Aylesbury Vale District Council had prosecuted Call a Cab Ltd for operating without a private hire operator’s licence.
The firm claimed that it was not an operator but an intermediary, acting as a taxi management service, finding operators to meet the customer’s journey requirements rather than accepting the booking itself.
It also argued that the council had not properly adopted legislation that controls private hire operators.
The council passed a resolution to adopt private hire controls in March 1989 but could not prove it had sent copies of the notice to all relevant parish councils – a legal requirement – as at some point since then its records had been destroyed.
Therefore, the court dismissed the case.
The council denied the judgement means it can no longer enforce taxi licensing due to a legal loophole.
Councillor Judy Brandis, chairman of the licensing committee, said: “The council is very disappointed with this result and will be lodging an appeal. We firmly believe that the private hire controls were properly adopted in 1989.
“I must stress that the court’s decision does not affect the council’s ability to continue to enforce private hire controls in the interests of public safety and the public interest generally.”
A council spokesman said the authority does not need to pass new legislation before it can enforce licensing.
“We disagree with the judgement and hence have appealed.”