Dame Shirley Porter and Others v John Magill
| Jurisdiction | England & Wales |
| Judge | THE VICE PRESIDENT |
| Judgment Date | 19 December 1997 |
| Judgment citation (vLex) | [1997] EWCA Civ J1219-9 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | CO/1539/96 CO/1738/96 CO/1829/96 CO/1830/96 |
| Date | 19 December 1997 |
[1997] EWCA Civ J1219-9
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
CROWN OFFICE LIST
DIVISIONAL COURT
Royal Courts of Justice
The Strand
London
The Vice President of the Court of Appeal Criminal Division
(Lord Justice Rose)
Mr Justice Latham
and
Mr Justice Keene
CO/1539/96
CO/1653/96
CO/1738/96
CO/1829/96
CO/1830/96
APPEARANCES:
MR A SCRIVENER QC, MR S CAKEBREAD and MISS C ROBERTS (instructed by Messrs Nicholson Graham and Jones, London EC4N 6AR) appeared on behalf of THE FIRST APPELLANT
MR S CAKEBREAD and MISS C ROBERTS (instructed by Messrs Nicholson Graham and Jones, London EC4N 6AR) appeared on behalf of THE SECOND APPELLANT
MR R GORDON QC and MR A MACLEAN (instructed by Messrs Rochman Landau, London W1N 7TD) appeared on behalf of THE THIRD APPELLANT
MR J McMULLEN QC and MISS J EADY (instructed by Messrs Pattison and Brewer, London WC1N) appeared on behalf of THE FOURTH APPELLANT
MR D WIDDICOMBE QC and MR A PARR (instructed by Messrs Joseph Hyde and Co, London W1X 7RT) appeared on behalf of THE FIFTH APPELLANT MR A JONES QC, MR J HOWELL QC, MR D PERRY and MISS K McHUGH (instructed by Messrs Rowe and Maw, London EC4V 6HD) appeared on behalf of THE RESPONDENT
MR B ASH QC (instructed by the Solicitor for Westminster City Council) appeared as an INTERESTED PARTY
Friday 19 December 1997
This is the judgment of the court. Different sections have been written by different members. Each of us concurs fully in all sections.
The five Appellants appeal against the decision of the Respondent, an auditor appointed by the Audit Commission under s13 of the Local Government Finance Act 1982 ("the Act"), certifying, in relation to Westminster City Council's accounts for the years 1987/8 to 1994/5 that, by wilful misconduct, they had jointly and severally caused a loss of approximately £31 million to the Council. ("WCC"). The certificate was issued and the appeal is brought under Section 20 of the Act. At the relevant period, the first appellant (to whom we shall refer as DSP) was the leader of the majority party on the Council. The second appellant, Mr Weeks, (to whom we shall refer as W) was the Deputy Leader. The third appellant, Mr Hartley, (to whom we shall refer as H) became Chairman of the Housing Committee. The fourth appellant, Mr England (to whom we shall refer as E) was the Director of Housing. The fifth appellant, Mr Phillips, (to whom we shall refer as P) was the Managing Director of the Council.
On any view, the auditor's investigation was vast. It cost over £3 million. Whether Parliament contemplated so gigantic an investigation by an auditor into an objection to local authority accounts we very much doubt. In our judgment in any future investigation of this kind it will be essential for the auditor to exercise a sense of proportion and to balance, on the one hand, the need for adequate scrutiny of the accounts and the objections to them and, on the other, the need to avoid prolonged and inordinately expensive enquiry. We digress, briefly, to make an important point of general application. Our civil and criminal courts, are overburdened with work. Information technology and copying machines, if their use is not carefully controlled, require and, in many cases, waste huge and ever-increasing quantities of paper. At such a time, it is incumbent on judges, counsel, solicitors, auditors and everyone else taking part in procedures which culminate in judicial or quasi-judicial decision to select and concentrate on points of real significance and to discard the rest as dross. We do not suggest a general return to the quill pen: but in the days of its use, it concentrated the mind wonderfully. In this connection we particularly commend the submissions made by Mr Gordon QC, on behalf of H, which were a model of clarity and brevity. Detail may be important, but its relentless pursuit can obscure vision.
The auditor in this case conducted over 130 interviews with 44 people, including the appellants, each of whom he interviewed many times. The history of events is set out in detail in over 400 pages which are Appendix 1 to his decision. His investigations started at the behest of electors who were members of the minority party and who, on 18th July 1989, gave him written notice, under section 17(4) of the Act, of objection to the lawfulness of the Council's accounts. He gave his final decision on 9th May 1996. Including appendices, it extends to almost 2000 pages. He examined over six thousand pages of documents. Many thousands of pages of transcript of his interviews, the proceedings before him and the submissions made to him were generated. We ruled, prior to the hearing of the appeal, that the auditor's interviews of persons other than the appellants should be treated as evidence before us.
Before this court, with the assistance of all counsel to whom we are indebted, it has been possible, with the aid of comprehensive and detailed written submissions, amplified in oral argument, on behalf of all parties, to focus on the issues raised in this appeal with recourse to comparatively few of these voluminous papers. It has also been a significant feature of this appeal that, although none of the appellants chose to give evidence before the auditor, each of them has sworn a substantial affidavit for the purpose of the appeal, on which each was orally cross-examined. We have also received the written reports of expert valuers and accountants in relation to what, if any, loss the Council suffered and these experts have also been orally cross-examined. In addition, Mr Child, the solicitor who advised the auditor during his investigation and took a significant part in the questioning of witnesses, and Miss Capaldi, in relation to management reviews carried out for the Council in 1986–7 and 1988–9, swore affidavits for the purpose of the appeal and Mr Child was orally cross-examined. We have also considered affidavits from Mr Bryant, Mr Langleben and Mr Neville on behalf of DSP and Miss Clarke and Mr Neville for H. Mr Bryant was cross-examined before us. It is to be noted that, despite the initial protests of counsel, the hearing of the appeal was completed comfortably within the time table prescribed by the court.
It follows that we have conducted this appeal by way of re-hearing in accordance with RSC Order 55 Rule 3. In doing so, we have kept in the forefront of our minds the impairment of recollection which is the inevitable consequence of the passage of up to 11 years between the occurrence of material events and the evidence before us. In such circumstances, the contemporaneous documents are of obvious importance. We have approached the matter by considering, in relation to each appellant, whether the auditor appears to have gone wrong in any respect and whether, having regard to the high standard of proof appropriate to the seriousness of the allegation (see Hornal v Neuberger 1957 1 QB 247 per Morris LJ at 266 and In re H & Others 1996 AC 563 per Lord Nicholls at 586D-587A), on the material before us, wilful misconduct causing loss has been shown.
The material provisions of Section 20 of the Act are as follows:
"(1) Where it appears to the auditor carrying out the audit of any account under this part of this Act—
….
(b) that a loss has been incurred or deficiency caused by wilful misconduct of any person, he shall certify that …. the amount of the loss or the deficiency is due from that person and …. both he and the body in question …. may recover that sum or amount for the benefit of that body; and if the auditor certifies under this section that any sum or amount is due from two or more persons, they shall be jointly and severally liable for that sum or amount.
(2) Any person who
….
(b) is aggrieved by a decision of an auditor to certify under this section that a sum or amount is due from him may …. require the auditor to state in writing the reasons for his decision.
(3) Any such person who is aggrieved by such a decision may appeal against the decision to the court and—
(a) in the case of a decision to certify that any sum or amount is due from any person, the court may confirm, vary or quash the decision and give any certificate which the auditor could have given; …. and any certificate given under this sub-section shall be treated for the purposes of sub-section (1) above and the following provisions of this section as if it had been given by the auditor under sub-section (1) above.
(4) If a certificate under this section relates to a loss or deficiency caused by the wilful misconduct of a person who is, or was at the time of such misconduct, a member of a local authority and the amount certified to be due from him exceeds £2000 that person shall be disqualified for being a member of a local authority for the period of five years.
….
(7) On an appeal under this section relating to the accounts of a body, the court may make such order as the court thinks fit for the payment by that body of expenses incurred in connection with the appeal by the auditor or the person to whom the appeal relates or by whom the appeal is brought as the case may be."
It is to be noted that, by virtue of s 20(1), once the auditor is satisfied that a person has caused a loss by wilful misconduct he is not only obliged to issue a certificate but he has no discretion as to the amount for which the certificate should be issued. By virtue of (3) this court can only "give any certificate which the auditor could have given". It follows that, as in the present case, a certificate can result which bears no...
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