Scottish Court of Session Decisions

EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
Lord Coulsfield Lord Johnston Lord McCluskey	P436/00 OPINION OF LORD COULSFIELD in RECLAIMING MOTION on PETITION and ANSWERS in the cause DOUGLAS STEWART Petitioner and Reclaimer; against PERTH and KINROSS COUNCIL Respondents: for JUDICIAL REVIEW _______

 

 

Act: Bovey, Q.C., Henderson; Jardines (Petitioner and Reclaimer)

Alt: Sutherland; Anderson Strathern, W.S. (Respondents)

1 October 2002

1. This is a petition for judicial review of a decision by the respondents to refuse renewal of a second-hand dealer's licence previously held by the petitioner. The licence was originally granted in 1987 and was renewed in 1990, but a further renewal of the licence was refused on 18 February 1994. The reasons for the refusal were given in a letter dated 10 March 1994 and essentially depended upon breaches by the petitioner of conditions contained in his licence. The petitioner initially appealed against the refusal to the sheriff and was partially successful, but the sheriff's decision was recalled by this court on 6 December 1995, with the result that the respondents' decision stood. The first order in the present petition was made on 5 May 2000. The grounds of the petition, as summarised in the petitioner's pleas-in-law, are that the decision to refusal renewal of the licence was ultra vires and that the petitioner is entitled to reparation from the respondents for the effects of the refusal. A debate was heard before the Lord Ordinary who issued an opinion on 31 August 2000. Thereafter the petition was amended and there was a further debate. On 15 June 2001, the Lord Ordinary refused the pleas-in-law for the petitioner, sustained certain pleas for the respondents and refused the petition. The petitioner now reclaims.
2. The petition raised a number of issues which were canvassed in the debates before the Lord Ordinary and are all set out fully in the Lord Ordinary's opinions. In the reclaiming motion, the issue between the parties was very much narrowed and turned upon the question whether certain of the conditions attached to the licence were intra vires of the respondents. This was an issue which, although figuring in the pleadings, seems to have received little or no attention in the debates before the Lord Ordinary. The issues with which the Lord Ordinary was required to deal were not re-opened in the hearing of the reclaiming motion. In consequence, it is not necessary for us to deal with much of the material which is set out in the Lord Ordinary's opinions. It is only necessary to set out the background, so far as relevant, to the limited issue argued before us.
3. The petitioner has carried on business as a second-hand car dealer within the area of the respondents and their statutory predecessors as a local authority for many years. The Civic Government (Scotland) Act 1982 requires local authorities to operate licensing schemes in relation to certain activities and permits them to establish licensing schemes for other activities, if they think it proper to do so. Second-hand dealing is one of the activities for which licensing is optional. In 1986, the respondents' statutory predecessors introduced a scheme under which second-hand car dealers, and other second-hand dealers, were required to obtain second-hand dealers' licences. The validity of that scheme is not now in issue. In terms of the scheme, conditions may be attached to such licences and the authority for the imposition of such conditions is found in section 24(4) and (5) and paragraph 5 of Schedule 1 to the Civic Government (Scotland) Act 1982. Section 24 provides, inter alia, as follows:

"(4) without prejudice to paragraph 5 of schedule 1 to this Act, a Licensing Authority may, after consultation with the Chief Constable, attach conditions to a second-hand dealer's licence requiring the keeping of records in relation to the dealer's stock in trade; and conditions so attached may, without prejudice to the authorities power under this subsection, include provision as to -

(a) the information to be included in these records;

(b) their form;

(c) the premises where they are to be kept; and

(d) the period for which they are to be kept.

(5) A second-hand dealer acquiring a second-hand motor vehicle for the purposes of its resale in the course of his business shall keep a record of the mileage reading on the vehicle's odometer when he acquired it."

4. Paragraph 5 to Schedule 1 provides:

"(1) Where an application for the grant or renewal of a licence has been made to a Licensing Authority they shall, in accordance with this paragraph -

(a) grant or renew the licence unconditionally;

(b) grant or renew the licence subject to conditions; or

(c) refuse to grant or renew the licence.

(2) The conditions referred to in sub-paragraph (1)(b) above shall be such reasonable conditions as the Licensing Authority think fit and, without prejudice to that generality, may include -

(a) conditions restricting the validity of the licence to an area or areas

specified in the licence;

(b) in relation to the grant of a licence, where that licence is intended to

replace an existing licence, a condition requiring the holder of the existing licence to surrender it in accordance with paragraph 13 below."

5. The condition attached to the petitioner's licence to which objection is taken is as follows:-

"2.5(a) If the licence holder intends to display for sale/sell any vehicle to a member of the public he must

(i) carry out an inspection and prepare a full Inspection Report on the

vehicle prior to it being displayed for sale/sold and make a copy of the report available for inspection by any prospective purchaser while the garage/showroom is open, in accordance with the sample Inspection Report issued and in a style approved by the Council (see Appendix 2 and Note 3);

(ii) display a summary Information Sheet in a prominent position in the

vehicle displayed for sale so that it is clearly visible indicating that the vehicle has been inspected, that a full Inspection Report may be consulted in the office/showroom prior to sale and that the purchaser will receive a copy of the Report at the time of the sale, in accordance with the sample information sheet issued and in a style approved by the Council (see Appendix 3);

(iii) Complete all sections of the Inspection Report as appropriate and

provide the purchaser with a copy of the Inspection Report, which should be signed by both the purchaser and the dealer and dated, at the time of sale; and

(iv) retain one copy of the above Inspection Report as part of his records

for at least 3 years."

6. As I have mentioned, the reasons for refusal of the renewal of the petitioner's licence include reference to breaches of conditions. In particular, paragraph 3(iii) of the letter of 10 March 1994 states:

"On a further inspection by Mr. Braidwood on 28 January 1993 it was found that Mr. Stewart was not displaying information sheets in vehicles and neither was he keeping copies of pre-sales Inspection Reports, all as required by the conditions of his licence. Mr. Stewart had told Mr. Braidwood at the time that he was providing customers with pre-sales Inspection Reports and that he was not keeping copies. Mr. Stewart was provided with a fresh copy of the conditions attached to his licence."

7. Further reference to similar breaches is made in the following paragraphs of the statement of reasons. In giving its grounds for the refusal, the respondents' sub-Committee, which dealt with the matter, resolved that Mr. Stewart was not a fit and proper person to hold a licence on the ground that he had consistently failed over a long period of time to observe the conditions of the licence in respect of pre-sales information sheets and pre-sales Inspection Reports, despite having these matters drawn to his attention on several occasions. The sub-Committee also criticised Mr. Stewart's evidence, which they found unreliable, and criticised his failure to take responsibility for the observance of the licence conditions. It is therefore evident that the breach of these conditions was a material factor in the decision of the respondents. Counsel for the respondents conceded that, notwithstanding that the reasons dealt with matters other than the breaches of conditions, it was not possible to separate out the question of the breaches of conditions from the other mattes raised. Accordingly, if the petitioners' argument that the conditions were ultra vires succeeds, the decision to refuse renewal cannot stand.
8. In the debate before us, the principal issue considered was whether the conditions, and in particular condition 2.5, which we have quoted, fell within the scope of the statutory powers conferred on the respondents. There was, however, also some reference to the question of reasonableness. The argument was not really pressed to the extent of saying that any conditions were unreasonable, but since some reference was made to the issue, I think it appropriate to say something about it. It is a matter which can be dealt with briefly, and it is convenient to dispose of it before considering the question of the scope of the legislation. Among the documents placed before the Lord Ordinary were certain reports which preceded the adoption of the scheme. These include a report dated 4 December 1985. That report deals generally with the scheme, as then proposed. The scheme affects, of course, many other classes of second-hand dealers as well as second-hand car dealers. Paragraph 5 of the report records, however, that the Chief Constable, the Director of Trading Standards and the Fire Master had been consulted and also, importantly, that the Scottish Motor Trade Association had been consulted and accepted the recommendations which at that stage were being made. A report dated 25 May 1988 takes the matter further. That report discloses that concern had been expressed by certain dealers and that the Perthshire Chamber of Commerce had requested that the conditions to be attached to licences should be reconsidered. One of the conditions discussed was the condition requiring the display of a pre-sales Inspection Report. It is not necessary to go through what the report records about these discussions. What is clear is that the conditions were discussed with representatives of the motor trade and other persons interested, that alternative and amended conditions were discussed and that ultimately a meeting took place on Friday 20 May 1988 at which the proposed conditions were approved. In these circumstances, it seems to me that if there is to be any criticism of the conditions on the ground that they are unreasonable, specific reasons for holding them unreasonable should be put forward. In fact the only suggested ground for considering the conditions unreasonable was that they required an inspection to be carried out before any vehicle was exhibited for sale. However, there already exist provisions in the road traffic legislation which make it an offence to sell or display for sale a vehicle which contains certain specified defects or is unroadworthy. In these circumstances, I find it difficult to see that it can be said to be unreasonable that there should be an inspection of a vehicle before it is put on sale. In any event, given the background of the discussions which took place before the scheme was implemented, it seems to me that it would be necessary to specify some burdensome feature of the requirement to inspect the vehicle before it could be said to be unreasonable. That was not done. A subsidiary form of this contention was that there was nothing to indicate that the Council had considered the question of reasonableness before deciding that the conditions should be imposed: but that argument seems to me to be equally ill-founded. We were not referred to any specific resolution by which the Council, or an appropriate Committee, declared themselves satisfied that the conditions were reasonable, but it is implicit in the entire structure of the reports to which I have referred that the question of reasonableness was before the authority when it decided that the conditions should be imposed.
9. The real issue in this reclaiming motion, in my opinion, is the question whether the conditions fall within the scope of the legislation. This is an issue which is distinct, in my view, from any issue as to the reasonableness or otherwise of the condition. The question in this part of the case is what is the scope of the legislation or, to put it another way, what kind of conditions can be regarded as authorised under the legislation. Conditions may be entirely fair and reasonable in some broad sense, but, nevertheless, not be the kind of condition which the legislation authorises. That is clear from the decision in Chertsey Urban District Council v. Mixnam's Properties Limited 1965 A.C. 735. That case was concerned with conditions imposed as part of a site licence for a caravan site issued by a local authority. Under section 5(1) of the Caravan Sites and Control of Development Act 1960, a site licence could be issued subject to such conditions as the authority might think it necessary or desirable to impose on the occupier of the land in the interests of persons dwelling thereon, or of any other class of persons or of the public at large. The local authority imposed certain conditions, the broad effect of which was to extend security of tenure to persons occupying caravans under agreements with the owner of the site. It was held that such conditions went beyond what the legislation authorised. The argument in relation to the particular conditions and the particular statute was not straightforward and there are, possibly, some differences of view discernible in the speeches in the House of Lords. It was, however, agreed by all their Lordships, as I understand the case, that, however general the statutory words conferring the power to impose conditions may be, they must be construed as limited to the actual objects of the Act in question. An example of that approach is found in the speech of Lord Upjohn at page 763. His Lordship referred to conditions of a type which the local authority clearly would be entitled to impose, such as conditions limiting the number, type and positions of caravans to be brought into the land: and also conditions controlling the behaviour of the site owner and the residents on the site, such as conditions prohibiting noise, nuisance or annoyance. His Lordship continued:

"In my opinion, however, the powers of local authorities are subject to the limitation that Parliament never intended to empower them to lay down any conditions which entitle them to prescribe the actual terms and stipulations which must be included in or omitted from any contract between the occupier and a caravan owner. Of course, it cannot be disputed that the local authority can indirectly fetter the freedom of contract of the occupier, for example, by prohibiting caravans of a certain size on the site, but the scheme of the Act, in my opinion falls far short of empowering them to dictate the terms of contracts."

10. A number of other authorities were referred to but none of them were, in my opinion, sufficiently close to the circumstances of the present case to provide any great assistance and none of them really advanced the principle of the matter beyond what is stated in Chertsey Urban District Council v. Mixnam's Properties Limited.
11. In the present case, it is necessary to take account both of the general power to impose conditions contained in paragraph 5 of the Schedule 1 and also the more specific powers contained in section 24(4) and (5). I should perhaps observe that while account has to be taken of both the general and the specific powers, I do not think that the powers can be read together in any other sense. If the conditions can be authorised under the specific powers, that is, of course, enough for their validity. If not, it seems to me that authority must be sought in the general power, subject to whatever limitations in its scope may be appropriate in the light of the Chertsey U.D.C. case. In summary, the argument for the petitioner was that the conditions contained requirements which went beyond the mere keeping of records of the kind contemplated in section 24 and that they also went beyond the scope of paragraph 5 as properly understood in respect that they sought to interfere with or regulate contractual dealings between the dealer and his customer. It was suggested that an indication of the proper scope of the licensing power was found in a Scottish Development Department circular 6/1983 in which it was stated inter alia that the Secretary of State:

"shares the view expressed in Parliament that licensing for the optional activities should be introduced only where it is shown to be necessary to prevent crime, to preserve public order and safety, or to protect the environment. The purpose of licensing is not to restrict trade or competition. It follows that before introducing licensing, authorities should pay particular attention to the views of the Chief Constable and the traders likely to be concerned before proceeding to the resolution, and they should be satisfied that the introduction of licensing under the Act will contribute to the amelioration of the nuisance complained of."

12. That circular of course gave advice in relation to all activities for which a licensing scheme is optional, which include second-hand dealers' licensing. It was further submitted that the real and principal purpose of licensing second-hand dealers was to enable the police to control and monitor a trade in second-hand goods which otherwise would form a possible avenue for disposing of goods dishonestly obtained. The submission for the respondents, on the other hand, was that the legislation was intended to enable the authority to regulate certain trades and activities and that the conditions complained of formed a reasonable part of regulation of the business of a second-hand car dealer. Counsel for the respondents accepted, as I understood him, that the legislation did not confer an unlimited power to prescribe the terms on which a dealer should trade, but submitted that the power was wide enough to authorise the imposition of these conditions.
13. In my opinion, there are three sources which may be looked to for some indication as to the intended scope of the general power to impose conditions. Firstly, the statute itself permits a scheme to be made which may apply, as in the present case, to all second-hand dealers. If the power could be used to regulate the manner in which all such dealers carry on their business in relation to their customers, it would be an extensive power, more appropriate to some form of consumer protection legislation. Secondly, the fact that certain specific powers to require the keeping of records, including records of odometer readings, were given by section 24 suggests that such powers were not thought to be created under para. 5. Thirdly, the terms of the circular quoted above suggest that the licensing power was not designed to permit regulation of second-hand trading, but for the more limited purpose of prevention of crime and protection of public safety and the environment.
14. Taking that as the basis of approach, it seems to me that the conditions in question are not within either the special powers or the general power. It might be argued that condition (1) is concerned with a requirement to record the condition of a vehicle which is to be exhibited for sale, and that the fact that an inspection is necessary to make the record does not take away from the fact that what is in issue is the making of a record. In my view, however, the emphasis in the condition is on the making of the "full inspection" not the recording of it. Similarly, condition (2) is not directed merely to the keeping of information recorded, but the communication of information. Condition (4) may more plausibly be said to relate to the keeping of a record, but condition (3) cannot, in my view, be said to fall within the power in relation to the keeping of records at all. It is concerned with a different matter, the authenticating and delivery of a document as between a buyer and a seller.
15. The question whether a condition does fall within the scope of paragraph 5 has two aspects. One is, what is the object of the condition? The other is, what is the purpose of the legislation? Counsel for the respondents accepted in the course of argument that the condition did have a consumer protection purpose, or at least a consumer protection aspect. It is, I think, quite clear that while the condition does not purport to impose directly responsibilities upon the trader to give any particular guarantee or undertaking as to the condition of the car, it is intended to create a situation in which the Inspection Report will operate as a record of an agreement of the condition of the car. There may be a question as to what precise contractual effect the Inspection Report, if signed and handed over in accordance with the requirements of the condition, would have. It may also be a question whether, for example, the dealer would be entitled to add a clause either to the Inspection Report, or to his contract with his customer, stating that the Inspection Report should not have any contractual effect. In practice, however, a report authenticated and handed over as the condition requires is bound to have considerable importance in any dispute. In practice, therefore, it seems to me that the requirement of condition (3) is designed to affect the relationship between dealer and customer. The same applies to conditions (1) and (2).
16. The question then is whether affecting the relationship of dealer and customer in that way can be said to fall within the general scope of para. (5). I have come to the conclusion that it cannot. It seems to me that there is a difference between controlling the activities of dealers in respects such as the premises they use, the manner in which they use them, or the type of goods in which they deal, on the one hand, and interfering with the terms in which they trade with their customers, on the other. The licensing system seems to me to be appropriate for the control of the persons who carry on activities and the way in which they carry them on but not to be an appropriate method to provide consumer protection or regulate terms of trade. While the issue is narrow, it seems to me that the condition does go at least a step beyond the scope of what Parliament intended. In these circumstances it follows, in my opinion, that conditions (1), (2) and (3) are ultra vires. Condition (4) cannot stand on its own.
17. Since there is no possibility of separating the conditions or the sub-Committee's consideration of the breaches of them, it follows that the decision was not well-founded and that the prayer of the petition should be granted and the decision to refuse removal of the petitioner's licence reduced.

Stewart v Perth Kinross Council, Judicial Review [2002] ScotCS 268 (01 October 2002)

EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
Lord Coulsfield Lord Johnston Lord McCluskey	P436/00 OPINION OF LORD JOHNSTON in RECLAIMING MOTION on PETITION and ANSWERS in the cause DOUGLAS STEWART Petitioner and Reclaimer; against PERTH and KINROSS COUNCIL Respondents: for JUDICIAL REVIEW _______

 

 

Act: Bovey, Q.C., Henderson; Jardines (Petitioner and Reclaimer)

Alt: Sutherland; Anderson Strathern, W.S. (Respondents)

1 October 2002

1. I have had the opportunity to read the opinion of your Lordship in the chair with which I am in general agreement and would just wish to add a few observations. In that respect I gratefully adopt your Lordship's summary of the history of the case and the arguments presented to us.
2. With regard to the relevant legislation there is an obvious interaction between section 24 of the Civic Government (Scotland) Act 1982 and paragraph 5 of Schedule 1 of the same Act, not least because of the reference to it at the start of subsection (4) of section 24. Having said that, however, it is perfectly clear to my mind that section 24 is concerned only with the keeping of records in relation to stock. If, therefore, the conditions attached to the petitioner's licence, to which objection is taken, must fall within the scope of section 24 and/or paragraph 5, or, separately, within the general scope of paragraph 5 if they are not covered by the specific provisions of section 24.
3. I agree with your Lordship in the chair insofar as conditions (i) and (iv) are concerned. They can be regarded as falling within what is contemplated by the general record keeping provisions of section 24. The position in my opinion, however, as regards condition (iii) is different.
4. I do not consider that the provision of that condition can be regarded as falling within the scope of the record keeping provisions of section 24. It must therefore be justified by the more general terms of paragraph 5. Obviously, to meet that paragraph the question of reasonableness must be satisfied and, according to my notes, I am far from clear what was the ultimate position of counsel for the petitioner in this respect. Suffice it to say that no reasons were put forward to suggest that the condition was unreasonable and it therefore seems to me upon that basis that we should not decide the case in that respect. As your Lordship in the chair has pointed out, what matters is whether or not this particular condition falls within the scope of the legislation against the background to the case of Chertsey Urban District Council v. Mixnam's Properties Limited 1965 A.C. 735.
5. A close examination of the speeches in this case suggests a certain degree of anxiety, if not difficulty, being expressed by some of the judges, not least Lord Radcliffe. However, there is a general proposition emerging from the case, namely, that the court is entitled to consider what was the ultimate scope of the enabling powers in the relevant legislation and to determine whether the subsequent regulations or conditions fall within that scope. This is the analysis which your Lordship in the chair has undertaken and with which I generally agree.
6. In particular, I consider that the specific requirement found in condition (iii), which requires the seller to provide the purchaser with a copy of the inspection report goes beyond what was contemplated by the general legislation with regard to licensing in this context. Licensing obviously involves regulation but, in my opinion, albeit it is a narrow step, it is one step too far to invade what is properly to be regarded as the contractual position as between purchaser and seller. Whatever may be its legal effect and it is at least arguable that the handing over of the copy of the report is a warranty, it does seem to me to be importing something into what should be a situation regulated by freedom of contract. For that narrow reason I agree with your Lordship in the chair that I consider this condition does not fall within the scope of the legislation and is accordingly ultra vires.

Stewart v Perth Kinross Council, Judicial Review [2002] ScotCS 268 (01 October 2002)

EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
Lord Coulsfield Lord Johnston Lord McCluskey	P436/00 OPINION OF LORD McCLUSKEY in RECLAIMING MOTION on PETITION and ANSWERS in the cause DOUGLAS STEWART Petitioner and Reclaimer; against PERTH and KINROSS COUNCIL Respondents: for JUDICIAL REVIEW _______

 

 

Act: Bovey, Q.C., Henderson; Jardines (Petitioner and Reclaimer)

Alt: Sutherland; Anderson Strathern, W.S. (Respondents)

1 October 2002

1. At the end of the debate in this appeal, the only live issue left for decision was whether or not the 1982 Act conferred upon the licensing authority any power, when issuing or renewing the petitioner's licence, to subject the licence to a new condition, namely Condition 2.5(a), which has already been quoted.
2. I start from the premiss that section 24(4) and para. 5 of Schedule 1 to the 1982 Act are to be read together as providing the source of the powers that may be exercised by a licensing authority in order to adject conditions when granting or renewing a second-hand dealer's licence under Part II of the Act. As I read it, para. 5 of Schedule 1 to the Act provides the general powers, and section 24(4) specifies particular powers, without prejudice to the scope of those general powers. It follows from reading both provisions together that no condition may be inserted in a licence unless that condition passes the "reasonable" test imposed by para. 5. It is, however, equally clear, in my view, that the use of the word "reasonable" in para. 5 does not entitle a court, when considering whether or not a particular condition that has been imposed is intra vires, to ignore the need also to consider whether or not the imposing of such a condition falls within the scope and purpose of the Act. This is clear from the decision and the speeches in Mixnam's Properties Lid. v. Chertsey Urban District Council [1965] A.C. 735.
3. In order to determine the issue of vires, therefore, this court has to consider the scope and purpose of the 1982 Act. It is not necessary to attempt to define the scope and purpose fully; it is necessary only to discover if the particular condition that is said to be ultra vires properly falls within it.
4. The condition in question in these proceedings has been quoted in full by your Lordship in the chair and I need not repeat it.
5. I read this condition as imposing certain positive obligations upon the trader who intends to sell or to display for sale any vehicle to a member of the public. In summary, the obligations imposed upon the dealer are:-

- to inspect the vehicle and to prepare a full Inspection Report (in the form specified in the Appendix) before displaying the vehicle for sale or selling it;

- to display on any vehicle that is for sale a summary of the results of the inspection, and to make a copy of the Report available to any prospective purchaser;

- to provide any person who actually purchases a vehicle with a copy of the Report signed by both the dealer and the purchaser at the time of sale; and

- to retain a copy of the Report as part of his records for three years.

6. Does the imposing of such a set of conditions fall within the scope and purpose of the Act? The clear purpose of the Act is to enable the local authority to regulate, in some degree, the manner in which licensed persons carry on their licensed trading activity within the area over which the authority has jurisdiction. Trading (in the context of these proceedings) clearly involves dealing with members of the public who enter the licensed dealer's premises knowing that the local authority have licensed that dealer to sell/buy second-hand cars. That dealing is most likely to involve the prospective purchaser's asking questions of the dealer and the dealer's answering them. These questions and answers are likely to relate to such matters as the general state of the car, the mileage, the condition of essential parts - such as the brakes, the steering, the state of the bodywork and chassis - and so on. These are the very matters that are intended to be embraced by the Inspection and the resulting Report that the Condition requires; this is clear from the Sample Form. Accordingly it appears to me that the purpose of the imposing of this Condition is to ensure that much of the kind of information that a sensible prospective purchaser would ask for is made available to all prospective purchasers, that the information provided may be relied on - because based upon a very recent inspection by the person (the dealer) providing the information - and that the information is provided in an enduring form; so that, if any dispute should arise later as to what the dealer has represented about the condition of the vehicle at the time of sale, there is a straightforward means of checking it. The obligations in the Condition to provide the purchaser with a signed copy of the Report at the time of sale, and to retain a copy for three years in the dealer's records, are reasonably incidental to these purposes. The obligation on the dealer to examine or inspect the vehicle reflects the obligations imposed upon him by the Road Traffic Acts in relation to the sale of a vehicle (see section 75 of the Road Traffic Act 1988). The obligations in the Condition, supplemented by the Form, are not in exactly the same terms as those imposed by legislation; but, by requiring the dealer to fulfil the requirements of the Condition, the licensing authority is taking reasonable steps to ensure that the potential customers can have confidence that the licensed dealer had taken the steps necessary to perform his statutory obligation in relation to the selling of used vehicles. By imposing these licence obligations, the licensing authority is doing what is reasonably necessary to ensure that licensed dealers offer to the local public a service that is honest and free from unnecessary confusion.
7. Accordingly, I consider that the imposing of this Condition is clearly intended to regulate the way in which a licensed second-hand car dealer trades with the public: ("trades", in this context, includes the pre-sales exchanges between the dealer and the prospective purchaser). It regulates the manner in which the dealer imparts information to the prospective purchaser. It reduces the possibility of misunderstanding, however caused. It reduces the risk of fraud and dishonest trading. It protects the public from sleight of hand by experienced salesmen. It reduces the risk that a member of the public might purchase from a licensed dealer a vehicle that is in a dangerous condition. It gives the licensing authority a mechanism for checking, on behalf of the public, that the trader has performed his statutory duties of inspection. Of course, to applaud the good sense of the regulation is not in itself enough to warrant the conclusion that it is intra vires to make it. But what, in my view, is quite clear is that the whole purpose of licensing by a public authority - after the widespread consultation required by section 9 of the Act - is to enable the public to be reasonably assured that their legitimate interests are being safeguarded by the public authority, at least in respect of those traders who claim and receive the accolade of being licensed by a public authority. Licensing by a public authority is not the same as granting a Warrant of Approval (whether "by Royal Appointment" or "as seen on TV"): public licensing is designed to afford the public some assurance that those licensed are inspected, checked and regulated in a manner that affords some protection to the public from sharp practice and avoidable harm. If some members of the public want to purchase from non-licensed persons, caveat emptor applies. The whole point of licensing in this field is to give the prospective purchaser of second-hand goods the assurance, backed by the resources of an independent public body, that, at least in respect of the basic matters regulated by the licence (including the conditions annexed), the dealer is presenting a fair picture.
8. In my view, that is exactly what licensing of the kind provided for in the 1982 Act is about. The technical way of wording it is to say that this kind of activity is within the scope and purpose of the Act. If the Act is not designed to enable the licensing authority to exercise some control - by way of regulation - of the trading practices of the dealers when dealing with the public, then I have some difficulty in understanding what the purpose of the statutory regulation system is.
9. The fact that the regulation might have some effect upon the contractual rights and obligations of the parties is not enough to take the regulation outwith the scope and purpose of the Act, provided the effect is merely and properly incidental to the achieving of the main purpose, of ensuring that the licensed dealer in second-hand vehicles tells the prospective purchasers the essential truth about the goods that he is inviting them to buy. The Condition does not "dictate" the terms of any contract of sale: for myself, I do not see why the dealer and the purchaser could not contract on the basis that the Inspection Report was not to be regarded as accurately and conclusively defining the state of the inspected vehicle; and, still more so, the state of the vehicle as delivered.
10. I regret therefore that I find myself in disagreement with your Lordships; but, in my opinion, the reclaiming motion should be refused.