West Wiltshire District Council v Garland and Others; Cond and Others (Third Parties)
| Jurisdiction | England & Wales |
| Judgment Date | 01 December 1994 |
| Date | 01 December 1994 |
| Court | Court of Appeal (Civil Division) |
Court of Appeal
Before Lord Justice Balcombe, Lord Justice Butler-Sloss and Lord Justice Leggatt
Duty of care - common law - statutory - owed by auditors to local authorities
District auditors employed by the Audit Commission to audit the accounts of local authorities under the provisions of Part III of the Local Government Finance Act 1982 owed a statutory duty to a local authority whose accounts were being audited and a breach of that duty gave to the local authority a right of action against the auditors. Further, those auditors owed a common law duty of care to local authorities, breach of which gave rise to a right to bring an action in negligence.
The Court of Appeal so held, dismissing an appeal by Mr Y L Cond, Mr P W Heppleston and Mr P R Day, district auditors, from the decision of Mr Justice Morritt in the Chancery Division (The Times March 4, 1993; (1993) Ch 409) allowing to stand in part third party notices issued against them by Mr D C R Pugh and Mr J R White, officers of West Wiltshire District Council and defendants in proceedings brought against them by the council for breaches of contract and fiduciary duty.
The court, allowing a cross-appeal by the officers, further held that the district auditors, in addition to their statutory duty, owed a common law duty of care to the council.
Mr Charles George, QC, for the district auditors; Mr Alan Pardoe, QC and Mrs Elizabeth Andrew for the officers; Mr John Howell, QC and Mr Charles Gibson for the council.
LORD JUSTICE BALCOMBE in a reserved judgment said that in 1990 the council had started proceedings against certain officers, inter alia, Mr Pugh and Mr White, who had been employed by the council in senior posts. The claim was that each of them had acted in breach of contract and of fiduciary duties and had procured payments to be made by the council without proper authority.
Each of the district auditors was, during the period to which the action related, successively the district auditor to the council. By the third party notices the officers claimed against the auditors for contribution to, or indemnity against, any amount for which the officers might be found liable.
Three issues had been before Mr Justice Morritt:
1 Did the auditors owe any duty, whether by statute or at common law, to the officers?
The judge answered that question in the negative and there was no...
To continue reading
Request your trial