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You are here: BAILII >> Databases >> England and Wales High Court (Administrative Court) Decisions >> Veolia Es Nottinghamshire Ltd v Nottinghamshire County Council & Ors [2009] EWHC 2382 (Admin) (01 October 2009) URL: https://www.bailii.org/ew/cases/EWHC/Admin/2009/2382.html Cite as: [2010] Env LR 12, [2010] PTSR 797, [2009] EWHC 2382 (Admin) |
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QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Strand, London, WC2A 2LL |
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B e f o r e :
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VEOLIA ES NOTTINGHAMSHIRE LTD |
Claimant |
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- and - |
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NOTTINGHAMSHIRE COUNTY COUNCIL |
Defendant |
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-and- |
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(1) SHLOMO DOWEN |
First Interested Party |
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(2) AUDIT COMMISSION FOR LOCAL AUTHORITIES AND THE NATIONAL HEALTH SERVICE IN ENGLAND |
Second Interested Party |
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WordWave International Limited
A Merrill Communications Company
165 Fleet Street, London EC4A 2DY
Tel No: 020 7404 1400, Fax No: 020 7404 1424
Official Shorthand Writers to the Court)
Michael Supperstone QC and Ian Rogers (instructed by Nottinghamshire County Council) for the Defendant
Timothy Pitt-Payne (instructed by Friends of the Earth Rights and Justice Centre) for the First Interested Party
Peter Oldham (instructed by Audit Commission In-house solicitors) for the Second Interested Party
Hearing date: 25 August 2009
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Crown Copyright ©
Mr Justice Cranston:
INTRODUCTION
BACKGROUND
The parties
Mr Dowen's application and Veolia's challenge
The Contract
The Council's statement of accounts
"Waste Recycling
The Authority has received Government support for a Nottinghamshire Waste PFI scheme which involves the commissioning of Materials Recycling Facilities and an Energy Recovery Facility. A PFI credit of £38.3 million has been allocated. The contract was signed on 26 June 2006 and the main facilities are expected to become operational over the next five years. The charge to the County Council in 2008/09 was £21.2 million (£19.5 million in 2007/08). The first main new facility became operational in January 2009, the Materials Recycling Facility (MRF). The MRF site is subject to a rental agreement with NCC, 50 years, which is then recharged to Veolia at the same rates. The residual value of the facility as at 31/03/2033 is assessed at £6.87m."
The note to the statement of accounts on Revenue Reserves, note 36, has entries for contracting services, landfill reserve, and waste PFI reserve. Note 36 continues:
"Contracting Services and Other Trading Services reserves comprise accumulated revenue surpluses plus or minus any transfer between those reserves and the General Fund.
…
Landfill Allowance Trading Scheme (LATS) Reserve is the value of allowances which have not been utilised or sold by the Authority. Each year the Government sets the number of tonnes of landfill which the Authority should not exceed. This target reduces each year. From 2010 any landfill in excess of the cumulative targets will require the Authority to pay a penalty to the Government of £150 per tonne. Where the Authority uses less landfill than the target, the excess allowances are held in a reserve. The market value for these allowances has been set at nil as at 31st March 2009.
…
Bassetlaw, East Leake, Tram and Waste PFI reserves are surplus funding amounts set aside during the early years of the PFI contracts. These contributions from central Government and the County Council will be required in later years to finance the unitary charge."
LEGAL FRAMEWORK
"15(1) At each audit under this Act, other than an audit of accounts of a health service body, any persons interested may –
(a) inspect the accounts to be audited and all books, deeds, contracts, bills, vouchers and receipts relating to them, and
(b) make copies of all or any part of the accounts and those other documents."
The issue to be addressed is whether what I have called the disputed documents – Schedules 6A, 6B, 6C and 7 to the Contract, the invoices and the schedules to the latter – can be said to be related to the accounts so they are open to inspection and copying by Mr Dowen. Before focusing on section 15(1) itself, it is necessary to examine its legislative history and contemporary statutory context.
Legislative history of section 15(1)
"...to require any Person holding or accountable for any Money, Books, Deeds, Papers, Goods or Chattels, relating to the Poor's Rate or the Relief of the Poor, to produce to such Auditor his accounts and Vouchers..."
At this stage those paying rates had no right to inspect the documents produced to the auditor.
"A copy of the accounts duly made up and balanced, together with all rate books account books deeds contracts accounts vouchers and receipts mentioned or referred to in such accounts, shall be deposited in the office of such authority, and be open, during office hours thereat, to the inspection of all persons interested for seven clear days before the audit, and all such persons shall be at liberty to take copies of or extracts from the same, without fee or reward."
That provision was reproduced in similar, but not identical, terms in section 224(1) of the Local Government Act 1933:
"A copy of every account which is subject to audit by a district auditor, duly made up and balanced, and all rate books, account books, deeds, contracts, accounts, vouchers and receipts relating to the accounts, shall be deposited in the appropriate office of the authority, and shall for seven clear days before the audit be open at all reasonable hours to the inspection of all persons interested, and any such person shall be at liberty to make copies of or extracts from the deposited documents, without payment."
Section 226 conferred a right upon a local government elector for the area to make objection to the accounts. As can be seen, section 224(1) replaced "mentioned or referred to" which had been used in s.247(4) of the Public Health Act 1875 with "relating to." That same pattern was found in sections 159(1) and (3) of the Local Government Act 1972, with sub-section (2) incorporating the right for a local government elector to question the auditor. Section 159, with minor modifications, was carried through into section 17 of the Local Government and Finance Act 1982, which in turn was replaced by the provisions in the Audit Commission Act 1998.
Audit Commission Act 1998
"(2) An auditor may—
(a) require a person holding or accountable for any such document to give him such information and explanation as he thinks necessary for the purposes of his functions under this Act; and
(b) if he thinks it necessary, require the person to attend before him in person to give the information or explanation or to produce the document.
Other sub-sections elaborate on the auditor's rights in this regard. Finally, section 6(5) provides a general residual power:
"Without prejudice to subsections (1) to (4C), every body subject to audit shall provide the auditor with every facility and all information which he may reasonably require for the purposes of his functions under this Act."
"(3) Nothing in this section entitles a person—
(a) to inspect so much of any accounts or other document as contains personal information within the meaning of subsection (3A) or (4); or
(b) to require any such information to be disclosed in answer to any question.
(3A) Information is personal information if –
(a) it identifies a particular individual or enables a particular individual to be identified; and
(b) the auditor considers that it should not be inspected or disclosed.
(4) Information is personal information if it is information about a member of the staff of the body whose accounts are being audited which relates specifically to a particular individual and is available to the body for reasons connected with the fact—
(a) that that individual holds or has held an office or employment under that body; or
(b) that payments or other benefits in respect of an office or employment under any other person are or have been made or provided to that individual by that body."
"(1) At each audit of accounts under this Act, other than an audit of accounts of a health service body, a local government elector for an area to which the accounts relate may make objections to the auditor—
(a) as to any matter in respect of which the auditor could take action under section 17; or
(b) as to any other matter in respect of which the auditor could make a report under section 8.
Since February 2005, appointed auditors have determined 38 objections under section 16, excluding what were likely to be a few cases where a section 8 public interest report was made, and some purported objections which in the auditor's view did not satisfy the requirements of the 1998 Act to allow them to be treated as such.
Local Government Act 1972
"(5) Accounts shall be kept of receipts carried to, and payments made out of,
(a) the county fund, in the case of a county ..."
The 2003 Regulations
"5(2) The accounting records determined by the responsible financial officer on behalf of a relevant body in accordance with paragraph (1)(a) shall be sufficient to show the body's transactions and to enable the responsible financial officer to ensure that any statement of accounts, income and expenditure account, statement of balances or record of receipts and payments and additional information to be provided by way of notes to the accounts, as the case may be, which are prepared under these Regulations, comply with these Regulations."
Under regulation 5(3), the accounting records must in particular contain entries from day to day of all sums of money received and expended by the body and the matters to which they relate.
"(1) A relevant body which is not a smaller relevant body shall prepare, in accordance with proper practices in relation to accounts, a statement of accounts for each year, which shall include such of the following accounting statements as are relevant to the functions of the relevant body –
…
(d) any other statements relating to each and every other fund in relation to which the body is required by any statutory provision to keep a separate account."
Under regulation 10 it is the duty of the relevant body to prepare the statement of accounts in accordance with regulation 7 and of the responsible financial officer to certify it in terms set out in regulation 10(2). Regulation 11 obliges the publication of the statement of accounts.
"shall state the facts on which the local government elector proposes to rely, and contain, so far as possible -
(a) particulars of any item of account which is alleged to be contrary to law, and
(b) particulars of any matter in respect of which it is proposed that the auditor could make a report under section 8 of that Act."
At the conclusion of the audit, notice by advertisement must be given of that fact and that "the statement of accounts" is available for inspection by local government electors: r. 18.
Code of Audit Practice
Information rights legislation
The jurisprudence
"65. I recognise that this will sometimes mean that information which is confidential may be revealed which the authority would prefer to keep hidden, not out of self regard but for good and worthy motives. I accept that the council does have genuine concerns about personal information about individuals being revealed and perhaps used in ways which could prejudice the interests of such persons. But the fact that this legislation has not framed a set of exceptions such as are found in other areas, is not, in my opinion, a justification for adopting a narrow construction to the concept of "persons interested."
"...although an auditor might be entitled to make enquiries of an architect [who issued the certificates] and to ask for documents submitted to him and considered by him when granting the certificate there is no such right [on a local government elector] under s.159" (519, col.2).
Whether the parties had provided that certain information was to be treated as confidential was quite irrelevant to any consideration as to whether the local authority was obliged to disclose it (520, col. 2). The judge found that the schedule of rates formed part of the building contract and so ought to have been disclosed by the local authority.
"It is perfectly obvious...that the field of inquiry which is open to the district auditor under s.225(1)[ similar terms to section 6 of the Audit Commission Act 1998] is far larger than the field of inquiry which is open under section 224(1) to those who are described as 'persons interested.' The enumeration of terms is similar until one gets to the word 'receipts', but in section 224(1) the remaining words are only the words 'relating to the accounts' while in section 225(1) the words go on: 'and other documents which he' — that is, the district auditor — 'may deem necessary for the purpose of the audit.' Those words and the words which follow them show that the district auditor is clothed with far ampler powers that the powers or opportunities which are offered to 'persons interested.'" (436, col.1)
The Lord Chief Justice observed that "it would be difficult to imagine anything more offensive than the widespread distribution of such information among neighbours, and, it may be, trade competitors" (436, col. 2). The court held that the documents were not vouchers.
"The statutory language seems to me quite compulsive upon the point. It may be said that the result is unfortunate in that employees' private affairs are thereby likely to be revealed and revealed to persons who are under no obligation to respect confidentiality. That, if it be the case, is a matter for Parliamentary consideration. But confronted with the phrase "the accounts to be audited and all books … relating to them", I am quite unable to say that a summary extract such as was here proffered in order to protect employee's private affairs is a compliance with the section" (at 7 of the Transcript).
Watkins LJ agreed and added:
"Here we have been obliged to find that the statute does not prohibit such disclosure. It is, in my judgment, unfortunate that it gives the opportunity to an elector, allowed to look at the books of the council, to use the information thereby gained for an improper purpose" (at 9 of the Transcript).
The upshot of Oliver was that section 17 of the Local Government Finance Act 1982 was amended by the introduction as described earlier of a confidentiality provision, which is now section 15(3).
WHAT ARE THE "ACCOUNTS" IN SECTION 15(1)?
WHAT DOCUMENTS ARE RELATING TO THE ACCOUNTS?
(a) Veolia's submissions
(b) The documents relate to the accounts
(c) Interpreting "relating to" in section 15(1)
CONCLUSION