Elliott and others v Southwark London Borough Council

Development area–Council’s CPO followed by owners’ applications for rehabilitation orders–Council entitled, in refusing rehabilitation, to say merely that their policy was to demolish existing properties and put up new housing accommodation on the sites–‘More than a mere statement of the council’s conclusion’–‘Did state the salient reason why the houses could not be rehabilitated’ This was an appeal by Mr Alpheus Elliott and three other owners of houses in the Selborne Road area of Camberwell, London SE5, against the refusal of Willis J in the Queen’s Bench Division on February 2 1976 to declare that the respondents, Southwark London Borough Council, had failed to carry out their statutory duty under the Housing Act 1974 to consider, determine and give reasons for their refusal to make rehabilitation orders in respect of the appellants’ houses, all of which were subject to the Selborne Road (No 1) Compulsory Purchase Order 1973. Mr P Boydell QC, Mr D Keane and Mr P Crawford (instructed by Jeffrey Gordon & Co) appeared for the appellants, and Mr G Moriarty QC and Viscount Culross (instructed by the London Borough of Southwark) represented the respondents. Giving the judgment of the court, JAMES LJ said that the appeal had been expedited by order of the court, and the judgment of Willis J had been given only on February 2 1976 on the hearing of an originating summons taken out on January 22 1976. By that summons ten plaintiffs claimed declarations and injunctions against the London Borough of Southwark, and four of those plaintiffs were the appellants in the present appeal. The background to the case was the introduction by legislation in 1974 of the concept of rehabilitation of houses as an alternative to demolition, clearance and redevelopment. The relevant statutory provisions were the Housing Act 1974, section 114, and the tenth schedule to that Act as amended by the Housing Rents and Subsidies Act 1975. Section 114 applied to houses that were comprised in a clearance area under Part III of the Housing Act 1957 and fell into any one of three categories which were likely to include many houses comprised in clearance areas. Subsection (2) stated: Where any house to which this section applies (a) was included in the clearance area by reason of its being unfit for human habitation, and (b) in the opinion of the local authority is capable of being, and ought to be, improved to the full standard, the local authority may make and submit to the Secretary of State a rehabilitation order in relation to that house. Paragraph 3 (2) of schedule 10 read: Where the owner of a house to which section 114 . . . applies and which was included in the clearance area by reason of its being unfit for human habitation requests the local authority to make a rehabilitation order in respect of the house, and the local authority refuse to make an order, they shall give him in writing their reasons for so refusing. In April 1968 the council declared a development area known as ‘Selborne Road development area.’  In March 1973 they made a clearance order under Part III of the Housing Act 1957 in respect of that area, and in May 1973 they resolved to effect the clearance by exercise of compulsory purchase powers. On October 12 they submitted a compulsory purchase order to the Secretary of State for confirmation. At that date there were 157 dwelling-houses in the area, of which 72 had already been purchased by the council by agreement with the owners. Of the remaining 85 houses, 70 were included in the proposed order on the ground that they were unfit for human habitation. The four appellants were owner-occupiers of four of those 70 houses. They and many other owner-occupiers to which the order applied objected to the making of the order. Some disputed the alleged unfitness of their houses. Many urged that the defects could be remedied and improvements made so that the houses would conform to the required standard. Many had done work of maintenance and repair. None wanted to leave. All wanted to preserve the existing community. Whatever compensation was payable, many people suffered considerable distress when their homes were taken from them by compulsory purchase and they were forced to leave familiar surroundings and start afresh in a strange and sometimes less convenient area. This was expressly recognised in the White Paper, Better Homes: The Next Priorities, presented to Parliament in 1973. The court felt great sympathy with persons who found themselves in the position of the appellants and the other occupiers of houses within the order. However, the Secretary of State ordered a local public inquiry which was held during two days in January 1974, and the inspector reported to the Secretary of State on April 22 1974 recommending that subject to certain modifications the order be confirmed. The Secretary of State wrote his letter of decision confirming the order, known as the London Borough of Southwark (Selborne Road) (No 1) Compulsory Purchase Order 1973, on December 2 1974, the same day that section 114 of the 1974 Act came into effect. On March 17 1975 the council served notices to treat. On May 8 and 9, many of those who had objected to the making of the order and who had advanced their objections at the public inquiry wrote to the council making application for ‘a rehabilitation order to be made in respect of houses which are the subject of the above-mentioned order,’ in other words, the order in question in the present appeal. The letters were all in the same terms, and expressly suggested that the appropriate reply to the application was ‘either to accept it or to give reasons for refusing it.’  Each letter referred to the property or properties in which the signatory had the necessary interest as owner. The applications were considered by a subcommittee of the housing committee, and subsequently by the housing committee of the council. The recommendation of these committees was accepted by the council, who resolved on July 16 1975 to refuse the application. On July 21 the deputy town clerk wrote to each applicant saying that the application was refused for the reason that the policy of the council was to demolish the existing properties and erect new housing accommodation on the sites. Demolition began on January 12 1976. Discussions and negotiations had not succeeded in bringing about any compromise or modification, except that a number of occupiers had been rehoused. Those who remained were constant in their desire to save their homes and the existing community, while the council remained unshaken in the opinion that their duty lay in the implementation of the order and the clearance of the area by demolition in order to facilitate redevelopment. So the appellants and six others joined as plaintiffs in the originating summons seeking declarations that the council had failed to carry out their statutory duties under the 1974 Act and that their decision refusing to make rehabilitation orders was invalid, with injunctions ordering the council to reconsider and determine their requests according to law and restraining the council from demolishing any of the houses until they had dealt with the requests for rehabilitation orders according to law. On January 17 they obtained an interim injunction. On February 2 the matter was heard by Willis J, who refused to grant the relief sought. It was from his judgment that four of the plaintiffs were appealing. They were said to represent the interests of all the owners of houses affected by the decision of the learned judge. It was desirable to begin by saying something as to the function of the court in a case such as the present one. It was not for the court to determine issues which by statute fell to be decided by a body such as a local housing authority. Thus, for example, it was no part of the court’s function to arrive at a view, or a decision, even if it had the material necessary to do so, on such questions as whether or not a particular house, or the houses in a particular area, should be rehabilitated or should be demolished in order that new housing might be built. Its function was not to substitute its own view or opinion or decision on matters which Parliament had left to the judgment of the local housing authority without provision for appeal. Its function was, where such issues were raised in proceedings of this nature, to decide whether the local authority, in reaching its decision, had acted in accordance with the statutory provisions by which Parliament had defined the authority’s powers, duties and procedure. The appellants invited the court to say that the council did not comply with their statutory duty under section 114 (2) of the 1974 Act and paragraph 3 (2) of the tenth schedule. They said that the council were under a duty to consider the applications and to consider them individually, and having discharged that duty, were under the further duty to give to each appellant in writing the reasons for refusing. They said that the material before the court, showed, at least by way of inference, that the council did not apply their minds to those considerations which were relevant to the applications, either individually or at all, and that the letter of July 21 did not give any or any sufficient reasons for the refusal. The council’s case was a denial of these assertions. The learned judge had said little in his judgment upon the question whether the council had given consideration to the applications. In the state of the evidence, there was no need for him to say more than he did. There was no evidence of any impropriety. There was evidence that the application had been first before a subcommittee of the housing committee and then before the housing committee itself, and that finally it had been the subject-matter of a resolution of the council. In those circumstances the learned judge accepted the submission of counsel that to hold that proper consideration had not been given would be ‘an outrageous thing for a court to do.’  Upon the question whether the council had properly discharged the duty to give reasons for the refusal, the judge said that paragraph 3 (2) of schedule 10 had to be looked at in the context of the legislation; that in the particular circumstances of the case it must appear to the satisfaction of the court asked to review the reasons that the recipient should fairly understand why the housing authority was not able to accede to the request; and that the question here was whether those reasons did pass the test. He (Willis J) construed the letter of July 21 as stating ‘for the reasons that the whole of the area has got to be demolished and the sites used for housing purposes.’  He thought that that statement was a sufficiently clear indication by the local authority of reasons which could not be said to be either inadequate or insufficient in the circumstances of the case, ‘bearing in mind what had gone before,’ and that the statement was intelligible to the recipient of the refusal. The words ‘bearing in mind what had gone before’ were one of a number of references which the judge made to the fact that the plaintiffs’ contentions had been advanced at the local public inquiry in January 1974. Mr Boydell, for the appellants, emphasised the prominence given to this feature in the judgment, and argued that the judge was in error in his interpretation of what had taken place at the inquiry. The judge used the expressions, ‘plainly canvassed and dealt with in evidence on both sides,’ ‘fully ventilated and dealt with in the report by the inspector,’ and ‘thoroughly thrashed out,’ in relation to the issue of rehabilitation in so far as it was raised at the inquiry. Their Lordships were inclined to the view that the words ‘fully ventilated’ and ‘thoroughly thrashed out’ were something of an overstatement, but this was a matter of minor criticism of the judgment. Then Mr Boydell advanced a number of other propositions. Much attention had been devoted to his submission that section 114 not only conveyed a power but imposed a duty upon the local authority to consider making a rehabilitation order, irrespective of a request to do so made by an owner of property which qualified for consideration. Mr Moriarty, on behalf of the council, disputed the proposition and supported his argument by a detailed analysis of the relevant statutory provisions, but their Lordships found it unnecessary to come to any conclusion on this issue,5 because it was common ground between the parties that once a request had been made pursuant to schedule 10, paragraph 3 (2), the local authority were under a duty to consider the matters relevant to the application and to give reasons for a refusal. Mr Boydell’s next proposition was that in the discharge of the duty, the local authority should pay regard to relevant and disregard irrelevant matters. Mr Moriarty did not challenge that. Then Mr Boydell said that if a statute imposing a duty to consider some matter expressly defined the relevant factors to be considered, the person on whom the duty lay must consider those factors; if and in so far as the statute did not define the relevant considerations, on the other hand, it was for the court to construe the statute and determine what relevant considerations were to be implied. In relation to a request for the making of a rehabilitation order, the local authority must consider two initial questions which were prescribed in the Act: (a) whether the particular house was capable of being improved to the full standard, and (b) if so, whether it ought to be so improved. Consideration of whether the house ought to be improved, said counsel, involved the consideration of other factors which the court should imply as necessary to proper consideration by the local authority in order to comply with the spirit and to fulfil the purpose of the Act. He (Mr Boydell) expressed these compendiously as the matters involved in balancing the difficulty and expense of improving a particuar home and the alternative of demolishing that house and redeveloping the site. Again there was no challenge to Mr Boydell’s proposition that the words of the Act required consideration of the two initial factors, whether a particular house was capable of being improved, and if so, whether it ought to be improved. Also, it was common ground that when considering ‘ought’ the local authority could and should take into consideration the area in which the house was situated and the neighbouring properties. It was clear that the matters which the local authority should consider when deciding whether a house, capable of improvement to the full standard, ought to be improved under the provisions of a rehabilitation order rather than be demolished, and the weight which should be given to one or another factor, would vary from case to case. It was not for the court to prescribe a list of matters which must always be considered or to prescribe which factors should be given more weight than others. It was worth repeating that the function of the court, where such issues were raised, was not to substitute its own opinion or decision on matters which Parliament had left to the judgment of the local authority, but to decide whether the council in reaching their decision had acted in accordance with the statutory provisions. The complaint that matters were wrongly considered rested upon the contention that the council relied upon the evidence and arguments at the public local inquiry and the findings of the inspector. The complaint that the council failed to consider relevant matters was that the council took no account, or not sufficient account, of changes since January 1974 in respect of the law, housing policy, economic conditions and costings. In their Lordships’ judgment the council were entitled to take into consideration what had transpired at the public local inquiry. If they had chosen to do so, they could have included in the reasons for refusal express references to the evidence given at the inquiry and to the findings of the inspector: see Givaudan & Co v Minister of Housing and Local Government [1966] 3 All ER 696 at 699. Although it was true that the evidence and arguments adduced and advanced at the inquiry were not, and could not be, directed to the making of a rehabilitation order, for at that date no such order could be made, there could be no doubt that the objectors at the inquiry were contending for the same result which could now be achieved by a rehabilitation order. It was clear from the inspector’s report that the arguments ranged round the merits of demolition as against rehabilitation. Thus there was material fit to be taken into consideration when the requests for rehabilitation orders were received. Their Lordships could find no evidence indicating that the local authority had failed to consider what, if any, changes, had taken place since January 1974. It was suggested that the inadequacy of the purported reasons for refusal gave rise to the inference of such failure, but their Lordships shared the view of the judge that in the face of the evidence of the elaborate committee procedure followed by the council it was impossible to infer that they did not take the relevant factors into consideration. The only other complaint was of a failure to give reasons or adequate reasons. At one stage, it was suggested on behalf of the appellants that the giving of reasons had relevance to the basis upon which compensation for compulsory purchase was payable. In the end it became clear that the difference, if any, in respect of the basis of compensation was not a material factor, and the point was not pressed. On the general issue, Mr Boydell said that where a statute expressed a duty to give reasons, the court should imply a condition that reasons given in discharge of that duty should be adequate and intelligible. Lord Parker said in Mountview Court Properties Ltd v Devlin (1970) 21 P&CR 689 that what reasons were sufficient depended upon the facts of the case. He (Lord Parker) cited from the judgment of Megaw J in Re Poyser and Mills’s Arbitration [1964] 2 QB 467 at 478: ‘Parliament provided that reasons shall be given, and in my view that must be read as meaning that proper, adequate reasons must be given. The reasons that are set out must be reasons which will not only be intelligible but which deal with the substantial points that have been raised.’  Mr Boydell argued that the reasons given by the council here did not pass that test. He said that if a body under a statutory duty to give reasons failed to do so, then (a) (which did not apply in this case) if the relevant statute prescribed the sanction of quashing the order or decision, the court should quash the order or decision, and (b) in other cases, if the failure to give reasons was sufficiently serious in the circumstances of the case, the court should quash the order or decision, but if the court did not quash the order or decision, the court should make an order requiring reasons to be given. He (counsel) submitted that the purported reasons were inadequate and did not convey to those who requested rehabilitation why the local authority was refusing the requests. It was argued for the council, their Lordships thought rightly, that there was no evidence that the council took into account irrelevant matters or failed to take relevant matters into account. The duty imposed by the statute was a duty to act in an administrative, not a judicial, capacity, and it was open to the council to arrive at a policy decision. It was further submitted for the council that the purported reason was adequate and intelligible. Against the background of the inquiry, the inspector’s report and the Secretary of State’s decision letter, the appellants and those owners of houses to whom similar letters were sent were fully informed by the terms of the letter that the request for a rehabilitation order was refused because it could not be granted consistently with the policy of the housing authority to demolish the existing and erect new housing accommodation. Their Lordships thought that this submission was correct. The letter was more than a mere statement of the council’s conclusion. It did state the salient reason why the houses in question could not be rehabilitated. Their Lordships did not think it was necessary to include in the reason given any reference to the cost of demolition as against the cost of improvement or any reference to the practicability of the houses being improved to full standard. There was certainly no need to refer to the various matters of detail which their Lordships assumed. in the absence of evidence to the contrary, had been taken into account when considering whether the houses ought to be improved to the full standard. To those who received the letters, the reason for the refusal was intelligible and sufficient without the inclusion of these details. It followed that the appeals failed, but this decision did not govern what might be different circumstances in other cases. The wording used for the giving of reasons in this case passed the test: the same wording in another case might fail to do so. The duty to give reasons pursuant to statute was a responsible one and could not be discharged by the use of vague general words which were not sufficient to bring to the mind of the recipient a clear understanding of why his request for a rehabilitation was being refused. The appeal was dismissed. Nor order was made as to costs. The appellants were refused leave to appeal to the House of Lords.