DELTA Merseyside Ltd & Anor v Uber Britannia Ltd

Factual and Procedural Background

The appeal concerns the interpretation of Part II of the Local Government (Miscellaneous Provisions) Act 1976 ("the Act"), which regulates private hire vehicles outside London (except Plymouth). The central issue is whether an operator licensed under the Act is required to enter into a contract as principal with the person making a booking for a private hire vehicle.

By an order dated 28 July 2023, Judge Foster granted a declaration stating that a licensed operator who accepts a booking must enter into a contractual obligation with the passenger to provide the journey. This judgment was reported at [2023] EWHC 1975 (KB), [2024] 1 WLR 1350.

Two private hire operators, Company A and Company B, appealed against the terms of this declaration with permission granted by Phillips LJ. The appeal was opposed by Company C, a rival operator.

The business models of the appellants were outlined: Company A operates across multiple local licensing authorities using a "traditional private hire" model acting as a "disclosed intermediary" between driver and passenger, providing transportation services to corporate accounts and booking services to others. Company B is a large regional operator with a "booking handling service" model, putting passengers in touch with drivers who provide the journey, with payment made directly to the driver.

The statutory regulatory scheme under the Act was examined, detailing licensing requirements for vehicles, drivers, and operators, and defining "operate" narrowly as making provision for the invitation or acceptance of bookings, not the provision of the vehicle itself.

A key statutory provision, section 56(1), is a deeming clause that treats every contract for hire of a private hire vehicle as made with the operator who accepted the booking, whether or not that operator provided the vehicle.

The appeal challenges the correctness and scope of the earlier declaration, particularly whether the Act requires an operator to contract directly with the person making the booking or the passenger.

Legal Issues Presented

1. Whether an operator licensed under Part II of the Local Government (Miscellaneous Provisions) Act 1976 is required to enter into a contract as principal with the person who makes a booking for a private hire vehicle.
2. The proper interpretation and effect of section 56(1) of the Act, particularly the scope and application of the deeming provision regarding contracts of hire.
3. The implications of section 55A and its relationship with the existence of contracts between operators and persons making bookings.
4. Whether the declaration made by the lower court was appropriate in its terms and scope.

Arguments of the Parties

Appellant's Arguments

• Company A and Company B argued that the declaration requiring operators to enter into contracts as principals with persons making bookings was incorrect.
• They emphasized that the Act’s language and regulatory scheme distinguish between accepting bookings and making contracts of hire.
• They contended that section 56(1) is a deeming provision applying only for regulatory purposes and does not impose a real-world contractual obligation on operators at the time of booking.
• They noted that the Act does not expressly require operators to contract with the person making the booking or the passenger, and that the declaration assumed facts not necessarily present (e.g., that the booking is made by the passenger and that the contract is to provide the journey).
• They highlighted that licensing authorities can impose conditions on operators’ licences to address concerns such as driver punctuality, as in the case of Company B’s licence condition imposed by the local authority.

Respondent's Arguments

• Company C submitted that it is a necessary implication of the Act that an operator must enter into a contract as principal with the person making the booking.
• They relied heavily on section 55A(2), which refers to "the contract" between the operator who accepted the booking and the person who made it, arguing this presupposes a real-world contract.
• They emphasized the purpose of Part II of the Act as ensuring passenger safety and argued that without a contract between the operator and the person making the booking, passengers would lack redress if the driver failed to provide the journey.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Milton Keynes Council v Skyline Taxis and Private Hire Ltd [2017] EWHC 2794 (Admin), [2018] PTSR 894	Definition of "operate" under section 55 as limited to making provision for invitation or acceptance of bookings, excluding provision of the vehicle itself.	Cited to confirm the narrow statutory meaning of "operate" focusing on arrangements for bookings rather than the provision of vehicles.
St Aubyn v Attorney-General [1952] AC 15	Explanation of the nature and purpose of deeming provisions in statutory interpretation.	Used to analyze the nature of the deeming provision in section 56(1) of the Act.
Fowler v HMRC [2020] UKSC 22, [2020] 1 WLR 2227	Principles for interpreting deeming provisions, including their scope and limits.	Applied to guide the court’s construction of section 56(1) and to avoid unjust or absurd results.
B (A Child) v DPP [2000] 2 AC 428	Definition of "necessary implication" in statutory interpretation as a compellingly clear implication.	Referenced in assessing whether a contract requirement is a necessary implication of the Act.
Pwr v DPP [2022] UKSC 2, [2022] 1 WLR 789	Clarification of the test for necessary implication in statutory interpretation.	Used to evaluate the respondent’s argument that the contract requirement is a necessary implication of the Act.
St Albans DC v Taylor [1991] RTR 400	Explanation of the underlying purpose of Part II of the Act as protecting passenger safety through vehicle and driver licensing.	Adopted to define the scope of passenger safety protections under the Act, distinguishing them from contractual obligations.
R (United Trade Action Group Ltd) v Transport for London [2021] EWHC 3290 (Admin), [2022] 1 WLR 2043	Interpretation of the Private Hire Vehicles (London) Act 1998 as implying a real-world contract between operator and passenger.	Cited to contrast the London regulatory scheme with the 1976 Act, noting differences in statutory language and absence of a deeming provision.

Court's Reasoning and Analysis

The court analyzed the statutory framework, focusing on the distinction between accepting bookings and making contracts of hire. It emphasized that "operate" under section 55 is narrowly defined as making provision for the invitation or acceptance of bookings, excluding the provision of the vehicle itself.

The deeming provision in section 56(1) was central to the analysis. The court explained that this provision treats every contract for hire as made with the operator who accepted the booking, but only "for the purposes of this Part of this Act"—that is, for regulatory purposes and not as a real-world contract imposing obligations beyond the regulatory scheme.

The court rejected the argument that the Act necessarily implies a real-world contract between the operator and the person making the booking. It held that such an implication is not compellingly clear from the language, context, or purpose of the Act.

The court noted that passenger safety is ensured by licensing requirements for vehicles and drivers, rather than by imposing contractual obligations on operators at the time of booking.

The court further observed that section 55A(2), which refers to "the contract," does not require a real-world contract and that the statutory scheme appears indifferent to the existence or terms of any contract, relying instead on the deeming provision to regulate relationships.

It was also noted that licensing authorities can impose licence conditions to address passenger expectations, such as ensuring a vehicle attends at the appointed time and place, providing regulatory rather than contractual remedies.

The court found the original declaration inappropriate because it assumed the booking was made by the passenger and that the operator was required to contract to provide the journey, neither of which is necessarily the case. The declaration also incorrectly implied that failure to contract would be a criminal offence, which is unsupported by the statute.

Accordingly, the court concluded that the declaration should be discharged and no further declaration made.

Holding and Implications

The court's final decision was to ALLOW THE APPEAL AND DISCHARGE THE DECLARATION.

This decision removes the prior declaration that an operator must enter into a contract as principal with the person making the booking in order to operate lawfully under the Act. The court held that the Act does not impose such a real-world contractual requirement on operators.

The direct effect is that operators are not legally required by the Act to contract with persons making bookings or passengers beyond the regulatory deeming provision. The court did not establish any new precedent beyond clarifying the statutory interpretation and emphasized that licensing authorities retain the power to impose licence conditions to regulate operator conduct and protect passenger interests.