Local authority — Street markets — Level of rent for stalls — Subcommittee proposing large rent increase — Change of basis of increase — Whether traders entitled to be consulted — Whether traders given sufficient time to consider proposals — High Court holding that traders had legitimate expectation to be consulted on change of basis of increase — Insufficient time given for consideration of report containing proposals
This was an application for judicial review of a decision of the Commercial Services (Financial and General Purposes) Subcommittee of the council concerning proposed increases in rents for stalls in Birmingham street markets of 135%. The application concerned four markets: the Bull Ring open market operating six days a week; and the Flea Market, the Row Market and the Rag Market, which all operated on Tuesdays, Fridays and Saturdays.
There was no formal system of application for and grant of licenses. Before 1990 rental fees were set on the basis of recovering costs on an historical basis, the main determinant being inflation measured by the retail prices index and the basis on which increases were calculated was known to both sides. In 1990 a fundamental review of rental values was undertaken and a new calculation was adopted involving a comparison between the charges levied in other markets and those in Birmingham. On the strength of that comparison a number of options were proposed, one being an increase of 135% in charges.
On September 27 the subcommittee met in the morning and adjourned to 2pm to enable traders to be present. They pleaded that they had had insufficient time to consider and comment upon the report leading to the suggested increase, but further time was refused. The meeting went ahead and it was agreed to put forward the proposal for an increase. The commercial services committee met on October 3 to consider the recommendation of the subcommittee. They adopted the proposal in a slightly modified form which involved an increase of over 100%. The traders subsequently applied for judicial review of subcommittee’s refusal to give them further time and their decision to recommend the increase.
Held The application was granted.
1. The claim was a public law matter capable of judicial review since underlying the relationship was the common law right to trade referred to in the case of R v Barnsley Metropolitan Borough Council, ex parte Hook [1976] 1 WLR 1052. It would be repugnant to arrive at a decision which involved the council, in a monopoly position to administer ancient markets, being the sole arbiters of the level of rent and accordingly in a position effectively to exclude traders altogether if for some reason they wished to do so.
2. The evidence showed that established practice was that the traders were consulted as to why the level of rent provisionally fixed by the council should be reduced. The traders raised practical considerations which were sometimes taken into account, like bus services, down turn in trade, the state of repair of the stalls, the number of void stalls and so on. That had to be seen in the context of a settled policy by the council of increasing rents broadly in line with inflation taking account of historical costs. It could be said that a regular practice of consultation as to the level of rent year after year, when that rent was decided on the basis of a broadly consistent formula known to both parties gave rise to a legitimate expectation of being consulted about a proposal fundamentally to alter the basis of computation.
3. The evidence showed that on matters such as reservation fees, licences and movement of stalls in the market the traders were consulted. Those were important matters but less important and likely to have a less significant effect on the traders than the fundamental change in the method of computation of charges. In this case therefore the applicants had established that they had a legitimate expectation of being consulted as to the levels of charges proposed in the report and that expectation extended both to the bare question of the amount of the charges and to the method of arriving at them.
4. It was incumbent on the council to provide sufficient details of their proposals and the reasons for them to enable the traders to understand what was proposed and why it was proposed and to make sensible comments in reply. Second, those details had to be provided and the responses received with an open mind and willingness to consider the representations of the traders and, if appropriate, to give effect to them. Third, the traders had to be given adequate time to consider what was proposed and respond to it. Fourth, the council had conscientiously to take into account such representations as the traders made in reaching a final decision.
5. As the other requirements were met in this case the real point was whether it could be said that on the facts of this case a reasonable authority acting reasonably could not have concluded that the period from September 27 to October 3 was sufficient to enable the traders to consider, get advice upon and respond to the report. There was no doubt that given the length and complexity of the report, the fundamental changes it proposed, the various different bases of change it advanced, and the identity and number of persons affected, the period was wholly inadequate.
Andrew Collins QC and Rembert De Mello (instructed by Rosenberg & Co, of Birmingham) appeared for the applicants; Stuart Isaacs QC and Rabinder Singh (instructed by the solicitor to Birmingham City Council) appeared for the council.
