Best Consideration

September 9th, 2016 by James Goudie KC in Land, Goods and Services

The policy of legislation such as Section 123 of the Local Government Act 1972 is to ensure, so far as reasonably possible, that public assets are not sold by public authorities at an undervalue, save, if at all, with the consent, general or specific of the Secretary of State.  In R (Faraday Developments Ltd) v West Berkshire Council [2016] EWHC 2166 (Admin) Holgate J distilled, at paragraph 131, the following principles from the case law as to the circumstances in which a judicial review Court may or may not intervene in relation to the application of Section 123:-

(1) The Court is not entitled to substitute its own view on the facts and merits for that of the local authority, the Court may interfere only if there was no material upon which the authority’s decision could have been reached, or if in reaching that decision, the authority disregarded matters it ought to have taken into consideration, or if it took into account matters which were irrelevant, or if its decision was irrational;
(2) The Court is likely to find a breach of Section 123(2) only if the local authority (a) has failed to take proper advice, or (b) failed to follow proper advice for reasons which cannot be justified, or (c) although following advice, it followed advice which was so plainly erroneous that in accepting it the authority must have known, or at least ought to have known, that it was acting unreasonably;
(3) Section 123(2) does not mandate the authority to have regard to any particular factors;
(4) There is no need for the authority’s decision-making process to refer to Section 123(2) explicitly, provided that the Court is able to see that the duty has in substance been performed;
(5) The obligation under Section 123 is not to conduct a particular process, but to achieve a particular outcome, (albeit process may have an important, or even determinative, evidential role in deciding whether the authority has complied with Section 123(2));
(6) “Consideration” in Section 123(2) is confined to those elements of a transaction which are of commercial or monetary value, and therefore the Court will quash a decision to sell property where the authority has taken into account an irrelevant factor, eg job creation, when assessing whether it is obtaining the best “consideration” reasonably obtainable;
(7) The deliverability or credibility of a bid, or the care with which it has been prepared, are commercial factors which are relevant to an assessment of whether the “consideration” offered is the best reasonably obtainable: the highest offer on the table need not represent the best “consideration”, because an authority may conclude that “a bird in the hand is worth two in the bush”;
(8) In order to discharge the duty under Section 123(2) there is no absolute requirement to market the land being disposed of, or to obtain an independent valuation.

The case also concerned whether the Development Agreement was a “public contract” to which the public procurement regime applied; from paragraph 171, addressed the principles concerning the “main object” of a contract and the concept of direct and indirect and enforceable legal obligations; and, from paragraph 196, whether the Development Agreement contained artificial measures or devices to avoid public procurement legislation.

 

Refusal of relief

August 12th, 2016 by James Goudie KC in Judicial Control, Liability and Litigation

In PS v GREENWICH COUNCIL (2016) EWHC 1967 (Admin) judicial review relief would have been refused both under Section 31(2A) of the Senior Courts Act 1981 and in the exercise of the Court’s discretion when, even if there had been errors in the local authority’s decision, the outcome for the claimant would have been no different.

 

Private law cause of action

August 10th, 2016 by James Goudie KC in Judicial Control, Liability and Litigation

In Richards v Worcestershire County Council (2016) EWHC (Ch) the County Council and an NHS Commissioning Group failed to strike out a CPR Part 7 restitution are claim by an individual who alleged that they had been unjustly enriched as a result of their failure to provide services following their after-care assessment under Section 117 of the Mental Health Act 1983 and who had paid privately for such services. The claim did not have to be by judicial review. Clunis v Camden and Jones v Powys were distinguished.

 

GPOC

August 5th, 2016 by James Goudie KC in Human Rights and Public Sector Equality Duty

GPOC In R (GS) v Camden LBC (2016) EWHC 1762 (Admin) it was held that the authority was under a duty to exercise its general power of competence under Section 1 of the Localism Act 2011 so as to provide accommodation when there would otherwise be a breach of ECHR Article 3.

 

Planning reasons

August 2nd, 2016 by James Goudie KC in Planning and Environmental

What is the standard of reasons to be applied to a local planning authority’s decision to grant planning permission? That was one of the questions in R (Hawksworth Securities) v Peterborough City Council (2016) EWHC 1870 (Admin). The Judge’s answer was that the position is not the same as it is with respect to a decision on a planning appeal. That is an adversarial procedure. A LPA however is not adjudicating in a dispute between planning applicant and objector. 

A LPA is not required to give reasons for rejecting objectors’ representations. It need only summarise the main reasons for its decision. It can do so briefly. 

It is not required to set out each step in its reasoning. It does not have to indicate what factual matters were accepted or rejected.

 

Public health functions

August 2nd, 2016 by James Goudie KC in Local Authority Powers

National AIDS Trust v NHS England (2016) EWHC 2005 (Admin) is a challenge to a decision of NHS England to refuse to consider in its commissioning process an anti-retroviral drug to be used on a preventative basis for those at high risk of contracting AIDS. NHS England argued that it had no power to do so under the governing legislation, the National Health Service Act 2006.

It argued that it did not have power to perform “public health functions” that are carried out by local authorities or the SOS pursuant to their respective statutory powers and duties. NHS England further argued that, pursuant to 2013 Regulations promulgated by the SOS there is now a division of labour between NHS England and local authorities, with the latter assuming responsibility for preventative medicine in relation to sexually transmitted diseases.

The local authorities disagreed. They were represented in the litigation by the LG A. At its core the judicial review was about the allocation of budgetary responsibility in the health field.

Green J concluded that NHS England had erred in law in deciding that it had no power or duty to commission the preventative drugs in issue. It has a broad preventative role and commensurate powers and duties. In any event preventative treatments facilitate and/or are conducive and/or are incidental to the discharge of its broader statutory functions. 

 

Emergency Powers Compensation

July 27th, 2016 by James Goudie KC in Environment, Highways and Leisure

In Hastings Borough Council v Manolete Partners Plc [2016] UKSC 50 the Council exercised its emergency powers under Section 78 of the Building Act 1984 to restrict public access to Hastings Pier.  The Pier was in a dangerous condition.  It had serious structural defects.  The Council also obtained a Court Order under Section 77 prohibiting public access to the Pier until remedial works had been carried out.  Section 106 required compensation to be paid for loss of business resulting from emergency action, but only where the owner or occupier of the premises has not been “in default”.  The Supreme Court has upheld the decisions of the lower Courts that the owner was not “in default”.

The Respondent, Manolete Partners PLC (“Manolete”) brought the claim for compensation as an assignee of the business Stylus Sports Ltd (“Stylus”). Stylus had leased two units from the freeholder of the pier, Ravenclaw Investments Incorporated (“Ravenclaw”), and had operated a bingo hall and amusement arcade. Two years before the closure of the pier Stylus had commissioned a structural engineering survey of the pier. This advised that urgent and future work, within a year, was required to the structure of the pier to prevent an unacceptable risk to the public. Ravenclaw, which was responsible as landlord for repair and renewal of the pier structure, did not take action to remedy the defects identified. Nor did the Council.  The pier remained open to the public. In April 2006 a section of tension cord fell from the pier. This led the Council to attempt, unsuccessfully, to compel Ravenclaw to take action, and to commission its own structural integrity report, which in June 2006 recommended immediate restrictions on access to the pier. The Council has exercised its emergency powers and in September 2006 obtained the Court Order.

The Council alleged that Stylus had breached the Occupiers Liability Act 1957 and the Health and Safety at Work Act 1974. The Council sought to rely on these alleged breaches to establish a “default”, thereby precluding Manolete from making a compensation claim under the 1984 Act. This defence was rejected by the Technology and Construction Court and the Court of Appeal, on the basis that the reference to “default” was limited default in respect of obligations imposed by the 1984 Act itself.

Upholding the rejection of the defence, Lord Carnwath, with whom the other Supreme court Justices agreed, said that Section 106 of the 1984 Act gives a right to compensation to a person who has sustained damage by reason of the exercise of the authority’s powers under the Act “in relation to a matter as to which he has not himself been in default”. This requires firstly, identification of the “matter” in relation to which authority has exercised its powers, and secondly, consideration of whether that is a matter “as to which” the claimant has been in default.

The relevant power is the power to take emergency action. The claim for compensation is limited to the period from the date of the Council’s emergency closure of the pier until the Court Order. The “matter” which led the Council to take such emergency action was identified in the letter sent by the Council to the tenants at the time, which was the state of the pier combined with fear of possible collapse from crowd-loading during the events planned for that month, in particular the risk of overloading in an emergency evacuation. The trigger was not the general state of the pier or the specific repairs identified in the report commissioned by Stylus. Whatever Stylus’ position towards its clients and employees, it was not “in default” as to the matter which led to the Council’s exercise of its Section 78 powers. On this basis, Manolete was entitled to succeed in its claim for compensation.

Although not strictly necessary to determine the appeal, Lord Carnwath addressed the issue of whether “default” in Section 106 is limited to default under the 1984 Act itself, as this may impact on future cases. Lord Carnwath found that the legislative history and the authorities under the predecessor statutes support the conclusion that the default is not limited to the particular provisions of each statute, but extends to other forms of legal default.

The Court of Appeal’s conclusion that the Council had no defence in principle to the claim for compensation was correct, not because , as they so held, there was no default under the 1984 Act, but because it was not Stylus’ default which led to the Council’s emergency action. Lord Carnwath emphasised that this does not limit the issues which can be taken into account by the arbitrator in assessing the level of  compensation payable. The arbitrator may take account of Stylus’ statutory and common law responsibilities to its clients and employees, the structural condition of the pier and the implications it would have had for the continuation of business quite apart from the effects of the emergency action.

 

Human Rights Claim Time Limit

July 26th, 2016 by James Goudie KC in Human Rights and Public Sector Equality Duty

As is well known, Section 6(1) of the Human Rights Act 1998 provides that it is unlawful for a public authority to act in a way which is incompatible with a Convention right, and Section 7(5) provides that proceedings in which a person claims that a public authority has acted in a way which is made unlawful by Section 6(1) must be brought before the end of (a) the period of one year “beginning with the date on which the act complained of took place” or (b) such longer period as the court or tribunal considers equitable having regard to all the circumstances.  By Section 6(6) “act” includes a failure to act.  In O’Connor v Bar Standards Board [2016] EWCA Civ 775 breach of Article 14 of the Convention in conjunction with Article 6 was alleged.  The claim was held to be barred by Section 7(5).  Lord Dyson MR observed:

“19.      … As a matter of ordinary language, the wording of section 7(5)(a) contemplates that an “act” is a single event which occurred on a single date. No express provision is made for an act which extends over a period of time. There is no difficulty in applying this approach in the paradigm case of a single act which takes place at a clearly identifiable point of time. The act should not be confused with its consequences. If it takes place more than one year before proceedings are brought, the claim is barred by section 7(5)(a) even if its consequences do not appear until later. There are also cases where the complaint is a failure to act. It may be difficult to determine when a failure to act occurs. This problem does not, however, arise in the present case.

20. There are also cases … where the question is whether the acts complained of are to be regarded as a single continuing act or as a series of discrete acts with continuing consequences. … it is not always easy to decide how to classify the acts in such a case. It will depend on the particular circumstances and the nature of the particular complaint.”

A decision to resist an appeal, and the implementation of that decision could not sensibly be seen as a continuation of the original decision to prosecute.

Elias LJ said:

“37.      …. On the appellant’s analysis, many acts which are plainly one-off would retrospectively be converted into continuing acts simply by virtue of being challenged. Take a case where a person claims a social welfare benefit, is refused, and challenges that decision by a process of internal appeal. The department can at all times revoke the decision and pay the benefit. The decision to refuse the benefit itself could not properly be described as a continuing act; it is manifestly a single act, albeit with potentially continuing adverse consequences. Yet on the appellant’s analysis it becomes a continuing act once it is challenged simply by virtue of the fact that the appeal is not conceded, with the consequence that time does not begin to run. I can envisage situations where the fact that there is an internal appeal may well be material to the question whether or not time should be extended, but it cannot in my view delay the commencement of the limitation period itself.”

Elias LJ indicated that the position might be different if what was alleged were continuing systemic discrimination.

 

PSED

July 25th, 2016 by James Goudie KC in Human Rights and Public Sector Equality Duty

R (DAT) v West Berkshire Council [2016] EWHC 1876 (Admin) is a PSED challenge which succeeded. It arose out of a budget decision to cut funding to voluntary sector organisations who provide short breaks for disabled children.  The officer report to members stated that the PSED requires decision makers “to keep the welfare of service users and their families at the forefront of their mind, particularly the most disadvantaged” (“the formula”).  Elisabeth Laing J found that, despite the provision by officers to members of the necessary factual information, the Council failed to have “due regard” to the needs listed in Section 149 of the Equality Act 2010.  The problem was that, while members were given the text of Section 149, they were directed to the formula.  She said:

“45.    … That would have been fine if the formula accurately encapsulated, for the purposes of the decision about short breaks, the effect of section 149. However, first, the formula is not tailored to that decision, … Second, it does not accurately capture the effect of section 149 in the context of that decision.

  1. As I have found, members had the factual material which would have enabled them to have due regard to the statutory needs. However, they were directed to look at that material in a way that did not help them to focus on the right question, but, instead, told them to focus on an irrelevant, or at best, only partly relevant, question. Had the report only included the text of section 149(1), it might not have made councillors’ lives easy, but I could have been satisfied that they had considered the right question. The flaw in the presentation of the material is that the repeated use of the formula to which I have referred, twice with the text of section 149(1), and twice on its own. That way of presenting the equality issues unavoidably suggests that the formula is equivalent to, or a substitute for, the statutory considerations, and it is not. It does not satisfy me that members asked themselves the right question when they looked at the material officers had so diligently assembled. …
  2. … A paraphrase of the statutory test which includes some, but not all, relevant matters is not enough. Express reference to the statutory test (or an accurate paraphrase or summary, as the case may be) ensures a focus on all the factors which Parliament … has prescribed.

The Judge was critical of paragraph 60 of the judgement of McCombe LJ in R (Bracking) v SoS for Work and Pensions (2013) EWCA Civ 1345 insofar as it may have suggested that public authorities must give equal weight to equality considerations and to other “pressing circumstances”.  She said, at paragraph 41:

“41.    The practical question, or questions, posed by section 149 in relation to a particular decision will depend on the nature of the decision and on the circumstances in which it is made. It is clear from the authorities that the fundamental requirement imposed by section 149 is that a decision maker, having taking reasonable steps to inquire into the issues, must understand the impact, or likely impact, of the decision on those of the listed equality needs which are potentially affected by the decision. On appropriate facts, this may require no more than an understanding of the practical impact on the people with protected characteristics who are affected by the decision … Further, where an impact is obvious, as a matter of common sense, but its extent is inherently difficult to predict, there may be nothing wrong in making a reasonable judgment and then monitoring the outcome with a view to making any adjustments that may seem necessary: the section 149 duty is ongoing.”

 

Judicial Control, Liability and Litigation

July 20th, 2016 by James Goudie KC in Judicial Control, Liability and Litigation

The Supreme Court has held by a 5-4 majority in Willers v Joyce (Neil) [1016] UKSC 43 that the tort exists of malicious prosecution not only in relation to criminal proceedings but also in relation to civil proceedings.  The Supreme Court considered and departed from the House of Lords decision in Gregory v Portsmouth City Council [2000] 1 AC 1412, preferring the decision of the Privy Council in Crawford v Sagicon [2014] AC 366.

 

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