Scottish Court of Session Decisions

OUTER HOUSE, COURT OF SESSION [2010] CSOH 97
P1142/09	OPINION OF LORD WOOLMAN in the Petition of WILLIAM JAMES BURNETT Petitioner; against HAMILTON T.O.A. RADIO CABS Respondents: For Judicial Review ­­­­­­­­­­­­­­­­­________________

Petitioner: Collins; Simpson & Marwick

Respondents: Gildea; Lindsays

16 July 2010

Introduction

[1] Mr Burnett has been a taxi driver for some 30 years. He is a member of Hamilton T.O.A. Radio Cabs, which is an association of taxi-drivers in the Hamilton area ("the Association"). In the past Mr Burnett served for many years on the Committee. He was also for a period the Secretary of the Association.

[2] On 15 October 2007 the Disciplinary Committee of the Association upheld a complaint against Mr Burnett. He now seeks to bring that decision under review. He contends that part of the penalty imposed upon him was incompetent in terms of the Constitution of the Association and should be reduced.

The Constitution

[3] The Association has a written constitution divided into twenty seven paragraphs, or "rules". It is governed by an elected three person Committee, consisting of a chairman, a secretary and a treasurer (rule 3). By paying their subscriptions each year, members agree to be bound by the constitution and any regulations and by‑laws (rule 20).

[4] The principal provision dealing with disciplinary powers is rule 6, which states:

"6(a) At a properly constituted Committee meeting, the Committee shall have the power to fine any operator up to a maximum of £100, suspend radio facilities, or a combination of both if they act in defiance of the Association's Regulations & By-Laws. The full Committee must be present to apply this rule.

6(b) When an operator's offence merits suspension or expulsion, they can only be suspended or expelled if two thirds of the membership agree to this at a special meeting called for this purpose. For this type of meeting the A.G.M rules apply.

6(c) Once a constitutional decision has been made, it will be a primary condition of membership to accept and act in good faith with the decision. Any contravention by a member ... will be dealt with under Rule 6(b).

6(d) An Operator appearing before the Committee on a disciplinary matter or before a General Meeting of the members of the Association either in relation to a Committee recommendation of expulsion or an appeal, will have the right to be accompanied by another member of the Association who may speak on his/her behalf. No other form of representation will be permitted."

[5] Rule 7 sets out the composition of the disciplinary body:

"7(a) At least one Committee meeting will be held each month to despatch all competent business. On these occasions, the Committee shall comprise three Committee members and 2 co-opted members drawn by lot. ... For matters of discipline five Committee members shall form a quorum. ... Members drawn by lot to form part of the Committee on discipline matters or who are hearing an appeal by a member against a Committee decision will receive the current rate of remuneration."

[6] Rule 18 deals with meetings of the Association:

"18(a) The Committee shall have the power to call a meeting of the Association, and shall be bound to call a meeting of the Association within 21 days of receiving a requisition signed by 51% of the membership stating the business they wish to be considered at the meeting.

18 (b) At all meetings of the Association 51% of the membership will form a quorum."

[7] Rule 26 covers appeals:

"26 When a member ... is fined by the Committee, he/she will not be allowed to 'Sign On' if the fine is not paid by the date stipulated by the Committee. A member ... fined by the Committee has the right to appeal to a five-member complaint committee that will be drawn by lot if he/she so wishes. A member ... whose appeal is dismissed by the complaints committee will meet the costs incurred for the appeal meeting."

The Facts

Background

[8] Each of the eighty members of the Association is self-employed. They are responsible for their own finances and compete against one another for three different types for work. First there are 'chance hires', where a taxi is hailed at random whilst driving around the locality. Next there are 'radio hires', where a customer seeking a taxi telephones the control room of the Association. The message is relayed by radio and the hire will be allocated to a member who is nearby and available to take the fare. Thirdly there are 'account hires', where the Association has a contract to provide regular work for a particular customer.

[9] The Association had a number of contracts under a Blindcraft scheme to provide taxis for visually impaired individuals. At the material time, taxis for these account hires were required on an almost daily basis and were a lucrative source of business

The Complaint

[10] Richard Stewart was a customer for one of the Blindcraft contracts. His contract was worth about £12,500 per year. It involved a return trip on weekdays from Larkhall to Hillington in Glasgow. In about early October 2007, Mr Stewart indicated that he wished to make a complaint about Mr Burnett. Mr Gordon Frew, the Chairman of the Association, went to visit Mr Stewart and drafted a letter on his behalf. It was addressed to the Association and was in the following terms:

"I would like to say that Mr Billy Burnett (Ham 35) asked me to cancel my account with Hamilton T.O.A. He said that he would arrange to take me in to work and take me home everyday.

I am fed up with him phoning me. I want it stopped. Could you please deal with this."

Mr Stewart's letter, although unsigned, was read over and approved by his wife. The Association took the view that this disclosed a serious disciplinary matter. By letter dated 9 October 2007, Mr Burnett was provided with a copy of Mr Stewart's complaint and requested to attend a disciplinary meeting on Monday 15 October 2007 at 6.30 pm.

[11] Mr Burnett attended at the appointed time. The Disciplinary Committee consisted of Mr Frew (Chairman), Patrick McMahon (Secretary), James Clements (Treasurer) and two other members drawn by lot. The nature of the complaint was explained to Mr Burnett. He denied the allegation and then left.

The Decision Letter

[12] Having considered the matter, the Committee upheld the complaint. Immediately after the meeting, a letter signed by Mr McMahon was sent to Mr Burnett. It stated:

"Thank you for attending our meeting tonight.

The Committee decision was that you were found guilty of the offence detailed in our letters to you dated 9 October 2007.

As a result you have been suspended from being allocated any work from the base for the period 17 October 2007 to 17 December 2007. In addition, once this suspension has expired you will not be allowed to compete for any account work in the future.

Please also note that you will be responsible for maintaining your weigh-in payments to the office during the period of suspension."

The Request for an Appeal

[13] The next day Mr Burnett wrote a reply in the following terms:

"I ... request an immediate appeal of a decision reached by you on the evening of 15 October regarding a complaint against myself and the decision made on that complaint."

[14] The Committee responded on the same day:

"Thank you for your letter dated 16 October 2007 which refers to the decision taken by the Committee, concerning yourself, on 15 October 2007. Your request for an appeal against the decision has been considered by the Committee, and refused.

For your further guidance we would refer you to Hamilton District T.O.A Constitution, Parts 6a/6c and 26."

[15] Mr Burnett denies the allegation made against him. He served the suspension part of the penalty some time ago. He continues to be prohibited from taking account hires.

Meeting on 5 March 2008

[16] Although it does not directly bear on the matters raised in the petition, it appears from some of the productions that there was a degree of animosity between Mr Burnett and the Committee and in particular between him and Mr Frew. I was informed that there had been a Special Meeting of the Association on 5 March 2008. It followed a heated exchange in a car park between Mr Frew and Mr Burnett. The meeting was called by Mr Frew to seek Mr Burnett's expulsion under rule 6(b). Mr Frew said that a serious allegation been made against him by Mr Burnett. I was told that twenty two members voted for expulsion, with thirty eight against. Accordingly, the requirement for a two-thirds majority of the membership in favour of expulsion was not achieved.

Submissions for Mr Burnett

Competency of Judicial Review

[17] There was an initial question as to the competency of the petition. The respondents' third plea-in-law states: "The matter under review is a contractual dispute between the parties and therefore judicial review is incompetent." In attempting to meet that argument, Mr Collins, who appeared on behalf of Mr Burnett, began his submissions by referring to Crocket v Tantallon Golf Club 2005 SLT 663 and Wilds v The Bothwell Castle Golf Club 2005 SLT 785. However, Mr Gildea on behalf of the Association indicated that he did not contest the competency of the petition and I proceeded on that basis.

Ultra Vires

[18] Although the petition contains a number of grounds of challenge, Mr Collins focussed on one point. He submitted that the decision was ultra vires and should be reduced. The Committee had exceeded the disciplinary powers set out in the Constitution because they had imposed a penalty that was not set out in rule 6.

[19] Rule 6(a) only allowed for two penalties to be imposed: a fine or a suspension. Mr Burnett was not fined, so whether or not the Committee could impose an indefinite ban in respect of account work turned on the phrase "suspend radio facilities". Mr Collins submitted that it meant both radio hires and account hires. In consequence, the only work open to Mr Burnett was chance hires.

[20] What had been done, maintained Mr Collins, was in effect to impose a penalty of indefinite suspension in terms of rule 6(b). That could only be done by the members at either a General or Special Meeting.

[21] Counsel submitted that there was no right of appeal against the decision. While rules 6(d) and 7(a) did refer to an "appeal", there was only a right of appeal against a fine: rule 26. It followed that the only means of challenging the decision was by way of this petition for judicial review.

[22] It was also submitted that any ambiguity in the wording of the Constitution should be resolved by adopting a construction favourable to Mr Burnett. That was because he found himself in a very difficult position. Not only did the decision affect his ability to earn his livelihood, but in the absence of any right of appeal, he was bound to accept the Committee's decision or face further proceedings under rule 6(c).

Submissions for the Association

[23] Mr Gildea's submission was in essence that reduction was not available in this case, because the member had a right of appeal under the rules. He began by observing that the Association could be regarded as similar to a club. It consisted of a group of like-minded persons who had banded together on the basis of a contract between and among them as to how their affairs should be managed. The members were most concerned about account hires, because they provided the most valuable source of business. Accordingly, any infringement of the rules in relation to account hires was treated as a very serious disciplinary matter by the Association.

[24] Mr Gildea referred to the statement of Viscount Dunedin in Adair v Colville 1926 SC (HL) 51, 55 - 56 that reduction is an exceptional remedy:

"... generally speaking, it is certainly not competent when other means of review are prescribed, and these means have either been utilised or the parties have failed to take advantage of them."

Although Mr Gildea cited a number of subsequent cases in this line of authority, it is enough to record that Viscount Dunedin's statement was expressly approved by the Second Division in Ingle v Ingle's Trustee 1999 SLT 651, 654J.

[25] Mr Gildea submitted that Mr Burnett himself was fully conversant with his rights of appeal under rules 26 and 18(a). His knowledge stemmed from his own experience on the Committee and as Secretary. It was evidenced by two letters sent by him to the Committee. In the first letter, which is dated 17 October 2007, he mentioned his right of appeal to a five man committee and indicated that he would be seeking an Extraordinary General Meeting to discuss his complaint. In the second letter, dated 14 January 2008, he stated:

"I will be addressing the members with my complaints of this committee constitutionally at the forthcoming A.G.M. where you can have the chance to address them with yours."

There being a right of appeal contained in the constitution, the court could not grant Mr Burnett the remedy of reduction that he sought.

[26] Mr Gildea also contended that the court could only intervene if the Tribunal had gone seriously wrong in its decision-making process: McDonald v Burns 1940 SC 370 at 383. He submitted that no such error was disclosed here. The phrase "suspend radio facilities" should be given a wide meaning. It entitled the Committee to permanently ban a member from a particular type of work. Mr Gildea suggested that one had to take care in dealing with terms of trade and referred to an observation by Somervell LJ in Lee v Showman's Guild of Great Britain [1952] 2 QB ER 329 at page 338:

"It is often fallacious in considering the meaning of a phrase consisting of two words to find a meaning which each has separately and then infer that the two together cover the combination arrived at. The two together as here may have acquired a special meaning of their own."

Decision

[27] The first issue to determine is whether there was another means of review available to Mr Burnett. What is plain as a matter of fact is that he was denied the opportunity to challenge the decision. The Committee immediately refused his application to appeal the decision. As there is no provision in the rules which states that leave is required for an appeal, in my view the only reasonable inference is that the Committee decided that he had no right of appeal. The position cannot be known with certainty, because no reason was given for the refusal.

[28] The Committee's decision does, however, square with the wording of rule 26. Given its natural and ordinary meaning, it only allows for an appeal against a fine, not against other types of penalty. To give it the broader construction suggested by Mr Gildea involves giving the words an artificial meaning. I see no reason to do that.

[29] I find the suggestion that rule 18(a) provides a right of appeal a surprising one. It is hard to see how this can be regarded as a right, when it depends upon the member in question securing the agreement of more than half of the membership to requisition attend and vote in the member's favour at the meeting in question. There might be many reasons why that could not be achieved. So no matter how convincing the basis for an appeal, a member may not be able to make a challenge in terms of this rule. I am therefore of the opinion that it does not confer a right of appeal. Accordingly the remedy of reduction is available.

[30] The second question concerns the scope of the Committee's powers. The proper approach to the constitution of a body such as the Association was set out by Lord Denning in Lee v Showman's Guild of Great Britain [1952] 2 QB ER 329, 344:

"The rules are the contract between the members. The committee cannot extend their jurisdiction by giving a wrong interpretation to the contract, no matter how honest they may be. They have only such jurisdiction as the contract on its true interpretation confers on them, not what they think it confers."

[31] In my view Rule 6 envisages a division of responsibility. In relation to minor disciplinary matters, the Committee has jurisdiction. That is demonstrated by the fact that the maximum fine it can impose is only £100. Before a penalty of suspension or expulsion can be imposed, however, a meeting of Association is required. That division is readily understandable. The penalties in rule 6(b) are likely to have a very significant effect. They might deprive a member of his or her livelihood. Accordingly, they should only be imposed after a vote at a meeting which the whole membership is entitled to attend.

[32] The critical question is whether the Committee acted in accordance with Rule 6(a). In my view it did not. It had the power to impose a fine, or suspend radio facilities or "a combination of both". It chose not to impose a fine. Instead it suspended Mr Burnett for two months "from being allocated any work from the base". It is not disputed that the Committee acted properly within its powers to suspend Mr Burnett's radio facilities for that period.

[33] On that basis, the second part of the penalty - "In addition, once this suspension has expired you will not be allowed to compete for any account work in the future" - must refer to something different. That construction is fortified by the reference to 'weigh-in payments' in the final sentence of the decision letter. Mr Gildea accepted that Mr Burnett's responsibility to maintain those payments only referred to the two month period of suspension. If that is so, then the second part of the penalty cannot refer to the suspension of radio facilities.

[34] It follows that by purporting to impose a penalty regarding account hires which was to last for an indefinite period, the Committee exceeded its jurisdiction. It imposed a combination of penalties which was not warranted by rule 6(a). I am therefore satisfied that the decision was ultra vires and shall grant decree of reduction. The practical consequence is that the Committee must reconsider the matter.