association against the fees set by Wakefield City Council in respect of taxi and private hire licence fees. 

In January 2018 Wakefield Council resolved to approve the fee to be charged from 1 February 2018 for a vehicle licence and an operator’s licence in respect of taxis and private hire vehicles. In setting the fee for the vehicle licence the Council took into account, as “costs in connection with the control and supervision of hackney carriages and private hire vehicles” within section 70 of the 1976 Act, the costs incurred by the Council in monitoring and undertaking enforcement action against drivers for such things as speeding, smoking in the taxi, dressing inappropriately, parking badly, using a mobile phone, carrying excess passengers, not permitting the carrying of an assistance dog and various other uncivil and illegal conduct (‘the Activities’).

The claim for Judicial Review was advanced on the basis  that the fees decision was unlawful as, (1) in calculating the fees to be charged, the Council’s Licensing Committee failed to calculate or to take into account previous relevant surpluses and deficits, and (2) the Licensing Committee wrongly attributed costs resulting from the licensing of drivers of taxis and private hire vehicles to the costs of taxis and private hire vehicles.

In the High Court the judge rejected the submission by the Council that there is a general principle which entitles all local authority schemes to be self-funding and restricted his decision to the interpretation of s 70. Wakefield had sought to argue that in the event that s.70 did not permit the inclusion of enforcement costs to the vehicle licence fee, the wording of s.53 would therefore permit the same, but the Court refused to hear the argument as to the application of s.53 at that time.   

The ruling of the High Court in December 2018 was that the taxi licensing regime is not subject to a general principle that it ought to be self-financing, and that the costs of enforcement against drivers could not be recovered under section 70 (control and supervision of vehicles).

The Appeal

In the absence of any clarity about the legality of recovering enforcement costs under section 53, Wakefield appealed the decision on the following grounds:

Ground (1) – The Judge incorrectly restricted himself to determining the meaning of section 70 only of the 1976 Act, when the correct question to be determined was whether driver enforcement costs were recoverable at all, and if so, whether under section 53(2) or section 70. The Judge, therefore, erred in refusing to have regard to the following four matters together: 

(a) the correct construction of section 53(2) with regard to the recovery of driver enforcement costs; 

(b) the correct construction of section 70 with regard to the same; 

(c) whether driver enforcement is recoverable at all; 

(d) whether the taxi licensing scheme for licence fees should be subject to the general principle that it should be self-financing and not be subsidised by the local rate payer.

Ground (2) – The Judge incorrectly concluded that there was no general principle that the taxi licensing fee regime should be self-financing.

The Local Government Association made written representations as an intervener broadly supportive of Wakefield.

The Decision

Wakefield had argued in the High Court and in the Court of Appeal that there is a general principle that the taxi licensing fee regime should be self-financing. The Court of Appeal agreed with the High Court that there is no such general proposition of self-funding [45].

The Court of Appeal agreed with the High Court that the recovery of the fees for the Activities under s 70(1)(c) was ‘a very strained and artificial interpretation of the relevant words’ [41]. The Court of Appeal did go on to consider whether the costs of enforcing the behaviour of licensed drivers can be recovered through the driver’s licence fee under s 53(2) and confirmed that they could:

The judgement states [46]:

In any event, we consider that the costs of enforcing the behaviour of licensed drivers can be recovered through the driver’s licence fee under section 53(2). The relevant words in that provision are “the costs of issue and administration”. The costs of “administration” must be something other than, and in addition to, the costs of “issue”. There is no difficulty in interpreting “administration” in its statutory context as extending to administration of the licence after it has been issued.  It naturally includes the costs of suspension and revocation, which are events expressly mentioned in Part II of the 1976 Act. Suspension and revocation rest on non-compliance with the requirements and conditions for continuing to hold the licence. As we have said, it would therefore have been obvious to Parliament, when enacting the 1976 Act, that costs would be incurred by the district council in monitoring compliance with such requirements and conditions.

The key section is as follows [24]:

“We agree with HHJ Saffman that the cost of monitoring and enforcing driver conduct cannot be taken into account in fixing the vehicle licence fee under section 70.  We consider that the wording of section 70 in the context of the structure of the 1976 Act leads clearly to that conclusion, irrespective of the proper interpretation of section 53. We also consider, however, that such cost can be included in the driver’s licence fee under section 53.  It is regrettable that no one representing drivers appeared before HHJ Saffman or before us to argue that point, which is plainly relevant to the scope of section 70.”

The appeal was dismissed by the Court of Appeal. The Court of Appeal decision leaves open the question of cross-subsidy and the potential that the case may not have been fully argued in the absence of drivers’ representative. The decision confirms that regime inevitably involves expenses on the part of the district council beyond the cost of the original grant of the licence and these are recoverable and this is welcomed clarity. 

Sarah Clover and Ben Williams, both of Kings Chambers, appeared for Wakefield Council.

Gerald Gouriet QC and Charles Streeten both of Francis Taylor Building appeared for Abdul Rehman on behalf of the Wakefield District Hackney Carriage and Private Hire Association.

The Local Government Association was represented by Leo Charalambides, of Kings Chambers.

The Institute of Licensing has several Licensing Fees Training courses coming up in 2020 and soon we will be publishing our Taxi Licensing - Basic and Taxi Licensing - Advanced courses for 2020. See www.instituteoflicensing.org/events