R v Secretary of State for the Environment, ex parte Hackney London Borough Council

JurisdictionEngland & Wales
Judgment Date31 January 1984
Judgment citation (vLex)[1984] EWCA Civ J0131-2
CourtCourt of Appeal (Civil Division)
Docket Number84/0030
Date31 January 1984

[1984] EWCA Civ J0131-2






(MAY, L.R. and McNEILL, J.)

Royal Courts of Justice.


The Master of the Rolls

(Sir John Donaldson)

Lord Justice Dunn


Lord Justice Browne-Wilkinson


No. CO/118/82

Secretary of State for the Environment,
Ex Parte London Boroughs of Hackney and

MR. ROGER HENDERSON, Q.C. and MR. CHARLES GEORGE (instructed by F. Nickson, Esq., Chief Executive and Town Clerk) appeared on behalf of the Appellant London Borough of Camden.

MR. ROBERT ALEXANDER, Q.C., MR. SIMON BROWN and MR. PAUL WALKER (instructed by the Treasury Solicitor) appeared on behalf of the Respondent Secretary of State.


This is an appeal by the London Borough of Camden (Camden) from the judgment of the Divisional Court whereby on the 28th January, 1983 the court dismissed Camden's application for judicial review of decisions of the Secretary of State for the Environment (the Secretary of State) purportedly made in accordance with the provisions of the Local Government Act 1974 (the 1974 Act) and the Local Government Planning and Land Act 1980 (the 1980 Act), and in particular of a decision notified to Camden by letter dated the 19th February, 1982, whereby the Secretary of State withheld and/or reduced the amount of rate support grant (R.S.G.) payable to Camden in respect of the year 1980/81.


The application has a long history and complicated background, and I gratefully adopt the account of the R.S.G. system and of the background of events set out in the judgment of the Divisional Court in R. v. The Secretary of State, ex parte Brent L.B.C. (1982) 1 Queen's Bench 593 at pages 609 to 633 (the Brent case), and the findings of the Divisional Court on that application, the provisions of sections 1(1), 2(2) and 3 of the 1974 Act and Regulation 5 of the R.S.G. Regulations 1979( S.I. 1979 No. 1514) (the 1979 Regulations), and the subsequent events set out in the judgment of the Divisional Court in the present application in (1983) 1 Weekly Law Reports at pages 529 to 533.


In order that this judgment should be comprehensible, it is however convenient to set out certain dates which are relevant to the decisions of the Secretary of State in respect of the year 1980/81. This was the year to which the transitional provisions contained in sections 48 to 50 of the 1980 Act applied. The year ran from the 1st April to the 31st March, and the year beginning the 1st April, 1981 was appointed as "the commencing year" for the new system of block grants introduced by the 1980 Act.


In November 1979 the government published a White Paper setting out its proposals for legislation for the introduction of the new block grant system, and for transitional arrangements for the year 1980/81.


16th November: White Paper proposals discussed at a meeting of the Consultative Council on Local Government Finance.


28th November: R.S.G. Order together with the 1979 Regulations and report for the year 1980/81 were laid before Parliament pursuant to the provisions of the 1974 Act.


9th January, 1980: D.O.E. wrote inter alios to Camden notifying it of the estimates of individual payments and the dates of such payments of R.S.G. for the year 1980/81.


6th January: Debate in the House of Commons on R.S.G. Report and Order for 1980/81.


17th January: R.S.G. Order 1979 took effect.


1st April: 1979 Regulations came into force.


18th November: Royal Assent to 1980 Act introducing the new system of the block grants and transitional provisions.


16th December: R.S.G. (Increase) (No. 2) Order 1980 made pursuant to the 1974 Act. Report on that Order and R.S.G. (Principles of Multipliers Order) (the Multipliers Order) made pursuant to the 1980 Act all laid before Parliament. 6th January, 1981: D.O.E. wrote inter alios to Camden notifying it of revised calculations of estimated payments of R.S.G. for 1980/81. Paragraph 4 of the letter stated "The adjustments referred to in this letter take no account of" the Multipliers Order.


14th January: R.S.G. (Increase) (No. 2) Order 1980 and Multipliers Order both approved by Parliament.


15th January: Above Orders took effect.


26th January: Secretary of State's decision to implement the transitional arrangements under the 1980 Act.


6th February: D.O.E. wrote to Camden notifying it of reductions in the needs element of R.S.G. for 1980/81 in the approximate sum of £5,000,000 pursuant to the transitional arrangements (the first decision).


March: The amounts withheld under the transitional arrangements were distributed to other authorities.


1st April: Block grant system came into effect.


21st October: Divisional Court quashed the first decision on the ground that the Secretary of State had refused after obtaining his power under the 1980 Act and before making his decision to listen to any new representations which the applicants desired to make. The court added: "It will of course be open to the Secretary of State after considering the applicant's representation, now fully documented, to reach any decision he considers right and which is within the terms of the 1980 Act and the Multipliers Order." It was accepted in the Divisional Court and in this court that that observation was obiter, and not binding on any subsequent court.


9th November: D.O.E. wrote to Camden inviting further representations which were duly made in subsequent correspondence.


26th November: D.O.E. wrote to Camden refusing to pay the moneys withheld pursuant to the first decision.


2nd December: The time limited for appeal from the order of the Divisional Court expired.


4th February, 1982: Application by Camden for judicial review of the Secretary of State's decision to withhold payments as communicated by his letter of the 26th November, 1981.


19th February: D.O.E. wrote to Camden notifying it that R.S.G. for 1980/81 would be abated in accordance with the Multiplier Order unless Camden was able to show that its expenditure fell within the terms of certain waivers, which Camden was unable to do. (The second decision).


23rd January, 1983: The Divisional Court dismissed Camden's application for judicial review on the grounds that under the terms of the 1974 Act the Secretary of State was empowered to decide when and in what amounts instalments of R.S.G. were to be paid, and that in the absence of lack of bona fides (which was not alleged) the Secretary of State had power to defer payments of amounts to which the applicants would otherwise have been entitled until he decided, after hearing any further representations, whether to exercise his transitional powers to reduce the amounts of R.S.G. for the year 1980/81. The court also decided that the judgment in the previous proceedings in the Divisional Court did not raise an issue estoppel against the Secretary of State, and that in any event issue estoppel could not be raised in application for judicial review under R.S.C. Order 53.


In this court Mr. Henderson's argument depended essentially on the following submissions. The letters of the 9th January, 1980 and the 6th January, 1981 evidenced determinations by the Secretary of State pursuant to section 2(2) of the 1974 Act of the amounts of the payments to be made to Camden in respect of R.S.G. for the year 1980/81, and of the dates on which both amounts were to be paid. Subject to the provisions of the 1980 Act and of the Multipliers Order those amounts and dates could not be varied save by regulations made pursuant to section 10 of the 1974 Act, and the regulations in fact made were inappropriate to cover the reductions in R.S.G. made under the 1980 Act. Accordingly the Secretary of State was under a duty to make payments of the amounts and on the dates set out in the two letters, and Camden had a corresponding right to receive those amounts on those dates. Mr. Henderson accepted that the Secretary of State could, by a valid exercise of his powers under the 1980 Act, have reduced those amounts but not retrospectively. In other words, he could withhold any amount unpaid at the date he made his decision, but could not recoup any sums already paid. In particular any decision under the 1980 Act must, on a purposive construction of the Act and the Multipliers Order, be validly made before the end of the transitional year, i.e. the 31st March, 1981. Mr. Henderson submitted accordingly that if the first decision had been valid the Secretary of State could have reduced the amounts of the payments falling due between the date of the decision and the 31st March, but was bound to pay all amounts due down to that date in full. But since the first decision had been held to be invalid, and the Secretary of State relied only on the second decision made after the end of the transitional year, and at a time when the block grants scheme had come into effect, the second decision was not effective to reduce the amounts set out in the two letters.


The first part of the submissions depended on the construction of the 1974 Act, in particular section 2(2), and the second part of the submission depended upon the meaning of the phrase "payable to a local authority for the year 1980/81" in section 48 of the 1980 Act. Mr. Henderson submitted that the word "payable" in its ordinary and natural meaning meant "to be paid" and was looking to the future. The meaning of the word "payable" accepted by the Divisional Court, that in its context it was descriptive and not strictly temporal, and that the phrase in question meant "in respect of" the year 1980/81 was an unnatural use...

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