Birmingham & Solihull Taxi Association & Anor, R (on the application of) v Birmingham International Airport & Anor

A body performing public functions may be amenable to judicial review, but not every decision made by it is reviewable. Where a public body exercises contractual rights in accordance with the contract, judicial review generally requires an abuse of power, such as an improper purpose or bad faith. Courts should be cautious before imposing consultation or procedural-fairness duties which dilute freely agreed commercial terms. European Union transparency and equal-treatment principles do not invariably require a fresh tender when an existing tender process has recently concluded. The question is whether the absence of a further process creates a real risk of discrimination or otherwise undermines those principles.

The claimants, a taxi association and one of its drivers, challenged decisions by Birmingham International Airport Limited to terminate an existing exclusive licence for taxi services and to appoint another operator. The termination relied on a contractual power arising from the airport operator’s opinion that there had been a substantial deterioration in the association’s financial circumstances. The claimants alleged improper purpose, procedural unfairness and failure to consult. They also argued that European Union transparency and equal-treatment principles required a fresh tender before the alternative operator was appointed.

The court also considered whether the airport operator was amenable to judicial review and whether its contractual decisions were reviewable in public law.

1. Outcome. Permission was granted at the rolled-up hearing, but the claim for judicial review failed. The challenged decisions were upheld.
2. The airport operator was amenable to judicial review because it performed public functions and made decisions affecting substantial numbers of members of the public. That did not make all its decisions reviewable.
3. Authorities including Mercury Energy Limited v Electricity Corporation New Zealand [1994] 1 WLR 521, R (Molinaro) v Kensington & Chelsea RLBC [2002] LGR 336 and Hampshire County Council v Supportways [2006] EWCA Civ 1035 established that a public body’s exercise of contractual rights in conformity with the contract is generally reviewable only for abuse of power. An improper motive would constitute such an abuse.
4. The contractual licence expressly permitted termination where, in the airport operator’s opinion, there had been a substantial deterioration in the licensee’s financial circumstances. The court was cautious about imposing public law consultation or fairness duties which would dilute or alter those freely agreed terms. In any event, the association had been given a meaningful opportunity to explain its financial position and the representations made did not undermine the objectively justified conclusion that its finances had substantially deteriorated.
5. The transparency and equal-treatment principles identified in Parking Brixen [2005] ECR I-8585 did not require a fresh tender in every case. A recent tender process had concluded only months earlier, and there was no reason to suppose that selecting another connected tender participant without a further process increased the risk of discrimination.
6. The court doubted that the airport operator satisfied the criteria in Foster v British Gas [1990] ECR I-3313 for a body subject to the State’s authority or control, but this did not affect the outcome.