R v Secretary of State for the Environment, ex parte Norwich City Council
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE KERR,LORD JUSTICE MAY |
| Judgment Date | 09 February 1982 |
| Judgment citation (vLex) | [1982] EWCA Civ J0209-1 |
| Docket Number | 82/0023 |
| Court | Court of Appeal (Civil Division) |
| Date | 09 February 1982 |
[1982] EWCA Civ J0209-1
The Master of the Rolls
(Lord Denning)
Lord Justice Kerr and
Lord Justice May
82/0023
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION (DIVISIONAL COURT)
(DONALDSON, L.J. AND GOFF, J.)
Royal Courts of Justice.
MR. NIGEL MACLEOD, Q.C. and MR. CHARLES CROSS (instructed by Messrs. Sharpe Pritchard & Co., London agents for R. Bramford, Esq. of Norwich) appeared on behalf of the Appellant.
MR. SIMON BROWN and MR. JOHN LAWS (instructed by the Treasury Solicitor) appeared on behalf of the Respondent.
This case raises party politics. There is no hiding it: each side in the case has been influenced by its political views. But all these are put aside in this court. The issues are to be decided according to law and none else. It is about the sale of council houses. The local authorities own a great number of council houses. They have built them for the purpose of housing those in need. They have received housing subsidies from the government for the purpose. But they have become the subject of much controversy. We had a good deal of trouble about it a few years ago. In Clay Cross in Derbyshire the local council used to let their council houses at very low rents. Parliament passed the Housing Finance Act 1972 requiring them to increase the rents up to sums which were fair. Eleven councillors refused to carry out their statutory duty. They deliberately flouted the law. They were surcharged by the District Auditor. They were held liable to pay for the loss or deficiency, see Asher v. Lacey (1973) 1 Weekly Law Reports 1412, and disqualified from acting as councillors, see Asher v. Environment Secretary (1974) Chancery 208: but they were afterwards relieved of all liability by the Housing Finance (Special Provisions) Act 1975.
Now we have another trouble. Parliament has passed the Housing Act 1980. It gives council tenants the right to buy their houses at a big discount. Sometimes at half price. Some local councils think this is undesirable. It means that the houses are taken out of their housing stock. They are no longer available for the young marrieds and others who are desperately in need of accommodation.
The city of Norwich has been caught up in this conflict. It is a fine cathedral city with a population of 120,000. The city council owns about 25,000 dwellings—about half of all those in the city. When the 1980 Act came into force many tenants claimed the right to buy their council houses. But there seemed to be endless delays. The tenants became very upset. They complained to the Secretary of State about the slowness. The Secretary of State tried to get the city council to hurry things up, but not with any great success. At length he took very drastic action. He took all the sales out of the hands of the council and into his own hands. The council dispute his right to do this. They have come to the court asking that the order of the Secretary of State be quashed.
The statutory provisions
In their election manifesto in 1979 the Conservative Party stated that they would introduce legislation to give tenants the right to buy their council houses. On getting into power they introduced a Housing Bill. It contained provisions giving the right to buy. It came into force on the 3rd October, 1980. It gives tenants of three years' standing the right to buy their council house: and, what is more, to leave the whole or part of the price on mortgage with the council. A tenant is entitled to serve on the council a notice claiming to exercise his right to buy his house. The council has to reply within four weeks saying whether or not they admit his right to buy. If they admit it, the price has to be ascertained. It is to be its present value in the open market less a discount. If the tenant has been there for less than four years, the discount is 33 per cent, that is, one-third off. If he has been there for more than four years, it is one per cent more discount for each year, up to a maximum of 50 per cent. That is, half- price for tenants of 20 years' standing.
In Norwich many tenants exercised their right to buy by giving notice to the council. Then the statute prescribes this timetable:
1. Within four weeks the council has to serve written notice either admitting or denying the right to buy, see section 5(1).
2. If it is admitted, the council is bound "as soon as practicable" to serve on the tenant a notice stating "the price at which in the opinion of the council" the tenant is entitled to buy the house, see section 10(1). If there is any question about the value of the house, it has to be determined by the district valuer, see section 11.
3. The council are bound to convey the house to the tenant "as soon as all matters relating" to the grant and mortgage have been determined, see section 16(1).
It was foreseen by Parliament that some councils might "drag their feet". I expect the Conservative majority thought that the councils under Labour control would delay sales as much as they could. So there is a most unusual power given to the Secretary of State. It is by section 23. If the tenants are having difficulty in buying their house, the Secretary of State can take the whole process out of the hands of the council. He can step in and conduct all the sales himself.
What happened at Norwich
At Norwich in the very first month when the Act was in force—October 1980—452 tenants claimed the right to buy. Others came in rapidly in subsequent months. In the first year it was 900. In most cases the council, within the prescribed four weeks, gave notice admitting the tenant's right. But then there were complaints of delay. It was said that the council did not get the valuations done quickly enough: and that, when the valuations were made, they were too high. Many tenants appealed to the district valuer and got them reduced. Tenants were asked to go to the council staff for "counselling" advice. This all took up time. After 7 1/2 months, by the 20th May, 1981, the council had admitted in 803 cases that the tenants had the right to buy: but the council had only had valuations done and stated a price in 35 cases: and in no case had the sale been completed.
The tenants complain
The tenants were very upset at these delays. From February 1981 onwards many wrote complaining. I will take three instances to show the nature of the complaints.
The first was on the 8th February, 1981 from Mr. G.E. Ward of 80 Watling Road. It complained of the effect of delay:
"No progress has been made since Oct. 1980. I am a man 58 years old and would therefore have liked to have had an early settlement as I am not able to get the long-term mortgage as a younger person".
Another was in April 1981 from Mr. H. Stamp of 127 Tuckswood Lane. It complained of the "counselling" procedure:
"I am Mr. H. Stamp. I live in a council house in Norwich. I applied and filled in my RTB form on Oct. 3rd 1980. On Jan. 9 1981 I was interviewed and given a lecture on the pitfalls of buying my house. I then asked what the price was. I was told I would be told sometime in May. The point I am making, sir, is this. In Norwich we have according to the council 1200 wanting to buy their houses and they have not sold one yet. They are dragging their feet, and have no intention of selling these houses. I've lived in my house for 36 years and would very much like to buy my house.
"Could something be done to get this Labour council moving".
Another was on the 24th September, 1981 from Mr. and Mrs. Thompson of 50 Bowman Road. It complained of over-high valuation:
"On the 13th July 1981 we were served upon with a formal offer notice in respect of 50 Bowman Rd. In fact this was an inflated offer of £23,050 which we had to have altered. We turned down the offer on the same date and had in August 1981 the district valuation officer to value the house. £19,500 was the figure he gave us which we accepted claiming 50% discount".
Many tenants said that they wanted to pay no more rent: but to pay mortgage instalments instead.
The intervention by the Secretary of State
From May 1981 onwards the Department of the Environment took up the matter with the Norwich City Council. Meetings were held between the officers on both sides. Afterwards they were held between the councillors of Norwich and the ministers themselves. The Secretary of State, Mr. Michael Heseltine, and the Minister of State for Housing, Mr. John Stanley, took part personally. Letters were written setting out the point of view on both sides. The Norwich City Council made some improvements and made some progress. But never enough to satisfy the Secretary of State. One stumbling-block was the time taken by the council in making valuations of the houses. The council said that they had not the staff to make more than a few a week: and that they could not divert other staff from other work to make these valuations. The Secretary of State said that they could employ the district valuer to make the valuations—at no expense to themselves. But the council said that it was not legitimate for them to do so. Another difference was about the covenants which the council wanted to put in the conveyances. These were said to be unduly onerous on the tenants: and restricted them too much. Another difference was about the maps to be affixed to the conveyances. The council said that they had to be on the very large scale of 1/500 and had to be specially prepared: whereas...
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