Delta Merseyside Ltd & Anor, R (On the Application Of) v Knowsley Metropolitan Borough Council

A licensing authority considering an application for a private hire vehicle driver’s licence must apply the statutory “fit and proper person” test. That test concerns the applicant’s personal characteristics and professional qualifications. It does not permit refusal because the applicant prefers to work predominantly outside the licensing district.

Where the statutory conditions are satisfied, grant of the licence is mandatory. A policy which treats intended work location as relevant to fitness, or which seeks to curtail the statutory freedom to operate outside the licensing district, is unlawful. The court left open whether a clearly defined, proportionate licence condition could lawfully address local licensing concerns.

Uber and Delta, private hire vehicle operators licensed by Knowsley Metropolitan Borough Council, challenged a policy requiring applicants for private hire driver’s licences to demonstrate an intention to work predominantly in Knowsley. The policy stated that applicants lacking that intention would normally not be granted a licence and that licences could be refused or revoked.

The claimants sought judicial review on grounds including statutory misdirection, consideration of an immaterial factor, uncertainty and infringement of the freedom of establishment under article 49 TFEU. The central issue was whether intended geographical work location could lawfully influence the grant, renewal or revocation of a driver’s licence under Part II of the Local Government (Miscellaneous Provisions) Act 1976.

1. The policy was quashed. The court held that the grant of a private hire driver’s licence is mandatory once the authority is satisfied that the applicant is a fit and proper person and is not disqualified by immigration status. The authority has no general discretion to refuse a licence for an otherwise fit and proper applicant.
2. The phrase “fit and proper person”, in this statutory context, concerns the driver’s personal characteristics and professional qualifications. It does not include work preferences, intended predominant work location or the applicant’s geographical visibility to the licensing authority. A person does not become unfit merely by choosing to work predominantly outside the licensing district.
3. The statutory scheme permits a licensed private hire vehicle, driver and operator to undertake journeys outside the licensing district, subject to the statutory licensing requirements. The policy therefore unlawfully attempted to curtail the driver’s lawful freedom to operate outside Knowsley. The same defect affected the provisions concerning renewals and revocation, so the whole policy document was quashed.
4. The intended location of the applicant’s driving was also an immaterial consideration. The uncertainty challenge was not determined, although the court recognised that the policy was difficult to understand.
5. The article 49 TFEU proportionality issue was also left undecided. The court considered it strongly arguable that the policy imposed a disproportionate burden, but the alleged disproportionality arose from the same defect that made the policy unlawful under the 1976 Act.
6. The court expressed no concluded view on whether a clearly defined and proportionate licence condition could require predominantly local work. That issue was unnecessary to decide and was left open for future litigation.

This was a first-instance judicial review in the Administrative Court. The judgment does not state any prior appellate decision in the same proceedings.