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House of Lords

Law Report November 15 1991

Council cannot charge for advice


Regina–v-Richmond-upon-Thames London Borough Council. EX parte MaCarthy & Stone (Developments) Ltd Before Lord Mackay of Clashfern, Lord Chancellor, Lord Bridge of Harwich, Lord Brandon of Oakbrook, Lord Ackner and Lord Lowry.

[Speeches November 14th].

A local planning authority had no power to make a charge for pre-application advice concerning speculative Development or redevelopment proposals.

The House of Lords so held allowing an appeal by the applicant developers, MaCarthy & Stone (Developments) Ltd from the Court of Appeal (Lord Justice Slade. Lord Justice Mann and Sir David Croom-Johnson) (The Times March 2. 990: [1990 2 WLR 1294). The Court of Appeal had dismissed the developers' appeal from the Refusal of Mr Justice Popplewell, (The Times. February 7. 1989), to grant judicial review of the decision made by Richmond- Upon-Thames London Borough Council, on October 27 1987, not to revoke their policy of charging £25 for such preliminary consultations.

The Court of Appeal in its judgment had said that it was common practice for persons contemplating proposals for development or redevelopment to seek the informal views of the officers of the planning authority so as to discover whether the proposals were likely to be acceptable.

The desirability of Pre- application consultation was common ground. It had been encouraged by the Secretary of State for the Environment. The process. however. Inevitably absorbed time on the part of the council officers concerned. Section 111 of the Local Government Act 1972) provides: “(1) . . . a local authority shall have power to do anything ... which is calculated to Facilitate or is conducive or incidental to the discharge of any of their functions.”

Mr Anthony. Scrivener QC and Mr Richard Rundell for the developers: Mr David Mole and Mrs Jane Oldham for the council.

Lord Lowry said that it was agreed that to charge for pre-application advice the council needed statutory authority (see Attorney-general v Wilts United Dairies Ltd (1921) 37 TRL 884: (1922) 38 TLR 781) and that such authority could only be found, in express words or by necessary implication, in section 111 (1) of the 1972 Act.

A Local authority could at common law do anything that was reasonably incidental to its functions and the council relied on the proposition that to impose a charge for pre-application advice was reasonably incidental, not merely to the giving of that advice, but also to the council's function of considering and determining applications for planning permission.

It was clear from Hazell -v- Hammersmith and Fulham London Borough Council (The Times November 2 1989 [1990 2 QB 697 [DC]: The Times February 26 1990: 1990 2 QB 697.762 (CA): The Times January 25. 1991: [1991] 2 WLR 372 (HL) that the consideration and determination of planning applications was a function of the council but that the giving of pre-application advice, although it facilitated, and was conducive and incidental to the function of determining planning applications, was not itself a function of the council.

Thus, it was one thing to say that the giving of pre-application advice facilitated or was conducive or incidental to the council's planning functions but it was quite another thing to say that for the council to charge for that advice also facilitated or was conducive or incidental to those functions.

The council had presented its case on the basis that charging for the service facilitated, or was conducive or incidental to, the giving of the pre-application advice, but, even assuming that to be a fact, that way of presenting the case would simply amount to saying that imposing a charge facilitated, or was conducive or incidental to, a service which in its turn facilitated, or was conducive or incidental to, the council's planning functions.

The developers, on the other hand submitted that, to qualify as something that was authorised by section 111 (1), the imposition of a charge or pre-application advice had to facilitate, or be conducive or incidental to, the planning functions themselves.

The argument that something that was incidental to the incidental, but not incidental to the function, did not pass the test was not a novelty: see Attorney-general v Manchester Corporation [19061 1 Ch 643. 656. per Mr Justice Farwell. cited in Hazell ([1990] 2 QB 697. 724).

The Court of' Appeal had contrasted functions, such as planning, that the council had a duty to provide with those, such as providing a museum, a library or a public park, that it had power to provide, on the basis that without statutory authority it could not charge for the provision of a function that it had a duly to provide, whereas it could charge for a function that it had merely power to provide, or not to provide, at its discretion.

Thus, it was said, the council could charge for a service which at its discretion it provided by virtue Of section 111(1), as facilitating or being conducive or incidental to the relevant function, in this case that of considering and determining planning applications.

It did not by any means follow that all of the discretionary functions of the council or all of the facilitating or incidental activities contemplated or possibly contemplated by section 111 were services for which it was permissible to charge in the absence of express authority.

The rule was that a charge could not be made unless the power to charge was given by express words or necessary implication. Those last words imposed a rigorous test going far beyond the proposition that it would be reasonable or even conducive or incidental to charge for the provision of a service.

Furthermore, the relevance of the contrast attempted to be drawn between duty functions and discretionary functions was vitiated when one had regard to the large number of discretionary functions for the provision of which express statutory authority to charge had been enacted.

The council had instanced situations in which, without any express authority, it seemed obvious that a charge would properly be made, but to say that the council could receive payment for, for example, the sale of redundant and worn-out equipment did not advance the argument that a council could without statutory authority charge for a service.

The power to sell, for example, old motorcars for which the council no longer had a use necessarily implied that, in the interests of the ratepayers, the council would receive from a commercial transaction the return that any seller would expect to receive, as a normal incident of local government administration.

The provision for a financial consideration of conference facilities, assuming that that was a legitimate activity, had the character of conducting a business, and it would be strange and unjust if those who enjoyed the facilities were to do so at the expense of the ratepayers or their modern equivalent

His Lordship Would not be prepared to say that, in the absence of express statutory power, there could never be a case in which the power to charge arose by necessary implication but he had heard no) convincing argument to show how the present facts could support such an implication.

His Lordship agreed with the Court of Appeal (at p1304) that section 150 et seq of the Local Government and Housing Act 1989, containing a number of new provisions relating go the imposition of charges by certain authorities, did not affect the present question.

To charge for performing a function, subject always to considerations of reasonableness, was necessarily always incidental to the provision of the service provided.

Therefore, the council's interpretation of section 111(1) would allow it to charge for the performance of every function, both obligatory and discretionary that provided a service. Such a construction could not possibly be justified.

The argument had commended itself to the Court of Appeal that, since the council was not obliged to provide the service in question, it could state on a "take it or leave it" basis that it was willing to provide it for a reasonable fee, as if entering into a contract.

That was an untenable proposition which, if correct, would justify a local authority in charging for any discretionary service but which in reality was in conflict with Lord Justice Atkin's second principle in Attorney-general v Wilts United Dairies Ltd (at p887)

The Lord Chancellor. Lord Bridge. Lord Brandon and Lord Ackner agreed.

Solicitors: Metson Cross & Co. Mr George R. Chesman. Twickenham.

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