Liverpool v Kelly

Fees authorised by section 70 of the Local Government (Miscellaneous Provisions) Act 1976 are not confined to applicants who ultimately receive a vehicle licence. They may include reasonable inspection costs incurred to decide whether a licence should be granted or renewed, including failed and repeated inspections. Charges may be collected when each inspection occurs. The power is for cost recovery, not revenue raising. A council may prescribe separate maximum sums for first and subsequent inspections and related administrative costs without an overall maximum, provided statutory notice and objection procedures for variations are followed.

The respondent operated a hackney carriage in Liverpool. The Council charged £30 for an initial vehicle inspection, £25 for each further inspection and £120 for the licence. The respondent challenged the charges. Andrew Smith J held that the Council could charge only persons whose vehicles were granted licences and that inspection charges could not lawfully be made separately at the time of inspection. The Council appealed on the proper construction of section 70 of the Local Government (Miscellaneous Provisions) Act 1976. The central issues were whether unsuccessful applicants could be charged, whether inspection charges could be levied separately, and how the statutory maximum-fee provisions operated.

The court allowed the appeal, set aside the order of Andrew Smith J and dismissed the respondent’s action. The Council was ordered to pay the respondent’s costs here and below.

1. Scope of the charging power. The phrase fees for the grant of vehicle licences was ambiguous. It could include fees arising from functions properly associated with granting or renewing a licence. Inspection was fundamental to that function. The power therefore permitted charges to applicants whose vehicles failed inspection and were not initially granted licences. Parliament could not have intended compliant applicants, or the Council, to subsidise repeated presentation of substandard vehicles.
2. Separate inspection charges. The Council could charge for each inspection when it occurred, including a further inspection following failure. The judge’s contrary conclusion depended on the rejected premise that unsuccessful applicants were not liable for inspection costs.
3. Maximum fees and variations. The broad purpose of section 70 of the Local Government (Miscellaneous Provisions) Act 1976 was cost recovery rather than revenue raising. The fees could cover reasonable inspection costs, hackney carriage stands, and related administrative, control and supervision costs. Section 70(2) limited the amount chargeable under subsection (1), but did not determine who could be charged. The reference to plural sums allowed separate maximums for first and subsequent inspections, administrative costs and other items without an overall maximum. Any variation had to be advertised and dealt with under subsections (3) to (5). Section 12 of the Interpretation Act 1978 supported the significance of the plural wording.
4. Application. A regime charging £30 for the first inspection, £25 for each subsequent inspection and £120 for the licence was not legally objectionable. The court declined to determine an unpleaded suggestion that the Council had otherwise misused its powers.

1. Court of Appeal (Civil Division): Allowed the appeal, set aside the order below and dismissed the respondent’s action with costs here and below: [2003] EWCA Civ 197.
2. Queens Bench Division, Liverpool District Registry: Andrew Smith J held that the Council could charge only those whose vehicles were granted licences and that inspection charges could not lawfully be made separately at inspection.