Collis, R (on the application of) v Secretary of State for Communities & Local Government & Anor

MR JUSTICE UNDERHILL: This is an application under Section 23 (1) of the Acquisition of Land Act 1981 questioning the validity of a compulsory purchase order made by the London Borough of TowerHamlets, the second defendant ("the council").

The order challenged was made by the council on 7 December 2005 pursuant to section 17 of the Housing Act 1985 and section 2 of the 1981 Act. The properties to which it related were seven long-leasehold flats (originally sold under the right-to-buy provisions) in a tower block called Priestman Point on the Crossways Estate in TowerHamlets. The estate was very run-down and had for some time been the subject for plans for extensive works of regeneration: those plans involved the transfer of the estate to the Swan Housing Association. The estate comprised Priestman Point together with three other blocks, Mallard Point, Hackworth Point and Holyhead Close. There were in all some 92 flats in Priestman Point. An order was not sought in respect of the remainder of the flats, albeit that it was necessary to obtain vacant possession of the entire block, because the owners were prepared to vacate and, if necessary, sell voluntarily.

The claimants are the owners of the seven flats in question. By section 2 of the 1981 Act any compulsory purchase order requires the confirmation of the Secretary of State, who must hear any objections made: see section 13A. Objections were lodged on behalf of the claimants, or some of them, and there was accordingly a public local inquiry. The inspector's report recommended confirmation. The Secretary of State duly gave that confirmation by letter from the Government Office for London dated 28 November 2006. That decision also is challenged in these proceedings, with the result that the Secretary of State is in fact the first defendant.

The grounds of challenge have nothing to do with the merits of the order and are essentially concerned with the formal authority under which it was made. The purported authority for the making of the order - referred to on the face of the order itself - is a resolution of the council's cabinet dated 9 February 2005. On that date the cabinet considered a wide range of recommendations contained in a report from the Director of Housing Management proposing the implementation of the disposal of the Crossways Estate to the Swan Housing Association and ancillary matters. The recommendations in question included recommendations as to the use of the council's compulsory purchase powers. The housing association had no such powers and would require the assistance of the council where vacant possession of the blocks in which work was to be done was required. Recommendation (o) in the report was that the cabinet should -

The claimants submit that as a matter of construction that resolution does not authorise the making of the order of 7 December 2005. Mr Edwards, who appears for them before me, makes essentially two points, although they overlap.

First, he submits that as a matter of construction, simply having regard to its own terms, the resolution does not authorise the making of any particular compulsory purchase order but only the taking of the preparatory steps, so that further authority would be needed if a particular order were to be made. He says that that is the natural reading of the phrase "initiates and appropriately manages back-up of CPO processes". He submits both that the rather woolly verbs (my characterisation of his point, rather than his actual words) "initiate" and "manage" fall short of authorising the taking of a formal legal step; and also that the phrase "CPO processes" suggests only preparatory and administrative processes. As to the latter point, I asked him what such processes might be. He said that it referred to such matters as instructing officers to commence negotiations with the owners, finding out who the owners and occupiers of the properties in question were and the identity of any mortgagees, and generally what he described as "the whole evidential basis". He also referred to the need, at any rate in principle, to survey the properties to see if they were sub-standard or defective. With the possible exception of the last point, none of those processes seem to me to be matters requiring the formal authority of the cabinet. They are simple administrative matters. The same might not be said of surveying the properties, which might require formal powers in order to gain access; but that was of little significance in the present case where the order, if made, was to be based not on the condition of particular properties but on the block as a whole, as to which the council had been fully advised.

Mr Edwards referred to some other pointers which he said supported his construction. He referred in particular to the failure of the resolution to identify the precise flats to be purchased and the lack of any reference to the precise legal powers being employed. In that connection it is fair to say that the text of the report did specifically identify some 38 flats, not all in Priestman Point, in respect of which it was thought that compulsory purchase powers might need to be employed; and that while no specific reference was made in the report to the particular powers needed, there was general reference to the existence of such powers. Mr Edwards' point does not however depend on whether these points are mentioned in the report: he says, rather, that the failure to mention them specifically in the resolution is supportive of his submission that the resolution itself was not intended to be the final authority. He also submits that it would be bad practice, and therefore unlikely to be what was intended, for some kind of blanket authorisation to be given: compulsory purchase powers should always be property-specific. Finally he refers to the well-known observations of the Court of Appeal in Prest v Secretary of State for Wales (1982) 81 LGR 193 to the effect that compulsory purchase powers should be narrowly construed.

Secondly, Mr Edwards draws attention to the advice given by the Chief Legal Officer of the council, as recorded in section 16 of the report. Paragraph 16.8 is in the following terms:

Taking these two points either together or separately, Mr Edwards submits that the resolution of 9 February 2005 did not represent valid authority for the order of 7 December. It follows that the order was invalid and that it could not be saved by its "confirmation" by the Secretary of State in the exercise of his statutory powers.

The issue of the validity of the order was in fact fully argued before the inspector and was formally dealt with and rejected in the Secretary of State's decision letter. Mr Edwards has various criticisms of the inspector's reasoning and, as he would submit, the lack of reasoning in the Secretary of State's decision letter. However, as Mr Strachan, for the Secretary of State, points out, these criticisms do not really advance the argument. If Mr Edwards' underlying substantive point is good, he does not need them. If it is bad, the fact that the expressed reasoning of either the inspector or the Secretary of State in rejecting it was inadequate would not be a basis for quashing the order.

The principal submission of Mr Strachan, and of Mr Lewis who appeared for the council, is that the language of the resolution was fully effective to authorise the order of 7 December as made, and that its effect cannot be modified or undermined by reference to the advice from the Chief Legal Officer contained in the report.

I start with the passage in the report setting out the advice of the Chief Legal Officer. The council has lodged a witness statement from Mr James Marlowe, the solicitor responsible for the drafting of the relevant paragraphs. He gives an explanation, which I am content to accept as a matter of fact, of how paragraph 16.8 came to be drafted in the terms that it was. He says that it was in fact intended to reflect the fact that, unusually, the report itself had identified the particular properties liable to be covered by the contemplated order or orders; and that the point intended to be made was, accordingly, that the "usual practice" of returning to the council with a further report and for further authority would not be necessary in the present case. He acknowledged, however, that the drafting was not properly carried through as a result of changes made during the drafting process; and I am bound to say that the impression conveyed by the paragraph does not give effect to the intention stated by Mr Marlowe. Rather, it does indeed convey the impression contended for by mr Edwards.

However it is Mr Strachan's and Mr Lewis's case that, whatever impression they may give, the terms of paragraph 16.8 of the report cannot be imported into the terms of the resolution. I accept that. The resolution must be construed as it stands. Adopting that approach, I find that the drafting of the resolution constitutes adequate authorisation for the order in fact made. Although the language is somewhat jargonish, in my view the only sensible meaning that can be given to the term "initiates and ... manages ... CPO processes" is as a reference to the making of a compulsory purchase order. The processes identified by Mr Edwards, as I have already observed, do not need any kind of formal authorisation. As Mr Strachan points out, the making of a compulsory purchase order is in fact the first step in a process which includes confirmation by the Secretary of State, the issue of a notice to treat followed, if necessary, by a notice of entry or alternatively the use of the vesting declaration procedure, and followed finally by the elaborate processes necessary to assess compensation. It seems clear to me that those are the processes referred to in the resolution. I should say that the word "back-up" - to which Mr Edwards, I think, attached some importance though I am not entirely clear how he thought it assisted him - is irrelevant for present purposes. It clearly means that the initiation of CPO processes was intended as a precaution in case voluntary re-purchase proved impossible.

It follows that I find that the order of 7 December 2005 was validly made. I need not therefore make findings on three fall-back submissions made by Mr Strachan and Mr Lewis. But I should briefly mention them.

The first submission is based on evidence contained in the witness statement of Mr Marlowe which is in the following terms:

The second fall-back argument is that even if the order of 7 December 2005 was invalid it could have been validated by the Secretary of State's subsequent confirmation. I need only say that I was not persuaded by this submission.

The third submission is that even if I were to find that the order was formally invalid, section 24 (4) of the 1981 Act, which sets out my powers in dealing with any appeal, provides only that - "a court may quash the compulsory purchase order"; and that I should use my discretion not to do so. Mr Strachan referred me to the decision of Kerr J in Miller v Weymouth and Melcombe Regis Corporation and Another (1974) 27 P & CR 468, in which he held, in relation to the equivalent provisions of Section 245 of the Town and Country Planning Act 1971 relating to discontinuance orders, that that language gave the court a discretion - though it is fair to say that he observed that " ... it would no doubt only be rarely and in very unusual circumstances that a court would not exercise its discretion to quash a ministerial or statutory order that was not within the statutory powers". Mr Strachan submitted that in the very special circumstances of the present case I should if necessary refuse to exercise my discretion to quash the order notwithstanding its formal invalidity. The facts on which Mr Strachan relied in support of that submission appear from a witness statement of Mr Pearce of the Swan Housing Association, also lodged by the council in May. This shows that, of the seven claimants, the five who were occupiers of their flats at the time that the order was made had all definitively or in principle agreed to leave their flats in Priestman Point on the basis that they would be able to return after refurbishment; and that the only two who had not agreed any such terms were not occupiers. In those circumstances, he submitted, the present dispute was largely academic and it would be wrong that the future of this important project should be thrown into doubt, or at any rate subjected to substantial delay, by the need to re-take a decision and go through the necessary formal procedures all over again. I am bound to say that I found that submission attractive, but I should have needed to hear much fuller argument about the possibility of prejudice to any of the claimants before I would have been prepared to accede to it.

It is right that I should record that in the submissions before me Mr Edwards referred to - without ever formally formulating any submissions based on them - various other alleged failings by the council, including in particular a failure to spell out to the cabinet the Human Rights Act implications of this proposed action. I have not felt it necessary to deal with these points because they go beyond the grounds clearly pleaded in the particulars of claim in the claim form. Those particulars focus on the points with which I have so far dealt and go no wider. It is true that there is a reference to Article 8 of the European Convention on Human Rights and Article 1 of the First Protocol, asserting that -

I should also record that Mr Edwards referred me to the well-known decision in the Court of Appeal in Co-operative Retail Services Ltd and Another v Taff-Ely Borough Council (1982) 42 P & CR 1, but I could extract no proposition from it relevant to the circumstances of the present case.

I dismiss this application.

MR STRACHAN: I would ask for an order in those terms and, in addition, I would ask for an order that the claimants pay the first defendant's costs and also that those be summarily assessed in relation to the costs schedule that should be before you.

MR JUSTICE UNDERHILL: Yes. It should be. I have not focussed on it. Let us hear what Mr Lewis has to say.

MR LEWIS: I, too, have an application for the council's costs.

MR JUSTICE UNDERHILL: Have you, too, submitted a schedule?

MR LEWIS: We have. There is a revised schedule which I will hand up, but I will give way to my friend.

MR JUSTICE UNDERHILL: Let me have both schedules.

MR LEWIS: I should indicate that I will have to develop my application for costs by reference to authorities because there is authority on the situation when both sides appear and the Secretary of State and another party appear to defend the situation.

MR JUSTICE UNDERHILL: Yes and no. You are not thinking of those planning cases, are you? They are not quite the same. Here you have both been sued in proceedings under the CPR. That is rather different, is it? It may be it is not, I do not know.

MR LEWIS: It is not different in so far as the requirements of the Rules are that both parties have to be served and it is also not different in so far as the usual class of case is one where the Secretary of State will be advancing submissions in defence of the decision made by him or her and, often as not, defending the reasoning. It is very much as your Lordship observed in the course of argument. The difference in this case is that the challenge is addressed to the order as made by the council and, more specifically, the resolution authorising it than it was to the merits of confirmation or reasoning. If you are conscious of authority on the point - - it is probably best if I - - - - -

MR JUSTICE UNDERHILL: I think I ought briefly to see it. (Handed).

MR LEWIS: I can give the general background. This was a Section 288 challenge under the Town and Country Planning Act. As you appreciate from the reference to Miller v Weymouth Corporation, the predecessor of Section 288 which was Section 245 in the 1971 Act is in substantially the same terms as Section 24 - - - - -

MR JUSTICE UNDERHILL: Yes, I see. You are not picking out the observation that this sort of case can be distinguished in principle on the facts of this particular case.

MR LEWIS: I cannot completely side-step the principle in Bolton, which is a case I can cite to your Lordship. But nevertheless Bolton itself acknowledges that there are certain circumstances where an award of a second set of costs will exceptionally be justified. That is, first, where there is an entirely separate interest which can be identified for which the second party was entitled to appear and then seek costs in respect of; or, as appears in Bolton, in an event that there are special circumstances in the case or some other reason to make an exception.

MR JUSTICE UNDERHILL: I do not want to drive a wedge between you and Mr Strachan, and I appreciate that as things have turned out he has done most of the work so far as advocacy is concerned. Logically if any one of the two should be getting the costs, it is the council rather than the Secretary of State because you were the one with access to the key documents. I appreciate that the Secretary of State's decision was also appealed, but that is really a parasitical attack on you.

MR LEWIS: Indeed. Again this is an issue which came into the discussion in Bolton, and you may see from the headnote there it is rarely appropriate either to divide costs as between the Secretary of State and the other party appearing. That comes from the situation where, for instance, local authorities have substantial vested interests in the outcome of a planning decision affecting their area. Again - albeit perhaps regretfully - I do not feel I can simply invite you to divide things up between me and my friend Mr Strachan. Equally unless there is some kind of arrangement - which would be uncommon, not to say unheard of - where the borough council stepped in and agreed with the Secretary of State or Treasury Solicitor that the borough council would make the running.

MR JUSTICE UNDERHILL: That could have happened in this case.

MR LEWIS: In this case?

MR JUSTICE UNDERHILL: Yes. It could have happened. It did not happen, but it could have. There would not be any real prejudice.

MR LEWIS: It may be that Mr Strachan has some helpful observations.

MR JUSTICE UNDERHILL: The trend of my observations is adverse to him rather than you. Before I hear from Mr Edwards, Mr Strachan, I am bound to say that the way I am thinking at the moment is that there should only be one set of costs but it should not be yours for reasons you will have heard in my observations to Mr Lewis. That is not in any way being rude about the very helpful contribution you have made.

MR STRACHAN: Can I address you on that? It will not please my friend Mr Edwards because the council's costs are considerably greater.

MR JUSTICE UNDERHILL: I saw that.

MR STRACHAN: I leave that aside. As a matter of principle, in my submission that would be contrary to established principles as set out in Bolton. I refer you to page 1178 in Lord Lloyd's speech:

MR JUSTICE UNDERHILL: You are both saying to me this is just like a planning appeal. It is not quite the same situation. That is a case where the Secretary of State has made a decision in favour of a development.

MR STRACHAN: No, not necessarily. The Secretary of State can make a decision contrary to the developer.

MR JUSTICE UNDERHILL: Cases where they are both trying to defend the same decision.

MR STRACHAN: Yes.

MR JUSTICE UNDERHILL: In that sense, it is likely to be in favour of development.

MR STRACHAN: It could be a dismissal in which case the developer will be challenging.

MR JUSTICE UNDERHILL: What we have here is a different kind of case: two public authorities, one of whom has made a decision and the other of whom has confirmed the decision.

MR STRACHAN: That is right. That is precisely - - - - -

MR JUSTICE UNDERHILL: That is not analogous, is it?

MR STRACHAN: It is, because the Section 93 application is directed at the Secretary of State's confirmation. There is a point of principle but also a point of detail.

MR JUSTICE UNDERHILL: I had a sudden wobble which I briefly referred to in my observations as to why you were a party at all. I said in argument that was probably a bad point.

MR STRACHAN: Can I take you to the claim form? I am here not really for how things pan out but for the way the case is put against my client. The claim as put is a claim against the Secretary of State, the first defendant. It is not a claim brought by way of judicial review against the order itself. This is a claim under Section 23 brought against my client. The way the claim was put - it has been put in a number of ways - if one turns to the grounds at paragraph 17, the first defendant either wrongly concluded in paragraph 10 (the decision letter) as to the validity or failed to give adequate reasons.

MR JUSTICE UNDERHILL: One of us is wrong here obviously. But the logic of that is that, unlike the planning cases, you should both have your costs.

MR STRACHAN: There is a stronger basis for my friend to get his second set of costs where he challenged or impugns acts on the part of the Secretary of State in this case.

MR JUSTICE UNDERHILL: Does it not do that here?

MR STRACHAN: He does.

MR JUSTICE UNDERHILL: Section 23, oddly, does not say "parties" - - it says he may make an application to the High Court. It does not say who the parties should be. But the obvious party is the first party who made the order which he impugns. The oddity of compulsory purchase orders is that they are made by one party but necessarily confirmed by another, so both parties are, I think, probably necessary parties to the action.

MR STRACHAN: They are.

MR JUSTICE UNDERHILL: But it remains doubtful whether they both need to be represented.

MR STRACHAN: Can I deal with the principle. If you are right and both parties are named under Order 94 of the Rules of the Supreme Court in the Schedules of the CPR which checks out the processes for statutory applications, the Secretary of State has to be served along with the relevant local authority. That is the point of principle. We are both required to be served.

MR JUSTICE UNDERHILL: That is not true, is it, with a challenge to a planning decision?

MR STRACHAN: It is exactly the same on a planning decision under Section 288.

MR JUSTICE UNDERHILL: I see. The developer has to be a party.

MR STRACHAN: The local authority has to be a party. So the developer, if challenging a dismissal of an appeal under Section 288, the relevant parties under the statutory application are the Secretary of State and the local authority, both first and second defendants. The important point of principle is, first, it is the Secretary of State's decision which is why you see the way the grounds are put in paragraph 17, that my friend for the claimants attacked the Secretary of State's decision so the Secretary of State wrongly concluded on the relevant issue. Because if the Secretary of State had come to a different conclusion the order might not have been confirmed. So it is a question of did the Secretary of State get it right. I appreciate that because a legal issue arises, your Lordship looks at the matter as a matter of law. The processes are challenged and the Secretary of State's decision is confirmed.

The other point of importance is that the challenge was also to the reasons made by the Secretary of State or the reasons given by the Secretary of State.

MR JUSTICE UNDERHILL: I am thinking that this actually is a point on which I need rather more thought than I can give at 5.15. I need to ponder it. What I am going to direct is that the three of you make brief written submissions on what order is appropriate. I will hear Mr Edwards now in case there is any point I have not seen which I can deal with orally, and on quantum.

MR STRACHAN: Could I make an observation?

MR JUSTICE UNDERHILL: Yes.

MR STRACHAN: In my submissions I have been seeking to advance so far, I have been setting out what I understand to be the established course. It would be a matter of some concern if you were departing from that course in any significant way.

MR JUSTICE UNDERHILL: You are saying that. I have no idea whether this is so. I have come across planning cases where the principles that you are describing apply. All that is reasonably familiar to me. It may be that you are right. I am not at the moment convinced that the present matter is analogous. There is a bit of an analogy, but not a total analogy. If I were to make a different order in this case it would not be because I say Bolton is wrong but I would say that it did not necessarily apply in a case which is an application under Section 23. You may tell me that too is contrary to well established practice. If so, that is news to me. But you would have to show me some evidence that that was the case.

MR STRACHAN: If you are suggesting that we go down the road of submissions, I do not want to trespass on that. Can I, for example, seek to say about the case I handed up earlier concerning the London Development Agency. They asked for their costs. The challenge there focussed on the reasons given by the inspector for the Secretary of State; a similar challenge, but a failure to give adequate reasons. I am instructed on behalf of the Secretary of State both to deal with the wrong conclusion and the reasons.

MR JUSTICE UNDERHILL: That might be a reason.

MR STRACHAN: The process followed in that case was the Secretary of State got his costs and the second defendant - there was a matter of discretion in that case - and the other did not.

MR JUSTICE UNDERHILL: You will have to put these down on paper. I would like brief submissions, headline submissions, and I will deal with it. If you think it is worth some huge point of principle I may give liberty to apply to mention it in open court, but they will be at risk as to costs.

MR STRACHAN: I will have to take instructions. I think you can see why I am raising this because Section - - - - -

MR JUSTICE UNDERHILL: I do not know how often Section 23 challenges come up; not nearly as often as planning ones, but they come up sometimes.

MR STRACHAN: I will have to take instructions.

MR JUSTICE UNDERHILL: You see what is worrying me. The points I put are not concluded views. It may be that once I see your submissions on paper I will find them convincing. At the moment I am not convinced that it is a straightforward analogy with Bolton. Mr Edwards, I do not want to hear submissions on that point; it will be on paper. Supposing you have to pay either or both parties' costs - or suppose in principle you have to - is there any special reason why a costs order should not be made in this case? Do you have any observations about quantum?

MR EDWARDS: I cannot resist the principle of costs. Clearly we have lost. I would say there is a dispute as to quantum, the amount of hours spent on the matter. In the light of the discussions that have just taken place, that debate on quantum might be informed by debate. There has been in the corse of the day perhaps some duplication of time. So I would be asking for detailed assessment.

MR JUSTICE UNDERHILL: It is not normal to have detailed assessment for a case that only lasted a day.

MR EDWARDS: I accept that, but as you pointed out with regard to costs, this is not a straightforward case. The rules effectively dictate that the Secretary of State and the acquiring authorities have to be served. If one looks at the cases it is under the Acquisition of Land Act - - one sees that it is in fact the Secretary of State and the acquiring authority that do have to.

MR JUSTICE UNDERHILL: Yes.

MR EDWARDS: In other words, the claimants are being penalised because the statute and the rules dictate that.

MR JUSTICE UNDERHILL: Yes, that is a fair point.

MR EDWARDS: My clients are not rich landowners like some of the cases. They are of fairly modest means.

MR JUSTICE UNDERHILL: Have you any specific points you want to make on quantum?

MR EDWARDS: I need to take instructions on that.

MR JUSTICE UNDERHILL: In other circumstances I would be more strict with you about that because that is something you really ought to do beforehand because you cannot be sure you are going to win. But I think I will allow you to make those points in written submissions. It is bound to be rough and ready. You will have to address both because you will not know which, if any, you are facing.

MR EDWARDS: Will I see Mr Strachan's and Mr Lewis's submissions first and have a chance to respond, or do you want simultaneous submissions?

MR JUSTICE UNDERHILL: It might be sensible to see Mr Edwards responding.

MR STRACHAN: I will have to be able to respond.

MR JUSTICE UNDERHILL: There is some force in that. It will get too complicated if we have a different routine. Mr Edwards, you will have to go first because you ought to make a point on quantum. You know roughly what the points are because you heard the debate about whether you should pay both sets and, if not both, whose. I guess you will be saying it will be the Secretary of State's because his is less. I will read your submissions on the merits nevertheless. Shall I say 4 o'clock on Tuesday.

MR EDWARDS: Yes.

MR JUSTICE UNDERHILL: Then seven days to respond. Then I will deal with the matter on paper as soon as possible.

MR EDWARDS: Do you want it in bullet form?

MR JUSTICE UNDERHILL: Any from you like, but I do not want them elaborate; you know the kind of short submissions usually made. That is all that is necessary to argue.

MR EDWARDS: Can I make application for permission to appeal on the basis that it does raise, in my submission, a point. You have described matters as woolly drafted. I would submit that it does raise an important point for people who practice in the area of compulsory purchase. They will be looking for guidance as to what an order for compulsory purchase ought to contain.

MR JUSTICE UNDERHILL: I refuse that application. The issues here were totally fact-specific and I do not believe there would be a reasonable prospect of success.

MR EDWARDS: I am obliged.