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Corporation Undertakings
It must have been something of a surprise to the Liver-
pool corporation and no doubt will come as a similar
surprise to other city councils, to find that the Court of
Appeal has taken the view that undertakings by the
council which are not legally binding may, nevertheless,
be regarded by the court as having some legal effect.
(R.
v.
Liverpool Corporation
(1972)
The Times,
February 15, 1972.)
The circumstances in which this point arose were in
relation to the corporation's statutory function to
licence taxicabs. Since 1948, the corporation had limited
the number of cabs to 300. After proposals to increase
the number had been considered, the full city council
on August 4, 1971, heard an undertaking delivered by
the chairman of the relevant committee to the effect
that no addition to the figure of 300 would be made
until legislation designed to control private hire cars
was passed. It was contemplated that it would be done
in time to take effect early in 1973. The undertaking
was confirmed in writing by the town clerk.
However, the corporation then decided to issue further
licences prior to the council affirming on December 22,
1971, the committee's decision. The consequence of
this was, of course, that the undertaking had not been
complied with.
The corporation had not, it seemed, forgotten about
the undertaking but had assumed that it was not binding
upon them. In that assumption, they were correct since
it is not possible for a local authority to make a legal
binding arrangement which has the effect of fettering
its statutory discretion in a way inconsistent with the
objects of the Act.
It might seem, therefore, that if the undertaking was
not binding on the corporation, they could ignore it if
they so chose. The Court of Appeal did not think so.
Having regard to the earlier practice of the corporation
in having consultations with the Liverpool Taxi Opera-
tors' Association and the Liverpool Taxi Owners'
Association, the Master of the Rolls, Lord Denning,
said that the corporation should not depart from the
undertaking they had given unless they gave the associa-
tions an opportunity to put their point of view. Accord-
ingly orders of prohibition were issued to prevent the
corporation from acting under the resolution to increase
the number of taxi licences.
This case has far reaching implications. It comes
close to establishing in England what the Americans
call "due process",
i.e.,
that procedures can be chal-
lenged merely because they are not sufficiently fair. Lord
Denning himself used the phrase "as a matter of fair
dealing" as a reason for refusing to allow the cor-
poration to proceed with their intentions.
The Courts have recently adopted an approach to
administrative matters such as the issuing of licences
which suggest that where action might result in a loss
or reduction of the means of livelihood, the person
affected could claim to have a right of hearing. The
Court of Appeal held that the owners were so affected,
and were therefore entitled to the court's protection.
Justice of the Peace, March
25, 1971.
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