R DURHAM COUNTY COUNCIL v DARLINGTON BOROUGH COUNCIL [QBD, 25/07/2003]
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE BLACKBURNE,Mr Justice Stanley Burnton,MR JUSTICE STANLEY BURNTON |
| Judgment Date | 06 November 2003 |
| Neutral Citation | [2003] EWHC 2377 (Admin),[2003] EWHC 2598 (Admin) |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 06 November 2003 |
| Docket Number | CO/469/2003,Case No: CO/469/2003 & CO/1755/2003 |
[2003] EWHC 2377 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT
Royal Courts of Justice
Strand
London WC2
Mr Justice Blackburne
CO/469/2003
MR T STRAKER QC and MR M SHANKS (instructed by MESSRS DICKINSON DEES) appeared on behalf of the CLAIMANT
MR L DRABBLE QC and MR D KOLINSKY (instructed by MESSRS ROWE & MAW) appeared on behalf of the DEFENDANT
Friday, 25th July 2003
This is an application for leave to appeal a number of points of law arising out of two separate arbitration agreements. The awards, one of Malcolm Spence QC, published on 6th December 2002, and the other of Mr Christopher Cochrane QC, published on 3rd February 2003, were made under a statutory disputes resolution procedure contained in regulation 19 of the Local Government Changes for England (Property Transfer and Transitional Payments) Regulations 1995.
They arise out of the establishment of Darlington Borough Council as a separate unitary authority effected by The Durham (Borough of Darlington) (Structural Change) Order 1995, made by the Secretary of State pursuant to powers contained in the Local Government Act 1992. The order provides that with effect from 1st April 1997 the functions of Durham County Council in relation to the borough of Darlington should, subject to the provisions of Part II of the order and any other relevant provision, be transferred to Darlington Council.
Various conditions must be satisfied if leave to appeal is to be given. These being arbitrations, those conditions are set out in section 69(3) of the Arbitration Act 1996. According to that provision:
"Leave to appeal shall be given only if the court is satisfied -
(a) that the determination of the question will substantially affect the rights of one or more of the parties,
(b) that the question is one which the tribunal was asked to determine,
(c) that, on the basis of the findings of fact in the award -
(i) the decision of the tribunal on the question is obviously wrong, or -
(ii) the question is one of general public importance and the decision of the tribunal is at least open to serious doubt, and
(d) that, despite the agreement of the parties to resolve the matter by arbitration, it is just and proper in all the circumstances for the court to determine the question."
According to subsection (4):
"An application for leave to appeal under this section shall identify the question of law to be determined and state the grounds on which it is alleged that leave to appeal should be granted."
And according to subsection (5):
"The court shall determine an application for leave to appeal under this section without a hearing unless it appears to the court that a hearing is required."
I am satisfied that the application for leave to appeal identifies the questions of law to be determined and states the grounds on which it is alleged that leave to appeal should be granted. There has, of course, been a hearing which has been helpful, although perhaps it has lasted longer than had originally been intended.
Coming to the conditions set out in (3): in approaching the various tests I have very much in mind that the court is not required to give lengthy reasons for its decision, and that it is ordinarily sufficient for the court to indicate whether the condition has or has not been fulfilled. In this respect I have had my attention drawn to the decision in CMACGM v Beteiligungs-Kommanditgesellschaft MS 'Northern Pioneer' Schiffahrtgesellschaft mbH & Co & Others [2002] EWCA Civ 1878. In particular I notice paragraph 20, which refers to the decision of the Court of Appeal in North RangeShipping Ltd v Seatrans Shipping Corporation [2002] EWCA Civ 405.
I also have in mind what Lord Phillips said in paragraph 60, after having quoted from Lord Diplock on the Nema guidelines, contrasting them with the wording of what became section 69(3), and in particular sub-paragraph 2, in relation to general public importance:
"… the decision of the arbitrators should be at least open to serious doubt."
Lord Phillips says:
"These words impose a test which is broader than Lord Diplock's requirement that permission to appeal should not be given 'unless the judge considered that a strong prima facie case had been made out that the arbitrator had been wrong in his construction.'"
So I bear that in mind.
Coming then to the tests. First:
"(3)(a) that the determination of the question will substantially affect the rights of one or more of the parties."
I am satisfied that that condition applies, and indeed it was not, as I understood it, disputed. Second:
"(b) that the question is one which the tribunal was asked to determine"
That is also so in the case of each of these questions. Third, either:
"(c) that, on the basis of the findings of fact in the award -
(i) the decision of the tribunal on the question is obviously wrong…"
I do not consider that that is true of any of the questions which the tribunals were asked to determine. Or:
"(ii) the question is one of general public importance and the decision of the tribunal is at least open to serious doubt…"
Are the questions of general public importance? I am satisfied that they are. The broad reason for that is that these questions arise out of the construction of statutory provisions —regulations —made under powers contained in the Local Government Act 1992. They remain in force and they can be applied to future structural changes under the Act.
I bear in mind that the round of local government structural changes which followed the passing of the Local Government Act 1992 have been, as it is said, completed, although there was some doubt as to exactly how many there were and when they were completed.
I bear in mind that, so far as counsel are aware, there has only been one arbitration and that, in a sense, there is, as it was put, no track record. But I also bear in mind that, as I have mentioned, the regulations remain in force, as of course does the statute. I also bear in mind the passing recently of the Regional Assemblies (Preparations) Act 2003, which applies provision of the 1992 Act including, in particular, section 19 and, on the face of it, therefore, the 1995 Regulations.
Coming to the individual questions, and dealing initially with Mr Spence's award, the first question is:
"Whether, on a proper interpretation of those [1995] regulations, the minority shareholdings of Durham [that is Durham County Council] in Newcastle International Airport Ltd (NIAL) and Teeside International Airport Ltd (TIAL) were 'investments' which were not 'relevant shares' (within the meaning of regulation 3(2)) so as to be excluded from regulation 5 by virtue of regulation 5(1)(a)."
This is a matter dealt with by Mr Spence in paragraphs 37 to 40 of his award. I am not persuaded that Mr Spence's conclusion in those paragraphs is open to serious doubt. That is not to say that I fully endorse his reasoning in paragraph 40. It seems to me, and this, I think, flows from his reasoning, that on a proper construction of the definition of 'relevant shares' in regulation 3, with its reference to section 68 of the Local Government and Housing Act, and the references in that definition, not least to the Companies Act, that his conclusion on that issue is not open to serious doubt.
The next issue is:
"Whether, on a proper interpretation of those regulations the shares held by Durham in NIAL, TIAL and Durham County Waste Management Company Ltd… were:
(a) held by Durham for the purposes of, or in connection with the exercise of functions in or in relation to Darlington's area and
(b) required by Darlington for the purposes of, or in connection with the exercise of functions in or in relation to that area on and after the re-organisation date…
So as to be within regulation 5(6)."
This is a matter dealt with in the award between paragraphs 41 and 46 in relation to the shares held in NIAL and TIAL and between paragraphs 51 to 54 in relation to the shares held in the Waste Management Company.
I take the view, having carefully considered the matter and listened to arguments on both sides, that, for the reasons essentially set out in paragraphs 23 to 25, 26 to 31 and 35 to 43 of Mr Drabble's written submissions, the conclusions of Mr Spence are not open to serious doubt.
I come next to the third of the issues, which is:
"Whether, on a proper interpretation of those regulations, the waste disposal site at Creebeck was held by Durham and required by Darlington as set out… above or whether it was 'surplus land' as defined by regulation 10(7) [which in turns refers back, I believe, to regulation 5(6)]."
So far as this issue is concerned I am persuaded that Mr Spence's award, his decision on this, is open to serious doubt.
The question turns on the definition of surplus land and whether at the time that it was acquired, and subsequently, it was acquired in connection with the exercise of a function. I am, as I say, persuaded that the award in that regard is open to serious doubt in his holding that the land was surplus land and, in the circumstances, must always have been surplus land.
That brings me to the award of Mr Cochrane in respect of which there are two questions concerning the payment of interest. The first question is:
"(1) whether, on a proper construction of Part III of the Regulations, the 'paying authority' is liable pursuant to Regulation 18(1) to pay interest in respect of any additional sum which...
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