Part III of Housing Act 1957–Clearance area–Challenge to validity of compulsory purchase order–Analysis of section 42(1) of Act–Comparative costs of demolition and rebuilding on the one hand and of repair and rehabilitation on the other treated as irrelevant by inspector and by Secretary of State–Failure by Secretary of State to take into account a matter which he ought to have taken into account–Order consequently not within powers of Act–Appeal from decision of Phillips J allowed and order quashed
This was an
appeal from a decision by Phillips J dismissing an application to quash the
London Borough of Southwark (Braganza Street) (No 5) Compulsory Purchase Order
1973, which had been confirmed by the Secretary of State. The application to
Phillips J had been made by the present appellant, Tobias William Hammersley
Eckersley, and two others, but the present appeal was by Mr Eckersley only.
Desmond Keane
(instructed by Nicholas Haylor) appeared for the appellant; Gerard Ryan
(instructed by the Treasury Solicitor) represented the Secretary of State. The
London Borough of Southwark was not represented and took no part in the
proceedings.
Giving the
judgment of the court, BROWNE LJ said that the appellant was the owner-occupier
of a house at 30 Berryfield Road, Southwark, which was included in the 1973
compulsory purchase order. The area covered by the order was about 3 acres with
82 houses built about 1885. Some 200 people were affected. About 2 1/4 acres
had houses found to be unfit for human habitation and the remainder fit but
included in the "added land."
It was accepted that the appellant’s house was fit and the minister’s
inspector had spoken very highly of it in his report.
Mr Keane had
referred the court to several authorities on the powers of the court under
paragraph 2(ii) of Schedule 4 to the Housing Act 1957, which dealt with appeals
to the High Court. It was enough to cite the statement of Lord Denning MR in Ashbridge
Investments Ltd v Minister of Housing and Local Government [1965]
1 WLR 1320 at p 1326. This had been cited by Phillips J but the criticisms made
of Phillips J were quite unjustified. The inspector’s report said: "An
analysis of the costs of repair and improvement under Part II of the Housing
Act 1957, the Housing Act 1961, and the Housing Act 1969, and a reinspection of
all the properties, showed that the best course of action was
demolition." Mr Eckersley took the
view that this meant that the inspector and the Secretary of State had seen some
document or other evidence that had not been available to the objectors and
that there had therefore been a breach of the principles of natural justice. It
was clear that this matter had given Phillips J great anxiety and he had been
determined to clear up Mr Eckersley’s suspicions. He adjourned the case and
asked the inspector to explain "for the benefit of the court and the
parties to what he is referring when he speaks of an analysis of the costs and
so on." The inspector then swore an
affidavit which made it clear that Mr Eckersley’s suspicions were unfounded.
No doubt the
general principle was that in civil proceedings (unlike criminal proceedings) a
judge himself was not entitled to call a witness unless both parties
consented–see Re Enoch and Zaretzky’s Arbitration [1910] 1 KB 327; Fallon
v Calvert [1960] 2 QB 201. It would of course be entirely wrong on an
application to the High Court to quash a compulsory purchase order (or in any
similar proceedings) for the judge to ask the inspector to make fresh or
additional findings of fact. Further, where such an application depended on the
construction of the inspector’s report any evidence from the inspector about
what he meant by his report would of course be inadmissible, and it would be
wrong to ask him to explain his meaning. It was clear that Phillips J had these
points fully in mind. But what he was concerned about was Mr Eckersley’s
suspicion that there had been a breach of the principles of natural justice and
it was clear that the object of the judge’s order was to make sure that there
had been no such breach.
The
investigation of a possibility that there had been a breach of natural justice
must nearly always involve receiving evidence outside the inspector’s report
and the minister’s decision letter. In this case Mr Eckersley had sworn his
affidavit, raising the point and the respondent had chosen not to answer it. Mr
Eckersley was appearing in person, and it is clear that Phillips J acted as he
did in the interests of justice and in an attempt to help Mr Eckersley and to
clear up his suspicions. It might therefore seem illogical for the appellant to
make this a ground of appeal. There was certainly no general rule that in
applications such as this the court could order additional evidence and it
would be a very unusual course to take. But Phillips J was in the present
court’s judgment entitled, in the special circumstances
had been raised by Mr Eckersley’s affidavit in a way which the judge thought
not merely fanciful it had to be investigated. The course taken by Phillips J
seemed to be eminently sensible and just.
Mr Keane’s
first point failed, but the court agreed with him that so far as the decision
of this appeal depended on the construction of the inspector’s report the court
must ignore his affidavit. Mr Keane’s second point seemed far more formidable.
It was
necessary first of all to consider the structure and interpretation of section
42 in Part III of the Housing Act 1957, especially section 42(1). That
subsection began by enacting that "where a local authority . . . are
satisfied . . ." as to the matters in paragraphs (a) and (b) "the
authority shall . . . pass a resolution. . . ." Then followed the proviso that "before
passing any such resolution the authority shall satisfy themselves" as to
the matters in paragraphs (i) and (ii) of the proviso. Mr Keane submitted that
all four of the matters specified in (a) and (b) and (i) and (ii) were material
considerations which the Secretary of State must take into account when
deciding whether or not to confirm the order; in particular, he must consider
the resources of the promoting authority (proviso (ii)). Mr Ryan submitted that
the only material considerations for the Secretary of State were (a) and (b);
he said that proviso (i) and (ii) were the responsibility of the local
authority, and that they were not material considerations which the Secretary
of State had to take into account at the stage of inquiry and confirmation.
Mr Keane
submitted that there was no difference between "are satisfied" in the
enacting part and "satisfy themselves" in the proviso. Mr Ryan said
there was all the difference. He said that the matters dealt with in the
proviso were matters internal to the local authority, about which it was their
responsibility to satisfy themselves before deciding to go ahead by passing a
resolution. The Secretary of State was concerned with the proviso matters
because of section 42(2) and (3), and Mr Ryan submitted that up till the time
when the order was made, and probably up till the time when objections are
received by the Secretary of State, there was no objection to the Secretary of
State concerning himself with these matters in consultation with the local
authority–see Frost v Minister of Health [1935] 1 KB 286 per
Swift J at pp 290-292. It was not necessary to consider in this case how far
the Secretary of State should concern himself at that stage.
The court
accepted Mr Ryan’s submission that the proviso matters were the responsibility
of the local authority and not of the Secretary of State. Compliance with the
provisos was a condition precedent to the validity of the resolution declaring
the clearance area, and an objector might be able to challenge its validity for
non-compliance with them, though only on very limited grounds, eg that the
authority acted without any evidence or in bad faith: see Goddard v Minister
of Housing and Local Government [1958] 1 WLR 1151 and Savoury v Secretary
of State for Wales (1976) 31 P & CR 344; see also the Privy Council
case of Ross-Clunis v Papadopoullos [1958] 1 WLR 546 at p 560,
which dealt with the words "satisfy himself." If the validity of the resolution could be
successfully challenged, the condition precedent had not been fulfilled, and
the order must be quashed under Schedule 4, paragraph 2 (ii) as being not
within the powers of the Act. For this limited purpose it might be legitimate
to investigate "proviso matters" at the inquiry. But in the court’s
judgment the "proviso matters" were the responsibility of the local
authority and were not matters which the Secretary of State ought to or need
take into account when deciding whether or not to confirm the order. The court
therefore rejected this ground of appeal on resources.
As to another
ground, relative costs of demolition and rebuilding as compared with repair and
rehabilitation, Mr Keane submitted that where a crucial issue was whether
"the most satisfactory method of dealing with the conditions in the
area" was demolition and rebuilding or repair and reconditioning of the
existing houses the comparative costs of the two methods must be a material
consideration. Mr Keane said the inspector had failed to make any findings of
fact on this point and had expressed the opinion that it was irrelevant. Mr
Ryan conceded that matters of cost might well be relevant and could properly be
taken into account by the inspector and the Secretary of State. He further
conceded that they were relevant in this particular case, where this was a
crucial issue, but submitted that they were taken into account. These
concessions were plainly right. As a matter of commonsense, questions of cost
were obviously one of the factors relevant to a decision whether demolition and
rebuilding or repair and reconditioning was the most satisfactory method of
dealing with the conditions. Further, they are expressly made relevant in the
provisions of Part II of the Act dealing with individual unfit houses, and it
would be strange if they were not also relevant under Part III, which was
dealing with areas of unfit houses.
This part of
the case came down to a question of construction of the inspector’s report and
the Secretary of State’s decision letter. The inspector’s report contained many
conclusions in the form of expressions of opinion. The inspector made clear and
detailed findings of fact as to the condition of the houses under the headings
"description" and "condition on inspection." Many of the statements under the headings
"opinion" are also findings of fact, though many others are truly
"opinions." As to the
comparative costs of demolition and rebuilding as against repair and
rehabilitation, the inspector set out very fully the evidence, some of it
conflicting, and the arguments on both sides. Two interpretations were
suggested. Mr Keane submitted that the inspector was expressing the opinion–and
indeed giving a decision–that questions of comparative cost were irrelevant,
not merely to this inquiry, but to any inquiry under Part III of the Act. Mr
Ryan submitted that the inspector was saying that he was not going to express
any opinion on this point himself, but was referring it to the Secretary of
State for his decision.
The court
agreed with Phillips J that the inspector was expressing the view that these
matters were irrelevant. If so, the inspector was clearly wrong. In the court’s
view the inspector in the sentence "These matters may be interesting and
instructive but it is inappropriate within the limits of inquiry into an order
made under Part III of the Act to comment upon . . . the purely economic
advantages of the objectors’ proposals" was expressing his opinion that
the question of relative costs was irrelevant. If the Secretary of State had
disagreed with the inspector’s opinion that comparative costs were irrelevant,
and had considered and decided the matter for himself, it seemed that the
decision letter must have said so. On the contrary, it did not contain any
findings or decision by the Secretary of State on the point, and the statement
that "the arguments put forward by the objectors and the council have been
considered" seemed to be quite inadequate. Even if the inspector’s
statement had meant that the inspector was leaving the decision on the point to
the Secretary of State, the decision letter entirely failed to show that the
Secretary of State did consider or decide it. It followed that he had failed to
show that he had taken into account relevant considerations and his decision
must be quashed.
The appeal
would therefore be allowed with costs.