London Welsh Association Ltd and another v Secretary of State for the Environment and another

Compulsory purchase order by Camden Borough Council on listed houses in bad state of disrepair–Application by owners to quash Secretary of State’s confirmation of order–Alternative schemes put forward by owners for redevelopment, one a major scheme involving a whole site which included the three houses and other properties, the other a minor scheme affecting the three houses only–Inspector’s report following inquiry referred to both schemes–Secretary of State’s decision letter contained no reference to minor scheme–‘Wednesbury’ principle–Was Secretary of State entitled to regard the minor scheme as so trivial that there was no need to mention it?–Perfectly clear that minor scheme was a matter of some substantiality–Nothing to show that Secretary of State took into account a material consideration–Decision confirming compulsory purchase order quashed In these proceedings the London Welsh Association and Mr Michael Williams applied for an order to quash the decision of the Secretary of State confirming a compulsory purchase order made by Camden Borough Council in relation to three houses in an 18th-century terrace in Doughty Street, London WC1. C J Lockhart-Mummery (instructed by T J James & Co) appeared on behalf of the applicants; Simon Brown (instructed by the Treasury Solicitor) represented the Secretary of State. The second respondents, London Borough of Camden, were not represented and took no part in the proceedings. Giving judgment, FORBES J said: In this case Mr Lockhart-Mummery moves for an order that a decision of the Secretary of State for the Environment, whereby he confirmed a compulsory purchase order made by the second respondents, the London Borough of Camden, should be quashed. The applicants are the London Welsh Association and Mr Michael Williams and I can deal, I think, very briefly with the history of the matter as it is set out in the inspector’s report in this case. The buildings with which the case is concerned are 29, 30 and 31 Doughty Street, which are part of an early 18th-century terrace running, I think I am right in saying, parallel to and immediately behind Gray’s Inn Road. Those three properties together with 11 Mecklenburgh Square and 157 to 163 Gray’s Inn Road were purchased at some time, or certainly owned by, Sir Howell Williams, who was the grandfather of the second applicant, and by deed of trust in 1937 the property was settled on trust for, inter alios, the London Welsh Association. In 1947, in a case in the House of Lords, the appellate committee decided that the 1937 trust instrument did not found a valid charitable trust and there was obviously considerable difficulty for the London Welsh Association thereafter; but by the Charities Trusts Validation Act 1954 a retrospective provision, validating certain invalid charitable trusts, was enacted by Parliament. The question then arose as to whether that Act had in fact validated the 1937 trust. It appears that in 1975 an application was made to the Charity Commissioners to determine whether or not the trust was valid having regard to the provisions of that Act. Because of the uncertainty about the charitable position of the trust–and I am taking this very shortly and no doubt overlooking a number of incidental, and perhaps more than incidental, points on the way–but, because of that situation nothing very much was done to 29, 30 and 31 Doughty Street and certainly two of those buildings, which were residential buildings, fell into a very considerable state of disrepair: their condition was described by the inspector, who went to look23 at the property, as ‘. . . appalling. They have been neglected for years,’ she said. ‘Roofs are defective, woodwork rotten, floors gone, ceiling and wall plaster defective or missing. Penetrating damp is severe and has caused a great deal of damage. . . .’, and so on. It is quite clear that nos 29 and 30 were in a very bad condition indeed and no 31, although inhabited to some extent, was obviously generally in a poor condition, though in nothing like the bad state of nos 29 and 30. Now the Camden Borough Council, in pursuance of their Housing Act powers, discovered that nos 29 and 30 had been empty for some considerable time and were in this very bad state of repair; and mindful of their very large waiting list for council housing, and their duty to provide houses for the London Borough of Camden, they made a compulsory purchase order on all three properties in order to provide houses under their statutory duty. There is no suggestion that they were wrong in exercising those powers, or seeking to exercise those powers, under the Housing Act of 1957, nor that they were not entitled to take compulsory purchase proceedings and make a compulsory purchase order in order to acquire those three properties compulsorily. But the London Welsh Association and Mr Williams who, on any view of the matter, was the owner, and would remain technically the owner, or one of the owners, whether or not the charitable trust was validated, objected to this compulsory purchase order and an inquiry was held. As is usual in these cases, the inspector who held that inquiry has produced an extremely able, readable and, as far as I can make out from what has been told to me, comprehensive report on the evidence and submissions which were put before her at the inquiry. I do not think I need bother about the dates too much, but the inquiry was on August 9 1977 and she made the report to the Secretary of State on October 12; and the Secretary of State issued his decision letter on December 29 1977. I am not going to go into it in any great detail and it seems to me that that is sufficient of the background, but I ought to say what were the contentions at the inquiry. The council’s contention of course, was that here were three houses; underused in the case of one of them; wholly unused in the case of the other two; in an appalling condition; all of them, may I say, listed buildings (which meant that to pull them down might be very difficult from the planning point of view); making no contribution to the housing of persons in the borough of Camden and therefore, as it were, a proper target for compulsory purchase for housing purposes. That was basically the case for the council, and I do not think, so far as that went, that it was challenged by the appellants, the London Welsh Association and Mr Williams. What they said was that they had their own scheme for redeveloping the site. They said, in effect, that they had to apologise for not doing anything about the buildings for a very long time but that this was due to the uncertainties of the charitable status of the trust and that, in those circumstances, little money had been available to spend on them, particularly having regard to the fact that it would not have been known whether they could have been used for charitable purposes until the Charity Commissioners had made their decision. I have to take this carefully, but what is described, it appears to me, at the inquiry as two schemes were put forward by the association–and if I continue to call it the association without bringing in Mr Williams I am sure he will acquit me of any suggestion that I am being rude to him–two possibilities were put forward by the association. One was for a major scheme involving the redevelopment of the whole site, including 11 Mecklenburgh Square and the properties in Gray’s Inn Road. So far as the properties in Doughty Street were concerned, the facade would have been maintained and the whole of the redevelopment would have taken place behind that facade; the general idea being that that part of the major redevelopment on Doughty Street would be residential premises for use with the remainder. The basic object of the redevelopment was to provide headquarters for a number of smaller charities who might find it difficult to find separate headquarters for each of them. That was the basic object of the scheme. But the scheme was to be considered as a major redevelopment costing perhaps £3 1/2m or £4m and probably taking four or five years to complete. It is fair to add that planning permission was not available and had not in fact been applied for and that the negotiations with the possible charitable organisations who might find their homes there were not, at any rate, completed. The whole matter, of course, was over-shadowed by the question of whether the association was to achieve charitable status or not and the appellants suggested, and gave evidence to this effect, that a decision on their charitable status was expected before the end of the year; and the inquiry, of course, was held in August. Now that was the first and major scheme and I have not the slightest doubt that, if I can borrow Mr Brown’s phrase, the main thrust of the association’s case was aimed at that major scheme; that was what they would have preferred to have done with the land. But they also had what was called a ‘minor’ scheme and that was a much more limited and modest affair. It involved merely converting the three properties on Doughty Street into a hostel for people connected or concerned with the London Welsh Association. As I say, I am satisfied from what I can see of the way this is reported by the inspector that that was their second-best suggestion and, of course, properly regarded and called a ‘minor’ scheme because it was a very much more limited project than the major scheme for the redevelopment of the whole of the association’s site. Well now, that is dealt with in the inspector’s report in various paragraphs to which my attention has been drawn. In paragraph 29, as part of the council’s case, it is pointed out that, although separate planning permission would be required, a hostel use (and that can only be a reference to the minor scheme) came within residential zoning. It is accepted there was a need for hostels; whether permission would be given was a matter for the committee, that is the planning committee; the council would welcome any proposal which brought these properties into use, but residential use was preferred to hostel use; and it is quite apparent that in cross-examination, Mr Lockhart-Mummery, who appeared at the inquiry for the appellants, obtained a very useful admission from the council’s witnesses and that is referred to in paragraph 54. The council’s witnesses had accepted that the justification for the council’s scheme went if physical rehabilitation for hostel use went ahead. This minor scheme could be started in 18 months. Then in paragraphs 46 to 50 are set out in the inspector’s report the two schemes; the major scheme, which I have referred to, and the minor scheme, which I have also referred to. And it is important to establish or record that paragraph 50, which is the paragraph which deals with the ‘minor’ scheme, is introduced in this way: ‘If the major redevelopment did not proceed . . .’ and then the paragraph goes on to deal with the minor scheme. In other words, it is plain that, rightly or wrongly, the inspector took the view of these two proposals that the second or minor proposal was dependent on a decision to abandon the major proposal. That seems to me to be perfectly clear from the way the inspector sets out the contentions of, or the cases for, the parties in this matter. Then there are three paragraphs headed ‘Generally’; that is the case for the appellants ‘generally.’  Paragraph 54 deals with the two schemes, the major scheme and the minor scheme, and ends up by saying that the minor scheme could be started in 18 months. The next paragraph deals with a point which had clearly been made by the appellants that, having regard to the impending decision of the Charity Commissioners, the compulsory purchase order was premature and that if no decision on this trust situation had been given in 18 months’ time things might be different. 24 Then there are closing submissions for the council, that is the Camden Borough Council, recorded in the inspector’s report; and at paragraph 67 there is a short resume of the council’s objections to the major scheme and in paragraph 68 a somewhat longer record of their objections to the minor scheme. Having very properly set all those matters out the inspector went on to detail her findings of fact. I do not need, I think, to deal with those at any length. Some of them are recorded in the decision letter and it is part of the applicants’ case here that the omissions in the decision letter of certain of those findings of fact is a significant matter. Now if I may turn to the decision letter. That was dated, as I say, December 29 1977. Paragraph 3 of that letter reads as follows: The objections to the order were mainly and I emphasise mainly on the grounds that acquisition by the council was not justified because once certain problems relating to ownership of the houses had been resolved satisfactorily, the owners wished to restore the properties themselves as part of a larger scheme of development involving adjoining buildings owned by the London Welsh Association. . . . It is plain that in that paragraph no mention is made of the minor scheme. The only reference is to part of a larger scheme of development which is a clear reference to the major scheme only. I do not think Mr Lockhart-Mummery suggests that, if that was the only omission to mention the minor scheme, he would be suggesting that this order should be quashed. But in paragraph 5 the Secretary of State sets out, in paragraphs lettered ‘a’ to ‘j’, certain of the findings of fact of the inspector. It reads in this way: ‘The inspector’s findings of fact are given at paragraph 70 of her report and include the following:’  and then there are paragraphs ‘a’ to ‘j’ which are, in fact, paragraphs 3 to 16 of the findings of fact inclusive, omitting paragraphs 4 and 8 of the inspector’s findings of fact. Finding 4 was a reference to what would happen to the ownership of the property according to whether the trust was declared valid or invalid by the Charity Commissioners and paragraph 8 is a mere reference to 157 to 163 Gray’s Inn Road. But Mr Lockhart-Mummery points out that omitted from those findings of fact are paragraphs 17 and 19, which set out two matters which, he says, were important parts of the case for the appellants. Paragraph 17, that is finding of fact no 17 in the inspector’s report, reads: If this project that is the major project does not proceed the order land houses would be used as a hostel for people connected with the London Welsh Association and subject to the decision on the trust being available by the end of this year this project could start in 18 months’ time. and finding of fact no 19: Having regard to the submission to the Charity Commissioners the objectors maintain that the order is premature. Now having set out that selection (which excluded nos 17 and 19) of the inspector’s findings of fact the Secretary of State’s letter went on: Having regard to those facts the inspector concluded that, in spite of the difficulties involved with the trust situation, it was difficult to justify the considerable delay in taking action to improve 29 and 30 Doughty Street. Even if the trust problems were resolved in the near future, further delays in the preparation of detailed development proposals by the owners and necessary consultations with interested parties would be inevitable. The sincerity of the owners’ plans for the London Welsh Association was not doubted but having regard to the housing needs of the council, and the fact that further delays would only result in the further deterioration of the houses, acquisition by the council was justified. Accordingly she recommended that the order be confirmed subject to the exclusion of a 3-ft strip of land along the rear boundary of the order land to provide access between the main premises in Gray’s Inn Road and 11 Mecklenburgh Square. Paragraph 7: The arguments put forward by the objectors and the council have been considered together with the inspector’s report. The representations made at the inquiry have also been considered together with information received after the inquiry that the Charity Commissioners had decided that the trust is valid within the appropriate legislation and that consequently, the problems relating to the ownership etc of the order properties had been resolved. The inspector’s findings of fact, conclusions and recommendations have been accepted and the Secretary of State has therefore decided to confirm the order subject to the modification that a 3-ft strip of land along the rear boundary of the order land to provide access between the premises of the London Welsh Association in Gray’s Inn Road and No 11 Mecklenburgh Square be excluded therefrom. This decision is given without prejudice to the Secretary of State’s consideration of any proposals for the order lands which may require his approval. Well, those are, as far as I can see, the relevant passages from, respectively, the decision letter and the inspector’s report. What Mr Lockhart-Mummery says for the applicants is this: that nowhere at all in that decision letter can be found any reference to the minor scheme. There is no reference to it in paragraph 3, as I have indicated; the reference in the inspector’s findings of fact to the minor scheme have not been included in the decision letter’s paragraph 5, and there is nothing in paragraphs 6 or 7 which refers specifically to the minor scheme. As I understand it, the contention for the applicants can be put in this way; the first submission is that it is incumbent upon the Secretary of State to consider every relevant matter before taking a decision; that he has not done so in this case; and that on the principle of the Wednesbury case (Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223) no reasonable Secretary of State, sitting where this Secretary of State for the Environment did, could have come to the conclusion that he was entitled to disregard the minor scheme. His second proposition seems to me to be this: that, if it is possible to read the decision letter as indicating that he did take into consideration the minor scheme, nowhere in the decision letter can there be found any reasons for rejecting it. Mr Lockhart-Mummery put forward a third and fourth proposition which refer to the second and third grounds in the notice of motion but, as I see them, they are really particular matters to which he wished to refer in support of one or other of those two main submissions. In answer to those two submissions Mr Brown, for the Secretary of State, puts it in this way; that to succeed the applicant has to discharge the onus of showing that no reasonable Secretary of State could have regarded the minor point as substantial, or other than insubstantial, to the point where it required mention in the decision letter. It is always difficult to deal with double negatives and perhaps I prefer to state Mr Brown’s proposition, as I see it, in another way. It was perfectly reasonable for the Secretary of State, in a case such as this, to regard this point, the minor scheme, as so insubstantial as not to require mention in the decision letter. In formulating that as a positive proposition I hope that it is clear that I have taken into account that it is the applicant’s duty to show that the Secretary of State was not entitled to do that and there is no onus on the Secretary of State to show that he had. And Mr Brown concedes this, as I understand it, that if that proposition is wrong, and that the point was not so insubstantial as not to require mention, it is plain that the Secretary of State has given no reasons for rejecting the submissions about the minor scheme. So that really this case turns on a very short point; and I am sorry it has taken so long to get to it, but it was necessary, I think, to deal with some of the factual background. Is Mr Brown right in saying that the Secretary of State is entitled, in a case such as this, and was entitled in this case, to regard the minor scheme as so insubstantial that he need not mention it?  Of course the onus is on the applicant to prove to the contrary, as I have25 indicated. Put in another way, as Mr Brown suggested in the course of argument, it was perfectly reasonable for the Secretary of State not to condescend to deal with what he regards as an insubstantial argument. Now it is plain to me that there must be cases in which the Secretary of State is entitled to take the view that parts of the applicant’s case are so immaterial, so trivial, that he need not in fact refer to them without being thought not to have considered them: because one has to look at it from that point of view. The first task of the applicant is to show that the Secretary of State has not considered what was a material consideration and, as I have indicated, Mr Lockhart-Mummery seeks to do that by showing that nowhere in the decision letter is there any indication that the Secretary of State has taken this point into consideration, because he never mentions it from beginning to end. And it is not sufficient in my view, and indeed to be fair to him I do not think Mr Brown sought to say that it was, that such consideration can be inferred from what is often referred to in cases such as this as the ‘incantation’; namely a sentence which is put into nearly all these decision letters saying: ‘The inspector’s findings of fact, conclusions and recommendations have been considered (or accepted or rejected)’ or whatever it may be. It is not sufficient merely to refer to any matter of any substantiality in that general way. So we have the situation that Mr Lockhart-Mummery is maintaining that he discharges his onus by showing that nowhere in the decision letter has the Secretary of State referred in terms to the ‘minor’ scheme, and Mr Brown saying well, he accepts that, but it does not follow that the Secretary of State had disregarded it because he is entitled to say that it was so insubstantial that it did not require separate mention. I think that is really the argument between the parties. Now I have been referred to a number of cases. They are well known to those who are dealing with cases of this kind: Re Poyser and Mills’ Arbitration [1963] 1 All ER 612, Givaudan & Co Ltd v Minister of Housing and Local Government [1966] 3 All ER 696, a case called Kent Messenger v Secretary of State for the Environment, which is a decision of Phillips J reported in (1976) 241 ESTATES GAZETTE 25. I have also been referred to a decision of my own in Sovmots Ltd v Secretary of State for the Environment [1976] 2 WLR 73, a case which went to the House of Lords but not, I think, on the point on which I desire to refer to it. As I indicated, there must be cases in which the Secretary of State is entitled to say: ‘I regard this point as so trivial that I really do not need to mention it.’  Now in the Sovmots case such a point arose though in rather a different form. It was suggested in that case, not that the Secretary of State had overlooked a material argument, but that the inspector had; and, of course, it was necessary in those circumstances to look at what the material was before the inspector because, ex hypothesi, the point was not to be found in his report. And, by agreement by all counsel involved, I was shown in that case some of the documents which were before the inspector, including a verbatim transcript of the closing submissions of Sir Derek Walker-Smith, who was appearing at the inquiry, though not before me, for this particular appellant. And what had happened was that, at one stage in the case, and in cross-examination, a particular point or issue was put to a number of the witnesses called for the acquiring authority, but it was noticeable that in his final address, which covered many pages, the only possible reference to this point, and that was a very oblique one, was in six words embedded in a much longer sentence. And I took the view, and one can find it on pp 83 and 84 of the report in [1976] 2 WLR, that the inspector was perfectly entitled in those circumstances to assume that the point was so trivial that it had been abandoned, and that is the sort of situation in which, it seems to me, it would be perfectly permissible for an inspector, or the Secretary of State, to regard a matter as so trivial that he need not refer to it. But I think it is a very different matter when one comes to consider the material before the Secretary of State in this case. It is claimed, from paragraphs 36 to 50 of the inspector’s report, that these were two proposals which were being made by the appellants for the redevelopment of the site: a major redevelopment and a minor redevelopment. True, that the minor redevelopment depended on the abandonment of the major; true also that it is quite apparent that the major redevelopment was the scheme preferred by the appellants; but nevertheless the minor scheme was quite clearly a proper proposal put forward by the appellants as an alternative. That it was so regarded by the council is quite clear when one comes to look at the report of the closing submissions for the borough council in which those two proposals are dealt with, respectively, in paragraphs 67 and 68 of the report. It is perfectly true, and Mr Brown has drawn my attention to the fact, that the second of them is described in somewhat derogatory terms in the closing submissions of the council, but that does not seem to me to be a matter which can be taken into consideration when regarding what is the materiality of those proposals to the appellants’ case, because that, of course, is what the Secretary of State has to look at. It seems to me to be clear that it was not an insubstantial point; it was a point of some materiality, and it was a point dealt with by the inspector, and by the council in their closing submission, as a point of some materiality. It is plain that the inspector so regarded it because she in fact dealt with the matter in paragraph 72 of her conclusions, and it is plain that her view of the matter was that even if the second or minor scheme was to go ahead she still regarded it as a matter which would introduce further delay into the rehabilitation of these buildings and for that reason, I have no doubt on reading her report, she thought it was unacceptable. But that does not seem to me to alter the situation so far as the Secretary of State is concerned. I find myself in this situation: that I cannot, despite Mr Brown’s best endeavours, find myself taking the view that any reasonable person reading the report of the inspector could come to the conclusion that the minor scheme was so peripheral and insubstantial as not to require mention at all; and, of course, if that is the situation then it seems to me that Mr Lockhart-Mummery has discharged the onus which is upon him on the Wednesbury principles, because that is clearly what the Secretary of State appears to have done. Indeed, the sole reason for the way in which Mr Brown is constrained to put his case is because that is exactly what the Secretary of State has done–he has not mentioned this matter in the decision letter and there it is. In my view this was a matter of sufficient importance to require the Secretary of State to have dealt with it, and to have dealt with it otherwise than by some oblique reference in what has been called the ‘incantation’ to the conclusions of the inspector. The matter does not quite end there because it is claimed that, after the date of the inspector’s report, the Secretary of State received the information that the Charity Commissioners had decided that the trust was valid; and no point is taken that having taken that fact into consideration he did not give the parties an opportunity to make representations. No point was taken about that. It is accepted that that is the situation, but Mr Lockhart-Mummery says that that makes it all the more important to remember that fact no 19 of the inspector’s findings of fact was, ‘having regard to the submission to the Charity Commissioners the objectors maintain that the order is premature,’ and that nowhere in paragraph 7 of the decision letter, which refers to the information about the Charity Commissioners’ decision, is there any indication that the Secretary of State has dealt with that point or that argument, because, like the reference to the minor scheme itself, it is entirely absent from the decision letter. It seems to me for those reasons that one need not, in fact as I understand it from Mr Brown’s submissions he accepts that one need not, go on from there to consider the question of reasons. Clearly, if a matter is so insubstantial as not to require mention, then there can hardly be a duty on the Secretary of State to give reasons for rejecting the submission which is as insubstantial as that; but once one comes to the conclusion that it is not so insubstantial as not to require mention, then the question arises: what has the Secretary of State done here?  He has not mentioned it and he has not, of course, given any reasons for rejecting it, but it does not seem to me that I need embark on the question of the giving of reasons once one has reached the situation where it is plain that the Secretary of State has not had regard to a material consideration. The question of reasons is then irrelevant and I do not need to consider that point. For the reasons I have advanced, it seems to me that Mr Lockhart-Mummery has discharged the onus on him; there is nothing in this letter to indicate that the Secretary of State took into account what is a not insubstantial point, material to his decision and in those circumstances he has erred and the decision must be quashed. I come to this conclusion with a certain amount of regret because one of the things that is perfectly plain in this case is that delay was a major matter in the minds of all parties at the time of this inquiry. One cannot help noting that the decision letter was December 1977 and here we are some 14 months later; presumably nothing has been decided in the interim. But all I can do is quash the order; it does not at all follow that that necessarily resolves all problems between the parties; it merely means that the order must be quashed. The Secretary of State for the Environment was ordered to pay the costs of the application.