The Gazette 1972

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.)

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.

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

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