Campaigner wins High Court battle with council over correct treatment of up to £10m in car parking income at Whitby Harbour

A predecessor council to North Yorkshire Council should have credited car parking and rental income from land adjacent to Whitby Harbour to the harbour’s account rather then its general one, the High Court has ruled after studying laws dating back to 1827.

The case arose after local resident Susan Boyce challenged the accounts of the former Scarborough Borough Council, which became part of North Yorkshire in 2023.

Council auditor Mazars concluded the legal position in relation to Ms Boyce’s objection was unclear and declined to declare any items unlawful.

Mazars instead recommended the council seek declarations from the court to determine the correct position.

Mr Justice Sweeting said in his judgment that a significant portion of the harbour area is used for car parking from which the council derives income.

Ms Boyce said this money should have been credited entirely to the separate revenue account maintained by the council as the harbour authority. According to Fight 4 Whitby, the sums involved could amount to up to £10m.

The council said only income directly related to harbour operations should be included in the harbour account and other income belonged in its general fund account.

Sweeting J said the case centred on the interpretation of the Whitby Urban District Council Act 1905 and related legislation; specifically what constituted the ‘harbour undertaking’ and whether the income from the car parks is “from or in respect of the harbour undertaking” within the meaning of s.62 of the 1905 Act. The parties narrowed this to five disputed plots of land.

The council argued that 'harbour undertaking’ is defined by the activities and usage authorised by harbour legislation and is essentially economic in nature and not simply synonymous with physical land acquired for harbour purposes.

Income and expenditure that should be included in the separate harbour account is harbour dues and charges arising from activities authorised by the harbour legislation, it said.

Car parking provided for the general public, and some commercial rental income was not harbour income, the council argued, and the power to provide parking for the general public rested on the council’s role as a highway authority and not as harbour authority.

Ms Boyce said if land was acquired by the council as a harbour authority for harbour purposes and was still used as such, any revenue generated should be credited to the harbour account.

She said the council has no discretion to allocate income from car parks or occupational interests to its general fund as the 1905 Act had been designed to ensure the harbour undertaking covered its costs, and that revenue should be directed to maintaining and improving the physical structure.

Sweeting J said: “Whilst the council characterises [Ms Boyce’s] approach as concentrating on harbour assets rather than harbour purposes, that criticism does not appear to me to reflect the statutory language.”

After referring to detailed provision of the 1905 Act, he said: “Occupying the land as a harbour authority is part of the harbour undertaking.

“The lawful exploitation of the harbour authority's land either by charging for car parking incidental to the use of the harbour, or by leasing premises would appear to fall squarely within the terms of section 16: ‘All money in the nature of revenue received by the council in respect of the harbour undertaking’”.

Sweeting J said this meant Ms Boyce was right that public car parking was not a separate, unrelated activity, but an integral part of the harbour's function and operations and so “all income from car parking facilities on harbour land should be credited to the separate revenue account.

“I therefore reject the council's argument that car parking revenue can be split into categories, with some considered to be received for ‘harbour purposes' and other revenue not.”

Conducting this split was not straightforward, the judge said. He concluded revenue from lawfully exploiting a harbour asset was inherently harbour revenue and that the disputed plots were all connected to the harbour development scheme, which aimed to expand and modernise the harbour facilities.

Mark Smulian