B e f o r e :
MR JUSTICE KERR
||(on the application of)
||KINGSTON UPON HULL CITY COUNCIL
||SECRETARY OF STATE FOR BUSINESS, INNOVATION AND SKILLS
||THE COUNCIL OF THE CITY OF NEWCASTLE UPON TYNE
||(First Interested Party)
||(Second Interested Party)
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Mr Ben Dylan Williams appeared on behalf of the Claimant
Mr Andrew Kinnier appeared on behalf of the Defendant
Ms Anna Medvinskaia appeared on behalf of the First Interested Party
Mr Jonathan Kirk QC appeared on behalf of the Second Interested Party
HTML VERSION OF JUDGMENT
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MR JUSTICE KERR:
- This case arises from a dispute about the lack of toilet and washing facilities at two fast food outlets in Hull. The City Council, the claimant ("Hull"), is not happy about that. It believes the commercial operator of the outlets (the second interested party ("Greggs") should provide those sanitary facilities and that Hull is being wrongly prevented from exercising its power to require Greggs to provide them on pain of criminal proceedings.
- Hull complains that the first interested party, Newcastle City Council ("Newcastle") and the defendant's ("the Secretary of State's") executive agency, the Better Regulation Delivery Office ("BRDO"), have unlawfully made decisions whose effect is that Greggs has become unlawfully freed from its obligation to provide sanitary facilities at those two fast food outlets. Hull says this gives Greggs an unlawful and unfair commercial advantage over other providers of food at cafés in Hull where food is consumed on as well as off the premises.
- The Secretary of State, supported by Greggs, considers that Newcastle has acted properly in issuing guidance and advice to Hull and other authorities, the effect of which is that Greggs need not provide such facilities at the two outlets and others like them. The case raises difficult and important issues arising from a novel statutory method of local authority regulation introduced by the Regulatory Enforcement and Sanctions Act 2008 ("the 2008 Act").
- In slightly more detail, the dispute arises from a decision by the BRDO made on 11 February 2015 to uphold as "correct" certain advice and guidance given by Newcastle in respect of enforcement of the statutory functions of other local authorities including Hull, and the statutory obligations of Greggs concerning the provision of sanitary facilities at outlets such as those in Hull, where simple take away food is sold, but where some seating is provided for customers who prefer to stay, usually for a short time only, sit down at the seating and tables provided and eat the food on Greggs' premises.
- To determine the issues, I have to look at the interaction of two statutory schemes and their application to the facts in this case, in the light of the usual public law principles. The first statutory scheme is the one governing the provision of sanitary facilities at cafés, bars and fast food outlets. I start with section 87(1) of the Public Health Act 1936 ("the 1936 Act"), as substituted by a provision in the Local Government Act 1972, which provides so far as material that a local authority may provide sanitary conveniences in proper and convenient situations.
- Under the original 1936 Act, section 89(1) provided that a local authority:
... may by notice require the owner or occupier of any inn, public-house, beer-house, refreshment-house or place of public entertainment to provide and maintain in a suitable position such number of sanitary conveniences for the use of persons frequenting the premises as may be reasonable.
- And there were enforcement provisions and a right of appeal. That was the forerunner of what became section 20 of the Local Government (Miscellaneous Provisions) Act 1976 ("the 1976 Act"), to which I come next. That provides, as amended but not materially, at section 20(1)(a) and (d) that a local authority may require, by serving a notice on the owner or occupier of a "relevant place", that person to provide "sanitary appliances", i.e. toilets and washbasins, free of charge.
- Failure to comply with a notice is an offence. However, the person served with a notice can appeal against it to the county court (see section 21 of the 1976 Act), on the ground that a requirement of the notice is unreasonable. On such an appeal the county court, so far as material here, can either quash the notice or dismiss the appeal. It cannot modify the notice, e.g. by reducing the number of toilets that must be provided. As long as the notice is served on the right person, the county court judge must either quash it completely or dismiss the appeal.
- The notice can only be served on the owner or occupier of a "relevant place". That is defined in section 20(9) materially as follows:
"relevant place" means any of the following places-
(a) a place which is normally used or is proposed to be normally used for any of the following purposes, namely-
(i) the holding of any entertainment, exhibition or sporting event to which members of the public are admitted either as spectators or otherwise,
(ii) the sale of food or drink to members of the public for consumption at the place;
(b) a place which is used on some occasion or occasions or is proposed to be used on some occasion or occasions for any of the purposes aforesaid; ... .
- There is also power to serve an "occasional notice", but I do not think it is necessary to go into that. This case is concerned with regular trade of the type carried out by Greggs and its many competitors in the instant food and drink trade.
- Only one county court decision is known to have been made on an appeal against a notice. The appeal was brought by a Mr Millar, the owner of Millar's Sandwich Bar in Grainger Street, Newcastle. No transcript of the decision is available. There is an unapproved note of what the judge, HHJ Crawford, said when giving judgment on 21 March 1997.
- It appears, if the note is accurate, that Millar's had seven stools for sitting and eating and drinking, beneath benches in the front window. It appears that what happened was as follows. There was an inspection of the premises at lunch time when they were busy. Only two people were sitting down. The judge said that section 20 would not apply were the proprietor to remove the seats because a "relevant place" is one where the sale of food or drink is for consumption in the place.
- The judge, having seen the sandwich bar, said that it could be seen that it provided facilities to office workers nearby. He declared himself unsatisfied that it was normally used for the sale of food or drink for consumption on the premises as the great majority of the customers do not eat there. He said that the Council had not satisfied him on the point, and that the premises were normally used for the purchase of food to be eaten elsewhere. The person who eats at the premises was, he thought, the exception rather than the rule.
- He appears to have decided that the premises thus did not fall within section 20. He went on to refer to the reasonableness of the notice and stated, again assuming the note is accurate, that it seemed to him that Millar's was an establishment at which it would be unreasonable to require the proprietor to provide any toilets, for to provide even one would destroy the business given the small size of the premises.
- The judge therefore allowed Mr Millar's appeal. Newcastle did not appeal against the ruling, perhaps not surprisingly in view of the finding that a requirement to install even one toilet would destroy the business. There was therefore no means of questioning the judge's view of what constituted a "relevant place". Perhaps chastened by its defeat in court, Newcastle changed its attitude radically and thereafter based its policy on the judge's decision.
- I come next to look at the second relevant statutory scheme. In the mid 2000s, central government was considering ways of lifting the burdens on business arising from local authority regulation. Government came up with the idea of a novel form of regulation which, it reasoned, would help businesses know what they had to do to achieve compliance with their regulatory obligations and avoid enforcement action, including prosecution.
- The core of the idea was that commercial concerns could enter into statutory "arrangements" with a "primary authority" nominated as such by, and with the approval of, the Secretary of State; and that the statutory arrangements would be treated as compliance with the relevant regulatory obligations of the commercial party which was to be the "regulated person".
- The procedural machinery to give effect to the regime was to be something of a merry-go-round. The "primary authority" would also give "advice and guidance" to other authorities; and those other authorities, if they chose to take enforcement action against the regulated person, could be stopped from doing so by the primary authority issuing a direction to that effect; but the Secretary of State could then decide, on a reference, whether such a direction was properly given and should stand, or whether it should be revoked leaving the other authority free to take the contemplated enforcement action.
- All that machinery was to operate alongside the continuing appellate jurisdiction of the county court, and the criminal jurisdiction of the magistrates' court, both of which I have already mentioned. One might have thought all those various remedies and procedures would obviate the need for judicial review, as was no doubt intended; but the grant of permission by His Honour Judge Behrens in this case demonstrates otherwise.
- The statutory scheme I have just outlined emerged from two reviews: the Hampton Review, Reducing Administrative Burdens: Effective Inspection and Enforcement, March 2005; and the Macrory Review, Regulatory Justice: Making Sanctions Effective, November 2006. As a result of that process a consultation exercise took place in 2007, leading to what became the 2008 Act.
- The relevant provisions are as follows. By section 25(1):
..[T]he Secretary of State may nominate a local authority to be the "primary authority" for the exercise of the relevant function in relation to the regulated person.
That could only be done if there was agreement that it should be done as between the local authority to be nominated and the regulated person: see section 26(1).
- Under section 24(1) and section 4, a "relevant function" is one which is the subject of local authority regulation under a host of statutes listed alphabetically in Schedule 3 to the 2008 Act. They include the 1976 Act.
- As Ms Medvinskaia, for Newcastle, has pointed out, they include regulatory functions such as under section 20 of the 1976 Act, which are discretionary in character. There is no exception made for discretionary functions, except where they are recognised as par excellence suitable only for the exercise of discretion at a local level, as in the case of, for example, functions relating to licensing, gambling and fire safety.
- It is necessary to quote section 27 in full:
(1) The primary authority has the function of-
(a) giving advice and guidance to the regulated person in relation to the relevant function;
(b) giving advice and guidance to other local authorities with the relevant function as to how they should exercise it in relation to the regulated person.
(2) The primary authority may make arrangements with the regulated person as to how it will discharge its function under subsection (1).
- Section 28 provides that before taking any enforcement action the "enforcing authority" (here, Hull) must notify the primary authority (here, Newcastle). If the latter determines that the proposed enforcement action is inconsistent with its advice or guidance previously given, it may direct the enforcing authority not to take enforcement action. Absent such a direction, the regulated person (here, Greggs) must be informed of the position.
- Enforcement action is widely in subsection (5), and clearly includes the service of enforcement notices or the bringing of criminal proceedings, in the absence of compliance with such a notice. By subsection (6) the Secretary of State is empowered by order to specify action which is or is not to be regarded as enforcement action. By subsection (7) Schedule 4, dealing with references to the Secretary of State, has effect.
- In Schedule 4, it is necessary only to refer to paragraph 1: an enforcing authority subject to a direction against enforcement given by a primary authority may "with the consent of the Secretary of State" refer the matter to the Secretary of State. On such a reference the Secretary of State must confirm the direction if satisfied as to the matters set out in subparagraph (3) and must revoke the direction if not so satisfied.
- Those matters are as follows:
(a) the proposed enforcement action is inconsistent with advice or guidance previously given by the primary authority (generally or specifically),
(b) the advice or guidance was correct, and
(c) the advice or guidance was properly given by the primary authority.
In the present case only the second of those, set out at (b), is relevant.
- I have been shown several of the travaux préparatoires in which the thinking behind the 2008 Act has been articulated, as well as post-2008 Act statutory and non-statutory guidance. I do not think it is necessary to refer to more than a small fraction of that material. It is sufficient to quote two references from the statutory and non-statutory guidance.
- The statutory guidance was made under section 33 of the 2008 Act and was published in July 2008. Section 33 empowers the Secretary of State to give such guidance, and requires local authorities (subsection (3)) to have regard to any guidance given. The statutory guidance included the following (at p.26):
In reaching a view on whether the advice was correct, LBRO [the predecessor of BRDO] will not be taking the place of the Courts; in particular, it will not be given the opinion that there is only one correct piece of advice or guidance on a particular matter, but will instead take a view as to whether the advice or guidance is not inconsistent with its understanding of the law as it stands at the time of determination.
- The non-statutory guidance was published in October 2014, during the events (to which I am coming in a moment) relevant to this challenge. It stated as follows, at paragraph 5.4, page 88:
To provide value to the business, Primary Authority Advice must be properly given, within the statutory framework, and it must also be a legally correct interpretation of the law. This does not mean that the primary authority is giving a definitive interpretation of the law, or that it is 'usurping the role of the courts'. It is providing the business with an informed and considered professional view of the law, which is supported by a commitment that the regulatory community will stand by this interpretation. It is quite possible that there will be interpretations that differ from those agreed by the primary authority and that are equally valid, but this does not of itself make the Primary Authority Advice incorrect.
- Those references show the government considered, rightly or wrongly, that there can be more than one "correct" version of what the law is. That is, moreover, the case that has been argued for the Secretary of State before me in this application, when Mr Kinnier (for the Secretary of State), was addressing the meaning of the word "correct" in paragraph 1(3)(b) of Schedule 4 to the 2008 Act.
- The Secretary of State has made an order under section 28(6) of the 2008 Act making certain other regulatory functions "relevant functions" within the regime of that Act. These did not include a local authority's functions relating to provision of sanitary facilities, conferred by section 20 of the 1976 Act. The order did not need to do so since those functions were, it is common ground, caught by the Act anyway.
- That, then, is the body of statute law relevant to this case. Moving onto the facts: on 23 May 2011, with the agreement of Greggs which has several outlets in Newcastle and had worked closely with Newcastle over the preceding three years, the Secretary of State (acting through the predecessor of the BRDO) nominated Newcastle as the primary authority for Greggs' business, to exercise relevant functions grouped under the heading of health and safety, including the function conferred by section 20 of the 1976 Act.
- On 1 June 2011, Newcastle issued its first "advice" to other local authorities, in the following terms:
The majority of Greggs shop premises operate within the A1 retail sales definition of the Town and Country Planning (Use Classes) Order 2005. If the main use of the shop is determined to be takeaway sales and if no more than 10 seats are provided for occasional customer use, the requirement to provide customer toilets under the provisions of Section 20 of The Local Government (Miscellaneous Provisions) Act 1976, would not be applicable as the premises should not be classed as a "relevant place".
The definition of a "relevant place" was determined in Newcastle following an appeal against an Improvement Notice under The Local Government (Miscellaneous Provisions) Act 1976 and a ruling by Judge Crawford stating that a premises would not be a "relevant place" if the nature of the business was predominantly take-away.
Greggs operate a number of Cafe style operations with A3 planning permission these premises will be provided with customer toilets.
- After that, a dispute developed between Hull and Greggs in relation to the two Greggs outlets in Hull which, Hull officers considered, ought to have toilets and washbasins for the use of customers who sat at tables and chairs to eat food and drink beverages purchased there. That dispute started in or around August 2012. There were visits and sporadic correspondence, the details of which do not matter.
- The dispute came to a head on 17 January 2014 with the service of two notices under section 20 of the 1976 Act. These required the provision of a toilet and wash basin in each of the two premises by 16 April 2014. The notices included a warning of criminal prosecution in the event of failure to comply.
- Greggs did not comply, no doubt confident that Newcastle would come to its rescue. Indeed, on 3 April 2014 Newcastle wrote to Hull saying that if Hull took any further enforcement action, Newcastle would issue a direction stopping it. There the matter rested until 19 September 2014, when Newcastle issued slightly revised advice placing a little more emphasis than previously on take-away sales.
- That advice was in the following terms:
The main use of Greggs shops is determined to be takeaway sales. If no more than 10 seats are provided for occasional customer use, the requirement to provide customer toilets under the provisions of Section 20 of The Local Government (Miscellaneous Provisions) Act 1976, would not be applicable as the premises should not be classed as a "relevant place".
The definition of a "relevant place" was determined in Newcastle following an appeal against an Improvement Notice under the Local Government (Miscellaneous Provisions) Act 1976 and a ruling by Judge Crawford stating that a premises would not be a "relevant place" if the nature of the business was predominantly take-away. Legal advice on this matter has shown that, although not binding, the judgement should be regarded as a position that a reasonable tribunal would take.
The last sentence was new.
- On 21 October 2014, Newcastle issued a direction to Hull not to proceed further with any enforcement action against Greggs. Hull then applied to the BRDO on 29 October 2014 under Schedule 4 to the 2008 Act, asserting that Newcastle's advice was not correct because it misstated the law on the meaning of a "relevant place"; that Judge Crawford's decision was wrong; and that it was "absurd and inequitable" for Hull to be able to exercise its enforcement powers properly against other businesses but not against Greggs.
- Newcastle made written representations to the BRDO on 26 November 2014 in defence of its advice which, it pointed out, was based on the legislation, various discretionary considerations such as primary use, proportion of take-away customers, length of time staying customers stayed (set out in a list), and the Millar decision, among other things. At paragraphs 9 and 10, it supported Judge's Crawford's reasoning.
- At paragraph 11, Newcastle pointed that the relevant guidance indicated that for advice to be correct, it did not necessarily have to state the law correctly, as long as it represented an "informed and considered professional view of the law". At paragraph 12, Newcastle said it did not claim to state the law definitively, since that would be a matter for the court.
- Greggs also made written representations, on 27 November 2014. Greggs supported Newcastle's position and submitted that Newcastle's advice was correct because it was "within the range of responsible and professional advice that could be given by a Primary Authority" (paragraph 17). In supporting evidence, Greggs suggested that other authorities had not sought to disagree with Newcastle's advice.
- In January 2015, the Secretary of State consented to the reference. The BRDO issued its decision (under challenge in this judicial review) on 11 February 2015. The decision was that Newcastle's advice was "correct" for the purposes of Schedule 4, paragraph 1(3) to the 2008 Act and the direction of Newcastle was therefore confirmed.
- In attached written reasons BRDO stated:
i. There may be more than one interpretation of provisions such as section 20 of the Local Government (Miscellaneous Provisions) Act 1976. However, if the advice given by a Primary Authority is soundly based upon the purpose and content of the disputed provision, and is consistent with the law, then the advice should be considered to be correct for the purpose of Schedule 4 of the [2008 Act];
ii. The Primary Authority rightly recognised that the question of whether a particular place is "relevant" (within the meaning of section 20 of the 1976 Act) is a mixed question of fact and law which will be informed by a number of factors, primarily evidence relating to the use of the premises and the nature of any facilities provided. Having considered the evidence, BRDO believes that the analysis and advice issued by the Primary Authority in this instance represents an informed and professional view of the law;
iii. The Primary Authority's advice is consistent with the only court decision in this area. Millar v Newcastle Upon Tyne City Council 1997 (unreported), albeit a County Court decision and therefore not binding, provides a reasonable guide both to the likely construction by a Court of the term "relevant place" within section 20 and also to the reasonableness of the exercise of the discretionary power to serve a section 20 notice. BRDO believes that the advice issued by the Primary Authority in this case, and its representations, fairly reflect HHJ Crawford's reasoning in the Millar case; and
iv. Evidence has been provided to demonstrate that since June 2011 the Primary Authority Advice issued by Newcastle has been accepted by other local authorities as reflecting a reasonable and proportionate interpretation of section 20 of the 1976 Act.
- Newcastle had indeed indicated in its representations that "all other local authorities" except Hull had accepted the advice and Greggs had also relied on the support of other authorities. However, Hull later sent out a questionnaire to authorities in England and Wales which generated (on a response rate of about 17%) widely differing reactions to Newcastle's advice, from agreement to strong disagreement. A number of authorities appeared not to understand that it was confined to Greggs, although others clearly did.
- I come then to the issues that I have to decide in this case. The first is whether the BRDO was entitled to be satisfied that the advice given by Newcastle was "correct" for the purposes of paragraph 1(3) of Schedule 4 to the 2008 Act.
- Mr Williams, for Hull, submitted that the BRDO could not lawfully profess itself so satisfied, because the advice proceeded from a wrong understanding of the meaning of "relevant place", which imported into the definition a non-existent numerical threshold of 10 seats, and a non-existent test of whether take-away custom or sit-down custom was the predominant part of the business
- Counsel for the Secretary of State and the two interested parties submitted that the construction apparently adopted by Judge Crawford, and adopted by Newcastle, was right and not wrong. They argued that if the take-away trade was predominant, the premises would not be "normally used" for sale of food and drink for consumption on the premises. They argued that the "predominance" test was the key to what was a normal use of the premises.
- Alternatively, they argued that if it was wrong, it was still an informed professional view of the law, and therefore "correct" within the meaning of the statutory provision. Mr Williams, for Hull, submitted by contrast that the advice and guidance given by Newcastle could not be "correct", because it was founded on a misdirection of law.
- In my judgment, the construction adopted by Newcastle is completely unsustainable. It is obvious that if a person sits down in a Greggs outlet at the seats provided and proceeds to eat a pasty and a fizzy drink just purchased at the counter for that purpose, that is a normal use of the premises. The fact that most customers take away their purchases and those who stay do not normally stay long, does not change that.
- The construction which looks to the predominant type of trade (sit-down or take-away) is obviously wrong, as Mr Williams correctly submitted. It would mean that a café with, say, 25 tables, which also does a roaring take-away trade, doing more business for off-site than on-site consumption, could not be required to install toilets for those brave enough to sit down for a drink. That would be a very surprising result and I do not think it is even a tenable interpretation, let alone the right one.
- Sensibly, the Secretary of State and interested parties did not suggest that a numerical threshold of 10 seats can be found as part of the statutory definition. There is no such threshold, as they accepted. They said that did not matter, since it was open to Newcastle to impose the threshold by way of advice and guidance on how the "discretion" to serve a notice under section 20 of the 1976 Act was to be exercised. I shall return to this point when considering whether Newcastle's error was material.
- But before addressing that issue, some further points need to be made. They are important, and they are these. First, the statutory definition cannot have more than one correct construction. Second, the correct construction is a matter for the court. Third, if the construction adopted is materially different from what the court decides is the law, the advice cannot be correct. The guidance documents are wrong to suggest otherwise.
- The notion of more than one correct construction, taken to its logical limit, would be subversive of the rule of law. It would make the executive and not the courts responsible for deciding what the law is. For that reason, at the very least crystal clear words would be needed to confer on an executive body the function of deciding on the meaning of statutory provisions and giving the body a choice about which of more than one possible meaning it prefers. In the absence of such clear words, the term "correct" should be taken to mean what it says, i.e. "right" or, if you prefer, "not wrong".
- Fourth, it is critical that the primary authority gets the law right; otherwise the regulated person is subjected to different law from that which applies to its competitors and colleagues in the market place. That would violate the principle of equality before the law. In this case the consequences would be, as Mr Williams correctly submitted, that Hull would be unable to use its enforcement powers against Greggs in the same manner and to the same extent as against all other business.
- That may in some cases be an inevitable if surprising consequence of the legislation properly operated, because of differences in how "discretionary" elements of a particular statutory regime are applied to different regulated persons by different primary authorities. But such differential treatment as between regulated persons is only justifiable if the law, as applied to all regulated persons, is correctly and not incorrectly stated.
- The guidance is wrong when it speaks of more than one tenable construction. It is no answer to say that the court's function is not being usurped because the choice between two tenable constructions is not an authoritative ruling from a court of law. That reasoning is specious. The court's function is being usurped because the wrong interpretation of the law is applied to the regulated person by means of wrong "advice and guidance" backed up by a statutory veto on enforcement action by an authority which has the temerity to apply the law correctly.
- Ms Medvenskaia, at paragraph 20 of her skeleton argument, even suggested that the court should not in a judicial review "usurp a function bestowed on the Defendant", the Secretary of State, by "second-guessing its decisions on the merits". That submission, with respect, flies in the face of constitutional propriety. I find myself needing to point out, with some surprise, that it is for the court to say what the law is, not the Minister. The court is not second-guessing the merits; it is the executive bodies which are second-guessing the law. Their conception of what is "correct" is an ouster clause in all but name.
- Fifth, the advice here proceeded from a clear misconstruction of section 20(9) of the 1976 Act. As I have said, Newcastle wrongly stated that a Greggs branch is not a "relevant place" if it has fewer than 10 seats. That is not the law. Further, it wrongly stated that a Greggs branch is not a relevant place if most of the customers take their food away. That is not the law either. If it is normal for customers to sit down and eat their food on the premises, the branch is a relevant place. Why else would the tables and chairs be provided? If, as may have happened, Judge Crawford decided otherwise, he was, with respect, wrong.
- Did the Secretary of State err in law in upholding as "correct" the advice of Newcastle? The answer is plainly yes for the reasons already given. The BRDO misdirected itself in law by proceeding on the basis that Newcastle's advice and guidance could be "correct" within the statutory meaning even if that advice and guidance was founded on a misinterpretation, albeit an informed and professional misinterpretation, of the law.
- The next issue is: was the error material? The Secretary of State, supported by the two interested parties, submitted that the error was not material because the two matters wrongly imported into the definition of a "relevant place" could be, and inevitably would be, re-cast as what might be termed "mandatory-discretionary" considerations which Newcastle required other authorities to follow, on pain of any enforcement action being countermanded.
- The Secretary of State and interested parties relied on evidence from Newcastle's officer, Mrs Orde, to the effect that such would be her reaction to any relief from the court if it required Newcastle to reconsider its advice. Mr Williams, for Hull, begged to differ. He said that Newcastle would be bound to consider the effect on other businesses of advice which conferred an unfair commercial advantage on Greggs, and that it could not be said that there was no difference between misstating the law and requiring an exercise of discretion which came to the same thing.
- I am in no doubt that the error was material. I reject the submission that the error was irrelevant and that relief should be refused because the two erroneous features of Newcastle's advice should be treated as discretionary matters which other authorities must necessarily adopt in order to test whether to serve an enforcement notice.
- The starting point when considering this issue is the current advice that, as a matter of law, Greggs need not have toilet facilities in their outlets if there are fewer than 10 seats, or the trade is mainly take-away. That is, as I have said, fundamentally wrong and not the law.
- The flaw in those propositions is so deep that Mrs Orde cannot properly say there would be no difference in practice if she were to reconsider the matter. The glib argument that there is no practical difference between law and discretion must be rejected as a matter of principle as well as practice. Newcastle will need to consider the discretionary features of the 1976 Act regime from the standpoint of a correct understanding of their functions under the 2008 Act. That, they have not yet done.
- I accept that advice and guidance about a "relevant function" can include advice and guidance on "how they [the other authorities] should exercise it in relation to the regulated person" (section 27(1)(b)). I accept also that the statutory purpose of the 2008 Act is that the regulated person should know where it stands and expect consistency of treatment as between one local authority and another.
- But the 2008 Act only enacts that purpose up to a point. It stops short of appointing the primary authority as the statutory regulator of the relevant regulated activity outside its own area. Parliament could have done that, but did not. The 2008 Act only gives the primary authority power to issue "advice and guidance" to authorities outside its own area.
- The discretionary functions under the 1976 Act remain with the authority for the area concerned, in this case Hull. It remains Hull, not Newcastle, which has to consider and exercise the power under section 20 to serve an enforcement notice. It is trite public law that where statute confers a function on authority A, that function can only be exercised by authority A and not by authority B. Hull cannot abdicate its section 20 powers in favour of Newcastle.
- How then should Hull reconcile its retention of section 20 functions in relation to Greggs' branches in Hull, with its obvious, although unstated, obligation to take account of Newcastle's advice about how to exercise those same functions? The interaction of statutory functions leads to the following division. I will use the facts of this case as an example of how the scheme should operate, in this case and in other cases.
- First, it is for Newcastle to give advice and guidance to Hull, as it did. In doing so, it must get the law right; see above. It is crucial that it does so because the law must be the same for everyone in the relevant market, to avoid unlawful distortion of competition. You cannot have one law for Greggs and another for its competitors. That proposition alone is sufficient to defeat the objection founded on immateriality.
- Secondly, in advising and giving guidance on the exercise of discretionary powers, Newcastle may suggest what weight should be given to particular factors. These may include matters such as the number of seats and the proportions of take-away and sit-down customers. Those discretionary matters must be clearly separated from, and seen to be separated from, statements of what the law is. For the reasons I have already given, that is not a matter that is merely cosmetic or immaterial. It is fundamental.
- Third, the advice and guidance must obviously be taken very seriously by Hull. In practice, it is advice that should be followed unless there is a good reason not to do so, because otherwise either the primary authority (here, Newcastle) or the regulated person (here, Greggs) can, albeit ultimately subject to the consent of the BDRO, stop the enforcement action by using the section 28 and Schedule 4 machinery.
- The Secretary of State, if he consents to a reference (which he is not obliged to do), must direct, or uphold a direction, stopping the enforcement action if the advice is "correct" and is not followed. If the enforcing authority (here, Hull) decides to take enforcement action on the basis of a policy which ignores Newcastle's advice and guidance on the discretionary elements of the regime, then it is likely, though not inevitable, that it will be stopped from doing so.
- But it does not follow from the complicated machinery whose operation I have described, that the decision whether to serve an enforcement notice in this case is that of Newcastle and not Hull; that is not what section 20 says. And because the decision maker is Hull and not Newcastle, Hull will need to satisfy itself that the advice and guidance from Newcastle is satisfactory, correct in law and rational in its treatment of discretionary considerations.
- Here, as to the former (correctness in law), Hull rightly perceived that this was not the case, and the Secretary of State failed to correct Newcastle's error of law. It follows that the claim is well founded. As to the latter, advice and guidance on discretionary elements of the regime must be built on the rock of sound law and not on the shifting sands of a tenable but wrong account of the law.
- I turn to other matters. Reliance was placed by the Secretary of State and interested parties on section 31(2A) of the Senior Courts Act 1981. That requires the court to refuse to grant relief if it appears to the court that it is highly likely that the outcome for the applicant, Hull, would not have been substantially different if the conduct complained of had not occurred.
- If I had been of the view that the requirement in that provision had been made out, I would have been prepared to consider whether the further exceptional public interest test in section 31(2B) was met in this case; and I would not have shut Hull out from arguing for that proposition, even though it was not squarely pleaded in Hull's grounds. In the event, it is not necessary engage with that issue because I do not, as will be plain from what I have already said, think that the test in 31(2A) is met.
- It is therefore unnecessary to consider the differing approaches to section 31(2A) of Holman J in R (Hawke) v. Secretary of state for Justice  EWHC at paras 341-6, and of Blake J in R (Logan) v. London Borough of Havering  EWHC 3193 (Admin) at para 55. Whichever approach is to be preferred (which I need not decide), it does not appear to me highly likely that the outcome for Hull here would not have been substantially different if the conduct complained of had not occurred.
- The conduct complained of in this case is the decision of the BRDO to uphold as correct the advice of Newcastle. If that had not occurred, the BRDO would not have upheld Newcastle's advice as correct and would have been obliged by paragraph 1(2)(b) of Schedule 4 to the 2008 Act to revoke Newcastle's direction of 21 October 2014. Hull would then have been free to take enforcement action against Greggs. That can hardly be called an outcome not substantially different from what in fact happened.
- The question of delay was raised by the defendant and interested parties but, it is fair to say, was not pressed hard at the hearing before me; possibly in the light of the decision in R (Criminal Injuries Compensation Board) ex p. A  2 AC 330 (see per Lord Slynn at 340-1), which I drew to the parties' attention.
- The submissions on delay were not formally abandoned at the hearing, but I am satisfied that there is nothing in the delay point. The claim was brought within three months of the decision of which complaint is made. There was no application by any party to expedite the matter, whether before or after the grant of permission. No argument was made that the grant of relief would cause detriment to good administration, the phrase used in section 31(6) of the Senior Courts Act 1991.
- Indeed, the only consequence of the delay is the very consequence which Greggs and Newcastle and Secretary of State wish to continue, namely it has not been during the period of delay required to install sanitary facilities at its food outlets in Hull.
- For the reasons given above, the claim is well-founded and subject to hearing the parties, I propose to quash the BRDO's decision under challenge and declare that Newcastle's advice is flawed by error of law.
[After discussion about costs]:
MR KINNEAR: My Lord there is one final matter. My Lord, it is the usually difficult submission that I have to make. My Lord, in the circumstances I would ask for permission to appeal. Perhaps the most substantive ground would be, and having regard to CPR 52.3, it is page 1671.
MR JUSTICE KERR: Is that the compelling reason ground?
MR KINNEAR: My Lord, yes. My Lord will anticipate that clearly the construction not only of RESA itself but also of section 20 of the 1976 Act and in particular construction of the term "correct" within the 2008 Act is a point of general importance that ought to be determined by the appellate courts. My Lord, the question of what is "correct", for the purposes of the 2008 Act, is clearly a fundamental aspect of the determination procedure. In those circumstances, my Lord, I would ask that permission is granted, that there is a compelling reason for that issue to be determined elsewhere and that compelling reason exists.
MR JUSTICE KERR: Where is the wording?
MR KINNEAR: Apologies, my Lord. If you go to page 1671 of Volume I of the White Book, it is CPR 52.36.
MR JUSTICE KERR: I have it. Because you are going under the second ground, you are not going –
MR KINNEAR: My Lord I was leading with my chin, first in terms of compelling reason taking matters in reverse order. My Lord, in respect of other matters, I would ask for permission to appeal in respect of your determination on the meaning of "correct" and also the extent to which the advice provided by Newcastle was correct. That there is a real prospect of succeeding, for the reasons effectively advanced before you both in writing and orally by not only myself but also the interested parties.
MR JUSTICE KERR: So I was incorrect on "correct".
MR KINNEAR: Ironically or otherwise my Lord.
MR JUSTICE KERR: Though justice may require conveniences rather than convenience. I think you have a point. What about Mr Kirk? Do you wish to say anything?
MR KIRK QC: I wish to say absolutely nothing other than we support the application and we make it ourselves.
MS MEDVINSKAIA: Likewise for us my Lord. We would seek clarification as well as to the scope of advice that the primary authorities can give under the scheme and whether when it comes to discretionary power, they may give advice, on the discretionary matters that ought to be considered or whether they may exercise their discretion for the local authorities.
MR JUSTICE KERR: Mr Williams?
MR WILLIAMS: My Lord I disagree. A very clear judgment. In fact, the judgment certainly, from my listening to it intently, did go on to give some very clear explanation with reference to this case on the scope of the advice.
MR JUSTICE KERR: I was with Ms Medvinskaia on that issue because of the words in section 28, on how to exercise the discretion. So at the moment the judgment is in your favour on that.
MS MEDVINSKAIA: I may have misunderstood but what my note says is that the primary authority may suggest what weight is to be given as opposed to stating that this is the way in which we exercise it and you must take that.
MR JUSTICE KERR: I see, so it is not a discretion at all. Do you have anything more?
MR WILLIAMS: My Lord, not a great deal more. I disagree that there is a compelling reason as put forward by my learned friend.
MR JUSTICE KERR: I am persuaded to grant leave to appeal. I think this is one of those cases where it is a new statutory scheme. As far as I am aware this is the first case. It is a matter of considerable importance that applies not just to these health and safety functions; it can apply to a large number of authorities, a large number of commercial entities across the board and in a wide range of regulated activities. As this is the first case and it is of some importance and as I cannot, I think, say an appeal has no reasonable prospect of success, I will grant leave. I do not think it is realistic to restrict the grounds. So you will have leave to appeal.
MR KINNEAR: I am grateful my Lord.
MR JUSTICE KERR: Are there any other matters? Obviously the order.
MR KINNEAR: Of course my Lord.
MR JUSTICE KERR: Is there anything else anybody else wants to add? Thank you all very much for your assistance.