Challenge over claim of eroded taxi-plate values dismissed

The High Court has dismissed a challenge by three taxi drivers who claimed the value of their taxi plates was wiped out overnight when the sector was deregulated in 2000.

Alphonsus Muldoon and Vincent Malone sued the Minister for Environment and Local Government and Dublin City Council, while Thomas Kelly sued the Minister and Ennis Town Council.

Theirs were test cases for more than 1,100 similar claims by taxi drivers.

Mr Justice Michael Peart said all three claims must be dismissed. A large number of people were in court for his judgment.

The three sought damages and declaratory orders claiming, because the Minister and/or the local authorities permitted a licensing regime to operate as it did over so many years, they suffered immediate and significant losses as a result of overnight deregulation and liberalisation of the market.

Constitutional rights

Mr Muldoon and Mr Kelly claimed the Minister and State acted beyond his powers by delegating the role of deciding on the number of licences to the local authorities and in breach of their right to earn a livelihood and their constitutional rights.

Mr Muldoon also sought declarations including that Dublin City Council acted contrary to competition law and that the defendants, or some of them, were unjustly enriched as a result of the regulatory regime operated and/or approved by them.

Mr Justice Peart said the need for more taxis increased as Dublin developed, but this need was never met between 1978 and 2000.

Taxi owners and their representatives resisted any significant increase in the number of licences, and lobbied effectively to that end.

Queuing for a taxi, particularly at night time, was the norm and waiting times became longer and longer.

While the industry always appeared to come out on top in negotiations about more licences, something had to be done.

Secondary market

At the same time there was a secondary market in the sale of taxi plates which “contained within them the seeds of destruction” when new regulations, introduced by the Government on January 13th, 2000, provided a person could pay €5,000 for a new licence. Before the change, plates were changing hands for substantial sums, up to €100,000 in some cases, he said.

The judge was completely satisfied it was within the Minister’s powers to delegate regulatory powers to local authorities.

He also found the regulations did not interfere, “much less unjustly attack”, the drivers’ right to earn a livelihood.

“They could continue to earn their livelihood,” he said. It was therefore not necessary for him to address the issue of whether they were entitled to recover damages for breach of a constitutional right.

The drivers also could not claim for breach of statutory duty by the defendants, he found. Each of them entered the market voluntarily, in the knowledge the regulatory regime could change. They also knew there was a risk their licences would not hold their value, he said.

Public interest

He rejected the claim the Minister was in breach of his duties to them when he introduced the new rules. The Minister’s duty was to regulate public service vehicles in the public interest, the judge said.

There was nothing in the original 1961 regulations to indicate the imposition of a duty to regulate in a way that does not interfere with the interests of individual licence holders, he said.

In relation to competition law, he said the drivers had sought to establish licensing by the councils met the criteria for an economic activity, at least in principle, but were “overlooking or ignoring, as they must for their argument, the non-commercial reality of that activity”.

The fact a secondary market had evolved in the sale of plates as an incidental consequence of the regulations in operation at the time was irrelevant to the court’s considerations, he added.

The non-economic activity engaged in by the councils means, when performing this regulatory function, they were not undertakings for the purpose of competition law and this activity therefore “fell at all times outside the competition rules”.

Costs will be dealt with next month.