Ambassador Cars Ltd., R (on the application of) v Central Criminal Court

This is an application by Ambassador Cars Limited for permission to apply for judicial review. The claimant seeks permission to challenge a decision of the Central Criminal Court on 2 April 2009 to refuse to state a case for the opinion of the High Court.

The claimant is a private hire vehicle operator company. It has held a Private Hire Vehicle Operator's Licence since 2001. That had been granted by the Public Carriage Office ("PCO") and was renewed in 2006. Following a compliance visit on 5 June 2007 the PCO revoked the operator's licence by letter dated 26 July 2007. The claimant appealed to the City of Westminster Magistrates' Court. That appeal was dismissed on 8 August. Their right to a further appeal to the Central Criminal Court was exercised. A hearing took place on 22-25 February 2009. The licence was revoked on the ground that the claimant had failed to comply with regulations 11 to 13 of the Private Hire Vehicles (London) (Operators' Licences) Regulations 2000. It was the record keeping which was found to be defective.

In refusing to state a case for the opinion of this court the presiding judge at the Central Criminal Court, Mr Recorder David Farrer QC, stated that the issues were of fact, not of law, or lacked relevance. The decision of the Crown Court was by a majority. A suspension of the revocation has been granted pending this hearing.

The Crown Court stated that the application was frivolous. That expression has been construed in R v Mildenhall Magistrates' Court, ex parte Forest Heath District Council [1997] 161 JP 401. Lord Bingham CJ, with whom Millett and Potter LJJ agreed, defined the word "frivolous" as used in the statute. He said at page 408:

It must be borne in mind that this court is not a fact-finding court in this context. It is the courts below, including the Crown Court, which have been entrusted with the exercise of fact-finding. This court must respect such findings of fact, save insofar as the treatment of the evidence may be so defective as to amount to an error of law. Respect is also due to the opinions of the PCO, the body entrusted with the duty, in the public interest, to safeguard public safety by the regulation of taxi licences. That clearly is a matter of public concern, given the function of taxis. Passengers will enter a vehicle driven by someone of whom they have no personal knowledge. There is a strong public interest in the keeping of proper records to protect the public in terms of safety on the road, but also in terms of personal safety while entrusting themselves to a taxi driver.

Mr Cox QC has addressed the court persuasively and helpfully. In his written submissions he has summarised the case at paragraph 17 as follows:

In his oral submissions Mr Cox dealt first with the last of those points. Although the original grounds included eleven points, they are comprehended in the seven paragraphs to which I have referred. Regulation 11 provides:

The first relevant inspection was on 1 May 2007. Complaint had been made of the refusal of a driver to accept a passenger who needed to have a guide dog with him. No record was kept of that journey. The case the claimant made was that, in compliance with Regulation 11, there was no need to make a record until the passenger's journey had begun. Mr Cox submits that the obligation arises only at the passenger's point of departure. The practice was for the booking to be accepted by the office (and presumably an informal note made), but the Regulation 11 record would be entered only once the driver had informed the office of "POB" (passenger on board).

There was a further visit on 5 June. The great majority of cases which formed the basis for the revocation, and the subsequent upholding of that revocation, arose on the later visit. Mr Cox submits that in declining to state a case the Recorder has erred in stating that the Regulation was "not the issue on the appeal". At paragraph 12 the court found:

Further analysis of the submission is, however, required, subject to a consideration of the effect of the Regulation. It may bear upon the record of 1 May 2007 which depended upon the absence of a record when the man with the guide dog was refused entry to the cab. However, there is no other evidence set out in the judgment and no findings of fact which enable this court, when considering whether there has been an error of law, to decide whether any of the relevant complaints (some of which are set out at paragraph 25) related to this point, that is the timing of the book entry.

Although details are given in paragraph 25, we are told that they all relate to driver and vehicle records. The judgment of the court does not spell out the lack of booking records, which would enable this court to consider whether reliance had been placed on the point now at issue on Regulation 11. Nor is it a part of the application to state a case that the Crown Court ignored relevant records. The case turned on the later visit when the large number of faults was found. There is no factual basis on which (subject to the record on 1 May 2007) this issue can be of relevance. That is probably what the Recorder had in mind when he gave the answer he did.

In my judgment the submission has no merit. I agree with the ruling of the Crown Court as to the meaning and effect of the Regulation. It would, in my judgment, make a nonsense of the booking system if no records had to be kept until "POB". The particulars in paragraphs (a) to (h) of paragraph 11 support, in my view, that construction of the Regulations. Quite apart from the absence of a factual basis (subject to 1 May), I consider the application on this ground to be "hopeless" (as stated by Lord Bingham).

Mr Cox refers to the commendation of the business and its proprietor by the Crown Court, where it is said:

In the light of the long history of breaches and the earlier reversed revocation, we consider that the intrinsically significant failures of 1 May and 5 June 2007 justified revocation. The PCO was entitled to conclude that nothing short of revocation would stem the flow of failures. So are we. The fact that the PCO did not invoke section 17(2) of the Act so as to give immediate effect to the revocation in the interests of public safety is of no significance."

Mr Cox makes the general point that, over a period of years, the claimant had been allowed, and even encouraged, to function at a certain level of compliance: that if faults were found, a second inspection would follow rather than action such as that taken in the present case. The claimant was allowed to believe that the existing situation would be tolerated. If the operators had been told that from now on they would have no second opportunity to put things in order, they would have taken that opportunity. That opportunity should have been given.

The specific complaint in relation to the PCO is that reliance was placed on the decision of the PCO when the PCO had not considered alternative sanctions to that of revocation. The court set out Mr Cox's submissions at paragraph 51 that the CPO:

I accept that that was the state of the evidence before the Crown Court. There is no specific reference in the report, the contents of which the court summarised, to prosecution or to suspension (a point raised by Mr Cox in his submissions to both courts). I accept that prosecution was not an option considered.

Before expressing my conclusions on that issue, I consider Mr Cox's overall submissions because to some extent they are interrelated. His submission on this aspect of the case is that in the context of an operator receiving a general commendation, which this operator did, and in the context of an operator who had over a period of years expected second inspections, a lesser sanction should at each stage (by the PCO and by the court) have been considered. There is, of course, room for argument as to whether prosecution is a greater or lesser sanction. I follow the important economic considerations at stake which from the operator's point of view may favour prosecution as against revocation. However, in my judgment the PCO are entitled to have regard to the need to ensure compliance and to form a judgment as to whether, in the public interest, and indeed in the interest of operators, prosecution is a course readily to be contemplated.

Against that background Mr Cox submits that there were three errors of law. First, the Crown Court took into account the decision of the PCO when the PCO did not consider a lesser option. Secondly, even if there is no legitimate expectation in public law terms, the history being as it was, if the enforcement regime was to be changed, warning should have been given; in the absence of warning, revocation was not necessary or appropriate. Thirdly, there was in public law terms a legitimate expectation.

The court dealt with this question at paragraph 45 as follows:

At paragraph 47 the court quoted the words of Maurice Kay J:

In summarising his submissions, Mr Cox argues that fairness required that there would be no revocation without the opportunity of a second inspection. Further, for a hard-working operation the sanction imposed was unnecessarily onerous and an undue restriction of the claimant's rights. As the Crown Court noted, there would be serious consequences to the company.

On the legitimate expectation, I agree with the reasoning of the Crown Court at paragraph 45 and, respectfully, with the judgment of Maurice Kay J, which the court cited. That appears to me to deal accurately and comprehensively with the question of legitimate expectation in public law. It also bears upon the more general point made, that in the absence of what in public law terms is a legitimate expectation, fairness required that some other action be taken.

I cannot find any arguable error of law in the approach of the Crown Court to the PCO. They were entitled to have regard to the report of the PCO, which they found to be wholly fair, and to accord respect to the recommendation made. The court used words carefully and advisedly at paragraph 45, which I have already quoted. The PCO was entitled to conclude that nothing short of revocation would stem the flow of failures. I am not prepared to assume that a different sanction was not considered by the PCO. Even the absence of oral or written evidence of consideration of other possible sanctions does not impugn the conclusion of the Crown Court, given the expertise and fairness of the report, that in all the circumstances no lesser sanction would be appropriate.

Moreover, that is not the end of the matter. The hearing before the Crown Court was a fresh hearing. It was for the Crown Court, on the basis of the evidence, to form its judgment as to whether revocation was the appropriate sanction. The court heard submissions from Mr Cox QC, which were no doubt as persuasive before them as they have been before us. They have accurately summarised his submissions and the case put forward by the claimant in relation to legitimate expectation. On their analysis of the evidence, including that of the CPO, in performing their function as fact-finders and in reaching conclusions on the basis of those facts, they were entitled to reach the conclusion that revocation was required. They were entitled on what was a re-hearing (because there had been a first appeal to the magistrates' court) to reach the conclusion they did. There is no arguable error of law either in their approach to the PCO or in their overall approach to the evidence and the sanction required in response to serious breaches.

I have already considered the submissions on regulation 11. In my judgment this is a case where the Crown Court were entitled to decline to state a case. An arguable error of law must be shown. For the reasons I have given, I do not find that there is any arguable error of law such as would permit this court to grant permission for a further hearing or to find that the Crown Court were not entitled to reach the conclusion that the application to state a case was a frivolous one.

I appreciate its importance from the claimant's point of view, but in my judgment the application is hopeless. For those reasons I would refuse permission.

MR JUSTICE CRANSTON: I agree. In deference to the arguments so powerfully put by Mr Cox QC, I would add just a few words.

First, the construction of regulation 11, which he advanced, is untenable given the obvious public protection purpose behind it. No error of law arises in that regard.

Secondly, there can be no issue of law in relation to legitimate expectation. The Crown Court carefully considered that matter but concluded that the expectation was not legitimate. That was a matter of judgment and fact, not of law. Mr Cox put the matter in the alternative: there was a failure to take into account a relevant consideration -- that the practice had encouraged a view on the part of the appellant that it would be allowed time and, indeed, a second inspection, to remedy matters. However, as Pill LJ has pointed out, the Crown Court considered that issue, not least in paragraph 45 of its judgment. In particular it was seized of the powerful point that there were the printed warnings on notices and letters, admittedly sometimes crossed out.

The issue which has troubled me is what seemed to be a failure of the PCO to consider any avenue other than revocation. However, it is clear that Mr O'Brien's report had canvassed other options. The Crown Court was aware of that report. It relied upon the evidence of the previous inspections -- when the claimant was warned that failure in the future might be reported to the licensing authority -- in upholding the conclusion that no lesser measure than revocation would have secured compliance.

Mr Cox has rightly drawn our attention to the reputation and success of this company and of the services provided to the public. Despite his attractive advocacy, I agree with my Lord that there is no flaw in the refusal of the Crown Court to state a case in this instance.