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EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
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Lord Johnston
Lord Clarke
Lord Penrose
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[2007] CSIH 22
XA80/06, XA78/06 and XA79/06
OPINION OF THE COURT
delivered by LORD JOHNSTON
in
APPEAL
From the Sheriffdom of
Lothian and Borders at Edinburgh
in the cause
THE CITY OF EDINBURGH COUNCIL
Applicants and Appellants;
against
DAWN SALTERI, JACK
LEITHHEAD STEWART and NICHOLAS FORSYTH
Respondents
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Act: Armstrong, Q.C.,
Simpson; Gillian Lindsay, Solicitor,
City of Edinburgh Council (Applicants and Appellants)
Alt: No appearance (Respondents)
23 March 2007
[1] These are
conjoined appeals in respect of three applications by the respondents to the
appellants in respect of potential taxi licenses in terms of the Civic
Government (Scotland) Act 1982, consequent upon an
application by the appellants to the sheriff in respect of an attempt to extend
the time limit for consideration of the respondents' applications. In each case the sheriff refused the
application, and, on appeal to the sheriff principal he did likewise. These appeals are now brought to us.
[2] It has to be
stated that in the course of the hearing before us, at which the respondents
were not represented, the court raised an issue of competency as to the appeal
from the sheriff to the sheriff principal and thereafter on to this court,
which matter was considered before the sheriff principal but not by the
sheriff.
[3] The concern
that we had was that these appeals might be precluded by section 50 of the
Sheriff Courts (Scotland) Act 1907 which addresses the issue
of appeals or lack of it in relation to summary applications to the Sheriff Court.
In this respect counsel referred us to Arcari v County Council of
the County of Dumbarton 1948 S.C. 62 and Rodenhurst v Chief Constable
of Grampian Police 1992 S.C. 195. In
respect of Arcari the point was
specifically considered by the Lord President on page 66 and in Rodenhurst by the Lord Justice Clerk on
page 11. The substance of those
decisions is that an appeal is competent in the ordinary course in respect of a
summary application where it is properly to be regarded that a lis exists and, equally importantly,
that the sheriff is performing a judicial rather than an administrative
function. This latter function is
evidenced by the need for him to provide a written judgment in terms of section
50. We consider that in this case both
these factors are satisfied, there being effectively a contest between the
licensing authority, the appellants, and the taxi applicants, and that equally
written judgments were issued. It is
also to be noted that an appeal on precisely the same point was taken before
Sheriff Principal Caplan in Cunningham
District Council v Payne 1988
S.L.T. (Sh. Ct.) 21 where the issue of competency
appears to have been accepted and is briefly referred to in the judgment. In these circumstances we consider that these
appeals were properly taken from the sheriff to the sheriff principal and
thereafter to us and require therefore to be dealt with on the merits.
[4] The relevant
legislation which is to be found in the Civic Government (Scotland) Act 1982 is as follows:
"3.-(1) For the purpose of the discharge of their
functions under this Part of this Act, every licensing authority shall
consider, within 3 months of its having been made to them under paragraph 1 of
Schedule 2 to this Act, each application so made and, subject to the following
provisions of this section, reach a final decision on it within 6 months.
(2) On
summary application by the licensing authority within the 6 month period
referred to in subsection (1) above, the sheriff may, if it appears to him that
there is good reason to do so, extend that period as he thinks fit.
(3) The
applicant shall be entitled to be a party to a summary application under
subsection (2) above.
(4) Where
the licensing authority have failed to reach a final decision on the
application before the expiry of-
(a) the
6 month period referred to in subsection (1) above, or
(b) such
further period as the sheriff may have specified on application
under subsection (2) above,
the licence applied for shall be
deemed to have been granted or, as the case may be, renewed unconditionally on
the date of such expiry and shall remain in force for one year, but this
subsection is without prejudice to the powers of revocation under section
7(6)(a) of this Act, of variation under paragraph 10 of Schedule 1 to this Act
and of suspension under paragraphs 11 and 12 of that Schedule and to the
provisions of paragraph 8(5) of that Schedule.
(5) The
licensing authority shall make out and deliver the licence to the applicant to
whom it has been deemed to have been granted under subsection (4) above".
[5] Section 10(3)
is also relevant which is in the following terms:
" ... the grant of a taxi licence may
be refused by a licensing authority for the purpose of limiting the number of
taxis in respect of which licenses are granted by them if, but only if, they
are satisfied there is no significant demand for the services of taxis in their
area which is unmet".
[6] There was no
significant difference in relation to fact as far as the three applications are
concerned beyond the fact they were all presented on slightly different dates,
but were all made in March 2005 and the 6 month period accordingly expired in
September 2005. The present applications
to the sheriff were made immediately before the expiry of that 6 month period,
in respect of each case.
[7] Counsel in
his submissions to us demonstrated how the appellants approached the matter in
terms of their duties under section 3.
[8] For some
time, apparently, the licensing authority had decided to control the issue of
licenses by a policy which was dependent upon demand or, in the case of a
refusal, lack of it. This followed upon
an extensive period of deregulation which we were told had not been
successful. The determination of an
issue of demand was achieved by instructing consultants to conduct surveys from
time to time involving a number of activities on their part, and to advise the
Council as to whether or not there was a demand for taxis in the context of
further applications. Once such surveys
were, from time to time, completed they were submitted initially to a group
called the Hire Car Licensing Consultation Group which was in informal,
non-statutory body comprising stakeholders interested in the provision of taxi
services. The matter was then referred
to the appellants' Taxi and Private Hire Car Regulatory Committee who would
consider the report in question before making recommendations to the Council,
whose final decision it was in respect of the granting or refusing of an
application.
[9] We were
informed in respect of the present applications that a survey was under review
during the relevant period i.e. after March 2005 and by the time it became
available the process of first of all consulting the group and thereafter
referring the matter to the Council Committee, would take too long in practical
terms to enable the process to be completed within the time limit and thus this
was said to be "the good reason" for extending the six month period and hence
the present applications by the appellants.
[10] The first
observation we have to make is that the substance of the sheriff principal's
decision did not address the issue of good reason at all but rather the time
imposed in respect of the word "consider" in section 3(1) as if that were a
separate and self-contained statutory requirement of the process. He determined that that three month period
had not been met, notwithstanding the fact that within the papers was a letter
to the respondent dated 5 April 2005 both setting out the policy of the local
authority and also informing the applicant of the fact that there was a waiting
list, apparently of some hundred people, seeking to acquire taxi licenses.
[11] Whether or not
that amounted to in itself to consideration in terms of section 3(1) seems to
us to be immaterial. Section 3(1)
envisages a process that must be begun within three months and, subject to extension,
be completed within six months. The
crucial time limit is the six month period which is the deadline the Council
must meet, failing which the licence will be automatically granted unless there
is an extension granted by the sheriff.
It is our view of the statute that the Council, while required to take
applications into active consideration within the three month period, are not
penalised if they fail to do so, what matters is the failure to meet the six
month period with a determination.
[12] In our
opinion, therefore, the sheriff principal approached the matter on the wrong
basis. He did not address the issue of
good reason and we therefore are unable to accept his approach. That being so the issue of "good reason" is
now before us for consideration.
[13] In this
respect it is important to understand the scheme of the legislation which
imposes strict time limits in terms of section 3 with only limited relief. We have some difficulty with the phrase "good
reason" but we are entirely satisfied that the appellants, in seeking an
extension, must both put forward a reason which can be categorised as good and
persuade the sheriff in his discretion to grant the extension. That, counsel submitted, is what the appellants
here had done, having regard to the fact that their own procedures had not been
fulfilled in the course of the six month period, which he submitted justified
the application.
[14] In our opinion
this approach is totally flawed having regard to the terms of the
legislation. The entitlement of the
authority to seek an extension of the period an application to the sheriff
should be regarded as a relief to be exercised only in exceptional
circumstances. In the present case the
appellants had embarked upon a voluntary policy not so much based on supply and
demand, although that obviously featured, but rather directed towards section
10(3) which enabled them to refuse an application if they were satisfied that
there was no significant demand for additional taxis. Thus, the local authority had determined that
their decision-making process should depend upon section 10(3), apparently in
every case. This was an entirely
voluntary imposition on their procedures which they were not required to carry
out. In terms of the statute they could
have refused every application when it was originally made or equally have allowed
them to be granted by default at the end of the six month period. It is they who have voluntarily accepted the
burden of satisfying the sheriff if they are putting forward as a good reason
lack of demand that there was no significant demand at the relevant time, which
means at the time when the application was being considered. Simply to fail to meet procedural elements in
the process regulated by consultation and meetings of Committees did not
remotely amount, in our opinion, to meeting the provisions of section 3(2) in
the context of section 10(3). It may be
that having embarked upon this policy the local authority must keep constantly
under review the issue of supply and demand so as to be able to give a reason
for refusal in that context on the basis that in each case that they are
considering they are satisfied there is no significant demand for further
licenses.
[15] In our opinion
this self-imposed burden, whatever may be the problems of procedure with regard
to consultation with interest groups and by Committee, cannot amount to a "good
reason" for not determining a licence application within six months, as
required by section 3, being the linchpin of the whole procedure. It is to be noted that in terms of section
10(3) the refusal issue is predicated on the word "may". If therefore, in our opinion, the relevant
licensing authority, here the appellants, chooses to go down that route it must
be satisfied that the relevant criteria in terms of the section are met.
[16] In the present
case it would appear that no such satisfaction could be obtained in the
relevant time because of the local authority's procedures. That does not appear to us to be a "good
reason". As to what might constitute a
"good reason", we reserve our opinion.
[17] For these
reasons, which differ from those of the sheriff principal, these appeals will
be refused.
