Fivepounds.co.uk Ltd, R (on the application of) v Transport for London

For a vehicle to be treated as part of a fleet under a congestion charging scheme, the operator must control and manage it in practice and to more than a de minimis extent. Nominal contractual powers, or obligations to display promotional material and permit inspection, are insufficient.

A public authority may close a scheme loophole even if only one operator has exploited it. Legitimate expectation generally requires a clear and unqualified representation, supported by full disclosure of the relevant facts. Informal discussions with a helpline do not ordinarily satisfy that requirement. A contractual termination on the ground that eligibility conditions are not met does not, without more, engage property rights under Article 1 of Protocol 1.

Fivepounds.co.uk Ltd operated an account under Transport for London’s fleet notification scheme for the Central London congestion charge. The scheme allowed eligible fleet operators to pay reduced charges monthly in arrears.

Transport for London amended its terms to define control and management by reference to the ability to direct when, by whom and for what purpose vehicles were driven. It then closed the claimant’s account, concluding that the claimant’s customers’ vehicles were not genuinely controlled and managed by it.

The claimant sought judicial review, arguing that actual directions were unnecessary, that the vehicles were used for its business, that the amended definition was ultra vires, and that Transport for London had breached legitimate expectations and Convention rights.

1. Control and management. The claim was dismissed. In the context of the congestion charging legislation and scheme terms, control and management meant practical control exercised to a significant, more than de minimis, extent. The claimant’s requirements for identity discs and advertising stickers, together with limited inspection rights, did not satisfy that test. The court distinguished the employment and tax context considered in Ready Mixed Concrete v Minister of Pensions and National Insurance [1968] 2 QB 497.
2. Purpose of use. It was unnecessary to decide whether the scheme imposed a strict primary-purpose requirement. A genuine dual purpose might exist in some cases, but that issue was separate from control and management. It did not assist the claimant.
3. Amended definition. The amended definition was not ultra vires. Properly understood, it did not require directions in minute detail. In any event, it made no practical difference because the claimant had not controlled or managed the vehicles even under the earlier wording. The claimant’s amended contractual terms also made no difference. Their sweeping powers were not exercised, and the court regarded their purported future exercise as involving a high degree of legal fiction.
4. Legitimate expectation. The applicable principles, drawn from Rowland v Environment Agency [2005] Ch 1, required consideration of clarity, qualification, full disclosure and objective reasonableness. The more specific approach in R v Inland Revenue Commissioners (ex parte MFK Underwriting Agents Ltd) [1990] 1 WLR 1545 was directly relevant. The claimant had not disclosed its arrangements fully before building its business, and had received no clear, unambiguous and unqualified assurance of eligibility. Closing a loophole used by one operator was not, for that reason alone, an abuse of power.
5. Convention rights. The court rejected the reliance on Article 1 of Protocol 1. Although Wendenburg v Germany (ECHR, 6th Feb 2003) showed that goodwill might in some circumstances be a possession, it did not alter English law concerning termination or amendment of the contractual arrangement.
6. The judicial review application was dismissed.