Telford and Wrekin, R (on the application of) v Shrewsbury Crown Court

J U D G M E N T

1. MR JUSTICE MOSES: In this application the Borough of Telford and Wrekin seek to quash a decision of Mr Recorder Rafferty and Justices at the Shrewsbury Crown Court on 21st June 2002. The decision was that the Telford and Wrekin Borough Council ("the Council") should pay the costs of the interested party's appeal. The appeal had been determined by consent.

2. Mr Malik, the interested party, was a taxi driver. He had held a licence issued by the Council between 1990 and May 1999. He had suffered, unfortunately, from diabetes. He had been treated by regulating his diet and taking prescribed medication. In May 1999, however, his medical condition had reached the stage that he needed to control his diabetes, so he was advised, by taking insulin. In accordance with the terms of his Hackney Carriage Licence, he had to submit himself for medical examination on reaching the age of 45 and, as one would have expected of him, he disclosed the fact that he had become an insulin-dependent diabetic.

3. The Council, in exercising its obligation to consider whether to renew the licence, sought advice from a Dr Wainwright. Dr Wainwright wrote to the Council on 18th July 2001. He reported that he had not conducted a full medical report on the taxi driver because he had discovered that he was an insulin-dependent diabetic. He continued:

"Although there was no history of hypoglycaemic attacks, I understood that the medical adviser to Telford and Wrekin Council had always taken the view that diabetics treated with insulin would present an unacceptable risk in taxi drivers. I therefore advised him that he was unsuitable to become a taxi driver because of his medical condition and I did not proceed with the medical. Despite letters from Dr Good who works as an assistant to Dr West the diabetic Consultant at Princess Royal Hospital and some further information from the Licensing Authority, I cannot see that there is any reason to change this opinion. I have discussed the matter with my partners who also act as medical advisers for taxi licensing and they are of the same opinion."

Acting upon that advice, Mr Malik's licence was not renewed.

4. Mr Malik had a right of appeal. The appeal was considered before the Appeals Committee and the original decision of the Council was confirmed.

5. As was his right, Mr Malik appealed to the magistrates. The hearing was before District Judge Brown sitting at the Telford Magistrates' Court. He gave a full and, if I may say so, well-reasoned judgment refusing the appeal. He quoted the letter I have already quoted. By the time of that appeal, which took place on 8th November 2001, Dr Wainwright had written a further letter in which he drew attention to the guidelines within the DVLA's 'At-a-Glance' guide. Following that guidance he repeated that he and his practice took the view that it would not be safe to have an insulin- dependent diabetic driving a taxi. He went on:

"I would also draw your attention to the 'What is 'At a glance' issued by the DVLA page 3 or 4 'DVLA does not issue licences for taxis, ambulances or emergency service vehicles. The Medical commission on Accident Prevention recommends that group 2 medical standards should be applied to these categories as an occupational health policy."

That part of the letter was a reference to the DVLA guidance which Dr Wainwright set out.

6. Further examination of the guidance reveals that where drivers had previously been managed by diet and tablets the DVLA advised that if the driver became insulin treated it recommended refusal or revocation. The letter went on to reiterate the view of both Dr Wainwright and his partners that taxi drivers in a position of Mr Malik should not be granted licences.

7. The District Judge referred himself to the advice of the DVLA guidance and recorded the rival views of the British Diabetic Association. He took the view that the Council were entirely reasonable in refusing the application and stressed the importance of public safety. In refusing the appeal he referred to the advice of the DVLA, the opinion of the Council's medical advisers and what he described as in "the absence of specific and persuasive medical reports on Mr Malik".

8. After the appeal two things of importance occurred. Mr Bridgeman, of Elliot Bridgeman, Telford, who, to his credit, was doing important and hard work on behalf of Mr Malik, discovered that the DVLA's advice was out-of-date. I was shown a letter to Mr Bridgeman which postdates the decision of the District Judge dated 19th December 2001 which makes it clear that that which appeared on the web site was out-of-date, had been removed and that it was a matter for various licensing authorities to determine the standard to be applied to the issue of licences in their area, including the determination of any medical standard. The DVLA had no influence or involvement in these procedures.

9. Once that fact had been discovered, it appeared that the interested party, Mr Malik, obtained a medical report from Dr West, which I have not seen, that the Council was prepared to accept. That report indicated that Mr Malik was fit to drive his taxi despite his condition. In those circumstances the Council agreed that the appeal should be allowed. There remains, however, the question of the costs.

10. Mr Bridgeman in his written statement says that he had incurred considerable costs and was not prepared that the appeal should go by consent without the Council paying his costs. There was, accordingly, a hearing before the Recorder and the Justices. It is that decision which is the subject matter of this application.

11. It is most unfortunate that I should have to record that there is no note agreed by the Recorder of his judgment; apparently the tape was not switched on, which is a lesson to us all and, therefore, any record of his judgment depends upon the notes prepared on behalf of the Council and notes, to which my attention has been drawn, prepared by solicitors for Mr Malik. But it is quite wrong and, indeed, unfair that this court should be asked to make comment or rule upon a decision which has not specifically been endorsed by the Recorder. I would, in other circumstances, have either refused this application or, at least, ordered an adjournment until this had been done. Having regard to the subject matter of this case, it does seem to me appropriate that I should continue, there being to a large extent agreement between the parties as to that which fell from the Recorder in relation to the important part of his decision. But I repeat, this should not happen and, in my judgment, a Recorder should have properly shown to him and endorsed by him the notes taken before any other court sees it, in the absence of a transcript.

12. The Recorder referred to the decision of Lord Bingham, Chief Justice, in City of Bradford v Booth [2000] COD 338 dealing with the power to award costs under section 64(1) of the Magistrates' Court 1998. His reasoning is set out in the claimant's note as follows:

"I have no doubt having had his licence withdrawn the appellant was in the position of being unable to pursue his occupation. I have no doubt the Local Authority were acting reasonably and honestly. Underlying was mischief of arbitrary approach taken by Local Authority in taking a blanket approach - Dr Wainwright's refusal to examine. Had the Local Authority been more reasonable, the costs might have been avoided."

13. He therefore ordered the local authority to pay Mr Malik's costs to be taxed if not agreed. I should observe at this stage that it does not seem that that note accurately records the view that the local authority was acting reasonably. Read as a whole that does not seem to have been the Recorder's conclusion. That is confirmed in the version advanced by the interested party in which he refers to the need to balance on the one hand the financial prejudice to any of the parties against the need to encourage a local authority to stand by the decisions made in the public interest. The note then goes on to say that the Recorder accepted that the local authority believed (in atalics), it acted reasonably in resisting the appeal.

14. It is plain to me that the basis of the decision was the view taken by the Recorder that the authority had refused to renew the licence on the basis of an arbitrary approach, in the sense that it was a "blanket approach". It is that reasoning which is the subject of criticism in this application.

15. The statutory framework under which the local authority had to act is contained in section 51(1) of the Local Government (Miscellaneous Provisions) Act 1976 which provides:

"... a district council ... shall not grant a licence

(a) unless they are satisfied that the applicant is a fit and proper person to hold a driver's licence."

By section 77 there is a right of appeal during which period the person seeking to appeal may carry on his business. There is a right of appeal to magistrates and thereafter to the Crown Court.

16. The principles which a court should apply in determining costs on an appeal from a decision of a licensing authority were considered by the Divisional Court in City Of Bradford Metropolitan District Council v Booth (q v Supra). In that case the principles were explained by Lord Bingham, Chief Justice, in these terms:

"1. Section 64(1) confers a discretion upon a magistrates' court to make such order as to costs as it thinks just and reasonable. That provision applies both to the quantum of the costs (if any) to be paid, but also as to the party (if any) which should pay them.

2. What the court will think just and reasonable will depend on all the relevant facts and circumstances of the case before the court. The court may think it just and reasonable that costs should follow the event, but need not think so in all cases covered by the subsection.

3. Where a complainant has successfully challenged before justices an administrative decision made by a police or regulatory authority acting honestly, reasonably, properly and on grounds that reasonably appear to be sound, in exercise of its public duty, the court should consider, in addition to any other relevant facts or circumstances, both (i) the financial prejudice to the particular complainant in the particular circumstances if an order for costs is not made in his favour; and (ii) the need to encourage public authorities to make and stand by honest reasonable and apparently sound administrative decisions made in the public interest without fear of exposure to undue financial prejudice if the decision is successfully challenged."

I should note that submissions advanced on behalf of the Council in that case were specifically rejected by the court at paragraph 22. They went too far. Those submissions are recorded at paragraph 10 of the judgment. At that point Mr Blair-Gould's submission on behalf of the Council is recorded as being that no costs should be awarded against an authority making an administrative decision unless it has acted unreasonably, improperly or dishonestly. Thus, the court may order costs even if it takes the view that the authority did act reasonably and properly. Nevertheless, it is plain that costs should not be awarded merely because the licensing authority has lost the appeal. It is difficult to conceive of circumstances in which it would be just and reasonable to award costs against an authority acting in a licensing capacity, unless there was a good reason to do so.

17. Be that as it may, it is plain that the Recorder ordered costs against the authority, despite the fact that it had agreed to accept the medical report shown to them after the decision of the District Judge, on the basis that it had adopted an arbitrary approach in taking a blanket view in relation to taxi drivers whose diabetes control was dependent on the taking of insulin. It is that reasoning which is attacked, and it is that reasoning which I must consider.

18. It goes without saying that I should not reverse the exercise of discretion in relation to costs made by this Recorder unless his response to the question, whether costs should be ordered against the authority, was not within the range of reasonable responses, or he had misdirected himself in a significant way, either as to fact or as to law.

19. In my judgment, even though it would be open to the Recorder to order costs, despite taking the view that the Council had acted reasonably, it is plain in this case that the basis of his decision was his view that the Council had adopted what he described as an "arbitrary approach". In my view, it was not open to him to reach a conclusion as to the payment of costs on that basis. It was not open to him to say that the Council had adopted a policy of operating a blanket ban on all taxi drivers who were insulin dependent.

20. It is clear to me that the Council had acted on medical evidence. The medical evidence which was advanced before them was the medical evidence of Dr Wainwright, who took the view that taxi drivers, in the position of this particular individual, should not be granted a licence despite the rival views of Dr Good which Dr Wainwright had seen. That cannot be described as a blanket ban. The position must be distinguished between a Licensing Authority adopting an inflexible policy that because a driver is dependent upon insulin in order to regulate his diabetes he should not have a licence, and one where the Council seeks medical advice and the medical advice is that such drivers should not be licensed. The two situations, are, to my mind, quite distinct. The authority was faced with that medical evidence and had no medical evidence to gainsay it at that stage. Mr Malik had not chosen to put before the Council any other medical advice. Moreover, the advice was endorsed by advice still available from the DVLA. It was Mr Bridgeman's astute work in challenging the DVLA about it and seeking further information which led to the news that that advice had been withdrawn. It is quite impossible to say that the authority, faced with a medical report, which referred to the previous DVLA's advice on web the site, should not have done so. Moreover, the matter came before the district judge, who, in a reasoned judgment, endorsed that approach, and indeed referred again to the fact that there was no other medical advice upon which the Licensing Authority could act before him. Mr Malik had not chosen to obtain medical evidence even at the stage that his appeal, by way of a complete rehearing, was before the magistrate. The magistrate had to exercise the same judgment as the Licensing Authority. But he again, as he specifically mentioned, had no medical evidence to gain say the views of Dr Wainwright.

21. In those circumstances, by the time those acting on behalf of Mr Malik had discovered the true position in relation to the DVLA advice, and had obtained their own medical report, the local authority then changed its mind. It acted wholly reasonably in doing so and could not be said not to have done so.

22. In the the light of all those circumstances, in my view, it cannot be said that the authority acted in an arbitrary way in following a policy of a blanket ban on all taxi drivers dependent upon insulin to control their diabetes. Not so. The facts were all one way that the authority had acted on the basis of medical advice and no other medical advice to gainsay that had been put before them or before the District Judge.

23. In those circumstances, there was to my mind no underlying basis for the conclusion of the Recorder that the authority had acted in an arbitrary way because it had imposed a blanket ban.

24. There was some dispute about whether in fact there was any financial prejudice to Mr Malik. Some suggestion was raised by the authority in this application that his solicitor was acting pro bono. The full position has been set before me, it does not appear to have played a part in the Recorder's decision. There appears to have been a misunderstanding and I need not deal with it further. The fact of the matter remains that, in my judgment, the decision of the Recorder was tainted by his unfounded conclusion that the Council had acted in an arbitrary way. There was no basis for so ruling.

25. In those circumstances, whilst acknowledging that the cases in which this court should interfere with a decision as to costs should be very rare indeed, I am driven to the conclusion that the Recorder did misdirect himself as to whether the Council had acted in an arbitrary way.

26. For the reasons I have given, this application is allowed and the decision ordering costs to be paid by the authority is quashed.

27. MR SPENCER: My Lord, thank you. The defendant here is properly the Crown Court in this particular case.

28. MR JUSTICE MOSES: So no order as to costs.

29. MR RICHARDS: My Lord, I am most grateful to my learned friend for putting the cost's position in that way. My Lord, the decision having been quashed, section 7 of claim form asks for an order remitting the matter back to the Crown Court for the questions to be redetermined. No doubt those sitting behind me would think very careful before---

30. MR JUSTICE MOSES: That theoretically is the right thing, I do not have to----

31. MR RICHARDS: You do not have to----

32. MR JUSTICE MOSES: I could exercise the discretion afresh, because it was decided on an erroneous basis, could I not?

33. MR RICHARDS: My Lord could, but you do not have all the material.

34. MR JUSTICE MOSES: I do not think I should.

35. MR RICHARDS: So, my Lord, just in case.

36. MR JUSTICE MOSES: All I need say is that the decision is quashed and then it will be up to your people whether they want to do that, I think; nobody can stop them.

37. MR RICHARDS: No. I am grateful.

38. MR JUSTICE MOSES: Very good. That is right, is it not, Mr Spencer?

39. MR SPENCER: My Lord, yes.

40. MR JUSTICE MOSES: I will just say I will quash the decision. Thank you both very much indeed, had it not been for the help in the written argument and in Mr Bridgeman's affidavits it would not have been so short. Thank you very much.