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What amounts to an abuse of process or entrapment in licensing test purchasing?

I was reminded this week of the case of East Riding of Yorkshire Council v Dearlove 2012 [ALL ER D] 163. I was advising a local authority in relation to a procedure that they wish to put in place for some test purchasing and had to reread the judgment.

This was a case where the High Court determined that the Magistrates’ Court below it had erred in staying, as an abuse of process, a prosecution brought by a local authority against an individual for operating a private vehicle without a licence. The High Court held that the local authority had not entrapped him by carrying out a “test purchase” in booking his vehicle in response to a newspaper advertisement placed by him offering his services.

The appellant local authority had appealed by way of case stated against the decision of the Magistrates’ Court staying a prosecution that it had brought against the respondent – Dearlove. Dearlove had placed an advert in a monthly free newspaper stating “Chauffer-driven BMW, VIP, Executive, Corporate Business Travel, Airport Connections, Male/Female Chauffeurs.” An email address was given at the bottom of the advert. This was reported to the local authority and a copy of the advert was faxed to it. The local authority informed Dearlove that he was not licensed to carry out the activities advertised. Initally, Dearlove indicated that he would apply for a licence that but he later claimed that he would be using the vehicle for weddings and funerals only, for which he did not need a licence. Dearlove was warned of the possibility of a “test purchase” and he said he was not trading as a taxi firm and that, indeed, he had no business at all.

A test purchase was ordered to check whether this was correct. The caller enquired about the fare for a specific journey and whether it included alcohol. At the end of the journey, Dearlove accepted payment as agreed and handed over an invoice and a business card.

The local authority prosecuted Dearlove for driving, operating and using a private hire vehicle without a licence in a controlled district and carrying on a licensable activity by selling alcohol from the vehicle without authorisation. After considering the relevant authorities the Justices concluded that the prosecution should be stayed.

The questions for the opinion of the High Court were whether:

  1. In the light of Attorney General’s Reference (3 of 2000), re R [2001] EWCA Crim 1214, [2001] 2 CR App R 26, the Magistrates has erred in law in finding the local authority’s conduct went beyond simply providing D with an opportunity to commit a crime.
  2. The Magistrates had erred in law in determining that the information available to the local authority prior to the test purchase did not amount to reasonable grounds for believing that criminal activity was taking place.
  3. The Magistrate’s erred in distinguishing the facts of Dearlove’s case from Nottingham City Council the Amin [2000] 1 WLR 1071 DC.

The High Court in looking at this case answered the three questions as follows in its decision:

  1. The local authority had not stepped over the line and had done nothing that any member of the public would not have been able to do. There was nothing in the way the test purchase was carried out that could amount to entrapment. Despite the fact that the local authority knew that Dearlove had no work and was vulnerable, it simply gave Dearlove the opportunity to provide a service as advertised by him. There were reasonable grounds for suspecting him and continuing suspicion was justified. Dearlove had had an express warning that a test purchase would be made and therefore there was no unfairness. There was a strong public interest in ensuring that services such as those offered by Dearlove were properly licensed. The brining of the prosecution could not be regarded as an affront to public conscience. The Justices had erred in ordering a stay of the case against him.
  2. The answer to the first question was yes; no answer was needed to the second question.
  3. The situation in the instant case was comparable to Amin but a yes or no answer was not required to the third question as formulated.

The case was therefore remitted to the Justices for substantive consideration, with the appeal being allowed.

This case gives clear guidance on the position of the local authorities in cases such as this and other areas where test purchasing is carried out – not just the situation with taxi licensing. Authorities have wide discretion and, as long as they act consistently with the guidelines set out in this case, will not be criticised for their approach to test purchasing, particularly if there is “a strong public interest in ensuring that services are not offered incorrectly.”