A judge ruled Barnet council in north London acted unlawfully when it increased the cost of residents' parking permits and visitor vouchers in controlled parking zones (CPZs) to raise revenue.
The additional income was intended to meet projected expenditure for road maintenance and improvements, concessionary fares and other road transport costs. But Mrs Justice Lang declared at London's High Court that the 1984 Road Traffic Regulation Act "is not a fiscal measure and does not authorise the authority to use its powers to charge local residents for parking in order to raise surplus revenue for other transport purposes".
The ruling was a victory for the Barnet CPZ Action group, made up of parents and residents from the borough, and David Attfield, who brought the lead case.
Mr Attfield, who lives in a borough CPZ at East Finchley, won the quashing of the council's decision in February 2011 to dramatically increase the charges with effect from April 2011.The judge rejected arguments put forward by council lawyers that it had powers under section 45 of the 1984 Act to raise a surplus from parking charges for transport functions.
Professor Stephen Glaister, director of the RAC Foundation, said of the ruling quashing the increases: "This is fantastic news for drivers. This decision should never have been in any doubt. The law is explicit - parking charges are about managing congestion, not raising revenue. If there is a surplus collected then there are strict rules on what it can be used for. The question is: why did Barnet ever think it had an arguable case to pick on one group of residents to shoulder an additional tax?"
Barnet council leader Richard Cornelius conceded that the increase in charges had been carried out "too abruptly and rather charmlessly", but said there would be an appeal.
Mr Cornelius said: "Both our pricing and spending are very much in line with other London boroughs and I very much believe that our spending of the income from our parking account on items such as road maintenance and transport services is entirely within the scope of the special parking account under the Road Traffic Act. With that in mind I don't think we have any alternative but to look to appeal this decision.
The judge ordered the council to repay the parking charges unlawfully obtained from Mr Attfield, plus his legal costs. This opens the way for other residents to seek their money back. The judge formally rejected Barnet's application to appeal against her ruling, but the council can still ask the Court of Appeal itself to hear the groundbreaking case. Mrs Justice Lang said her orders against Barnet would be stayed until the appeal court makes a decision.