Taxi drivers “operating” within an area

A council has been ordered to pay the costs of an “improper” prosecution of a private hire operator. Matt Lewin explains why.

A local authority has been ordered to pay costs to a private hire operator after it discontinued a two-year long prosecution against him, accepting that it could not prove he had been “operating” within its area.

The defendant was the co-owner of Lucky Seven Taxis which has, over the past 50 years, established itself as a significant operator of private hire vehicles in the Midlands. It held operator’s licences with Stoke-on-Trent City Council, Wolverhampton City Council, Cheshire East Council and Newcastle-under-Lyme Borough Council.

In late 2021, ownership of the business changed hands after the death of one of the co-owners. The company applied to each of its authorities for a new operator’s licence and completed the necessary suitability checks. Each authority granted a new operator’s licence in the names of the new business owners.

However, Newcastle-under-Lyme Borough Council purported to “transfer” the existing licence to the new owners, retaining the old licence’s original expiry date of April 2022 – an effective licence term of just six months. 

Due to an oversight on their part, the owners did not appreciate that they had not – as they had expected – been granted a new five-year licence (the default term specified by section 55(2) of the Local Government (Miscellaneous Provisions) Act 1976) until the afternoon of the expiry date. 

In response, they hastily made arrangements to ensure their business could continue to operate lawfully, through allocating bookings to licensed hackney carriages (for which no operator’s licence is required: Stockton-upon-Tees Borough Council v Fidler [2010] EWHC 2430 (Admin)) or by sub-contracting bookings through their Stoke entity to other Lucky Seven entities or a separate Newcastle-licensed operator (under section 55A of the 1976 Act).

Crucially, at all times, the business had operated from a single premises – the address of which was specified in their Newcastle operator’s licence – over the border in the administrative area of Stoke-on-Trent.

Newcastle-under-Lyme Borough Council took the view that this arrangement was unlawful and amounted to operating without an operator’s licence, in breach of sections 46 and 55 of the 1976 Act. A prosecution was commenced in October 2022.

As well as raising a defence on the facts, the defendant made two legal arguments in his defence:

• As he had not “made provision for the invitation and acceptance of bookings for a private hire vehicle” in Newcastle’s area (he had been doing so in Stoke), he had not been “operating” in its controlled district and therefore the offence was not made out.
• The Council had unlawfully granted him an operator’s licence of just six months’ duration. Had he been granted the 5-year term to which (in the absence of any exceptional circumstances justifying a shorter term) he was entitled, he would have had the benefit of a valid operator’s licence throughout the period subject of the prosecution. Accordingly he had a public law defence to the charge because the prosecution was brought as a direct result of the council’s own unlawful act.

The prosecution was adjourned no less than three times due to lack of court time over two-and-a-half years. At no point did the council formally respond to the two issues of law raised by the defendant.

The trial was listed for a fourth time on 17 February 2025 at Cannock Magistrates’ Court.  On the morning of the trial, the council belatedly conceded that it could not prove its case that the defendant had been operating in its own district, given that all of the antecedent arrangements for the dispatch of vehicles had taken place in a neighbouring controlled district. 

In offering no evidence, the council also cited problems with witnesses, most notably a former Lucky Seven driver who had provided a witness statement in support of the prosecution but who – a few days before one of the abandoned trial dates – had sent two voicenotes to the defendant explicitly offering to change his evidence “if you pay to me some good money”. The District Judge described this behaviour as “offensive in the extreme”.

Exceptionally the court granted the defendant’s application under section 19 of the Prosecution of Offences Act 1985 for an award of costs against the council (as opposed to the standard order of costs from central funds). The council did not resist the application and agreed the amount that should be paid.

A section 19 order is reserved for cases where one party to a prosecution has incurred costs “as a result of an unnecessary or improper act or omission” by another party to the proceedings.  It has been held that such order will be “very rare” and “restricted to those exceptional cases where the prosecution has made a clear and stark error as a result of which a defendant has incurred costs for which it is appropriate to compensate him” (see Lewis v Francis [2025] EWHC 17 (Admin)).

Matt Lewin, a member of Cornerstone Barristers’ Licensing Team, was instructed by the defendant through direct access.