England and Wales High Court (Administrative Court) Decisions

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

		Royal Courts of Justice Strand, London, WC2A 2LL
		13 July 2017

H.H. Judge Keyser Q.C. :

Introduction

1. This is an appeal by case stated, brought by Reigate and Banstead Borough Council ("the Council"), against a decision of the South East Surrey Justices, sitting at Redhill Magistrates Court, on 2 February 2016. By that decision the Justices allowed an appeal by Mr Jacek Pawlowski against the revocation by the Council of his private hire vehicle driver's licence ("PHV driver's licence") and ordered the Council to pay Mr Pawlowski's costs of the appeal in the sum of £1800.
2. At the outset of the hearing before me, Mr Savill for the Council made it clear that the Council does not seek a further revocation of Mr Pawlowski's PHV driver's licence. It brings this appeal primarily because of concern as to some remarks made by the Justices concerning the use of the statutory power to suspend PHV drivers' licences and in the hope of obtaining some guidance for the future consequent upon the judgment of Singh J in R (Singh) v Cardiff County Council [2012] EWHC 1852 (Admin), [2013] L.L.R. 108. Mr Pawlowski has no personal interest in any determination of that matter. The Council does, however, challenge the award of costs in Mr Pawlowski's favour on the ground that the Justices neither had nor stated sufficient grounds for making such an award. It is reasonable to assume that the Council would not have appealed against the award of costs if it had not anyway been bringing this case for the purpose of trying to clarify the use of the power to suspend.
3. The relevant facts can be shortly stated. On 2 August 2015 Mr Pawlowski was arrested on suspicion of being drunk in charge of a motor vehicle. Police officers had called at the home of his former partner upon a report of a domestic disturbance. They found Mr Pawlowski in an intoxicated state. They asked him to leave the vicinity and he assured officers that he had called for a taxi to take him home. Officers subsequently saw him get into his own car and turn on the ignition, whereupon they arrested him. He provided a specimen of breath containing 121 microgrammes of alcohol in 100 millilitres of breath. He was charged with an offence of being in charge of a motor vehicle having consumed excess alcohol, contrary to section 5(1)(b) of the Road Traffic Act 1988. On 4 August 2015 the Council was notified of the charge against Mr Pawlowski. On 5 August 2015 the Council decided to revoke his PHV driver's licence with immediate effect. It issued notification of that decision on the same day. At trial on 28 October 2015 Mr Pawlowski was found not guilty of the charge.
4. Mr Pawlowski appealed to the Justices against the revocation of his PHV driver's licence, under section 61(3) of the Local Government (Miscellaneous Provisions) Act 1976. The appeal was heard by the Justices on 2 February 2016. It was common ground that the appeal was not a review of the Council's decision but a hearing de novo. The question for the Justices was whether Mr Pawlowski was a fit and proper person to hold a PHV driver's licence. They concluded that he was and allowed his appeal.
5. The reasons of the Justices, as recorded by their clerk, were as follows (I supply paragraph numbers for convenience):

"[1] The Court has to decide whether the licence of the appellant, Jacek Pawlowski, was properly revoked after his arrest and charge on a count of drunk-in-charge.

[2] Furthermore, the Court is asked to decide whether the revocation is right now, in the light of events subsequent to the issue of the initial revocation.

[3] We believe that action was appropriate after the arrest and charge, but that revocation was not the appropriate action. Suspension, whatever its limitations, would have been the appropriate action.

[4] In the light of the guidelines, which indicate that even a relatively serious conviction would be no bar to a Private Hire driver retaining his licence, we note that the appellant has no convictions, and neither has he come to the attention of the licensing department in the past. We conclude that the revocation is not now appropriate and, on the balance of probabilities, allow the appeal."

6. There is no separate note of reasons in respect of the award of costs, and the Justices acknowledge that they did not give detailed reasons.
7. The Justices have formulated three so-called questions for this Court; "so-called", because in fact they are not as drawn questions at all but rather propositions for consideration. Reformulated, they result in the following 4 questions:

1) In the light of R (Singh) v Cardiff City Council [2012] EWHC 1852 (Admin), [2013] L.L.R. 108, did the Justices err in law in deciding that the Council's decision to revoke was wrong and that the Council ought to have suspended Mr Pawlowski's private hire driver's licence?

2) Did the justices err in law in failing to provide adequate reasoning for their decision that the said licence ought to have been suspended rather than revoked?

3) Absent any finding that Mr Pawlowski would suffer substantial financial hardship if an order for costs were not made in his favour, did the Justices err in law in making an order for costs against the Council?

4) In the light of the relevant authorities, was the Justices' reasoning for making an order for costs against the Council inadequate?

The fourth question stays close to the wording of the second part of the third proposition stated by the Justices for consideration. I shall take it to mean "Did the Justices err in law in failing to give adequate reasons for making an order for costs against the Council?" Thus the questions address both the legal merit of the award of costs and the legal adequacy of the Justices' stated reasons.

Questions 1 & 2: the power to suspend

8. The power to revoke or suspend a PVH driver's licence is contained in section 61 of the Local Government (Miscellaneous Provisions) Act 1976, which at the material time, and so far as material, provided as follows:

"(1) Notwithstanding anything in the Act of 1847 or in this Part of this Act, a district council may suspend or revoke … the licence of a driver of … a private hire vehicle on any of the following grounds:—

(a) that he has since the grant of the licence—(i) been convicted of an offence involving dishonesty, indecency or violence; or (ii) been convicted of an offence under or has failed to comply with the provisions of the Act of 1847 or of this Part of this Act; or

(b) any other reasonable cause.

(2) (a) Where a district council suspend, revoke or refuse to renew any licence under this section they shall give to the driver notice of the grounds on which the licence has been suspended or revoked or on which they have refused to renew such licence within fourteen days of such suspension, revocation or refusal and the driver shall on demand return to the district council the driver's badge issued to him in accordance with section 54 of this Act.

…

(2A) Subject to subsection (2B) of this section, a suspension or revocation of the licence of a driver under this section takes effect at the end of the period of 21 days beginning with the day on which notice is given to the driver under subsection (2)(a) of this section.

(2B) If it appears that the interests of public safety require the suspension or revocation of the licence to have immediate effect, and the notice given to the driver under subsection (2)(a) of this section includes a statement that that is so and an explanation why, the suspension or revocation takes effect when the notice is given to the driver.

(3) Any driver aggrieved by a decision of a district council under subsection (1) of this section may appeal to a magistrates' court.

9. The exercise of the power to suspend PHV drivers' licences was considered by Silber J in Leeds City Council v Hussain [2002] EWHC 1145 Admin, [2003] R.T.R. 13; much of the judgment is also relevant to the power to revoke. Silber J held that the words "any other reasonable cause" in section 61(1)(b) indicated that something other than a criminal conviction would justify a suspension of a PHV driver's licence. He continued:

"12. To my mind, the phrase 'any other reasonable cause' has been specifically selected to show the width of the discretion which is given to a council. Their task of making a decision is very much a jury question for them in which they are entitled to take account of all relevant circumstances.

13. The fact that these circumstances are very wide was emphasised by Lord Bingham LCJ in McCool v Rushcliffe Borough Council [1998] 3 All ER 889, when dealing with a refusal to grant an application for a licence to drive a private hire vehicle, at page 891F:

'One must, as it seems to me, approach this question bearing in mind the objectives of this licensing regime which is plainly intended, among other things, to ensure so far as possible that those licensed to drive private hire vehicles are suitable persons to do so, namely that they are safe drivers with good driving records and adequate experience, sober, mentally and physically fit, honest, and not persons who would take advantage of their employment to abuse or assault passengers.'

14. This passage demonstrates that the relevant circumstances need not relate to the criminal conduct, and it would be permissible to suspend a licence of a driver if, for example, he or she is not mentally or physically fit. I do not think as a matter of principle that before a licence can properly be suspended there is any need for a conclusion to be reached by the magistrate that in the wording of question (c) and the issues raised in the case stated 'there is at least a reasonable chance [of the respondent] being convicted of [a serious] offence.'

15. Indeed, in R v Maidstone Crown Court ex parte Olson (Times 21st May 1992) it was held that a local authority was entitled, for the purpose of seeking to rebut his contention that he was a fit and proper person to hold a licence, to go behind the applicant's acquittal entered on the hearing of an appeal of a charge of indecently assaulting a passenger.

16. More recently, in McCool v Rushcliffe Borough Council, the Divisional Court upheld a decision of the Crown Court that the local authority was permitted to examine the facts which had led to a charge being made against the applicant driver of indecently assaulting a passenger for the purpose of seeking to rebut his contention that he was a fit and proper person to hold a licence even though the applicant had been acquitted of that charge. In other words, in both cases the local authority was permitted to suspend the driver's licences on grounds of criminal conduct even though the holders of the licence had been found not guilty of those relevant offences."

10. In R (Singh) v Cardiff City Council, Singh J explained the exercise required of a local authority under section 61:

"69. … I would note that in my view section 61 does not confer only a discretion. In my view, it includes an element what may be called the exercise of a judgment in particular in subsection (1)(b) which requires there to be any other reasonable cause. It was common ground before me, in substance, for present purposes, that means whether a person continues to be a fit and proper person to hold a driver's licence.

70. As I have said, that is not a pure exercise of discretion, it is rather an exercise which calls for judgment to be performed on whether the statutory question has been answered in favour of or against the relevant driver.

71. That is a threshold question before which the exercise of discretion does not exist. Even once the threshold question has been answered against a driver, there still exists in the local authority a discretion. Section 61 provides that in those circumstances a council may, not that it must, suspend or revoke a licence. So at that stage of the process discretion does come into it. That discretion of course must be exercised lawfully according to well-known principles of public law."

11. For the purposes of this appeal, the especially relevant part of the judgment in R (Singh) v Cardiff City Council concerned the case of the second claimant in that case, Mr Morrissey. As a result of two particular incidents, an officer of the council made a report to the council's Public Protection Committee for consideration at its next meeting on 5 July 2011. The report questioned Mr Morrissey's fitness to continue to hold a PHV driver's licence. Although he had received a copy of the report and notice of the meeting of the committee, Mr Morrissey did not attend the meeting. The committee therefore resolved to suspend his PHV driver's licence "until [he] attended a future meeting of the Committee to answer the report made against [him]", in purported exercise of the power set out in section 61. When Mr Morrissey did not attend the next meeting of the committee on 9 August 2011, the committee gave substantive consideration to the complaints in the officer's report and revoked Mr Morrissey's PHV driver's licence. The facts are set out in more detail in paragraphs 33 to 42 of the judgment. The material parts of Singh J's reasoning are in paragraphs 100 to 105:

"100. The claimant [i.e. Mr Morrissey] submitted that in any event, quite apart from his other arguments what happened in this case was that on 5^th July 2011 the defendant decided to suspend his licence rather than to revoke it. It was submitted, as it were, that the defendant authority was therefore 'functus officio'. It was submitted there is no power of interim suspension in section 61 of the 1976 Act.

101. I would accept those argument on behalf of the claimant Mr Morrissey, in this case.

102. Returning to the language of section 61, I remind myself that this was not a case in which any attempt was made to activate the suspension of the licence to have immediate effect pursuant to the interest of public safety basis in subsection (2B). The notice sent to Mr Morrissey did not purport to invoke that provision or to make the suspension immediately effective.

103. In my judgment, the way in which the concept of suspension is used by Parliament is section 61 of the 1976 Act is not, as it were, to create a power of interim suspension, it is rather after a considered determination in other words a final decision on whether a ground for either revocation, or suspension of a licence is made out, for there to be either revocation or, as a lesser sanction, a sanction of suspension.

104. By way of analogy, one can envisage for example in a professional context a solicitor or a barrister can be disciplined on grounds of his conduct. The relevant disciplinary body may conclude that even if the misconduct has been established, that the appropriate sanction should be something less than complete revocation of the practising certificate for the relevant lawyer. It may be, for example, a suspension for a period of 1 year, will constitute sufficient sanction in the interests of the public.

105. It is in that sense, in my judgment, that Parliament uses the concept of suspension in section 61 of the 1976 Act. It does not use, as it were, to create an interim power, before a reasoned determination has been made, that the grounds in subsection (1A) or (1B) have been made out. It is not, as it were, a protective or holding power. It is a power of final suspension, as an alternative to a power of final revocation. For those reasons I accept that aspect of Mr Morrissey's claim for judicial review also."

12. The case stated by the Justices records that the advocate for the Council referred to R (Singh) v Cardiff City Council—no doubt the passage set out above—as authority for the proposition that a licence may not be temporarily suspended pending a final decision. The concern that has led the Council to bring this appeal arises from the remarks of the Justices in paragraph [3] of their reasons, as set out in paragraph 5 above. The Council considers that it has been wrongly criticised for acting properly in accordance with Singh J's explanation of the proper use of the power to suspend. Questions 1 and 2 in the case stated relate to these concerns. A number of remarks are in order in this connection.
13. First, the matters raised by questions 1 and 2 have no bearing on the substantive disposition of Mr Pawlowski's case, because the Council does not seek to challenge the Justices' decision to reinstate his PHV driver's licence.
14. Second, in my judgment questions 1 and 2 are not directed to the Justices' decision on the appeal before them. The issue on the appeal was whether, upon a fresh consideration of the matter in the light of all the circumstances then appearing, Mr Pawlowski was a fit and proper person to hold a PHV driver's licence. That was essentially the question posed in paragraph [2] of the Justices' reasons and answered in paragraph [4]. The Justices also asked a further question, namely whether the Council had been right to revoke the licence in the first place; that question is posed in paragraph [1] of the reasons and answered in paragraph [3]. However, it was paragraph [4] that was determinative of the appeal, not paragraph [3].
15. For the Council, Mr Savill submits that the Justices' reasoning cannot be divided up in the manner I have described and that, where such a large proportion of the concise reasons relates to the Council's original action, it is clear that the reasoning in paragraph [3] informs that in paragraph [4]. I do not agree with that submission. The Justices' reasons, though short, have a clear structure, which I have explained above, and the reasoning in paragraph [4] is distinct from that in paragraph [3]. Although the primary focus must be on the reasons expressed at the time, I note that my interpretation of the reasons is consistent with the explanation subsequently given by the Justices in paragraph 5(b) of the case stated:

"During the hearing we heard from both parties on the issue of the council's decision to revoke the applicant's private hire licence with immediate effect rather than to suspend it. Whilst our decision was not based upon the appropriateness or otherwise of the council's decision to revoke the applicant's licence before the hearing of the criminal charges and whether the council misdirected itself as to the options open to it at that point, we did make observations on this issue in our reasons."

16. There also seems to me to be some incoherence in the Council's approach to this aspect of the case. The gravamen of the Council's complaint, as expressed to me, is that the Justices seemed to be criticising the Council for failing to use the power of suspension in the very manner that (in the Council's view) is ruled out by Singh J's observations in R (Singh) v Cardiff City Council. But that complaint supposes that the Justices were not saying merely that suspension was the correct final disposition of the matter against Mr Pawlowski (which, whether right or wrong, would raise no question arising out of R (Singh) v Cardiff City Council), but rather that the Council ought to have suspended pending a final determination after the outcome of the criminal proceedings was known. If that latter interpretation of the Justices' remarks is the correct one, then although it might raise a question concerning R (Singh) v Cardiff City Council it would show clearly that the remarks in paragraph [3] of the reasons were quite distinct from those in paragraph [4]. That is the true position, in my view.
17. It follows that, so far as concerns questions 1 and 2 and the power of suspension, the case stated in this appeal does not properly arise out of the decision of the Justices on the appeal before them, as well as being irrelevant to any issue between the Council and Mr Pawlowski. I should be reluctant to seek to give a conclusive determination of a point that did not properly arise for consideration on either the appeal before the Justices or the appeal before me.
18. Third, there is a further reason for caution in using paragraph [3] of the Justices' reasons as a platform from which to purport to issue guidance on the use of the power to suspend under section 61. One of the matters considered by the Justices was the Council's "Taxi and PHV Licensing Criminal Convictions' Policy", apparently issued in October 2012. This Policy was the "guidelines" mentioned in paragraph [4] of the Justices' reasons. It was also relevant to the conclusion in paragraph [3] of the reasons; as the Council has observed, paragraph [3] is in the nature of a conclusion and does not state the underlying reasoning. Paragraph 13 of the Policy states:

"If the individual is the subject of an outstanding charge or summons their application can continue to be processed, but the application will need to be reviewed at the conclusion of proceedings. Where information is received through the Notifiable Occupations Scheme or otherwise, officers will use their delegated powers as appropriate. This may include suspending the licence if the licence holder has been charged with a relevant offence, pending a review once the outcome of the case is known."

19. This Policy was published after the decision in R (Singh) v Cardiff City Council, though possibly in ignorance of it. I do not know what part it played in the reasoning of the Justices concerning the propriety of an initial suspension of Mr Pawlowski's PHV driver's licence. It is reasonable, however, to assume that it played some part. This assumption is made the more plausible because of the principle that was stated by Scott Baker J in R (Westminster City Council) v Middlesex Crown Court and Chorion plc [2002] EWHC 1104 (Admin), [2002] L.L.R. 538, where, when considering "how a Crown Court or Magistrates' Court should approach an appeal where the Council has a policy", he said at paragraph 21:

"In my judgment it must accept the policy and apply it as if it was standing in the shoes of the Council considering the application. Neither the Magistrates Court nor the Crown Court is the right place to challenge the policy. The remedy, if it is alleged that a policy has been unlawfully established, is an application to the Administrative Court for judicial review. In formulating a policy the council no doubt first consult various interested parties and then take into account all the various relevant considerations."

That was the principle that persuaded Singh J in R (Singh) v Cardiff City Council to grant judicial review even though the claimants had not availed themselves of the statutory right of appeal. The principle raises the possibility, which I cannot exclude, that the Justices' remarks in paragraph [3] of their reasons were influenced by the Council's own Policy.

20. For the reasons indicated above, I shall answer questions 1 and 2 as follows:

1) The question whether the Council was wrong to revoke Mr Pawlowski's private hire vehicle driver's licence and ought rather to have suspended it did not properly arise for the decision of the Justices and their observations in that regard constitute neither the substantive decision they made nor the ground of that decision.

2) The Justices did not err in failing to give any further or other reasons for their observations, because they were not required to give reasons for observations that did not constitute their decision on the appeal before them.

21. However, in the light of the views expressed by the Justices and the concerns expressed by the Council, and in the hope of providing a small measure of assistance for the future, I offer some very limited observations of a general nature.
22. The decision in R (Singh) v Cardiff City Council caused a degree of consternation among local authorities. A fairly widespread practice appears to have developed, whereby a licensing authority that learned of a criminal charge or summons or other allegation of wrongdoing against a licence-holder would impose a suspension of the licence pending either determination of the criminal proceedings or investigation of the allegation and would then, in the light of the outcome, take such further action as might appear to be merited, perhaps involving revocation of the licence if the charge or allegation were proved. The decision in R (Singh) v Cardiff City Council shows that suspension of a licence pursuant to section 61(1) can only be achieved by a substantive decision on the basis that one of the grounds in that subsection is made out. Suspension cannot be imposed as a holding exercise, pending consideration whether a ground is made out. In that sense, suspension is a final decision.
23. In his skeleton argument, Mr Douglas-Jones on behalf of Mr Pawlowski submitted that, despite the prohibition on interim suspensions in R (Singh) v Cardiff City Council, it would be open to a local authority, in a suitable case, to make a substantive decision to suspend on learning that a licence-holder had been charged and to make a further substantive decision to revoke on learning that he had been convicted on the charge: the fact of the charge would amount to a "reasonable cause" under section 61(1)(b), and the fact of conviction would amount to new circumstances entitling the local authority to exercise afresh its judgment and discretion under section 61. Although it would be inappropriate for me to attempt to say anything definitive about that suggestion, in circumstances where my observations are not made with reference to specific facts and are unnecessary for my decision, I am of the view that the suggested approach is not helpful as a general guide to local authorities' conduct.
24. R (Singh) v Cardiff City Council establishes that it is unlawful for a local authority to use suspension as a holding operation pending further investigation. So a council cannot lawfully suspend by reason of a criminal charge on a "wait and see" basis. It follows that it cannot use the cloak of a substantive decision to suspend to achieve the same holding operation. If it suspends the licence, it must do so by way of a substantive decision on the fitness of the driver to hold the licence, after giving the driver a proper opportunity to state his case, not merely as a means by which to maintain a position pending the final outcome of the criminal proceedings. Once it is seen that suspension is not a holding operation but a substantive decision, it becomes apparent (in my view) that suspension will rarely be the appropriate course where a driver is charged with a matter for which, if convicted, he would be subject to revocation of his licence. If such a charge merits action, and if the action is not by way of an interim measure pending determination of the facts at criminal trial, revocation will generally be the appropriate course. To suspend a licence because an allegation is made and then revoke it because the allegation is proved is, as it seems to me, contrary to the decision in R (Singh) v Cardiff City Council, even if the former decision is dressed up as a substantive rather than a merely provisional or holding decision.
25. This is not to say that, once a decision has been taken to suspend upon notification of a charge or allegation of wrongdoing, no subsequent decision to revoke can ever be taken. Although the submission accepted by Singh J in R (Singh) v Cardiff City Council referred to the council being functus officio, a licensing authority will never be functus officio with respect to section 61 in the sense that it no longer has duties to discharge and powers to exercise. The point rather is that any decision to suspend, though in one sense final, can only be made on the basis of the information available at the time the decision was made. When faced with a decision under section 61, the council must fully consider the available information, afford the licence-holder the opportunity to state his case, and exercise the judgment and discretion identified by Singh J. Thus, as Mr Douglas-Jones submitted orally when acting in the role of an amicus curiae, it is possible to envisage a case where, although the information provided to a local authority concerning a criminal charge leads it to consider that suspension is a sufficient sanction, facts thereafter emerging in the course of the criminal trial put a different complexion on the matter and require revocation. It does not seem to me that the initial suspension would necessarily rule out a subsequent revocation in such circumstances, having regard in particular to the fact that the council's powers are conferred for purposes of public protection. Such a case, however, is very different from the case considered in R (Singh) v Cardiff City Council, where suspension is simply in the nature of a holding measure pending a substantive decision as to what if any sanction is appropriate.
26. The effect of this is that, although the decision in each case will be one for the judgment and discretion of the council, where a licence-holder is charged with an offence the commission of which would be considered to render him unfit to hold a licence, the council is likely to consider it appropriate to revoke the licence at that stage. For reasons already stated, to suspend the licence merely because of the charge and revoke it merely because of the ensuing conviction would in my view conflict with the decision in R (Singh) v Cardiff City Council as to the scope of the power under section 61. Any decision to revoke will be subject to a statutory right of appeal. Further, if it should later transpire, for example by reason of acquittal at trial, that the former licence-holder is indeed a fit and proper person to hold a licence, provision can be made for expeditious re-licensing.

Questions 3 & 4: the award of costs

27. The issue here is whether the Justices erred in making an order for costs in favour of Mr Pawlowski or in failing to give sufficient reasons for making that order.
28. The power to order costs is conferred by section 64 of the Magistrates' Courts Act 1980, which gives to the Justices the discretion to make such order as they think just and reasonable.
29. In R (Perinpanathan) v City of Westminster Magistrates' Court [2010] EWCA Civ 40, [2010] 1 WLR 1508, the Court of Appeal endorsed the application to licensing proceedings in the magistrates' courts of the principle stated in City of Bradford Metropolitan Council v Booth (1999, unreported). The first judgment was given by Stanley Burnton LJ; Maurice Kay LJ agreed both with his judgment and with the judgment of Lord Neuberger of Abbotsbury MR, whose reasoning was essentially similar to that of Stanley Burnton LJ. The relevant part of Stanley Burnton LJ's judgment, for present purposes, is the following:

"40. … (5) Where the principle [in the City of Bradford case] applies, and the party opposing the order sought by the public authority has been successful, in relation to costs the starting point and default position is that no order should be made. (6) A successful private party to proceedings to which the principle applies may nonetheless be awarded all or part of his costs if the conduct of the public authority in question justifies it. (7) Other facts relevant to the exercise of the discretion conferred by the applicable procedural rules may also justify an order for costs. It would not be sensible to try exhaustively to define such matters, and I do not propose to do so.

41. Lord Bingham CJ [in the City of Bradford case] stated that financial prejudice to the private party may justify an order for costs in his favour. I think it clear that the financial prejudice necessarily involved in litigation would not normally justify an order. If that were not so, an order would be made in every case in which the successful private party incurred legal costs. Lord Bingham CJ had in mind a case in which the successful private party would suffer substantial hardship if no order for costs was made in his favour. I respectfully agree with what Toulson J (with whom Richards LJ agreed) said in R (Cambridge City Council) v Alex Nestling Ltd (2006) JP 539, paragraph 12:

'As to the financial loss suffered by the successful appellant, a successful appellant who has to bear his own costs will necessarily be out of pocket, and that is the reason in ordinary civil litigation for the principle that costs follow the event. But that principle does not apply in this type of case. When Lord Bingham referred to the need to consider the financial prejudice to a particular complainant in the particular circumstances, he was not in implying that an award for costs should routinely follow in favour of a successful appellant; quite to the contrary.'

42. I would also comment that there may have been a tendency to focus more on Lord Bingham CJ's answer to the straightforward issue defined in paragraph 1 of his judgment than to the more nuanced propositions set out under paragraph 23. Ultimately, the duty of the magistrates' court is to make such order as to costs as is just and reasonable, subject to the constraint imposed by section 64."

30. As regards the duty to give reasons, the Council relies on the well-known passage in the speech of Lord Brown of Eaton-under-Heywood in South Buckinghamshire District Council v Porter (No. 2) [2004] 1 WLR 1953, at paragraph 36:

"36. The reasons for a decision must be intelligible and they must be adequate. They must enable the reader to understand why the matter was decided as it was and what conclusions were reached on the 'principal important controversial issues', disclosing how any issue of law or fact was resolved. Reasons can be briefly stated, the degree of particularity required depending entirely on the nature of the issues falling for decision. The reasoning must not give rise to a substantial doubt as to whether the decision-maker erred in law, for example by misunderstanding some relevant policy or some other important matter or by failing to reach a rational decision on relevant grounds. But such adverse inference will not readily be drawn. The reasons need refer only to the main issues in the dispute, not to every material consideration. They should enable disappointed developers to assess their prospects of obtaining some alternative development permission, or, as the case may be, their unsuccessful opponents to understand how the policy or approach underlying the grant of permission may impact upon future such applications. Decision letters must be read in a straightforward manner, recognising that they are addressed to parties well aware of the issues involved and the arguments advanced. A reasons challenge will only succeed if the party aggrieved can satisfy the court that he has genuinely been substantially prejudiced by the failure to provide an adequately reasoned decision."

In Little France Ltd v London Borough of Ealing [2013] EWHC 2144 (Admin), [2014] L.L.R. 92, Mr Mark Ockelton, sitting as a deputy High Court judge, held that the principles stated by Lord Brown, though enunciated in a planning case, were applicable to the common-law duty on a court to give reasons for its decisions.

31. In the present appeal, paragraphs 5(c) and 6 of the case stated by the Justices read as follows:

"5(c) In relation to costs, we found that the sum of £1800 sought by the Applicant was just and reasonable and that it was in the interests of justice to make an award in that sum in his favour.

6 In relation to the question of costs, Mr Saville on behalf of Reigate and Banstead Borough Council drew our attention to Perrin v Westminster Magistrates' Court [2002] EWCA Crim 747 [it is suggested that this is a mistaken reference to the Perinpanathan case] and the factors to be considered by the court when deciding whether to make an order for costs against a regulatory authority.

Mr Ellis on behalf of the applicant argued that as a consequence of the council's decision to revoke the applicant's private hire licence the applicant had suffered financial hardship.

In reaching our decision we took account of the fact that the council's decision to revoke the applicant's licence meant that the only recourse available to him was to appeal to an independent tribunal. We found that this chain of events had put the applicant in some financial difficulty as he was unable to work between October 2015 and February 2016. We acknowledge that we did not give detailed reasons on this point."

32. For the Council, Mr Savill makes two complaints about the award of costs. First, no proper reasons for the award were stated at the time. The only reason stated orally at the hearing (as I am told and accept) was that the award of costs was "in the interests of justice". The reasoning in paragraph 6 of the case stated is tainted with the risk that it represents an ex post facto rationalisation of a decision reached for other reasons or for no genuine reason at all. Second, even if paragraph 6 of the case stated is accepted on its own terms, the finding of "some financial difficulty" falls short of the requirement of "substantial hardship" as required by Perinpanathan.
33. I reject these complaints.
34. The adequacy of reasons falls to be considered in the context in which the decision was made. Here the only information as to what transpired comes from the case stated. This shows that the Council relied on the principles in Perinpanathan and that the Respondent relied on financial hardship resulting from the loss of his licence. No other matters were raised for consideration. The Justices' decision was a straight choice between, on the one hand, reliance on the starting-point that there should usually be no order for costs and, on the other hand, the argument that an order for costs should be made because Mr Pawlowski had suffered financial hardship on account of the temporary loss of his livelihood. In those circumstances, although it would have been better for the Justices to say rather more about their reasoning, a conclusion expressed in terms of the interests of justice could reasonably mean only one thing, namely that the reasons advanced on behalf of Mr Pawlowski were accepted. The Council cannot seriously have been unclear about the basis on which the decision was made and could not properly claim to have been seriously prejudiced by the economical way in which the Justices expressed their decision.
35. As to the second complaint, it is well to remember that "substantial hardship" is not a statutory formula and is not to be treated as one. The basic test is what is just and reasonable. Usually in licensing cases it will not be just and reasonable to make an adverse costs order against the regulatory authority. The hardship that arises merely from having to bear the expense of litigation in the statutory appeal will not justify an award of costs. But financial hardship resulting from the exercise of the regulatory powers against which a successful appeal has been brought might do so. Use of the word "substantial" indicates that, if such hardship is to be relied on, it must have some substance, rather than being merely trivial or insignificant. No further refinement of the expression "substantial hardship" is necessary or appropriate, because the question is always and only whether the matter relied on suffices to make an award of costs just and reasonable. In the present case, the case advanced on behalf of Mr Pawlowski was that the temporary loss of his licence and his resulting inability to work for several months had caused him financial hardship. The Justices clearly accepted that the hardship had been suffered and that it was sufficient to make an award of costs just and reasonable. There is no error of law in that approach.
36. Accordingly, I shall answer questions 3 and 4 "No".
37. For these reasons the appeal is dismissed.
38. In the time since this judgment was circulated in draft, the parties have been unable to agree the appropriate terms of the order for costs consequential upon my decision. Understandably, Mr Douglas-Jones seeks an order for payment of Mr Pawlowski's costs of the appeal. If the Council contends that some other order ought to be made, it must file and serve written representations in that regard by 4 p.m. on 18 July 2017 and I shall consider the matter further. If in the meantime the parties are able to agree the appropriate terms of an order, they should file it not later than the time I have mentioned.
39. Finally, I should express my appreciation to Mr Savill and Mr Douglas-Jones for their helpful and admirably focused written and oral submissions.