Sex establishment - Control - Whether fee determined by authority
Hemming (t/a Simply Pleasure Ltd) and others v Westminster City Council: QBD (Admin): 16 May 2012Hemming (t/a Simply Pleasure Ltd) and others v Westminster City Council: QBD (Admin) (Mr Justice Keith): 16 May 2012
The claimants operated licensed sex establishments in the City of Westminster. The defendant local authority charged a licence fee to the owners of licensed sex establishments. The licence year ran from 1 February to 31 January. It was common ground that the authority was not entitled to make a profit out of the fees it charged. In September 2004, the fee for the year 1 February 2005 to 31 January 2006 was determined by the authority at £29,102.
The same fee was charged for each of the subsequent six years. That fee reflected the costs of dealing with the application (the authorisation procedures) and of taking enforcement action against unlicensed sex establishments (the enforcement procedures). The majority of the fee reflected the costs of the enforcement procedures.
In April 2011, the claimants applied for judicial review of the fee demanded for 1 February 2011 to 31 January 2012 (2011/12) on the basis that the fee was never determined for that year. The claimants’ case was that a reasonable fee should be determined for 2011/12. Further, the claimants brought a restitutionary claim on the basis that the authority had not determined the appropriate licence fee for the five previous years as well. The claimants sought the difference between the sums they had paid for the licence fees and whatever would have constituted reasonable fees for those years.
The claimants submitted that the fee for 2011/12 should be determined by the authority and that the fee to be determined should no longer reflect the cost of the enforcement procedures, pursuant to regulation 18(4) of the Provision of Services Regulations 2009, SI 2009/2999. Consideration was given to whether or not the authority would have to carry forward surpluses or deficits from previous years when determining the fee for 2011/12. The claim would be allowed.
(1) In the present case, no licence fee had been determined for sex establishments in 2011/12, or for any of the years since the year ending 31 January 2006. Accordingly, the authority would have to determine the fee for 2011/12. That fee would have to be adjusted to reflect any previous deficit or surplus and there was no basis for not going back to the year ending 31 January 2007 in doing so. Any surplus or deficit from the previous year would have had to have been carried forward, and even if the authority had decided to keep the fee at the same level for that year, any surplus or deficit from that year and the previous year would again have had to have been carried forward.
In respect of whether the fee could reflect the cost of the enforcement procedures, there had to be not only a proportionate relationship between the fee which was charged and the cost of the authorisation procedures, but the fee could not exceed the costs of those procedures. Therefore, since the year beginning 1 February 2010, the authority had not been permitted, when determining the licence fee for sex establishments, to reflect in the fee the cost of the enforcement procedures (see , , , , ,  of the judgment).
(2) It was established principle that where money had been paid as a result of an unlawful demand for payment, the person or body who had paid it was entitled under the common law to have it repaid (see  of the judgment). The restitutionary claim had to succeed as the authority had demanded what purported to be lawful fees, and had been paid them, for the five relevant years when the demands had been unlawful because the authority had not determined what the licence fees for those years should have been.
Accordingly, the claimants were entitled to recover the difference between the sums they paid for the relevant years and whatever would have constituted reasonable fee for those years.
Philip Kolvin QC (instructed by Gosschalks) for the claimants; Nathalie Lieven QC and Jacqueline Lean (instructed by Westminster City Council) for the authority.