England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT

		The Royal Courts of Justice The Strand London WC2A 2LL
		8 October 2002

Introduction

1. The claimant, Mark Ian Royden, is the proprietor of a hackney carriage which is licensed by the defendant, the Metropolitan Borough of Wirral, under section 37 of the Town Police Clauses Act 1847, as amended, to ply for hire within that Borough. A "hackney carriage" in this context is a taxi which is entitled to ply for hire, or wait at a taxi rank, as distinct from a private hire taxi which has to be booked by prior reservation, in this case by telephone.
2. In these proceedings Mr Royden seeks judicial review of the decision of the defendant, made on 18 March 2002, to modify its previous policy and remove forthwith the pre-existing limit on the number of vehicles licensed as hackney carriages under the Act of 1847 within the area of the Metropolitan Borough of Wirral.
3. Mr Royden is also Secretary of the North West 6/584 Taxi Section Wirral Branch of the Transport and General Workers' Union. His original claim, lodged on 16 May 2002, was made on his own behalf. Amended grounds of claim lodged on 8 August 2002 state that Mr Royden also brings his claim on behalf of 52 members of his branch who, it is contended, are similarly affected by the defendant's decision. In the claimant's skeleton argument it is stated that the claim is now made on behalf of 91 branch members. The names of the members concerned do not appear on the papers before the Court.
4. The defendant does not object to the claim being amended to state that Mr Royden also brings his claim in a representative capacity, at least as far as the issues of law are concerned, but submits that, on factual issues, it is only Mr Royden's personal situation that is relevant. In these somewhat untidy circumstances, I propose to treat Mr Royden's claim as also made on behalf of those members of his branch of the Transport and General Workers' Union who object to the defendant's decision of 18 March 2002. However, I have no evidence about the position of other branch members, other than what appears from the bundles before the Court.
5. The grounds of the claim are, in brief summary, (1) a failure to consult; (2) a failure to obtain, or take account of, necessary relevant information as to the state of demand, bearing in mind Article 1 of the First Protocol to the European Convention on Human Rights and Fundamental Freedoms ("ECHR"); (3) an unlawful interference with the claimant's property rights under Article 1 of the First Protocol to the ECHR; and (4) a failure to give adequate reasons.

Background

The Act of 1847 as amended

6. Until 1985, section 37 of the Town Police Clauses Act 1847 provided, so far as relevant, that "the commissioners" – now the licensing authority for the area concerned – "may from time to time licence to ply for hire … such number of hackney coaches or carriages … as they think fit."
7. Section 16 of the Transport Act 1985 amended section 37 of the Act of 1847 with respect to hackney carriages. The effect of those amendments is (a) to omit the words "such number of" and "as they think fit" from section 37; and (b) to add to section 37 a proviso that

"the grant of a licence may be refused, for the purposes 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 carriages (with the area to which the licence would apply) which is unmet."

8. The effect of section 37 of the Act of 1847, as amended, is thus that the licensing authority may, from time to time, license hackney carriages to ply for hire, provided that the grant of a licence may be refused, for the purposes of limiting the number of hackney carriage licences granted, if, but only if, the licensing authority is satisfied that, within the relevant area, "there is no significant demand for the services of hackney carriages … which is unmet".

The situation up to 1998

9. Prior to its decision of 18 March 2002 the defendant's policy was to limit the number of hackney carriage vehicle licences which it issued. From 1974 onwards, the number of licences issued for the Borough was 86. In 1991, a decision by the defendant refusing to issue ten further licences for hackney carriage vehicles was appealed to the Crown Court at Liverpool. The Crown Court found that there was an unmet demand within the meaning of the Act of 1847 and ordered the ten further licences to be issued. After various procedural complications that case, and another parallel case, were appealed by way of case stated to the High Court. In March 1995 the High Court held that Liverpool Crown Court should not itself have ordered the grant of further licences, but should have remitted the matter to the defendant to decide the applications for further licences in the light of the Crown Court's decision on the question of unmet demand. The decision of the High Court was upheld by the Court of Appeal in May 1996, and leave to appeal to the House of Lords was refused in October 1996.
10. Following that litigation, and consultation with the trade and other interested parties, the defendant received applications for 76 further licences. In June 1997, the defendant increased the number of hackney carriage vehicle licences issued by 15, thus making 101 licences in total. Once again, a number of the unsuccessful applicants for further licences appealed to the Crown Court. The Crown Court again found that there was unmet demand under the Act of 1847, and remitted the matter back to the defendant to decide on the grant of further licences.

The Maunsell Report

11. Following that decision by the Crown Court, the defendant commissioned a survey by a firm of consultants, Maunsell Transport Planning, whose report of over 100 pages is dated 28 October 1998. The Maunsell Report's conclusions under the heading "Executive Summary", at pages (iv) to (v), are expressed in these terms:

"Taking all evidence into account, the Study concludes that there is NO SIGNIFICANT UNMET DEMAND for the services of hackney carriages in the Wirral at the present time. Current case law makes it clear that the significant queues and waits on Friday and Saturdays at night clubs are not sufficient to constitute significant unmet demand over the full time period.

However, the overall hackney carriage market in Wirral has become distorted over time, and has seen a larger than usual growth of the private hire vehicle industry. The hackney carriage operation relies heavily on rank-based work. Just one radio circuit exists and there are no mixed hackney/private hire fleets as exist in other areas of England and Wales.

Hackney services tend to be limited to the Liscard and Birkenhead areas and many outer area ranks, though potentially viable (as evidenced by relatively large nearby private hire bases), remain unserved. A major concern is that there is no easy way for the disabled to obtain a service relevant to their needs. The impossibility of undertaking the proposed wheelchair user survey arose because just two phone numbers could be used to request a wheelchair accessible vehicle. Improvements to external (telephone book) and on-vehicle advertising for hackneys have been suggested.

Evaluation of the current observed structure of both hackney carriage and private hire industries suggests the need for policy revision and issue of further plates to ensure the provision of the type of service required by customers in the Wirral. Improved training for drivers and standards for both hackney and private hire vehicles are needed.

To ensure the hackney carriage trade has opportunity to develop steadily and firmly in rising to its full potential, the Consultant recommends issue of a further 25 plates. The effect of these must be monitored to allow further tranches to be released if this is proven necessary for market development."

12. Under the heading "Findings of the Study" the Maunsell Report stated at paragraphs 7.3 and 7.4:

"7.3 The present hackney operation relies very heavily on traditional rank-based work. Only one radio network exists, and although it has nearly half of the vehicle fleet attached, the Consultant understand the bulk of its work remains from the ranks. The fleet remains in the hands of mainly single owner/drivers, and there are no company-style operations.

7.4 Rank work is also concentrated on just five ranks of the current 32. Despite some being in relatively good locations, very little use is made of ranks beyond Birkenhead or Liscard centres. There are few direct links between trains or buses and taxis."

13. The Maunsell Report elaborated on the question of market distortion at paragraphs 7.9 to 7.12:

"7.9 Although it can be argued that the current service to the current key ranks is relatively good, the evidence of unused ranks, a desire of passengers for service at some of these, and for the hackney vehicle, and the significant shortage of service to night club areas suggests that taken overall, there is a severely distorted market for hackney services in the Wirral. Evaluation of the current situation in terms of the currently observed structure of the industry suggests this could only be assisted by issue of additional plates alongside other policy revisions.

7.10 Further evidence of market distortion is shown by the high number of private hire vehicles (over 10 for every hackney), and the amount of plying for hire undertaken by private hires (which often has to be condoned by police as public safety issues override the regulatory issues).

7.11 It appears that the market for hackney and private hire services in the Wirral has been severely distorted by an inability of the hackney plates to expand with the opportunities available. Whilst some of this is attributable to the policy of limiting vehicles by and other policies of the Borough, the internal organisation of the hackney trade has also assisted the retention of a very traditional operation. This implies [that] further development of the role of hackneys in Wirral transport must be a joint effort between all involved parties. This effort needs to draw upon external sources such as NATPHLEO and an independent voice with national experience.

7.12 The existence of a well-known plate premium represents a significant investment by current owners. However, its continued existence appears not to encourage maximisation of use of current vehicles nor to readily attract new entrants. That many current drivers would like to be owners is evidenced by the current rush of applications for hackney drivers' badges.

…"

14. Under the heading "Recommendations", the Maunsell report states at paragraphs 7.18 to 7.19, and 7.22 to 7.24:

"7.18 The long standing policy of limiting hackney vehicle numbers appears to have strongly stunted the growth of the hackney industry, with a corresponding increase in private hire vehicles to meet the demand. It is regretful that the restraint appears to have been compounded as hackney owner/drivers appear to have lost the will to battle both against restraint and competition. Policies and trade behaviour have combined to retain a very traditional hackney service.

7.19 The growth of private hire offices near out of town (and even in town) rank locations suggests a market has remained, which not being met by hackney carriages found satisfaction in private hire vehicles. Had there been sufficient hackney vehicles this was not the necessary conclusion. The Consultant believes additional plates would be needed to allow development of hackney carriage services in these locations.

…

7.22 It is particularly important that the Licensing Authority ensure that adequate hackney plates are available to take advantage both of new opportunities and attract more car drivers away from less sustainable use of their vehicles. Both these items might require additional plates to allow growth.

7.23 The current practice of allowing private hire vehicles to advertise their phone contact numbers, but forbidding this on hackney vehicles should be strongly reconsidered. This policy has almost certainly contributed to the restrained growth of hackney compared to private hire vehicles and the continuance of a very traditional hackney operation. It also reinforces the difficulty of disabled persons obtaining suitable vehicles. …

7.24 The Consultant would suggest a phased introduction of additional plates to allow the hackney industry opportunity to develop steadily and firmly. Taking experience from other areas, a planned growth of 25 plates now, followed by plans for further tranches if required until a reasonable operating level is identified. …"

The 1999 licences

15. Following the Maunsell Report, the defendant decided to issue a further 25 licences. There were 58 applications. The licences were issued in 1999, the claimant being one of the successful applicants. The total number of licences in issue thus increased to 126.
16. According to the defendant's evidence, applicants for the 1999 licences were asked where they would ply for hire if granted a licence, the intention being to encourage the use of vehicles other than in Birkenhead and New Brighton. According to the defendant, however, little has changed since 1999, the majority of vehicles still being concentrated in those areas.

The Joint Consultative Committee

17. There is in existence a "Private Hire/Hackney Carriage Joint Consultative Committee" established by the defendant ("the Joint Consultative Committee"), which meets every two months. Apparently the Joint Consultative Committee includes representatives from the Transport and General Workers' Union Private Hire Section, Transport and General Workers' Union Hackney Carriage Section, Wirral Licensed Taxi Operators Association, and the Wirral Private Hire Operators Association. It is also attended by officers from Merseyside Police, the Department of Highway and Engineering Services, officers from the Borough Solicitor and Secretary's Department, as well as Councillors, including and the Chair and Vice Chair of the Licensing, Health and Safety and General Purposes Committee ("the Licensing Committee").
18. According to the defendant's evidence, after 1999 the question of the "de-restriction" of the number of hackney carriage vehicle licences continued to be raised "fairly regularly" at meetings of the Joint Consultative Committee. Again according to the defendant, the hackney carriage and private hire representatives, respectively, each expressed opposing views on this issue.

The defendant's review

19. It appears that, in the autumn of 2001, the defendant indicated its intention to review its policy on the licensing of hackney carriages. At a meeting of the Joint Consultative Committee on 9 October 2001 it was indicated that a report on this subject was intended to go to the Licensing Committee at the end of November. In a further meeting of the Consultative Committee on 11 December 2001, at which Mr Royden was present, a representative of the defendant said that the "de-restriction report did not go to the Licensing Committee last month, but it would at a later date."
20. In mid February 2002, a questionnaire, in the same form as that used in the previous consultation of 1996, was sent to all licensed hackney carriage and private hire drivers, proprietors and operators in the Borough, as well as to other interested parties such as Merseyside Police, Merseytravel and the Wirral Association for the Disabled. The total number of copies of the questionnaire, sent out on a "freepost" basis, was 2,400.
21. The standard form letter accompanying the questionnaire sent out in mid February 2002 stated:

"As you may well be aware the Council appointed Consultants in 1998 to review the level of demand for hackney carriage vehicles in the Borough. After considering the Consultants conclusions this Council granted an additional twenty-five hackney carriage vehicle licences in 1999.

The Council is undertaking a review of its policy in relation to hackney carriage vehicle licences and as part of this review is to consult with all interested parties. A report will then be prepared for the Licensing, Health and Safety and General Purposes Committee to consider. For your information there are three options open to that Committee:-

1. Retain the limit on the numbers of hackney carriage vehicle licences (currently 126).

2. Remove the limit on the number of hackney carriage vehicle licences entirely.

3. Issue a further tranche of hackney carriage vehicle licences.

It is vitally important to know your views and in that regard there is annexed to this letter a questionnaire seeking your views. As long ago as 1991 the Council formulated certain conditions and criteria, which might apply to the grant of new licences. A copy of the conditions and criteria applied in relation to the last hackney carriage licences is attached to the questionnaire. Your views are also sought on this point. I also attach to the questionnaire a copy of the representatives of the Private Hire and Hackney Carriage Joint Consultative Committee with whom you might wish to consult before responding to this letter.

It is vitally important to know your views and I would be greatly assisted if you would complete and return the questionnaire to me by 1 March 2002.

Finally, if there are other matters which you consider relevant to the review of the hackney carriage policy and which you wish to have taken into consideration by the Council, you should indicate what those matters are and express your views on them.

If you have any queries please contact the Licensing Department (0151 691 8476) who will be happy to assist."

22. In addition a public notice dated 13 February 2002 was placed in the press in the following terms:

"REVIEW OF HACKNEY CARRIAGE VEHICLE LICENCE POLICY

The Council is responsible for the licensing and regulation of private hire and hackney carriage vehicles in the Borough.

The manner in which a customer can book those two types of vehicle is quite different. Private hire vehicles are required by law to be booked in advance with an operator whilst hackney carriage vehicles may be hired without this requirement and can be flagged down.

The Council has for many years limited the number of hackney carriage vehicles that are allowed to operate within the Borough, the current limit being 126.

The Council is undertaking a review of this policy and as part of that review is seeking to consult with all interested parties.

The Council considers that it is vitally important that the views of members of the public who use either of these types of vehicles are obtained on this issue.

If you have any comments that you wish the Council to take into account when it undertakes its review please forward them to the Borough Solicitor and Secretary, Town Hall, Brighton Street, Wallasey, Wirral, CH44 8ED no later than 1^st March 2002."

23. It appears from the minutes of the Joint Consultative Committee dated 12 February 2002 that members of the Borough Solicitor and Secretary's Department informed the Committee on that occasion "that full consultation would take place and that a report was to be presented to members in relation to hackney carriage vehicle licensing policy". It was further reported:

"… that letters were being sent out concerning this consultation with responses being invited by 1 March 2002. All sections of the trade, the relevant organisations and members of the public were being invited to respond and all responses would be placed before members and copies supplied to JCC members."

24. Mr Royden was not present at that meeting, according to his witness statement, because he was on a training course. However, his colleague Mr Derek Cummins, from the same branch, was present at the Joint Consultative Committee meeting on 12 February 2002.

The exchanges between Mr Royden and Johanna Miller

25. According to his witness statement dated 13 May 2002 Mr Royden had by this stage become concerned that "none of the recognised trade representatives" had been consulted as to the wording of the questionnaire being sent out, nor as to how the matter of the review was to be handled. According to Mr Royden (paragraph 8 of his witness statement), it seemed to him that Ms Johanna Miller, the Borough Solicitor and Secretary, and her Department, "had already decided what the Council was going to do and that was to immediately and totally de-limit the number of hackney carriage proprietors' licences issued". Ms Miller, in her witness statement dated 12 July 2002, denies that allegation, as does Councillor Susan Brown, who chaired the meeting of the Licensing Committee on 18 March 2002, in her witness statement of 5 June 2002. It is common ground, however, that Ms Miller had a conversation with Mr Royden soon after 14 February 2002, in which Mr Royden expressed the view that the questionnaire sent out as part of the consultation had prejudged the matter and asked that the report on the hackney carriage licensing policy be removed from the agenda of the Licensing Committee.
26. On 26 February 2002 Mr Royden wrote to Ms Miller in these terms:

"Dear Ms Miller

I wrote to you two weeks ago requesting a meeting concerning the best value review but, have so far not received a reply. The questionnaire that the Council sent out to "all interested parties" has had a serious destabilising effect on the taxi trade and, I know of three drivers who have "shelved" plans to renew/upgrade their vehicles until the Council's policy becomes clear. As usual with any industry at a time of uncertainty, the rumours are rife and, I feel that I, as their elected representative should be able to answer queries: alas sadly I find that I am as much in the dark as they are.

The worrying aspect of the rumours, and the reason why so many drivers are giving them credence is that the source appears to be the licensing section, because driver after driver has told me that they were informed by a certain individual from the licensing section as to the intentions of the Council on the plate issue. If it is true, goes against all established procedures established by the Council and, this can only be seen as irresponsible, and dare I say, reprehensible action by the licensing section.

For the good of the trade, I would urge that you arrange a meeting at the earliest possible date. The fact that drivers, some heavily in debt, have been left in the dark while rumours spread like wildfire shows indifference and a worrying ignorance about the dynamics of the taxi trade by the people who wield the power.

I am currently consulting with my Union officer about taking this matter further."

27. On 1 March 2002 Mr Royden wrote again, this time to the Chief Executive of the defendant, Mr Steve Maddox, in the following terms:

"Dear Mr Maddox

We believe that there has been a serious breach of confidence by the Licensing section. As you are aware the Council is currently engaged in a best value scoping exercise encompassing all services offered by the authority. At our recent meeting (joint consultative committee) Mr J R Jones of the Solicitors and Secretary's Department outlined how this was to affect the taxi trade stating that, nothing has been decided with reference to the issue of further hackney carriage licenses (taxi plates). However the taxi trade and "all interested parties" were to be consulted as to whether they believed a further plate issue was necessary or indeed desirable.

What Mr Jones has stated is at odds with what numerous drivers have been told by licensing officers in particular Mrs Calvert and Ms Gallagher. They have stated that it is a "done deal" and that the Council have already decided to issue a further tranche of twenty five hackney carriage licenses. If this is the case then Mr J R Jones had lied to the elected representatives of the taxi trade at a properly constituted meeting.

This has had a de-stabilising effect on the trade with at least three drivers shelving plans to upgrade their vehicles, with others expressing a desire to leave the industry. We seek urgent clarification of the policy of the Licensing Section concerning the issue of plates.

Either way we would like put on record our extreme disappointment at the behaviour of the Licensing Section and their apparent disregard to well established procedures in passing on information to the taxi trade. I as trade representative have been severely undermined by the actions of the aforementioned Officers, in trying to calm what has developed into a volatile situation, with impromptu meetings springing up at regular intervals. When attending these meetings I explain the scenario outlined by Mr Jones at the recent JCC, only to be told by several individual drivers (all of whom are prepared to swear affidavits) that they have heard it from "the horses mouth" that there will be a plate issue of twenty five.

The Licensing Section have acted nothing short of disgracefully and we believe that two courses of action must now be taken, the first being that Ms J Miller must issue a statement to be given to all taxi drivers stating the true policy of the Local Authority. Secondly as the questionnaire has been pre-judged (prejudiced), we believe that the Council should scrap it and look at other ways of defining the true level of demand in the taxi trade.

I trust that you will give this your urgent consideration."

28. On 15 March 2002 Ms Miller wrote to Mr Royden as follows:

"I write with reference to your letter of 1 March 2002 addressed to the Council's Chief Executive and copied to the list of people at the bottom of this letter. You first wrote to me on 14 February and we had a discussion in the Town Hall informally when I explained to you that the issue of restriction on the number of hackney carriages had to be considered by the members of the Authority even if they decided to remain with the current policy. This will be required as part of a Best Value Review but it is also required because of the litigation we have faced and are facing and in view of our own survey on demand which now requires updating.

I understand that you were not actually at the JCC meeting at which you say various different things were said. The situation is that the debate about the policy must take place. I appreciate that having the debate alone may cause unrest amongst the trade but I am afraid that it must happen and in fact it is in the best interests of the whole of the trade and with the public and the Authority for that debate to take place, whatever the outcome of that may be.

It is also vital that consultation has to take place and this is what we have done so far. It may well be that we need to consult further as this is only the first stage in reviewing this policy. I can assure you categorically that the policy decision about the level of demand for hackney carriages in the borough and when any limit should apply and indeed what that limit should be is a matter for the elected members of the Authority to decide. There is no "done deal" about what the future policy should be or, indeed, how many licences should be issued. I have spoken to all of the staff concerned and am satisfied that they all understand that that is the situation and that none of the comments that you allege have been made have actually happened.

As I have said to you, the debate has to take place and you will see to that end a report to the Licensing Committee next week which I attach to this letter. As I have said to you, that does not seek to pre-judge the situation at all but it does encourage the debate to take place. I do not believe that stopping the debate or cancelling the very hard work that has been done so far by both officers and representatives of the trade would be of help in any way.

I hope that this letter gives you reassurance. I can assure you that my commitment to making sure that true and effective consultation takes place with the trade and customers.

I am copying this letter to those to whom you sent your letter of 1 March."

29. I am told that Mr Royden did not receive this letter until 18 March 2002, which was the day of the meeting of the Licensing Committee in question.

The response to the questionnaire

30. It appears that there were 118 responses to the questionnaire. Of these, 70 were from current hackney carriage proprietors or drivers opposing the defendant's proposals. Forty-two responses were from private hire proprietors or drivers, who largely supported the defendant's proposals. The defendant received a response from Merseyside Police dated 26 February 2002, which expressed concern that "de-restriction" might exacerbate incidents of highway obstruction or disorder over ranking at some of the more popular designated ranks. A similar concern was expressed on behalf of the defendant's Director of Highway and Engineering Services in a letter dated 7 March 2002.

The Report to the Licensing Committee dated 12 March 2002

31. On 12 March 2002 a report of some ten pages entitled "Hackney Carriage Vehicle Licence Policy" ("the Report to the Committee") was prepared by Ms Miller for the Licensing Committee.
32. Under the heading "2. Legal Position", the Report to the Committee first summarised the effect of section 37 of the Town Police Clauses Act 1847, as amended by section 16 of the Transport Act 1985, and concluded that:

"Where a Licensing Authority has a limitation policy, in order to comply with Section 16, it must be satisfied there is no significant unmet demand before it can refuse to grant a licence for the purpose of limiting numbers."

33. The Report to the Committee then referred to Circular 3/85 issued by the Department of Transport in 1985 giving guidance to local authorities as to the licensing of hackney carriage vehicles, following the amendments introduced by the Act of 1985. Paragraphs 27 and 28 of that Circular are in these terms:

"District councils may wish to review their policy on the control of hackney carriage numbers in the light of the section. Limitation of numbers can have many undesirable effects – an insufficiency of taxis, either generally or at particular times or in particular places; insufficient competition between the providers of taxi services, to the detriment of their customers; and prices for the transfer of taxi licences from one person to another which imply an artificial restriction of supply. Under the section a district council may refuse a licence to restrict numbers only if satisfied that there is not significant unmet demand for taxis in the relevant area. If there is an appeal, it will be for the Council to convince the Court that they had reasonable grounds for being so satisfied. It will not, in general, be sufficient for a district council to rely on the assertion of existing taxi licence holders that the demand is already catered for. They have evidence only of the demand which they satisfy and it will be for the Council themselves to seek for and examine the evidence of unmet demand. There may be those who have given up trying to use taxis because of the inadequacy of the service and there may be latent demand in parts of a district that have not been adequately served – where those who wish to use taxis may not have demonstrated their demand since there had been no opportunity of having it satisfied. Moreover, if the applicant for a new taxi licence proposed to use it – for instance under Section 12 – and had reasonable grounds to believe that there would be a demand for his service if he provided it, a Council which wished to refuse a licence would have to satisfy themselves that the demand would not be forthcoming. Overcrowding at taxi ranks is not itself evidence that there is no unmet demand. It may be that the provision of ranks has been too limited and that the Council should look actively for sites for further ranks.

There are a number of district councils which already exercise no control over the number of taxis in their areas without causing problems of oversupply. However, the Department accepts that in some areas the total abandonment of quantity control could lead to an initial over-supply of taxis before market forces could bring about an equilibrium between supply and demand. In order to avoid possible disruption, a district council faced with a large number of applicants could in the Department's view, reasonably grant a proportion of the applications, deferring consideration of the remainder until the effects of granting the first tranche could be assessed."

34. The Report to the Committee went on:

"R -v- Great Yarmouth Borough Council is authority for the proposition that a Licensing Authority can at any time decide to de-limit the number of hackney carriages it will licence subject to the proviso that the decision to do so must not of itself be irrational or unlawful."

35. Under the heading "3. Background", the Report to the Committee then set out the background to the matter, including the litigation in the 1990s and the subsequent Maunsell Report. Under the heading "4. Other factors to consider" the Report stated:

"When considering the issue of hackney carriage vehicle licences other factors may be considered relevant. These are set out below –

(i) Value of licences

The Council has for many years elected to restrict the number of licences that will be granted. It would be fair to say that as with any commodity where supply is restricted, a licence has acquired a value.

A person who wishes to be a hackney carriage vehicle proprietor does not only have to purchase a licensed vehicle but also to pay the 'licence plate value'. Existing licensees have invested in a licence at some stage in the past and put some reliance on their ability to sell it to secure their financial future. Maunsell Transport Planning indicated in the survey in 1998 that 'plate' exchanges realised a premium of £15,000.

(ii) Possible reduction in custom to existing licence holders

It is often argued that to remove the limit on numbers of licensed vehicles would lead to congestion and unacceptably high number of hackney carriage proprietors suffering a reduction in their earnings. It is easy to see why existing licence holders hold such concerns as many of them have invested considerable sums and see that value as being eroded by a decision of a Local Authority to remove the limit on numbers.

In R -v- Great Yarmouth Borough Council ex parte Sawyer Woolf LJ stated:

"The other matter which I would mention is clearly, on the material before the Court, the individual taxi drivers may suffer material hardship as a result of the change of policy. With regard to their problems, the Court has in mind the evidence, but because of the role of the Courts to which I have already made reference, there is no basis for intervening on the grounds of the individual hardship of individual members."

(iii) Availability of hackney carriage stands

An increase in hackney carriage numbers can lead to additional pressure on hackney carriage stands. However, realistically, it is expected that some vehicles will be unable to rank at any given time because they will be either plying for hire, hired or not working. It would also be fair to say that the Council when it issued the additional 40 licence plates attempted to encourage the new vehicles to operate elsewhere than Birkenhead and New Brighton. However, the majority of those vehicles ended up plying for trade in the main areas notwithstanding the vehicles proprietors representations to work in other areas when interviewed by the Licensing Panel for these additional licences.

(v)[sic] Availability of service to disabled passengers

All of the hackney carriage vehicles licensed by the Borough are wheelchair accessible.

(vi) Benefit to the public for more vehicles being available

If the limit on numbers were to be removed, then provided that vehicle and driver standards are maintained (or improved) the public would have access to more licensed vehicles which can legally be flagged down.

(vii) Vehicle standards

One argument is that by increasing the number of licensed vehicles the standard of those vehicles would decline due to proprietors having less income to invest in the proper maintenance and repair of vehicles.

The issue of vehicle standards is entirely separate from the issue of numbers. The Council applies a vehicle standard and enforces it.

The Council, when issuing the additional licences adopted criteria relating to the age of those vehicles ie less than 3 years old.

(viii) Opportunities for others to enter the trade

It is very difficult for people to enter into the trade when a limit on numbers is in force, a person would have to find an existing licensee prepared to transfer to them the licence but they would also have to finance the purchase of the vehicle (including any licence premium).

On each occasion that additional licences were issued, the number of applicants far exceeded the licences available.

(ix) Illegal plying for hire

The primary concern with illegal plying for hire is that the pre-booking requirement is not met. This means that the passenger has no way of knowing whether the vehicle and driver are licensed, they have not recourse concerning the fare charged and there are no records at the operators office to enable the Council (or the police) to identify the vehicle and driver concerned. Illegal plying for hire is also likely to invalidate any insurance held by the driver.

It would also appear that some drivers 'sign off' the operator's radio circuit at busy times and choose to ply for hire instead. The benefit the driver receives is that the fare they charge is unregulated and they do not encounter the problem of booked passengers having already been picked up by other drivers that are plying for hire.

The Consultant's report indicated that it could not be easily denied that there were high levels of unmet demand for hackney carriages at nightclubs between midnight and 3.00 am on Friday and Saturday evenings. The report indicated that whilst private hire vehicles may be legitimately be collecting pre-arranged bookings, the scale and nature indicated otherwise."

36. Under the heading "5. Other Licensing Authorities", the Report to the Committee stated:

"A number of other large licensing authorities have been contacted to establish their experiences in this area. The information is summarised below.

Liverpool City Council have a restricted fleet of 1417 hackney carriage vehicles. The last survey was 10 years ago. Another survey may be undertaken shortly. Liverpool has a population of 457,000 and the ratio of hackney carriage vehicles per thousand population is 3.1.

Knowsley Borough Council restrict to 240 hackney carriage vehicles. Last survey was June 1988. No survey is planned for near future. Knowsley has a population of 153,000, the ratio of hackney carriage vehicles per thousand population is 3.1.

Sefton restricts to 277. Last survey was just over 12 months ago. Licence fees have £2 to go towards regular (every few years) surveys. Sefton has a population of 286,000 and the ratio of hackney carriage vehicles per thousand population is 0.96.

St Helens Metropolitan Borough Council has a restricted fleet of 63 hackney carriage vehicles. It has a population of 179,000. The ratio of hackney carriage vehicles per thousand population is 0.35.

Halton Borough Council has a restricted fleet of approximately 220 hackney carriage vehicles. It has a population of 121,000 and the ratio of hackney carriage vehicles per thousand population is 1.8.

Wirral Borough Council has a population of 327,000 and the ratio of hackney carriage vehicles per thousand population is 0.38."

37. Under the heading "6. Options", the Report to the Committee stated that a number of options were open to members as follows:

"(i) Maintain limit on hackney carriage vehicles

As stated above, the Council can only refuse to grant hackney carriage vehicle licences for the purpose of limiting number of hackney carriage vehicles only when it is satisfied that there is no significant unmet demand within the area.

The burden of proof is on the Council to show that there is no significant unmet demand.

Experience has shown that the only acceptable method of demonstrating whether demand for hackney carriage vehicles is met, or if not, the extent of the demand is to commission a survey. Surveys conducted in-house have not been looked on favourably by the Court.

Independent surveys are expensive but essential if the Council is to attempt to defend a refusal to grant a hackney carriage vehicle licence. The costs of the survey can be recovered from the trade through an increase in fees.

It is also important to be aware that regular reviews would have to be undertaken if a limit on hackney carriage vehicles was retained as the Council would be constantly at risk of appeal against refusal and would have to discharge the burden of proof regarding demand and an up to date survey would be a pre-requisite of defending any such appeals.

A survey would have to be updated regularly and such would involve cost of approximately £7,000. There is no provision in the budget for this and thus an increase in licence fees would have to recoup these costs.

Similarly, defending any appeals to Court has cost implications in respect of Court and legal fees. These can be considerable as the most recent litigation involved costs of approximately £13,000. Again there is no provision in the budget for these amounts and such amounts would have to be covered by an increase in licence fees.

(ii) Remove the limit on hackney carriage vehicle licences

It is possible to remove the limit on hackney carriage vehicles at any time subject to the requirement that such a decision must not be irrational, unlawful or perverse. The Council in coming to the decision has to take into account relevant matters and not consider anything irrelevant.

The obvious benefits of removing the limit are that there would be no costs relating to commissioning surveys or defending appeals against refusal to issue licences. However there would be a number of issues that would have to be considered for example the provision of hackney ranks.

(iii) Retention of limit but controlled release of additional plates

Maunsell Transport Planning concluded in 1998 that there was no significant unmet demand for hackney carriage services within the Borough at that time. However, it further concluded that due to the long standing policy of limiting hackney carriage vehicle licences appeared to have stunted the growth of the hackney carriage industry and identified a severely distorted market for hackney carriage services.

Maunsell's recommended that twenty five additional licences be issued to allow the hackney carriage trade to develop, with the possibility of further tranches if required until a reasonably operating level is identified. Though Maunsell's did not indicate what a reasonable operating level was.

If additional restricted number of licences were to be issued the Council would have to decide on the number and be able to justify this to the Court if any unsuccessful applicants appealed. It is clear from past experience that unsuccessful applicants will appeal and the Council then has to discharge the burden of unmet demand. In this particular case, how it decided on the number of additional licences to be issued.

If this option were to be followed it would be appropriate to commission a survey to look at the issue of demand once again and have regular surveys thereafter.

However, if any further applications were to be made the Council would have to satisfy itself afresh as to the absence of significant unmet demand."

38. Under the heading "7. Consultation", the Report to the Committee stated:

"Consultation has taken place with the trade, Merseyside Police, Merseytravel and other parties who may have interest eg Wirral Association for Disability. A copy of the letter and questionnaire are attached to this report marked Appendix 1. The public were also invited to make representations via a notice in the local press. A copy of all representations received is attached to this report marked Appendix 2. A summary of the responses is attached marked Appendix 3."

39. Under the heading "8. Conclusion", the Report to the Committee stated:

"It is clear that to do nothing is not an option. If members are minded to maintain a limit, then it will be necessary to significantly increase licence fees to cover the costs of litigation that will inevitably ensue and regular surveys, which will prove necessary to justify the limitation policy. Such surveys may recommend an increased plate issue in any event.

The limit on numbers could be removed without controls. However I would suggest that the limit on numbers of hackney carriage vehicles is removed with controls such as an age limit. This would let market forces find an equilibrium.

The situation would be kept under review and it would always be open to the Council to re-impose a numerical limit on the number of hackney carriage vehicle licences if the evidence indicated that this was appropriate."

40. Paragraph 14 of the Report to the Committee stated:

"14. Human Rights Implications

Article 1 of the First Protocol is concerned with the protection of property and provides that every person is entitled to peaceful enjoyment of his possessions.

"Possessions" is given a broad definition and includes a licence. Article 1 of the First Protocol does not apply to property which a person wants or hopes to acquire. Therefore an applicant hoping to acquire a hackney carriage vehicle licence is not able to rely on this Article.

Existing licence holders are caught by Article 1 of the First Protocol and are entitled to peaceful enjoyment of their possessions ie the economic value of the hackney carriage vehicle licence. A fair balance must be struck between the protection of the individual's fundamental rights and the demands of the general interests of the community.

Article 6 which relates to a right to a fair hearing would apply to the consideration of any applications for hackney carriage vehicle licences if any are issued."

41. Finally, paragraph 16 of the Report to the Committee stated:

"16. Recommendation

For members to decide the policy in relation to hackney carriage vehicle licences."

The decision of the Licensing Committee of 18 March 2002

42. The meeting of the Licensing Committee of 18 March 2002 was Chaired by Councillor Susan Brown, who has provided two witness statements to the Court dated 5 June 2002 and 8 July 2002. Councillor Brown has, according to her evidence, also regularly attended the meetings of the Joint Consultative Committee, including those of 9 October 2001 and 12 February 2002.
43. The meeting of the Licensing Committee was attended by members of the trade. Mr Cummins and four other trade representatives spoke. Mr Royden was present, but states that he left the matter to Mr Cummins who was aware of the issues since he (Mr Royden) had been away on a course and had not been sent any agenda or date of the meeting.
44. Mr Cummins attaches the notes of his speech to his witness statement dated 24 June 2002. According to the notes, Mr Cummins criticised the defendant, notably, for not allowing the trade to have its say, contrary to the rules of natural justice. He considered that due weight was not given to the views of hackney carriage drivers who had invested some £28,000 to buy their cabs, and that weight should not be given to "the opinions of carpetbaggers, and PH drivers who just want to put hackney plates on their saloon cars". He urged the defendant to have a further survey of demand before taking a decision.
45. Mr Cummins also says in his witness statement that he and his colleagues had previously lobbied Labour voting Councillors who were then in the majority on the Licensing Committee. As a result, he believed the Licensing Committee would decide to have a further survey, and he did not appreciate that a final decision would be taken at that meeting. According to Councillor Brown, nothing was said to Mr Cummins that could have given him that impression. According to Mr Cummins, he was not allowed to ask questions at the meeting, nor were any questions put to him. When those that wished to speak had finished, the public was asked to retire. Five minutes later, according to Mr Cummins, the public was asked back in and the result of the vote was announced. According to Mr Cummins, "there was uproar and all my colleagues left the room". He himself was surprised and shocked. However, Claire Hallwood, a solicitor employed by the defendant, whose three witness statements, dated 5 June 2002, 12 June 2002 and 5 July 2002, set out the background to the matter from the defendant's point of view, points out in her third witness statement that Mr Cummins' notes for his speech tend to suggest that he anticipated that members might decide against a survey. Ms Hallwood also contests Mr Cummins' suggestion that he did not anticipate that the Licensing Committee would make a final decision at the meeting of 18 March 2002.

The Licensing Committee's decision

46. The relevant minute of the Licensing Committee's decision of 18 March 2002 reads as follows:

"67. HACKNEY CARRIAGE VEHICLE LICENCE POLICY

The Borough Solicitor and Secretary requested members' views on the hackney carriage vehicle licence policy which, until 1997, had maintained a limit of 86 hackney carriage vehicle licences. She reported that following lengthy Court proceedings and a consultation process, a further 15 additional licences had been issued in May 1997, making a total of 101 licensed vehicles. Further Court proceedings ensued which resulted in an independent survey being undertaken, and a further 25 additional licences being issued in February 1999. The total number of licensed hackney carriage vehicles issued to date was 126.

The Borough Solicitor and Secretary also reported other factors which could be considered relevant when considering the issue of hackney carriage vehicle licences, such as the value of licences, the possible reduction in custom to existing licence holders, the availability of stands, the availability of service to disabled passengers, the benefit to the public for more vehicles being available, the vehicle standards, the opportunities for other to enter the trade and illegal plying for hire. She also reported upon the experiences of other licensing authorities in the area.

Having considered the facts outlined above, the Borough Solicitor and Secretary detailed three options open to members in their consideration of the hackney carriage vehicle licence policy. These were to maintain the limit, to remove the limit, or to retain the limit with a controlled release of additional licences. She reported that consultation on this issue had taken place with hackney carriage drivers and proprietors, private hire drivers, proprietors and owners, who had all been sent a questionnaire, and Merseyside Police, Merseytravel, and other parties who may have an interest, for example Wirral Association for Disability. She further reported that a notice had been put in the local press inviting the public to make their representations known. Of all those invited to respond only 118 were received.

Many members of the trade, both hackney carriage and private hire, attended the meeting and the Chair allowed the following five members to make their representations.

Mr J Squibb of the TGWU (Cab Section) stated that the last 25 licences had been issued to take on the growth that was expected to happen in the leisure industry. He stated that, as the expected growth had not happened, more licences were not needed as over-ranking at certain ranks in the Borough was already a problem and this view was echoed by the comments received from Merseyside Police and the Director of Highway and Engineering Services.

Mr D Cummins of the TGWU (Cab Section) stated that the Council should have a survey to determine the level of demand, and that the trade would pay for it and take responsibility for it. He stated that to remove the limit on the number of licences issued would be an insult to those who currently held licences and who had invested £28 – 30,000 in their cabs, many of whom had young families to support.

Mr A Norbury of the TGWU (Private Hire Section) stated that a decision on the matter should be adjourned as the trade had not been properly consulted. He stated that he did not feel that Councillors were sufficiently up-to-date to make an informed decision as there had been no debate with the trade. Mr Norbury stated that he felt that if a decision was made it would be a knee jerk reaction and that would not benefit the public.

Mr B Howard, a hackney carriage driver, stated that he believed that not many questionnaires were returned because drivers did not believe that any heed would be given to them and there was total apathy in the trade.

Mr C Realey of the TGWU (Private Hire Section) stated that he had not returned his questionnaire as he believed it to be loaded. He stated that the matter should be adjourned to give more time for Councillors to talk the issue through sensibly. He stated that the private hire section of the trade had not been taken into account regarding this issue, and they moved the greatest number of people about Wirral.

The Borough Solicitor and Secretary stated that 2400 questionnaires were sent out to all sections of the trade with a letter, a post-paid envelope to return the questionnaire, and a notice listing all the Joint Consultative Committee contact numbers. She further stated that the item had been regularly discussed at the Private Hire and Hackney Carriage Joint Consultative Committee over the last eighteen months and she felt that there had been a full consultation with the trade.

After hearing all the representations made, members indicated that they wished to obtain legal advice in the absence of members of the public.

…

In the course of the Committee's deliberations in relation to the policy on hackney carriage vehicle licences, it was moved by a member of the Committee and duly seconded that –

"Having read the report and considered the consultations and representations, the Committee agrees to amend the existing policy and to remove the numerical limit on Hackney Carriage Vehicle Licences forthwith, subject to compliance with the following criteria:

(i) that every vehicle must comply with the Council's Hackney Carriage Vehicle Licence conditions;

(ii) that every vehicle must be purpose built to accommodate wheelchair disabled passengers;

(iii) that every vehicle must be properly tested and roadworthy to a standard approved by the Council's vehicle inspectors, such testing to include the structural integrity;

(iv) that all vehicles licensed must be properly insured and that proof of such insurance be shown to the Council either upon application or before issue of licence;

(v) that every vehicle must be three years old or less from the date of first registration."

The motion was put and carried (12:0)"

Subsequent developments

47. It appears that after 18 March 2002 meetings took place between the defendant and representatives of the trade on 21 March 2002 (apparently after a number of the members of the trade had "blockaded" the Town Hall) and 25 March 2002. On 5 April 2002, in a letter to the claimant's then solicitors, the Borough Solicitor and Secretary's Department stated:

"The Local Authority did not base its decision on the survey carried out by Maunsell Transport Planning. Rather, members reached their decision following consideration of a comprehensive report whereby they were invited to review the Authority's policy in relation to hackney carriage vehicle licences. For your information I am enclosing a copy of the report that was presented to members of the Licensing, Health and Safety and General Purposes Committee at its meeting on the 18 March 2002. As you can see, full and proper consultation had been undertaken with the trade, members of the public and all other interested bodies. In addition, this matter had been the subject of frequent discussion at the Private Hire and Hackney Carriage Joint Consultative Committee, which is attended by representatives of both sides of the trade, members and officers. At the Committee meeting, various representatives of the trade were given the opportunity to make representations to members. Accordingly, I do not accept that consultation has in any way been inadequate or insufficient and am satisfied that there is nothing unlawful or irrational about the Committee's decision. In addition to these representations, you will note from the report the factors that were considered and taken into account by members.

48. On 8 April 2002 the Licensing Committee approved in principle the carrying out of a further survey but, according to the defendant's present solicitors' letter to the claimant's solicitors dated 14 August 2002, this survey is intended to be looking at much wider issues as part of the defendant's "best value" review of its whole licensing function, which is a review being conducted in the context of the defendant's obligations under the Local Government Act 1999. It does not appear that events subsequent to 18 March 2002 are relevant to the issues the Court has to decide.
49. It also appears that, prior to the start of these proceedings, over 22 further licences were issued by the defendant after 18 March 2002. It is now accepted by the claimant that no relief is sought as regards those further licences, notwithstanding that the claimant asks the Court to quash the decision of the Licensing Committee of 18 March 2002.

The grounds of claim

(1) The failure to consult

Arguments of the parties

50. The claimant submits that he had a legitimate expectation of proper consultation arising from previous practice; from an express promise made by Ms Miller on or about 14 February 2002, or in her letter to the claimant dated 15 March 2002; and from the fact that a decision to "de-restrict" hackney carriage vehicle licences would affect his livelihood and remove the capital value of the premium of some £15,000 normally payable by the transferee to the licence holder on the transfer of a hackney carriage vehicle licence.
51. According to the claimant, there has been no proper consultation, notably because the questionnaire set out in February 2002 contained no objective data, especially demand survey data, which would have enabled consultees to express an informed view or give a reasoned response. The Report to the Licensing Committee did not contain any demand survey data either, and was prepared only on 12 March 2002. The claimant did not receive the Report until 18 March 2002, under cover of Ms Miller's letter of 15 March 2002. In addition, Ms Miller's letter of 15 March 2002 referred to the questionnaire being "only the first stage in reviewing this policy" and also referred to her commitment to ensuring that effective consultation "takes place". These phrases, using the present tense, necessarily imply that there would be further consultation. The Licensing Committee, however, declined to adjourn the meeting of 18 March 2002 and proceeded to an immediate decision to "de-restrict". There was thus no proper consultation: see R v North and East Devon Health Authority ex parte Coughlan [2001] QB 213.
52. The defendant concedes that the claimant had a legitimate expectation that there would be consultation on the basis of past practice, before a decision was taken to remove the numerical limit on licences, but contends that there has been proper and adequate consultation. There was no express or implied promise of further consultation: see R v IRC ex parte MFK Valuation Agents Ltd [1990] 1WLR 1545, 1569G. The claimant and his colleagues had been familiar with the issues from the Maunsell Report and discussions in the Joint Consultative Committee. There was no obligation to have a demand survey as part of the process of consultation.

Analysis

53. The claimant's argument has two limbs. First, he submits that there was an obligation to consult, arising from the circumstances of the existing licence holders and past practice, which was not fulfilled. Secondly, he says that there was an express promise to consult made by Ms Miller, either orally in mid-February 2002, or in her letter of 15 March 2002, which was not fulfilled either.
54. As regards the obligation to consult said to arise out of the circumstances of the case and past practice, a licensing authority is under no statutory duty of prior consultation when exercising its powers under section 37 of the Town Police Clauses Act 1847, as amended. However, in this case the defendant has conceded that there was an obligation of prior consultation, and did in fact embark upon a consultation exercise. In those circumstances it is unnecessary for me to consider the precise legal basis of any obligation to consult there may be. As the Court of Appeal said in Coughlan, cited above, at paragraph 108:

"whether or not consultation of interested parties and the public is a legal requirement, if it is embarked upon it must be carried out properly"

55. I must therefore determine whether the consultation which in fact took place was proper and sufficient in the circumstances of this case, as far as the claimant and his colleagues were concerned. In Coughlan's case the Court of Appeal said, also at paragraph 108:

"To be proper, consultation must be undertaken at a time when proposals are still at a formative stage; it must include sufficient reasons for particular proposals to allow those consulted to give intelligent consideration and an intelligent response; adequate time must be given for this purpose; and the product of consultation must be conscientiously taken into account when the ultimate decision is taken: R v Brent London Borough Council, Ex p Gunning (1985) 84 LGR 168."

56. In my view the relevant facts are as follows.
57. First, there was the public notice published in the local press on 13 February 2002 (see paragraph 22 above). That notice indicated that the defendant was undertaking a review of its policy on restricting the number of hackney carriage vehicles, and invited comments by members of the public by 1 March 2002.
58. Secondly, there was the questionnaire sent out in mid-February 2002, which was sent by "freepost" to some 2400 interested parties, apparently in the same form as had been used in 1996. The covering letter (see paragraph 21 above) referred to the previous work by Consultants (i.e. the Maunsell Report), and indicated that the Council was considering three options, namely retaining the existing limit, removing the limit altogether, or issuing a tranche of further licences. Stating that "it is vitally important to know your views" the letter invited the enclosed questionnaire to be returned by 1 March 2002. It also asked the recipients to express their views "on other matters which you consider relevant to the review of the hackney carriage policy and which you wish to have taken into consideration by the Council".
59. Thirdly, the background to the matter was well known to the interested parties, including Mr Royden and his colleagues. The Maunsell Report dated from 1998 had fully described the situation then prevailing in the Borough. That Report found a situation of "market distortion" in which services were concentrated in the Liscard and Birkenhead areas, at five ranks out of 32, with other areas being left unserved. That led, according to the Maunsell Report, to an unusually high number of private hire vehicles and illegal plying for hire by the latter.
60. Fourthly, the claimant has produced no evidence, even anecdotal evidence, to indicate that the situation of "market distortion" shown in the Maunsell Report had changed materially by early 2002. The defendant's evidence is to the effect that the situation was largely the same (see Councillor Brown's statement of 5 June 2002 at paragraph 11; Mrs Hallwood's statement of 5 June 2002 at paragraphs 15 and 29).
61. Fifthly, the issue of "de-restriction" had apparently come up regularly at previous meetings of the Joint Consultative Committee, of which Mr Royden and his colleagues were members. The Joint Consultative Committee was apparently alerted in October 2001 to the fact that that 'de-restriction' issue was to reconsidered by the Licensing Committee.
62. Sixthly, Mr Cummins and four of his colleagues were able to, and did, address the meeting of the Licensing Committee on 18 March 2002.
63. It seems to me, at first sight, that those elements, taken together, constitute a sufficient process of consultation in the circumstances of this case.
64. Taking more specifically the four criteria set out in Coughlan's case (paragraph 55 above), it seems to me, first, that the consultation was undertaken at a time when the proposals were still at a formative stage. The letter accompanying the questionnaire set out the three options facing the Council and the same three options were before the Licensing Committee on 18 March 2002. Despite the fears Mr Royden expressed in February 2002, in my view there is no basis on which this Court could find that the Licensing Committee had already prejudged the matter before the consultation took place, or that the consultation was not a genuine exercise (see notably the Report to the Licensing Committee and Councillor Brown's statement of 5 June 2002, at paragraph 6 onwards, and her statement of 8 July 2002).
65. Secondly, as to the question whether the consultation was such as to permit those consulted "to give intelligent consideration and an intelligent response" to the proposals, the claimant's principal submission is that, because the defendant had conducted no demand survey, the consultees were not provided with sufficient information to permit them usefully to comment on the issues arising. In particular, says the claimant, the questionnaire contained no up-to-date demand information and could only produce individual and eccentric reactions made on no particular factual basis.
66. I am unpersuaded by this submission. Whether consultees in a particular case have sufficient information to enable them usefully to be consulted seems to me to depend on the circumstances of each case. In this case, the Maunsell Report sets out very fully the factual situation as it was in 1998. I have seen nothing to suggest that there had since been any material change to the circumstances as set out in that Report, and the defendant's evidence, not contradicted by the claimant, is that nothing had changed fundamentally. Hence Mr Royden and his colleagues already had a great deal of factual material at their disposal, including material about the patterns of demand. In addition, they were very familiar with the factual circumstances prevailing in the Borough, both through their work as hackney carriage drivers and through the meetings of the Joint Consultative Committee. Nothing prevented Mr Royden or his colleagues from using this knowledge to supplement their answers to the questionnaire with information or views as to the possible impact of the Council's proposals on their livelihoods, or on any other matter. The claimant does not indicate, even hypothetically, any suggested changes in the pattern of demand which a new survey might have revealed or confirmed. In these circumstances it does not seem to me that the lack of a more up-to-date demand survey commissioned by the defendant prevented the claimant from being able to respond adequately and intelligently to the consultation.
67. Thirdly, as to whether adequate time was given for the purpose of consultation, it is true that the period of a month between mid-February and 18 March 2002 is not over long; that the Report to the Licensing Committee was not – apparently – available until shortly before the meeting of 18 March 2002; and that the Licensing Committee decided the matter on that date without a further adjournment. However, on the other hand, the claimant and his colleagues were or should have been familiar with the factual background set out in the Maunsell Report. They were able to return the questionnaires by the deadline of 1 March 2002, and could have submitted supplementary comments by that date or at least before 18 March. They had participated in discussions of the issue in the Joint Consultative Committee over a considerable period of time. It was known from October 2001 onwards that the question of "de-restriction" was likely to come before the Licensing Committee. The Report to the Licensing Committee mainly summarises well-known arguments: it has not been suggested that that Report contained significant new elements. In any event, Mr Cummins and his colleagues were in a position to address the meeting of the Licensing Committee of 18 March 2001 in the light of that Report. Mr Cummins concedes that he was given adequate time and his notes suggest that he was able to make an effective speech.
68. In these circumstances, it seems to me that the time allowed for consultation was not, in the circumstances of this case, inadequate.
69. Fourthly, the evidence before the Court is that the product of the consultation was conscientiously taken into account when the decision of 18 March 2002 was taken. That is apparent from the Report to the Licensing Committee itself and from Councillor Brown's two witness statements of 6 June 2002 and 8 July 2002.
70. For these reasons, in my view the claimant's ground of review based on a breach of a general obligation, or legitimate expectation, of consultation, fails.
71. As to the express promise of further consultation allegedly made by Ms Miller, the Borough Solicitor and Secretary, I see nothing in Mr Royden's statement of 13 May 2002 (in particular at paragraph 10) to support an oral promise by Ms Miller that there would be further consultation, in addition to the consultation then taking place. In so far as Ms Miller assured Mr Royden orally in mid-February that proper consultation would take place before any decision was made, it seems to me that such consultation did take place, for the reasons I have just given.
72. As regards Ms Miller's letter of 15 March 2002, the relevant passages are as follows:

"…

I understand that you were not actually at the JCC meeting at which you say various different things were said. The situation is that the debate about the policy must take place. I appreciate that having the debate alone may cause unrest amongst the trade but I am afraid that it must happen and in fact it is in the best interests of the whole of the trade and with the public and the Authority for that debate to take place, whatever the outcome of that may be.

It is also vital that consultation has to take place and this is what we have done so far. It may well be that we need to consult further as this is only the first stage in reviewing this policy. I can assure you categorically that the policy decision about the level of demand for hackney carriages in the borough and when any limit should apply and indeed what that limit should be is a matter for the elected members of the Authority to decide. There is no "done deal" about what the future policy should be or, indeed, how many licences should be issued. I have spoken to all of the staff concerned and am satisfied that they all understand that that is the situation and that none of the comments that you allege have been made have actually happened.

As I have said to you, the debate has to take place and you will see to that end a report to the Licensing Committee next week which I attach to this letter. As I have said to you, that does not seek to pre-judge the situation at all but it does encourage the debate to take place. I do not believe that stopping the debate or cancelling the very hard work that has been done so far by both officers and representatives of the trade would be of help in any way.

I hope that this letter gives you reassurance. I can assure you that my commitment to making sure that true and effective consultation takes place with the trade and customers."

73. It is true that the sentence in the letter of 12 March 2002 "It may well be that we need to consult further as this is only the first stage in reviewing this policy", and the reference, in the present tense, in the last sentence, to Ms Miller's commitment to ensuring that "true and effective consultation takes place", lend some support to the claimant's argument. On the other hand, it is clear from the overall context that the main purpose of Ms Miller's letter of 15 March 2002 is to respond to Mr Royden's allegation, in his letter of 1 March 2002, that the whole matter was a "done deal". In my view the thrust of Ms Miller's letter is to emphasise that the matter has not been prejudged, rather than to promise further consultation.
74. At this stage the Licensing Committee had, in fact, not yet reached any decision, and one possibility would have been for the Licensing Committee to decide on further consultations. I read the phrase of the letter "it may well be that we need to consult further" as leaving open the possibility of further consultation, if that is what the Licensing Committee decided to do. The use of the present tense in the last sentence of the letter is in my view explicable by Ms Miller's concern to emphasise her personal and ongoing commitment to effective consultation.
75. In my view, it is impossible to read the letter of 15 March 2002, taken overall, as containing a clear promise of yet further consultation, in addition to the consultation which had already taken place. In particular, in my view that letter did not contain any assurance of yet further consultation which was "clear, unambiguous and devoid of relevant qualification": R v IRC ex parte MFK Underwriting [1990] 1 WLR 1545, per Bingham LJ at p. 1569.
76. Moreover Ms Miller, although the Borough Solicitor and Secretary, was not in a position to pre-judge or even foreshadow what decision the members of the Licensing Committee might come to at their meeting the following Monday, still less commit the defendant to a further round of consultation. That might not be decisive if Mr Royden had acted to his detriment on the basis of Ms Miller's letter of 15 March 2002, but as far as I can see Mr Royden did not do or omit to do anything that he would not otherwise have done or not done, in reliance on Ms Miller's letter.
77. For these reasons, in my view, the alleged breach of a legitimate expectation of further consultation, based on an alleged promise by Ms Miller, also fails.

(2) Failure to take account of necessarily relevant information

(3) Interference with property in violation of Article 1 of the First Protocol to the ECHR

(4) Insufficient reasons

78. It is convenient to take these three grounds together, since they all depend, one way or another, on the application to this case of Article 1 of the First Protocol to the ECHR. Article 1 provides:

"Protection of property

Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of the State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties."

79. As is well known, section 3 of the Human Rights Act 1998 requires that, so far as possible, legislation – including for this purpose section 37 of the Act of 1847 – must be read and given effect to in a way that is compatible with Convention rights. Moreover, it is unlawful for the defendant, a public authority, to act in a way which is incompatible with a Convention right: section 6(1) of the Human Rights Act 1998.

Arguments of the parties

80. The claimant submits, first, that his hackney carriage vehicle licence is a "possession" for the purposes of Article 1: see Tre Traktörer Aktiebolag v Sweden (1991) 13 EHRR 309; Gudmundsson v Iceland 21 EHRR CD 89; Zacher v Germany (1996) 22 EHRR CD 136. It is an income-generating asset, which entitles him to ply for hire and earn his living. It also has a capital value, as paragraph 4(i) of the Report to the Licensing Committee recognised (see paragraph 35 above). A taxi sold with a licence plate is more valuable than a taxi without such a plate.
81. Then, says the claimant, the defendant's decision of 18 March 2002 constitutes an "interference" with the peaceful enjoyment of the claimant's possessions contrary to Article 1. The inevitable result of that decision was to eliminate the premium value of the licence – what the claimant calls "the scarcity value" – and to threaten his ability to make a living using his licensed hackney carriage vehicle.
82. The claimant submits that this interference with the peaceful enjoyment of his possessions can be justified under Article 1 to the First Protocol only if (i) it is in the public interest; and (ii) the requirement of proportionality is satisfied. In particular, there must be "a reasonable relationship of proportionality between the means used and the aim sought to be realised": James v United Kingdom (1986) 8 EHRR 123, paragraph 50. In effect, section 37 of the Act of 1847 must now be read and given effect to as if it were subject to Article 1 of the First Protocol. Cases such as R v Great Yarmouth Borough Council ex parte Sawyer [1989] RTR 289 are no longer reliable because they pre-date the Human Rights Act.
83. According to the claimant, the onus is on the defendant to show that the requirement of proportionality is satisfied: R v Oakes (Supreme Court of Canada) [1986] 1 SCR 103, 137-138. The Canadian approach has been followed in this country in such cases as R (Daly) v Secretary of State for the Home Department [2001] 2 AC 532. In order to satisfy the proportionality requirement the defendant must be in a position to demonstrate that the objective of the interference is sufficiently important to justify limiting the right; the measures designed to meet the objective are rationally connected with it; the means used to impair the right is no more than is necessary to accomplish that objective; and that the interference does not have an excessive or disproportionate effect on the affected individual.
84. In this case, says the claimant, the defendant cannot discharge that burden. In particular, since the defendant had no or no reliable current information about the level of demand within the Borough, it had no way of knowing whether, or to what extent, the general interest required an increase in hackney carriage vehicle licences. Hence it could not know whether, and to what extent it was necessary to interfere with the value of existing licences: see Hatton v United Kingdom (2002) 34 EHRR 1, paragraphs 97, 102-103 and (especially) 106. Moreover, because of the absence of relevant and necessary information about the state of demand, the defendant disabled itself from ascertaining (a) whether the public interest could only be served by removing the limit on the number of licences or (b) whether the aim could be achieved in some more limited way, e.g. the issue of a further tranche of licences, as the Maunsell Report had suggested, coupled with a further assessment of the impact. In other words, the defendant had no adequate factual basis for depriving the claimant of the "scarcity value" of his licence. The defendant simply failed to take the comparatively simple procedural step of establishing a sufficient factual basis upon which to conduct the balancing exercise required by Article 1 of the First Protocol.
85. As regards the failure to give reasons, the claimant relies on (i) the common law duty to give reasons (R v Westminster City Council ex parte Ermakov [1996] 2 All ER 302, Save Britain's Heritage v Number 1 Poultry Ltd [1991] 1 WLR 153); and (ii) the implied right to a reasoned decision which, says the claimant, arises from the right to a fair trial under Article 6 of the ECHR. Reasons are required under Article 6 in order to ensure that any person with an interest in the decision is informed of the basis of the decision and that the public in a democratic society may know the reasons for decisions: Hadjianastassiou v Greece (1992) 16 EHRR 219, at paragraph 33. The more decisive a point is for the decision, the heavier the obligation to address the point specifically and expressly in the reasons: see e.g. Hiro Balani v Spain (1994) 19 EHRR 565, paragraph 28.
86. In the present case, neither the defendant's letter of 5 April 2002 (paragraph 47 above), which refers back to the Report to the Licensing Committee, nor the Report to the Licensing Committee itself, nor Councillor Brown's witness statements, are sufficient to fulfil the obligation to give reasons in this case. In particular, none of these documents refer to the duty on the defendant to establish a proportionate balance of interests, nor to the proportionality principle. There is no indication as to how the defendant went about weighing the different interests involved, nor what weight was given to each factor, and particularly the weight given, or not given, to the impact of the decision on the claimant and his colleagues. That approach is contrary to the requirements laid down by Lord Steyn in Daly's case at p. 547. Moreover, there is no reference to the need to achieve the desired aim by the least drastic means, nor any consideration of whether the defendant's objective could be achieved by a less drastic alternative, such as the phased release of further licences. Such an alternative – supported by a further survey – would have been one way of achieving the defendant's objectives while taking into account the human rights of the claimant and his colleagues.
87. Following the close of the argument in this case, the claimant has made submissions on two further judgments drawn to its attention by the court, namely the decision of the Irish High Court in Gorman v Minister for the Environment [2001] 2 IR 414 and decision no. 10426/83 by the European Commission on Human Rights in Pudas v Sweden of 13 December 1984. The claimant submits that Gorman's case arises in relation to a differently drafted provision of the Irish Constitution, and is thus of limited assistance (see AG of Hong Kong v Lee Kwong-Kut [1993] AC 951), and that the reasoning in that case is doubtful, not least because no Strasbourg case law is referred to. As to the decision in Pudas v Sweden, the claimant submits that the Commission's approach in that case is unduly complex and has not been adopted by the European Court of Human Rights. The correct approach, which should be followed under section 2(1) of the Human Rights Act, is that of the Court in the Tre Traktörer case, cited above, and in Fredin v Sweden (No.1) [1991] 13 EHRR 784.
88. The defendant submits, first, that since the Transport Act 1985, the general rule under section 37, as amended, of the Act of 1847, has been and is that a licensing authority may not limit the number of hackney carriage vehicle licences unless it is satisfied that there is an unmet demand: R v Great Yarmouth BC ex parte Sawyer [1989] RTR 289. It follows that, if the defendant had wished to maintain a restriction on licences, it would have had to be satisfied on the question of unmet demand. That in turn would, in practice, have meant having a survey. But the reverse is not true: there is no obligation under the Act of 1847, as amended, to have a demand survey when deciding to lift a restriction on the number of hackney carriage vehicle licences issued. That is a policy decision for the elected members to take in the exercise of the discretion given to them by the Act.
89. In this case, submits the defendant, the principal issue faced by the defendant was not 'unmet demand' in the Borough taken as a whole, but the distortion of the market identified in the Maunsell Report. That situation meant that only five so-called "honey pot" ranks out of 32 were fully served, with the result that there was an unduly high proportion of private hire vehicles (in the ratio of 10:1), and illegal plying for hire, as well as other problems. The defendant's overall approach, as shown by its decision of 18 March 2002, was to address the situation by allowing competitive forces to find their own level, while at the same time imposing stricter conditions for the licensing of hackney carriage vehicles, including the conditions that the vehicle should be less than three years old and have facilities for the disabled. This is fully in accordance with the provisions of the Act of 1847, as amended, and with the Department of Transport Circular no. 3/85. The Report to the Licensing Committee set out at length all the relevant factors. It was for the Council members on the Licensing Committee to strike the balance, and they were not required to go into greater detail than they in fact did.
90. As regards Article 1 of the First Protocol of the ECHR, the defendant argues that a hackney carriage vehicle licence issued pursuant to section 37 of the Act of 1847 is not "a possession". Moreover, under section 43 of that Act the licence lasts for one year only. Pursuant to section 60(1) of the Local Government (Miscellaneous Provisions) Act 1976, a licence holder may be deprived of his licence, notably, for "any other reasonable cause". "Any other reasonable cause" has been widely construed: see Comyn J in Norwich City Council v Thurtle and Watcham, 21 May 1981 (unreported). In these circumstances, the claimant had no legitimate expectation of the lasting nature of the licence: see Gudmundsson v Iceland, already cited.
91. Moreover, the claimant acquired his licence gratuitously, only in 1999, in the tranche of further licences which followed the Maunsell Report. The issue of those further licences was not intended to, and should not be construed as, creating a "property right" protected by Article 1. Moreover, there is no "interference" in this case, which differs from the situation in Tre Traktörer. A diminution in value of a hackney carriage licence is not an "interference", nor are any Article 6 'civil rights and obligations' determined by the policy decision here in question.
92. It follows that the defendant was not obliged by Article 1 of the First Protocol to undertake a further demand survey, and the principle of proportionality does not come into play. In any event, the Report to the Licensing Committee shows that the situation of the claimant and his colleagues was sufficiently taken into account, with an express reference to Article 1 in that Report.
93. There is no statutory duty to give reasons, but in any event the Report to the Licensing Committee and the minute of the meeting of 18 March 2002 show that all relevant factors were taken into account and why the decision was taken.

Analysis

94. I will deal with the matter in two stages, by considering first the provisions of the Act of 1847 and the conventional principles of judicial review, and then turning to the question of the impact, if any, of Article 1 of the First Protocol to the ECHR.

The position under the Act of 1847

95. The claimant does not contest that, since 1985, licensing authorities have not been empowered to limit the number of hackney carriage vehicle licences in their area unless satisfied that there is no unmet demand. In R v Great Yarmouth Borough Council ex parte Sawyer, cited above, the chairman of the local taxi proprietors' association challenged the decision of the licensing authority to de-restrict the number of hackney carriages operating in the Borough. In rejecting the application Woolf LJ (as he then was) said at p. 298 F-H:

"Clearly, the policy of the Transport Act 1985 is to restrict the ability of the licensing authority to refuse a licence for the purposes of limiting the number of hackney carriages, except in circumstances where the authority is satisfied that there is no significant demand for the services of the hackney carriages which is unmet. In the words of the judge, it is to remove restraints and allow market forces to take their course in a way which did not exist before section 16 of the Transport Act 1985 came into effect. It is, however, to be noted that notwithstanding the amending provisions of section 16, the licensing authority still retains a discretion. Its discretion is only limited where the refusal is 'for the purpose of limiting the number of hackney carriages.'

If the grounds for refusing the grant of a licence are for a different purpose, then, as I understand the proper interpretation of section 16, it does not restrict the discretion which the licensing authority had prior to the amendment."

96. He added at p.298J:

"However, undoubtedly the effect of section 16 is substantially to cut down the discretion which the licensing authority prior thereto enjoyed to restrict the number of hackney carriage licences which the authority granted. It is also to be observed that the authority is required to be satisfied about a negative, which can create evidential difficulties for the authority."

97. It seems to me to follow from the wording of section 37 itself that, in principle and absent any special circumstances which might lead to irrationality or unfairness, the legal position under the Act of 1847 is as Hodgson J put it at first instance in the Great Yarmouth case, cited by Woolf LJ at p. 300 H:

"It follows that, in my judgment, an authority which was exercising a restriction policy prior to 1986 could rescind that policy and adopt in its place a policy with no numerical ceiling to the number of licences issued. A policy, in other words, of allowing market forces to take their course. It could adopt such a policy whether or not there was unmet demand, so that there was no obligation on an authority to consider the question of demand at all."

98. Woolf LJ also added at p. 302L – 303A:

"The other matter which I would mention is that clearly, on the material put before this court, the individual taxi drivers may suffer material hardship as a result of the change of policy. With regard to their problems, the court has in mind the evidence, but because of the role of the courts to which I have already made reference, there is no basis for intervening on the grounds of the individual hardship of individual taxi drivers."

99. In those circumstances it seems to me established that, subject to any relevant human rights considerations, as a matter of law the defendant was entitled, under the Act of 1847, to 'de-restrict' the number of hackney carriage vehicle licences in issue, and that no prior survey of demand was required by that section before any such decision was taken. Conscious though the court is of the potential impact of the decision on individual taxi drivers, Lord Woolf's comments in the Great Yarmouth case show that the court is bound by the law and cannot intervene on grounds of hardship.

The conventional grounds for judicial review

100. The Report to the Licensing Committee and the minute of the meeting of 18 March 2002 show that the Licensing Authority took into account a large number of facts and matters before reaching their decision. After setting out the legal position under the Act of 1847 and the guidance issued by the Department of Transport, the Report to the Licensing Committee draws attention to: (i) the value of the existing licences, and the fact that "Existing licensees have invested in a licence at some stage in the past and put some reliance on their ability to sell it to secure their financial future"; (ii) the possible reduction in earnings of existing licence holders; (iii) possible additional pressure on hackney carriage stands; (iv) the availability of service to disabled passengers; (v) the benefit to the public of more vehicles being available; (vi) the enforcement of vehicle standards; (vii) the limitation on opportunities to enter the trade; (viii) illegal plying for hire; and (ix) the situation in other licensing authorities (see paragraphs 32 to 37 above).
101. The Report to the Licensing Committee then goes on to identify the three options facing the defendant. The Report points out that if a restriction on licences were maintained, there would have to be a survey, the defendant would need to defend any appeals, and the cost of both of those matters would have to be recouped by increasing licence fees. If the limit were removed, a number of issues would have to be considered, including the provision of hackney ranks. As regards the option of the controlled release of additional plates, the Report recalls that the Maunsell Report had found a severely distorted market. If an additional but restricted number of licences were to be issued, the defendant would have to decide on the number. A survey would be necessary since the defendant would have to justify to the court that there was unmet demand and how it had decided on the number of additional licences to be issued (see paragraph 37 above).
102. After referring to the results of the consultation (see paragraph 38 above) Ms Miller expressed the view in the Report that "doing nothing is not an option". She said notably:

"The limit on numbers could be removed without controls. However I would suggest that the limit on numbers of hackney carriage vehicles is removed with controls such as an age limit. This would let market forces find an equilibrium.

The situation would be kept under review and it would always be open to the Council to re-impose a numerical limit on the number of hackney carriage vehicle licences if the evidence indicated that this was appropriate."

(see paragraph 39 above).

103. Paragraph 14 of the Report to the Licensing Committee expressly drew attention to Article 1 of the First Protocol and stated:

"Existing licence holders are caught by Article 1 of the First Protocol and are entitled to peaceful enjoyment of their possessions ie the economic value of the hackney carriage vehicle licence. A fair balance must be struck between the protection of the individual's fundamental rights and the demands of the general interests of the community."

(see paragraph 40 above).

104. The minute of the meeting of 18 March 2002 summarises the above matters and adds the views of the persons who addressed the Committee. In reaching its decision to 'de-restrict' the Licensing Authority also imposed conditions, notably that vehicles should be adapted for wheelchair access, and should be three years old or less.
105. Taking all the foregoing into account, it seems to me that it would be impossible to hold that the decision of 18 March 2002 is unlawful, applying the conventional grounds of judicial review. The decision is not in my view irrational or unreasonable in the sense of Associated Picture Houses v Wednesbury Corporation [1948] 1 KB 223. Relevant factors, including the impact of the decision on existing licence holders have been taken into account, and no irrelevant factors have been considered. The decision is not perverse, nor procedurally unfair, nor erroneous in point of law.
106. The position is, therefore, that applying the normal principles of English law, the contested decision has been regularly adopted according to law. The question, therefore, is whether the combined effect of the Human Rights Act and Article 1 to the First Protocol to the ECHR are such as to alter that conclusion.

The ambit of Article 1 of the First Protocol

— The case law

107. The following cases under Article 1 of the First Protocol (cited at paragraph 78 above) decided by the European Court of Human Rights ("the Court") or the European Commission on Human Rights ("the Commission") have been drawn to my attention.
108. In Tre Traktörer (1991), cited above, the company TTA had a licence to sell alcoholic beverages at a restaurant in Helsingborg. The administrative authorities revoked the licence on the ground of inadequate bookkeeping, and the restaurant closed. After various proceedings TTA brought the matter before the Court, alleging (a) a breach of Article 6(1) of the ECHR; and (b) a breach of Article 1 of the First Protocol. Most of the judgment is concerned with the alleged breach of Article 6(1), which provides "In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing by an independent and impartial tribunal established by law". In its judgment, the Court held (at paragraph 39) that the licence "conferred … a 'right' … in the form of an authorisation" to sell alcoholic beverages, and that such a "right" fell within the ambit of a "civil right" for the purposes of Article 6(1) (see paragraphs 43 to 44 of the judgment). There was a breach of Article 6(1) because the question of the revocation of the licence could not be brought before a tribunal satisfying the requirements of Article 6(1) (paragraphs 47 to 49).
109. As regards Article 1 of the First Protocol, the Court said at paragraphs 55 to 55:

"53. The Government argued that a licence to serve alcoholic beverages could not be considered to be a "possession" within the meaning of Article 1 of the Protocol (P1-1). This provision was therefore, in their opinion, not applicable to the case.

Like the Commission, however, the Court takes the view that the economic interests connected with the running of Le Cardinal were "possessions" for the purposes of Article 1 of the Protocol (P1-1). Indeed, the Court has already found that the maintenance of the applicant company's business and that its withdrawal had adverse effects on the goodwill and value of the restaurant (see paragraph 43 above).

Such withdrawal thus constitutes, in the circumstances of the case, an interference with TTA's right to the "peaceful enjoyment of [its] possessions".

…

54. Article 1 (P1-1) in substance guarantees the right of property (see the Marckx judgment of 13 June 1979, Series A no. 31, pp. 27-28, para. 63). It comprises "three distinct rules": the first rule, set out in the first sentence of the first paragraph, is of a general nature and enunciates the principle of the peaceful enjoyment of property; the second rule, contained in the second sentence of the first paragraph, covers deprivation of possessions and subjects it to certain conditions; the third rule, stated in the second paragraph, recognises that the Contracting States are entitled, amongst other things, to control the use of property by enforcing such laws as they deem necessary in the general interest (see the Sporrong and Lönnroth judgment of 23 September 1982, Series A no. 52, p. 24, para 61). Now the three rules are not "distinct" in the sense of being unconnected: the second and third rules are concerned with particular instances of interference with the right to peaceful enjoyment of property and should therefore be construed in the light of the general principle enunciated in the first rule (see, inter alia, the Lithgow and Others judgment of 8 July 1986, Series A no. 102, p. 46, para. 106).

55. Severe though it may have been, the interference at issue did not fall within the ambit of the second sentence of the first paragraph. The applicant company, although it could no longer operate Le Cardinal as a restaurant business, kept some economic interests represented by the leasing of the premises and the property assets contained therein, which it finally sold in June 1984 (see paragraph 23 above). There was accordingly no deprivation of property in terms of Article 1 of the Protocol (P1-1).

The Court finds, however, that the withdrawal of TTA's licence to serve alcoholic beverages in Le Cardinal constituted a measure of control of the use of property, which falls to be considered under the second paragraph of Article 1 of the Protocol (P1-1)."

110. However, the Court went on to hold that the withdrawal of the licence was in compliance with Swedish law and undertaken in pursuit of the general interest, namely the control of the sale of alcoholic beverages (paragraphs 56 to 58). As to whether the "interference" was proportionate, the Court said at paragraph 59:

"59. As was pointed out in the James and Others judgment of 21 February 1986 (Series A no. 98, p. 30, para. 37), the second paragraph of Article 1 of the Protocol (P1-1) has to be construed in the light of the general principle set out in the first sentence of this Article (P1-1). This sentence has been interpreted by the Court as including the requirement that a measure of interference should strike a "fair balance" between the demands of the general interest of the community and the requirements of the protection of the individual's fundamental rights … . The search for this balance is reflected in the structure of Article 1 (P1-1) as a whole … and hence also in the second paragraph. There must be a reasonable relationship of proportionality between the means employed and the aim sought to be realised (see the above-mentioned James and Others judgment, p. 34, para. 50)."

111. On the facts the Court concluded that there had been no violation of Article 1 since:

"62. The "burden" placed on TTA as a result of the contested decisions, though heavy, must be weighed against the general interest of the community. In this context, the States enjoy a wide margin of appreciation.

Even though the County Administrative Board and the National Board of Health and Welfare could have taken less severe measures under section 64 of the 1977 Act (see paragraph 27 above), the Court, having regard to the legitimate aim of Swedish social policy concerning the consumption of alcohol, finds that the respondent State did not fail to strike a "fair balance" between the economic interests of the applicant company and the general interest of Swedish society."

112. In Fredin v Sweden [1991] 13 EHRR 784, which followed shortly after Tre Traktörer, the applicants' licence to extract gravel on their land was revoked. As to the applicants' complaint that there had been a violation of Article 1 of the First Protocol, the Court held that there had been no "deprivation" of their property, since the revocation of the licence did not take away "all meaningful use" of the properties in question, and the prospects of future gravel extraction were, in any event, uncertain. The revocation was, however, a "control of use" of property within the scope of the second paragraph of Article 1. The Court also held that the requirement of proportionality was satisfied, notably because the applicants made their investments after the entry into force of the Swedish law permitting revocation of their licence. In these circumstances, they had no legitimate expectation that the licence would not be revoked at some future time.
113. In Gudmundsson v Iceland (1996), cited above, the applicant lost his taxi driver's licence when a new law led to the introduction of an age limit. He complained that the withdrawal of his taxi driver's licence was in breach of Article 1 of the First Protocol and Article 14 of the ECHR, which prohibits discrimination. The then European Commission of Human Rights held (at CD 89-90):

"As regards the question as to whether a licence to conduct certain economic activities could give the licence-holder a right which is protected under Article 1 of Protocol No 1, the Commission considers that the answer will depend inter alia on the question whether the licence can be considered to create for the licence-holder a reasonable and legitimate expectation as to the lasting nature of the licence and as to the possibility to continue to draw benefits from the exercise of the licensed activity. Furthermore, the Commission notes that a licence is frequently granted on certain conditions and that the licence may be withdrawn if such conditions are no longer fulfilled. In other cases, the law itself specifies certain situations in which the licence may be withdrawn.

It follows, in the Commission's opinion, that a licence-holder cannot be considered to have a reasonable and legitimate expectation to continue his activities if the conditions attached to the licence are no longer fulfilled or if the licence is withdrawn in accordance with the provisions of the law which were in force when the licence was issued (cf. No. 10426/83, Dec. 5.12.84, D.R.40 p. 234). As regards expectations for future earnings, the Commission also recalls its previous case law to the effect that future income could only be considered to constitute a "possession", if it had already been earned or where an enforceable claim existed to it (cf. Dec.8410/78, 13.12.79, D.R. 18, p. 216 at 219)."

114. The Commission continued at CD 90:

"In the present case the Commission recalls that the applicant became a taxi driver at a time when no particular restrictions were placed on such activity. It was only at a much later stage the Law on Taxicabs introduced the age limit for taxi drivers which led to the withdrawal of the applicant's licence. Until then the Commission finds that the applicant could be considered as having a legitimate expectation to continue his activities regardless of his age. In these circumstances the Commission finds that the facts at issue fall within the ambit of Article 1 of Protocol No. 1 and that Article 14 of the Convention, taken together with that provision, therefore applies."

115. The Commission decided, however, that the rules on age limits for taxi drivers were enacted for the common good, and the application of those rules to the applicant – he was 75 when his licence was withdrawn – was not unreasonable or disproportionate.
116. In Zacher v Germany (1996), cited above, the bank had foreclosed on the applicant's land which was ordered to be sold by auction. One parcel was sold to a third party. In accordance with the relevant German regulations, part of the applicant's milk quota was also transferred to the third party. The applicant complained that this was in breach of Article 1 of the First Protocol, on the basis that the parcel in question should have been transferred without any milk quota, given that the land had been used only for growing potatoes. Apparently, in fixing the value of land being transferred, the German court had not taken into account the 'value' attaching to the milk quota. The Commission held (at p.4):

"As to the question whether or not Article 1 of Protocol No. 1 (P1-1) applies in the instant case, the Commission recalls that economic interests connected with the running of a business or trade are "possessions" for the purposes of Article 1 of Protocol No. 1 (P1-1), and the withdrawal of a licence being one of the principal conditions for the carrying on of such business may be regarded as interference with the right to the "peaceful enjoyment of one's possessions" (cf. Eur. Court HR., Tre Traktörer Aktiebolag v Sweden judgment of 7 July 1989, Series A no. 1s59, p. 21, para. 53).

In this respect, the Commission has held that the applicability of Article 1 of Protocol No. 1 (P1-1) depends, inter alia, on whether the licence gives rise to a reasonable and legitimate expectation of continuing benefits from the exercise of the licensed activity. Accordingly, a licence-holder cannot be considered to have such an expectation where the conditions attached to the licence are not or no longer fulfilled or if the licence is withdrawn in accordance with the provisions of the law in force (No. 19819/92, Dec. 5.7.94, D.R. 78 p.88).

In the present case, the applicant's farming estate, including the parcel in question, was acquired by third persons in the context of proceedings for the forced sale by auction instituted by a banking institute, the applicant's creditor. Following the forced sale, the competent agricultural authority, as confirmed by the German administrative courts, issued a certificate on the transfer of part of the milk quota previously attributed to the applicant to the person having acquired parcel No. 385 in the above forced sale, in the proportion which the parcel bore to the total size of the real estate, minus 20% which reverted to the Federal Republic of Germany.

The Commission notes that, in accordance with the relevant legal provisions, milk quotas are in principle linked to the farm land used for dairying. Accordingly, a transfer of the milk quotas is provided for if the property right or the right to exploit the farm land concerned has been acquired by a third person. Taking into account that, following the forced sale by auction of her farm estate, including parcel No. 385, the applicant no longer owned the land so as to enable her to carry on any dairying activities, the impugned transfer of the milk quota did not amount to any interference with the applicant's rights under Article 1 Protocol No. 1 (P1-1) of the Convention."

117. In addition, one of the decisions referred to in Gudmundsson v Iceland, cited above, is decision no. 10426/83 Pudas v Sweden of 13 December 1984. In that case the applicant, a taxi driver, had a licence to operate transport services on certain interurban routes. A rival company applied for a licence to run transport services over those routes, and for the applicant's licence to be revoked. The transport authority concluded that the rival company could operate a better and more co-ordinated route network than the applicant had been able to do. Accordingly the rival company was granted a transportation licence for the routes in question, and the applicant's licence was revoked, it being made clear that there was no criticism of the applicant's conduct. The Commission said:

"The Commission is of the opinion that the licence to operate interurban route traffic could not as such be regarded as a "possession" within the meaning of Article 1 of the First Protocol.

As regards the question as to whether a licence to conduct certain economic activities could give the licence-holder a right which is protected under Article 1 of the First Protocol, the Commission considers that the answer will depend inter alia on the question whether the licence can be considered to create for the licence-holder a reasonable and legitimate expectation as to the lasting nature of the licence and as to the possibility to continue to draw benefits from the exercise of the licensed activity.

The Commission notes, however, that a licence is frequently granted on certain conditions and that the licence may be withdrawn if such conditions are no longer fulfilled. In other cases, the law itself specifies certain situations in which the licence may be withdrawn. It follows, in the Commission's opinion, that a licence-holder cannot be considered to have a reasonable and legitimate expectation to continue his activities, if the conditions attached to the licence are no longer fulfilled or if the licence is withdrawn in accordance with the provisions of the law which was in force when the licence was issued. As regards expectations for future earnings, the Commission also recalls its previous case law to the effect that future income could only be considered to constitute a "possession", if it had already been earned or where an enforceable claim existed to it (cf. No. 8410/78, Dec. 13.12.79, D.R. 18 p. 216 at 219).

In the present case, it is recalled that a licence to operate interurban route traffic in Sweden is granted subject to several conditions allowing for its possible revocation in the future. In particular, the licence may be revoked provided that it is likely that the transportation service would be improved if the licence was held by a community or by the Principal. This ground for the withdrawal of the licence was applied in the present case, since it was considered that the transfer of the licence to the Principal would ensure a better transportation service.

In these circumstances, the Commission considers that the withdrawal of the licence in accordance with the applicable legal provisions did not affect any property right protected under Article 1 of the First Protocol.

Furthermore, the Commission notes that the applicant retained the ownership of the property, one car and possibly other equipment, which he used under the licence, and he was also guaranteed compensation from the new licence holder for the equipment, if he so requested.

In view of the above considerations, the Commission concludes that the applicant's complaint falls outside the scope of Article 1 of the First Protocol and is therefore incompatible ratione materiae with the provisions of the Convention within the meaning of Article 27 para. 2."

— Analysis

118. Article 1 of the First Protocol to the ECHR, cited at paragraph 78 above, contains a number of concepts. It is headed protection of "property", but uses the word "possessions" in the first paragraph and the word "property" in the second paragraph. According to paragraph 54 of the judgment in Tre Traktörer (see above), also repeated in Fredin, Article 1 comprises "three distinct rules". The first rule is a general rule, set out in the first sentence of the first paragraph, "which enunciates the principle of the peaceful enjoyment of property". The second rule, to be found in the second sentence of the first paragraph, covers "deprivation of possessions". The third rule, to be found in the second paragraph, relates to measures which "control the use of property". According to the second sentence of paragraph 1, a deprivation of property may be justified if it is "in the public interest and subject to the conditions provided by law". According to the second paragraph, the "control of the use of property" may be justified if it is "in the general interest".
119. Self evidently, the question whether there is an interference with "property" contrary to Article 1 of the First Protocol is different from the question whether there has been a "determination of a civil right" so as to engage the "fair trial rights" protected by Article 6 of the ECHR.
120. In Pudas v Sweden, cited above, the Commission held that a licence to provide taxi services was not itself a "possession" for the purposes of Article 1 of the First Protocol. While, in accordance with Tre Traktörer (at paragraphs 39 to 44) I can accept that the withdrawal of a licence could amount to the determination of a "civil right" for the purposes of Article 6 of the ECHR, I have some difficulty in accepting that an authorisation granted by the State under public law to carry on a particular activity is, in itself, "property" or a "possession" within the meaning of Article 1 of the First Protocol.
121. In this case, however, it appears that as long as the supply is restricted, a hackney carriage vehicle licence in the Wirral area commands in practice a premium on transfer of some £15,000. The Inland Revenue apparently regards this premium as representing the "goodwill" of the business, and the disposal of a licence may, it appears, attract a capital gain or a capital loss: see the Inland Revenue's letter of 17 October 2001. In Mr Royden's particular case the possibility of realising this future premium appears to be a "windfall", since he was successful in the award of new licences in 1999 and had only to pay a modest fee. It may be, however, that an unspecified number of his colleagues have in the past paid a premium for a licence. How is this situation to be analysed for the purposes of Article 1 of the First Protocol?
122. In Tre Traktörer, the Court held that the "economic interests" connected with the running of the Le Cardinal restaurant were "possessions", and that the withdrawal of a licence on which the running of the business depended constituted an interference with the applicant's right to the "peaceful enjoyment of its possessions" (paragraph 53). The "economic interests" the Court is there referring to appear to be the maintenance of the company's business and the goodwill and value of the restaurant, rather than to the licence itself. At paragraph 55, the Court held that there had been no "deprivation" of property within the meaning of the second sentence of Article 1, since the applicant still retained the underlying leasehold interest and assets of the business, even if it could no longer run the restaurant.
123. Paragraph 55 of the judgment in Tre Traktörer to my mind implies that the relevant "property" is not the licence, of which the applicant company had been deprived, but the underlying assets of the business. That it seems to me is consistent with the Court's conclusion, also at paragraph 55, that the withdrawal of the licence to serve alcoholic beverages in the restaurant "constituted a measure of control of the use of property" under the second paragraph of Article 1 of the First Protocol, the property in question being the restaurant business.
124. It seems to me that Fredin's case, cited above, points to the same conclusion. In that case the "possessions" were held to be "the economic interests connected with the exploitation of the gravel pit" (see paragraph 40). However, there was no 'deprivation' in that case, even though the licence had been revoked, because the revocation did not take away all meaningful use of the properties in question. The Court analysed the matter as a "control of use".
125. If one transposes the approach of the Court in Tre Traktörer and Fredin to the present case, it is to be noted at once that the present case does not involve the withdrawal of a licence. The claimant Mr Royden is still in possession of a hackney carriage vehicle licence, and of a hackney carriage, and, I assume, of the business that goes with it.
126. In my view it is very difficult, in the light of paragraph 55 of the judgment in Tre Traktörer, and the subsequent case of Fredin, to regard the present case as constituting a "deprivation" of property within the meaning of the second sentence of the first paragraph of Article 1. If, according to the Court in Tre Traktörer, the loss of a licence to sell alcoholic beverages is not a "deprivation" of property, apparently because the underlying leasehold and physical assets of the business remained, the same conclusion must follow even more strongly in the present case, where Mr Royden still has his licence and is still able to carry on the business in question. If in Tre Traktörer the destruction of the restaurant business and loss of goodwill was not sufficient to constitute a "deprivation of property", it is hard to see how there can be such a "deprivation of property" within the meaning of the first paragraph of Article 1 in this case, even if Mr Royden has lost the chance of commanding a premium on the transfer of his licence at some future date. The same conclusion follows from Fredin.
127. In Tre Traktörer and Fredin, the Court was able to find that the withdrawal of the licence constituted "a measure of control of the use of property" so as to bring Article 1 into play. In the present case, however, it is hard to see how the concept of "a measure of control of the use of property" could apply here. In the present case the decision of 18 March 2002 allows others, in effect to apply for licences, without imposing or attempting any "control" over Mr Royden's property. It would seem to me very difficult, even perverse, to say that a measure which was precisely designed to de-control the use of property (i.e. hackney carriage vehicles in the Wirral) should be classified as a measure of control for the purposes of Article 1 of the First Protocol.
128. On the analysis so far, we are left with the possibility of a rather hard to define "interference" with property, contrary to the general rule in the first sentence of the first paragraph of Article 1, which is neither a "deprivation", nor the "control of the use" of property. Although I accept that, conceptually speaking, one can envisage a residual category of "interference with property" which is neither deprivation nor control of use, it seems to me that in such a case the nature of the "interference with property" alleged should be analysed closely in order to determine whether it really is a matter within the ambit of Article 1 of the First Protocol.
129. In this case, the essence of the alleged "interference" is a change of policy on the part of a licensing authority which is said to render a particular business less profitable in the future, and almost certainly reduces to nil the value of what is arguably an intangible "asset", namely the premium value to be realised on the future transfer of the licence, which is regarded by the Inland Revenue as part of the "goodwill" of the business.
130. However, there are many circumstances in which a change of regulatory policy by a public authority, or even a change in the general law, may make a business less profitable than it was before, or affect the value of its goodwill, or affect the earnings of those who work in the business.
131. As regards Mr Royden's possible loss of future earnings, there is no evidence what this loss might be. Assuming, however, some future diminution of earnings, the Commission has held that the expectation of future income should only be considered a "possession" if it had already been earned or where there was an enforceable claim to it: Gudmundsson v Iceland, cited above at paragraph 111. In my judgment Mr Royden's possible future loss of income in the present case does not fall within the ambit of Article 1 of the First Protocol. The Convention does confer the right to earn a livelihood as such, or protect any particular level of earnings.
132. Since Mr Royden has not been deprived of his licence, and does not object to the conditions attaching to the licence (e.g. a vehicle no more than three years old, wheelchair access etc), that leaves only the expected loss of the premium or 'scarcity value' of the licence that might have been expected to be payable by a transferee of Mr Royden's licence at some future date. However, unlike the normal case of "goodwill" as a business asset, this 'premium' does not arise out of the fact that Mr Royden has built up a reputation or has an established clientele, as might be the case of a business such as a restaurant. The 'premium' arises simply because of the restriction on the number of hackney carriages authorised to ply for hire in the Wirral area. In other words, it is simply the reflection of the value of the local monopoly enjoyed by the existing hackney carriage proprietors and drivers. Presumably, the transferee's willingness to pay such a premium results from his estimation of the future profits he hopes to be able to make from the business thus protected.
133. In my view, in the circumstances of this case, Article 1 of the First Protocol of the ECHR does not apply so as to protect the premium value of the hackney carriage vehicle licences held by Mr Royden and his colleagues. In my opinion that conclusion may be reached by three different routes.
134. First of all, the Commission held, in Pudas v Sweden, Gudmundsson v Iceland and Zacher v Germany, cited above, that the applicability of Article 1 to cases of the withdrawal of a licence depends, among other things, "on whether the licence gives rise to a reasonable and legitimate expectation of continuing benefits from the exercise of the licensed activity". Thus the withdrawal of the licence if the conditions of the licence are no longer fulfilled, or the withdrawal of the licence in accordance with the law in force, does not, according to those decisions, normally attract the protection of Article 1.
135. The present case is not a case of withdrawal. However, applying the above principles by analogy, it seems to me hard to say that Mr Royden and his colleagues had a reasonable and legitimate expectation that a policy of restricting the number of hackney carriage vehicles licensed in the Wirral area would continue indefinitely in force. On the contrary, it has been clear since the coming into force of the Transport Act 1985, and the Department of Transport Circular no. 3/85, that the legislative policy has been in favour of de-restriction, the only possible exception being if no unmet demand can be established. Even if an authority is satisfied that there is no unmet demand, it is still under no statutory obligation to maintain a restriction on the numbers of licences issued.
136. In those circumstances, it seems to me, anyone acquiring a hackney carriage vehicle in the Wirral, at any rate after 1985, must be taken in law to have done so in the knowledge that a policy of "de-restriction" might come into effect at some future date, whatever the state of the demand. In those circumstances it seems to me that there could be no reasonable or legitimate, expectation that the "premium value" of the licence would be maintained. Those that paid such a premium (and I have no specific evidence about that) in my view made a business judgment about whether the premium was worth paying, and took a business risk. Those, like Mr Royden himself, who paid no premium, have simply lost the possibility of a future "windfall". In my view in law Mr Royden could not, after 1999, have reasonably or legitimately expected that this "windfall" was protected against the possibility of "de-restriction" under the Act of 1847 as amended.
137. It is true that in Fredin's case the Court considered the issue of legitimate expectations in the context of the proportionality test, rather than in the context of considering whether Article 1 of the First Protocol applied in the first place. Here, however, we are dealing with a different factual context where there has been no withdrawal of a licence, no "deprivation" and, in my view, no "control of use". In those circumstances it seems to me that the three decisions of the Commission, cited above, constitute relevant guidance in the circumstances of the present case. I do not see that anything in R (Alconbury Developments) v Environment Secretary [2001] 2 WLR 1389 or R (Anderson) v Secretary of State for the Home Department [2002] 2 WLR 1143 which precludes me from following that guidance.
138. The second route to the conclusion that Article 1 of the First Protocol does not apply is by analogy with the reasoning of Carney J in the Irish High Court in Gorman v Minister for the Environment and Local Government [2001] 2 IR 414, following the earlier decision by Costello J in Hempenstall v Minister of the Environment [1994] 2 IR 20.
139. In Gorman's case there was a severe restriction on the number of taxis entitled to ply for hire in Dublin. Taxi drivers paid a premium of some £80,000 to obtain a licence. After protracted litigation, a statutory regulation, SI no. 367 of 2000, abolished quantitative restrictions on taxi licences throughout Ireland. The taxi drivers challenged SI no. 367 of 2000 as contrary, notably, to Article 43 and Article 40.3.2 of the Constitution of Ireland. Article 43 is headed "Private Property" and provides:

"1.1 The State acknowledges that man, in virtue of his rational being, has the natural right, antecedent to positive law, to the private ownership of external goods

2 The State accordingly guarantees to pass no law attempting to abolish the right of private ownership or the general right to transfer, bequeath, and inherit property.

2.1 The State recognises, however, that the exercise of the rights mentioned in the foregoing provisions of this Article ought, in civil society, to be regulated by the principles of social justice."

140. Article 40.3.2 under the heading "Personal Rights" provides that:

1 The State guarantees in its laws to respect, and as far as practicable, by its laws to defend and vindicate the personal rights of the citizen.

2 The State shall, in particular, by its laws protect as best it may from unjust attack and, in case of injustice done, vindicate the life, person, good name, and property rights of every citizen."

141. At paragraph 30 of his judgment, Carney J referred to the judgment of Costello J in Hempenstall's case, which concerned a ministerial regulation which lifted a moratorium on the issue of taxi and hackney cab businesses. Carney J said at paragraph 32 onwards:

"32. Costello J, in rejecting the applicant's arguments [in Hempenstall], primarily on the ground that no diminution in the value of their licences had actually occurred, made observations on the nature of the property right enjoyed by the applicants. He states at page 28 of his judgment that:

"… even, if it were established that the making of the Regulations of 1992 resulted in a diminution in the value of the applicants' taxi-plates this would not as a matter of law amount, in my opinion, to an attack on the applicants' property rights. Property rights arising in licences created by law (enacted or delegated) are subject to the conditions created by law and to an implied condition that the law may change those conditions. Changes brought about by law may enhance the value of those property rights (as the Regulations of 1978 enhanced the value of taxi-plates by limited the numbers to be issued and permitting their transfer) or they may diminish them (as the applicants say was the effect of the Regulations of 1992). But an amendment of the law which by changing the conditions under which a licence is held cannot be regarded as an attack on the property right in a licence – it is the consequence of the implied condition which is an inherent part of the property right in the licence.[emphasis added]"

33. Thus the property right invoked by the Applicants in this case is one which, although recognised as a valuable property right, is also a right which is subject to an important qualification in that the licence is at all times subject to the conditions created by law. As Costello J. makes clear this is "an inherent part of the property right in a licence".

34. He examined more fully the issue of whether a change in the law can be said to have been an "unjust attack":-

"Thirdly, a change in the law which has the effect of reducing property values cannot in itself amount to an infringement of constitutionally protected property rights. There are many instances in which legal changes may adversely affect property values (for example, new zoning regulations in the planning code and new legislation relating to the issue of intoxicating liquor licences) and such changes cannot be impugned as being constitutionally invalid unless some invalidity can be shown to exist apart from the resulting property value diminution. In this case no such invalidity can be shown. The object of the exercise of the Ministerial regulatory power is to benefit users of small public service vehicles. It has not been shown or even suggested that the Minister acted otherwise than in accordance with his statutory powers. Once he did so then it cannot be said that he has thereby "attacked" the applicants' property rights because a diminution in the value may have resulted. [emphasis added]""

142. Carney J went on at paragraph 40:

"… The nature and extent of the property rights enjoyed by the Applicants in this case were described thus by Costello J in Hempenstall:

"Property rights arising in licences created by law (enacted or delegated) are subject to the conditions created by law and to an implied condition that the law may change those conditions"

41. The decision of Costello J in Hempenstall, far from having no relevance to the factual scenario which presents itself in this case, clearly defines the scope of the property rights enjoyed by a holder of a taxi licence. In addition, it would appear to be on all fours with the facts of the instant case. The Applicants in Hempenstall also claimed that they had been subject to an unjust attack on their property rights as a result of a change in the law. The temporary nature of the moratorium does not seem to have been in any way central to Costello J's decision in this case.

42. The Applicants in this case accepted a similar restriction on the exercise of their property rights ab initio. They must have been aware of the risk inherent in the licence that legislative change might affect its value. Dramatic legislative changes had been introduced by means of Regulations in 1978 and 1995 and the Applicants were under no misapprehension that changes in the licensing scheme effected by means of Regulation could have a considerable impact on the value of their investment. Indeed, such conditions must be necessarily implied if the Minister of State is not to be unduly hampered in exercising his powers under statute in the public interest.

43. The Applicants in the instant case, as well as the applicants in Hempenstall, have in the past reaped the benefits of legislative change. It is not open to them to complain about such changes in the law having a detrimental effect on the value of their licences. It follows therefore that the actions of the Respondents in introducing a scheme of deregulation by means of SI 367 cannot constitute an unjust attack as this restriction is inherent in the very nature of a licence. As Costello J stated in Hempenstall:

"A change in the law which has the effect of reducing property values cannot in itself amount to an infringement of constitutionally protected property rights.

Such a legislative change per se cannot be unconstitutional in the absence of some further invalidity. Therefore, to the extent that the Regulations do not fall foul of the Article 6 and the principles of the separation of powers, they must stand.""

143. Although, as the claimant points out, the texts differ and no Strasbourg jurisprudence is cited, it seems to me that the reasoning of Costello J and Carney J is transposable, at least by analogy, to the present case. Even assuming that a hackney carriage vehicle licence, or its value, constitutes "property", that "property" arises solely because the legal regime in force in the Wirral which restricted the number of licences in issue. It has been the case, at least since 1985, that the restriction on the number of licences in issue in the Wirral could, in law, be removed. It follows that anyone acquiring a licence after 1985 did so on the implied understanding that that might occur. The "property" in the licence was, therefore, inherently subject to the possibility of such a change occurring. On this view, there is no "interference" with the property, since the possibility of 'de-restriction' occurring was always intrinsic to the "property" itself. This approach may also be expressed in wider terms, with which I myself would respectfully agree, namely that changes in the law which may affect property values, or the value of a business, cannot normally be impugned under Article 1 of the First Protocol solely on the grounds that a change in the law has caused a diminution in value.
144. The third route to the same conclusion focuses on the nature of the 'property' or 'possession' relied on in this case. First, the premium value of the licence here in issue arises by virtue of a legal monopoly in favour of the existing licence holders, and not by virtue of their efforts to build a reputation or establish a clientele. It is, in my view, an artificial value, since it has been created solely by the extraneous effect of the policy previously adopted by the defendant. It is also unofficial, in that no statutory provision authorises or envisages the creation of such a premium. Moreover, unlike real or personal property, there is no intrinsic reason why a hackney carriage vehicle licence, which is an authorisation granted by the State, should have a "private value" in the hands of the license holder (see also paragraph 17 of Councillor Brown's first statement). Whereas it is clear that Article 1 prevents someone from being unreasonably deprived of their land or goods, I find it harder to see on what basis the protection of Article 1 should extend to the licence premium that apparently exists in this case. Although there is no authority directly in point, I would have thought it unlikely that the authors of the Convention intended that a "scarcity value" arising from operation of law constituted "property" protected under Article 1. (Compare also, under European Community Law, the position as to the transfer 'value' of milk quotas: Cases T-466/93 etc O'Dwyer and ors v Council [1995] ECR II-2075, at paragraph 99.)
145. For these reasons, while I am conscious of the difficulties faced by the claimant and his colleagues, as a matter of law I am not satisfied that Article 1 of the First Protocol applies in this case. It follows that all the arguments advanced on the basis that Article 1 does apply must, in my judgment, fail.

Justification

146. Even if I were to take a different view about the application of Article 1 of the First Protocol, it seems to me that the claimant's case would fail, in any event, on the issue of justification.
147. It is common ground that, even assuming, contrary to my view, that Article 1 of the First Protocol applies, that provision is not infringed if it can be shown that the interference with the property concerned is justified in the general interest. The claimant says that the defendant, on whom the onus lies, cannot show that the "interference" with the value of his licence respects the requirement of proportionality. In particular, the defendant took the contested decision with insufficient factual information at its disposal, and notably without an up-to-date survey or demand. In consequence, the defendant could not properly conduct the balancing exercise required by Article 1 in order to satisfy the requirement of proportionality. In addition, so the claimant says, there is no reasoning to show that the defendant was aware of the need to respect the proportionality principle, nor how the defendant went about weighing the different interests, what weight was given to each factor, and why the defendant rejected the less drastic alternative of the release of a further tranche of licences (see paragraphs 82 to 86 above). In my view those arguments are unfounded, for the following reasons.
148. In the Tre Traktörer case, at paragraph 39, the Court said that "a measure of interference should strike a "fair balance" between the demands of the general interest and the requirements of the protection of the individual's fundamental rights … There must be a reasonable relationship of proportionality between the means employed and the aim sought to be realised …": see also Fredin, at paragraph 51. In R (Daly) v Home Secretary [2001] 2 AC 532 Lord Steyn discussed the application of the principle of proportionality in the context of the ECHR at p. 547:

"27 The contours of the principle of proportionality are familiar. In de Freitas v Permanent Secretary of Ministry of Agriculture, Fisheries, Lands and Housing [1999] 1 AC 69 the Privy Council adopted a three-stage test. Lord Clyde observed, at p 80, that in determining whether a limitation (by an act, rule or decision) is arbitrary or excessive the court should ask itself:

"whether: (i) the legislative objective is sufficiently important to justify limiting a fundamental right; (ii) the measures designed to meet the legislative objective are rationally connected to it; and (iii) the means used to impair the right or freedom are no more than is necessary to accomplish the objective."

Clearly, these criteria are more precise and more sophisticated than the traditional grounds of review. What is the difference for the disposal of concrete cases? … The starting point is that there is an overlap between the traditional grounds of review and the approach of proportionality. Most cases would be decided in the same way whichever approach is adopted. But the intensity of review is somewhat greater under the proportionality approach. Making due allowance for important structural differences between various convention rights, which I do not propose to discuss, a few generalisations are perhaps permissible. I would mention three concrete differences without suggesting that my statement is exhaustive. First, the doctrine of proportionality may require the reviewing court to assess the balance which the decision maker has struck, not merely whether it is within the range of rational or reasonable decisions. Secondly, the proportionality test may go further than the traditional grounds of review inasmuch as it may require attention to be directed to the relative weight accorded to interests and considerations. Thirdly, even the heightened scrutiny test developed in R v Ministry of Defence, ex p. Smith [1996] QB 517, 554 is not necessarily appropriate to the protection of human rights. It will be recalled that in Smith the Court of Appeal reluctantly felt compelled to reject a limitation on homosexuals in the army. The challenge based on article 8 of the Convention for the Protection of Human Rights and Fundamental Freedoms (the right to respect for private and family life) foundered on the threshold required even by the anxious scrutiny test. The European Court of Human Rights came to the opposite conclusion: Smith and Grady v United Kingdom (1999) 29 EHRR 493. The court concluded, at p 543, para 138:

"the threshold at which the High Court and the Court of Appeal could find the Ministry of Defence policy irrational was placed so high that it effectively excluded any consideration by the domestic courts of the question of whether the interference with the applicants' rights answered a pressing social need or was proportionate to the national security and public order aims pursued, principles which lie at the heart of the court's analysis of complaints under article 8 of the Convention."

In other words, the intensity of the review, in similar cases, is guaranteed by the twin requirements that the limitation of the right was necessary in a democratic society, in the sense of meeting a pressing social need, and the question whether the interference was really proportionate to the legitimate aim being pursued.

28 The differences in approach between the traditional grounds of review and the proportionality approach may therefore sometimes yield different results. It is therefore important that cases involving Convention rights must be analysed in the correct way. This does not mean that there has been a shift to merits review. On the contrary, as Professor Jowell [2000] PL 671, 681 has pointed out the respective roles of judges and administrators are fundamentally distinct and will remain so. To this extent the general tenor of the observations in Mahmood [2001] 1 WLR 840 are correct. And Laws LJ rightly emphasised in Mahmood, at p 847, para 18, "that the intensity of review in a public law case will depend on the subject matter in hand". That is so even in cases involving Convention rights. In law context is everything."

149. As Lord Steyn's speech makes clear, the effect of applying the principle of proportionality in Convention cases is not to turn judicial review into a review by the court of the merits of the decision. That is especially true where the decision concerned is in a discretionary area of policy where a margin of discretion is properly accorded to the decision maker: see generally R v Samaroo [2001] EWCA Civ 1139, [2001] UKHRR 1622 at paragraphs 26 to 36; R (on the application of Farrakhan) v Secretary of State for the Home Department, 30 April 2002, at paragraph 67.
150. In such cases, it seems to me that in determining whether a "fair balance" has been struck, the essential role of the court is to review the decision-making process to ensure that the decision maker has in fact gone through any balancing exercise required, has given due and appropriate weight to Convention rights, and has arrived at a result which is within his margin of discretion, and which cannot be characterised as either arbitrary or oppressive. Such a process means, in practice, that the reasons for the decision must be sufficiently apparent to enable the court to carry out its task of review.
151. It is also clear that in the human rights context the intensity of the court's review will vary according to the nature of the right in question. Where a balance is required to be struck, the court is more likely to defer to the opinion of the decision maker than it is where the right is absolute. Moreover, where the issue requires consideration of social, economic or political factors, the court is likely to accord greater deference to the decision maker. If, however, the right is of especial importance – such as the right to freedom of expression or access to the courts – a "high degree of constitutional protection" will be appropriate: see Samaroo, at paragraph 35.
152. In my view, in the present case, the decision of 18 March 2002 is in an area of policy in the sphere of local administration. Social, economic, and in some respects political, factors are in play. In addition, even if it were protected at all, which I do not think it is, the protection of the value of unofficial premium attaching to a hackney carriage vehicle licence would be, in my judgment, a relatively long way down the scale of fundamental human rights protected by the Convention.
153. It is also to be noted that the policy decision in the present case is taken in the context of the Act of 1847, as amended, which provides that there should be no numerical limit on hackney carriage licences unless it is established there is no unmet demand. Even then, under the Act, the licensing authority is under no obligation to maintain a numerical restriction. The policy choice as between "a free market" and a restricted market has, therefore, already been made by Parliament, and the Licensing Authority has to exercise its discretion within that statutory context.
154. Whatever the scope for "reading in" Convention rights, (see e.g. R v A (no.2) [2002] 1 AC 43) I do not think it would be permissible to "re-interpret" section 37 of the Act of 1847 in a way that departed substantially from the plain meaning of that section (see e.g. In re S (minors) (Care Order: Implementation of Care Plan) [2002] 2 WLR 720). The plain meaning of that section is that the Licensing Authority has no discretion to maintain a numerical restriction, the only exception being if the Licensing Authority is satisfied that there is no unmet demand. I would not accept that the effect of Article 1 of the First Protocol, even if applicable, could be to turn section 37 round and oblige the Licensing Authority to maintain a numerical restriction on licences unless satisfied that there was an unmet demand.
155. For the purposes of this case, it seems to me, the Licensing Authority had to start from the premise that a policy choice in favour of de-restriction had already been made by Parliament, and that they (the Licensing Authority) had only a limited discretion to restrict the number of licences in issue. In my view, when considering whether the Licensing Authority exercised its discretion "proportionately" it has to be borne in mind that the Licensing Authority had only a limited discretion in the first place.
156. In all these circumstances, it seems to me, in the context of this particular case, that there is relatively little scope for the court to review the 'proportionality' of the decision of 18 March 2002. Even on the assumptions most favourable to the claimant, it seems to me that the court should confine itself to verifying that the Licensing Authority carried out an adequate balancing exercise within the confines of the statutory context, remained within its margin of discretion, and did not act in a way that was arbitrary or oppressive.
157. Turning to the specific points made by the claimant, I am unpersuaded by the submission that the defendant lacked the necessary information on which to base its decision, namely an up-to-date survey of demand. The Maunsell Report set out the situation very fully as it was in 1998, and revealed a situation of market distortion. The evidence is that little had changed since that date, and there is no countervailing evidence to show that the pattern of demand was any different in 2002. The defendant, and in particular Councillors such as Councillor Brown, were very familiar with the issues, notably as a result of the meetings of the Joint Consultative Committee. In addition, the defendant had undertaken a process of consultation. The Licensing Committee had the benefit of the thoroughly prepared Report to the Licensing Committee, as well as hearing five representatives of the trade. In my view, the Licensing Committee had ample information on which to undertake any balancing exercise which may have been required of them. Certainly the absence of such a survey could not be characterised as "arbitrary or oppressive".
158. As to the question of whether the defendant gave due weight, and if so what weight, to the various factors concerned, the defendant had three options. A large number of factors and the pros and cons of each option are comprehensively set out in the Report to the Licensing Committee. Prominence is there given to the question of the licence premium, the effect on the livelihoods of the existing proprietors, and, expressly, to the need to respect Article 1 of the First Protocol. Those considerations were reinforced by the representations made by the trade at the meeting on 18 March 2002. There is therefore no basis for saying that the claimant's interests were not weighed in the balance.
159. On the other hand, the advantages to the public of "de-restriction", the findings of the Maunsell Report, the consequences of maintaining a restriction on numbers, the results of the consultation and a comparison with other authorities (showing the Wirral to be poorly served), are equally set out, so one can see what factors the Licensing Committee took into account in favour of de-restriction. It seems to me that in an area of discretionary policy such as this, the court is entitled to assume, in the absence of evidence to the contrary, that the Licensing Committee took all these factors into account and decided to give greater weight to the factors which supported "de-restriction" than to the factors which supported the other two options. I have no reason to doubt Councillor Brown's evidence at paragraphs 9 to 17 of her first witness statement that that is, in fact, what the Licensing Committee did.
160. With regard to the claimant's specific complaint that there is no evidence that the Licensing Committee properly considered "the least drastic alternative", namely the issue of a further tranche of licences, the evidence is that that indeed was one of the options which the Licensing Committee considered. The evidence also is that that option had been tried in 1999, following the Maunsell Report, but had failed to correct the market distortion identified in that Report whereby large areas of the Borough were poorly served by hackney carriage vehicles. In addition, it is apparent that the option of a further tranche would have placed the defendant in the invidious position of deciding which applicants were to get licences and which not, and would have placed the defendant in a difficult legal position given the statutory wording of section 37.
161. In all those circumstances, in my view, this Court is entitled to conclude on the evidence that the Licensing Committee took the option of the issue of a further tranche of licences into consideration, and took account of the interests of the claimant and his colleagues, but decided that the arguments in favour of this option were outweighed by the arguments against. In so doing, seems to me that the Licensing Committee remained within its margin of discretion.
162. As regards reasons, it is apparent from the foregoing that the well-prepared Report to the Licensing Committee, and the minute of the decision of 18 March 2002 supplemented, in my view legitimately, by the evidence of Councillor Brown, have enabled the Court to determine what the principal reasons for the defendant's decision were, to verify that the claimant's Convention rights (if any) had been taken into account, and to satisfy itself that the defendant did in fact carry out a reasonable balancing exercise in deciding which option to adopt. I do not consider, therefore, that there is a failure to provide sufficient reasons in this case.
163. Finally, given the provisions of the Act of 1847, the Maunsell Report, the discussions in the Joint Consultative Committee, the consultation exercise, the Report to the Licensing Committee, and the representations before that Committee on 18 March, it seems to me impossible to characterise the defendant's decision on that date as arbitrary or oppressive in law.
164. I would only add that it is apparent from Fredin's case, cited above, at paragraph 54, that the fact that the applicants had made investments subsequently to a change in the law which permitted their licence to be revoked, meant that the applicants had no legitimate expectation that the licence would not be revoked. Hence, it was held, the applicants had no ground for arguing that the revocation of the licence was disproportionate on the basis that they had lost their investment. It seems to me that that general approach is equally applicable in the present case, even assuming that, unlike Mr Royden himself, some of his colleagues had in fact paid a premium at the time of acquiring their licences.
165. It follows from the foregoing that there has been, in my view, no breach of Article 1 of the First Protocol, even if, contrary to my view, that provision has any application in this case. For those reasons, while understanding the strong feelings of the claimant and his colleagues, and the difficulties they may face in the future, I find myself compelled to reject this claim for judicial review.
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SIR CHRISTOPHER BELLAMY: Unless there are any further observations, I propose to give judgment in terms of the draft handed down. Are there any applications?

MS BUSCH: I have an application for costs.

MR CLAYTON: My Lord, I have two applications.

SIR CHRISTOPHER BELLAMY: Shall we deal with costs first?

MR CLAYTON: In principle we do not oppose costs, but we do have a number of observations about --

SIR CHRISTOPHER BELLAMY: Am I being invited to assess the costs today?

MR CLAYTON: It is a matter for my learned friend, I think.

MS BUSCH: We would like summary assessment, if possible.

SIR CHRISTOPHER BELLAMY: I do not think I have seen, until it was handed up to me this minute, the statement of costs. So I have not considered quantum at all. Mr Clayton, what do you say about this?

MR CLAYTON: There are a number of areas of concern.

SIR CHRISTOPHER BELLAMY: Are you asking for a detailed assessment, or are you simply contesting what is asked for by way of summary assessment?

MR CLAYTON: We will be content with detailed assessment.

SIR CHRISTOPHER BELLAMY: I think I will give costs for the defendant, to be subject to detailed assessment if not agreed.

MS BUSCH: I also have an application for liberty to apply against the 91 members of the claimant's trade union, who are behind him in the claim. My understanding is that there is no actual concern at present about the claimant's ability to apply, but in case --

SIR CHRISTOPHER BELLAMY: To apply for an order for costs against those others you mean?

MS BUSCH: Yes.

SIR CHRISTOPHER BELLAMY: One of the difficulties the court has is that I do not actually have the names of the 91, or exactly how many there actually are. I would suggest that.

MR CLAYTON: We certainly agree to liberty to apply, My Lord. Can I just request something else? Could we provide a list within 14 days of the various individuals?

SIR CHRISTOPHER BELLAMY: This is within 14 days, liberty to apply as asked, detailed assessment. Very well.

MR CLAYTON: I hope your Lordship has seen a very brief skeleton. Would it be helpful to --

SIR CHRISTOPHER BELLAMY: I have read it, Mr Clayton. I think, having read your submissions, I will see what Ms Busch has to say on the question of permission.

MS BUSCH: We oppose the application for permission on the ground that there is no reasonable prospect of success. In our submission, so far as the grounds for the claim pertaining to the eventual judicial review grounds is concerned, your Lordship's judgment turned purely on questions of fact, and in any event they are not dealt with by my learned friend in his skeleton for this morning's purposes. They are not really in question, there is no reasonable prospect of success in determining a reason so far as those are concerned.

So far as Article 1 of the First Protocol is concerned, the defendant does not deny that the arguments raised under that heading are all very interesting, but in my submission they are purely academic, and if the matter were to go to appeal the arguments concerning them would also be purely academic. So again, there is no reasonable prospect of success under that heading. The reason for that submission is that your Lordship gave not one but three separate arguments for the conclusion that Article 1 of the First Protocol did not apply in the circumstances of the present case. Each argument proceeded on a different premise. In our submission there is no prospect whatsoever that all three of those arguments would be found to be -- one of those three arguments would be wrong, and in any event, having dealt with the question of the application of Article 1 of the First Protocol, we then found that in any event the defendant was justified in taking the steps that he did. That finding, in our submission, again turned on matters of fact, which are clearly not subject to challenge.

So, my Lord, a summary of my submission: the main point is that key aspects turned on findings of fact, and as a point of principle, your Lordship dealt with three distinct arguments. There is no reasonable prospect of success of overturning your Lordship's judgment.

MR CLAYTON: My Lord, I simply would not criticise my learned friend before this submission. So far as the permission application is concerned, we are only interested in the human rights points. One is always conscious when making an application of this kind that your Lordship has come to a different view. But certainly we would submit pretty strongly that all three limbs of your Lordship's reasoning could be tested. And just taking them very quickly, I will just develop very briefly, if I may.

In relation to the first point, the way in which your Lordship sought to distinguish the instant case from the two European Court cases, we would submit, as a matter of analysis, the same basis applies equally to a taxi licence, which is in the final analysis part of a -- it provides the operational basis for the business in the same way that a restaurant licence does with (inaudible).

Alternatively, we would say in any event that conventionally people would say the Fredin case and the Tre Traktörer case -- my Swedish is not up to that -- are licence cases. Your Lordship came to a different view, but we would simply suggest in relation to that particular holding that the weight of the text books -- and for these purposes I exclude my own -- the weight of the European Convention text books, of which there are many, would also do the same thing.

So far as the holding that the commission cases should be applied in preference to the court cases, that in fact involves in principle a number of quite interesting issues. Our short point -- there is rather more that can be said to it than this -- is that in the final analysis, if this case ended up in Strasbourg, Strasbourg would apply the court cases (inaudible). We would also observe in any event that the way in which your Lordship dealt with the interference in terms of its impact on the nature of the property is not, in our respectful submission, entailed. And we also draw attention to the Anderson case. I hope your Lordship had the opportunity --

MS BUSCH: Yes I did. Thank you very much. So far as the Gorman case is considered -- because your Lordship only touched on why we say it is a matter of analysis. Is asserted in pristine terms in Gorman that there are necessary implications to a contract. There is no reference to it, and with respect to the Learned Judge, looking at Liverpool Corporation(?), it is not as self evident as all that.

So far as the fourth point,(d), is concerned, this is a novel area, and it is also important to see the extent to which this suggestion that something which is, in fact, of value should be disregarded. That is hard to reconcile with the milk quota case because that is artificial in terms of actual value, and basis for value as a taxi licence. So far as (e) is concerned, that submission speaks for itself.

The point we make about section 3 is in fact quite important. Section 3 of the Human Rights Act is only displaced in very limited circumstances. The RNA(?) case is a case where the plain meaning of the Act was turned on its head by the reading in of convention rights. By comparison, this is a case where we are simply seeking to impose an additional fetter on the general discretion, and it is worth remembering two things: first, in RNA(?) Lord Steyne quotes Lord Irvine, the Lord Chancellor's speech, in the second reading in saying that 99 out of 100 cases would result in the convention (inaudible) outcome, and he accepts and adopts that view. One way of testing the section 3 conclusion is whether section 37 with the Human Rights Act edition would in reality necessitate a declaration of incompatibility. And with respect, our submission would be that it is difficult to say that the language of section 37 is so conclusive in character that it dictates or requires a declaration of incompatibility, assuming other arguments --

SIR CHRISTOPHER BELLAMY: Yes.

MR CLAYTON: So far as proportionality is concerned, again we part company with my learned friend's submission that these are issues of fact. They are, with respect, not issues of fact, they are about what is the proper test of proportionality in the context. I think the most important point we make is that, as Lord Steyne observed in Daly, one is involved in proportionality in looking at weight or intensity factors, and our submission is that the English courts really are bound to conclude that the burden lies on the defendant because, as the de Freitas case makes clear from the Privy Council, proportionality as developed under the Human Rights Act plainly derives from Canada, and it derives in fact from Oakes, which is the locus classicus on this subject.

So, really what it comes to, my Lord, is this. Can I take the general points in reverse order? On any view we would submit that this case involves issues of general public importance. If we are wrong, we are wrong, but if we are right, it involves the whole question of how taxi licences should be -- the scheme should work.

I should also tell your Lordship that there is at least one authority waiting on this case to decide what the appropriate course is. In our submission this case, which is the way I put it in 3(a), involved a number of novel legal principles whose resolution is not self-evident.

SIR CHRISTOPHER BELLAMY: Can I just have a look at the rule?

MR CLAYTON: The relevant rule for that, you will find it at page 1084. It takes its root from Smith v Cosworth, which is set out at 52.3.14.

SIR CHRISTOPHER BELLAMY: I am sorry. I have the 2001 volume here. Just tell me what the rule is.

MR CLAYTON: 52.3.14. It is the commentary. 52.3.10 should be the basic criteria for granting permission.

Counsel has kindly offered your Lordship the current edition, which may help.

SIR CHRISTOPHER BELLAMY: It is page 1084 of the current edition. I am not sure the paragraph numbers are the same, but if your Lordship begins at 52.3.13, it refers to the second ground being "some other compelling reason". The origins of (b) can be traced to the Bowman Report which, in the judgment of Woolf LJ: "there are many reasons for granting leave ..."

The rule itself is 52.3(6). And it is (b):

"There is some other compelling reason why the appeal should be heard."

Then as a matter of commentary, and if I may say so, as a matter of practice, the leave is frequently considered on the basis of whether it raises a public matter of general public importance which the Court of Appeal ought to think about. And the basis for saying that begins at 52.3.13, through to 53.3.16. And, if I may say so, although the analysis of the commentary is slightly tortuous, the practice, so far as I am aware, particularly in relation to human rights cases, simply because those are the ones I have come across, is that if there is a real point of some general significance, then that is in itself sufficient reason for grounds of leave.

Of course, I make that submission to your Lordship on the footing that in any event we submit a further variety of reasons that there are real prospects in any event. Unless I can assist you further.

SIR CHRISTOPHER BELLAMY: No, thank you. Mr Clayton, in my judgment in this case, although the case has a certain public importance, and although we are to some extent in novel territory, I have come to a clear view about the law, as set out in my judgment. This is not the occasion to re-rehearse those arguments, so I think it appropriate that you should ask the Court of Appeal for permission rather than that I should grant permission.

MR CLAYTON: In that case, can I explain, dealing with the points, just that this is an academic appeal. On Monday our understanding is that Wirral proposes to start issuing licences to all and sundry, so the first thing I would take your Lordship to is page 1091, rule 52.7, stay. Interestingly, the position about stay seems to be much more straightforward than the one in the White Book. It is simply a matter of discretion, in our respectful submission, that absence of stay, the lack of appeal, would become truly academic. We would ask for sufficient time to lodge an appeal with the court for an application for permission, and also we would make it clear we would seek directions for expedition of an appeal as well. We have 14 days in general to lodge an appeal, perhaps I could ask for seven, and a stay until the determination of the permission application by the Court of Appeal.

SIR CHRISTOPHER BELLAMY: That seems to me to be reasonable.

MS BUSCH: We accept that.

SIR CHRISTOPHER BELLAMY: What is the position at the moment? Is there an undertaking or an order or an interim order in force?

MR CLAYTON: I think there is an undertaking, actually.

SIR CHRISTOPHER BELLAMY: Not to issue further licences, I think.

MS BUSCH: I thought there was an undertaking.

SIR CHRISTOPHER BELLAMY: So the defendant's undertaking -- I do not know whether the defendant can just agree to extend its undertaking for seven days until an application for permission to appeal has been lodged, and if it is lodged until the determination of that application.

MR CLAYTON: I am obliged.

MS BUSCH: Thank you My Lord.

SIR CHRISTOPHER BELLAMY: Very well. Thank you very much indeed.