Appropriation of Land

August 5th, 2014 by James Goudie KC in Land, Goods and Services

R (Maries) v Merton LBC (2014) EWHC 2689 (Admin) concerned the exercise by the Council of its powers of appropriation of land under s122(a) of the Local Government Act 1972 and whether land is no longer held for the purposes for which it is currently held.  The land in question is a recreation ground acquired pursuant to s164 of the Public Health Act 1875 on trust for the enjoyment of the public.  The Council proposed to expand an adjacent primary school onto part of the recreation ground.  The Court, para 59, distilled 3 material principles: (1) whether land is still or is no longer required for a particular purpose, meaning no longer needed in the public interest of the locality for that purpose, is a question for the local authority, subject only to Wednesbury;  (2) the legislative provision is concerned with relative needs or uses for which public land has or may be put, and does not require it to fall into disuse before the authority may appropriate it for some other purpose; and (3) the authority is entitled when exercising its appropriation power to seek to strike a balance between comparative local needs and to take a broad view of local needs.

Applying those principles, the Court rejected the judicial review challenge to the appropriation of part of the recreation ground.  The correct statutory question had been addressed; the approach to considering the competing needs and to the question whether the land was no longer required for the purpose for which it was held had not been flawed; and the decision was not irrational.  In any event, paras 88-91, the Judge would have denied relief.

 

Capital Finance and Companies

July 30th, 2014 by James Goudie KC in Capital Finance and Companies

A challenge by a number of local authorities from the South Yorkshire and Merseyside Regions to the decision of the Secretary of State for Business, Innovation and Skills (“the SoS”) to change the allocation of EU Structural Funds in a manner that was disadvantageous to them, having failed at first instance, R (Rotherham BC) v SoS [2014] EWHC 232 (Admin), (2014) LGR 389, save in relation to the PSED, has now failed in the Court of Appeal, [2014] EWCA Civ 1080.  In particular, the claimant authorities sought to challenge the allocation of EU Structural Funds for the period 2014-2020 as between the four countries of the United Kingdom, and as between the English regions.  Articles 174-178 of the Treaty on the Functioning of the European Union require the EU to promote its overall harmonious development and strengthen its economic, social and territorial cohesion by reducing disparities between the levels of development of the various regions through the Structural Funds.  The allocation of the Structural Funds is determined by EU Council Regulations and the authorities of the Member States.  In March 2013 the SoS took a decision, effectively, to allocate higher funding than previously to Northern Ireland, Scotland and Wales.  In a further decision in June 2013 allocations were reduced for South Yorkshire and Merseyside.  Overall, the claimant authorities suffered a substantial fall in funding.  They alleged that the two decisions by the SoS have produced discriminatory and disproportionate funding cuts for their Regions, and breached the EU law principles of equal treatment and proportionality. 

It was common ground that, in making the first and second decisions, the SoS was acting within the scope of EU law and that accordingly the EU law principles of proportionality and equal treatment apply.  It was also common ground that the “margin of discretion” allowed by EU law may be broad or narrow according to the circumstances of the case, in particular the identity of the decision-maker, the nature of the decision, the reasons for the decision and the effect of the decision. Of these factors, the Court of Appeal said, at para 54, that “the nature of the decision is usually the most important”.  The Court of Appeal considered, at para 56, that the margin of discretion was “a wide one in the circumstances of this case”.  They stated, at para 57:-

“In our view, the first and second decisions were plainly concerned with matters of high level policy and economic, social and political judgment.  They involved the making of choices as to funding allocations between the regions. … Even if the only objective was the reduction of the disparities between levels of economic development of regions, that would involve the making of complex assessments of their respective economic circumstances.  These are not hard-edged decisions which admit of clear and straightforward answers. … In our view, this is classic territory for affording the decision-maker a wide margin of discretion.  … the Court should only interfere if satisfied that the decisions were manifestly inappropriate or manifestly wrong.”

The Court of Appeal then proceeded to consider whether the decisions were disproportionate and/or irrational.  They concluded, at para 64, that they came nowhere near to being that.

Turning to equal treatment, the Court of Appeal observed that the equal treatment principle requires that comparable situations must not be treated differently and different situations must not be treated in the same way, unless such treatment is objectively justified.  The question in the case was whether there was a failure to treat like cases alike and unlike cases differently, or rather what margin of discretion (if any) should be afforded to the SoS in deciding whether different categories are like or unlike each other (“the comparability issue”).  The Court of Appeal said:-

“70.     … We see no reason in principle why the width of the margin of discretion in relation to a decision on comparability should be approached differently from any other decision made within the scope of EU law.  In other words, it may be broad or narrow according to the circumstances of the case and in particular the nature of the decision: … In a simple case of discrimination, there may be no margin of discretion at all in deciding the comparability issue.  … But some comparisons are less straightforward and are not so clear cut.  They may involve making complex evaluative judgments as to which there is real scope for differences of opinion.  In principle, the more complex and the more judgment-based the decision, the greater the margin of discretion should be afforded to the decision-maker.”

“72. … The context in which the first and second decisions were taken is critical to the intensity of the court’s review of them. … The Secretary of State was required to have regard to a number of different overlapping considerations, and the regulation does not prescribe the weight to be given to each of them. … the reduction of regional disparities does not involve a simple comparison of the development level and economic performance of one region with another.  … It is a complex exercise. It includes not only making comparisons of the economic performance of different regions, but also inter alia of their respective employment rates for different age groups, their respective conditions for research and development and their respective  greenhouse gas emissions.  Each of these comparisons might individually involve making judgments.  Overall, the exercise of comparing one region with another is or ought to be multi-factorial.  It involves making a substantial number of value judgments of an economic and social nature.  In our view, the decision-maker is entitled to a wide margin of discretion in making such a decision.”

The Court of Appeal expressed its overall conclusion on the equal treatment issues as follows, at paragraph 86:-

“… For the reasons already given, the Secretary of State was entitled to a wide margin of discretion in deciding questions of comparability.  We agree with the judge that the court should only interfere if a high standard of unreasonableness is met.  The evidence of Dr Baxter shows that the Secretary of State approached the task of allocating the funds in a careful and systematic way and had particular regard to the relative position of the different regions.  He gave particular consideration to the position of Merseyside and South Yorkshire.  We are satisfied that the high threshold for interference by the court has not been crossed in this case.”

 

Consultation and PSED

July 30th, 2014 by James Goudie KC in Decision making and Contracts

In R (Sumpter) v Secretary of State for Work and Pensions [2014] EWHC 2434 (Admin) Hickinbottom J summarised, at para 94, the general law in relation to a consultation process as follows:-

“i) Whether required by statute or (as in this case) voluntary, if performed, consultation must be carried out properly (R v North and East Devon Health Authority ex parte Coughlan [2001] QB 213 at paragraph 108).

ii) Key features of a proper consultation process were set out in R v Brent London Borough Council ex parte Gunning (1985) 84 LGR 168 at page 189 per Hodgson J (as approved by the Court of Appeal in Coughlan at paragraph 108), namely:

(a) consultation is undertaken at a time when the relevant proposal is still at a formative stage;
(b) adequate information is provided to consultees to enable them properly to respond to the consultation exercise;
(c) consultees are afforded adequate time in which to respond; and
(d) the decision-maker gives conscientious consideration to consultees’ responses.

iii) However, fairness is the touchstone: for consultation to be lawful, it must be fair.  That is the test.  Although consideration of the particular facets of fairness identified in Coughlan may assist, whether the consultation process is fair is a fact-sensitive question that depends upon all the circumstances of the particular case looked at as a whole, and without drawing artificial distinctions between particular stages of the whole process  (R (Medway Council) v Secretary of State for Transport [2002] EWHC 2516 (Admin) at [28] per Maurice Kay J (as he then was), R (J L and A T Baird) v Environment Agency [2011] EWHC 939 (Admin) at [52] per Sullivan LJ, and R (Royal Brompton and Harefield Hospital NHS Foundation Trust) v Joint Committee of Primary Care Trusts [2012] EWCA Civ 472 at [9] per Arden LJ; see also R (Osborn) v Parole Board [2013] UKSC 61 at [64]-[71] per Lord Reed JSC).

iv) It is a matter for the court to decide whether a fair procedure was followed: its function is not merely to review the reasonableness of the decision-maker’s judgment of what fairness required (Osborn at [65] per Lord Reed).

v) If it is alleged that a consultation process is unfair, it is for the claimant to show that the unfairness was such as to render the consultation process unlawful.  Especially with the benefit of hindsight, it may well be possible to identify how a consultation process might have been improved; but, even if it was less than ideal, it will become unlawful only if what has occurred makes it unfair as a matter of law.  That is a substantial hurdle: in Baird, Sullivan LJ said that “in reality a conclusion that a consultation process has been so unfair as to be unlawful is likely to be based on a factual finding that something has gone clearly and radically wrong (Baird at [51]; see also Royal Brompton at [13] per Arden LJ).

vi) The consultation documents must be intelligibly clear to the general body of interested persons, and present the issues fairly and in a way that facilitates an intelligent and effective response (R (Breckland District Council) v The Boundary Commission [2009] EWCA Civ 239 at [46] per Sir Anthony May P, and Royal Brompton at [8]-[14] per Arden LJ).

vii) To be fair and proper, consultation must be performed by the decision-maker with an open mind.  However, an open mind is not the same thing as an empty mind (R (Royal Brompton and Harefield NHS Foundation Trust) v Joint Committee of Primary Care Trusts [2011] EWHC 2986 (Admin) at [16] per Owen J, adopting a phrase used in the course of argument by Neil Garnham QC).  Therefore, whilst a decision-maker cannot have a predetermined option, such that consultation is a sham, he may have a preferred option; but he must disclose that to potential consultees “so as to better focus their responses” (R (Sardar) v Watford Borough Council [2006] EWCA 1590 (Admin) at [29] per Wilkie J).  A consultation may properly be focused upon a limited number of options or even a single proposal.

viii) The process must be considered as a whole; and, therefore, where a decision-maker is in fact prepared to accept and consider further representations after the close of the formal consultation, then those subsequent events can be taken into account in assessing whether the process was fair; although it may be appropriate to give those subsequent events less weight, because (eg) the opportunity to make representations was not given such widespread publicity as was given during the formal process (Baird at [52]).

ix) In cases where there has been a consultation exercise, and it is decided to have a further consultation, the fairness of that further exercise must be considered in the context of the earlier and fuller consultation process.  In such cases, it may not be unfair to any interested party for the further consultation exercise to be more limited, whether as to the identity of consultees, or the content and duration of the consultation (R (Milton Keynes Council) v Secretary of State for Communities and Local Government [2011] EWCA Civ 1575, especially at [36]-[38]).

x) Proper consultation is an important part of the decision-making process.  The purposes of requiring fairness in procedural matters such as consultation include to ensure high standards of decision-making by public bodies, to enable parties interested in the subject matter to identify and draw to the attention of the decision-maker relevant factors which he may have overlooked to enable responses that will best facilitate a sound decision, and to avoid the sense of injustice which a person affected by a decision may otherwise feel if not given a proper opportunity to have their views known and taken into account (Osborn at [67]-[70]) per Lord Reed, and Baird at [41] per Sullivan LJ).  However, the obligations imposed upon a decision-maker in the course of consultation must not be unreasonably onerous, otherwise effective decision-making might be impaired and decision-makers might become reluctant to engage in voluntary consultation where (as in this case) there is no statutory duty to consult.”

At paragraph 117 the Judge added:-

“… R (Medway Council) v Secretary of State for Transport [2002] EWHC 2516 (Admin) … R (Montpeliers and Trevors Association) v City of Westminster [2005] EWHC 16 (Admin) … show that, although a decision-maker may formulate options on which to consult and restrict the consultation to that option or those options, in certain circumstances it may be unfair and unlawful to exclude an option from a consultation exercise.  They make clear that a decision-maker, as long as he keeps an open mind, might have a very much preferred option: what he cannot do is, for practical purposes, exclude a legitimate option.”

As regards the PSED, the Judge said, at para 137:-

 “The duty requires a “conscious directing of the mind to the obligations” (R (Meany) v Harlow District Council [2009] EWHC 559 (Admin) per Davis J (as he then was)), “due regard” being the appropriate regard in all the circumstances.  In R (Hurley) v Secretary of State for Business, Innovation and Skills [2012] EWHC 201 (Admin) at [78], Elias LJ illuminatingly explained:

“The concept of ‘due regard’ requires the court to ensure there has been a proper and conscientious focus on the statutory criteria, but if that is done, the court cannot interfere with the decision simply because it would have given greater weight to the equality implications of the decision than did the decision-maker.  In short, the decision-maker must be clear precisely what the equality implications are when he puts them in the balance, and he must recognise the desirability of achieving them, but ultimately it is for him to decide what weight they should be given in the light of all relevant factors.”

In R (Bailey) v London Borough of Brent Council [2011] EWCA Civ 1586 at [102], Davis LJ emphasised the importance of not interpreting the duty in such a way as to make decision-making unduly and unreasonably onerous.”

 

Predetermination

July 28th, 2014 by James Goudie KC in Decision making and Contracts

In IM Properties Development Ltd v Lichfield District Council [2014] EWHC  440 (Admin) Patterson J held that an e-mail sent by a committee chairman to members of the same political party telling them to vote in a particular manner fell within Section 25(2) of the Localism Act 2011 and was not to be taken as a predetermination.  She found, at para 86, that the tenor of the e-mail was not “so strident” as to remove the discretion on the part of the recipient as to how he or she would vote.  Patterson J added: “The debate shows a far reaching discussion between members and displays no evidence of closed minds in relation to the decisions that had to be taken”; and “A fair minded and reasonable observer in possession of all the facts would not be able to conclude on the basis of all the evidence that there was any real possibility of predetermination as a result of the e-mail …”.

 

Libraries

July 25th, 2014 by James Goudie KC in Land, Goods and Services

Many rounds of cuts include library closures.  In Draper v Lincolnshire County Council [2014] EWHC 2388 (Admin) a judicial review challenge to a decision to reduce library provision from 44 to 15 libraries succeeded.  It did so on two grounds.  One ground was that the authority had not properly considered an expression of interest from a charitable organisation to provide the services. The other ground was that consultation had not taken place at a formative stage.

Chapter 2 of Part 5 (Sections 81-85) of the Localism Act 2011 (“LA 2011”) introduced a mechanism by which civil society organisations can require local authorities to consider conducting a procurement exercise in relation to one or more of the services that they provide.  The basic structure is that a local authority is under a duty to consider an “expression of interest” that has been submitted to it by a “relevant body”.  An “expression of interest” is an expression of interest in providing or assisting in providing a service on behalf of the local authority.  A “relevant body” is a voluntary or community body, a charitable body, a parish council or two or more employees of the local authority at issue.  A voluntary body is one whose activities are not carried on for profit.   A community body is a body carrying on activities primarily for the benefit of the community.  There is no requirement that a “relevant body” have local connections.

Upon consideration of an expression of interest, one of three things can happen: it can be accepted, rejected or modified, but an expression of interest can be modified only in circumstances where the authority thinks that the expression of interest would not otherwise be capable of acceptance and the relevant body agrees to the modification.  In deciding whether to accept an expression of interest, the local authority must consider “whether acceptance of the expression of interest would promote or improve the social, economic or environmental well-being of the authority’s area”; and if a local authority accepts an expression of interest it must then carry out a procurement exercise: the exercise “must be such as is appropriate having regard to the value and nature of the contract that may be awarded as a result of the exercise”.

There have been made the Community Right to Challenge (Expressions of Interest and Excluded Services) (England) Regulations 2012, SI 2012/1313, Schedule 1 to which specifies requirements for expressions of interest.  Also, the Secretary of State has issued statutory Guidance.

In the Lincolnshire Libraries case, Greenwich Libraries Ltd (“GLL”), which manages libraries in the London Boroughs of Greenwich and Wandsworth, and which is a “relevant body”, submitted what Collins J found to be an Expression of Interest within Section 81 of LA 2011 made in time.  It proposed taking over the provision of the County’s library services and stated that it could do so retaining what existed and achieve savings.  Collins J found that the Expression of Interest was not “properly considered”: paras 46/47.

Further, consultation must of course be when proposals are at a “formative stage”.  At para 17 Collins J said:

“It is clear that it is proper for an authority to have a preferred option and to consult on the basis that that is what is proposed by the authority.  But for consultation to be meaningful the authority must be prepared to think again if those consulted are unhappy with the proposal and suggest a different solution.”

Collins J found, at para 27, that the consultation exercise was flawed.  This was because a central element in relation to the statutory service, namely to reduce it to 15 libraries with the targeting for those outside the 30 minutes travel area, could not be changed.

However, the inevitable PSED challenge failed, as did an irrationality challenge. The authority had identified the possible areas of discrimination and identified measures which it believed would ensure that there was no unlawful discrimination (para 50).  The “overwhelming objection” to the decision did not in itself mean that it was unlawful (para 53).  The decision to make the cuts was “a political one … which cannot be challenged in the Courts”:  “The need for cuts will inevitably produce hard decisions for many, but that does not make them unlawful”.

 

Rates

July 15th, 2014 by James Goudie KC in Council Tax and Rates

The Liquidator of a tenant company has disclaimed the lease.  The property is unoccupied.  Who then is the “owner” of the property for the purposes of non-domestic rates? Answer: the landlord.  So ruled Hickinbottom J in Schroder v Birmingham City Council [2014] EWHC 2207 (Admin).  The disclaimer determined the lease.  It gave the landlord the right to immediate possession.  It was irrelevant that the Insolvency Act 1986 preserved the contractual liabilities of the guarantor.  Those did not mean that the guarantor had a right to immediate possession.

 

Local Government Ombudsman

July 8th, 2014 by James Goudie KC in Non Judicial Control

Who can complain to the Local Government Ombudsman?  Basically, “a member of the public”: Section 26A of the Local Government Act 1974.  Who for this purpose is “a member of the public”?  An individual or “a body of persons”, whether incorporated or not, that does not come within either of the exclusions in Section 27.  The first exclusion is of a local authority or other authority or body constituted for purposes of the public service or of local government, or for the purposes of carrying on under national ownership any industry or undertaking or part of an industry or undertaking.  The second exclusion is of any other authority or body whose members are appointed by Her Majesty or any Minister of the Crown or government department or by the Welsh Ministers, or “whose revenues consist wholly or mainly of moneys provided by Parliament or the Welsh Ministers”.  The purpose no doubt of both exclusions is to avoid one public body invoking the Ombudsman to pursue a complaint of injustice which it attributes to another public body.

In The Matter of an Application by Armagh City and District Council for Judicial Review, [2014] NICA 44, the Northern Ireland Court of Appeal held that a GP partnership is a “body” for the purpose of similar exclusions in Northern Ireland legislation, but that, although the partnership was mainly publicly funded under the NHS, it did not come within the “… revenues … provided by Parliament …” exclusion of complainants from the Ombudsman’s jurisdiction.

 

Local Auditors

July 7th, 2014 by James Goudie KC in Non Judicial Control

The Local Audit (Auditor Resignation and Removal) Regulations 2014, SI 2014/1710 (“the Regulations”) made pursuant to the Local Audit and Accountability Act 2014 (“the Act”) make provision about the resignation and removal of a local auditor appointed under Part 3 of the Act. Local auditors audit the accounts of relevant authorities (as to which, see Section 2 of, and Schedule 2 to, the Act). Most relevant authorities are required to have an auditor panel to advise on the selection and appointment of its local auditor (see Section 9 of, and Schedule 4 to, the Act in relation to auditor panels).

Regulation 2 makes provision about the application of the Regulations in relation to relevant authorities that are policing bodies (by virtue of Section 9(2) of the Act those authorities are not required to have an auditor panel). Regulation 3 sets out requirements on an auditor when resigning from office as a relevant authority’s local auditor and steps that must be taken by the authority in question. Regulation 4 requires the auditor panel of the authority to investigate following the resignation of a local auditor.  The panel’s statement is required to be published.

Regulations 5 to 7 make provision about the removal of a local auditor from office, including the way in which such a decision must be taken, the process the relevant authority must follow prior to removal of the auditor and the steps it must take after that removal. Regulation 8 requires a relevant authority to notify certain bodies that the local auditor has ceased to hold office. Regulation 9 requires a relevant authority to appoint a new local auditor within three months and contains provision enabling the Secretary of State to appoint, or direct the authority to appoint, a replacement auditor where the authority has failed to do so.

 

Local Auditors

June 30th, 2014 by James Goudie KC in Non Judicial Control

Regulations have been made under the Local Audit and Accountability Act 2014 (“the Act”).  The Local Audit (Professional Qualifications and Major Local Audit) Regulations 2014, SI 2014/1627 make provision about professional audit qualifications under the Act, which requires “relevant authorities” to appoint their own “local auditors”.  Schedule 5 to the Act applies, with modifications, provisions of the Companies Act 2006 in relation to the eligibility and monitoring of local auditors.  The Local Audit (Liability Limitation Agreements) Regulations 2014, SI 2014/1628, make provision about agreements (liability limitation agreements) to limit the liability of a local auditor appointed under the Act Pt 3 in respect of any negligence, default, breach of duty or trust in relation to a “relevant authority”.  Regulation 2 sets out a restriction on the duration of an agreement: it cannot cover more than the financial year or years to which the appointment of the local auditor relates.  Regulation 3 prevents the agreement from limiting the local auditor’s liability to less than such amount as is fair and reasonable in all the circumstances of the case.  The Public Interest Reports and Recommendations (Modification of Consideration Procedure) Regulations 2014, SI 2014/1629, provide for paragraph 5 of Schedule 7 to the Act to apply with modifications in respect of certain relevant authorities listed in Schedule 2 to the Act.  Paragraph 5 of Schedule 7 to the Act sets out the procedure for the consideration by relevant authorities of public interest reports or recommendations.  Relevant authorities must consider the report or recommendation at a meeting within one month of receiving it under paragraph 5(5).  The Regulation modify the application of this sub-paragraph so that certain relevant authorities may consider a report or recommendation as soon as is practicable, rather than within one month of receipt.

 

Officers’ Reports

June 30th, 2014 by James Goudie KC in Decision making and Contracts

In R (Sky Blue Sports & Leisure Ltd) v Coventry City Council [2014] EWHC 2089 (Admin), in which the Claimants unsuccessfully sought judicial review of the City Council’s Decision to lend £14.4 million to the company, ACL, that manages the stadium, the Ricoh Arena, at which Coventry City Football Club played, the Claimants’ assertions included that Council Members had failed to take into account relevant considerations in making the Decision because their Officers’ Report that recommended the Decision had allegedly been deficient and misleading.  Hickinbottom J rejected these allegations as not being arguable.  As regards the legal principles to be applied when considering a challenge of this kind, the Judge said, at paragraph 139 (emphasis added):-

            “i) A local authority acts unlawfully if, in making a decision, it fails to take into account a material consideration …  For these purposes, a consideration is material if the decision-maker might have decided the matter differently had he taken it into account …

ii) Decision-makers … (usually councillors, in full Council or in a committee to which decision-making is delegated) often act on the basis of information provided by its officers in the form of a report. Such a report usually also includes a recommendation as to how the application should be dealt with. In the absence of contrary evidence, it is a reasonable inference that, where a recommendation is adopted, the decision-making councillors follow the reasoning of the report.

iii) The councillors are not deemed to know something that the officers know, but which is not transmitted to them …

iv) The officers’ report is therefore often a crucial document. It has to be sufficiently clear and full to enable councillors to understand the important issues and the material considerations that bear upon them; and decide those issues within the limits of judgment that the law allows them. However, the courts have stressed the need for reports also to be concise and focused, and the dangers of reports being too long, elaborate or defensive. The councillors do not have to be provided with every detail of every relevant matter, but only those matters which are so relevant that they must be taken into account, i.e. the salient facts which give shape and substance to the matter such that, if they are not considered, it can be said that the matter itself has not been properly considered …

The assessment of how much and what information should go into a report to enable it to perform its function is itself a matter for the officers, exercising their own judgment …

v) Of course, if the material included is insufficient to enable the decision-making councillors to perform their function, or if it is misleading, a decision taken on the basis of a report may be challengeable. However, when challenged, officers’ reports are not to be subjected to the same exegesis that might be appropriate for the interpretation of a statute: what is required is a fair reading of the report as a whole …

vi) In construing reports, it also has to be borne in mind that they are addressed to a “knowledgeable readership”, including councillors “who, by virtue of that membership, may be expected to have a substantial local and background knowledge” … As in this case, they may have been given briefings prior to the meeting at which the decision is taken. Furthermore, in deciding whether they have got sufficient information to make a properly informed decision or request further information or analysis, again that involves the exercise of judgment on their part. They are entitled to ask for more. Given the experience and expertise of councillors, coupled with the fact that they are democratically elected, the judicial approach to challenges to their decisions should be marked by particular prudence and caution …”

At paragraph 160 the Judge said (emphasis added):-

“…   As I have indicated, officers’ reports are to be read broadly and as a whole. Reading the Hastie Report thus, I consider the belated criticism of it unfounded. In my view, it set out, properly and succinctly, the important relevant matters that the councillors were required to take into account, including the relevant risks of the proposal as well as the potential benefits. The courts have been rightly cautious about requiring officers’ reports to be too full (see paragraph 139(iv) above): the dangers of such a requirement are obvious. A focused and succinct report, such as Mr Hastie’s Report in this case, is in my judgment positively to be commended.”

The main issue in the case, however, was whether or not the loan amounted to State Aid.  The Judge, applying the objective test of the Market Economy Investor Principle, ruled, at paragraphs 86-132 inclusive, that it did not.  A private investor in the Council’s position, as an investor in the stadium company seeking to protect its existing investment, may have made the same investment on the same terms.

Moreover, in rejecting an allegation that the Council’s conduct had been underhand and reprehensible, the Judge observed, at paragraph 35: “The Council was here engaged in the commercial field, and (subject to its public duties) it was entitled to act in the way that it considered was best in protecting its own commercial interests, namely its share in ACL”.

 

« Older Entries
Newer Entries »