EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
	[2014] CSIH 21
Lord Menzies Lady Smith Lady Dorrian	P897/12 OPINION OF THE COURT delivered by LORD MENZIES in the reclaiming motion by SPRING RADIO CARS LIMITED Petitioners and Reclaimers; against GLASGOW CITY COUNCIL Respondents: _______________

Petitioners and Reclaimers: Howlin QC; Gillespie Macandrew LLP

Alt: Anderson QC, Blair; Glasgow City Council Legal Services

11 February 2014

Introduction

[1] The petitioners carry on business as operators of private hire cars. They own about 180 vehicles which are driven by self-employed drivers. They also operate a fleet of about 500 other vehicles which are owned by third parties. Among the areas in which the petitioners provide private hire car services is the City of Glasgow.

[2] Private hire cars are, like taxi cabs, available for hire by members of the public. The manner in which private hire cars operate differs in a number of respects from that in which taxi cabs operate. There are certain restrictions on picking up passengers which apply to private hire cars but not to taxis: private hire cars are not allowed to ply for trade; their drivers are not allowed to pick up passengers who attempt to hail them in the street; their fares are calculated by reference to the mileage driven and not by reference to a taxi-meter.

[3] The respondents are the licensing authority for the City of Glasgow for the purposes of the Civic Government (Scotland) Act 1982. They maintain a list of types of vehicle which they regard as suitable for use as a private hire car ("the Approved Vehicles List").

[4] It was agreed between the parties that the population of the City of Glasgow is approximately 529,300. Within the City of Glasgow there are over 1,428 taxi cabs licensed by the respondents, and about 2,800 private hire cars licensed by them.

[5] The petitioners wish to have a modified version of the Fiat Scudo van included in the Approved Vehicles List. This vehicle is already approved by the respondents for use as a taxi cab. The Fiat Scudo is a van which is imported into the United Kingdom from France, where it is manufactured by a joint venture formed between the Italian company Fiat and the French group PSA Peugeot Citroen (or subsidiaries of those companies). The petitioners aver that each year around 500 of these vans, having an aggregate value when imported of around £6.4 million, are imported into the United Kingdom from France for conversion into either private hire cars or taxi cabs. There are other makes and models of vehicles which are imported into the United Kingdom for this purpose. For example, the Peugeot Expert van is imported into the United Kingdom from France, and is converted for this purpose in the United Kingdom (a converted Expert sometimes being called an E7). The Mercedes Vito vehicle is imported from Spain into the United Kingdom, sometimes already adapted for use as a taxi, and sometimes requiring conversion for this purpose in the United Kingdom. The Mercedes Viano/M8 is also imported from Spain into the United Kingdom, and requires to be converted into a taxi or a private hire car after it has been imported.

[6] The petitioners aver that there is a company in the Glasgow area which carries out the work of adapting Fiat Scudo vans (and vehicles manufactured by Peugeot and Mercedes) for use as taxi cabs or private hire vehicles. They aver that the adapted Fiat Scudo (which is called a "Scotcab's Fiat Scudo", or, in the case of another company that carried out such works until recently, a "Paton TW 200") is well suited for use either as a taxi cab on the one hand or as a private hire car on the other hand, and that it has "whole vehicle MI type approval" in terms of the relevant directives of the European Union relating to the type-approval of motor vehicles and their trailers.

[7] The respondents have already approved the converted Fiat Scudo vehicle for use as a taxi cab. It is the policy or practice of the respondents that they will not usually allow vehicles of the same type to operate both as taxis and as private hire cars. The history of this policy/practice may be summarised as follows.

On 9 October 1990 the respondents' Licensing Committee adopted the text of the Approved Vehicles List in the following terms:

"PRIVATE HIRE CAR LICENSING

APPROVED CARS LIST

1. This list indicates 'Yes' or 'No' to each make and model of car. 'Yes' means the model is approved, 'No' that it is not.

2. Even though any model is approved, it must nonetheless meet the basic criteria:-

(a) marked 'Yes' on the list and

(b) Engine size of nominal 1600 cc or more

(c) 4 door type (or 5 if hatchback or estate)

(d) Rear seat width 48'' or more

(e) Right hand drive.

e.g. Austin Maestro is 'Yes', but Maestro 1300 is not acceptable.

3. Vehicles which are purpose-built as taxis or 'hackney carriages' are not approved for use as private hire cars. Currently these are Carbodies FX4 types, and MCW/Reliant Metrocabs.

4. Occasionally applications may be made for unusual vehicles. The Committee may entertain such applications, if there is good reason."

[8] On 8 September 2008 the petitioners applied to the respondents to have the Scotcab Fiat Scudo added to the list of approved vehicles. On 25 September 2008 the respondents' Committee met for the purpose of considering this application. The Committee considered a report dated 25 September 2008 which stated inter alia:

"Members will be aware of the practice that if a vehicle is approved for use as a taxi, it would not be approved for use as a private hire car, and vice versa."

That report was accompanied by an earlier report on the Scotcab Fiat Scudo dated 11 September 2008 from the Inspection Centre Manager of the respondents' Land Services Department. This earlier report stated inter alia:

"The above vehicle was assessed by the Inspection Centre and the findings are that the base vehicle is built on the Fiat Scudo, which is the same vehicle as the Patons Taxi TW 200. It is usually Council practice not to allow the same vehicles to operate as both taxis and private hire cars. The front page of documentation from Scotcab describes the vehicle as a "wheelchair accessible taxi adaptation"."

[9] In 2009 the petitioners applied to the respondents' Committee to have the Paton TW 200 vehicle added to the list of approved vehicles. Their application was considered at a meeting of the Committee on 4 March 2009. At the meeting the chairman and other Committee members referred inter alia to the similarity of the Paton TW 200 vehicle to vehicles which had already been added to the list of approved vehicles for use as taxi cabs and the danger that members of the public would confuse the Paton TW 200 private hire vehicle with a taxi cab. The respondents' Committee has departed from this policy/practice on only two occasions. The Committee approved the Mercedes Viano and the Mercedes Vita for use as a private hire car and approved the Mercedes M8 Hackney for use as a taxi. The petitioners maintain that the Viano, the Vito and the M8 are essentially one and the same vehicle under different names.

[10] The respondents have been quite open with the petitioners in explaining the basis for their policy/practice in this regard. For example, the respondents' Executive Legal Manager (Licensing) wrote to the petitioners by letter dated 2 February 2009 in the following terms:

""I refer to your request, by email dated 8 September 2008, for approval of a new vehicle type, namely a Fiat Scudo, as a Private Hire Car vehicle.

...

The information attached to your letter of 22 September 2008 will be taken into account.

You will be given an opportunity to address the Committee on the terms of your request. In doing so you should be in a position to address the Committee on the Council's long-standing policy/practice regarding the approval of vehicles for use as Private Hire Cars.

The Council's policy/practice is as follows:-

·               The legislation - the Civic Government (Scotland) act 1982 - draws a clear distinction between the operations of a Taxi and the operations of a Private Hire Car.

·               Section 10(2) of the Act states 'A Licensing Authority shall not grant or renew a Taxi Licence or Private Hire Car Licence unless they are satisfied that the vehicle to which the Licence is to relate is suitable in type, size and design for use as a Taxi or Private Hire Car, ....'

·               In exercising the power given by that Section, the Council, as Licensing Authority, takes the view that to reflect the distinct operations of Taxis and Private Hire Cars, the vehicles to be approved for each use should also be distinct in terms of 'type' & 'design'.

·               The 'distinctive approach' of the Legislation is also reflected by the terms of Section 14 of the Act which prohibits signage etc., on a Private Hire Car that may even suggest that the vehicle is available for hire as a Taxi.

·               In pursuance of this 'distinctive approach' the Council has consistently maintained two separate approved vehicle lists - one for approved vehicles to be used for Taxis and one for approved vehicles to be used as Private Hire Cars.

·               The Council's Licensing Committee on 9 October 1990 approved the approach to be taken with regard to the approval of vehicles for use as Private Hire Cars - that is the Committee approved a Report on the basis that 'vehicles which are purpose-built as Taxis or "hackney carriages" are not approved for use as a Private Hire Car'. That policy/practice remains in force.

Your request for approval of a new vehicle type for use as a Private Hire Car, namely the Fiat Scudo, will require to be considered against the terms of the policy/practice as aforesaid. That is because the Fiat Scudo is the same base vehicle as the Fiat TW200 which has already been approved for use as a purpose-built Taxi.

In presenting your request to the Committee you should be in a position to address the Committee as to why your proposed vehicle should be approved as a Private Hire Car notwithstanding that the same vehicle (albeit under a different name) is already approved for use as a Taxi. Your request will be dealt with on its own merits.

You should note that the Committee on 11 February 2009 will take a decision in principle as regards the approval of your proposed vehicle type for use as a Private Hire Car. If the Committee decides in your favour, the matter will be continued to allow you to produce documentation to prove that the vehicle meets the required technical specifications - including M1 Whole Vehicle Type Approval.

I will copy this letter to your Solicitor J.P. Mowberry.

If you require any further written background information prior to the hearing of your request on 11 February 2009, please let me know."

[11] On 25 August 2011 a further written application was made to the respondents to have the Fiat Scudo added to the approved vehicle list. Although this application was made by Greater Glasgow Private Hire Association, the respondents treated it as though it emanated from the petitioners. The application was considered at a meeting of the Committee held on 18 January 2012, at which the application was refused. At that meeting, the Committee had before it a report dated 20 September 2011 entitled "Application for inclusion in approved vehicle list" and subtitled "Vehicle make: Fiat...Vehicle model: Scudo". The concluding paragraph of the report was in the following terms:

"The base vehicle is built on the Fiat Scudo, which is the same base vehicle as the Paton's Taxi Fiat TW 200. It is usually Council practice not to allow the same vehicle to operate as both taxis and private hires."

[12] At its meeting on 18 January 2012 the Committee also had a report of the same date from the respondents' Executive Director of Corporate Services to the Committee. Paragraph 1.2 of that report was in the following terms:

"Members will be aware of the current policy/practice which is to the effect that if a vehicle is approved for use as a taxi, it would generally not be approved for use as a private hire car and vice versa. That policy/practice was last affirmed by the Licensing Committee on 9 October 1990 and has been followed consistently ever since. The stated policy/practice was predicated on the distinctive approach of the Civic Government (Scotland) Act 1982 to the operation of taxis and private hire cars. Section 10(2) of that Act states:

'A licensing authority shall not grant or renew a taxi licence or a private hire car licence unless they are satisfied that the vehicle to which the licence is to relate is suitable in type, size and design for use as a taxi or private hire car.'"

[13] The petitioners aver that at the Committee's meeting on 18 January 2012 one of the councillors observed inter alia that the TW 200 vehicle looked like a taxi and could confuse the public. The minutes of that meeting referred to the report of the Executive Director of Corporate Services as "advising of this authority's current policy and practice to this matter, which was to the effect that if a vehicle was approved for use as a taxi, it would generally not be approved for use as a private hire car and vice versa."

[14] In view of these facts, and the previous history of the respondents' policy/practice as referred to above, the petitioners aver that the Committee's reasons for refusing the application on 18 January 2012 may fairly be summarised as follows:

"(1) The Committee considers that section 10(2) of the Civic Government (Scotland) Act 1982 requires licensing authorities to ensure that vehicle types which are approved for use as private hire cars are distinct from vehicles which are approved for use as taxi cabs.

(2) The Committee has a policy of not licensing one and the same type of vehicle for use as a private hire car and as a taxi cab and is not prepared to consider departing from that policy in the petitioners' case.

(3) The Committee considered that if the petitioners' application were granted there was a danger that members of the public would confuse a TW 200 operating as a private hire car with a TW 200 operating as a taxi cab."

[15] The respondents deny the first and second of these averments.

[16] In the present proceedings the petitioners seek judicial review of the respondents' Committee's decision dated 18 January 2012. Before the Lord Ordinary, they argued (1) that the Committee's decision to reject the application proceeded on a misunderstanding of the Civic Government (Scotland) Act 1982 and was vitiated by error of law, (2) that it was unreasonable because the Committee took into account irrelevant matters, (3) that it was perverse and irrational, and "tainted by lack of proportionality", (4) that the respondents' policy/practice amounted to an unlawful fettering of its discretion, and (5) that it was a measure having equivalent effect to a quantitative restriction on imports between Member States and was therefore unlawful in terms of article 34 of the Treaty on the Functioning of the European Union.

[17] On 25 January 2013 the Lord Ordinary dismissed the petition, for the reasons given in his opinion of even date. Against that interlocutor the petitioners now reclaim.

The issues

[18] Two broad issues are raised by this reclaiming motion:-- (1) what is the proper construction of section 10 of the Civic Government (Scotland) Act 1982, and does the respondents' policy/practice fall within the powers conferred by that statute? and (2) having regard to the provisions of article 34 of the Treaty on the Functioning of the European Union ("the Treaty") is the decision a measure having equivalent effect to a quantitative restriction on imports between Member States, and so unlawful?

Statutory and Treaty Provisions

The Civic Government (Scotland) Act 1982 provides inter alia:

"10.-(1) A licence, to be known as a 'taxi licence' or, as the case may be, a 'private hire car licence', shall be required for the operation of a vehicle as -

(a) a taxi; or

(b) a private hire car.

(2) A licensing authority shall not grant or renew a taxi licence or private hire car licence unless they are satisfied that the vehicle to which the licence is to relate is suitable in type, size and design for use as a taxi or private hire car, as the case may be, and is safe for that use, and that there is in force in relation to the vehicle such a policy of insurance or such security as complies with Part IV of the Road Traffic Act 1972.

...

(4) A vehicle shall, for the purposes of subsection (2) above, be treated by a licensing authority as being suitable in type, size and design if it complies with regulations in that regard made by the Secretary of State under section 20(2) of this Act in respect of their area.

...

11.-(1) The holder of a taxi or private hire car licence shall present the taxi or private hire car for inspection and testing by or on behalf of the licensing authority within such period and at such place as they may by notice reasonably require.

(2) An authorised officer of a licensing authority (as respects a taxi or private hire car licensed for the area of the authority) or a constable shall have power at any reasonable time to inspect and test, for the purpose of ascertaining its fitness, a licensed taxi or private hire car or, for the purpose of testing its fitness or accuracy, any taximeter and if he is not satisfied as to the safety of the taxi or private hire car for the carriage of passengers or as to the fitness or accuracy of the taximeter he may by notice in writing -

(a) require the holder of the taxi or private hire care licence to make the taxi, private hire car or taximeter, as the case may be, available for further inspection at such reasonable time and place as may be specified in the notice;

...

14.-(1) Subject to subsection (2) below, there shall not be displayed on or in a private hire car any word, sign, notice, mark, illumination or other feature which may suggest that the vehicle is available for hire as a taxi.

...

20.-(2) The Secretary of State may by regulations made by statutory instrument prescribe types, sizes and designs of vehicles for the purposes of section 10(4) of this Act and, in doing so, may prescribe different types, sizes or designs of vehicles in respect of different areas.

...

23.-(1) In sections 10 to 22 of this Act -

'taxi' means a hire car which is engaged, by arrangements made in a public place between the person to be conveyed in it (or a person acting on his behalf) and its driver for a journey beginning there and then; and

'private hire car' means a hire car other than a taxi within the meaning of this subsection."

The Local Government (Miscellaneous Provisions) Act 1976

The Local Government (Miscellaneous Provisions) Act 1976, which applies to England and Wales but does not apply to Scotland, provides inter alia:

"4. - Licensing of hackney carriages.

(1) A district council may attach to the grant of a licence of a hackney carriage under the Act of 1847 such conditions as the district council may consider reasonably necessary.

(2) Without prejudice to the generality of the foregoing subsection, a district council may require any hackney carriage licensed by them under the Act of 1847 to be of such design or appearance or bear such distinguishing marks as shall clearly identify it as a hackney carriage.

...

48. - Licensing of private hire vehicles.

(1) Subject to the provisions of this Part of this Act, a district council may on the receipt of an application from the proprietor of any vehicle for the grant in respect of such vehicle of a licence to use the vehicle as a private hire vehicle, grant in respect thereof a vehicle licence;

Provided that a district council shall not grant such a licence unless they are satisfied -

(a) that the vehicle is -

(i) suitable in type, size and design for use as a private hire vehicle;

(ii) not of such design and appearance as to lead any person to believe that the vehicle is a hackney carriage;

(iii) in a suitable mechanical condition;

(iv) safe; and

(v) comfortable."

Transport Act 1980

Section 64 of the Transport Act 1980, which applies to England and Wales but does not apply to Scotland, provides inter alia:

"64. - Roof-signs on vehicle other than taxis.

(1) There shall not, in any part of England and Wales outside the metropolitan police district and the City of London, be displayed on or above the roof of any vehicle which is used for carrying passengers for hire or reward but which is not a taxi -

(a) any sign which consists of or includes the word 'taxi' or 'cab', whether in the singular or plural, or 'hire', or any word of similar meaning or appearance to any of those words, whether alone or as part of another word; or

(b) any sign, notice, mark, illumination or other feature which may suggest that the vehicle is a taxi."

The Treaty

Article 34 of the Treaty on the Functioning of European Union (formerly article 28 of the Treaty on the European Community and before that article 30 of the EEC Treaty) provides:

"Quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between Member States.""

Article 36 of the Treaty provides:

"The provisions of Articles 34 and 35 shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures possessing artistic, historic or archaeological value; or the protection of industrial and commercial property. Such restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States."

Submissions for the parties

[19] Both parties helpfully provided the court with full notes of argument which we do not seek to repeat here. (Indeed, senior counsel for the petitioners helpfully provided us with a sequence of notes of argument, each of which superseded the last. We proceed on the basis of the "further abbreviated note of arguments for the petitioners", number 21 of process, and the note of argument for the respondents (number 16 of process)). The parties' respective positions may be summarised as follows:-

Submissions for the petitioners and reclaimers

[20] Senior counsel for the reclaimers addressed first the domestic law. He observed that there was nothing in section 10 of the 1982 Act which referred specifically to an approved vehicle list, but he did not consider such a list objectionable; there were sound administrative reasons for maintaining such a list, which he described as avoiding the need to "reinvent the wheel". However, he submitted that the respondents had fallen into error in construing section 10(2) of the Act as requiring them to adopt a distinctive approach, in type and design, as between taxis and private hire cars. Despite the words "as the case may be" where they appear in the subsection, there is no justification in the statute for any requirement of distinctiveness between taxis and private hire cars. The respondents do not give any specific reason for taking the view that this vehicle is unsuitable for use as a private hire car, nor do they give any reason to support their view that there may be a risk of confusion between a taxi and a private hire car in this instance. Their only reason for refusal was their policy/practice - because they have already approved this vehicle as a taxi, they will not approve it as a private hire car. That is not good enough. There is nothing in the wording of section 10(2) to suggest that suitability in type, size and design for use as a taxi and suitability in type, size and design for use as a private hire car are mutually exclusive. The Lord Ordinary erred in law in holding (at paragraph [25] of his opinion) that the respondents had not misconstrued section 10(2).

[21] Turning to the reclaimers' case based on article 34 of the Treaty, senior counsel submitted that although this case was not concerned with a quantitative restriction on imports, the decision of the respondents amounted to a measure having equivalent effect to a quantitative restriction on imports. The terms of article 36 were not such as to save this measure - this case did not raise a serious issue about article 36. In any event, even if he was wrong in this, in order for such a measure to be justified by article 36 it requires to satisfy the test of proportionality; it requires to be both "appropriate" ("suitable") to secure the objective and "necessary" as a means of doing so - Sinclair Collis Ltd v The Lord Advocate 2013 SLT 100 (at paragraph [56]). Other licensing authorities have insisted on detailed conditions to ensure a differential in appearance between the same vehicle operating as a private hire vehicle and as a taxi cab, without resorting to a policy which amounts to a blanket ban on the same make of vehicle operating in both categories. Details such as colour and signage could achieve this objective. Senior counsel referred us to a report to Manchester City Council as an example of this (in the context of the English legislation).

[22] Senior counsel also referred us to information contained in an affidavit by Mr John Paul Cassidy, general manager of the petitioners and reclaimers. The information in this affidavit was subject to amendment and elucidation in the course of the hearing before us. We understood that, in its final form, Mr Cassidy's position was that around 500 Fiat Scudo vans are imported into the United Kingdom each year for the purpose of conversion into either private hire cars or taxis; the cost of importation of these vehicles, after a discount, was about £6.4 million, and their aggregate sales value after conversion works was about £11.5 million. There was accordingly a significant number of such vans being imported for this purpose from another Member State, and the respondents' policy/practice was the equivalent of a quantitative restriction on these imports which did not meet the test of proportionality.

[23] "It should be recalled, as a preliminary observation, that the free movement of goods between Member States is a fundamental principle of the Treaty which finds its expression in the prohibition, set out in article 28 EC" (now article 34 of the Treaty) "of quantitative restrictions on imports between Member States and all measures having equivalent effect" - European Commission v France [2010] ECR I-757 (at paragraph 73). Moreover, it is not necessary for the petitioners and reclaimers for there to be an actual, clear cut demonstrable effect of the measure; a potential effect will suffice. Senior counsel referred to the decision of the ECJ in Procureur du Roi v Dassonville [1974] ECR 837, and particularly to paragraph 5 of its judgment where the court stated:

"All trading rules enacted by Member States which are capable of hindering, directly or indirectly, actually or potentially, intra-Community trade are to be considered as measures having an effect equivalent to quantitative restrictions."

[24] Senior counsel accepted that the ECJ has subjected the apparently very general rule enunciated in Dassonville to certain qualifications. He referred in particular to the cases of Rewe-Zentral AG v Bundesmonopolverwaltung Für Branntwein ("Cassis de Dijon") [1979] ECR 649, Keck & Mithouard [1993] ECR 1-6097 and the analysis of the jurisprudence by the ECJ in Commission v Italy [2009] ECR 1-519, as this analysis is set out at paragraph [51] of Sinclair Collis Ltd v The Lord Advocate.

[25] Senior counsel submitted that the qualification described in Cassis de Dijon did not apply in the present case. The respondents did not seek to invoke the qualification, and in any event the measure in question in the present case does not relate to the marketing of products. In answer to a question from the court, he confirmed that his position was that article 34 was not engaged in those circumstances. The legislative act does not purport to deal with the marketing of products. Even if the term "marketing" is given a broad construction, the provision must be necessary in order to satisfy the mandatory requirements of the protection of the consumer; section 10(2) of the Act is not mandatory. Moreover, as already submitted, the measure must be proportionate.

[26] Although the expression used in Dassonville was "trading rules", the language of article 34 is "measures", which is broader in scope than "trading rules". The ECJ has now departed from the "trading rules" formula since Dassonville - Fra bo SpA v DVGW (Case C-171/11, an unreported judgment of the court (4^th Chamber) dated 12 July 2012). At paragraph 22 of its judgment the court observed:

"According to settled case law, all rules enacted by Member States which are capable of hindering, directly or indirectly, actually or potentially, intra-Community trade are to be considered as measures having an effect equivalent to quantitative restrictions...Thus, the mere fact that an importer might be dissuaded from introducing or marketing the products in question in the Member State concerned constitutes a restriction on the free movement of goods for the importer."

[27] There was nothing in the respondents' answers to suggest that there would not be a potential for restriction of intra-Community trade, nor that importers might not be dissuaded from introducing or marketing the vehicle in the United Kingdom.

[28] The breadth and importance of article 34 is emphasised, senior counsel submitted, by Commission v Italy. That case concerned a provision in the Italian Highway Code as to which vehicles were allowed to tow trailers. Senior counsel suggested that it was difficult to imagine a provision which was ex facie less concerned with intra-Community trade; however, the ECJ held (at paragraph 58) that the prohibition laid down in article 56 of the Highway Code, to the extent that its effect is to hinder access to the Italian market for trailers which are specially designed for motorcycles and are lawfully produced and marketed in Member States other than the Italian republic, constitutes a measure having equivalent effect to quantitative restrictions on imports within the meaning of article 28 EC (now article 34 of the Treaty) "unless it can be justified objectively." In that case, the ECJ held that the prohibition in question was appropriate for the purpose of ensuring road safety, and was necessary and proportionate, and having regard to this (and other factors) the ECJ held that the prohibition was justified on the basis of article 30 EC (now article 36 of the Treaty). Senior counsel also referred to Humanplasma GmbH v Austria [2010] ECR I-12869.

[29] Mr Howlin QC submitted that the respondents' policy/practice, and the decision complained of, amounted to a measure; it was capable of hindering, directly or indirectly, actually or potentially, intra-Community trade and it has an effect on the manner in which certain businesses carry on their trade. He submitted that the present case did not fall into the other qualification of the Dassonville principle, namely Keck & Mithouard, because this case does not concern a "selling arrangement".

[30] The Lord Ordinary fell into error in attaching the weight which he did to (and in the construction he placed on) the case of Quietlynn Limited v Southend Borough Council [1991] 1 QB 454. The Lord Ordinary took from this authority that the ECJ had declined to find that a measure contravened article 34 because it was not intended to affect intra-Community trade. However, article 34 is not concerned with intention, but with effect. There is no rule of intention, and no de minimis rule in this context. Quietlynn does not form part of the mainstream of authorities in the jurisprudence of the ECJ in this area; it has not been often relied upon by the court or by the Commission. Moreover, that case was concerned with a statutory prohibition on the sale of articles; the present case concerns a decision about whether a particular vehicle make and type should be licensed for a particular use. Quietlynn should be distinguished on its facts and is of no assistance.

[31] The Lord Ordinary erred in law in holding (at paragraph [40] of his opinion) that the decision complained of "had nothing to do with international trade". It is apparent that the Lord Ordinary took the view that a "measure" could not be caught by article 34 unless it was "to do with international trade"; this is wrong in law.

[32] The Lord Ordinary also erred, Mr Howlin QC submitted, in holding that "the decision has no impact whatsoever upon the various other uses, including use as a taxi, to which a suitably adapted Fiat Scudo can be put in the United Kingdom." There is threefold error in this passage - (1) the Lord Ordinary appears to consider that the availability of other uses for a Fiat Scudo somehow countermines the de quo of article 4, but this has no bearing upon article 34; (2) the approach ignores the Dassonville jurisprudence which confirms that article 34 is engaged when the measure is merely capable, directly or indirectly, actually or potentially of having an effect on intra-Community trade; and (3) there was no evidence before the court to justify a finding that there was "no impact whatsoever".

[33] For these reasons, (and having adopted his further abbreviated note of arguments) Mr Howlin invited the court to grant the reclaiming motion.

Submissions for the respondents

[34] Mr Anderson QC invited us to refuse the reclaiming motion and to adhere to the interlocutor of the Lord Ordinary.

[35] The reclaimers' submissions on domestic law proceeded upon the misapprehension that the respondents interpreted section 10(2) of the Act as requiring them to maintain two separate lists of approved vehicles, one for taxis and the other for private hire cars. That is not the respondents' position; rather, they maintain that there is nothing in the 1982 Act which prohibits such a policy. In considering the purpose of the Act, it was necessary not just to consider section 10, but the whole legislative scheme. The reclaimers require to satisfy the court that the respondents' policy is ultra vires, and either inconsistent with, or destructive of, the powers given to the respondents by the 1982 Act. There are helpful averments in the petition explaining the distinction between taxis and private hire cars. It is part of the purpose of the Act that the public should be able to recognise and distinguish a taxi from a private hire car. Section 14 of the Act emphasises the need to avoid confusion, and provides a clear indication of the importance of assisting the public in differentiating between the two.

[36] In England, the importance of this ability to differentiate is made explicit - see eg section 48 of the Local Government (Miscellaneous Provisions) Act 1976, and section 64 of the Transport Act 1980. The same express provisions are not found in the Scottish legislation; however, reading the 1982 Act as a whole (and in particular sections 10 and 14 together) it is clear that the legislative intent was to maintain the distinctiveness between taxis and private hire cars, as it was in England.

[37] The question of what measures are appropriate in a particular locality will vary from place to place, and are best determined by the local licensing authority which is deemed to know the conditions of its own locality - R v Bournemouth Borough Council ex parte Thompson (1985) 83 LGR 662, particularly at 667.

[38] Mr Anderson QC submitted that the question for this court is not "Where do you find explicit permission for this policy in the Act?", but rather "Is there anything in the Act which expressly prohibits such a policy, or suggests that it is inconsistent with the general scheme of the Act or destructive of its purpose?". There was nothing of the kind in the present case. He drew an analogy with the provisions of the Licensing (Scotland) Act 1976 regarding extensions of permitted hours for licensed premises, and policies which contained restrictions as to particular times in particular areas; there was no express provision in the 1976 Act which permitted this, but it had never been accepted by the court that such policies were ultra vires of the powers of a licensing board. Senior counsel submitted that the analysis by the Lord Ordinary at paragraph [25] of his opinion was correct; the language of section 10 was sufficiently wide to give the respondents discretion to adopt such a policy, and this was fortified by the terms of section 14. The Lord Ordinary reached the correct conclusion with regard to the domestic law.

[39] Turning to the EU law argument, the respondents' position is that their policy/practice falls outwith the scope of article 34, which is concerned with intra-Community trade. The mischief at which article 34 is aimed is the possibility of putting a foreign exporter at a disadvantage when competing with a domestic trader or manufacturer. It is designed to ensure a level playing field, so that an exporter or manufacturer of foreign goods is not disadvantaged by comparison with a domestic competitor. This is clear from the jurisprudence of the ECJ - for example, paragraph 5 of the judgment in Dassonville refers to "hindering...intra-Community trade", and this is repeated in Cassis de Dijon which was concerned with a prohibition on the marketing of a product from one Member State in another Member State which hindered the importation of that product in a direct and immediate manner. Again, in Walter Rau v De Smedt PvbA [1982] ECR 3961, the court was concerned (at paragraph 20 of its judgment) with "circumstances in which the consumer may be protected and informed by means which hinder the free movement of goods...".

[40] What the reclaimers were seeking to do was to start from the end and work backwards. If there is a potential for restriction of sales, the reclaimers argue that a measure falls within article 34. That is not the correct test. In identifying whether article 34 applies, one must ask whether this policy (or measure) puts a foreign trader or manufacturer at a disadvantage compared with a domestic trader or manufacturer. The answer to this question is no - the measure applies equally to both. That this is the correct test is clear from the judgment of the ECJ in Keck & Mithouard, particularly at paragraphs 12 to 18.

[41] The respondents' policy does not hinder the importation of the Fiat Scudo van, either by the petitioners or by anyone else. The petitioners aver that 500 such vans are imported annually for conversion to taxis or private hire cars, and many more are imported for use as vans, so the policy does not hinder importation. It is not aimed at the Fiat Scudo van, nor is it aimed at any imported vehicle. It makes no mention of any particular make of vehicle, and applies to vehicles manufactured in the United Kingdom as much as it does to vehicles imported from Member States. The Fiat Scudo is approved by the respondents for use as a taxi, and the petitioners are free to import it for that purpose. Intra-Community trade remains. Taking these factors together, there is nothing about the respondents' policy that has any connection with imports. As in Quietlynn, its connection with imports is non-existent. Moreover, it restricts the use of a vehicle already imported and subjected to conversion works in the United Kingdom; this is crucially different from a restriction on the ability to import.

[42] Mr Anderson QC accepted that the term "measure" in article 34 is a broad term, not restricted to a trading rule, and that a policy of the respondents could contravene article 34. He also accepted that it was not strictly necessary for the petitioners to demonstrate the actual effect of a measure, and that potential effect may be sufficient, and that questions of intention may or may not be relevant but are not necessarily determinative. However, none of these factors were to the point, because the petitioners and reclaimers have fallen into the error of looking at this issue from the wrong end. They identify a potential or possible effect, and then argue that because of this article 34 is engaged. If this reasoning were correct, it would affect countless policies or decisions. For example, if a local licensing board restricts the hours of opening of a public house, this has the potential to restrict sales of wines and beers imported from other Member States. However, this would not be a contravention of article 34, because the measure would apply equally to domestic products, such as English beer or Scotch whisky. So much is clear from the judgment in Keck & Mithouard (particularly at paragraph 13). The proper approach was to look first at the measure itself, how it affects traders, manufacturers, and whether it puts traders/manufacturers from other Member States at a disadvantage when compared with their domestic competitors. The unreported decision of the Court of Appeal in England and Wales in R v Lincoln City Council ex parte King and Cook (2 February 1995) provides strong support for such an approach.

[43] The suggestion on behalf of the reclaimers that Quietlynn Limited v Southend Borough Council was outwith the mainstream of EU jurisprudence was, said Mr Anderson, simply wrong. It was followed in R v Birmingham City Council ex parte Wesson [1992] 3 CMLR 377, and approved by the Court of Appeal in R v Lincoln City Council. Moreover, it was not inconsistent with the Dassonville formula. The reasoning in the Advocate General's opinion in Quietlynn (at paragraphs 5-13) was accepted and adopted by the ECJ at paragraphs 9-11 of its judgment. Although this decision predates by some 2 years the decision of the ECJ in Keck & Mithouard, the same approach is evident.

[44] Applying this approach, it is clear that article 34 is not engaged. The respondents' policy has nothing to do with where vehicles are manufactured. They might come from the UK, the USA or other Member States of the EU. Each case must be looked at on the basis of its own facts; on the facts of the present case, article 34 is not engaged at all. For these reasons this court should adhere to the interlocutor of the Lord Ordinary and refuse the reclaiming motion.

Reply for the petitioners and reclaimers

[45] Mr Howlin submitted that Mr Anderson had misunderstood the decision in Keck & Mithouard, and was seeking to apply the observations of the court to circumstances quite different from those in that case. In paragraph 16 of the court's judgment in that case, general guidance was being given by the court, but only in relation to selling arrangements. We are not concerned with selling arrangements in the present case, so the decision in Keck & Mithouard is not applicable. Provisions of EU law relating to selling arrangements are in a category of their own - see paragraphs 46/47 of the opinion of the Advocate General in Fachverband der Buch-und Medienwirtschaft v LIBRO HGmbH [2009] ECR 1-3717. The present case does not fall within the Keck exception, and accordingly Dassonville applies.

[46] Mr Howlin reiterated that the Quietlynn case has not given birth to a trend of jurisprudence. It was followed in Sheptonhurst v Newham Borough Council, case C350/89, which was decided in about 1991. His researches had thrown up only nine other cases in which Advocate Generals have mentioned the Quietlynn decision, and it has not been mentioned at all since 1997.

[47] To the extent that it was argued by the petitioners that the averments in the petition were insufficiently specific to argue breach of article 34, Mr Howlin sought to lodge a minute of amendment (which was not opposed by Mr Anderson and which we allowed). Mr Howlin reiterated his motion that we should grant the reclaiming motion, recall the interlocutor of the Lord Ordinary dated 25 January 2013 and grant the prayer of the petition.

Response for the respondents

[48] Mr Anderson submitted that it was inconceivable that the Keck decision was an exception which was restricted only to selling arrangements. The reference to the opinion of the Advocate General in Fachverband gave no support for such a contention - the Advocate General was addressing circumstances in that case relating to selling arrangements, and it followed that his views addressed those circumstances. It does not follow that the general guidance provided by the court in Keck & Mithouard was confined only to selling arrangements - indeed, it would be astonishing if it was the court's intention to restrict the exception only to selling arrangements. Paragraphs 46 and 47 of the Advocate General's opinion in Fachverband must be read together with footnote 13, which was important, and provided support for the respondents' position. It was necessary also to have regard to paragraphs 19, 21 and 22 of the court's judgment in that case.

Discussion

[49] We are not persuaded that either the policy/practice of the respondents to the effect that if a vehicle is approved for use as a taxi it would generally not be approved for use as a private hire car and vice versa, or the decision complained of in these proceedings, is ultra vires or otherwise contrary to domestic law.

[50] In considering this issue, the starting point is to ascertain what is the purpose, or legislative intention, of the Civic Government (Scotland) Act 1982 insofar as it is concerned with the licensing and regulation of taxis and private hire cars. The statutory provisions governing this are to be found in Part II of the Act, at sections 10 to 23. What is abundantly clear from these sections is that it was the intention of Parliament to make a clear distinction between the operation of a vehicle as a taxi and the operation of a vehicle as a private hire car. A different licence is required for driving each category of vehicle, there is a different scheme for setting taxi fares (together with its own appeal procedures) which does not apply to private hire cars, there are provisions relating to taxi stances which do not apply to private hire cars, and section 21 provides for different offences in relation to the two categories of vehicles. In short, the statutory scheme for the licensing and regulation of taxis is quite different from that for the licensing and regulation of private hire cars.

[51] It is also clear that Parliament sought to avoid, so far as possible, confusion in the public mind between the two categories of vehicle. Section 14 of the Act prohibits (subject to exceptions) the displaying on or in a private hire car any word, sign, notice, mark, illumination or other feature which may suggest that the vehicle is available for hire as a taxi. The intention to avoid confusion on the part of the public - in particular, on the part of passengers and customers or potential customers - is readily understandable, given the different regimes for charging fares and the different licensing and regulatory regimes applying to the two categories of vehicle.

[52] It is true that the legislation in England and Wales makes express provision for steps to avoid such confusion. Section 48 of the Local Government (Miscellaneous Provisions) Act 1976 provides that a district council shall not grant a license to use a vehicle as a private hire vehicle unless they are satisfied "(a) that the vehicle is....(ii) not of such design and appearance as to lead any person to believe that the vehicle is a Hackney carriage". Similar provision is contained in section 64 of the Transport Act 1980. However, we are satisfied that the same purpose underlies the scheme contained in Part II of the Civic Government (Scotland) Act 1982.

[53] Having identified the purpose of the statutory scheme, it is necessary to ask whether anything done by the respondents in the present circumstances undermined or contravened that purpose. We can find nothing that did so. The reclaimers take no issue with the fact that the respondents established an approved vehicles list, despite the fact that there is no express provision within the statute for such a list. The practical benefits of establishing such a list are obvious, and we see nothing by way of excess of powers in the respondents establishing this. As Mr Howlin put it, it avoids having to "reinvent the wheel". Nor do we find anything in the respondents' policy/practice that if a vehicle is approved for use as a taxi it would generally not be approved for use as a private hire car and vice versa as being contrary to the purpose or intention of the Act. This policy/practice is directed at ensuring, so far as possible, that each category of vehicle is distinctive in its appearance, and minimising the risk of confusion on the part of passengers and customers/potential customers.

[54] In our view nothing turns on the fact that there is no express provision in the 1982 Act authorising this policy/practice. This is the sort of matter which is frequently left by Parliament to local licensing and regulatory bodies. As was observed in R v Bournemouth BC ex p Thompson, this raises questions which have to be answered in relation to local circumstances. It is for the local licensing authority to devise and implement a system of licensing and regulating taxis and private hire cars suitable for the circumstances of its own locality. That system will require to preserve the distinctiveness between the two categories of vehicle and avoid, so far as possible, the risk of confusion between the two. Provided that the policy/practice is not contrary to the purpose of the Act, and provided that it is not perverse or irrational or otherwise unlawful, the court will not interfere with the respondents' discretion in this regard.

[55] We do not consider that there is anything in the respondents' policy/practice, or in the particular decision complained of, which undermines or contravenes the purpose of the Act, nor is there anything perverse, irrational or otherwise unlawful about them. Other authorities may have different policies and practices which they consider appropriate to the circumstances of their own localities. It does not follow that the respondents were not entitled to adopt this policy/practice, or that this decision was unlawful. We find no error of law in the way in which the Lord Ordinary has disposed of this issue, and we agree with the reasoning at paragraphs [25] to [29] of his opinion.

[56] We are also not persuaded by the submissions for the petitioners and reclaimers with regard to article 34 of the Treaty. We agree with Mr Anderson that the reclaimers' submissions look at the issue from the wrong end, by identifying a possible or potential effect of the respondents' decision, and arguing that therefore the decision is a measure struck at by article 34. We agree that article 34 is designed to achieve, so far as possible, a "level playing field" with regard to intra-Community trade, so that an exporter or manufacturer of goods in another Member State is not placed at a disadvantage against domestic competitors. The policy/practice of the respondents, which underlies the decision complained of, is not directed at the source of the vehicles. The vehicles may be manufactured in the United Kingdom, or the United States, or another Member State of the EU (or elsewhere). The policy/practice does not place vehicles imported from a source outside the United Kingdom at a competitive disadvantage to vehicles produced within the United Kingdom. It does not prohibit the use of such vehicles (after conversion works which, as it happens, are carried out within the United Kingdom, to render the vehicles suitable for the purpose) as either taxis or private hire cars. It only prohibits within the respondents' area use of the vehicles (in common with all other types and makes of vehicles) as taxis when they are on the private hire car authorised list, and as private hire cars when they are on the taxis authorised list. We do not consider that the respondents' policy/practice, nor the decision complained of in this case, is a measure which is struck at by article 34.

[57] In Sinclair Collis Ltd v The Lord Advocate, this court took as its starting point on the application of article 34 the preliminary observations of the ECJ in Commission v Italy, and did not consider that any restatement of this definitive analysis of the ECJ jurisprudence would assist. We agree. We observe that the passage quoted at paragraph [51] of Sinclair Collis provides clear support for the view that article 34 is aimed at measures which discriminate against products from other Member States:

"34 Article [34] reflects the obligation to respect the principles of non-discrimination and of mutual recognition of products lawfully manufactured and marketed in other Member States, as well as the principle of ensuring free access of Community products to national markets...

35. Hence, in the absence of harmonisation of national legislation, obstacles to the free movement of goods which are the consequence of applying, to goods coming from other Member States where they are lawfully manufactured and marketed, rules that lay down requirements to be met by such goods constitute measures of equivalent effect to quantitative restrictions even if those rules apply to all products alike...

36. By contrast, the application to products from other Member States of national provisions restricting or prohibiting certain selling arrangements is not such as to hinder directly or indirectly, actually or potentially, trade between Member States for the purposes of the case law flowing from Dassonville, on condition that those provisions apply to all relevant traders operating within the national territory and that they affect in the same manner, in law and in fact, the marketing of domestic products and of those from other Member States..."

[58] We observe that the present case is far removed from what the ECJ indicated would be a contravention of article 34. There is no question here of any ban on imports, or any quantitative restriction on imports. The measure does not relate to production, manufacture, importation or even selling arrangements, but merely licensing and regulatory functions. Moreover, the provisions apply to all relevant traders operating within the national territory, and they affect in the same manner, in law and in fact, domestic products and products from other Member States.

[59] In making these observations, we accept that the word "measures" used in article 34 is a broad term, and not restricted to trading rules (despite that being the expression used in Dassonville), that it is not necessary to show actual effect and that potential effect may be enough, and that the intention of the measure is not necessarily determinative of the issue. However, we agree with senior counsel for the respondents that none of these points arise directly in this case, because article 34 is not engaged by this decision.

[60] Further support for this view is to be found in the judgment of the ECJ in Keck & Mithouard. That case was concerned with a national prohibition on resale at a loss, and whether this distorted competition, especially in frontier zones, between the various traders on the basis of their nationality and place of establishment. It was concerned with selling arrangements. However, we do not consider that the general guidance given by the ECJ was confined to selling arrangements, nor to national prohibitions on resale at a loss. Although the case was concerned with these facts, the judgment of the court sheds light on the correct approach to what measures are struck at by article 34. The ECJ observed as follows (it being borne in mind that it was considering article 30 of the EEC Treaty, which was the predecessor of article 34 of the Treaty with which we are concerned):

"12. National legislation imposing a general prohibition on resale at a loss is not designed to regulate trade in goods between Member States.

13. Such legislation may, admittedly, restrict the volume of sales, and hence the volume of sales of products from other Member States, in so far as it deprives traders of a method of sales promotion. But the question remains whether such a possibility is sufficient to characterize the legislation in question as a measure having equivalent effect to a quantitative restriction on imports.

14. In view of the increasing tendency of traders to invoke Article 30 of the Treaty as a means of challenging any rules whose effect is to limit their commercial freedom even where such rules are not aimed at products from other Member States, the Court considers it necessary to re-examine and clarify its case-law on this matter.

15. It is established by the case-law beginning with 'Cassis de Dijon' (Case 120/78 Rewe-Zentral v Bundesmonopolverwaltung für Branntwein [1979] ECR 649) that, in the absence of harmonization of legislation, obstacles to free movement of goods which are the consequence of applying, to goods coming from other Member States where they are lawfully manufactured and marketed, rules that lay down requirements to be met by such goods (such as those relating to designation, form, size, weight, composition, presentation, labelling, packaging) constitute measures of equivalent effect prohibited by Article 30. This is so even if those rules apply without distinction to all products unless their application can be justified by a public-interest objective taking precedence over the free movement of goods.

16. By contrast, contrary to what has previously been decided, the application to products from other Member States of national provisions restricting or prohibiting certain selling arrangements is not such as to hinder directly or indirectly, actually or potentially, trade between Member States within the meaning of the Dassonville judgment (Case 8/74 [1974] ECR 837), so long as those provisions apply to all relevant traders operating within the national territory and so long as they affect in the same manner, in law and in fact, the marketing of domestic products and of those from other Member States.

17. Provided that those conditions are fulfilled, the application of such rules to the sale of products from another Member State meeting the requirements laid down by that State is not by nature such as to prevent their access to the market or to impede access any more than it impedes the access of domestic products. Such rules therefore fall outside the scope of Article 30 of the Treaty."

[61] The present case is not concerned with selling arrangements, but with local licensing and regulatory provisions, but we consider that the court's observations about selling arrangements apply with equal force to such provisions. Applying the test identified by the ECJ at paragraph 16 of its judgment, the respondents' policy/practice applies to all relevant traders operating within the national territory and affects in the same manner, in law and in fact, the use of domestic products and of those from other Member States. The policy/practice is not by its nature such as to prevent or impede access for products from other Member States any more than it impedes the access of domestic products.

[62] Mr Howlin sought to argue that the guidance given by the court in Keck & Mithouard applied only to selling arrangements, and sought support for this proposition from the Fachverband case. We do not consider that this submission is sound. It is true that both Keck & Mithouard and Fachverband were concerned with selling arrangements; it is accordingly unsurprising that the court addressed itself primarily to those arrangements. However, neither the Advocate General nor the court in Fachverband suggested that the observations in Keck related only to selling arrangements. The footnote to paragraph 46 of the Advocate General's opinion refers to Keck & Mithouard and observes:

"Where the Keck exception is applied, it is necessary to bear in mind the Court's reasoning in paragraph 17 of the judgment, which states that the application of such rules to products from another Member State is not by nature such as to prevent their access to the market or to impede access any more than it impedes the access of domestic products. In my view, it depends primarily on whether a national measure is such as to prevent or impede access to the market."

[63] We agree with Mr Anderson that it is unlikely that the ECJ would have intended its observations to be confined to selling arrangements. Although the facts of these two cases concerned a national prohibition on resale at a loss and the fixing of book prices respectively, we see no reason to apply the reasoning only to those factual circumstances, and not to a regulatory or licensing policy such as that operated by the respondents.

[64] Quietlynn Ltd v Southend Council was a decision of the ECJ some 2 years before its decision in Keck & Mithouard, and it was concerned with local government licensing and regulatory provisions and not selling arrangements, yet the reasoning and language of both the Advocate General and the court in Quietlynn bore striking similarities with the reasoning and language in Keck. The following excerpts from the opinion of the Advocate General in Quietlynn serve to illustrate the point:

"5. If one proceeds on the basis of the formula which was set out in relation to article 30 in Procureur du Roi v Dassonville...that is to say if consideration is given to the question whether the provisions at issue are "capable of hindering, directly or indirectly, actually or potentially intra-Community trade," there can be little doubt that this is the case.

6. It is indeed conceivable that, without the Act and the local authority resolutions adopted pursuant thereto, that is if so called sex articles could be sold without hindrance, sales would be more extensive and imports therefore greater....Regulating the sale of sex articles may therefore, it can safely be assumed, lead to a reduction in imports and thus justify application of article 30.

7. However, a comprehensive appraisal of the relevant case law makes clear that this consideration is not in itself sufficient. In fact, that formula is merely a starting point for the requisite examination....each case must be decided on its own merits.

...

9. I would cite, for example, Oebel (Case 155/80) [1981] E.C.R. 1993 concerning the sale of bakers' wares which, at certain times of the night, could not be sold to individual consumers and retail outlets but only to wholesalers and dealers. A central feature of this case was the finding that intra-Community trade nevertheless remained possible, and, consequently, there was held to be no infringement of article 30.

10. I would also cite Blesgen v Belgium (Case 75/81) [1982] E.C.R. 1211 (concerning the prohibition on the sale of certain alcoholic beverages in Belgian public houses). An important factor in that case was that the rules in question did not apply to other forms of sale and it was, therefore, found that article 30 of the E.E.C. Treaty did not apply since in reality the connection with imports was non-existent.

11. In this regard attention was also correctly drawn to Ministère Public v Gauchard (Case 20/87) [1987] E.C.R. 4879 concerning French provisions relating to authorisations to operate supermarkets which can result in a restriction of sales of goods, including imported products. On this point the question as to the relevance of article 30 was examined during the proceedings. The Advocate General concluded that it was not relevant and pointed out that, as a result of the provisions in question, sales on the domestic market of imported goods and those produced domestically were affected to the same extent. The court evidently shared that assessment.

...

12. The recent judgment in Torfaen Borough Council v B & Q Plc (Case 145/88) [1990] 2 QB 19 is also not without relevance. That case concerned the prohibition on the sale of certain goods on Sundays and is of interest because, in the first paragraph of the judgment containing the court's assessment, it is pointed out that, regard being had to the fact that the rules in question apply to imported and domestic products alike, the marketing of products imported from other member states is not in principle made more difficult than that of domestic products."

[65] In its judgment in Quietlynn the court adopted much of the reasoning of the Advocate General, and again emphasised the purpose of achieving a "level playing field" for products imported from other Member States as against domestic products:

"9. First it must be noted that national legislation prohibiting the sale of sex articles from unlicensed sex establishments applies without distinction to imported and domestic products. It thus does not constitute an absolute prohibition on the sale of the products in question, but merely a rule regarding their distribution, regulating the outlets through which the products may be marketed. In principle, therefore, the marketing of products imported from other member states is not rendered any more difficult than that of domestic products.

10. It must be pointed out that in similar cases concerning rules governing the marketing of certain products the court has held article 30 of the E.E.C. Treaty not to be applicable. In its judgment of 14 July 1981 in Oebel (Case 155/80) [1981] E.C.R. 1993, the court held that national rules governing working hours in bakeries and the hours of delivery and sale of bakers' wares were compatible with article 30 of the E.E.C. Treaty since trade within the Community remained possible at all times. Likewise, in its judgment in Blesgen v Belgium (Case 75/81) [1982] E.C.R. 1211 the court considered that a legislative provision that concerned only the sale of strong spirits for consumption on the premises in all places open to the public and did not concern other forms of marketing the same drinks had in fact no connection with the importation of the products and for that reason was not of such a nature as to impede trade between member states.

11. It must also be pointed out that the provisions prohibiting the sale of sex articles from unlicensed sex establishments have in fact no connection with intra-Community trade, since the products covered by the Act may be marketed through licensed sex establishments and other channels, that is to say through shops in which sex articles account for only an insignificant proportion of sales and which are therefore not required to be licensed, or by mail order. Moreover, those provisions are not intended to regulate trade in goods within the Community and they are therefore not of such a nature as to impede trade between member states."

[66] The language and reasoning of the ECJ in Quietlynn is similar not only to that in Keck, but also to that of the Court of Appeal in Lincoln City Council ex parte King and Cook. The factual circumstances of that case were much closer to those of the present case, it being concerned with judicial review in relation to refusals by two local authorities to renew hackney carriage licences on grounds that the vehicle did not satisfy the local authorities' licensing conditions. It was argued that the policies of the two councils offended article 30 of the EEC Treaty. Swinton Thomas LJ referred to the judgment of Rose J (as he then was) in R v Birmingham City Council, ex parte Wesson [1992] 33 CMLR 377:

"The mere fact that the measure may lead to a reduction in the imports to the United Kingdom is not...sufficient to lead to the assumption that article 30 applies to the measure. Measures which apply without distinction to imported and domestically produced goods and not intended to regulate trade in goods, and which do not prevent the import or sale of goods even if they affect the outlets through which the goods are distributed are not caught by article 30".

Swinton Thomas LJ went on to observe:

"The conditions laid down by the two Councils before they will grant licences apply equally to all producers and manufacturers throughout the Community. In my judgment, contrary to Mr Langstaff's submissions, these policies are not discriminatory policies and do not place other manufacturers outside the United Kingdom at a disadvantage. They are simply designed for the assistance of the disabled. Any manufacturer throughout the European Community can comply with those requirements. I agree with the finding of Brooke J that the submission that article 30 renders these decisions and the policies of the councils illegal is unarguable."

[67] In the same case, Leggatt LJ quoted from Keck & Mithouard, and went on to state:

"The policies of the two Councils with which this Court is concerned are not intended to regulate, and do not regulate, trade in goods within the Community. The policies apply to all traders in the United Kingdom; they affect the marketing of domestic products in the same way as those from other Member States; there is no restriction on importation; and manufacturers in the United Kingdom and in other EEC countries have to fulfil the same conditions in order to produce a vehicle which fulfils the Council's requirements. In my judgment, in neither of the present cases is there any quantitative restriction on imports capable of constituting a breach of article 30 of the Treaty."

[68] We consider that the reasoning in the cases of Quietlynn, Lincoln City Council and Keck & Mithouard supports the respondents' position in the present case. We do not consider that article 34 of the Treaty is engaged in these circumstances. Again, we agree with the Lord Ordinary's disposal of this matter.

[69] For these reasons we shall adhere to the interlocutor of the Lord Ordinary and refuse this reclaiming motion.