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Cite as: [2010] EWHC 2923 (Admin)

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Neutral Citation Number: [2010] EWHC 2923 (Admin)
CO/508/2010

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT

Royal Courts of Justice
Strand
London WC2A 2LL
14 October 2010

B e f o r e :

MR JUSTICE OUSELEY
____________________

Between:
THE QUEEN ON THE APPLICATION OF MOSS Appellant
v
KPMG LLP Respondent

____________________

Computer-Aided Transcript of the Stenograph Notes of
WordWave International Limited
A Merrill Communications Company
165 Fleet Street London EC4A 2DY
Tel No: 020 7404 1400 Fax No: 020 7831 8838
(Official Shorthand Writers to the Court)

____________________

Mr M Gullick (Mr J Chegwidden at judgment) instructed by Khakhar & Co appeared on behalf of the Appellant
Mr P Patel instructed by Trowers & Hamlins appeared on behalf of the Respondent

____________________

MR M GULLICK (MR J CHEGWIDDEN AT HTML VERSION OF JUDGMENT) INSTRUCTED BY KHAKHAR & CO APPEARED ON BEHALF OF THE APPELLANT
MR P PATEL INSTRUCTED BY TROWERS & HAMLINS APPEARED ON BEHALF OF THE RESPONDENT
HTML VERSION OF JUDGMENT
____________________

Crown Copyright ©

  1. MR JUSTICE OUSELEY: Barry Moss, the appellant, describes himself as a "parking crusader". Over recent years he has crusaded against what he sees as a wholesale failure by Bolton Metropolitan Borough Council to mark its on-street parking bays and parking restrictions in the way required by the relevant regulations, whilst still issuing penalty charge notices (PCNs) to those who park in those bays or infringe the restrictions, for example, by not paying and displaying as required by those same regulations. Mr Moss has also taken issue with inadequate signing in off-street car parks operated by Bolton MBC as to what failings will lead to a PCN being issued. He has had some success for himself and family and others in challenging these PCNs before parking adjudicators. The council has sometimes withdrawn the PCNs to avoid, as he believes, decisions adverse to it. It has also, Mr Moss believes, been slow to remedy admitted deficiencies in signage in on and off-street car parks.
  2. It appears that on the other hand Bolton MBC regards the enforcement of parking control as important to the flow of traffic and to the availability of parking spaces for road users who know and accept they may have to pay PCNs for infringement.
  3. KPMG are the auditors to Bolton MBC. They audited its accounts for the year 1 April 2007 to 31 March 2008.
  4. On 17 September 2008 Mr Moss objected to the accounts on the ground that they contained an item of unlawful income - that received by way of PCNs - because the failings to which I have referred meant that a very large proportion of the income, he said, was received unlawfully. Although neither party has shown me the item in the accounts, I was told that PCN income for that year was about £1.2 million and is to be found in the income figure for Environmental Services.
  5. KPMG considered the lengthy material Mr Moss sent them on a number of occasions, including his responses to what Bolton MBC had to say about his material. He also had a number of meetings with KPMG. On 17 December 2009, following a provisional decision to the same effect as the eventual final decision, KPMG gave its reasoned decision for not making an application to the court for a declaration that the item was unlawful.
  6. Mr Moss appeals to this court against that decision on the grounds that KPMG should have concluded that the item was unlawful and applied for a declaration to that effect. Its reasons for the exercise of its discretion not to do so were unsound in law.
  7. The Statutory Provisions

  8. Section 16 of the Audit Commission Act 1998 provides for objections to be made to the auditor that an item in the accounts of the local authority is contrary to law. Section 17 governs applications and appeals to the courts in these terms:
  9. "(1) Where -
    (a) it appears to the auditor carrying out an audit under this Act, other than an audit of accounts of a health service body, that an item of account is contrary to law .....
    the auditor may apply to the court for a declaration that the item is contrary to law.
    (2) On an application under this section the court may make or refuse to make the declaration asked for; if it makes the declaration then ..... it may also -
    .....
    (c) order rectification of the accounts.
    .....
    (4) A person who has made an objection under Section 16 (1) (a) and is aggrieved by a decision of an auditor not to apply for a declaration under this section may -
    (a) not later than six weeks after being notified of the decision, require the auditor to state in writing the reasons for his decision, and
    (b) appeal against the decision to the court;
    and on such an appeal the court has the same powers in relation to the item of account to which the objection relates as if the auditor had applied for the declaration."

    The nature of the appeal

  10. It is common ground that CPR Part 52 applies to this appeal. It follows that the appeal can only be allowed if I conclude that the auditor's decision is wrong (CPR 52.11 (3) (a)). There was no allegation of serious procedural error by the auditor who is the lower court for this purpose.
  11. Mr Gullick for Mr Moss contended that the approach the court should adopt in the objector's appeal was the same that it would adopt towards an application for a declaration by the auditor because the court's powers were the same and, he submitted, there was no sensible reason for the result of the appeal to differ according to the route whereby the issues as to lawfulness and discretion reached the court. The appeal, he submitted, should also be by way of rehearing and not review because the Practice Direction under CPR 52.11 (1) (a) provides for the appeal to be by way of rehearing where the appeal is from a person or body who had not held a hearing in order to come to his decision. The meetings between Mr Moss and the auditor had not been hearings.
  12. Mr Patel for KPMG submitted that the statutory structure made it clear that the nature of an appeal by an objector was quite different from an auditor's application. His arguments focus not on the question of lawfulness but on the exercise by the auditor of his discretion not to seek a declaration. He contended that I had to be satisfied that he had exercised his discretion in a way which was unreasonable before I could conclude that the exercise of his discretion was wrong. I could not simply exercise my discretion on an appeal as if no discretion had been exercised by the auditor. The appeal should be by way of review unless I considered the interests of justice meant that a rehearing was necessary, since the meetings with the auditor had included hearings.
  13. First, I am satisfied that I should deal with this appeal as a review because there is no reason to deal with it by way of rehearing. I do not accept Mr Gullick's submissions that none of the meetings Mr Moss had with KPMG were a hearing. On the contrary, there is at least one particular meeting which, in my judgment, was a hearing. On 15 October 2009 Mr Moss and the auditor met. By this stage Mr Moss had provided the auditor with voluminous material on a number of occasions by way of objection and by way of response to what Bolton MBC had to say about his objection. He knew from the provisional decision what the auditor's provisional view was on lawfulness and discretion. Mr Moss went to the meeting to explain his case again to the auditor, to persuade the auditor of its merits, to deal with the response from Bolton MBC and to address the auditor's concerns expressed in his provisional decision. He knew of the purpose of the meeting before the meeting. Mr Gullick was quite unable to say in what respect this meeting was not a hearing but he appeared to feel that it could not be a hearing because a hearing had to be more formal.
  14. In my judgment the essence of a hearing is the provision of an opportunity for the objector to explain in person and orally what his case is, to deal with the other side's case and to persuade the decision maker to his point of view knowing that that is the purpose of the event. The precise format of the hearing can vary with the subject matter. Those essential features were present on at least this occasion and so I am satisfied that there was at least one hearing.
  15. Secondly, I am satisfied that Mr Patel is right as to the approach to be adopted to the appeal, whether dealt with by way of review or rehearing. The statutory provisions for an application to court by an auditor and for an appeal to the court by an objector are materially different, and for good reason. The auditor is a specialist professional charged by statute with the task of deciding whether an item appears to be contrary to law and, if so, deciding whether or not that requires a declaration from the court. The auditor reaches that decision in the course of his auditing function. The auditor cannot seek such a declaration unless he has formed a view that there has been unlawfulness. He cannot seek a declaration simply because the law may be uncertain and the advice of the court might be useful. The auditor can take into account in deciding whether to seek a declaration the extent to which his conclusion that an item appears unlawful is disputed, and so a court decision on its lawfulness may be required. He can take into account the costs and prospects of success in such proceedings, the importance of the issue, the nature, scale and consequences of the potential unlawfulness and the effect of any remedial or compensatory measures offered by the council or defaulters.
  16. The objector plays an important role in the audit, but that role is played through informing, assisting or taking issue with the decisions of the auditor. The objector cannot apply to the court. He can only challenge by appeal what the auditor omitted to do. It would have been very simple for Parliament to grant any objector the right to seek the declaration which the auditor can seek, but Parliament did not do so. That must have been for the very simple reason that it did not intend to grant the same powers or role to an objector. The auditor has a specialist professional and independent statutory task to perform, unlike the objector; the court's rulings on lawfulness which he can seek underpin his function. Obviously, as well, Parliament could not give a statutory and reviewable discretion to an objector not to bring an application in relation to unlawfulness. Requiring the objector to challenge the auditor's decision rather than enabling him to apply directly may also help to protect auditor, council and court from litigation which, even if unlawfulness is found, may have no real public value.
  17. The statutory structure is not thus some accident of wording but the reflection of different roles. The different focus of an objector's appeal must therefore be acknowledged in the approach of the court to deciding whether an auditor's decision is wrong and in particular in deciding whether his discretion has been wrongly exercised. True it is that the powers of the court on appeal, once it has decided that an item is unlawful or that the discretion has been wrongly exercised, are the same as on an application by the auditor himself. But that does not illuminate the approach to whether the decision is wrong. Nor does it necessarily mean that the consequential powers should be exercised in the same way, whether the proceedings are by appeal or application. The statutory structure may mean that the decision of the court will differ or vary, depending on the route by which the issue is raised. But that is not illogical. Rather that is the consequence to be expected from the statutory scheme.
  18. What that means for this appeal is this. On an application by the auditor for a declaration, the first question is the simple one of whether the item was lawful or unlawful. If it is held to be unlawful, the question then arises as to whether to make the declaration sought. The auditor would obviously not have exercised any contrary discretion, otherwise he himself would not be seeking the declaration. On an appeal by an objector the first question is whether the auditor's decision on lawfulness is wrong and, if so, (and the item is unlawful) the second question is whether the exercise of his discretion not to seek a declaration was wrong.
  19. What makes a decision "wrong" has been the subject of a number of authorities as the notes to CPR 52.11 in the White Book illustrate. It depends on the subject matter, the nature of the decision at issue and the nature of the error relied on. The fact that the appeal will normally be by way of review does not require the application of judicial review or Wednesbury principles. The Court of Appeal made this clear in E.I. Du Pont De Nemours & Co v S.T. Dupont [2003] Civ 1368, [2006] 1 WLR 2793 (especially at paragraph 94). A pure error of law would simply be wrong. A finding of primary fact would be less readily held wrong than an inference drawn from documents or an evaluation of factual material in which the court was as well placed as the auditor to make a decision. The exercise of the discretion is wrong either where it is wrong in principle or where it is outside the range of decisions reasonably open to the decision maker or has been made without consideration of the relevant factors. This involves an approach to discretion probably indistinguishable from judicial review principles.
  20. This is especially important where an appeal relates to the exercise of a discretionary judgment by an expert and specialist person or body in the course of a specific statutory function, such as local government auditors. Obviously if no discretion was exercised because the auditor wrongly thought that the item in issue was lawful, the approach by the court to the question of discretion would be very different from that where an auditor had correctly concluded that an item was unlawful but had exercised his discretion against seeking a declaration, or had exercised his discretion against seeking a declaration on the contingent basis that even if the item were unlawful no declaration should be sought.
  21. Lawfulness

  22. The auditor did not conclude that all, none or any proportion of the PCN income was unlawfully received. He reached no positive conclusion on that issue one way or the other, save that in his final decision, dated 17 September 2009, he said under the heading "Our reasons for our decision that we would not make an application to the court or declaration that an item of account was unlawful":
  23. "We agree that there have been problems with some of the lines and signs and hence with PCNs issued by the council. Our legal advice acknowledges that money received by a council where a line or sign is wrong may have given rise to an unlawful item of account."

    The auditor then turned to the exercise of discretion. However he clearly did not form the positive view that the item appeared to him unlawful, which was a necessary pre-condition for an application to the court.

    On-street Parking

  24. I do not propose to deal with the two spaces at the Town Hall because there is no doubt that the PCNs were unlawfully issued. The matter was remedied, and a comparatively small sum was involved.
  25. De-criminalised on-street parking enforcement is regulated by a scheme made under the Road Traffic Regulation Act 1984. The year in question is regulated by the Bolton MBC (Regulations: Waiting Loading and Unloading) (Consolidated) Order 2005. Article 19 permits a PCN to be issued where a vehicle parks on a road, taxi rank, loading bay or other controlled area in contravention of the Order.
  26. I am not entirely persuaded that this Order deals with permitted on-street parking payment, notwithstanding Mr Gullick's reliance on it for that purpose. The relevant Order is, I believe, the Road Traffic (Permitted Parking Area and Special Parking Area) (Metropolitan Borough of Bolton) Order 2000, also made under the 1984 Act and not, so far as I can see, consolidated into the 2005 Order. However the 2000 Order conveys comparatively little by itself and would need to be read and understood with other statutory provisions in order to see what contraventions led to a PCN. I do not have a clear picture at all about the basis on which PCNs for breach of permitted on-street parking requirements are issued, and hence are said to be invalid or unlawful where the related road marking is in a non-prescribed form. It appeared to be thought that I would declare something unlawful without seeing the statutory provision, contravention of which gives rise to the asserted unlawfulness. I confess to feeling far from happy with the exposition of the relevant statutory powers which I have had in this matter.
  27. The auditor decided to make no submissions on it and Bolton MBC, an interested party, did not appear or provide representations. It was only in response to my request of Mr Gullick for the statutory provisions said to be in issue that even the 2005 Order was produced after the end of the hearing.
  28. Be all that as it may, section 64 of the 1984 Act provides that traffic signs shall be of the size, colour and type prescribed by Regulations made under section 64 (1) or authorised by the Secretary of State. Section 64 (1) and (2) provide:
  29. "(1) In this Act 'traffic sign' means any object or device (whether fixed or portable) for conveying, to traffic on roads or any specified class of traffic, warnings, information, requirements, restrictions or prohibitions of any description —
    (a) specified by regulations made by the Ministers acting jointly, or
    (b) authorised by the Secretary of State,
    and any line or mark on a road for so conveying such warnings, information, requirements, restrictions or prohibitions.
    (2) Traffic signs shall be of the size, colour and type prescribed by regulations made as mentioned in sub-section (1) (a) above except where the Secretary of State authorises the erection or retention of a sign of another character ..... "
  30. Section 64 (4) importantly provides:
  31. "(4) Except as provided by this Act, no traffic sign shall be placed on or near a road ..... "

    The various exceptions that then follow are irrelevant to these proceedings.

  32. The relevant Regulations under the 1984 Act are the Traffic Signs Regulations and General Directions 2002, SI 2002/3113. Regulation 11 provides:
  33. "(1) Subject to the provisions of these Regulations, a sign for conveying information or a warning, requirement, restriction, prohibition or speed limit of the description specified under a diagram in Schedules 1 to 7, Part II of Schedule 10 and Schedule 12 to traffic on roads shall be of the size, colour and type shown in the diagram."
  34. Regulation 12 makes provision for variation from the prescribed signs in sub-paragraph (10) and gives some leeway by reference to tables in relation to what are otherwise very specific measurements and proportions prescribed down to millimetres. Table 2 deals with Schedule 6 diagrams which include some of those relevant to Mr Moss's contentions. The leeway given varies between roughly 10 per cent and 30 per cent of a dimension.
  35. The Local Authorities' Traffic Orders Procedure (England and Wales) Regulations 1996, SI 1996/2499, requires in Regulation 18 that such traffic signs as the local authority may consider requisite for securing that adequate information as to the effect of the order is available to road users should be placed on or near the road before a traffic regulation order comes into force.
  36. Mr Moss's first contention to the auditor was that the road markings used by Bolton MBC for its restricted areas, such as loading bays or doctors' or disabled parking bays, and for permitted or designated parking areas, invariably did not comply with what was prescribed by the Regulations. He provided a schedule of some of these together with generalised evidence that he had been unable to find a single one that met the requirements of the Regulations. He provided photographs of a number of contravening markings but did not provide a copy of most of the prescribed diagrams to enable a comparison to be made between the actual and the prescribed markings.
  37. Mr Gullick submitted, based on Mr Moss's evidence, that the non-compliance with the prescribed diagrams was more than trivial or de minimis on each occasion. The council had accepted, during 2007, that most of its road parking markings did not comply with the Regulations. As from October 2007 it set about re-marking them, starting with the roads which generated most PCNs.
  38. Mr Gullick's next contention was that any PCN issued for a contravention of a restriction was unlawful if the bay or restriction was not properly marked on the road, and therefore the income from it was not lawfully obtained or retained. It is important to understand the limit to the argument put forward by Mr Gullick. He did not contend that any on-street parking restriction was misleadingly or inadequately signed, so as to leave a driver uncertain as to which area was covered by what permission, prohibition or restriction. His point was exclusively concerned with the lawfulness of issuing a PCN where the marking on the road of the permission or the restriction did not conform to the prescribed diagram.
  39. No statutory provision which I have been shown provides for enforcement by PCN by reference to non-compliance by the parker with the prescribed markings. The language of the provision enabling the local authority to issue a PCN in the 2005 Order involves non-compliance by the parker with the parking restriction itself, rather than non-compliance with prescribed markings e.g. for a loading bay. I have not been shown any provision in which the proper marking of the restriction as prescribed is an express condition for a contravention of the restriction itself.
  40. The effect of non-compliance with the requirements of the prescribed diagrams on enforcement by criminal proceedings or by PCN has been considered in a number of cases. There is one group of cases in which there was a breach of the requirement in the 1996 Local Authority Traffic Order Procedure Regulations to place signs or markings adequately so that those affected would know what was forbidden. Examples are Hassan v Director of Public Prosecutions [1992] RTR 209 and James v Caley [1967] QB 676: where there was no sign stating the day or hours when parking on a yellow line was forbidden, the information as to the prohibition indicated by that line had not been adequately conveyed. The statutory requirement in the procedure order that the prohibition be adequately signed had not been met, and the offence of breaching the prohibition could not be proved. Those cases make it clear that if a traffic sign does not adequately inform the driver as to what is forbidden or where, the penalty cannot be enforced and, in a criminal context, no offence is committed.
  41. This appeal is not concerned with any on-street PCN issued to those who have not known what the prohibition was, or who may have been misled or prejudiced by marking deficiency. That is not the gravamen of the objection in relation to on-street parking PCNs.
  42. Mr Gullick relied on a different group of cases exemplified by Davis v Healey [1971] RTR 145. The defendant was convicted of the offence of failing to comply with an indication given by a traffic sign, that is he crossed a continuous double white line. Crossing the line was the offence. The markings did not conform to the requirements for such a sign indicating that they should not be crossed. So the offence related directly to what the sign on the road prohibited. There was an old white line between the two new ones and the latter were much further apart than prescribed. Lord Parker CJ said that there had to be strict compliance with the prescribed sign for contravention of the prohibition conveyed by the prescribed sign itself to be an offence.
  43. Cotterill v Chapman [1984] RTR 73 held that where the difference between the actual sign and the prescribed sign alleged to be contravened was de minimis the driver could be convicted of contravening the prohibition conveyed by the sign. In that case the gap between the 193 metre long double white lines was three millimetres less than the prescribed minimum over a length of 30 millimetres, and was held to be legally insignificant. This outcome does not surprise me and may account for the tolerances now built into the regulations.
  44. In Canadine v Director of Public Prosecutions [2007] EWHC 383 the offence was driving in excess of the speed indicated by prescribed signs. The shortcoming in the prescribed form of the sign in question was trivial, but it is clear that no offence would have been committed if there had been a significant shortcoming in the actual sign compared to the prescribed sign, even if the speed restriction itself had been clear. But again the offence-creating provision was failing to comply with the indication given by the prescribed sign rather than failing to comply with the requirement of the order, without direct reference to the sign itself.
  45. Of some relevance also is the decision of Jackson J in R (Barnet London Borough Council) v Parking Adjudicator [2006] EWHC 2357 Admin, [2007] RTR 14. This concerned the invalidity of a PCN which did not state the date of its issue as required by Section 66 of the Road Traffic Act 1991. Jackson J dealt with the argument that no prejudice was caused to the defendant by that clear non-compliance, at paragraphs 41 to 42:
  46. "41 Mr Lewis submits that even if there was non-compliance in this respect, nevertheless no prejudice was caused, PCNs should not be regarded as invalid. I do not accept this submission. Prejudice is irrelevant and does not need to be established. The 1991 Act creates a scheme for the civil enforcement of parking control. Under this scheme, motorists become liable to pay financial penalties when certain specified statutory conditions are met. If the statutory conditions are not met, then the financial liability does not arise.
    42 In the present case, the two PCNs issued by Barnet on 31st March 2005 did not comply with section 66 (3) (c), (d) and (e) of the 1991 Act. Accordingly, the requirements of section 66 were not satisfied and no financial liability was triggered either by the PCN or by any subsequent stage in the process such as the notice to owner."
  47. Mr Gullick also relied on what Mr Gary Hickinbottom (as he then was) said in the Parking Appeals Service on the review of the decision of the Chief Parking Adjudicator in Burnett v Buckinghamshire County Council in April 1988. He said obiter that signs had to comply with the Traffic Signs Regulations and General Directions, adding:
  48. "Consequently, in summary, as a condition precedent of a local authority enforcing a parking penalty, as a breach of a TRO made under the 1984 Act, the obligations of a motorist must be properly signed in accordance with the detailed provisions of the [2002] Regulations."

    Part of his overall conclusion was this:

    "Where an adjudicator finds that an authority has acted ultra vires in failing to comply with its mandatory obligations properly to set out the alleged contravention of a PCN or properly to sign a parking or waiting restriction, he can - and indeed must - find that the authority cannot pursue a penalty based upon its own unlawful act with the result that he must allow the appellant's appeal. In this case the council has failed to comply with two mandatory obligations. First, it failed to sign the restriction and, second, it failed properly to identify the contravention of the relevant Regulations upon which it purports to rely. By virtue of these failings, the council has acted beyond its powers and the appellant's appeal must be allowed."
  49. This, submitted Mr Gullick, was the approach adopted in Parking Adjudicator decisions concerning Bolton MBC. Mr Moss found Bolton unwilling to have the issue tested before parking adjudicators because where he was involved the council withdrew the PCN.
  50. On 16 December 2007 the Parking Adjudicator had allowed an appeal by Mr Jalali Biljadi who had received a PCN for parking in a loading bay. The end of the bay was marked with a double rather than the required single line, although by the time of the appeal that had been rectified. The parking adjudicator held the difference to be more than de minimis or trivial and allowed the appeal. On 26 April 2008 in a case involving a Mr Pilkington - related to Mr Moss - the pay-and-display bay was marked with a single, not the required double broken white line. The parking adjudicator allowed the appeal. The local authority abandoned its intended challenge to that decision before the further hearing took place.
  51. In my judgment, the event which gives rise to liability to a PCN in the de-criminalised parking scheme (the equivalent of the offence under a criminal statute) is parking in contravention or non-compliance with a provision in the 2005 Consolidated Order. The provisions of the Order are couched in language such as "the prohibition on parking during controlled hours on a road within a specified zone or loading bay or taxi rank". Those controls may be specified other than by reference to specific markings. I assume that the provision prohibiting a stay longer than paid for in permitted on-street parking bays is in similar vein. It therefore seems to me that two approaches are possible although neither arises unless the signs depart from the prescribed form in a more than trivial way. The first approach, on what I have been shown of the Bolton MBC Orders, is not to ask whether the signs comply with the Regulations where contravention of the sign itself is not prohibited. It is to ask whether the signing of the restrictions was adequate to inform the average driver of what he should or should not do or where. This would reflect decisions such as Hassan and James v Caley. I have not been shown any provision of the TRO which makes non-compliance with a prescribed marking or sign, by itself, a contravention of the TRO. It appears to be the reverse. The sign informs the driver about the restriction in the TRO. And if the restriction is itself adequately conveyed by means other than the sign and the sign does not mislead about the nature or extent of the restriction, the TRO on that approach may be enforced by PCN.
  52. The importance of this is that it may contrast with the language of the offences in Davis v Healey and Canadine v Director of Public Prosecutions in which the offence itself was contravening the prescribed road marking or sign. So any deficiency in the prescribed sign was directly in issue.
  53. Indeed, I see Jackson J in Barnet facing a similar issue. The PCN was ineffective as a demand when it did not contain a statutorily specified element. No liability to pay therefore arose. It was not what the statute required to generate the statutory liability, just as the white lines in Davis v Healey were not what the statute required for crossing them to be an offence.
  54. The alternative approach is to ask whether - subject to trivial non-compliance - the markings meet the prescribed requirements. If not, those markings should not have been placed on the road at all and the requirements or restrictions they indicated have no force, even though it may be perfectly clear from the deficient signs where and to what extent the restriction applies.
  55. Of course I am troubled by the width of the submissions which such an approach appears to be capable of generating. Mr Gullick submitted that where the transverse lines enclosing a long street bay were single and not double, or it may be the other way round, the entire length of bays was not subject to enforcement by PCN. The submission is troubling because it would appear to affect the obligation to pay and display, and potentially the permission to park. On the other hand, I am attracted by the simple argument that prescribed requirements should be met and they are easily achieved. I can also see the attraction - at least to some - of meeting what may be zealous, technical and even over-zealous car parking enforcement with a thoroughly technical response. The leeway claimed by the errant local authority is not to be denied by it to the errant driver.
  56. I have not found this an easy issue to resolve, not least because of my uncertainty about the statutory provisions which I have actually received (late and incompletely perhaps), the differing lines of authority and also because the issues have not been argued either by the auditor or by Bolton MBC.
  57. In the end, and without great confidence, I have concluded that what Mr Hickinbottom said in Buckinghamshire County Council should be taken to be the law. The purpose behind a common prescribed system of road signs and markings includes certainty for drivers wherever they are in the country. They are not therefore faced with different varieties of signs wherever they go for the same permitted parking, prohibitions and restrictions. The common system also regulates signs in order to avoid clutter and confusion to road users by regulating what can or cannot be put on the road surface or signs by its side.
  58. The statutory system of prescribed road signs also forbids the use of non-compliant road signs. If the statutory prohibition in Section 64 (4) of the 1984 Act were enforced, it would cause the removal of many signs necessary to delineate and inform drivers about the extent of permission and restrictions or prohibitions. That would also prevent adequate information being conveyed about them to the driver. A local authority should not be able to rely on its contraventions of statute as a basis for exacting a penalty and the civil enforcement measures that follow from non-payment of a PCN.
  59. As this is also the approach which, following Mr Hickinbottom's decision in Buckinghamshire County Council in 1998, I assume parking adjudicators have routinely followed for many years without challenge by non-compliant local authorities, I would be reluctant to upset what appears to be the current system of parking enforcement and parking adjudicating decisions on the basis of the arguments which I have heard. Bolton MBC has not attempted to take these issues further on appeal against a parking adjudicator or to address them before me. Such an approach should also act as a spur to compliance by local authorities with a duty under Section 64 rather than giving them a licence to adopt a slovenly indifference, which appears to have been Bolton MBC's approach until Mr Moss stung them into action in October 2007.
  60. A trivial non-compliance cannot be equated with one that causes no prejudice, although I think that some of Mr Moss's complaints may be trivial in certain circumstances. It may be - and I express no more than the possibility - that the use of the wrong closing at the end of a long bay of parking spaces is trivial other than at the very end of the bay. What is a trivial non-compliance may have to be judged in the context of the significance of the marking. Where it is a transgression of the Order to do something in relation to a prescribed line, triviality has to be judged in relation to that obligation. Where the obligation is not to park in contravention of the Order rather than across or outside a precise line, the limit of what is trivial may be slightly broader.
  61. Accordingly a substantial part of the income from PCNs issued in respect of off-street car parking was received in respect of PCNs that should not have been issued. I cannot say how much falls into that category because the remedial measures began in October 2007 but would have taken some time to complete. I cannot say how many non-compliant markings would have been regarded as trivial errors.
  62. I am unwilling to accept that absolutely all markings were not compliant because of the impossibility of such a contention being positively proved though I accept the thrust of what Mr Moss said about widespread non-compliance.
  63. Subject, however, to the next point, a substantial but uncertain proportion of the income from on-street PCNs was unlawfully received. I mention this point lest this judgment be treated as authority against a proposition which has not been argued. Mr Gullick assumed that the income received from PCNs which should not have been issued was for that reason alone an unlawful item of income. I have a reservation about that although the point has not been argued. I mention it to avoid it being thought that I have rejected it. The local authority clearly had advice - which I had no reason to believe it rejected - that so long as the nature and extent of the restriction was adequately conveyed to the driver, even if the road marking was defective, a PCN could be issued for failing to comply with the restrictions so long as the deficiency did not mislead or prejudice the driver.
  64. I have not heard argument about the extent to which a penalty received from a PCN issued in the genuine belief that the parking restriction could lawfully be enforced notwithstanding the deficiency in the road marking, was received unlawfully by the council, or unlawfullly retained when the payer could, but did not, appeal against the penalty charge or seek its return. Although for many such a step might simply have been a chore they decided not to undertake, for many there may also have been the view that the payer had in fact parked where he knew he ought not to or had not paid when he knew that he should have, and was disinclined to put to the test, if he knew about it, any issue as to what to him was an irrelevant non-compliance by the local authority with a prescribed diagram. It seems to me that there may be scope for an argument that if money is received in those circumstances and its return is not sought by the payer, the income received is not unlawfully received or obtained.
  65. Off-street Parking

  66. Article 31 of the Bolton (Off-street Designated Parking Places) (Consolidated) Order 2006, a TRO also made under the Road Traffic Regulation Act 1984, permits the local authority to issue a PCN in respect of a vehicle parked in an off-street car park in a way which does not comply with the requirements of the Order. The PCN is issued under Section 66 of the Road Traffic Act 1991. The Order has many requirements, including the display of a valid parking ticket and that the wheels of a parked vehicle must be wholly within the marked bay. There is no statutory requirement that the restrictions themselves be signed or that liability for a PCN for non-compliance be signed. The off-street car parks contained no sign requiring all wheels to be within the white lines, let alone signs saying that failure so to park created liability to a PCN. The parking adjudicator in Pilkington v Bolton MBC, 7 June 2007, in respect of a ticket issued in December 2006, held that the requirement to park a car with all its wheels wholly within the bay marked, breach of which created liability to a PCN, should be specifically signed. The adjudicator allowed the appeal since there was no specific sign to that effect. The sign in question had simply required the car to be within the bay.
  67. The National Parking Appeals Service in its 2006 Report stated:
  68. "In the absence of any statutory regulation, parking adjudicators must consider the general principle that the fair operation of a parking scheme requires that the conditions of use be clearly signed so as to inform the driver of what is required."
  69. In October 2007, half-way through the year in question, Bolton MBC amended signs to correct these defects which Mr Moss had identified. Mr Moss's evidence to the auditor implies that as many as 700 PCNs may have been issued in the six months of the year in question up to October 2007 for non-compliance with that particular requirement.
  70. Mr Moss also said that a defect in the signs - and one also remedied in October 2007 - was the absence of a warning sign that a PCN would be issued for any contravention of the requirements, including the requirement to pay and display a parking ticket. I have examined Mr Moss's representations to the auditor, and although at times it is very much a secondary point or one not clearly differentiated from his complaint about signs requiring the wheels only to be within the bay, I am satisfied that he did make the point that there were no signs warning that a PCN could be issued for any contravention of the parking requirements, that this was a failing common to all Bolton MBC off-street car parks and that he was contending that what was said by the parking adjudicator in Pilkington and by the Parking Appeals Service applied equally to all contraventions. Bolton MBC did not deny the absence of such signs in its response to the auditor, nor it did it provide any evidence to the court to suggest that there had been such signs. It again made no submissions in relation to the law. The local authority appears to have thought that no such sign was necessary, although Mr Moss's evidence again suggests that the local authority was unwilling to test this, since it did not pursue the PCNs he had deliberately incurred in order to obtain a decision. Such signs were however also erected in October 2007.
  71. The parking adjudicator in Pilkington, contrary to what Mr Moss said, drew a distinction between knowledge of the requirement to park with the wheels wholly within the bay and similar various specific requirements on the one hand and the common knowledge of drivers that failing to pay and display as the signs required would lead to a PCN, even if the sign were silent about that consequence. PCNs in relation to such a contravention continued to be issued after that date. Where the PCN relates to a vehicle not parked wholly within its space simply because a wheel merely intruded on to the white line defining the bay, the parking adjudicator's decision that that specific requirement and liability to a PCN in the event of a breach, should be clearly signed, is right. Failure to do so means that PCNs issued in those circumstances should not have been issued. Of course where any part of the vehicle is outside the bay beyond the white line the PCN was properly issued.
  72. Where, by contrast, the requirement to pay and display itself is actually signed and it is common knowledge that non-compliance is met with a PCN, issuing PCNs without signage to say that a PCN would follow is not unlawful. There is no statutory obligation to provide such a sign. People know that that is what will follow. The need to know what is a contravention giving rise to a penalty, may be quite different from the need to know what the penalty actually is. The need to know that may depend on how great or unusual the penalty actually is. The decision in Pilkington and the report by the National Parking Appeals Service do not suggest that a PCN in respect of non-compliance with a signed requirement to pay and display was unenforeceable in those circumstances. No contrary decision has been produced by Mr Moss. The absence of signing about a well-known penalty does not automatically make a PCN unlawful.
  73. I conclude therefore that, subject to the point I have adumbrated above in relation to on-street parking, the income from off-street PCNs included some that was unlawful but that by no means all of it was. No income received in respect of any PCN issued after the signs were amended was unlawful and that would be towards half of it. None in respect of pay and display was unlawful which is, I suspect, quite a high proportion of the off-street PCN income. The rest will include some unlawfully issued PCNs but it does not follow that all of the 700 or so PCNs issued in respect of wheels not wholly within the bay were issued merely in respect of wheels which rested on part of the white line without any other part of the vehicle overhanging another bay. It is impossible to know what proportion is therefore unlawful but it does not appear likely to be a very high proportion.
  74. Accordingly, and setting to one side the reservations to which I have referred, the auditor should have concluded that the item did include a significant number of payments that were unlawful. The auditor was wrong not to reach that positive conclusion. However these conclusions do not answer the question of whether I should declare the item of account unlawful.
  75. Discretion

  76. Before I turn to the decision of the auditor on this question I point out that the item I have been asked to declare unlawful is the whole of the PCN income. I cannot so declare because the PCN receipts are obviously not all unlawful. I cannot specify on the evidence before me an amount of money or a proportion of the receipts which were unlawful. I cannot define them by reference to PCNs issued at a particular time. I cannot declare that income from PCNs of a particular type was unlawful because even in relation to those issued in respect of wheels on a white line, part of the vehicle may also have been outside the marked bay. I cannot declare that all on-street PCNs were unlawful because what is a trivial non-compliance with the sign is a matter for debate. I am very reluctant to declare that an unknown but potentially substantial proportion of the item was unlawfully received. I am also reluctant to make a declaration because of my uncertainty about the nature of the statutory powers I have been shown and the fullness of the argument which I have heard.
  77. A challenge to Bolton's parking practices may have been better brought directly, rather than through this challenge to the auditor's decisions on the lawfulness of income received.
  78. If I cannot declare the whole item or a specific significant part of it as being unlawful, I would need a deal of persuading that this could be an appropriate case for a declaration by a court under section 17 (4) in relation to unspecific or insignificant parts. In the upshot there is nothing in my consideration of unlawfulness, differing as it does from the auditor's decision, which itself disposes me to conclude that I should grant a declaration that some unspecific part of the item in the accounts, however described, is unlawful.
  79. I turn to the auditor's decision on discretion, which is worth setting out in full:
  80. "Whilst we have considered carefully all that you have had to say, Section 17 of the Audit Commission Act 1998 gives auditors the discretion to decide whether or not to apply to the Court for a declaration that an item of account is contrary to law. In the circumstances of our audit for the year ended 31 March 2008 we are minded to exercise our discretion under Section 17 and not to apply to the Court for a declaration.
    Our reasons for exercising our discretion and not applying for a declaration that an item of account is contrary to law are:
    • The Council has a review programme in place which is reviewing the top 200 streets, by reference to the number of PCNs issued. Our audit work has identified that the Council ceases enforcement action where a review identifies non-compliant parking restrictions and enforcement action only begins again once the parking restrictions are made compliant. We understand the Council has spent in excess of £200,000, during 2008/09, on both consultants reviewing road traffic signs and markings for parking restrictions and making these compliant.
    • We are mindful of the high cost of seeking a declaration before the High Court which would eventually fall on local taxpayers and we are of the view that the issues arising from this matter do not warrant the expense. In this regard, we have taken into account that this is not a financial loss to the Council which has had a negative impact on all local taxpayers. Indeed, the income has been used by the Council in the provision of services in accordance with the ring fencing requirement for such income.
    • Motorists who felt they were wrongly issued with PCNs had the right of appeal, firstly to the Council, and then secondly to the parking adjudicator. In total, 225 PCNs were submitted for adjudication and 93 motorists have had their PCNs cancelled as a result of such appeals in 2007/08.
    • Our legal advice has identified that there is no legal obligation, enforceable via the courts, for councils to identify person who might have paid a penalty notice which was invalid. Our understanding is the Council fully accepts that any person who has paid under a line or sign which is demonstrably invalid should be entitled to reclaim the money they paid.
    • The Council has at all times been seeking to carry out its legitimate function of traffic and parking regulation."
  81. I am satisfied that the auditor did consider the exercise of his discretion on the necessary assumption that the item included unlawful income. He did not exercise his discretion on the erroneous basis that it did not appear to him that any expenditure was unlawful but was, for example, merely in part arguably unlawful. He factored in the correct premise on a contingent basis.
  82. I say that because although that is not the express wording in the decision letter, it would be, as the auditor knew, necessary for the exercise of his discretion that it appear to him that an item of account was unlawful. So when he describes the exercise of his discretion and gives his reasons, I take it - absent contrary evidence - that he is exercising it on the correct statutory basis. Indeed, the reasons show that he was proceeding on the correct assumption, and the tone of his letter also supports my view that he was dealing with the position on the contingent basis that he was wrong about lawfulness. It is his uncertainty about lawfulness which led him to address discretion on the correct contingent basis.
  83. Mr Gullick attacked each of his reasons in turn. First, he submitted that the council's review programme was irrelevant in law. I disagree. The programme goes to the need for a court remedy in order to achieve lawfulness for the future. It shows that Bolton MBC was putting matters right even before the year ended and the audit began. It may have been belated or begrudging. But it was being done by halfway through the year in question. It also affects considerably the amount of the £1.2 million which could be unlawful. It affects the value of a court declaration.
  84. Second, the cost of seeking a declaration is relevant to the auditor, especially when balanced against the prospects of success. I have not found the evidential basis for Mr Moss's contentions or the law in relation to on-street parking at all easy. The arguments are not as simple as Mr Gullick suggested. The local authority's alternative approach concerning the adequacy of information to the driver has real merit and has been applied in some instances, not necessarily all that readily distinguishable from those considered by Mr Hickinbottom.
  85. I also accept that the auditor's premise in relation to the high cost of proceeding was based on the assumption that he would need to examine each PCN for lawfulness. I accept that if that level of specificity were required, each on-street PCN would have to be examined to see if the markings were more than trivially non-compliant. That would have been impossible as new markings have now superseded them. It would also involve examining each off-street PCN to identify the contravention.
  86. The auditor did not consider the possibility of a less specific declaration covering parts only of the item. But I have considered that, and did not find that at all persuasive as a basis for a declaration.
  87. Third, the publicly beneficial use of the income is relevant though not necessarily weighty.
  88. Fourth, while I accept that the retention of over-claimed tax as against the over-paying taxpayer is "particularly obnoxious" (see Lord Goff in Woolwich Equitable Building Society v Inland Revenue Commissioners [1993] AC 70, 172), it is not so obnoxious where the PCN payer had a right of appeal and did not take it; and more so where he can still apply to the local authority for repayment since the local authority said it would be pay back those on-street charges which were demonstrably invalid. It has not refused to pay back demonstrably invalid off-street PCNs. It is not necessary for Bolton or the auditor to incur money to identify such candidates; it is for them to come forward and make their point.
  89. Fifth, it is also relevant that Bolton was carrying out a public function for which it was entitled to charge and which it is in the interests of the public should be enforced, both on and off-street. It is also relevant that save for the wheels-on-bay-lines PCNs, there is no basis for supposing that any payer was remotely misled by the deficiencies on or off street which Mr Moss has identified and, were the payer minded to take the point he could have appealed.
  90. All of that goes to the purpose and advantage in taking court proceedings to seek a declaration. I am satisfied that the decision of the auditor not to seek a declaration was justified here. And although certain aspects of his decision may have been overtaken by my decision, there is nothing in my judgment which means that I should regard the exercise of his discretion as wrong; nor is there anything which would dispose me to exercise my discretion differently. There is in my judgment no value in a declaration. It cannot be specific. The amount of the item which is unlawful cannot be clearly identified, the unlawfulness has stopped and there are other means for repaying those who might now wish - and be able - to prove that their PCN should not have been exacted even though they did not appeal.
  91. Accordingly, this appeal is dismissed.
  92. MR PATEL: In the circumstances I ask that a costs order follows the event. We ask for the costs of the appeal to be borne by the appellant. We have a schedule indicating that this was a day's hearing. It was not a day's hearing. Obviously it has been completed with your Lordship's judgment. Certainly I would ask you to summarily assess the costs.
  93. There are two schedules there. The first is all the costs up until 7 October which was last Thursday's hearing. The second is today's hearing. It also obviously included having to look at the notes that Mr Gullick prepared between the two hearings. We would say that those costs follow the event and are able to be awarded. We also rely on the fact that on 25 March, after we served our skeleton argument in this case, we sent Mr Moss's solicitors a letter saying that you had the opportunity to review the matter and the evidence that has been filed - Mr Walker's evidence - and that we say the appeal has no prospect of succeeding and will not succeed and therefore we ask him to withdraw the appeal, failing which we would seek costs against him.
  94. We said our costs would be in the region of £35,000 to £43,000 which, in the event, is actually quite an accurate estimate given the costs that are in the schedule. We said to him that we would ask him to provide security for costs.
  95. The only response we received from Mr Moss's solicitors was that they did not think an application for security of costs could be made and they said that they would not be withdrawing. We have got to last Thursday's hearing. We have had today's hearing. You will have seen from Mr Moss's skeleton arguments - the ones that have been advanced on his behalf - and you will have seen from the witness statements which he has put before you that he has prosecuted this appeal very very strongly. He has pursued it vigorously and strongly. We say that in those circumstances the fact that he has not succeeded should then give rise to the normal rule that one has in relation to appeals and that is that he should pay the auditor's costs.
  96. I say no more on the matter.
  97. MR CHEGWIDDEN: While I accept that my friend is of course correct that in the ordinary scheme of events costs should follow the event and that the authority and KPMG have been successful and that Mr Moss has not been successful, you will also be aware that there is in cases where the public interest has been at issue and where a claimant has brought proceedings in the public interest for no desire for personal gain that the order in the event of an unsuccessful appeal may in fact restrict wholly or partly his liability for costs under the ordinary rule.
  98. MR JUSTICE OUSELEY: Can you draw my attention to anything which supports that proposition?
  99. MR CHEGWIDDEN: Yes. I handed to my friend and I will hand to you a decision of the Court of Appeal in R (On the Application of Davey) v Aylesbury District Council, a 2007 decision. That is also a case in which the claimant was unsuccessful in mounting an appeal. The comments that are made at paragraph 21 by Lord Justice Sedley are relevant. Those are at paragraph 21, line 5, C:
  100. "In contrast to a judicial review claim brought wholly or mainly for commercial or proprietary reasons, a claimant ..... partly upholding the public interests albeit unsuccessful may properly result in a restricted or no order for costs."

    Part of sub-paragraph (2):

    "If awarding costs against the claimant the judge could consider whether to include other costs."

    That is not relevant to this particular appeal but that was an issue particularly in Davey.

  101. The general principle appears to be accepted that where a person acts in the same way as the appellant in that case did your Lordship has a discretion to restrict the effect of the costs following the event rule.
  102. What is submitted in this case is that Mr Moss is a retired non-professional, long time campaigner against parking enforcement in the Bolton area where the statutory requirements for the public to park consistently with the rest of the country and lawfully have extensively not been in place, and that follows from your judgment today. The correction of the unlawful situation that arose in Bolton in the year 2007 to 2008, to which you have just recently referred, was largely as a result of the campaign by Mr Moss and his persistence in the face of the council's reluctance to bring the situation into lawful order. Of course they have now and that is largely as a result of what Mr Moss has done.
  103. Furthermore, the Department of Transport has declared it, and I have documentary evidence from the Department to make it clear, is the responsibility of ordinary individuals, campaigners like Mr Moss, to bring unlawful parking enforcement standards or circumstances into proper order.
  104. MR JUSTICE OUSELEY: These proceedings were begun in 2010.
  105. MR CHEGWIDDEN: Yes. But even this year there are comments from the Department of Transport, and I can hand them up to you, issued in correspondence, expecting persons like Mr Moss to remedy the situation by the ordinary civil remedies that are available to him.
  106. MR JUSTICE OUSELEY: I do not think that can possibly include this one. This is not a normal way of dealing with the public interest in so far as there is a Bolton public interest. Whatever public interest there is and whatever spur you were providing had already had considerable effect by October 2007.
  107. The objections you raised to the auditor led to the auditor exercising a discretion not to take this particular route, that is to say appealing to the court, for reasons which he gave. One of those was that the authority had undertaken remedial measures and was willing to pay back PCNs that could be shown to have been invalid. So when you make your public interest submission, your public interest submission has to be in relation to the bringing of these proceedings in those circumstances.
  108. Your public interest, if you are going to engage the sympathy of the court on that, has to be the public interest in showing that the auditor's discretion was wrong or that his view on lawfulness was wrong. By the time these proceedings had begun you had won really as against Bolton, at least in terms of effect. And if other councils were behaving similarly slovenly, a more direct means would have been - if you wanted to go to the High Court - seeking a declaration against the defaulting local authority that XY markings, taking two or three that you exemplify, were unlawful and PCNs should not have been issued if you found that the local authority was ignoring parking adjudicator decisions or evading parking adjudicator decisions.
  109. That is the problem I have with your public interest point. It seems to me that you are focussing on a different public interest than the one engaged in these proceedings.
  110. MR CHEGWIDDEN: Forgive me for being so general at that point. I do appreciate you are directing me to the more specific public interest.
  111. MR JUSTICE OUSELEY: That is the only one that matters.
  112. MR CHEGWIDDEN: I intend to address those. May I confirm with my solicitor for one on the matter of value to auditors in particular in up-coming cases. (Pause)
  113. I turn to the issue of the auditor's exercise of discretion. My submission would be that this litigation has served the public interest in two specific ways. The first is that until today - and with the decision that has fallen from your Lordship - there has been no guidance specifically to district auditors to consider the point of what is a very significant amount of revenue under the environmental services heading when it considers the exercise of its discretion. That is not now the case. I am instructed that the absence of any guidance from any of the courts about this point has led to many concerns about many reports of district auditors.
  114. I am specifically instructed that there are a number of cases that are currently pending or currently have been issued involving challenges to a district auditor's exercise or non-exercise of his discretion on this specific point. It has not just been of interest to Mr Moss and the residents of Bolton to have the guidance that your Lordship has now issued. It has been of relevance to every district auditor and will be, I have no doubt, of interest to every district auditor to know what the court's view is about the discretion and power about unlawful accounts, specifically considering that the result of today's judgment is a finding that there may have been significant amounts of unlawfulness.
  115. What a district auditor will now be able to do - as a result of Mr Moss's efforts - is to direct his or her attention when looking at these accounts as to whether the amount of unlawful income can be quantified, whether it is going to be justified in terms of the costs of investigating as far the unlawfulness is concerned rather than simply saying I will not exercise my discretion because there has been no unlawfulness. In a sense every auditor is now in a position of being able to exercise more accurately his discretion because he now has what are fairly clear guidelines from you about what he or she is to do. That was not the case before.
  116. In circumstances where both the defendant and the local authority is put in a better position in terms of that discretion than they were before, this case has served the public interest. It is something of course that may be indirect to the man or woman on the street but the reference by an auditor for a declaration may in other cases have some significance. In this case it has not so resulted because we your Lordship has pointed out that we cannot quantify the extent of the unlawfulness or the justification. It may be that in other cases there is that ability and therefore some fairly clear conclusions can be drawn from district accounts.
  117. For those reasons I would say that there is a public interest that has been there. And even though these proceedings were commenced in 2007, I would like to address the issue that you raise rightly to say are these proceedings not effectively one lodged after the horse has bolted in the sense that the problems of 2007 are now no more in Bolton. Of cousre that is the case. But the problems in relation to district auditors had not been resolved by 2010. In respect of all of these matters when a person such as Mr Moss is confronted with a situation where he cannot obtain decisions from local adjudicators because of the reluctance of the council to pursue that matter and he is faced with proceedings such as these to get a clarification he should not be penalised for the resort that he has had to make to this court which has been of some assistance, both to the defendant (?) and to the local authority even they chose not to attend.
  118. On that final point I should note that a lot of the problems in this case that you have identified are as a result of a failure to clarify a statutory scheme, of a failure to illustrate the extent of or - at de minimus level - of unlawful restrictions by the local authority. Mr Moss has had to do it all on his own. You accepted the thrust of his survey of 2007. For Mr Moss having not being successful because of some of the unclarity of this appeal, largely because the local authority did not attend - - - - -
  119. MR JUSTICE OUSELEY: I do not think that is right. If you were seeking to say that something was unlawful the statutory provisions are a basic requirement. I was disturbed that I was being presented with parking adjudicator decisions and not the regulations. I am still of the view that I have not seen the ones that deal with off-street parking. And a much clearer picture of the regulations may have led me to go down the James v Caley line. I did not think that the arguments on the impact of those decisions I referred to. That is my reservation. I appreciate it was not on the other side. That is a problem. I was not entirely sure that what may be some quite interesting points were really grappled with by Mr Gullick who proceeded on assumptions. That is not the fault of the local authority.
  120. MR CHEGWIDDEN: I appreciate that. In respect of that I do not want to put it any higher than I have. I can only apologise on behalf - - - - -
  121. MR JUSTICE OUSELEY: These are known to be very technical pieces of law that you have to get right, particularly with local legislation. And it is if you are a campaigner crusader - - - - -
  122. MR CHEGWIDDEN: Those are my submissions in respect of principles of costs.
  123. MR JUSTICE OUSELEY: Shall we deal with the principle first? Mr Patel, can you say anything useful?
  124. MR PATEL: Only this. Parliament has entrusted the auditor with public interest, to decide whether to apply to the court. The appeal is against the auditor's discretion and you found with the auditor on that aspect of the case. Furthermore, there was a real difference of opinion which took up the bulk of the argument before you, certainly in terms of skeleton argument, which occupied the court's time as to what the proper approach in any appeal was. Mr Moss was arguing one particular way of approaching the appeal and I was arguing the other. You came down wholly on the side of the auditor in that respect.
  125. We say there is no public interest in terms of clarification of the approach of the auditor to apply to the court. He knows he has a discretion even if he finds that there is unlawfulness. He knows that that is subject to appeal. Certainly the auditor knows that as well. He knows what the approach of the court should be to that. The fact that this is the first case in which the court has articulated it does not mean that the principles are unclear. In fact we say the principles are clear. So we say that there is nothing special in this litigation. It did not need to be brought by Mr Moss. We actually gave him an option not to continue litigation because we said after we had served our own skeleton argument you can stop this if you want, not to waste costs. But he continued at great cost to the auditor, which is public money. The auditor's money is public money. Therefore we seek order for costs.
  126. MR JUSTICE OUSELEY: Any reply?
  127. MR CHEGWIDDEN: I think this is almost unnecessary, but of course even though the auditor is - the defendant is - KPMG, obviously a private body, my friend said in his last sentence which makes me hesitate before needing to reply that in this particular respect it was acting as a public body. So it is a local authority and a public auditor on the other side, and particularly in the circumstances where you have directed that the first stage of discretion was exercised wrongly by a very experienced firm of auditors indicates that - with the guidance that existed prior to these proceedings - [it] was not sufficient, was not satisfactory. Even though there may have been a general awareness of whether there was a discretion and whether it was subject to appeal, there were significant gaps in the knowledge which have led to the auditor doing in 2007 and 2008 what he did which hopefully will result in auditors around the country not doing that from now on or at least having a better chance of exercising discretion correctly.
  128. Where public money is concerned there is a public interest in these proceedings. On that basis we would ask that the ordinary rule not apply.
  129. MR JUSTICE OUSELEY: Mr Moss brought an appeal in 2010 in respect of accounts 2007-2008 relying on an unlawfulness which had been wholly remedied in certain respects and was on the way to being remedied in other respects by October 2007.
  130. The normal rules is that costs should follow the event. Mr Chegwidden submits that they should not do so here because of the public interest in these proceedings.
  131. In my judgment, that is misconceived. There was no public interest in terms of making Bolton comply with its obligations because the deficiencies were being remedied. Money would be paid back to those who lost. The auditor had made clear what the basis of his discretion was which I have upheld. If there had been a desire to challenge the way in which local authorities marked bays an d issued PCNs this particular route by challenging the auditor's discretion is an indirect and confusing one.
  132. Mr Chegwidden submits that it has been a public interest to have guidance to the auditor on the exercise of his discretion. There has in reality been no guidance. I have agreed with what the auditor did rather than setting out new principles for the auditor. I have disagreed with the auditor's view on this matter. But that is essentially the matter that arises between the local authority and Mr Moss and which is redundant as between them. If it is a live issue between Mr Moss and another authority or between another campaigner and another authority it is to be hoped that the issue will be raised in a more direct route. I am at a loss to see what public interest there was in these proceedings. I take account of the correspondence in March.
  133. Mr Patel, as I understand it, you were not asking for your costs if the case was withdrawn in March. Is that right?
  134. MR PATEL: Correct.
  135. MR JUSTICE OUSELEY: Mr Moss spurned that opportunity to avoid costs. If it is thought that the decision that I have reached is in the public interest because it helps a number of other potential objectors, appellants, they can help him out on costs.
  136. What do you want to say about the amount? I had a schedule of costs from your solicitors. It was about the same amount, possibly rather more.
  137. MR CHEGWIDDEN: That is so, but I have not compared the final figure.
  138. MR JUSTICE OUSELEY: I cannot see it off-hand. What do you want to say about the amount of costs?
  139. MR CHEGWIDDEN: Is it your intention to consider summary assessment now because if it is then I have some remarks to address towards issues on the schedule.
  140. MR JUSTICE OUSELEY: I normally would, it being a one-day case. I would normally have sought to deal with the assessment of costs in a summary fashion. I would only not do so if I found the issues were getting too difficult for fairness to be done. But even if there is something rough and ready about the consequential costs order I would normally deal with it.
  141. MR CHEGWIDDEN: First, whilst it may look that overall, looking at the bottom line, there may be an overall parity in costs, that is not necessarily a safe principle to rely on in assuming the claimability of all the amounts claimed, considering that in this one, or another, case the claimant or a defendant may need to spend a lot more time and effort in respect of the bundles and the evidence provided. As you have confirmed, Mr Moss has prosecuted this appeal very, very strongly with a huge amount of evidence which has been brought to this court and that has been the claimant's responsibility. Those instructing me had to take some time for that.
  142. In respect of the defendant's schedule, I have a number of observations first to make about the fee earners themselves. We have two grade A fee earners assigned to this matter. There is no explanation of why there is a duplication of two grade A fee earners, why two were needed. Additionally, the final trainee solicitor who has been used in this case is working at a rate well above the London allowed rate for 2010 which is recommended at £138, not £170. That is the issue. There is a duplication issue and there is a rate issue on the fee earners.
  143. Going through the actual work done, what we have here is attendances on the auditor. We have a total of 21 hours roughly, the result of which was one witness statement of 27 paragraphs and exhibits thereto. That does seem to be an exorbitant amount of time for that witness statement to be prepared. Also there is the duplication matter there. We have two grade A fee earners working separately at top rate - no real explanation why. I would recommend allowing five hours for the grade A fee earner and four hours for the grade C. Attendances on opponents, five hours: it does seem a little high. I do not have any explanation for why it is so much. Attendances on others: the question arises on whom. Presumably the court and council. We have eleven hours being spent by Miss Clayson and we have seven hours by the grade A fee earners on what does appear to be, in many respects, fairly ordinary attendances.
  144. The next part of the schedule is other work not covered above. There, I am at a loss, as are those instructing me, as to what the fifteen hours was spent on. The fifteen hours of work not covered above and three hours by the grade A fee earners. That is not explained. In terms of work done on documents we have an astonishing 31 hours spent on documents by Miss Clayson. Here I would observe that it was the claimant, Mr Moss, who did the files and the bundle. Where the document time went for the respondent I am not entirely sure.
  145. As far as attendances at the hearing is concerned, it is undisputed that those instructing Mr Patel did need to be at the hearing. But if a junior solicitor was required to attend simply to take a note of proceedings that should be claimed at the lower rate; it is being claimed at £250. That should be more like £170 considering the role that was being fulfilled. The same goes for the time travelling and waiting for the junior solicitor who attended Miss Clayson.
  146. I come to counsel's fees. I would note that the fees being charged by counsel for KPMG are roughly double what Mr Gullick was charging. We have £7,235 for advice and conference. I can assume that Mr Patel conducted a conference with his clients. In term of documents produced, me have one skeleton argument and one supplemental skeleton argument, no appeal drafted. It is a very high figure. If Mr Patel can claim such figures from his client that is a matter for him, but on a party-party basis whether he should be able to claim that high is a matter for the defendant.
  147. In respect of the hearing fee, the guidelines issued in the White Book for a half-day hearing in the Administrative Court [is] £1,746 so for a full-day hearing I would have thought something in the order of £3,500 is appropriate following the 2010 guideline. Here we have £5,000, so once again a little high. That concludes my observations on the costs schedule. I have nothing to say about the schedule for today. I can see that is much more modest.
  148. I have been passed a note by my instructing solicitor to inform the court about the matter that I raised at the beginning, namely the parity of the two schedules, to note that the claimant's schedule does include VAT. The other schedule does not. Where there is apparent parity (?) financially, in fact it is not. Those would be my submissions.
  149. MR PATEL: With respect to my friend who did not conduct the hearing, it may be that some of his submissions are on the basis that he has not quite understood the scale of the appeal and the documentation that Mr Moss put forward with which the party had to deal, had to assimilate and then had to understand and respond to. I seek to suggest that when one looks at the schedule on its own, when one compares it in terms of the schedule put forward by the claimant that confirms it the reasonableness of it. When one looks at the attendances of the parties - I will deal with the points made by friend in particular - there are two grade A fee earners. That is not because there was a duplication of work but because two grade A fee earners happened to do work on this particular case. Their particular attendances on others and on parties have been set out in particular where they have attended on the parties and where they have attended on others. That is not duplication of work, that is separate work done by two separate grade A fee earners.
  150. The second point is that it was said the attendance on parties was too much - 21 hours. When one looks at Mr Moss's statement the attendance on his is 23 hours. I would say that is fairly similar. We have got it in terms of attending on the auditor. My instructing solicitor had to go through Mr Moss's voluminous witness statement and his exhibits with the auditor and see what points there are and what his comments are on that before the witness statement was then drafted.
  151. In terms of attendances on opponents, we are not entirely clear what point my friend is making. It is almost exactly the same. It is five hours and thirty-six minutes for KPMG and about five hours and 54 minutes for Mr Moss. One would think they are almost the same.
  152. In terms of attendances on others, that includes the court, counsel and it would also include Bolton for KPMG because they have been attendance on Bolton in relation to that. Again if one compares it, Mr Moss is in the region of about eighteen hours and so is KPMG so they are fairly similar.
  153. One looks at work done on documents. It was said that there was an astonishing thirty-one hours done by the lower fee earner. What is astonishing is that work done on documents for Mr Moss is seventy-five hours in total. That is an astonishing figure, not the one that appears at thirty-one. In fact the work done on documents by KPMG is a much lower figure, forty hours compared to seventy-five.
  154. MR JUSTICE OUSELEY: What do you say about the other work - fifteen hours.
  155. MR PATEL: That is work done looking into the legislation, the complex legislation there is in terms of car-parking rather than work done on documents. So in that respect there is a separation there. So if one were to add that together - which is probably right to do - you have a figure of fifty-five compared to seventy-five rather forty and seventy-five.
  156. Attendance at the hearing: it was said that the second solicitor (there were to be two solicitors to be attending, no doubt because Mr Moss has two solicitors attending) the fee should be at a lower level. That is the fee that is proper to charge for a grade C solicitor - £250.
  157. I come to my fees. The difference between my fees - - - - -
  158. MR JUSTICE OUSELEY: This is the part I enjoy; barristers arguing for their fees - something I never had to do.
  159. MR PATEL: This is a case where there has been a lot if hard work on both sides by all concerned. Mr Gullick is 2003 call and I am considerably more senior to him in that respect. In relation to the fee for the hearing, there is no real difference. His fee is at £4,000 for 2003 call and mine is at £5,000 for 1996 call. In terms of other work, there were two skeleton arguments from myself - and I hope the paperwork was of assistance to your Lordship - which required some precision in both the law and the facts, getting down the relevant facts in to the chronology and also in terms of setting out the submissions of KPMG as to the proper approach.
  160. The second skeleton argument was necessitated by Mr Gullick's second skeleton argument in which he said that the correct approach to the appeal was that which he raised, which you have rejected. It had to be set out in order for the court to decide and have some of the necessary approach. In that rsepect I say those fees are not unreasonable; in fact they are reasonable in the context of this litigation. I say you should allow summary assessment in the figures that are set out in the two schedules in the figure of - - the first schedule is £44,463, the second £3,150.
  161. MR JUSTICE OUSELEY: Was a decision made not to deal with the lawfulness but to deal with discretion. If you are dealing with discretion, how much of the analysis or consideration of the material - I appreciate it was voluminous - that Mr Moss put forward did you and your solicitors actually have to do because it was the discretion point in the end? I appreciate it was argued about principles. It is not what took up much of the time. The time is considering all the unlawfulness point, partly at the hearing, and that is what almost all of the documents related to.
  162. MR PATEL: Indeed. Speaking for myself, and I suspect my instructing solicitors, we still had to consider and analyse the points that were being put forward. It was not our case that that was the way in which you should approach this particular appeal. It certainly was not our case that we necessarily - - we do not necessarily agree that you might well have concluded but we still had to consider it. It became very clear during the hearing that it was complicated.
  163. MR JUSTICE OUSELEY: You do not have to persuade me that parking restriction law is complicated and that the facts are complicated and the evidential basis for what is being put forward is complicated. You do not have to explain that.
  164. If you had to go through everything Mr Moss produced that would be one thing. But did you, in relation to the arguments that actually were deployed by you, have to do all that, bearing in mind the auditor - your client - had gone through that? They formed a view about lawfulness, where the problems were, what the arguments were and that it was not a completely straightforward area which the auditor had decided. He was not persuaded of unlawfulness but he was not really going to go into it because his view was, in any event, I am not going to court. Was it necessary for him in dealing with the appeal to review all of that as opposed to saying - - because Mr Moss, although it added enormously to the volume of papers, in the end I think he put his points a bit more clearly in his witness statement than he had in the material he presented to the auditors. It was the auditors who faced more of a muddle than the second helping the court had.
  165. MR PATEL: One could only learn that he was putting his points a little bit more clearly in what he was saying to the court once one read the entirety of the witness statement. You would have read the witness statement. One needed to read it all in order work out what the essential points were. Certainly for my part I had to read it all and assimilate it all just to see exactly what he was saying; certainly so did my instructing solicitors and so did the auditor. Whilst it is correct that we were submitting that in reality the appeal should not really be considering all that material, it should really be looking at the auditor's discretion (and that certainly was the thrust of our case), that was rejected very vehemently on behalf of Mr Moss. Mr Moss was saying you did not even bother looking at the discretion of the auditor, you just look at all the material that was before the auditor and you the court then have to make up your own decision.
  166. Whilst we were confident that that was not the correct approach - and your Lordship has, rightly we say, accepted that - we could not defend the appeal simply on the basis that you would actually agree with us, and therefore we had to go through all the material that we did.
  167. MR JUSTICE OUSELEY: You were never going to address me - as I understand it you never did - on whether you were right - - - - -
  168. MR PATEL: I did not because I took the view I did not need to address you on that because I took the view that it was not about that. I did not want to give the idea to you that this appeal was about that rather than about the points that I was actually particularly making. It does not, with respect, mean that I have not looked at it, nor - the way Mr Moss presented this case - mean that I was - - we say that the way Mr Moss presented this case means that we were forced to look at it. It required us to do so. Yet I would accept that there is an awful lot of work as to that. That is what has caused some of the money that is involved in this case.
  169. What we are claiming - the sum of £47,000 odd - is not far off what we gave to Mr Moss as an estimate back in March. I think we said 43. He is absolutely clear - and has been since March - as to his potential liability for our costs in the event that the appeal should fail. We say we told him that would be the case, and it has failed. Therefore we say he should be paying the costs which we say are reasonable.
  170. Unless I can assist further, those are my submissions.
  171. MR JUSTICE OUSELEY: Do you want to reply, Mr Chegwidden?
  172. MR CHEGWIDDEN: Only briefly to say that there is a difference between preparing documents and simply reviewing them. I appreciate what my friend says that a certain degree of familiarity with what an appellant is going to present is needed. That is not denied. What is denied - and what we discover now - is that effectively documentary and the other work is, what in some other firms might be considered together, work done on the documents, the legislation and all of the claimant's witness statements and so on. It is 55 hours. That is not far off what it took the claimant to create all those documents in the first place. We are not in that realm. It is very high and it is very high specifically considering that for the auditor to win in this case, as it has, it really only had to win on the discretion point. I appreciate what my friend says that there must be a degree of familiarity in what the other side is saying. The focus for the auditor properly was to focus on the discretion issue. That should have taken up the bulk of their time.
  173. It may be fair of them to say we need to spend time fully canvassing the unlawful position. But if they are to do that not all of those costs should be recoverable. I am not suggesting that there be parts of the schedule completely struck out but I am suggesting that there should be a reduction, and that is because some of those costs incurred which were incurred from an abundance of caution rather than need are actually not recoverable properly from Mr Moss in this case.
  174. MR JUSTICE OUSELEY: There are two issues that arise in the assessment of costs. One is the general point which is bearing in mind the restricted basis of the submissions which Mr Patel provided, essentially focussing on the discretion issue, was it necessary to incur the considerable time it would have taken to read and understand the voluminous repetitive material which Mr Moss provided.
  175. I accept that the auditor - although he would have had some familiarity with the issues - or rather his lawyers would have had to go through the material even if deciding to focus not on lawfulness but on discretion. So the bill has to be judged in the light of the fact that the respondent needed to look at all the voluminous material. I accept Mr Chegwidden's point about the difference between the work an appellant has to do on documents and the reviewing of those documents which a respondent has to do. That is probably reflected in the lesser time in relation to that item, comparing 46 hours with 75.
  176. I am not persuaded that in the points made about hours spent there are really significant points. But I do not doubt that if one poured over this in the way that a costs assessment would entail, that the full sum claimed - which is a total of £44,463 plus £3,150 - some of that would fall by the wayside on assessment. I have reservations about the full extent of the number of hours, some of the hours spent by trainees and the extent to which the hours were actually needed. But it is not a large amount by which I propose to reduce the total of £47,613, I believe it to be. Does that figure include VAT?
  177. MR PATEL: No. I do not think it does.
  178. MR JUSTICE OUSELEY: VAT is on top of it, is it?
  179. MR PATEL: Yes.
  180. MR JUSTICE OUSELEY: In my judgment, it is appropriate that there should be some - but modest - reduction from that before VAT is added. I propose to reduce the sum that is due to the sum of £40,000 - as a around figure - upon which VAT must then be paid. £40,000 plus VAT.
  181. MR PATEL: I was trying to work out the VAT position. As I understand it, KPMG can recover the VAT on their fees.
  182. MR JUSTICE OUSELEY: So you do not need an order in relation to VAT?
  183. MR PATEL: No.
  184. MR JUSTICE OUSELEY: £40,000 then - dead.
  185. MR PATEL: I am grateful.
  186. MR CHEGWIDDEN: There is one further matter. It arises from the fact that the judgment that has come from your Lordship deserves further study by Mr Moss and his advisers. Under Part 52 - I will be corrected if I am wrong - because this is a statutory appeal it is considered to be effectively a first appeal as opposed to a first hearing. So if there were to be an appeal on this decision as far as the merits - not the costs decision - as far as the actual appeal was concerned, it would be direct from the Court of Appeal as opposed to from your Lordship on this actual - - - - -
  187. MR JUSTICE OUSELEY: There is not a provision in the Act that says this decision is final.
  188. MR PATEL: I cannot say I know. I think it is subject to appeal from the Court of Appeal.
  189. MR JUSTICE OUSELEY: Then it is appealable to the Court of Appeal and you need to ask me for permission.
  190. MR CHEGWIDDEN: I do make that application. I do not know whether - - - - -
  191. MR JUSTICE OUSELEY: Unless there are any particular points you want to make and making them for the sake of form so you can consider it more fully with Mr Gullick when you have a transcript - - - - -
  192. MR CHEGWIDDEN: Would you entertain the possibility of allowing
  193. Mr Moss sometime to lodge a notice with you within seven days of today given that this judgment now merits being studied, and of course Mr Gullick - - - - -

  194. MR JUSTICE OUSELEY: I am not inclined to do that. I am not going to give you permission to appeal. You would need to have something really powerful to say. I have - as I have made clear - my reservations about the value of this judgment anyway on the lawfulness issue. What I would be prepared to contemplate is extending time, which I have power to do, for you to make an application to the Court of Appeal for permission to appeal until you had the approved transcript for fourteen days which means Mr Gullick will be able to consider it subject to anything Mr Patel may wish to say against that.
  195. MR PATEL: My clients are anxious that this whole matter is resolved because they cannot close the accounts until the matter is resolved. I can understand why you have made the order. Certainly I will not argue against time being set.
  196. MR JUSTICE OUSELEY: I have not made the order. I am giving you the opportunity to argue it.
  197. MR PATEL: Could I ask for a shorter time period than fourteen days? They already know the thrust of your decision. The question will then be just looking at the transcript. Could I ask for a period of seven days rather than fourteen?
  198. MR JUSTICE OUSELEY: I think that is reasonable. (To Mr Chegwidden) You will have to give Mr Gullick the heads-up on what I said and any discouraging words I added about the appeal. I will give you seven days from the date when the approved transcript is issued to lodge an application for permission to appeal with the Court of Appeal.
  199. MR CHEGWIDDEN: I presume that that application for the transcript needs to be processed with the Registry. Is that so?
  200. MR JUSTICE OUSELEY: I do not think so. You make a request for the transcript, there will be a transcript done as soon as possible. That will wend its way to me for approval. I will then deal with it as soon as time permits. It will then go back to the shorthand writer who will make such corrections as are required. If there are a lot it may come back again. We will endeavour of course, as we always do, to do things expeditiously. We do not always succeed.


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