Salman, R (on the application of) v London Borough of Barking & Dagenham

MR JUSTICE STANLEY BURNTON: This is an unfortunate case in a number of respects, not least because it is a case where the local authority's behaviour has been far from difficult and it has sought to behave responsibly, and certainly has behaved courteously. The present position arises out of a mistake of the kind that is, no doubt, all too easy to make having regard to the complexities of educational funding. The consequences for the claimant of that acknowledged mistake and the amends that the local authority, the London Borough of Barking and Dagenham, has sought to make is made all the worse by the fact that all that is now outstanding as a result of developments since the decision which is in dispute came to be made is costs.

The claimant wished to study osteopathy; she wished to become a practitioner in that field. For that purpose, she made applications to a number of institutions, including the British School of Osteopathy. She applied to another institution at which she could study osteopathy, but also made applications, as she was entitled to under the UCAS regulations, to institutions where she would be studying other subjects, such as biology. According to a regrettably undated letter, written in about the latter part of October 2003, and certainly not before the 16th, she and no doubt her parents were concerned about funding. As far as the British School of Osteopathy were concerned, they made inquiries and discovered that, it being a private school, the fees would be above £6,000 a year. They were concerned about that cost, as a result of which they got in touch with their local authority, the London Borough of Barking and Dagenham. The contact went so far as to involve their seeing Miss Simone Mills, who was a member of staff responsible for educational funding. According to the letter, and this happily is not really disputed, Miss Mills took details of the course to check if the local authority could pay the fees. She came back to the Salmans, again according to the letter. She appreciated -- that is Miss Mills appreciated -- that the British School of Osteopathy was a private school, but the course was a designated course and, as a result, fees would be paid by the local authority subject to a contribution from Tanyel or the family of £1,125 a year.

The letter states that Tanyel would only choose the course if the fees were going to be paid by the local educational authority, otherwise she would choose another course and, indeed, the fact that an appointment was made with Miss Mills gives some support for that assertion.

The family completed the forms required to obtain the educational support they had sought and which they had been told would be available, and on 15th September 2003 Tanyel started the course, she having, as is implicit in that chronology, rejected the offers of any other places -- and I interject to say that she was offered a place at all the institutions, all six of them, to which she had applied under UCAS. Her choice clearly was influenced by the fact that her fees at the British School of Osteopathy would, subject to the contribution of £1,125, be paid by the local authority as she believed.

Students at the school were required to pay the first term's fees in full. The local authority had not paid the fees, nor had Tanyel or her parents. As a result of that requirement, Mrs Salman, or her husband, or Tanyel herself, but I assume from the letter that it was Mrs Salman, telephoned Miss Mills, who informed her that she should divide the contribution of £1,125 by three, one for each term, and send the school a cheque, therefore, for £375 and that is what the family did. The school objected, telephoned the Salmans and said that the fees were £6,480 and not £1,125, and could they therefore please have a cheque for the balance.

The Salmans rang Miss Mills and told her about that and Miss Mills rang the school to sort the matter out. She initially thought that the school had made a mistake and Tanyel would not be liable to pay anything other than the £1,125. However, three weeks into the course, that is to say on 6th October 2003, Miss Mills, having learnt that she had misunderstood the significance of the course being a designated course at a private school, telephoned the Salmans to say that she had made a mistake about the fees and that the local authority would not be funding them.

The Salmans were understandably unhappy with that news, and Mrs Salman went to see Miss Mills' superiors to discuss the matter and no doubt to ask, if not demand, that the council pay the fees that they had originally said that they would pay. She had two meetings, apparently, one on 14th and one on 16th October, with Mrs Benjamin and Mr Cowley. At the second meeting, she was asked to put her position in writing, and did so in the letter to which I have just referred, which set out the history of the matter, which is effectively uncontentious, and finished by saying:

Since that letter is undated, I do not know how long after the meeting of 16th October 2003 it was written, but I assume it was written within a reasonable time of the meeting of that date, since it contains nothing that Mrs Salman would have been unable to put to the local authority immediately after the meeting.

A response did not come until 27th November 2003. In the meantime, Tanyel was continuing at the British School of Osteopathy, no doubt hoping that the local authority would do as it had said it would do and ensure that her fees were paid. As I said during argument, the letter of 27th November 2003 written by Mr Luxton, the Director of Education, Arts and Libraries, is a courteous and appropriate letter.

Mr Luxton referred to the meeting of 16th October and the letter that had been received from Mrs Salman. It contained an unreserved apology for failing to give proper advice in respect of the student loan application. The letter was addressed to Tanyel rather than to her mother. He said:

He said that he had arranged a full investigation and had taken steps to ensure that such errors would not recur, and continued:

He finished the letter by saying:

I repeat my commendation of the terms of that letter. It is, in retrospect at least, a pity that what would appear to be a considerable time elapsed between Mrs Salman's letter, or Tanyel's letter possibly, and the letter of 27th November 2003. Something turns on that, as we shall see, but not as much as what turns on what then occurred.

Tanyel continued at the school. Pending clarification of the position, the school did not expel her and it took no steps to enforce any claim for the full fees. Time, however, passed without the local authority coming to a conclusion as to what course of action was appropriate in the circumstances. Eventually, the Salmans consulted solicitors. They wrote, on 6th January 2004, responding to the letter of 27th November 2003, referring to a number of authorities and effectively saying that unless a proper offer was made there would be an application for judicial review.

Further time passed. Eventually, on 12th February 2004, the local authority, having made a decision, communicated it. In an letter of that date addressed to the claimant's solicitors, Mr Luxton said:

The offer was rejected in a letter dated 2nd March 2004. Quite some time had passed since the making of the offer by that date. After some further correspondence, proceedings were commenced.

There was a further important development, and that is that the British School of Osteopathy was taken over by a public education institution with the result that it became not a private school but a publicly funded college, so that, in fact, for the second and following years of her course, Tanyel will be liable, or has in fact been liable, only for the sum of £1,150 originally anticipated. It follows that the offer of the fees for the first year of the course fully satisfy any financial loss that she suffered as a result of the local authority not fulfilling its original representation.

However, by the time that had happened, these proceedings had begun. Not surprisingly, having regard to that development, the offer became acceptable, apart from costs. If the offer were accepted, however, the community funding institution would absorb all the offer, or a substantial part of it, as a result of the charge it has on recoveries. The only outstanding issue, therefore, became costs. Regrettably the parties were not able to come to a settlement or accommodation on the question of costs, no doubt because of the obligation owed to community funding by those advising and acting for the claimant, and therefore this hearing became necessary.

I express my regret at that. This is a case in which public funds are involved on both sides. Those funds, whatever I decide, will have been diminished by the costs of this hearing, whoever pays them. It is always regrettable when not only are costs incurred but costs are incurred only on a question of costs, where the taxpayer, ultimately, is going to pay whatever happens. There it is. That is not a matter which I can consider.

The first question is whether there is a claim for relief in circumstances such as the present. The claim was put on the basis of legitimate expectation and indeed that was the basis upon which the judge, giving permission for this application to go forward, expressly granted permission to apply for judicial review.

Mr Oldham has put the legal position somewhat differently. The local authority has no power to make any payment to the claimant under the regulations governing its provision of educational support. That is, I understand, common ground. Any payment it makes, it makes as a result of its residual powers under Section 2 of the Local Governments Act 2000. It is common ground that it has power to make a payment in circumstances such as the present under Section 2, and indeed that was held to be the position by Silber J in R (Theophilus) v London Borough of Lewisham.

If the local authority had no power to make any payments in circumstances such as the present, the fact that a representation had been made that it did have that power, or could make that payment, or would make that payment, would not assist the claimant. It could not make intra vires what would otherwise be ultra vires. There is, however, a relevant power available to the local authority, under Section 2, and one way of looking at this case is to ask oneself whether the discretion available to the local authority under Section 2 has been properly and lawfully exercised by it in the present case.

Ultimately, it makes no difference whether the case is looked at as a case of legitimate expectation or the exercise of a discretion under Section 2. An exercise in discretion available to the local authority under Section 2 must take into account what the claimant was told in relation to funding, when, and the action that she took in consequence of it, and the possibilities open to her at relevant times, and must ensure that it deals with the claimant fairly and reasonably. Similarly, the adoption of legitimate expectation requires that a decision be made on the subject in question in which the legitimate expectation created by the local authority is taken fully into account and, unless there are good reasons not to, it would be appropriate for a promise made by the local authority to be kept.

There is no question here but that an assurance, which may be termed a representation, was given by the local authority and it is one of the significant aspects of this case that there is happily no dispute as to that, nor, as I have already stated, is it in dispute that there is power in present circumstances to make some sort of provision for the claimant. The question, therefore, is: did the local authority act lawfully, having regard to its apparent commitment, when it decided to make the offer in the letter of 12th February 2004?

On the face of it, the offer is, in some respects, a generous offer. It is an offer of the entirety of the first year's fees plus £1,000 compensation for the inconvenience. I certainly would not castigate the position of Barking and Dagenham in the present case as being manifestly unreasonable or anything of the sort. What I do find of concern is the basis upon which the decision was made.

What was said in the letter of 12th February 2004 was that although an error had been made:

Then a second point, and possibly it is part of the first point, is made:

The suggestion being made in those two sentences is that Tanyel could and should have taken some action to limit the consequences of her having been misled by the local authority as to the question of funding. Effectively, what is being said is that, having learnt as she did in October when Miss Mills telephoned that there had been a mistake with the fees, Tanyel could and should, realising that she had no assurance of support from the local authority, have gone elsewhere, left the course, or something of that kind.

What I find difficult about the points being made in those two sentences in the letter of 12th February 2004 is that no such suggestion had previously been made by Barking and Dagenham. No such suggestion had been made, according to any of the evidence I have, during October, and indeed November, December or January. Indeed, it is evident from the terms of Tanyel's undated letter to Mrs Benjamin and Mr Cowley that she was at least hoping that the local authority would pay her fees, and that the position was undecided. Moreover it was implicit in the letter of 27th November 2003 from Mr Luxton that the position was undecided. If it was being suggested that Tanyel should have left the British School of Osteopathy then, or taken any other action to mitigate the consequences of the council's error, that should in fairness have been put to her at as early a stage as possible. Moreover, if that was going to be the basis of the decision made by the local authority, it should have put that to her to give her an opportunity to come back to say, as she might have done, well but I could have left but I decided not to, or had I left at that point I would have found that I would have been out of education for two years, even if I were to study a different course, or two years if I were going to continue on this course. Certainly, by February 2004, the evidence is that she did face being out of education for two years if she were going to apply through UCAS for a place elsewhere.

I do not think that the local authority was entitled to make the decision it did without having explored those matters with her. It is said that she must have been aware of what the position was in October, and could have taken action then, but, as I say, her comments were required if that was to be held against her. In any event, it seems to me, having regard to the fact that a decision by the local authority was still pending, it would be understandable that she would continue where she was, rather than taking the precipitative action of leaving the course until she had a decision from Barking and Dagenham. The delay in making the decision worked against Barking and Dagenham in that respect. I do not think it was for her to make a decision while their decision was still pending.

The conclusion I come to, therefore, is that the decision of 12th February 2004 was, for those reasons, unlawful and must be reconsidered and retaken. It follows from that that the claimant was entitled to bring proceedings at a time when the position in relation to future fees was still outstanding. I certainly, may I say, would not have held that the offer of £1,000 compensation for inconvenience was in any way inadequate or unreasonable, but I have made the decision I have on the ground that the basis of the decision of 12th February 2004 was inappropriate.

It does not follow from my decision that if this matter is reconsidered, even if it had been reconsidered without a change in the status of the school, that more would have been offered. But it should be appreciated that the points held against the claimant had never been put to her and she had never had an opportunity to comment upon them. Fairness, in my judgment, did require those points to be put if they were going to be the basis of a decision.

MRS AKHTAR: My Lord, there is a question of costs, now.

MR JUSTICE STANLEY BURNTON: Do you have a schedule?

MRS AKHTAR: I have, yes.

MR JUSTICE STANLEY BURNTON: Has Mr Oldham seen the schedule?

MR OLDHAM: No, I have not seen a schedule.

MR JUSTICE STANLEY BURNTON: Schedules are meant to be served by 4.30pm the night before.

MRS AKHTAR: My Lord, I apologise for that. There are two schedules, I understand, that have been prepared: one on the basis of the legal aid rates and the other on the usual basis.

MR JUSTICE STANLEY BURNTON: Why should there be two schedules?

MRS AKHTAR: That was just for --

MR JUSTICE STANLEY BURNTON: Does that mean a high figure and a low figure?

MRS AKHTAR: Yes, my Lord.

MR JUSTICE STANLEY BURNTON: Mr Oldham, are you able to deal with this on the hoof?

MR OLDHAM: My Lord, I think we need to have a look at it, I am afraid. I do not want to be obstructive.

MR JUSTICE STANLEY BURNTON: No, no, the rules require these schedules to be served by 4.30pm the night before the hearing, do they not?

MR OLDHAM: They do, my Lord, yes.

MR JUSTICE STANLEY BURNTON: So if you say you want time to consider the schedule, you are entitled for time to consider the schedule.

MR OLDHAM: I am grateful.

MR JUSTICE STANLEY BURNTON: What are you asking for?

MR OLDHAM: My Lord, in terms of time --

MR JUSTICE STANLEY BURNTON: Can you object to costs in principle?

MR OLDHAM: The only point I would make there is that we entirely accept your Lordship's judgment and understand the reasoning of it. My Lord, I think it can be said that the way your Lordship put it was different from the way my learned friend put it. It is effectively a fairness point, a procedural point, and it is not the case that was put forward. Now, I do not know what possibly other -- it is possible that different evidence might have been put forward, I do not know, I am not trying to resist that, but I do say that, at the very least, it gives your Lordship a discretion as to what to do on costs, because really the case before your Lordship, as I understand it, has not succeeded. So, my Lord, can I leave that thought with your Lordship?

MR JUSTICE STANLEY BURNTON: What do you want to do about this schedule?

MR OLDHAM: Can I say to be assessed if not agreed?

MR JUSTICE STANLEY BURNTON: You can, but then it makes it more, does it not? I mean if you do not agree --

MR OLDHAM: I would be very hopeful that it would not go to an assessment.

MR JUSTICE STANLEY BURNTON: I mean you can have overnight and come and see me at ten o'clock tomorrow morning. It would be a lot cheaper than going to the possibility of detailed assessment.

MR OLDHAM: Of course. I am sure that we would not think of trying to go to an assessment at all. I am not sure I will be able to come along, but I can certainly send my Lord a note through --

MR JUSTICE STANLEY BURNTON: Well, you can say Monday morning, or whatever you like, I do not mind.

MR OLDHAM: If there were agreement, my Lord, would it be possible to send a note to your Lordship?

MR JUSTICE STANLEY BURNTON: Let us deal with the question of costs in principle, then I shall assess the cost at a convenient time on the basis of the schedule.

MR OLDHAM: My Lord, if not agreed, my Lord.

MR JUSTICE STANLEY BURNTON: If not agreed, exactly, so it gives you that option.

MRS AKHTAR: My Lord, the point that was made to you about the basis of the claimant's application being based upon legitimate expectation, but clearly a fundamental part of the legitimate expectation argument relates to fairness, ie whether or not the decision taken on the part of the defendant in this case was fair, having considered the promise that was made to her. So to say that the argument that was put to you has not really succeeded and you have come to the conclusion that we wanted you to come to, but in a very different manner, is simply not correct in the claimant's submission.

MR JUSTICE STANLEY BURNTON: I did not really decide whether it was perverse of them to offer only £6,500. All I said was that you cannot make an offer on the basis that someone should have mitigated her loss without asking her whether she could have mitigated her loss.

MRS AKHTAR: Yes, but, my Lord, the reason for that is -- part of the limb of legitimate expectation is that they failed to consider fully the promise that was made to her and they have acted in a way -- they have chosen to adopt a course of action that is at odds with the promise that was given to her, and therefore it is unfair. Clearly the reason for that is the reason that you have given in relation to the letter of 12th February. So I think it would be artificial to make a distinction.

MR JUSTICE STANLEY BURNTON: Mr Oldham, do you want to say anything else?

MR OLDHAM: My Lord, the case was put forward as a substantive legitimate expectation. We are now talking about a different case, which is a procedural point. But your Lordship has the point; I would say it is a substantial one.

MR JUSTICE STANLEY BURNTON: Well, I have already said how much I deprecate cases coming before the court where the only issue is costs, but it seems to me that in substance that as the claimant has won she is entitled to her costs, which I shall assess summarily if they are not agreed. I leave it to the parties to bring the matter back before me by the end of next week if there is no agreement.

MR OLDHAM: My Lord, I am grateful. Can I mention --

MR JUSTICE STANLEY BURNTON: There seem to be a lot of hours here, I must say. Yes?

MR OLDHAM: I was going to mention this, my Lord. Although there is no order, your Lordship mentioned in your Lordship's judgment that we ought to reconsider. I am not sure whether that is necessary.

MR JUSTICE STANLEY BURNTON: Absolutely. When I get the transcript I will say something like "would have had to reconsider".

MR OLDHAM: I am grateful.

MRS AKHTAR: My Lord, we are still -- that depends upon whether or not clearly the offer was still standing in relation to compensating her for the first year outlay that she has had to make, and we would clearly like the defendants to consider that, perhaps not reconsider, but consider it at least sufficiently --

MR JUSTICE STANLEY BURNTON: Do you know what the position is there, Mr Oldham?

MR OLDHAM: My Lord, I thought -- it was probably my mistake, but I thought it had been more or less been agreed that there was no need for any more money, other than the £6,500.

MRS AKHTAR: Yes, that is accepted. We are not seeking to gain from --

MR OLDHAM: My Lord, I think, given that there is some doubt and confusion and may be I have made an assumption, perhaps the best thing is if we do look at it again. I think my instructing solicitor is suggesting that we should. I am not sure if there is any need for an order at this stage.

MR JUSTICE STANLEY BURNTON: Shall I say no order, but liberty to apply?

MRS AKHTAR: Very well, my Lord, but I do not see the harm it does to put that within the substance of the order to say that the local authority will reconsider.

MR JUSTICE STANLEY BURNTON: But they do not have to reconsider they just have to maintain, do they not?

MR OLDHAM: My Lord, I think the position is that your Lordship has mentioned in your Lordship's judgment that we ought to reconsider, and, on reflection, contrary to what I said earlier, perhaps given that there is some uncertainty we ought to think about it again. If there is some difficulty then no doubt my learned friend will apply.

MRS AKHTAR: I sincerely hope it does not come to that, but just for the sake of clarity, then, the order will state that the claimant's costs be summarily assessed if not agreed.

MR JUSTICE STANLEY BURNTON: Such assessment to be brought before the judge no later than 22nd April 2005.

MRS AKHTAR: And then liberty to apply and no order in relation to the consideration, is that correct?

MR JUSTICE STANLEY BURNTON: I think it is sufficient for me to say claimant to have costs, and no order but liberty to apply, frankly.

MR OLDHAM: We would be happy with that, my Lord.

MRS AKHTAR: Thank you, my Lord.

MR JUSTICE STANLEY BURNTON: I hope you agree costs. Thank you.