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

LORD JUSTICE PILL:

1. 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.

2. 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 The licence was revoked on the ground that the claimant had failed to comply with regulations 11 to 13 of the Private Hire Vehicles (London) (Operators' Licences) Regulations 2000.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.

3. 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.

4. 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:

"What the expression means in this context is, in my view, that the court considers the application to be futile, misconceived, hopeless or academic."

5. 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.

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

"1. The Crown Court had been wrong to conclude that a legitimate expectation had not existed on the facts as found in the claimant's case.

2. The Crown Court had failed to take into account a relevant factor, namely the existence of the legitimate expectation, in reaching its conclusion.

3. That even if the claimant had not been entitled to rely on the expectation engendered by past practice so as to require a warning before the practice was changed, that did not, as the Crown Court appears to have assumed, exhaust its relevance to this case. The fact that the claimant had been 'led by past history to believe that it would receive a further inspection .... to give it the opportunity once again to rectify its failings', was relevant to the question whether in fact a warning that the practice would no longer apply, possibly coupled with another sanction, would have sufficed to secure compliance. Thus the court had failed to take into account a relevant and important consideration.

4. There was no or insufficient evidence before the court on which it could reasonably have concluded that alternative actions or measures would not have been sufficient to secure the claimant's compliance. The respondent [the PCO] had not offered any retrospective explanation in evidence before the Crown Court as to why the alternatives, which it admitted that it had not considered at the time, would have been ineffective. In the absence of such evidence, it was not open to the Crown Court to speculate as to what its answers would or might have been. Moreover, the Crown Court's own very favourable findings of fact as to the claimant's character, repute and motivation tended to contradict the existence of an adequate basis for its conclusion on this point.

5. The Crown Court, in considering whether available alternative measures would have been sufficient to secure the claimant's compliance, had attached significant weight to the PCO's decision to revoke the claimant's licence, as reflecting the PCO's view that 'nothing short of revocation' would suffice. However, the PCO at the time of its decision had failed to make any relevant assessment or to consider any alternative measures, and its decision could have no logical bearing on that question. Therefore, the court had been significantly affected by an irrelevant consideration.

6. That the Crown Court's decision to uphold revocation was disproportionate and imposed an unnecessarily onerous infringement of the claimant's rights.

7. That the Court's interpretation of Regulation 11 of the Private Hire Vehicles (London) (Operators' Licences) Regulations 2000 was incorrect."

7. 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:

" Particulars of private hire bookings

Before the commencement of each journey booked at an operating centre specified in his licence an operator shall enter the following particulars of the booking in the record referred to in regulation 10 --

(a) the date on which the booking is made and, if different, the date of the proposed journey;

(b) the name of the person for whom the booking is made or other identification of him, or, if more than one person, the name or other identification of one of them;

(c) the agreed time and place of collection, or, if more than one, the agreed time and place of the first;

(d) the main destination specified at the time of the booking;

(e) any fare or estimated fare quoted;

(f) the name of the driver carrying out the booking or other identification of him;

(g) if applicable, the name of the other operator to whom the booking has been sub-contracted, and

(h) the registered number of the vehicle to be used or such other means of identifying it as may be adopted."

8. 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).

9. 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:

"For the sake of completing our view of this incident we should add that, despite the argument of Mr Cox QC, on behalf of Ambassador, such an interpretation of Regulation 11(f) was correct or at least tenable. We have no doubt that the obligation to record the prescribed particulars arises no later than the time of allocation of the driver to the job and that the journey book begins as soon as he/she begins to proceed to the collection point. By that time all the requisite particulars are known to the operator. The need to record every booking at that stage is well demonstrated by the case under consideration. Aborted hirings are especially liable to give rise to complaint or dispute. It would be very odd if they were excluded from a requirement which clearly relates to concerns over public safety and is equally in the interests of the conscientious driver."

Mr Cox submits that that demonstrates the relevance of the Regulation to the reasoning and findings of the court, especially when, at paragraph 19, the complaints which are stated to be relevant at paragraph 20 are (i) the booking records, and (ii) driver and vehicle records. Mr Cox submits that it cannot be correct to say that the Regulation is of no relevance when the court has adopted that approach.

10. 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.

11. 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.

12. 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).

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

"37. .... Ambassador is plainly a reputable and successful business. Mr Khan is rightly respected as a decent, honest and hard-working principal. ....

....

56. .... this is a successful business, providing a livelihood to a large number of people and a high level of service to the many contented customers who took the trouble to register their support for Ambassador...."

Mr Cox submits that if the court had taken only relevant factors into account, the outcome of the appeal to the Crown Court was likely to have been different. It is submitted that the court erred in its approach to the PCO. Reference was made to the PCO's actions. The court said:

"54. In our opinion, it is in this context that the opinion of the PCO itself, the authority charged with regulating hire vehicle operators and drivers and armed with the experience of running the system, can be treated as a relevant factor in our decision as to what is the reasonable response.

55. 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."

14. 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.

15. 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:

"should have considered prosecution (which, apparently, was a weapon which the policy of the PCO disowned) or, at worst, suspension of the licence for such period as would enable Ambassador to demonstrate a lasting reform of its record-keeping system."

Reference was made to a report from the PCO which was before the court. The court dealt with the inspection report at paragraph 18. The person who was responsible for the preparation of the report appeared at the Crown Court and the opportunity to cross-examine her on the relevant issues was taken. The court stated:

"18. This inspection [of 1 May] prompted the preparation of a report headed 'Recommendation for the Consideration of a PHV Operator's Licence dated 6 July 2007 from Mr O'Brien, the PCO Appeal manager to the Head of Standards and Regulations. It is a document of some importance, in our judgment, and a model of balance and fairness, whether or not its conclusion should be upheld. It set out in considerable detail the findings of both inspections of 1 May and 5 June, treating the first by implication, rightly or wrongly, as a compliance inspection. It included findings as to complaints and lost property records and the unlawful use of the term 'taxi' (see section 31 of the Act). It referred to a past history of failed inspections, which we consider later in this judgment. It related to Ms Allman's recommendation of revocation on the grounds of the combined failings revealed by the two inspections. It acknowledged that no notice of the 5th June inspection had been given, that perfection in a large operator was not to be expected and that 'the majority' of the failings seemed to result from a failure to update rather than the complete absence of the required records. It expressed particular concern, however, as to the state of the booking records which could not be made good retrospectively, noting their importance in the context of public safety. It identified two options, namely a further inspection or revocation of the licence and indicated that Mr O'Brien was 'still inclined' to recommend revocation due to the failings in the booking records. The Head of Standards and Regulations approved the recommendation on 13 July 2007."

16. 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.

17. 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.

18. 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.

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

"We are prepared to accept that Ambassador was led by past history to believe that it would receive a further inspection after 5 June 2007 to give it the opportunity once again to rectify its failings. What effect is that said to have had on the conduct of the business? The inescapable implication of Ambassador's argument, in our judgment, is that such a practice allowed it to continue to breach the Act and the Regulations, provided that it could demonstrate temporary compliance for the purposes of a second or third inspection. Alternatively, put somewhat crudely, Ambassador is saying, 'If you had warned us that you might revoke next time, we should have made sure that we complied with the law'. Mr Cox QC, when pressed as to when, if at all, the PCO could say 'enough is enough' without a further re-inspection, argued that it could do so only if the breaches revealed were of such gravity as to justify a peremptory break with past practice. That would involve indefinite tolerance of the level of offending demonstrated on this appeal, unless an unambiguous warning were given that the existing practice would now cease. It would also treat as meaningless the printed warnings on Notices and letters to which we have referred."

In paragraph 32 of its judgment, the court confirms what is summarised in paragraph 45.

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

"We note the words of Maurice Kay J in R v Dinev and Others, ex parte City of Westminster Council (CO/1096/2000) at paragraph 7:

'The present case is concerned with unlicensed street trading, a repeated criminal offence notwithstanding the practice of non-enforcement. As this unlawful activity has created increasing problems for the Council in the recent past, the Council is naturally and properly concerned to address those problems. It has chosen to do so by way of the temporary licensing scheme. In those circumstances the law should be slow to extend to persons acting unlawfully a legitimate expectation of consultation because their expectation does not have a basis in legitimacy and their interest is not one that the law holds protected .' (Our emphasis)"

21. 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.

22. 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.

23. 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.

24. 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.

25. 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.

26. 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.

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

28. 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.

29. 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.

30. 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.

31. 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.

LORD JUSTICE PILL: Are there any applications?

MR BUTT: My Lord, yes. There is an application by the Interested Party for costs confined to the serving of the Acknowledgement of Service.

LORD JUSTICE PILL: Confined to?

MR BUTT: The serving of the Acknowledgement of Service.

LORD JUSTICE PILL: Is that de minimis?

MR BUTT: No. Someone had to respond in some detail to the refusal of the Crown Court to state a case, and that was done.

LORD JUSTICE PILL: Yes. Mr Cox?

MR COX: I do not think I can oppose that.

LORD JUSTICE PILL: Very well.

MR COX: They can join the queue no doubt. I am going to ask your Lordship to continue the stay granted by Wyn Williams J on the condition that we lodge within seven days, in accordance with the CPR, notice of application to the Court of Appeal, for which of course there is a right.

LORD JUSTICE PILL: I do not think we have jurisdiction to do that. We have refused permission.

MR COX: Yes, but pending appeal Wyn Williams J granted the stay until today.

LORD JUSTICE PILL: Yes, pending today's application.

MR COX: Pending the application to this court. If there were no jurisdiction to do that, then one can see, my Lord --

LORD JUSTICE PILL: The general rule is -- it may be that in this particular jurisdiction it is different, but if the lower court refuses permission to appeal, then that is the end of the matter.

MR COX: My Lord, as I understand it, the application has to be made to the Court of Appeal. We are appealing against your Lordships' decision not to grant leave to move for judicial review against a decision not to state a case.

LORD JUSTICE PILL: Yes, this is the High Court.

MR COX: Perhaps I have not established the line as clearly as I should have done at the outset. That is a right of appeal which is granted under the CPR and therefore --

LORD JUSTICE PILL: Yes. You are quite right. I usually sit in a different jurisdiction, but we are the High Court and it is no special status because we are a Divisional Court.

MR COX: No.

LORD JUSTICE PILL: Mr Butt, what do you say about that?

MR BUTT: My Lord, Wyn Williams J made that order recognising that there had been a long period from the decision up to the refusal of the Crown Court to state a case. The Public Carriage Office on that occasion expressed concern that these proceedings are being spiralled, despite there being an absence of any arguable point. We are now more than two years since the decision of the Public Carriage Office to revoke the licence. My Lord, in my submission there is no viable point before this court for an appeal and the Public Carriage Office oppose an application for a further stay.

LORD JUSTICE PILL: Yes.

MR COX: My Lord, we submit, quite frankly to your Lordships, that we wish to appeal and we contend that there are arguable points of law here. One concern that I have is that the full facts are not before your Lordships. This is not a full hearing at which all the facts could be properly considered. Your Lordships have not even seen the document -- the memorandum -- to which your Lordship referred in the judgment. That ought to have been read, in our submission, before a conclusion could be reached as to whether it was properly balanced and a model of fairness. So we do submit that this does raise significant issues which we are entitled as of right to take to the Court of Appeal. We will do so within seven days, which the CPR requires us to do.

The consequence of an error having been made is of such a draconian character for this company -- there is a statement in the bundle which time did not allow me to take your Lordships to, but setting out what those consequences are. It is unimaginable that if indeed the Court of Appeal were to conclude there was here at least an arguable point -- and one that would not be struck out on an application to strike out a pleading -- at least an arguable point, it would be quite wrong if the enforcement of this order were imposed now, given what is at stake, my Lord.

LORD JUSTICE PILL: Yes.

MR COX: Now, we undertake to bring that within seven days -- or inform the Interested Party that we are not going to do so. But I am most anxious to preserve the status quo, at least as long as I can bring before the Court of Appeal the application, and that can be done very quickly. If we lodge within seven days, we will apply for a stay in the Court of Appeal. Your Lordship only has to extend it for such time as we are able to lodge the proceedings and bring the application before the Court of Appeal for a stay. But not to do so would jeopardise the entire right and make it in effect an ineffectual right of appeal.

LORD JUSTICE PILL: Yes. This does not come within the criminal bracket, does it?

MR COX: No, my Lord.

LORD JUSTICE PILL: This is a revocation. Had the other course been taken of prosecution --

MR COX: That would not have been appealed because a fine of £500 is rather different from the loss of hundreds of --

LORD JUSTICE PILL: Yes, but there would be the certification problem there as well.

MR COX: My Lord, in the case of a prosecution it would have been criminal.

LORD JUSTICE PILL: Yes.

MR COX: But this, it is common ground, has been civil throughout.

LORD JUSTICE PILL: Yes. Do you have anything further, Mr Butt? Mr Cox should have the last word.

MR BUTT: My Lord, no.

LORD JUSTICE PILL: Thank you. We will retire.

( The court retired to confer )

LORD JUSTICE PILL: While we are reluctant to grant a yet further stay in this case, Parliament and the rules have seen fit to give remedies to a claimant in the position of this claimant, which includes a right of appeal to the magistrates' court, then to the Crown Court, then to this court, and with the potential of a further application to the Court of Appeal.

That being so, and having regard to what is involved, we are persuaded that a stay should be given on terms. Mr Cox has given the undertaking that any application for permission to appeal will be filed within seven days. We grant the stay for that period and for a further seven days so that an application to the Court of Appeal can if necessary be made.

I feel entitled to do this, although it is not usual for the lower court to make the recommendation, but I would hope that the application could be given expedition in the Court of Appeal.

MR COX: We will try to do so.

LORD JUSTICE PILL: Mr Cox has said, and I fully accept, that he will work for expedition. I hope that the listing officer will also keep that in mind, having regard to the very long time this state of affairs has persisted.

MR COX: I am grateful to your Lordship, thank you.

LORD JUSTICE PILL: Thank you.

MR BUTT: My Lord, the costs to be assessed if not agreed?

MR COX: My Lord, we are talking about the drafting of the Acknowledgement of Service.

LORD JUSTICE PILL: Mr Cox's reaction to your application was such that I would not expect any difficulty in those instructing you agreeing with those instructing him a figure, but failing that, to be assessed.

MR COX: My Lord, it occurs to me that for the purposes of expedition a transcript of your Lordship's ruling would be most helpful. Would your Lordship order an expedited transcript?

LORD JUSTICE PILL: Yes.

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