R (Rehman) v Wakefield City Council - Court of Appeal on taxi licensing fees

Those with an interest in taxi licensing fee regimes (yes, they do exist) have been waiting for the Court of Appeal’s ruling in R (oao Rehman) v. Wakefield City Council [2018] EWHC 3664 (Admin) with the sort of baited breath Loonquawi and Phouchg had as Deep Thought was about to deliver the results of his 7.5m year cogitation as to the answer to the ultimate question of life, the universe and everything.

The Court of Appeal's decision R (oao Rehman) v. Wakefield City Council [2019] EWCA Civ 2166 was handed down today.

At first instance, the case touched (although did not directly engage) the curious differences between the provisions of the Local Government (Miscellaneous Provisions) Act 1976 relating to the fee setting regimes for - on the one hand - driver’s licences, and - on the other hand - vehicle and operator’s licences.

For driver’s licences, s.53(2) provides:

Notwithstanding the provisions of the Act of 1847, a district council may demand and recover for the grant to any person of a licence to drive a hackney carriage, or a private hire vehicle, as the case may be, such a fee as they consider reasonable with a view to recovering the costs of issue and administration and may remit the whole or part of the fee in respect of a private hire vehicle in any case in which they think it appropriate to do so.

For vehicle and operator’s licences, s.70(1) & (2) provides:

(1) Subject to the provisions of subsection (2) of this section, a district council may charge such fees for the grant of vehicle and operators’ licences as may be resolved by them from time to time and as may be sufficient in the aggregate to cover in whole or in part—

(a) the reasonable cost of the carrying out by or on behalf of the district council of inspections of hackney carriages and private hire vehicles for the purpose of determining whether any such licence should be granted or renewed;

(b) the reasonable cost of providing hackney carriage stands; and

(c) any reasonable administrative or other costs in connection with the foregoing and with the control and supervision of hackney carriages and private hire vehicles.

(2) The fees chargeable under this section shall not exceed—

(a) for the grant of a vehicle licence in respect of a hackney carriage, twenty-five pounds;

(b) for the grant of a vehicle licence in respect of a private hire vehicle, twenty-five pounds; and

(c) for the grant of an operator’s licence, twenty-five pounds per annum;

or, in any such case, such other sums as a district council may, subject to the following provisions of this section, from time to time determine.

There is a difference in language insofar as the vehicle/operator regime in s.70(1) specifically refers to “costs in connection … with the control and supervision of hackney carriages and private hire vehicles”, whereas the driver regime more generally refers to the “the costs of issue and administration”.

Some commentators, including Button on Taxis (4th edition, 2017) were of the view that s.53(2), as so worded, probably did not extend to the costs of enforcement against drivers, because “administration” did not cover “compliance”. Others (including myself) disagreed, and considered that “administration” referred to administration of the entire licensing scheme insofar as it related to drivers, including enforcement.

Advice that lead to Wakefield’s fee setting decisions in 2018 in line with the approach taken in Button. It did not seek to recoup the costs of driver enforcement under driver licence fees. Instead, it sought to recoup those costs under vehicle licence fees, arguing that there was a general principle that licensing fee regimes should be self-funding, and that the costs of enforcing matters such as speeding, smoking in a taxi, dressing inappropriately, parking badly, using a mobile phone whilst driving, carrying excess passengers and so on (“the Activities”) could be recovered from the licences charged to vehicle proprietors.

At first instance, HHJ Saffman (sitting as a Judge of the High Court) was unpersuaded [15-17] that there was a general principle that licensing regimes were self-funding, and declined to make any determination as to whether this was the case for the scheme in question. He also rejected [22-25] Wakfield’s argument that enforcing the Activities could be recovered from vehicle proprietors as they related to the use of the vehicle once licensed.

The Master of the Rolls was joined by King L.J. and Lavender J. in hearing Wakefield’s appeal in Leeds on 26 November 2019. Their joint judgment was handed down on 10 December 2019.

The Court dismissed Wakefield’s appeal.

Like HHJ Saffman, they were not persuaded that there was any general principle of self-funding [45]. It is plain that they considered that each licensing regime should be considered on its own terms rather than under any umbrella approach.

In a refreshing approach, the Court reviewed the provisions of the 1976 as a whole, and concluded that each of the 3 types of licence (vehicle, operator and driver) has a comprehensive and self-contained statutory regime, which addresses grant, terms, suspension, revocation and fee [39].

In support of the principle against cross-subsidy, the Court said:

The notion that the fee for one type of licence can reflect the costs involved in another, far from being implicit in Part II of the 1976 Act, is entirely contrary to its structure.

The Court had no difficulty at all in agreeing with HHJ Saffman that the costs of enforcing the Activities could not be recovered from vehicle proprietors [24].

One can sense a certain judicial pressure on Wakefield to vary the thrust of its grounds at the hearing [21] and, for the first time [22], Wakefield argued in the alternative that - contrary to the advice it had previously received - if the costs relating to enforcement of the Activities could not be recovered against vehicle owners through fees set in s.70(1), they could be recovered against drivers under fees set under s.53(2).

No drivers were represented at the hearing, counsel for the applicant vehicle owners being careful to restrict their brief to that of owners [22]. It was “regrettable”, said the Court, that no-one appeared before either HHJ Saffman or them to argue the point on behalf of the drivers (they must have lost my phone number).

So, obiter (but a very strong obiter), the Court of Appeal went on to express an opinion on what s.53(2) covered. The answer was it did include the costs of enforcing against drivers. The Court said at [46] of what “administration” in the s.53(2) phrase “issue and administration” meant:

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.

They went on to record [47] what must be the uncontroversial proposition that “there would appear to be no obvious reason why, as is plain, the costs of monitoring and enforcing the conditions and requirements for vehicle and operators’ licences are recoverable under section 70, but those for those for monitoring and enforcing the conditions and requirements for drivers’ licences are not recoverable under section 53”. Applying a literal and purposive interpretation of s.53(2) it covers enforcement costs.

This is a welcome judgment. It hopefully puts to bed the suggestion that somehow drivers do not have to pay for the costs of enforcing driver conduct (an exercise from which they, as a group, benefit) and that these costs should fall on the ratepayer. It is a decision which does not just correspond with common sense, but which also derives an attractive purposive and high-level approach to statutory interpretation in this regime. It is often the case in the taxi sector that particular sub-sections will be picked over in an attempt to pursue the narrow objectives of certain sections of the trade, with the trees (or individual branches of the trees) being focused on to the detriment of the wood. The Court of Appeal has confirmed that, on the interpretation of this particular Act, the funding relates to the wood, and particular branches do not come free.