The Hon Mrs Justice Swift DBE :
Introduction
This is an appeal by the appellant, Bugbugs Ltd ("Bugbugs"), against a decision of Master Eyre dated 24 January 2007. Bugbugs had sought to strike out, on the grounds of abuse of process, a claim made under CPR Part 8 by the respondent, Transport for London ("TfL"), for a declaration that a pedicab is a "hackney carriage" for the purposes of section 4 of the Metropolitan Public Carriage Act 1869 ("the 1869 Act"). The Master dismissed Bugbugs' application to strike out TfL's claim. He gave permission to appeal.
I heard argument in this appeal on 25 October 2007. Bugbugs was represented by Mr David Wolfe; TfL was represented by Mr James Pereira.
Background
TfL is the licensing authority for hackney carriages in London. Pursuant to section 7 of the 1869 Act, it is an offence for a vehicle coming within the definition of a "hackney carriage" to ply for trade without a licence.
A pedicab is an adaptation of a rickshaw. It has three wheels like a tricycle. Over the back wheels is a compartment in which passengers sit. A pedicab is propelled by an individual using cycle technique, rather than (as with a rickshaw) running along the ground. Most pedicabs rely on pedal power, although a few are electrically assisted. Pedicabs have become a common sight in London and some other cities within the UK, as well as in other parts of the world.
Currently, pedicabs are not subject to any form of licensing. TfL wishes to introduce a licensing regime for pedicabs in order to give it powers to regulate, inter alia, the suitability of operators and drivers of pedicabs and the safety of their vehicles. In June 2006, it published a consultation document, seeking views on proposals for the licensing of pedicabs. It is in the context of those proposals that it seeks clarification of the legal status of a pedicab.
Bugbugs is the largest operator of pedicabs in the UK. It is a not-for-profit organisation, limited by guarantee and run by a board of trustees. It was founded in 1998 and its aims include the provision of a sustainable emission-free integrated form of passenger transport and the creation of work and training opportunities for people from all backgrounds and nationalities. Bugbugs now has 54 pedicabs and over 300 registered riders. Bugbugs leases its pedicabs on a monthly, weekly or daily basis to self-employed riders. The riders then ply the vehicles for hire. Fares are charged at a set rate per passenger, increasing incrementally according to the distance travelled. Unless arranged in advance, the fare does not cover hire of the whole pedicab – merely a seat therein.
Bugbugs has third party public liability insurance up to £2 million and operates systems, procedures and documentation which are aimed at ensuring the safety of staff, riders, passengers and other road users. It keeps riders' and pedicabs' activity logs and comprehensive maintenance records and arranges for regular servicing of its pedicabs. It liaises with relevant organisations, such as the police and local authorities. The information before me suggests that it is a highly responsible organisation.
There are, however, others within the industry who are not so responsible.
For many years, Bugbugs has been pressing for a system of regulation for pedicabs and their operators. It favours a new licensing regime which has been "tailor made" to cover the special characteristics and manner of operation of pedicabs. Such a regime can, it believes, be achieved only by means of primary legislation. Bugbugs opposes any attempt to bring pedicabs within the existing regime for regulating "hackney carriages". Its contention is that to treat pedicabs in effect as if they were black taxicabs would be unworkable in that it would impose conditions on pedicab operators that would be impossible to meet. It is concerned that it would result in pedicab operators going out of business. Because of its opposition to the inclusion of pedicabs within the "hackney carriage" licensing regime, Bugbugs has been anxious to avoid pedicabs from being categorised as "hackney carriages".
TfL came into existence in July 2000. Prior to that date, the body responsible for the licensing of hackney carriages and related matters was the Metropolitan Police Commission (MPC), through its Public Carriage Office (PCO). In July 2000, the PCO became an administrative department within TfL. Mr Roy Ellis has been Head of the PCO throughout the period of time relevant to this case. When it was part of the MPC, the PCO had an enforcement section staffed by police officers. This enforcement section would pass cases to the Crown Prosecution Service (CPS) when appropriate. The CPS would decide whether to prosecute and, if a prosecution was instituted, the CPS would conduct the case.
The relevant statutory provisions
Section 4 of the 1869 Act (as amended) defines a "hackney carriage" as "any carriage for the conveyance of passengers which plies for hire… and is neither a stage carriage nor a tramcar". Pedicabs are clearly not "tramcars". Thus, in order to take them outside the definition of "hackney carriages", it is necessary to establish that they are "stage carriages".
Section 4 defines a "stage carriage" as "any carriage for the conveyance of passengers which plies for hire in any public street, road or place… and in which the passengers or any of them are charged to pay separate and distinct or at the rate of separate and distinct fares for their respective places or seats therein".
Paragraph 16 of Schedule 1 of the Transport Act 1985 ("the 1985 Act") (which was given effect by Section 1 of that Act) provides that, "in any enactment or instrument passed or made before the commencement of section 1 of this Act", "any reference to a stage carriage shall be construed as a reference to a public service vehicle being used in the provision of a local service". By section 137(1)(2) of the 1985 Act, a "public service vehicle" is defined for the purposes of that Act as having the same meaning as in the Public Passenger Vehicles Act 1981 ("the 1981 Act"). Section 1(1) of the 1981 Act provides the definition of a "public service vehicle". One requirement of the definition is that a "public service vehicle" must be "a motor vehicle". A "motor vehicle" is defined by section 82(1) of the 1981 Act as "a mechanically propelled vehicle intended or adapted for use on roads". It is not disputed that a pedicab (even if electrically assisted) does not come within the definition of a "public service vehicle" and is not therefore a "stage carriage" within the meaning of the 1985 Act.
The question that arises is whether the effect of paragraph 16 of Schedule 1 to the 1985 Act is to import the construction of a "stage carriage" contained in that paragraph into the definition at section 4 of the 1869 Act. If that were its effect, then, since a pedicab would not fall within the meaning of a "stage carriage" thus defined, it must be a "hackney carriage".
History of events
I shall now set out a brief history of the relevant events leading to this appeal.
The Lane case
In July 1998, the Court of Appeal heard an appeal in the first case involving pedicabs (referred to in that case as "trishaws"): R v Cambridge City Council ex parte Lane [1999] RTR 182. Mr Lane applied to the Cambridge City Council for licences to ply pedicabs for hire on the streets of Cambridge. He and the Council differed over the terms of the licences as a result of which he applied for judicial review of the Council's decisions. A judge of the Administrative Court ruled that pedicabs came within the definition of "hackney carriages" contained in the Town Police Clauses Act, 1847, a statute which applies in Cambridge and other parts of the country, but not in London. The definition of a "hackney carriage" contained within the 1847 Act is significantly different from that which appears in section 4 of the 1869 Act.
The Begg case
The introduction of pedicabs onto the streets of London and other cities caused concern to operators and drivers of black taxicabs, which fall within the definition of "hackney carriages" and are, therefore, required to be licensed. They viewed unlicensed pedicabs as unfair competition. Pedicabs also caused concern to the police and local authorities, who had to deal with traffic and parking problems associated with their use. The PCO was soon under pressure to clarify the legal status of pedicabs and to ascertain whether they could properly be classed as "hackney carriages" and brought within the existing licensing regime.
In 1999, the PCO decided to initiate a "test case" before the Magistrates' Court. It provided information to the CPS about Mr Begg, the rider of a pedicab owned by Bugbugs, who had been plying for hire without a licence. Mr Begg was charged with driving and plying for hire an unlicensed hackney carriage, contrary to section 7 of the 1869 Act. Bugbugs, which was at that time the only operator of pedicabs in London, conducted the defence on Mr Begg's behalf.
On 6 December 1999, the Stipendiary Magistrate dismissed the case against Mr Begg. He found that a pedicab (referred to in that case as a "trishaw") was not a "hackney carriage". The prosecution had referred him to paragraph 16 of Schedule 1 to the 1985 Act. They argued that the effect of paragraph 16 was to amend the definition of "stage carriage" contained in the 1869 Act, with the result that a pedicab was outside the definition of a "stage carriage" and must therefore be a "hackney carriage". The Stipendiary Magistrate rejected that argument. In his decision, he said:
"… whilst the argument is an attractive one, I note that the purpose of the Act (i.e. the 1985 Act) was to take account of the deregulation of road passenger transport. I can find no reference to Section 4 of the Metropolitan Public Carriage Act to the 1869 Act having been amended by the 1981 Act and conclude that paragraph 16 of Schedule 1 to the 1985 Act was intended to deal with deregulation of bus operations and was not intended at a stroke to convert a stage carriage within the meaning of the 1869 Act into a hackney carriage …
I come to the conclusion that a 3 wheel pedicab propelled by human power where separate and distinct fares are paid by passengers can fall within the term "stage carriage" as defined in Section 4…. ".
It should be noted that, in that passage, the Stipendiary Magistrate does not deal with the opening words of paragraph 16, namely the reference to the application of the definition "in any enactment or instrument passed or made before the commencement of section 1 of this Act".
After the Begg case
Mr Roy Ellis, Head of the PCO, had had no personal involvement in the Begg case. He received a report dated 7 January 2000 from PC Eamon Cadden, the PCO police officer who had been involved in that case, informing him of the outcome. The report informed him that the CPS did not intend to appeal. PC Cadden advised that the "loophole" in the law being used by pedicab operators should be addressed urgently by bringing pedicabs within the provisions of the new Private Hire Vehicles (London) Act 1998. He pointed out that this would require an amendment to existing legislation.
Subsequently, both the MPC and the London Borough of Westminster ("Westminster"), which had its own concerns about the traffic and parking problems being caused by pedicabs, obtained Advices from counsel on the legal status of pedicabs. (It seems that the Advice obtained by Westminster must at some time have become available to the PCO.) Neither counsel had a copy of the full decision of the Stipendiary Magistrate in Begg. Instead, both had a copy of PC Cadden's report. Both remarked that it was unclear from that report what the basis of the Stipendiary Magistrate's decision had been. Neither referred in their Advice to the possible effect of paragraph 16 of the Schedule 1 to the 1985 Act. Mr Muir, who advised the MPC in February 2000, concluded that pedicabs were "stage carriages" and were therefore excluded from the definition of "hackney carriages" and fell outside the current licensing regime. He advised that there was a lacuna in the law which could only be remedied by legislation. Mr Spencer, who advised Westminster in September and November 2000, took the view that it was arguable that a pedicab could fall within the definition of a "hackney carriage", although he considered it more likely that it would be found by a court to be a "stage carriage". He advocated the promotion of new, or the amendment of existing, legislation in order to bring pedicabs within a licensing regime.
It seems that, between 2000 and 2002, there was a general acceptance by the PCO that pedicabs fell outside the definition of "hackney carriages" in the 1869 Act. In July 2002, however, as a result of Mayoral Questions relating to pedicabs, the question of the legal status of pedicabs was raised again. As a result, Mr Ellis asked Mr David Farmiloe, a Manager in TfL's legal department, to provide legal advice on the issue. Mr Farmiloe provided a review of the previous advice and information available to the PCO. That review, dated 30 September 2002, contained no mention of paragraph 16 of Schedule 1 to the 1985 Act or the possibility that it might have the effect of taking pedicabs outside the definition of "stage carriages" and into that of "hackney carriages". Mr Farmiloe advised Mr Ellis that pedicabs fell outside the regimes for licensing "hackney carriages", "private hire" or "public service" vehicles. He suggested that provision for the licensing of pedicabs could be achieved by amending legislation relating to private hire vehicles, by repealing or amending section 4 of the 1869 Act and bringing them within the definition of "hackney carriages" or by promoting new legislation specifically designed to deal with the licensing of pedicabs.
The Oddy Case
In October 2002, Mr Farmiloe was informed by the Tower Bridge Magistrates' Court that there was a private prosecution pending relating to the legal status of pedicabs. This was the first that TfL (or the PCO) knew about the prosecution. Mr Farmiloe told the Magistrates' Court about the previous case of Begg and, subsequently, the Court managed to locate the Stipendiary Magistrate's decision in that case. They sent a copy to Mr Farmiloe, who filed it. It is not clear whether Mr Farmiloe read it at that stage, although it seems probable that he would have done. Mr Ellis' evidence is that he himself did not see the judgment then.
The prosecution was brought by the Licensed Taxi Drivers' Association (LTDA), acting through an individual, Mr Robert Oddy. The relevant charge, which was brought against Bugbugs and two of its riders, was that Bugbugs owned, and the riders drove, a pedicab which was plying for hire, notwithstanding that it was a hackney carriage and had no licence, contrary to section 7 of the 1869 Act. The charge against the two riders under this section was, in the event, not proceeded with.
On 11 February 2003, Bugbugs sent an email to TfL, seeking confirmation (for the purposes of the Oddy case) that "regulation (of pedicabs) is on line for summer 2004". Mr Gary McGowan responded on behalf of TfL, saying, "I can only confirm that the process is beginning this financial year, to pursue primary legislation for the regulation of bicycle rickshaws, electric assisted and electric powered rickshaws… - all of which cannot be classed as taxis, private hire vehicles or buses at this time".
On 13 February 2003, the case of Oddy came before a District Judge (previously a Stipendiary Magistrate). She found that the definition of a "stage carriage" under section 4 of the 1869 Act (see paragraph 11 of this judgment) meant that the method of fare charging was determinative of the status of the vehicle. She concluded that, since the method of charging was per passenger (not for the hire of the pedicab as a whole), a pedicab was a "stage carriage" for the purposes of section 4, not a "hackney carriage". Consequently, the charge against Bugbugs was dismissed. The District Judge made no reference to the effect of paragraph 16 of Schedule 1 to the 1985 Act, nor does it appear that she was referred thereto.
A considerable amount of attention in the Oddy case was directed at resolving the question of whether the decision in the case of Lane was binding on the District Judge. She decided that, since the terms of the 1847 Act were materially different from those of the 1869 Act , she was not so bound.
After Bugbugs' acquittal in Oddy, Mr McGowan wrote to one of its employees, welcoming the news and observing that "it certainly helps justify their (the PCO's) need for new legislation".
On 4 April 2003, there was a meeting of pedicab operators and other parties supportive of the pedicab industry, called by the PCO. At the meeting, Mr Ellis gave a presentation and answered questions from those present. He told them that, if a system of licensing were to be introduced, there was no set timescale and no staff had been assigned to the matter as yet. There was unanimous agreement by those at the meeting that there should be some form of regulation of pedicabs.
On 4 July 2003, there was a further meeting. At its conclusion, Mr Ellis told those present that the PCO's priority at that time was to complete the process of private hire licensing. He said that no timescale could be decided with regard to the licensing of pedicabs. However, he warned them that, if primary legislation was necessary, it could be a lengthy process.
The appeal in Oddy
The LTDA appealed against the decision of the District Judge by way of case stated. The appeal was heard on 12 November 2003 by Mr Justice Pitchford, sitting in the Administrative Court. The LTDA submitted that the District Judge had been wrong to distinguish the case of Lane. It argued that it was illogical and contrary to principle for identical pedicabs to have a different legal status depending on whether they were operating in London or elsewhere in the UK. It was submitted that the District Judge in Oddy should have found that pedicabs were "hackney carriages" under the 1869 Act. Meanwhile, Bugbugs relied on the decision in Begg. It submitted that the legal distinction between a "hackney carriage" and a "stage carriage" arose principally from the different manner in which passengers were charged. It contended that, since passengers in pedicabs were charged "separate and distinct fares for their respective places or seats" then, under the provisions of section 4 of the 1869 Act, a pedicab must be a "stage carriage", not a "hackney carriage".
Pitchford J dismissed the LTDA's appeal and affirmed the District Judge's decision. The case is reported at [2004] LLR 124. The list of statutory provisions considered, at page 125, does not include any reference to paragraph 16 of Schedule 1 to the 1985 Act. Nor is there any reference to paragraph 16 in the judgment of Pitchford J. At paragraph 31 of that judgment, he observed:
"… the definitions of hackney carriage and stage carriage have been left entirely untouched, save that in 1992 the Transport and Works Act added the exclusion of tramcar from the definition of hackney carriage. Interestingly, the word tramcar was not, itself, defined."
He went on :
"[32] I consider section 4 of the 1869 Act to be a deeming provision which caught and still catches all carriages falling within its terms. It seems to me that since it was an agreed fact that pedicab passengers, if there was more than one, were charged a separate fare, then, strange as it may appear, pedicabs fall within the deeming provision. Mr Francis (counsel for Mr Oddy) suggests that the fare scheme was a sham to overcome the legislation. It may be that the fares scheme was deliberately adopted to avoid the licensing provision for hackney carriages but that fact does not in my view render the definition of a stage carriage inapplicable to this vehicle.
[33] While the draughtsman may not have contemplated a vehicle such as this, nor operating procedures such as those of the respondent, I conclude that the district judge was right to find as she did. It seems to me that R v Cambridge City Council ex parte Lane … has no application to ss 4 and 7 of the 1869 Act and the district judge was right to make that finding…
[34] I recognise that the consequences of this decision is that the pedicab plying for hire in London is subject to no licensing regime. That may be regarded as an unwelcome consequence. The first respondent (Bugbugs) has submitted to the London Public Carriage Office a draft strategy for pedicab regulation and it is anticipated that a scheme will be prepared within the next few months. I comment only that unless my decision is wrong in law, primary legislation will probably be required."
It should be noted that TfL dispute the Judge's finding that the definitions of "hackney carriages" and "stage carriages" had been left "entirely untouched" by subsequent legislation. It argues that the effect of paragraph 16 of Schedule 1 to the 1985 Act was to make important amendments to those definitions.
On 18 November 2003, the solicitor acting for the LTDA contacted TfL and asked whether it wanted to join in an appeal to the House of Lords against the decision of Pitchford J. On 4 December, he forwarded to TfL a copy of the questions of law that the LTDA proposed to submit to the Judge for certification. There was no mention of paragraph 16 of Schedule 1 to the 1985 Act in those questions. TfL's legal advisers and the PCO did not consider that an appeal based on the proposed questions was likely to succeed.
Therefore, Mr Farmiloe wrote to the LTDA's solicitor, informing him that TfL did not wish to pursue the appeal.
On 10 December 2003, Pitchford J certified a point of law of general public importance, namely: "Whether the Respondents' pedicabs, operated in London as found by the District Judge, are "stage carriages" within the meaning of section 4 of the Metropolitan Public Carriage Act 1869, and thus excluded from the licensing requirements for "hackney carriages" provided by section 6 and the penalties for unlicensed use provided by section 7 of the same Act". He refused Mr Oddy permission to present a petition of appeal to the House of Lords and the proposed appeal went no further. TfL were informed of this decision.
From 2003 to 2006
Meanwhile, in November 2003, the PCO had commissioned a consultancy firm, Sinclair Knight Mirtz ("SKM"), to prepare a "scoping report" on current and potential pedicab legislation. A draft report became available in early 2004 and, in August 2004, Mr Terry Sugrue (TfL's primary legal adviser on matters relating to the PCO in connection with taxi and private hire vehicle legislation, including pedicabs) received and read the final report. The report's authors reviewed the position as to the legal status of pedicabs and emphasised the fact that there was general agreement that regulation was required. They suggested that regulations for pedicab licensing might be included in a Bill to be sponsored jointly by TfL and Westminster (who were anxious to be in a position to enforce traffic and parking regulations as against pedicabs). Having read the report, Mr Sugrue carried out some research into the term "stage carriage". He quickly found a reference to paragraph 16 of Schedule 1 to the 1985 Act. He came to the conclusion that its opening words ("in any enactment or instrument passed or made before the commencement of section 1 of this Act") had the effect of amending the definition of "stage carriage" contained in section 4 of the 1869 Act, as a result of which pedicabs should be defined as "hackney carriages". This led him to believe that Oddy may have been wrongly decided. He says that, at this stage, he had not seen the decision of the Stipendiary Magistrate in Begg, nor was he aware that there was a copy in TfL's possession. He had seen PC Cadden's report (which referred to section 1 of the 1985 Act, but not paragraph 16 of Schedule 1) but had not understood from it that the Stipendiary Magistrate had considered the effect of paragraph 16. He communicated to Mr Ellis his views about the legal position. It is clear that, at that stage, he believed that primary legislation would still be required in order to incorporate pedicabs into the existing hackney carriage licensing regime.
Accordingly, TfL began to explore the possibility of securing legislation providing for the licensing of pedicabs. Various routes were considered, in particular a Bill sponsored by the Department for Transport ("DfT"), a joint Bill promoted by the TfL and another London local authority or authorities, and a Bill promoted by TfL alone. Each option was found to have its problems. Mr Sugrue and Mr Ellis also decided to investigate the possibility of incorporating pedicabs into the existing licensing regime for "hackney carriages".
In mid-October 2004, TfL instructed leading counsel to advise on the legal status of pedicabs. Later that month, Mr Charles George QC advised that, in the light of paragraph 16 of Schedule 1 to the 1985 Act, pedicabs should not be considered as excluded from the definition of "hackney carriage" in section 4 of the 1869 Act. He advised that Pitchford J did not appear to have considered the point in the case of Oddy. Mr George advised that what was required was a further prosecution which could be taken to appeal, or a declaratory judgment of the High Court.
Meanwhile, discussions were in train about a Bill, to be promoted jointly by TfL, Westminster and the Association of London Government Transport and Environment Committee, making provision for the enforcement of traffic and parking legislation against pedicabs. The draft Bill, when published, included a basic registration scheme for pedicabs to enable them to be identified for the purpose of traffic enforcement. It did not, however, contain provision for a full licensing regime. TfL had not had much, if any, input into the draft Bill, which defined pedicabs as "motor vehicles" for the purposes of enforcement and insurance issues.
In November 2004, Mr Chris Smallwood, Trustee of Bugbugs and representative of the London Pedicab Operators Association ("LPOA") contacted TfL, complaining, inter alia, about lack of consultation about the provisions of the draft Bill. TfL responded by explaining that the draft Bill dealt only with the enforcement of traffic and parking regulations as against pedicabs, and that TfL would be dealing separately with the licensing of pedicabs. According to TfL, Mr Smallwood was told at that stage that TfL had come to the conclusion that pedicabs should probably be categorised as "hackney carriages". Subsequently, TfL advised its co-promoters of the joint Bill that pedicabs should not be defined as "motor vehicles" and that some of the other, more controversial, aspects of the Bill should be dropped.
On 26 November 2004, the (amended) joint Bill was deposited. It was widely criticised. On 21 June 2005, the Bill received its Second Reading and was then able to progress to the Opposed Bills Committee stage. As I have said, the Bill dealt only with issues of the enforcement of traffic and parking regulations as against pedicabs. By the end of 2004, TfL had decided to further its plans for the licensing of pedicabs by seeking a declaratory judgment from the High Court and, having obtained such a judgment, by amending the licensing regime contained with the London Cab Order 1934, in order to create a regime suitable for pedicabs. It was unwilling to state its intentions publicly for fear that the LDTA would immediately initiate another private prosecution, based on the argument it intended to deploy. TfL did, however, inform certain bodies (e.g. Westminster and the DfT) of its intentions. It did not inform Bugbugs and it appears that, throughout this period, Bugbugs remained under the impression that TfL intended to achieve the licensing of pedicabs by means of primary legislation. At the end of October 2005, the Government informed TfL that they did not support the pedicab provisions contained in the Bill on the grounds that they did not provide for a licensing regime.
On 1 November 2005, TfL appeared by leading counsel, Mr Patrick Clarkson QC, at a hearing by the Opposed Bills Committee ("the Parliamentary Committee"). I shall refer to that hearing in greater detail later in this judgment. Suffice it to say for now that TfL did not inform the Parliamentary Committee about the way it intended to achieve its objective of a licensing regime for pedicabs.
Following the hearing, the Parliamentary Committee informed TfL that it intended to drop the pedicab provisions from the Bill. After that, efforts were made by various parties, including TfL, to achieve inclusion of the provisions in an amendment to an existing Road Safety Bill. These efforts ultimately proved fruitless.
On 21 December 2005, at a meeting between TfL and Mr Smallwood, TfL officials informed him of their intention to seek a declaratory judgment that, contrary to the decision in Oddy, pedicabs were "hackney carriages" within section 4 of the 1869 Act. Shortly afterwards, Mr Ellis informed Mr Smallwood that TfL was intending to make the application for a declaratory judgment at the same time as publishing a consultation paper on the content of a licensing regime for pedicabs.
In an email to Mr Sugrue, dated 26 April 2006, Mr Smallwood asked him to confirm that TfL's counsel had considered the case of Begg. In a subsequent telephone call, Mr Smallwood again mentioned the case of Begg. Mr Sugrue indicated that he had read the internal PCO report (i.e. PC Cadden's report) on Begg but not a copy of the full decision. It seems that he did not do so at this time. In June 2006, TfL produced its consultation document on the licensing of pedicabs. It made clear in that document that it would be seeking a ruling from the Court on the question as to whether pedicabs are "hackney carriages".
On 3 July 2006, Mr Sugrue became aware for the first time that Mr Farmiloe had received a copy of a decision in the Begg case in October 2002. Prior to that, the only information about Begg about which Mr Sugrue had been aware was that gleaned from PC Cadden's report. The decision in Begg made clear (see paragraph 18 of this judgment), as PC Cadden's report had not, that the Stipendiary Magistrate had considered the effect of paragraph 16 of Schedule 1 to the 1985 Act. Nevertheless, TfL decided to proceed with its application for a declaratory judgment, as previously planned.
On 24 July 2006, TfL issued its application. On 15 September 2006, Bugbugs applied to strike out the application. Prior to the hearing before the Master, TfL agreed to meet Bugbugs' costs of opposing the application, up to a maximum of £15,000. (There is, however, some dispute between the parties as to whether this agreement extends to the costs of the application to strike out and/or of this appeal.)
The hearing before the Master
The matter first came before the Master on 4 October 2006. At that hearing, TfL relied on a witness statement from Mr Ellis dated 20 July 2006 (made in support of its application for a declaratory judgment), together with a further witness statement from him dated 2 October 2006 (relating to the strike out application). Bugbugs' evidence consisted of witness statements from Ms Susan Ring, its solicitor, and from Mr Smallwood, both dated 24 August 2006. The Master heard evidence on the strike out application. There was considerable dispute about the history of events and the Master adjourned the hearing part heard to enable TfL to serve further evidence, explaining why its position on the legal status of pedicabs had changed.
Before the further hearing, TfL served a witness statement from Mr Sugrue, together with a detailed chronology of events and a large amount of documentation (including Advices from counsel, consultants' reports, etc.) relating to the history of its developing views on the appropriate way to approach the licensing of pedicabs. Bugbugs filed a further witness statement from Mr Smallwood in response.
In his Reasons for Ruling given on 24 January 2007, the Master rehearsed the background and the arguments raised by both parties, then ruled as follows:
"In particular, it must be at least arguable that:
a) The complainant in Begg could not then be identified with the Claimant, since the statutory provision making it merely a department of the Claimant had not yet come into effect.
b) There is nothing about the Claimant's conduct in relation to Oddy to make it obvious that for it to bring this action subsequently would be abusive.
c) A public body whose responsibilities include licensing, ought not to have its action characterised as an abuse merely because it seeks in it to have resolved a point of law that had not previously occurred to it".
Bugbugs' case
Bugbugs' case is that TfL has been guilty of abuse of process in three different respects, namely:
a) By seeking to re-open matters that have been decided by the courts and by failing to pursue the point it now seeks to pursue by way of appeal in the cases of Begg and/or Oddy:
b) By concealing from Bugbugs, the Parliamentary Committee and others its changed stance on the legal status of pedicabs and the way in which it intended to proceed to achieve a licensing regime for pedicabs; and
c) By its conduct in these proceedings.
I shall deal with these three contentions separately.
The re-opening of matters already decided by the courts
The Begg case
Before the Master, and on the appeal before me, it was argued on behalf of Bugbugs that the issue of whether or not a pedicab was a "hackney carriage" within the meaning of section 4 of the 1869 Act had been decided by the case of Begg in 1999. Paragraph 5 of the Stipendiary Magistrate's decision specifically rejected the prosecution's arguments about the effect of paragraph 16 of Schedule 1 to the 1985 Act. Mr Wolfe contended that the parties to the Begg case were, in reality, the same as in the present proceedings. He said that Begg had been a "friendly prosecution" by the PCO of Bugbugs in order to clarify the law. He submitted that the fact that the prosecution was conducted by the CPS on the PCO's behalf and was directed against Mr Begg (rather than against Bugbugs) was immaterial. The "informant" for the purposes of the prosecution had been the PCO. Bugbugs had conducted the defence and Mr Smallwood and others from Bugbugs had given evidence on Mr Begg's behalf. Mr Wolfe pointed to documents [2/358-9 and 2/322] which, he said, made it clear that the PCO had recognised that Bugbugs was the "real" defendant in the case of Begg. Thus, he said, the reality of the position was that Begg had been a prosecution by the PCO of Bugbugs.
Mr Wolfe argued that it would have been open to the PCO to appeal the decision of the Stipendiary Magistrate in Begg. He did not accept that the decision whether to appeal the decision in Begg had been one for the CPS alone. He said that, even if it were correct that the CPS had made the ultimate decision whether or not to appeal, it would plainly have been open to the PCO, having regard to the fact that an important matter of principle was involved, to make representations to the CPS that an appeal should be pursued. There was, he said, no evidence that this was done.
Mr Wolfe argued that the fact that TfL had not come into existence until after the Begg case did not mean that it could not be identified with the PCO, which had been the informant in that case. He pointed out that the PCO had been transferred from the MPC to TfL at the time the latter was created. TfL had succeeded to its legal functions and responsibilities. Its Head, Mr Ellis, was in post both before and after the transfer. He submitted that it was artificial to suggest that acts of the PCO when it was a department of the MPC could not be identified with the acts of the PCO after it became a department of TfL.
As to the PCO's knowledge of the basis of the decision in Begg, Mr Wolfe referred to the passage in PC Cadden's report where he stated:
"The Prosecution argued that under Section 1 of the Transport Act 1985, Stage Carriages become PSVs – local service under PSV Act 1981. The defence argued that the definition only applied to mechanically propelled vehicles, i.e. with an engine, not pedicabs."
He submitted that these words plainly referred to the argument based on paragraph 16 of Schedule 1 to the 1985 Act that had been raised before the Stipendiary Magistrate.
The Oddy case
Mr Wolfe pointed out that that the District Judge in Oddy had confirmed the correctness of the decision in Begg that a pedicab did not fall within the definition of a "hackney carriage". He said that the PCO (which by this time had been transferred to TfL) was well aware of the result of the hearing before the District Judge, yet chose not to become involved in the appeals. He said that the PCO was aware of the impending appeal before Pitchford J and could have applied to have become a party to that appeal. It chose not to do so.
Mr Wolfe pointed to the reference in Begg contained within the Skeleton Arguments submitted by the parties in advance of the appeal before Pitchford J, and to the fact that a copy of the Stipendiary Magistrate's decision in Begg was annexed to Bugbugs' Skeleton Argument on the appeal and would have been read by the judge. He accepted that the LTDA had not relied on any argument based on paragraph 16 of Schedule 1 to the 1985 Act before the Judge. He suggested that this was probably because counsel had recognised there was no merit in such an argument.
Mr Wolfe pointed out that the District Judge had penalised the prosecution in costs on the grounds that it was litigating a matter that had been previously decided by the Court. She had ordered the LTDA to pay the defence costs, giving as her reasons:
"8.6 No challenge to this decision (Begg) was mounted in any Higher Court by the Crown Prosecution Service. No attempt was made by Mr Oddy or the Licensed Taxi Drivers' Association to take over the Prosecution or otherwise seek the appropriate remedy so as to challenge Mr Pratt's findings of law.
8.7 This failure to do so and the decision of the Appellant to pursue in the main identical issues based on identical facts through the Magistrates' Court was in effect a rehearing. I felt that costs should therefore be paid by the Appellant (Mr Oddy) as opposed to Central Funds."
Mr Wolfe pointed out that Pitchford J had upheld the District Judge's cost order, stating that the LTDA had not "come near to demonstrating an error of law or perversity".
Mr Wolfe submitted that, in declining to join in the proposed appeal to the House of Lords, TfL had failed to avail itself of another opportunity to clarify the legal position, if that were necessary. He argued that TfL should not be permitted to re-open a question that had been decided by three different courts and which it had chosen at the time not to pursue further. He submitted that there was no merit in TfL's argument based on the interpretation of paragraph 16 of Schedule 1 to the 1985 Act and its effect on the definitions within section 4 of the 1869 Act. Nor, he said, was it a novel argument since it had been deployed in Begg. Even it were, however, the relevant issue had already been decided by the courts and TfL should not be permitted to re-open the question merely because it now had a "new" argument.
The concealment by TfL of its changed stance on the legal status of pedicabs and its intentions with regard to the licensing thereof
Mr Wolfe said, following the decision in Begg, the PCO and pedicab operators had proceeded on the basis that pedicabs were not "hackney carriages" and were not covered by the existing licensing regime. Bugbugs and others had built up their businesses, believing that to be the case. Bugbugs and the LPOA had been supportive of the introduction of a new regime for licensing pedicabs and had sought to work with the PCO to facilitate that. Mr Wolfe said that, as at the middle of 2004, there was a general consensus on the part of all interested parties (except the LTDA) that the way forward was to proceed by introducing new legislation which would establish a system for the regulation of pedicabs. It was recognised that, although the drafting and processing of new legislation would be complex and time-consuming, it would produce the best result; in particular, it would enable the regulatory system to be tailored to the specific requirements of pedicab operations. He said that this view was reflected in the final version of the SKM report, published in August 2004.
Mr Wolfe said that the only reason that matters had not proceeded in that way was TfL's change of stance (initiated by the research undertaken by Mr Sugrue) on the probable legal status of pedicabs. TfL did not disclose to Bugbugs that its stance had changed, although it is now clear that it had informed others of its position. He contended that TfL had deliberately concealed its change of stance from the Parliamentary Committee at its hearing on 1 November 2005. The Bill which TfL was jointly promoting contained, inter alia, a definition of 'pedicabs'. The Chairman of the Committee asked whether the proposed definition would alter the existing definition of pedicabs as "stage carriages". Mr Clarkson, representing TfL, replied:
"It makes absolutely no difference, sir. The picture is, as the law currently stands, that bicycles, rickshaws, pedicabs are not Hackney Carriages. So, howsoever defined, howsoever a pedicab is defined the law as it currently stands is that it is not a Hackney Carriage. Full stop."
Mr Wolfe pointed out that, less than three weeks after the hearing before the Parliamentary Committee, TfL had told Mr Smallwood of its proposal to seek a declaratory judgment that a pedicab was a "hackney carriage". He said that it was clear that TfL had sought to conceal from the Parliamentary Committee its intentions with regard to the licensing of pedicabs. Mr Wolfe submitted that, had TfL disclosed – as, he said, it should have done – its view that pedicabs were in law "hackney carriages", then consideration could have been given by the Parliamentary Committee as to what, if anything, could be done to resolve the position.
Mr Wolfe said that Bugbugs had been participating in discussions with TfL and had been expending its own resources in trying to facilitate the introduction of a proper system of regulation. It had thought that there was agreement that a licensing system specially designed for pedicabs was the only viable way forward. He argued that there would be considerable difficulties associated with attempting to "shoehorn" pedicabs into the existing licensing regime. Those difficulties would, he suggested, include a requirement that pedicabs should have motor vehicle insurance which insurers could not offer. The fare structure would be inappropriate. The regulations would apply only in London and would not be countrywide. The length of the licensing period would be inappropriate for the pedicab industry. Other problems would also be encountered and would make such a regime unworkable.
TfL's conduct in these proceedings
Mr Wolfe was also critical of TfL's conduct of these proceedings. He suggested that its witness, Mr Ellis, had not been frank about TfL's knowledge of the issues in the Begg case or the Oddy case. In addition, TfL was deliberately trying to distance itself from the previous activities of the PCO. Mr Ellis, he said, made no mention at all of the Begg case in his first witness statement, despite the fact that the Stipendiary Magistrate in that case had considered and rejected the argument which TfL was now seeking to mount.
Mr Wolfe referred in particular to a passage at paragraph 12 of Mr Ellis' first witness statement in which he said:
"Transport for London was made aware of the case (i.e. the Oddy case) after the High Court's judgment was delivered, but at that time it was not focussing its work on pedicabs and had no immediate reason to believe that the case was wrongly decided."
Mr Wolfe said that the documents now available made clear that TfL had in fact been aware of the Oddy case even before the Magistrates' Court hearing in February 2003. Moreover, he said that Mr Ellis' observations at the meeting on 4 July 2003 (see paragraph 30 of this judgment) made clear that TfL was focusing its attention on pedicab licensing at that time. He took issue with Mr Ellis' contention (at paragraph 6 of his second witness statement) that it was not until 2004/05 that the issue of the regulation of pedicabs was "seriously addressed". He argued that it was clear from the history that TfL had been involved in a detailed debate about regulation well before the High Court's decision in Oddy in December 2003. He said that the evidence contained in the chronology appended to Mr Sugrue's witness statement provided material relating to TfL's activities, and to information and advice received by them, that had not previously been before the Court. That material would never have been available to the Court if the Master had not adjourned to give TfL the opportunity to produce further evidence in support of its case.
The Master's decision
Mr Wolfe criticised the Master's judgment in a number of respects.
He submitted that, at paragraph 5 of his judgment, the Master appeared to have pre-judged the issue that TfL was seeking to raise. In addition, at paragraph 10(2)(a) of his judgment, the Master stated that it appeared that the Stipendiary Magistrate in Begg had not had his attention drawn to what the Master described as "the opening words of 5". Mr Wolfe interpreted this as meaning that the Master had concluded that the Stipendiary Magistrate had not been referred to paragraph 16 of Schedule 1 to the 1985 Act. He submitted that this was plainly wrong.
Mr Wolfe also criticised the Master's finding that the complainant in Begg could not be identified with TfL since, at that time, the statutory provision making the PCO a department of TfL had not yet come into effect. He argued that, since TfL is the statutory successor to the MPC and has assumed all the MPC's relevant powers and functions, the activities of the PCO before and after its transfer to the TfL cannot be divided. He submitted that the Master had misunderstood the nature and effect of the transfer of statutory responsibility from the MPC to TfL.
Further criticism was directed at the Master's finding at paragraph 12(3)(c) to the effect that a public body should not have its action characterised as an abuse merely because it seeks to have resolved a point of law that had not previously occurred to it. Mr Wolfe submitted that the Master's finding amounted to a ruling of law which had not been the subject of argument, for which there was no authority and which was unjustifiable.
Mr Wolfe argued that the finding amounted to saying that a lower threshold for a public authority was applicable than for a private individual. He said that, on the contrary, a higher threshold should apply. He referred to the case of Nadarajah v Secretary of State for the Home Department [2005] EWCA Civ 1768 and the judgment of Laws LJ at page 1363, paragraphs 67 and 68, where he emphasised the necessity for public bodies to deal straightforwardly and consistently with the public. Mr Wolfe submitted that, in acting as it had done after its change of stance, TfL had failed to do that.
The law
Mr Wolfe referred me to the case of Johnson v Gore Wood & Co (a firm) [2002] 2 AC 1. Mr Johnson, a businessman, conducted his affairs through a number of companies, including W Ltd, in which he held all but two of the issued shares. He brought proceedings against the defendants, a firm of solicitors, in connection with their allegedly negligent conduct in connection with the exercise of an option to purchase by W Ltd. The solicitors representing W Ltd informed the solicitors acting for the defendants that Mr Johnson also had a personal claim arising from the same matters and that he would pursue that claim in due course. Subsequently, there were discussions between solicitors about a possible overall settlement of the claims of W Ltd and Mr Johnson. Eventually, W Ltd's claim was settled. Later Mr Johnson issued a writ against the defendants in respect of his own claim. The defendants applied to strike out the action as an abuse of process. The judge declined to strike out the action. The Court of Appeal reversed the judge's decision. The House of Lords allowed Mr Johnson's appeal. In an authoritative exposition of the law relating to abuse of process at page 31A-F, Lord Bingham of Cornhill said:
"The underlying public interest is … that there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole. The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the Court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all. I would not accept that it is necessary, before abuse may be found, to identify any additional elements such as a collateral attack on a previous decision or some dishonesty, but where those elements are present the later proceedings will be much more obviously abusive, and there will rarely be a finding of abuse unless the later proceeding involves what the court regards as unjust harassment of a party. It is, however, wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before. As one cannot comprehensively list all possible forms of abuse, so one cannot formulate any hard and fast rule to determine whether, on given facts, abuse is to be found or not. Thus while I would accept that lack of funds would not ordinarily excuse a failure to raise in earlier proceedings an issue which could and should have been raised then, I would not regard it as necessarily irrelevant, particularly if it appears that the lack of funds has been caused by the party against whom it is sought to claim. While the result may often be the same, it is in my view preferable to ask whether in all the circumstances a party's conduct is an abuse than ask whether the conduct is an abuse and then, if it is, to ask whether the abuse is excused or justified by special circumstances."
Mr Wolfe submitted that the Master did not apply the test in Gore Wood. He said that this was not simply a case where a party was seeking to raise matters which it could have raised before and which had already been decided by the courts. He said that TfL had actively misled everyone, including the Parliamentary Committee, about its intentions. It had not been frank with the Court. Had the Master looked at the whole of the circumstances, he should have found that there was clear abuse.
Mr Wolfe submitted that the proper way forward was for TfL to pursue primary legislation for the purpose of licensing and regulating pedicabs. He said that, at present, TfL regarded itself as "shackled" by its change of stance on the legal status of pedicabs. A decision by the Court to strike out its application for a declaratory judgment would release it from its shackles and enable it to proceed with the necessary legislation.
TfL's case
Mr Pereira responded to the three contentions made by Bugbugs as follows.
In response to the contention that TfL's claim amounted to an abuse because it was attempting to re-open a matter that had already been decided and that it (or its successor, the MPC) could have pursued on appeal, Mr Pereira argued that TfL had not been a party to the proceedings in Begg or Oddy. He submitted that, for TfL to be barred from litigating the point at issue, there would have to be "privity of interest" between it and the parties who had prosecuted one or both of the two cases. He referred me to a passage from the judgment of Sir Robert Megarry, V-C in the case of Gleeson v J Wippell and Co Ltd [1977] 1 WLR 510, which is quoted in Gore Wood at 32F-G, in which he said:
"… I cannot see this provides any basis for a successful defendant to say that the successful defence is a bar to the plaintiffs suing some third party, or for that third party to say that the successful defence prevents the plaintiff from suing him, unless there is sufficient degree of identity between the successful defendant and the third party. I do not say that one must be the alter ego of the other: but it does seem to me that, having due regard to the subject matter of the dispute, there must be a sufficient degree of identification between the two to make it just to hold that the decision to which one was party should be binding in proceedings to which the other is party. It is in that sense that I would regard the phrase "privity of interest". "
Mr Pereira submitted that, in the present case, there was no such privity of interest. He further submitted that, even if I were to find that there was privity of interest between TfL and the prosecuting body in Begg, this was plainly not the case as between TfL and the LTDA, which was the prosecution authority in Oddy
Mr Pereira submitted that, in order to establish abuse, Bugbugs would have to show that the point raised in the application for a declaratory judgment could and should have been raised in the previous proceedings. He emphasised that it was not sufficient merely to show that the matter could have been raised. He relied on the dicta of Lord Bingham in Gore Wood at page 33 (see paragraph 75 of this judgment) and to a similar statement by Lord Millett at 59 G-H. Mr Pereira submitted that, contrary to Bugbugs' contentions, the High Court had not decided the point at issue in its application for declaratory judgment.
The Begg case
Mr Pereira accepted that the Stipendiary Magistrate's decision in Begg referred to paragraph 16 of Schedule 1 to the 1985 Act. However, he pointed out that the quotation from paragraph 16 that appeared at paragraph 5 of the Stipendiary Magistrate's decision omitted the opening words (i.e. "in any enactment or instrument passed or made before the commencement of section 1 of this Act") of the paragraph. He submitted that it was that omission to which the Master was referring at paragraph 9(2)(a) and also at paragraph 10(2)(a) and (4)(a) of his judgment. He submitted that it appeared that the Stipendiary Magistrate had not considered the effect of those opening words which were central to the question of whether paragraph 16 had had the effect of amending section 4 of the 1869 Act.
As to privity of interest in the Begg case, Mr Pereira submitted that it was not right that the CPS were, in effect, acting as agents for the PCO. He relied on Mr Ellis' evidence that, once a case had been referred by the PCO to the CPS, it was for the CPS to decide whether to pursue a prosecution, what legal arguments to deploy and, if appropriate, whether the case merited an appeal. He submitted that Mr Ellis' evidence on this point was supported by PC Cadden's report on the case which stated:
"The Crown Prosecution Service have said that they will not appeal against the decisions of the Stipendiary Magistrate and they refer to the legal term "a lacuna" (a gap in the law)."
Mr Pereira said that there was no indication that the CPS had felt it necessary or appropriate to consult the PCO before reaching that decision. Moreover, at the time of the case, TfL was not in existence. The fact that licensing powers were subsequently transferred from the MPC to TfL did not, Mr Pereira submitted, make TfL privy to the activities of, or decisions taken by, the MPC or PCO in 1999. TfL is a very different type of body from the MPC, with different obligations and responsibilities. Mr Pereira argued that it would not be in accordance with justice that a decision made by the PCO to defer to the opinion of the CPS in 1999 should tie the hands of TfL in 2006.
As to the contention made on behalf of Bugbugs that the prosecution in Begg was in reality directed at Bugbugs, rather than against Mr Begg himself, Mr Pereira said that this was not the case. It would have been open to the CPS to proceed against Bugbugs (as was done in Oddy) but it chose not to do so. The fact that Bugbugs itself decided to conduct the case on Mr Begg's behalf should not prejudice TfL now.
The Oddy case
Mr Pereira submitted that the arguments before the District Judge in Oddy had concerned the method of charging passengers and the issue of whether the decision of the Court of Appeal in Lane (decided under different legislation applicable outside London) was binding on the Court. It was clear that the effect of paragraph 16 of Schedule 1 to the 1985 Act was not considered by the District Judge. As to the contention made on behalf of Bugbugs that, on the appeal, Pitchford J had the Begg judgment and must, therefore, have considered the effect of paragraph 16 of Schedule 1 to the 1985 Act, Mr Pereira argued that this was not realistic or credible. It was clear from the list of statutory provisions considered on the appeal that the text of paragraph 16 had not been before the judge. It is not contended by Bugbugs that any argument was directed to the judge about its effect. In those circumstances, he said, the judge would have had no reason to address his mind to whether the decision on the point in Begg had been correct. The fact that the judge had not taken paragraph 16 into account was, he argued, supported by his observation (at paragraph 31 of his judgment) that the definitions of "hackney carriage" and "stage carriage" had been left "entirely untouched" since 1869.
Mr Pereira submitted that, in the circumstances, it would not be fair or just for the Court to draw the inference that the judge had considered the application of paragraph 16 and to use that finding as a basis for deciding that TfL's application for a declaration was an abuse of process and should be struck out.
Mr Pereira argued that, in any event, there was plainly no privity of interest as between TfL and the LDTA, the prosecutor in Oddy. The allegation here was that TfL should have intervened in the case of Oddy on appeal to Pitchford J or the proposed appeal to the House of Lords and, for that reason, should now be treated as if had been a party to that appeal. He argued that it was one thing to say that a party to litigation or its privy should have argued a point in the course of that litigation. It was, however, quite another thing to argue that a third party should have become involved in the litigation and did not. He said that this was a novel submission, which if accepted, could have far-reaching consequences, particularly in the field of commercial litigation. A situation whereby persons or organisations were constrained to become involved in litigation for fear of a finding of abuse in the future would, he said, be inconsistent with the current notions of efficient litigation which the courts are seeking to promote.
Mr Pereira argued that, in any event, those at TfL were unaware at the time of the Oddy case of the potential for mounting an argument based on the effect of paragraph 16 of Schedule 1 to the 1985 Act. He relied on Mr Sugrue's evidence to the effect that he was unaware of the potential argument at the time, and for several years afterwards.
Mr Pereira pointed out that Bugbugs is claiming that, because Begg was not appealed, TfL cannot raise the issue now. At the same time, it is also being argued on behalf of Bugbugs that TfL should have intervened in the case of Oddy. He pointed out that his was an illogical position to adopt. If it is accepted that it would have been open to TfL to argue the point in the appeal of Oddy, why, he asked rhetorically, can it not do so now?
Mr Pereira went on to deal with Bugbugs' second contention, relating to TfL's conduct once its stance on the legal status of pedicabs had changed. Mr Pereira submitted that TfL had not sought to mislead the Parliamentary Committee. Mr Clarkson was not being asked about the effect of the 1869 Act, but about the definition in the Bill. When stating that pedicabs were not "hackney carriages" Mr Clarkson had referred on three occasions to "the law as it currently stands". It is likely that he did so because he was aware that there was an intention to challenge the current law.
As to Bugbugs' criticisms of TfL's conduct of this case, Mr Pereira rejected the suggestion that its evidence had been materially misleading. He said that Mr Ellis had not mentioned the case of Begg in his witness statement because TfL had not been a party to that case. Nor had he misrepresented the position when he said that, in 2003 and 2004, TfL was not focussing on the licensing of pedicabs. Mr Pereira said that it was true that TfL was giving some consideration to the licensing of pedicabs at that time. However, the priority of the PCO (as Mr Ellis had told the meeting on 4 July 2003: see paragraph 30 of this judgment) was the licensing of private hire vehicles. He said that it was understandable that Bugbugs should have a different perspective as to the PCO's priorities from that of the PCO itself. Mr Pereira submitted that, after the Master had adjourned the hearing, TfL had sought to be as open as possible, for example by disclosing copies of Advices from counsel received in 2000 and responding to requests by Bugbugs' solicitors for information.
Mr Pereira submitted that, in any event, the issue of TfL's conduct of these proceedings was irrelevant for the purposes of this appeal. The Master had made no finding in relation to the allegation that TfL's evidence had been misleading and Bugbugs made no complaint of the Master's decision in this regard.
Dealing with Bugbugs' criticisms of the Master's judgment, Mr Pereira argued that the Master had not erred in law. He rejected the contention that the Master had prejudged the issue of law raised by TfL's application. He submitted that it had been open to the Master to conclude that, in the Begg case, the Stipendiary Magistrate's attention had not been directed to (or had not considered) the opening words of paragraph 16 of Schedule 1 to the 1985 Act. Those words were not referred to in the Supplementary Prosecution Skeleton Argument which had been put before the Stipendiary Magistrate, nor in his judgment. He submitted that the Master's finding that the complainant in Begg could not be identified with TfL was correct for the reasons already referred to.
Mr Pereira also submitted, that the Master's finding, at paragraph 12(3)(c) of his judgment, did not amount to a general proposition of law. Rather, it represented his decision on the facts of this case. It was a conclusion to which he was perfectly entitled to come, which reflected the substance of the argument before him and which also reflected the "public interest" associated with this case.
Mr Pereira referred me to the evidence setting out TfL's reasons for making the application for a declaratory judgment. In his witness statement, Mr Sugrue explained that there is a convention in the procedure for promoting private Bills in Parliament, whereby a Bill's promoters must declare on oath that the Bill does not contain provisions whose effect the promoters could have achieved by some other means. He says that, since TfL is currently advised that the effect of paragraph 16 of Schedule 1 to the 1985 Act is to bring pedicabs within the definition of "hackney carriages" and, therefore, within the licensing regime for hackney carriages, TfL could not properly make such a declaration and could not, therefore, promote a private Bill to deal with the licensing of pedicabs. It is for this reason that TfL seeks clarification of the issue by the Court. At paragraphs 16-19 of his statement, Mr Sugrue explained why TfL had come to the conclusion that an application for a declaratory judgment was the best way to proceed.
Mr Pereira argued that the application for a declaratory judgment was not made pursuant to a private law claim between two individuals. Rather, it was an attempt by a public authority to clarify a legal issue affecting the public interest. He said that the effect of striking out the application would be to hinder TfL in the carrying out of its licensing functions.
Mr Pereira indicated that TfL did not accept Bugbugs' contentions that the inclusion of pedicabs within the hackney carriage licensing regime would result in the imposition of conditions that were impossible or unreasonable for pedicab operators and riders to meet. He said that it had sought to reassure Bugbugs and others about this. In particular, it had informed them that it would not be necessary for pedicabs to have motor vehicle insurance. Mr Pereira said that TfL believed that it would be possible to introduce sufficient flexibility into the hackney carriage licensing regime so as to make it suitable for pedicabs. However, he submitted that the content of any licensing regime was a matter of policy for the licensing authority, not for the Court. The licensing authority would take its decision after consultation with all interested parties and consideration of all material issues.
Mr Pereira reminded me that it is for Bugbugs, as the party alleging abuse, to discharge the burden of proof. He submitted that it had not done so. In the event that abuse was established, Mr Pereira reminded me that strike out was not the only remedy available to me. He referred me to CPR 3.4 and to the remarks in the judgment of Clarke LJ in Asiansky Television plc v Bayer Rosin [2001] EWCA Civ 1792, in which he emphasised the need for the court to consider alternative sanctions short of the "draconian" remedy of striking out the action, in order to meet the justice of the case. He submitted that, in the event that (contrary to TfL's contentions) the court were to take the view that TfL had acted improperly in any way, that could appropriately be met by a sanction in costs.
Conclusions
Bugbugs submits that the point now being raised by TfL was decided by the Stipendiary Magistrate in Begg. There is, as TfL has pointed out, some illogicality in this position since Bugbugs is at the same time arguing that TfL should have raised the point in the later case of Oddy. There is no doubt that the Stipendiary Magistrate in Begg considered the effect of paragraph 16 of Schedule 1 to the 1985 Act. What is not clear, however, is whether he was referred (or gave consideration to) the opening words of that paragraph. Certainly, he made no specific comment on them in his decision. I am satisfied, however, that the point was not raised before the District Judge or Pitchford J, in the case of Oddy and that it cannot be assumed from the fact that Pitchford J had the decision in Begg before him that he considered the point at all.
It is not for me to decide on the merits of the argument based on the opening words of paragraph 16. All I can say is that those words must be material when considering the possible effect of paragraph 16 on the definitions contained in section 4 of the 1869 Act.
We therefore, have a decision by a Stipendiary Magistrate who may or may not have considered the material words, and decisions by a District Judge and High Court judge who did not. That being the case, it does not seem to me that it can properly be said that the issue of the legal status of pedicabs has been decided by a court of competent jurisdiction so as to preclude, of itself, future challenge.
Applying the principles set out in the case of Gore Wood, it is necessary to consider first of all whether the argument now raised by TfL could and should have been pursued by it (or its predecessor, the MPC) in the case of Begg and/or Oddy. The first question that arises is whether there is 'privity of interest' as between TfL and the prosecution in each of those cases.
So far as Oddy is concerned, no privity of interest can arise as between TfL and the LDTA. Moreover, TfL had no control over the conduct of that case at first instance, nor over the arguments that were or should be deployed.
The position as between TfL and the prosecution in the Begg case is less clear. There is no doubt that, in law, TfL succeeded to the functions and responsibilities of the MPC in relation to the licensing of hackney carriages. In that area, therefore, TfL can be regarded as having privity of interest with the MPC. In practical terms, there has been continuity in the personnel employed within the PCO before and after its transfer to TfL, notably in the case of its Head, Mr Ellis.
However, the prosecutor in the Begg case was not the PCO, but the CPS. Although the PCO was the informant in the case and its initiator, it seems that it was not itself responsible for conducting the case or for taking decisions about its conduct. The terms of PC Cadden's report to Mr Ellis – in particular, its reference to the decision taken by the CPS not to appeal – strongly suggest that that was the case. The CPS was acting as an independent prosecuting authority, not as the agent of the MPC or the PCO. In those circumstances, it does not seem to me that it could be said that there was a sufficient degree of identification between TfL and the prosecutor in the case of Begg to amount to a privity of interest.
TfL argue also that there is no privity of interest as between Mr Begg (the defendant in the prosecution of 1999) and Bugbugs (the defendant in the claim for a declaration in 2006). Here, it seems to me that they are on less strong ground. It is true that the CPS could have brought proceedings against Bugbugs, as the owner of Mr Begg's pedicab, but chose not to do so. It is true also that it was Bugbugs' own choice to assist Mr Begg in his defence. However, it appears from PC Cadden's report, and his fax to Mr Smallwood, dated 10 December 1999, that it was understood by the PCO (and presumably by the CPS also) that "the defence" was, in effect, Bugbugs. In the fax, PC Cadden said that the case had not been "personal" to Mr Begg, but rather "a legal argument of licensing definitions and interpretations". These documents suggest to me that both parties were aware that the "real" defendant in the Begg case was Bugbugs
Following the Begg prosecution, the PCO did not request or receive a copy of the Stipendiary Magistrate's decision. PC Cadden's report to Mr Ellis did not set out in clear terms the basis on which the Stipendiary Magistrate had decided the case. In particular, there was no mention of paragraph 16 of Schedule 1 to the 1985 Act or the argument that had been based on that provision. There was no indication in the report that the CPS considered that the Stipendiary Magistrate had made a mistake of law. According to PC Cadden, the CPS merely suggested that there was a lacuna in the current law that could only be remedied by legislation. Thus, it does not seem to me that the PCO could be blamed for not seeking to take the case further at that stage.
The complaint made in respect of the Oddy case is that TfL declined the opportunity to intervene in the appeal to Pitchford J, or to accept the LDTA's invitation to join in a proposed appeal to the House of Lords. Here, it is said on behalf of Bugbugs, was TfL's chance to obtain an authoritative ruling on the legal status of a pedicab and it failed to do so.
The decisions of the District Judge and Pitchford J accorded with the advice that had previously been given to the PCO by the CPS, and with the Advice of counsel obtained in 2000. It is true that Mr Farmiloe had received a copy of the Begg decision in October 2002 and that, if he had read it carefully and referred back to the text of paragraph 16 of Schedule 1 to the 1985 Act, he might have realised (as Mr Sugrue did later) that there were grounds for believing that the decision of the Stipendiary Magistrate relating to the interpretation of paragraph 16 might be wrong. It is clear that he did not do so. The draft questions formulated by the LTDA's solicitors for the proposed appeal to the House of Lords did not refer to paragraph 16, and TfL's legal advisers made a judgment that an appeal based on those proposed questions was unlikely to succeed. It was not suggested that that judgment, of itself, was wrong. Rather, criticism is made that those in the legal department at TfL did not themselves raise the argument based on paragraph 16 of Schedule 1 to the 1985 Act (an argument that had not been raised thus far in Oddy).
It does not seem to me that a failure by a party to raise an issue by involving itself in litigation being conducted by a third party should (save possibly in the most exceptional circumstances which do not exist here) automatically render the raising of the same issue by that party in later proceedings abusive. As Mr Pereira observed, this would place a considerable onus on non-parties, particularly in the field of commercial litigation. It does not seem to me that it can properly be said that TfL 'should' have intervened in the Oddy case in order to argue a point that Mr Farmiloe should have realised was available to it.
I turn now to consider TfL's conduct once its view of the relevant law changed. By mid October 2004, TfL had leading counsel's Advice to the effect that the decisions in Begg and Oddy were wrong in law and had also been advised as to the steps that could be taken to rectify that error. It was not until more than a year later, in December 2005, that TfL disclosed these matters to Bugbugs. (It is suggested by TfL that Mr Smallwood was told in November 2004 that TfL now considered that pedicabs should be categorised as "hackney carriages". It may be that this is disputed but, in any event, it does not seem that the full implications were spelled out at that time.)
Meanwhile, TfL pressed on with its attempts to legislate in relation to the enforcing of traffic and parking regulations as against pedicabs and to introduce a system of registration for this purpose. These attempts led to the hearing before the Parliamentary Committee on 1 November 2005 and to the repeated statement of Mr Clarkson that "as the law currently stands", pedicabs were not hackney carriages. I accept the submission made by TfL that, qualified as it was (on several occasions), this was not a misstatement of the position. Indeed, it seems to me that Mr Clarkson, who had, I am told, been fully briefed on TfL's intentions, was choosing his words with considerable care. The matter at issue before the Committee was whether the proposed new definition of pedicabs would alter the existing legal definition. Thus, any future alteration in the law was not strictly relevant. Nor does it seem to me that, if TfL's intentions had been disclosed to the Committee, such disclosure would have been likely to have had the effect of solving any problems as to the licensing question. The Parliamentary Committee was not, after all, concerned with the licensing of pedicabs, but with matters relating to the enforcement of traffic and parking regulations.
It is, in my view, regrettable that, having received counsel's Advice as to how to proceed in October 2004, TfL did not inform Bugbugs of its position for 14 months, and allowed 21 months to elapse before initiating proceedings for a declaratory judgement. I realise that TfL had many other issues to deal with during that period and that, so far as pedicabs were concerned, it was concentrating its efforts on promoting the joint Bill dealing with the enforcement of traffic and parking regulations. Nevertheless, it could have acted more promptly.
During the interim period, Bugbugs was continuing to assist TfL in forwarding its efforts (as Bugbugs believed them to be) to introduce a new regime of licensing for pedicabs. I can understand why Bugbugs felt that its efforts had been wasted and why it resented the fact that it had been kept "in the dark" about TfL's real intentions for so long. I am satisfied that one important factor in TfL's decision not to disclose its intentions was a desire to avoid the point being "hi-jacked" by the LTDA and argued in the course of a private prosecution over which TfL had no control. I accept that, in taking this course, TfL were seeking to assist pedicab operators and riders who might be the subject of prosecution. Nevertheless, this risk could have been eliminated had TfL moved quickly to make its application to the Court.
Criticisms are also made of the conduct of these proceedings. It would clearly have been better if TfL had set out the full story at an earlier stage. Its failure to do so led to the hearing before the Master having to be adjourned. However, I accept its explanation for the omission of the reference to the Begg decision in the first instance. I am satisfied that there was no intention to conceal the fact of that decision. TfL was well aware that Bugbugs knew of it, so there would have been nothing whatever to be gained by concealment. It seems to me that TfL considered that the main obstacle it had to overcome was the judgment in the Oddy appeal and that is why Mr Ellis' narrative began there. Once TfL realised that it would have to give a full account of what had happened in the earlier period, it adopted a frank and open attitude and disclosed many documents, including some which were plainly privileged. I am satisfied that there has been no deliberate or dishonest attempt to conceal matters from the Court.
In deciding whether TfL has sought to misuse or abuse the process of the court by seeking a declaratory judgment, I must look at the whole picture.
TfL has responsibilities for transport in London which extend far beyond its role as the licensing authority for hackney carriages. It is concerned with wider issues of transport policy, in the context of which the question of the licensing of pedicabs falls to be considered.
It is generally agreed that a system of regulation is necessary for the safe and efficient operation of pedicabs. Such a system of regulation should ensure that only suitably qualified riders drive pedicabs, that pedicabs themselves are in a safe condition and that, if an accident occurs, passengers or other road users are compensated for any loss and damage incurred. Such regulation is plainly in the public interest. TfL has for some time been attempting to put in place a system of licensing which would provide a regulatory framework. It has encountered a number of problems along the way.
TfL has now decided, for the reasons set out by Mr Ellis, that the most convenient and effective way forward is by seeking to include pedicabs in an amended form of the hackney carriage licensing regime. It is not for me to say whether or not that would be feasible or appropriate. There may or may not be substance in the concerns expressed by Bugbugs about this course, although it is difficult to see why TfL would want to introduce a regime that was bound to fail. Be that as it may, however, it is clear that TfL cannot proceed with its proposed course unless and until it has an authoritative decision as to whether, in law, a pedicab is a "hackney carriage".
If TfL were to decide to promote a Private Bill in order to introduce a licensing system for pedicabs, it would have to make a declaration as to the absence of alternative means of obtaining its objective. According to Mr Sugrue, it cannot do this at present, because of the advice it has received that pedicabs come within the legal definition of "hackney carriages". TfL argue that, if it is to make such a declaration, it requires a decision of the Court on the legal status of pedicabs.
TfL's application for a declaratory judgment relates to a matter concerning the responsibilities of the State towards potential passengers of pedicabs and other road users, as well as to the operators and riders of pedicabs. This is, as TfL submitted, not a case where purely private interests are involved. The proposition made by Bugbugs is that TfL should in 2006/7 be barred from seeking a declaratory judgment by reason of decisions taken by the PCO and TfL in 1999 and 2003. Even if it were to be accepted that TfL or its predecessors had been "at fault" for not pursuing either or both of the cases further, it does not seem to me that this would necessarily mean that TfL is misusing or abusing the process of the court in seeking a declaratory judgment now. Public bodies such as TfL will inevitably have changes of policy and direction from time to time, according to the prevailing circumstances and to the opinions held by the directing minds of the organisation.
Bugbugs has suggested that TfL's conduct amounts to "unjust harassment". I cannot agree with that proposition. TfL has a duty to consider the interests of parties other that Bugbugs. It is, as I find, seeking to do this in what it considers to be the most effective manner. It has sought to mitigate the difficulties caused to Bugbugs by this litigation by agreeing to pay a substantial sum towards its costs of opposing TfL's application. At the same time as bringing its application, it embarked upon a wider process of consultation about the licensing of pedicabs. These are not in my view the actions of a party seeking to harass or act unjustly.
In all the circumstances, I take the view that the Master was fully entitled to dismiss Bugbugs' application to strike out TfL's claim. The appeal is dismissed.
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