Stewart v Perth and Kinross Council

JurisdictionEngland & Wales
CourtHouse of Lords
Judgment Date01 April 2004
Neutral Citation[2004] UKHL 16
Date01 April 2004
Docket NumberNo 4

[2004] UKHL 16


Stewart (AP)
Perth and Kinross Council



My Lords,


I have had the advantage of reading the opinions of my noble and learned friends Lord Hope of Craighead, Lord Rodger of Earlsferry, Baroness Hale of Richmond and Lord Carswell. I agree with their opinions. I would also dismiss the appeal.


My Lords,


The respondent has for many years carried on business as a dealer in second-hand motor vehicles. The place where he carries on this business is within the area for which the appellants are the local authority and, as such, the licensing authority for the purposes of Part II of the Civic Government (Scotland) Act 1982 ("the 1982 Act"). Section 9 of the 1982 Act enables a licensing authority to resolve that the carrying on in its area of any of the activities mentioned in sections 10 to 27 and 38 to 44 of the Act requires to be licensed in accordance with the provisions of that Act and is to be regulated by those provisions. Among the activities mentioned in Part II is the carrying on of a business as a second-hand dealer. On 4 December 1985 the Property and General Purposes Committee of the appellants' statutory predecessors, Perth and Kinross District Council ("the District Council"), resolved that all dealers purchasing or selling second-hand motor vehicles within the District would require to be licensed with effect from 1 February 1986.


The respondent first applied for a licence for his second-hand motor vehicle business in 1986. His application was granted, and a licence was issued to him which was valid until 31 July 1987. The licence was subsequently renewed until 31 July 1990. During 1990 the respondent applied for a renewal of the licence, and a further licence was issued to him. It was valid until 31 July 1993. In 1993 he applied for a further renewal of his licence. His application was considered by the District Council's General Purposes (Licensing) Sub-Committee at meetings which were held on 4 and 18 February 1994. The Sub-Committee refused to renew the respondent's licence on this occasion, on the ground that he was not a fit and proper person to hold a licence. Among the reasons that were given for the refusal was the following:

"He consistently failed over a long period of time to observe the conditions of the licence in respect of pre-sales information sheets and pre-sales inspection reports despite having these matters drawn to his attention on several occasions. The Sub-Committee regard the ability of a licensee to comply with the conditions of a license to be an essential part of the licensing system."


On 13 February 1995 the sheriff pronounced an interlocutor remitting the respondent's application for the renewal of his licence to the District Council for reconsideration. On 6 December 1995 the sheriff's interlocutor was recalled by the Court of Session. On 4 May 2000 the respondent presented a petition to the Court of Session for judicial review of the decision of the District Council to refuse to renew his licence on the ground that its decision was ultra vires. On 15 June 2001 the Lord Ordinary refused the petition. On 1 October 2001 an Extra Division (Lords Coulsfield and Johnston, Lord McCluskey dissenting) recalled the Lord Ordinary's interlocutor, granted the prayer of the petition and declared that the decision to refuse renewal of the licence was ultra vires of the District Council and taken without legal warrant.


The only live issue at the end of the hearing before the Extra Division was whether the 1982 Act conferred power upon the licensing authority to subject the respondent's licence to a condition which had been inserted in the licences which were issued to him. The condition was in these terms:

"2.5(a) If the licence holder intends to display for sale/sell any vehicle to a member of the public he must -

(i) carry out an inspection and prepare a full Inspection Report on the vehicle prior to it being displayed for sale/sold and make a copy of the Report available for inspection by any prospective purchaser while the garage/showroom is open, in accordance with the sample Inspection Report issued and in a style approved by the Council (see Appendix 2 and Note 3);

(ii) display a summary Information Sheet in a prominent position in the vehicle displayed for sale so that it is clearly visible indicating that the vehicle has been inspected, that a full Inspection Report may be consulted in the office/showroom prior to sale and that the purchaser will receive a copy of the Report at the time of sale, in accordance with the sample Information Sheet issued and in a style approved by the Council (see Appendix 3);

(iii) complete all sections of the Inspection Report as appropriate and provide the purchaser with a copy of the Inspection Report, which should be signed by both the purchaser and the dealer and dated, at the time of sale; and

(iv) retain one copy of the above Inspection Report as part of his records for at least three years."


The sample Inspection Report in Appendix 2 is headed "Used Vehicle Pre-Sales Inspection Report". It requires details of the make, model, colour and certain other details of the vehicle to be inserted. A box is provided in which the odometer reading is to be inserted, against which a statement must be made as to whether it is correct or unverified. Alongside it is another box in which the approximate true mileage is to be inserted, if different from the odometer reading. Beneath these boxes there appear three columns by which provision is made for a detailed examination of various parts of the vehicle to be carried out as listed in column 1, for any defects outstanding to be noted in column 2 and any work carried out before delivery to be stated in column 3 alongside the list of the parts to be examined which are set out in column 1. Beneath these columns the form states: "The findings of the above report take into account the age and price of the used vehicle described. To be completed on sale of vehicle". Provision is then made for the price to be inserted, beneath which there are spaces for the signature of the purchaser and the dealer. Above the space for the purchaser's signature there are these words: "I acknowledge receipt of a copy of this inspection report." Beneath the spaces for the signatures the purchaser is told: "If you purchase this vehicle it is in your interest to keep this report." Three copies are to be made of this form: a white copy for the purchaser, a yellow copy for the dealer's showroom and a blue copy for the dealer's workshop. Note 3 of the Notes attached to the licence states:

"The defects listed in column 2 of the Report do not need to be rectified before the vehicle is displayed for sale, provided any work carried out at the time of sale is detailed in column 3 and the vehicle is sold in a roadworthy condition and complies with the provisions of the Road Traffic Acts."


The sample Information Sheet in Appendix 3 is headed "Used Vehicle Pre-Sales Information Sheet". It requires details of the make, model and colour of the vehicle, the number of owners, the date of its first registration and certain other details to be inserted, as well as the odometer reading. It requires a statement to be made as to whether the odometer reading is correct or unverified. It provides a space for any other comments. It then states: "A full report has been completed on this vehicle and is available in the showroom/office. A copy of this report will be given on the day of delivery."


The power which is given to the licensing authority by the 1982 Act to attach conditions to a second-hand dealer's licence is set out in section 24(4), which provides:

"Without prejudice to paragraph 5 of Schedule 1 to this Act, a licensing authority may, after consultation with the chief constable, attach conditions to a second-hand dealer's licence requiring the keeping of records in relation to the dealer's stock-in-trade; and conditions so attached may, without prejudice to the authority's power under this subsection, include provision as to -

(a) the information to be included in these records;

(b) their form;

(c) the premises where they are to be kept; and

(d) the period for which they are to be kept."


Paragraph 5(1) of Schedule 1 to the 1982 Act provides:

"Where an application for the grant or renewal of a licence has been made to a licensing authority they shall, in accordance with this paragraph -

  • (a) grant or renew the licence unconditionally;

  • (b) grant or renew the licence subject to conditions; or

  • (c) refuse to grant the licence."

Paragraph 5(2) of Schedule 1 provides:

"The conditions referred to in sub-paragraph (1)(b) above shall be such reasonable conditions as the licensing authority think fit and, without prejudice to that generality, may include -

(a) conditions restricting the validity of a licence to an area or areas specified in the licence; and

(b) in relation to the grant of a licence, where that licence is intended to replace an existing licence, a condition requiring the holder of the existing licence to surrender it in accordance with paragraph 13 below."

Paragraph 13(1) of the Schedule provides that a licence may be surrendered to the licensing authority at any time and that it shall thereupon cease to have effect.


Condition 2.5(a) falls within the power which is given to the licensing authority by section 24(4) of the 1982 Act, to the extent that it requires information to be included in the dealer's records, the form which that information is to take, the premises where the information is to be kept and the period for which it is to be kept. But it is plain that the condition does more than require the dealer to record and keep information. It also requires the...

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