Attorney General v Crayford Urban District Council
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE HARMAN,LORD JUSTICE DONOVAN |
| Judgment Date | 22 February 1962 |
| Judgment citation (vLex) | [1962] EWCA Civ J0222-3 |
| Date | 22 February 1962 |
| Court | Court of Appeal |
[1962] EWCA Civ J0222-3
The Master of The Rolls
(Lord Evershed)
Lord Justice Harman and
Lord Justice Donovan.
In The Supreme Court of Judicature
Court of Appeal
From Mr. Justice Pennycuick
Sir Lynn Ungoed-Thomas, Q. C, and Mr Peter Oliver (instructed by Messrs J. H. Milnor & Son) appeared as Counsel for the Appellant.
Mr Gerald Gardiner, Q. C. and Mr S. L. Newcombe (instructed by Messrs Barlow, Lydo & Gilbort) appeared as Counsel for the Respondents.
This appeal raises a question of no little importance, and, as Mr. Gardiner pointed cut, might on one view of it have farreaching effects. The action is by the Attorney-General at the relation of the Prudential Staff Union, which is a trade union. In the action the claim, is made that certain transactions undertaken by the Defendant Council in connection with the insurance by the Council's tenants with a Company known as Municipal Mutual Insurance Ltd. of the contents of the tenants dwellings against loss through fire, flood, theft and other like contingencies, is outside the powers of the Council under the Housing Act of 1957. The declaration sought in the statement of claim was as follows: "A declaration that the Defendant Council is not empowered to effect the insurance of the personaland household goods of Council tenants or to collect premiums in respect of such insurance and that the effecting of such insurance and the collection of such premiums are ultra vires the Defendant Council".
The circumstances and the relevant terms of the contract or contracts of insurance with Municipal Mutual Insurance Ltd. are related in the Judgment of Mr. Justice Pennycuick, and I shall not take time to repeat them in detail. What is complained of is this, that from time to time the Council has sent to every tenant a notice in the form set out at page 1 of the bundle of correspondence. I will' not read it all, but it starts thus: "Whilst the Council insure the premises which you occupy, it is the tenant's responsibility to insure his furniture and effects. In the circumstances, are you satisfied that your furniture and effects are adequately covered against fire, storm, tempest and similar risks? If not, then the scheme got out by the Council's insurers, whereby you can take out cover against all the risks set out in the enclosed leaflet, will interest you". Then a little later: "From now onwards, this scheme will be operated by the Council for your benefit and isopen for your acceptance at any time provided one week's notice is given". There was a proposal form sent with the letter and the accepting tenant filled up and signed the proposal form. On the evidence no further canvassing was done by or on behalf of the Council, but if the tenant so addressed accepted the suggestion made, then his name was added to the names of other tenants similarly accepting and covered by the policy or policies of insurance. The premium payable by the individual tenant was 5d. a week and was collected from him by agents on behalf of the Council when the rent was collected, and the Council sent to the tenant a certificate showing the risks against which the tenant was insured. The Council itself paid direct to Municipal Mutual Insurance Ltd. the monthly premiums in respect of the policies as they became due, after, however, deducting their commission as agents. It was proved that after allowing for the expenses incurred, the Council in fact made a profit out of the transaction.
The real complaint, therefore, (though not apparent from the form of declaration which I have read) is that the Council is acting as agent for a particular Insurance Company in effecting insurances of the private effects of the tenants. The interest of the realtors is because they represent, as their name implies, persons interested in a rival insurance business. The union as such is not a ratepayer, and, in any event, it is clear that the effect of what the Council is doing, does not impose any burden on the ratepayers. It is perhaps to be noted that the challenge was first contained in a letter at page 7 of the correspondence in which the protest, vigorously made, was stated to be on the grounds: "(a) The District Council arc restricting insurance to one specific office. (b) They are instructing rent collectors to become part time insurance men in the ratepayers' time, (c) They are depriving full time agents, who are ratepayers, of remuneration,(d) The Insurance Office concerned has a very bad recordregarding recognition of a bona fido trade union".
When the case was opened, we expressed some curiosity in regard to the action, brought as it is by the Attorney-General at the relation of the Union, It seems, however, quite clear that once the Attorney-General has initiated such proceedings, no question can be raised in regard to the nature of the action by reason of the interest or the lack of interest of the relater as a ratepayer or otherwise. I accept it as correct that no such point can now be made, and that the Attorney-General is entitled in the present proceedings to test the validity of what the Council has done. Sir Lynn Ungeed-Thomas said that if the challenge of the validity was well founded, an injunction would' follow as prayed in the statement of claim as a matter of course, whatever the consequences might be to the Council or the Council's tenants and notwithstanding that, as I have said, the scheme has imposed no charge upon the rates. Having regard to the conclusion which I have reached, it is unnecessary for mc to express any view upon this last mentioned matter, but I must not be taken to assent to the proposition that, if we thought the actions of the Council in any respect ultra vires, the remedy sought would inevitably follow.
Before I leave my reference to the facts, it is right further to state, first, that the policy or policies extend to loss or damage not only to the tenant's furniture and effects, but also to the landlords' fixtures for the upkeep of which the tenant would be liable under his contract of tenancy, and, second, that the policy or policies covers or cover also the tenant in case of certain liability to third parties in a very considerable sum and also provide for a substantial sum to be payable on the tenant's death.
Section 111, sub-section (1) of the Housing Act, 1957, roads as follows: "The general management, regulation and control of houses provided by a local authority under this Part of thisAct shall be vested in and exorcised by the authority, and the authority may make such reasonable charges for the tenancy or occupation of the houses as they may determine". The question involved may, then, be simply stated thus: Arc the activities, above described and challenged by the plaintiff, acts of "general management" within the terras of the sub-section? As the learned Judge said, the arguments on both sides were formidable, but he accepted what he described as the second of Mr. Gardiner's submissions. I read now from the bottom of page 8 of the transcript of the Judgment: "Secondly, Mr. Gardiner contends that looking at all the particular circumstances, the facilitation of insurance on personal effects by way of a collective policy is an 'act of management' in the ordinary sense of that term. This seems to be a formidable argument, and I have come to the conclusion that it is well founded. Once it is accepted, as it must be, (a) that most tenants of the class which occupies the Council houses do not insure their effects independently, and (b) that such tenants, if they lose their effects, are likely to default on their rent, then it follows that a prudent landlord, acting in his interests as such, may reasonably seek to protect his rent by facilitating insurance against such loss. If he elects to do so, I do not see how this can be said to be otherwise than an act done in the general management of his property". I agree with that passage in the learned Judge's Judgment and with...
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