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Edinburgh v. 3maxblack Llp [2005] ScotSC 44 (27 July 2005)

SHERIFFDOM OF LOTHIAN AND BORDERS AT EDINBURGH

Judgement

Sheriff Kathrine EC Mackie

In causa

THE CITY OF EDINBURGH COUNCIL City Chambers High Street Edinburgh as licensing authority in terms of the Civic Government (Scotland) Act 1982

APPLICANTS

against

3MAXBLACK LLP a limited liability partnership incorporated under the Limited Liability Partnerships Act 2000 Company number SO300418 having its registered office at 28A Carlyle Gardens Haddington EH41 3LS

RESPONDENTS

Act: Doherty QC, Stewart, Advocate, The City of Edinburgh Council

Alt: M Bell, Advocate, The Anderson Partnership, Solicitors, Glasgow

B170/05

Edinburgh 27 July 2005

The Sheriff having resumed consideration of the cause Finds in Fact:-

The Applicants are the Licensing Authority for the City of Edinburgh.

The Respondents submitted to the Applicants on 5^th November and 17^th December 2004 four applications for Taxi Licences. Numbers 3/1 to 3/4 of process are copies of the Respondents' applications.

The Applicants have adopted a policy of limiting the number of taxis in the City of Edinburgh. In July 1990 a limit of 1,030 was imposed. Number 15/15 of process is a copy Minute of the Licensing Sub-committee dated 20^th July 1990. By 2001 that number had increased to 1,211. In June 2001 Halcrow Group Limited, an independent transport consultancy, were commissioned by the Applicants to carry out a survey of demand for taxis. Their report, received by the Applicants in January 2002, recommended the issue of an additional 49 licences.

On 22^nd May 2002 the Applicants's Regulatory Committee recommended to the Executive the issue of 49 new licences in accordance with the terms of the report from Halcrow Group Limited. Number 15/16 of process is a copy of a Report advising the Committee in relation to the survey of demand carried out by Halcrow Group Limited. The Regulatory Committee has no power to determine policy. On 4^th June 2002 the Executive approved the issue of 49 new licences. The Executive's decision was called in by the Applicants's Environmental Quality Scrutiny Panel on 7^th August 2002. The Scrutiny Panel is a cross-party committee of elected members who are able to scrutinise decisions of the Executive. The Panel recommended to the Executive that further enquiries be made. The Executive considered the matter again on 5^th November 2002 and again approved the issue of the new licences. Number 15/17 of process is a copy of a Report to the Executive in relation to the survey of demand. Number 15/18 of process is a copy of the Minute of the Executive's decision. Their decision was called in to the Scrutiny Panel on 27^th November 2002. Number 15/19 is a copy of decisions called in by the Scrutiny Panel. On 27^th November 2002 the Panel agreed to let the decision of the Executive of 5^th November 2002 be implemented. Number 15/20 is a copy of the Minute of the Panel of 27^th November 2002.

Between December 2002 and May 2003 the Applicants issued 49 new licences at the rate of 8 per month. The Applicants' staff were instructed to advise further applicants for taxi licences of the Applicants' policy of limiting the number of taxi licences, that the total number of licences had been issued and that it was very unlikely that further licences would be issued. The fee for lodging an application is £700. The fee is not refunded if the application is unsuccessful. No applications for taxi licences were lodged, and insisted upon, from 2002 until the Respondents' applications were lodged in November and December 2004. A further 30 applications have been lodged since then.

There is no procedure whereby a taxi licence may be transferred from one individual to another. A taxi licence may be held by a corporate body or partnership.

Until 1999 the Applicants employed a Taxi Monitoring Officer. The post was part-time. In April 1999 the post became full time with expanded duties. Since then the position has been known as the Taxi Licensing Officer. The duties comprise monitoring the demand for taxis together with administrative functions including dealing with complaints relating to taxis. The Taxi Licensing Officer has daily contact with the taxi trade and the public. He has regular discussions with the Applicants' Head of Licensing. He monitors the number of applications for all types of taxi and private hire car licences. He conducts occasional stance and street surveys. When the Taxi Licensing Officer is known to be conducting a stance survey the taxi trade communicate by radio to ensure that the stances are serviced with the appropriate number of taxis. Each month he prepares a report to the Regulatory Committee. The purpose of his reports is to monitor the demand for taxis, to comment on any indications that there may be significant unmet demand and thereby assist the Committee in determining whether the grant of a taxi licence may be refused for the purpose of limiting the number of taxis. Numbers 19/2, 19/4, 19/6, 19/9, 19/12 and 12/5 of process are copies of the Taxi Licensing Officer's reports from February 2001 until June 2005.

The level of demand fluctuates at different times of day, week and season of the year. The level of demand is affected by external factors. Between 2001 and 2004 demand was reduced as a result of 9/11 and the BSE crisis.

The Applicants have kept the issue of demand under constant review.

In the Taxi Licensing Officer's report covering May 2004 he advised the Regulatory Committee that between March 2001 and the date of his report there had been an increase in the number of Private Hire Car Licences issued and that growth in the number of private hire cars may be indicative of a latent demand for taxis. Between August 2003 and June 2004 the number of private hire car licences increased by 37. Growth in the number of private hire car licences by itself is not a reliable indicator of demand. During that period there was no indication from the trade or public that there was a significant demand which was unmet. It was suggested that the Applicants consider commissioning a further independent survey to assess demand for taxis in the City. Number 12/5 of process is a copy of the Taxi Licensing Officer's report.

Guidelines issued by the Department of Transport to English local authorities recommend that a survey of demand should be carried out every three years.

On 16^th June 2004 the Regulatory Committee noted the Taxi Licensing Officer's report and decided to refer it to a meeting of the Hire Car Licensing Consultation Group to discuss the commissioning of an independent survey of demand. Number 12/8 of process is a copy of the Minute of the Committee's decision.

The Hire Car Licensing Consultation Group comprises representatives from the taxi and private hire car trade, user groups and officials. Prior to its inception the Applicants consulted with the Taxi Liaison Group which did not include the private hire car trade. The Hire Car Licensing Consultation Group meets quarterly. On 27^th August 2004 the Group considered the Taxi Licensing Officer's report and decided that there was no objection to a survey of demand being undertaken. Number 12/9 of process is a copy of the Group's decision. On 26^th November 2004 the Group noted the various reviews which were to be undertaken including the survey of demand, and that these were to be put out to tender. Number 12/11 is a copy of the decision of the Group of 26^th November 2004.

The cost of obtaining a survey of demand from independent consultants is funded from the Hire Car budget.

An invitation to tender was issued in December 2004. Number 12/6 of process is a copy of the invitation to tender. A tender was received in January 2005 from Jacobs Consultancy, a firm of Transport Management Consultants. Number 12/7 of process is a copy of the tender. The tender was accepted by letter dated 28^th February 2005. Number 19/24 of process is a copy of said letter. The position regarding the tenders received was reported to the Executive on 1^st March 2005. Number 19/25 is a copy of said report. The Executive noted the acceptance of the tender from Jacobs Consultancy. Number 19/26 is a copy of the Minute of the meeting of the Executive on 1^st March 2005.

A draft final report by Jacobs Consultancy has been received by the Applicants. The final report is expected to be received by the Applicants on 29^th July 2005.

Since June 2004 the Applicants have acted expeditiously to obtain an independent report on the demand for the services of taxis in their area.

Normal procedure following receipt of the final report would require the matter to be referred to a meeting of the Hire Car Licensing Consultation Group. Thereafter the matter would be considered at a meeting of the Regulatory Committee with a view to making a recommendation to the Executive. The Executive would then require to consider any change to policy in light of any recommendations made to it. Once the Executive has determined the policy to be adopted the matter would return to the Regulatory Committee for a decision to be made in relation to the Respondents' applications. The decision of the Executive may be called in for consideration by the Scrutiny Panel. The first meeting of the Regulatory Committee would take place in August, the meeting of the Executive would be in September and the second meeting of the Regulatory Committee would be in October.

The procedure could be expedited by placing consideration of the final report on the agenda of a meeting of the Applicants' full Council. A decision of the full Council is not subject to scrutiny by the Scrutiny Panel. Consideration by the Hire Car Licensing Consultation Group would be excluded if the matter were to go directly to the full Council.

When the Respondents attempted to lodge their applications on 5^th November 2004 they were told, initially, that the applications could not be accepted. At the request of the Respondents' representative, Mr Conroy, before he left the Applicants' licensing office, an employee of the Applicants provided a letter confirming the advice which she had tendered. Number 9/4 of process is a copy of her letter. The employee of the Applicants who gave that advice was inexperienced. She is qualified as a Solicitor in New Zealand. She is not qualified in Scots Law. She commenced employment in the Applicants' licensing department in December 2003. In November 2004 she had no experience of dealing with receipt of applications for taxi licences. After presentation of the applications she checked the position with the Applicants' principal Solicitor. By letter dated 8^th November 2004 her error was corrected and the Respondents were advised that their applications had been accepted. Number 9/3 of process is a copy of said letter.

When the Respondents' fourth application was lodged on 17^th December 2004 an employee of the Applicants in their licensing department wrote on the form "Advised he will not get a plate as there are none available but he insisted.".

Number 9/2 of process is a copy of a letter dated 28^th February 2005 from the Applicants' Director of Corporate Services to David McLetchie MSP.

Consideration of the Respondents' applications has been passed to the Cab Inspector. The Cab Inspector is a serving police officer who is seconded to the Applicants for the purpose of assisting in consideration of applications for taxi licences. His duties comprise facilitating a report from the Chief Constable on the question whether the applicant is a fit and proper person to hold a licence and assessing the suitability of the proposed vehicle for use as a taxi.

One of the persons in the Respondents was found not to be a fit and proper person and has been removed from the company.

Details of the vehicles proposed by the Respondents to be used as taxis have not been provided. A licence cannot be granted until details of the proposed vehicle have been provided and it has been inspected by the Cab Inspector and found to be suitable for use as a taxi. In view of the significant outlay involved it is not unusual for an applicant to delay purchasing a vehicle until an indication has been given by the Applicants as to whether a licence may be granted.

The Applicants have been unable to complete their inquiries within a period of six months from the date when the Respondents' applications were made. The Applicants have acted in good faith.

FINDS IN FACT AND IN LAW that there being good reason to extend the period within which the Applicants may reach a final decision on the Respondents' applications for taxi licences sustains the Applicants' first plea-in-law, repels the Respondents' pleas-in-law and EXTENDS the period within which the Applicants' Regulatory Committee may reach a final decision regarding the Respondents' applications up to and including 30^th October 2005; finds the Respondents liable to the Applicants in expenses, allows an account thereof to be lodged and remits same to the Auditor of Court to tax and to report, certifies the cause as suitable for the employment of Senior and Junior Counsel.

NOTE

The Applicants are the City of Edinburgh Council who are the Licensing Authority for taxis in their area under the Civic Government (Scotland) Act 1982. The Respondents are a limited liability partnership having their registered office in Haddington. In November and December 2004 the Respondents lodged with the Applicants four applications for taxi licences. Section 3(1) of the Act provides

"For the purpose of the discharge of their functions under this Part of this Act every Licensing Authority shall consider within 3 months of is having been made to them under paragraph 1 of Schedule 1 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."

Section 3(2) provides

"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."

The Applicants crave the court to extend the period within which they may reach a final decision on the Respondents' applications until 30^th October 2005. The application is opposed.

Evidence was led from the Applicants' principal Solicitor and Head of Licensing Robert J Miller and Peter G Lang their Taxi Licensing Officer. The Respondents led evidence from William Conroy, one of their Directors, Graham Brown, an applicant for a taxi licence, Niamh Laffan and Jessamy Herbert, employees of the Applicants and James Inch the Applicants' Director of Corporate Services. There was relatively little dispute on the facts.

The Applicants' position, put short, is that they have adopted a policy of limiting the number of taxi licences. A figure of 1260 licences was considered in November 2002 to be sufficient to meet the demand for the services of taxis following a comprehensive survey of demand by independent consultants who reported in January 2002. A Taxi Licensing Officer is employed to monitor demand by looking at various factors which might indicate that there is significant demand which is unmet. In June 2004 he reported that one indicator, namely a continued increase in the number of private hire car licences, was present. Taken together with the fact that some three years had elapsed since the last comprehensive survey of demand the Applicants decided to commission a further survey to ascertain whether there existed a significant demand which was unmet. After the process of commissioning the survey had commenced applications for taxi licences were received from the Respondents. The Applicants wish to have the report from the consultants conducting the survey in order to consider these applications. The report is expected to be received on 29^th July 2005. The Applicants seek an extension of the six month period within which to reach a final decision on these applications.

In summary, the Respondents in answer allege that since the first survey of demand was carried out the Applicants have done nothing to ascertain whether a significant demand is unmet. They have discouraged the lodging of applications for taxi licences thus creating the false impression that there is no demand which is unmet. By their inactivity they have put themselves in a position where they are unable to satisfy the provisions of section 10(3) of the Act. Such conduct on the part of the local authority cannot amount to good reason to grant an extension of time.

Mr Miller gave evidence about the operation of the Applicants' policy for determining applications for taxi licences. In normal circumstances a licence will not be granted if to do so would exceed the number of licences which the applicants have determined is sufficient to meet the demand for the service of taxis in their area. The objective was that there should be no significant unmet demand in Edinburgh. A policy of limiting the number of taxi licences was adopted in 1990. In 2001 as a result of pressure largely from the taxi trade a survey of demand was commissioned from an independent firm of transport consultants, Halcrow Group Limited (Halcrow). They undertook a comprehensive range of investigations, fully documented in their report, including stance observations between June and October 2001. Although their report was received by the Applicants in January 2002 its recommendation to increase the number of taxi licences by 49 was not ratified until November 2002 because of the process of consultation, scrutiny and consideration by various committees. The Regulatory Committee of the Applicants cannot determine policy and required to make recommendations to the Executive. Decisions of the Executive could be scrutinised by a cross-party committee who could call in the decisions to examine the reasoning behind the proposed policy and hear from witnesses. The Scrutiny Panel could either recommend that the decision be given effect to or that some change be made. The decision to issue new licences was called in to the Scrutiny Panel on two occasions. Once the Halcrow recommendation was ratified a further 49 licences were issued on a staggered basis of 8 per month. This process was completed by May 2003.

The Applicants employ a Taxi Licensing Officer to monitor demand for the service of taxis and to carry out administrative functions including dealing with complaints relating to taxis. Prior to April 1999 the post was filled on part-time basis. Since then it has been a full time post. The Taxi Licensing Officer has daily contact with members of the taxi trade and the public and has regular discussions with Mr Miller. He prepares a report each month for the Applicants' Regulatory Committee. It was accepted by the Taxi Licensing Officer that the monthly report by itself would not inform the Committee of the demand for services of taxis. The Taxi Licensing Officer's report was not a survey of demand. The purpose of the report was to assist the Committee through reviewing a number of indicators and highlighting, when appropriate, the need to instruct a further independent survey of demand. Factors considered by the Taxi Licensing Officer included comments from the taxi trade and the public, the number of private hire car licences issued, the number of applications for taxi licences, and occasional street and stance surveys.

Mr Bell criticised the absence of regular stance surveys carried out by the Taxi Licensing Officer. I accept the Taxi Licensing Officer's explanation that the stance survey offered little information of value, particularly when compared with the information produced by a comprehensive survey conducted by an independent consultant. Further, the Taxi Licensing Officer said that any information obtained was doubtful because when it became known that he was conducting a stance survey action would be taken by the trade to ensure that an adequate number of taxis were available at the stances. This evidence was not challenged.

Both Mr Miller and the Taxi Licensing Officer said that after the additional 49 licences were issued they were surprised by the continuing growth in the number of private hire car licences issued. A period of time was required after the issue of the new licences to see the effect. Demand was said to be dependent on a number of factors including the time of day, the day of the week, the season. The Taxi Licensing Officer had noted a decrease in demand as a result of various events such as 9/11 and the BSE crisis. Demand at the end of the year, over the festive period, is notably greater than at the beginning of the year. The increase in private hire car licences could be explained by, for example, the introduction of a new company or the obtaining of a new contract for the supply of hire cars. By itself the growth in private hire car licences is not considered to be a reliable indicator of demand for the services of taxis. The first report by the Taxi Licensing Officer after the number of licences reached the new figure of 1260 disclosed the number of private hire car licences issued to be 676. In June 2004 the number had increased to 713, an increase of 37. Although the increase was not significant a pattern of continued growth was apparent which may indicate a latent demand for the services of taxis.

In June 2004 the Taxi Licensing Officer reported to the Applicants' Regulatory Committee that in light of the continuing growth in private hire car licences the Applicants may consider commissioning a further independent survey to assess demand for taxis in the City. Mr Miller gave evidence about the procedure adopted. The matter was initially referred to the Hire Car Licensing Consultation Group to consider the commissioning of an independent survey. Mr Miller explained that under the previous administration there had existed a Taxi Liaison Group. It had been felt that private hire car licensees required greater representation. The present Consultation Group comprises drivers and operators representing the trade, user groups and officials. The Group meets quarterly. Mr Miller said that everything to do with the licensing of hire cars is funded through the licence fees which mean that the trade is effectively funding the exercise. For this reason it is considered important to keep the Group informed on developments. The frequency with which independent surveys are instructed would have an effect on the amount of the licence fee.

Mr Bell criticised the Applicants approach to people attempting to lodge applications for taxi licences. Mr Conroy and Mr Brown gave evidence about what they said happened when they tried to lodge their applications. There was little dispute about what actually happened although Mr Conroy seemed to me to embellish the account unnecessarily. It was clear that their applications were accepted when insisted upon after advice was given about the likelihood of them being successful. Miss Laffan and Miss Herbert seemed to me to give a clear and frank account of what happened when they were involved in the lodging of applications. Miss Herbert who acknowledged without reservation the error made particularly impressed me. Mr Inch confirmed much of what Mr Miller had said.

While the issue was being progressed through the various committees Mr Miller said that work was ongoing in framing an invitation to tender. After the decision to proceed to commission an independent survey was taken the invitation to tender was finalised and issued in December 2004. The tender by Jacobs Consultancy was considered the best. One of the factors considered in assessing the tenders was the timeframe within which a report would be available. It was considered that the Jacobs Consultancy was most likely to produce a robust report in as short a time as possible. The tender was accepted by letter dated 28^th February 2005. A draft final report has been received and the final report is expected to be received on 29^th July 2005. According to Mr Miller the draft report appears to address all matters which the consultants were instructed to address.

Once the final report has been received it will require to be considered. In the event that this application is granted and the extension of time allowed Mr Miller said that a meeting of the Hire Car Licensing Consultation Group would be called with a view to the Group's views being available for the next meeting of the Regulatory Committee which would take place in August. That committee would make recommendations to the Executive which would meet in September. He said it was likely that the decision of the Executive would be called in by the Scrutiny Panel which would have the opportunity to call witnesses from the Consultancy and other interested parties. He believed it would be possible to have a policy in place to allow the Respondents' applications to be considered by the end of October. If normal procedure was not possible the procedure could be expedited. A meeting of the Hire Car Licensing Consultation Group was not a mandatory step. Since the Regulatory Committee cannot make policy decisions the matter could be put straight onto the agenda for a meeting of the full Council. Decisions of the Council are not subject to scrutiny by the Scrutiny Panel. A meeting of the Regulatory Committee could be called on seven days notice to reach a decision on the applications. This procedure, while shorter, would not permit an opportunity for full discussion and the elected members may feel uninformed. Mr Inch emphasised the importance of full consultation and discussion in view of the contentious nature of taxi licensing.

Applicants' Submissions

Mr Doherty referred to the relevant provisions of the Civic Government (Scotland) Act 1982, namely sections 3(1), 3(2), and 10(3).

Section 10(3) provides

"Without prejudice to paragraph 5 of Schedule 1 to this Act 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 licences are granted by them if but only if they are satisfied that there is no significant demand for the services of taxis in their area which is unmet."

I was referred to the annotations to section 3(2) wherein it is stated that

"the discretionary power of the sheriff to grant an extension is limited to situations where a "good reason" exists for so doing and therefore would cover situations where say the Licensing Authority have, through no fault on their part been unable to complete their necessary enquiries within the six month period. This could be construed widely and it might even be appropriate for the sheriff to exercise his power where there has been inadvertence or negligence on the part of the authority provided that this was not the result of bad faith - see SDD Circular 6/1983 Appendix A para 6 "this provision is designed to strike an equitable balance between the right of the applicant to a speedy decision and the administrative needs of the local authority."

Both Mr Doherty and Mr Bell were content that the reference to the SDD Circular be restricted to that contained within the annotations.

Mr Doherty drew my attention to the provisions of section 10(2) in view of observations which had been made to the effect that a licence might be granted subject to a satisfactory inspection of the proposed vehicle. Section 10(2) provides that

"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 vi of the Road Traffic Act 1972."

Accordingly, it was submitted that it would not be competent to grant a licence subject to a condition in relation to the suitability of the proposed vehicle. In these circumstances the outcome of the survey of demand was not the only matter outstanding in relation to the Respondents' applications.

Proof focused upon the provisions of section 10(3) whereby the grant of a taxi licence may be refused for the purpose of limiting the number of taxis only if the authority are satisfied that there is no significant demand for the service of taxis in their area which is unmet. The reason why the Applicants seek an extension is to check that with their current policy of limiting the number of taxi licences to 1260, there is no significant demand which is unmet. The extension is to enable the exercise to be carried out on the basis of the most thorough robust and reliable information. The information is expected imminently, on 29^th July 2005. The Local Authority wish to await the receipt of the report from the independent consultants before reaching decisions in relation to the Respondents' applications. It was submitted that this was a sensible and fair way to proceed.

In Coyle-v-City of Glasgow Council 1997 SC 370 the court had been critical of the local authority for reaching a decision without conducting a process of checking the level of demand. Coyle was not an application for an extension of time but an appeal against a refusal of an application for a taxi licence. The Local Authority had adopted a policy of limiting the number of licences at a meeting on 12^th February 1991, more than five years before the appellant's application. At page 373A-B Lord President Rodger stated

"There is nothing whatever in the letter to suggest that the committee had applied their minds to the question of what the demand for taxis was in their area in April 1996. All that they seem to have done is to refer to the number in the decision of 12 February 1991. But that is simply an historic figure which may or may not have represented the number required to meet the demand by April 1996. Unless the committee had checked the position they could not know whether the figure still accurately reflected the number of taxis needed to meet the demand."

The circumstances in the present application are very different from those in Coyle. The present application is made with a view to ascertaining the position not in an ad hoc manner but in the most robust way in a short time frame.

At page 373G-H Lord President Rodger stated

"Counsel for the Appellant s submitted that it would be impracticable for the committee to consider the matter at every meeting. We do not agree. It appears that from time to time the Appellants carry out an exercise to determine the level of demand for taxis in their area. Presumably such an exercise lay behind the decision in 1991. Where a figure has been determined in this way all that is required is that the matter should be kept under review by an official who has the information to judge whether the demand has increased since the matter was last considered. If he informs the committee that there has been no change in the level of demand they can be satisfied that at that time there is no significant unmet demand if the relevant number of licences has already been issued. If on the other hand they are told that demand has increased then they will require to reconsider the matter. Unless they do so they will not be able to refuse to grant licences under sec 10(3) since they will not know whether the existing number of licences is sufficient to meet the increased demand."

Mr Doherty submitted that the Inner House in Coyle were not opining prescriptively as to the appropriate means by which the level of demand was obtained. It was an example of how it might be done. What is necessary is that for a decision to be made the authority has before it information from whatever source to allow it to conclude the up to date position regarding demand.

The Applicants employ a Taxi Licensing Officer to monitor the position. As a result of the monitoring there were indications which raised a question in the mind of the authority about what the level of demand for taxis was. A survey of demand was commissioned by them and the final report of that survey is imminent. The Applicants have acted responsibly.

The Applicants policy of limiting the number of taxi licences to 1260 was made in November 2002. This followed a comprehensive and detailed survey of demand. 49 licences were issued over a period up to mid 2003 to reach the limit of 1260. A bedding-in period was necessary to monitor and assess the effect of the increase in numbers. Daily contact with the trade and public was maintained by the Taxi Licensing Officer together with regular contact with the Applicants' Head of Licensing. Monthly reports were submitted to the Applicants' Regulatory Committee to comment if necessary on the question of demand. If there were no indicators suggesting the need for a further survey of demand there would be no comment. In October 2003 stance surveys were conducted by the Taxi Licensing Officer. The result did not raise any concern that there was any unmet demand. Between 2002 and 2004 there was no indication from the trade or public that there was any significant unmet demand or that a further survey was necessary. The Taxi Licensing Officer had indicated that between October 2001 and June 2004 there were indications of a lowering of demand because of a number of factors such as 9/11 and the BSE crisis. The continued increase in private hire car licences might possibly, but not necessarily, indicate unmet demand. The increase could be explained by a significant contract to a private hire car company or a new company having appeared on the scene resulting in additional cars but not necessarily additional demand.

By 2004 it was in the mind of the Taxi Licensing Officer and raised in the discussions with Mr Miller that the continued increase in the number of private hire car licences despite the additional 49 taxi licences might indicate the need for a survey to ascertain the level of demand. A recommendation to commission a further survey was made in June 2004 and the Applicants have proceeded expeditiously since then. The process of obtaining the survey was in hand before the Respondents lodged their applications for taxi licences. It was not a reactive exercise to the presentation of applications. It had been planned and instigated before the applications were made.

Mr Doherty submitted that it was of no assistance to hypothesise what would have been the case if an application had been made at a different time. Nor was it of assistance with regard to the issue whether there was good reason for an extension of time to consider the actings of the Applicants' counter staff. The staff would advise applicants that there was a policy limiting the number of taxi licences to 1260, that these were all issued and that they would be periling the application fee in circumstances where it was unlikely that their application would be granted. The error in not accepting Mr Conroy's application was quickly corrected. Miss Herbert had made a mistake through her inexperience. Mr Brown had accepted in cross-examination that he had been told it was unlikely that his application would be granted. Miss Laffan had confirmed that her advice was that it was very unlikely that an application would be granted. However, it was Mr Doherty's position that this was tangential to the main issue.

The thorough nature of the survey by traffic consultants was most likely to give the Applicants the information on a robust basis as to whether there was any significant unmet demand. It was the wish of the Applicants and the trade that an independent survey be carried out rather than rely upon an employee of the Applicants. This was entirely reasonable.

The question whether there was a good reason for the extension of time could be answered in the affirmative. The report was imminent and would provide the best basis to answer the question whether there was any significant unmet demand. In balancing the administrative needs of the Licensing Authority to come to a proper and informed view and the applicants wish for a speedy decision equity favoured the grant of an extension.

With regard to the length of any extension Mr Doherty's primary position was that it should be until 30^th October 2005 to allow full and normal procedure to be followed. If that was thought to be too long then an extension should be granted to such date as I see fit. The procedure could be expedited by submitting the issue to a meeting of the full Council which would meet on 15^th September 2005. This would allow the matter to be put before the Hire Car Licensing Consultation Group and the Regulatory Committee before the end of September. While an earlier date was technically possible there were inherent risks in trying to have the matter before the Council meeting on 18^th August.

In conclusion Mr Doherty invited me to sustain plea-in-law 1 for the Applicants and repel the pleas-in-law for the Respondents.

Respondents' Submissions

Mr Bell invited me to sustain the Respondents' plea-in-law and repel the Applicants' pleas and dismiss the application on the ground that the Applicants had failed to meet the onus of establishing that there was a good reason for an extension of time.

Mr Bell referred to the passage quoted in the annotations to the 1982 Act from the SDD Circular. He emphasised that Parliament had set statutory time limits within which a decision was to be made so that local authorities would set up administrative procedures to meet them. The Applicants were unable to do so. They had failed to invoke the policy reflected in the cases of Coyle and The Dundee Taxi Cab Co Ltd-v-Dundee City Council 2005 SLT 401.

Mr Bell confirmed that no issue was being taken with the manner in which the commissioning of the survey had progressed since its instigation in June 2004.

It was submitted that the Applicants were well aware of the requirements of section 10(3) of the Act. Mr Bell referred to Coyle but unfortunately he was not referring to the same report as Mr Doherty. In the case reported in 1998 SLT 453 at page 455G-H Lord Rodger said

"Two things stand out. First the use of the phrase "if but only if" emphasises how tightly this discretion is drawn. Secondly the use of the present tense throughout the condition shows that the committee's assessment must be made in relation to the situation at the time when the application falls to be considered, in this case 10 April 1996. In other words when making their decision the committee required to be aware of the current demand for the services of taxis and to be satisfied that there was no significant unmet demand for those services."

If the local authority wishes to invoke section 10(3) and refuse an application for a taxi licence at the point of determination they must be aware of the exact demand in the area on that date. In the opinion of the court in The Dundee Taxi Cab Co Ltd delivered by Lady Cosgrove it is stated at page 403D-E

"It is perfectly plain from the terms of that letter that apart from the survey report of May 2000 all that was before the committee at their meeting on 5 September 2002 were two matters namely information that a fresh survey was underway and was due to report during the following year and a submission on behalf of the applicants as to an increase in the customer demand for the service provided by the company. We consider that these matters far from providing any support for the validity of the 507 figure ought to have raised a question in the minds of the committee as to whether that remained an appropriate measurement of demand at that point in time."

In that case the timescale was more restricted than in Coyle being a period of some 27 months. I was also referred to a passage at page 404B which deals with the issue of an authority maintaining a waiting list which was not an issue in this case. It was accepted that neither case was an example of an application for an extension of time.

It was submitted that it was necessary to look at the chronological history from the date of the last survey of demand and the manner in which the local authority dealt with those who apply for taxi licences and the imposition of their policy. It was clear from the evidence, it was submitted, that it was known to the Applicants that they had to continually assess demand and that if an application was made they would have to assess demand or if not they could not invoke section 10(3). Halcrow was a historical document of little use for more than a few months after the date of its delivery. It was functus by about autumn 2002. Halcrow could not be relied upon but the Applicants applied a policy of deterring applicants on the ground that it was not likely that their applications would be granted. The Applicants paid lip service to their duties and were seeking to avoid the practical problems of instructing a survey. There were no practical problems. It would be possible to revisit the survey report by some independent third party. Nothing was done. They stood by their policy with no information to back it up. A policy of limitation was only valid if they could pass the section 10(3) test. From 2002 until the initiation of the process of instructing the survey in 2004 there were no active steps taken by the Applicants to ascertain whether the data continued to be applicable. There was evidence that by autumn 2003 if an application had been made it could not have been determined properly in terms of section 10(3). From around that date there was no basis for continuing a policy of limitation at that figure and no justification for persuading those who applied not to do so. By dissuading applicants they produced a false monitor. If no one applied they did not have to address the question of demand. The reason no one applied was because they were being dissuaded from doing so. That was not the action of a proper administration. Had they carried out continual assessment it would have raised a warning that a further survey was required. The rise in the number of private hire car licences and the fact that Halcrow could not be relied upon should have made the Applicants reconsider.

Mr Bell submitted that steps should have been taken in the autumn of 2003 to obtain a further survey rather than some 10 months later. The factors which triggered the instruction of the survey are set out in the Minute of the meeting of the Hire Car Licensing Consultation Group on 27^th August 2004 (number 12/9 of process). There was no continual assessment. The Applicants had brought this situation upon themselves as a result of their lack of action before May 2004. Had the survey been instructed earlier there would have been no reason to wait for decisions to be made. The Applicants were the authors of their own misfortune. There was no good reason to remedy that situation by granting an extension of time.

In considering the approach suggested in the SDD Circular equity favoured the Respondents. They were entitled to have their applications dealt with speedily. They had done no wrong. There had been inappropriate administration. The Applicants had failed to discharge the onus upon them to show good reason for an extension of time.

Mr Bell concluded by submitting that if any extension were to be granted it should be for a shorter period than that craved.

Decision

The issue to be determined is whether the Applicants have established good reason for an extension of the time within which they must make a decision on the Respondents' applications for taxi licences. The Applicants maintain that because they are awaiting receipt of an independent report, which will inform them on the question whether there is any significant demand for taxis which is unmet, there is good reason to extend the statutory time period for their decision. The Respondents maintain that there has been inactivity on the part of the applicants which has resulted in them not having the information necessary to reach a timeous decision on their applications and that the consequences of such inactivity cannot amount to good reason.

I consider that there is force in the Applicants' submissions. The Applicants have a statutory obligation in terms of section 3(1) of the Civic Government (Scotland) Act 1982 to make a decision on an application for a taxi licence within six months of the application being lodged. The grant of a licence may be refused for the purpose of limiting the number of taxis "if but only if" the Licensing Authority are satisfied, at the time of reaching their decision, that there is no significant demand for the service of taxis which is unmet (section 10(3) and Coyle). Accordingly the Licensing Authority requires to inform themselves on the question of demand.

In 2001 the Applicants commissioned from Halcrow a survey of demand in which recommendations were made to the effect that demand would be met by increasing the number of licences available by a further 49. The Applicants accepted those recommendations in November 2002. By about the middle of 2003 the additional licences had been issued bringing the total of taxi licences to 1260. Mr Bell maintained that the Applicants had not followed the guidance offered by Lord Rodger in Coyle, and had done nothing "pro-actively" since obtaining the Halcrow report. He made frequent reference to a process of "rolling evaluation" being required. I do not consider his submissions to be well founded. Firstly what Lord Rodger actually said was that "all that is required is that the matter should be kept under review by an official who has the information to judge whether the demand has increased since the matter was last considered." Secondly, the Applicants have employed a Taxi Monitoring Officer, now known as a Taxi Licensing Officer, since before 1997. The current Taxi Licensing Officer has been in post since April 1999. He is in daily contact with the taxi trade and the public and has conducted occasional stance surveys, for such benefit as may be derived therefrom. He is in regular discussion with the Applicants' principal solicitor responsible for licensing. He prepares reports to the Applicants' Regulatory Committee on a monthly basis. It was as a result of his report to the Regulatory Committee in June 2004, drawing to their attention factors which might indicate that a further survey of demand was required, that the Applicants decided to commission a further survey. Mr Bell put it that "when it came to the bit, the Applicants had rushed out and instructed a survey". There might have been some force in this submission if consideration of the survey had been initiated only after the Respondents' applications were lodged but at the time their applications were lodged the process for the instruction of the survey had been ongoing for about five or six months. I am satisfied, on the evidence before me, that the applicants do have in place a system of keeping under review the question of demand.

It was accepted that the Taxi Licensing Officer's reports in themselves did not amount to an assessment of demand. The purpose of the reports was to monitor the position and alert the Applicants to any indications that there might be demand which was unmet. It is entirely reasonable to expect that following the issue of an additional number of licences a period of time would require to elapse within which to assess the impact of the additional licences. It is clear from the evidence that the position was being kept under review. In October 2003, a few months after the issue of the additional licences was completed, the Taxi Licensing Officer carried out a stance survey. The occasional stance survey can be no more than a snapshot and the validity of the information must be doubtful if when the trade learn of the presence of the Taxi Licensing Officer they take steps to ensure that the stances are serviced. However it is a possible indicator of demand and the Applicants took steps to ascertain the position at that time. That demand fluctuates from time to time was not in dispute. Accordingly it is reasonable to review the position throughout all the known periods of fluctuation. A period of one year from the issue of the additional licences would not seem unreasonable on that basis. The fact that the expected fall in the number of applications for private hire car licences had not materialised together with the guidance in England that surveys of demand should be carried out every three years, evidence of which was unchallenged, prompted consideration of the instruction of another survey to ascertain whether there was any significant unmet demand. No suitably qualified witness was called on behalf of the Respondents to offer evidence as to what steps could or should have been taken or when they could or should have been taken. There was accordingly no evidence to support Mr Bell's submission that the Applicants should have instructed a survey of demand in autumn 2003.

The evidence led on behalf of the Respondents focused largely on the Applicants' approach to the lodging of applications for taxi licences. The Respondents' position was that the Applicants were actively discouraging people from lodging applications which resulted in a false indicator of demand. There was little dispute about what happened when the Respondents attempted to lodge their applications on 5^th November 2004. Where there was any difference between the evidence of Mr Conroy and Miss Herbert I preferred the evidence of Miss Herbert. The error which she made as a result of her inexperience was quickly corrected and the Respondents' applications were accepted and are being considered. So far as Mr Brown is concerned his "connection" with the Respondents was neither explained nor explored. At no time did he offer a verbatim account of what he was told when he presented an application for a taxi licence. In his evidence in chief he said he had been told he was wasting his time but in cross-examination he accepted he had been told that it was unlikely that he would be successful and the fee of £700 could be lost if he was. While it was clear that Mr Brown wished to be supportive of the Respondents his evidence did not seem to me to be inconsistent with the Applicants' position that counter staff were to advise applicants that there was a policy limiting the number of licences, that the limit had been reached and that it was very unlikely that a further licence would be granted. Miss Laffan, who was on the front counter of the licensing department in November 2004, confirmed that that was the advice she had been instructed to give. Given the amount of the application fee, namely £700, and the fact that this was non-refundable, it does not seem unreasonable to give applicants an opportunity to reconsider. It would be open to an applicant to insist in his application as the Respondents have done and, notwithstanding his impression that the staff were "trying to put him off", as Mr Brown appears to have done.

I do not consider that there was anything improper in the advice being tendered by the Applicants. Indeed if that advice was not tendered and applicants not afforded an opportunity to consider whether they really wanted to risk their £700 application fee in circumstances where it was considered to be very unlikely that the applications would be successful I would have expected that there would have been an outcry. In any event if people were being dissuaded from submitting applications in circumstances where it was believed that there was a significant unmet demand I would have expected the Taxi Licensing Officer to be receiving representations from the trade at least.

Evidence to suggest that there is a market for the "sale" of taxi licences seemed to me to be, at best, unreliable and irrelevant. It was not relied upon by Mr Bell.

Even if there was some justifiable criticism of the Applicants' actings, which I do not accept, the question is what relevance it would have to the issue of whether there was good reason for this application for extension of time. Mr Bell maintained that the manner in which the Applicants had conducted themselves overall was relevant and where the problems were of their own making there could not be good reason for extending the time. Despite suggesting at one point that there was authority to support his proposition no such authority was produced. Indeed I was not referred to any authority dealing with an application for an extension of time.

In the annotations to section 3(2) it is suggested that good reason might exist in situations where the Licensing Authority through no fault on their part (my emphasis) have been unable to complete their inquiries within the statutory period. However it is also suggested that this could be construed widely and might even be appropriate where there has been inadvertence or negligence on the part of the authority provided that this was not the result of bad faith (my emphasis). The only guidance is the reference to the SDD Circular wherein it is suggested that the provision is designed to strike an equitable balance between the right of the applicant to a speedy decision and the administrative needs of the authority.

In my opinion the court has wide and unfettered discretion in determining whether there is good reason to extend the period of time within which the authority must reach a final decision. In these circumstances even where there may be justifiable criticism of the authority's actings there may nonetheless be good reason for extending the period of time. It is trite that each case must be considered on its particular facts.

In this case I am not persuaded that the Respondents' criticisms of the Applicants are justified. The Applicants have adopted a policy of limiting the number of taxi licences granted by them. Having fixed upon a benchmark figure following the Halcrow report they have kept the position under review. However before they could use that figure as a reason for refusing to grant a licence they must be satisfied that there is no significant demand for the services of taxis in their area which is unmet. In order to so satisfy themselves, because of the time which had elapsed since the Halcrow report and the continued increase in the number of private hire car licences, a survey of demand was commissioned from Jacobs Consultancy in June 2004, before any applications for taxi licences had been lodged and insisted upon. The report of that survey is anticipated to be received on 29^th July 2005. The Applicants wish to reach a decision on the Respondents' applications in light of the up to date information about the demand for the services of taxis in their area. They have been unable to do so within six months of the lodging of the applications because the report from Jacobs Consultancy was not finalised. In seeking to achieve a balance between the right of the Respondents to have their applications determined speedily and the needs of the Applicants to have the information to enable them to reach informed decisions and so fulfil their statutory duties it seems to me that equity favours the Applicants.

Accordingly, it appears to me that there is good reason to extend the period within which the Applicants must reach a decision on the Respondents' applications.

The report on the survey of demand is not the only matter outstanding. The Respondents have not provided in their applications details of the vehicles which they propose to operate as taxis. It is clear from the provisions of section 10(2) that a licence cannot be granted unless the Licensing Authority are satisfied that the vehicles are suitable for use as taxis and that there are in force policies of insurance relating to them. While an applicant may be reluctant to incur the expense of purchasing and insuring a vehicle before receiving an indication that his application will be successful a final decision in relation to the application requires to be made within six months of the application being lodged. If within that period no details of the proposed vehicle are provided then the Licensing Authority cannot be satisfied in terms of section 10(2) and the application may be refused on that basis.

The Applicants crave an extension of the period up to and including 30^th October 2005. The Respondents understandably would prefer a shorter period. While it appears to be possible to expedite the procedures necessary for the Applicants to consider the terms of the final report from Jacobs Consultancy and to determine any policy in light of any recommendations made therein I consider that it would be inappropriate to impose a shorter period upon the Applicants. To do so would, probably, compromise the democratic process and may deprive interested parties, particularly those represented on the Hire Car Licensing Consultation Group, from a full discussion on the terms of the report. It is clear that the issue of taxi licensing is a contentious one. In these circumstances it seems to me that it is more important that the Applicants are assisted in determining any policy with regard to the grant of taxi licences by having the opportunity of full and informed discussions than that an arbitrary procedure is imposed which would result, in any event, in reducing the time period by only a few weeks. Accordingly I will extend the period as craved.

Counsel were agreed that, in accordance with the usual rule, expenses would follow success. They were also agreed that the cause be certified as suitable for the employment of junior counsel. However Mr Bell opposed certification for the employment of senior counsel. I was advised that the matter was of some considerable importance and there were about 30 other similar applications in dependence. Mr Bell submitted that there was no justification for the employment of senior counsel and the position with regard to other applications was irrelevant. I am satisfied that this matter is of sufficient importance to justify the employment of senior counsel and accordingly I will certify the cause as suitable for the employment of both senior and junior counsel.