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England and Wales High Court (Administrative Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Administrative Court) Decisions >> Howard, R (on the application of) v The Official Receiver  EWHC 1839 (Admin) (28 June 2013)
Cite as:  2 WLR 1518,  QB 930,  BPIR 204,  EWHC 1839 (Admin)
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QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT SITTING IN THE MANCHESTER CIVIL JUSTICE CENTRE
Strand, London, WC2A 2LL
B e f o r e :
| R (on the application of Amanda Howard)
|- and -
|The Official Receiver
Scott Redpath (instructed by Treasury Solicitor) for the Defendant
Hearing dates: 25 October 2012 and 9 November 2012
Crown Copyright ©
Mr Justice Stadlen :
Application for the DRO
(1) her 'qualifying debts' (as specified in the list of her creditors) were about £10,300. She put as her reason for her debt problems, "loss of debtor's employment";
(2) her monthly expenditure was £679;
(3) her declared monthly income was £679, the source of which appeared to have been state benefits.
"If I'm entitled to this money, I would like to use it towards rent arrears as the C.A.B. advised me to keep paying £5.00 a week off my rent arrears as if I didn't pay my rent arrears, they could throw me out when my D.R.O. was finished!
There is also a college course I wanted to pay for too @ £200 if possible.
This is to help me gain confidence + when I'm better get back into work.
The courses aren't government funded …"
OR's intention to revoke the DRO
"The reality is that my client has mental health issues and will not be returning to work in the near future if at all. She is therefore dependent on the following benefits – Employment Support Allowance, Housing and Council Tax Benefit."
Claimant's letter dated 5 October 2011
"13c – Reduced awareness of risks of everyday hazards has led or would lead to frequent instances of or to near-avoidance of: (1) injury to self or others; (2) significant damage to property or possessions but to such an extent that overall day to day life cannot be managed when such incidents occur.
14c – Frequently forgets or loses concentration to such an extent that overall day to day life can only be successfully managed with pre-planning, such as making a daily written list of all tasks forming part of daily life that are to be completed.
21e – is unaware of impact of own behaviour to the extent that (1) has difficulty relating to others for prolonged periods, such as a week; or (2) frequently causes distress to others."
The letter also stated that the Claimant "is seeing a specialist at the Royal Oldham Hospital and also a psychotherapist twice a week. Her problems are more mental than physical health and her functioning is affected."
(1) The Claimant was made redundant from a part-time job in 2009. She initially claimed Jobseekers Allowance "and then due to her disabilities she claimed Incapacity Benefit."
(2) She was again employed part-time in 2010, claiming Working Tax Credit to 'top up' her wages.
(3) However, "the nature of her health problems required her to give up work". She therefore claimed Employment Support Allowance, but because she failed the medical test, the benefit was withdrawn.
(4) Accordingly, she appealed against the decision and pending its outcome she was put on a lower rate of ESA of £65.45 per week.
(5) She had difficulties paying her bills "as her expenditure exceeded her income".
(6) On 6 September 2011, she received notice that she had been awarded the full basic rate of ESA with a work related activity component, thereby increasing her benefit to £95.25 per week.
(7) The upshot of this was two-fold: (i) she would receive a lump sum payment equivalent to £28.80 per week with effect from 15 December 2010; and (ii) the additional amount of benefit would be on-going.
(8) She was being advised to claim disability living allowance, although she had not yet done this, "although she has a substantial and long term impairment, which affects her ability to undertake normal day to day activities, pursuant to s6 of the Equality Act 2010".
(9) Her disability affected her ability to work, so that she was "likely to be dependent on benefits for some considerable time and the revoking of the order will cause her extreme hardship, and exasperate (sic) her health conditions".
(10) The tax credit office underpaid the Claimant in 2010 by £516.71 in respect of the period 4/9/10 to 16/11/10 (a period of 11 weeks equating to £46.97 per week). The lump sum payment was credited to her bank account on 13 September 2011.
(11) Had she received this money at the time it might not have been necessary for her to claim a crisis loan of £270 on 15 November 2010 or £98.14 on 24 December 2010.
(1) In respect of an underpayment of WTC in the period £516.71 4/09/10 to 16/11/10 treated as income over 3 month
period to 26/5/11
(2) In respect of arrears of ESA at the higher rate covering £979.20 the period 15/12/10 to 6/9/11
(3) A permanent increase in income of £124.80 per month £124.80 by way of future payment of ESA at the higher rate
"As our client has a protected characteristic under the Equality Act 2010, what steps have the Debt Relief Order Unit taken to ensure they do not treat out client less favourably because of something arising in consequence of her disability, pursuant to s15 of the Equality Act 2010? Further, what steps have you taken to make reasonable adjustments pursuant to s20 of the Equality Act 2010? Schedule 2 to the Act (Services and Public Functions) says at s(3)(b) that an adjustment under s20 can be "to adopt a reasonable alternative method of providing the service or exercising the function".
As the Debt Relief Order Unit is a public authority performing a public function you are also subject to the Public Sector Equality Duty at s149 of the Equality Act 2010 …"
"We have consulted with our Equality and Diversity Team regarding the matters you have raised regarding potential discrimination against the debtor should the decision be made to revoke the DRO. The opinion is that the debtor is not being discriminated against by reason of her disability in the circumstances set out above and in our earlier exchanges and the situation might be different if the payment was provided to specifically meet an expense arising as a result of a disability (e.g. accessibility adaptations); or was a payment by way of an underpayment of disability living allowance. The view taken is that DLA is specifically designed to meet a mobility or caring need and more importantly is disregarded in an income calculation for DRO purposes as a straight offset of income and associated expenses."
First Pre-action Protocol Letter 10 November 2011
"iii. With reference to the matter of discrimination, it is not just about the benefit in payment and its treatment. We supplied evidence which showed our client as a vulnerable adult with specific needs. Due to her health issues she is prevented from holding down a job and is therefore dependant on the benefit system. She has been underpaid benefits causing her to take out crisis loans and purchase things on credit. The re-instatement of her correct rate of benefit brings her back to the level that the Government has decreed is acceptable to live on i.e. applicable amount; prior to the re-instatement she was below the acceptable level. The windfall of a lump sum payment in respect of a benefit that was owed should not prejudice her or cause her hardship; which is the case if the debt relief order is revoked. As you are aware she would not be able to re-apply for a debt relief order until six years have passed. It is also unfair to prejudice someone living within their means and surviving on their income at the time. If Miss Howard was to apply for a debt relief order at this moment she would be eligible."
(1) The OR failed to take into account that the Claimant had a protected characteristic under the Equality Act 2010 ("the 2010 Act");
(2) the decision to revoke amounted to direct discrimination;
(3) there was failure to make a reasonable adjustment;
(4) there was a failure to consider the public sector equality duty under s.149 of the 2010 Act.
(1) the Protocol letter had been received and that it was unrealistic to expect a reply by 14 November 2011, but that the revocation would be forthwith suspended for 28 days to allow the OR to give full consideration to it;
(2) the three month time limit for commencing an application for judicial review would start "from the time that the official receiver provides you with a substantive response to your submission".
The OR's letter 6 December 2011
"the sum of £1315.59 was received on 13 October 2011 for the back dated ESA. The client has confirmed that as she had not had any money for a long time she used this for additional vets bills: replacing items such as purchasing new bedding towels throws and a kettle. She replaced her 3 piece suite which was old from the 1960s with a second hand one purchased from a friend. She paid for van hire. She replaced clothing boots and shoes …"
In an earlier email dated 10 November 2011 the Claimant's representatives had told the OR that she had not yet received those monies.
"…was first diagnosed with depression and anxiety in February 2010, but she had suffered from stress symptoms for months before that. The trigger seemed to be her redundancy when she described her symptoms of palpitations, headaches and poor sleep.
In October 2010 she was involved in a road traffic accident and she suffered from whiplash and low back pain. She had suffered from chronic work related back pain prior to 2006 when she was involved in an RTA and her symptoms again deteriorated after the accident in 2010. In March 2011, she was referred to the orthopaedic team regarding her back but she either didn't attend or we never received a clinic letter.
In April 2011 she was referred to the counsellors as she felt abuse in her childhood could possibly [be – sic] the cause of her current symptoms. Her last attendance for anxiety was 1st March 2012 when she had had further panic attacks and low mood and we decided to try her with Duloxetine.
Her last attendance for her low back pain was on 29th March 2012 when she was given Ibuprofen."
"Having considered these additional matters, my decision to revoke the DRO remains unchanged. In particular, even based on the financial information that the Claimant and her representatives have more recently disclosed, I consider that during the moratorium period, the Claimant's "monthly surplus income" (within the meaning of para 7 of Sch 4ZA IA1986) materially exceeded the statutory limit. Moreover, assuming that, as Official Receiver, I am not excluded from obligations imposed by s. 149 Equality Act 2010 in exercising jurisdiction to revoke a DRO, and assuming also that the Claimant is a disabled person as she claims, I do not consider the fact of such disability justification for me not reaching the same decision to revoke the DRO in this case."
"In reaching my decision to revoke the DRO I acted properly, rationally and fairly. It would have been an improper exercise of my discretion to revoke had I ignored the fact that the applicant's income position had materially changed, so that she was now in excess of the prescribed statutory limits which could justify the continuation of the DRO. I do not accept that the applicant's reasonable domestic needs have so changed that her "monthly surplus income" fell within the prescribed limits during the moratorium period."
The Official Receiver
Debt Relief Orders
"14. DROs made their appearance as a new form of personal insolvency procedure when they were introduced by amendments to the 1986 Act with effect from the 24th February 2009: see the Tribunals, Courts and Enforcement Act 2007 s108 and Schedule 17 and the Insolvency Amendment Rules 2009 (SI 2009/642). They sit beside and complement bankruptcy. They form part of a legislative programme of debt-solution procedures, such as Debt Repayment Plans, Administration Orders and Individual Voluntary Arrangements, which provide a flexible choice of paths for the relief of those who are unable to pay their debts. The Consultation Paper produced by the Department for Constitutional Affairs in July 2004 ("A Choice of Paths - Better options to manage over-indebtedness and multiple debt") estimated that in 2002 net lending rose by almost £10bn per month and that adults in this country owed an average of £18,000 each. The Paper predicted that if, in the context of "the historically high levels of borrowing", there should be "an economic downturn….a far greater number of people would be at risk of financial difficulties.
15. The scheme, structure and purpose of DROs broadly reflect the regime of bankruptcy orders: the effect of the order is to stay enforcement of the debts by creditors and the debts are discharged after a specified period (1 year in the case of DRO). While the order is in force the debtor is subject to similar restrictions and obligations as in bankruptcy. The main differences are that the DRO process does not require the intervention of the court and it is accessible to people who do not have the financial means to pay the higher fee for access to the bankruptcy procedure i.e. debtors who cannot afford to make themselves bankrupt. It is less elaborate, being initiated administratively by the Official Receiver on the application of the individual debtor via a debt advisor who is an "approved intermediary" and on the basis of specified criteria as to assets, income and liabilities. Unlike bankruptcy there is no trustee in whom the assets of the debtor are vested for distribution to creditors. DROs are thus meant for those over-burdened with debt who have relatively low levels of liabilities, no assets in excess of £300 in value and no monthly surplus income over £50 with which to come to an arrangement with creditors. The applicant must not have been the subject of a DRO within the previous 6 years.
16. An individual who is unable to pay his debts may apply via an "approved intermediary" to the Official Receiver for a DRO under Part 7A of the 1986 Act. The DRO is made in respect of the applicant's "qualifying debts" up to a maximum of £15,000. Overpayments of social security benefits and Social Fund loans are "qualifying debts". (Secured debts are excluded, as are some other kinds of debt). The debts of Mrs Cooper and Mrs Payne to the Secretary of State were specified as such in the respective DROs obtained by each respondent.
17. The DRO has the effect of imposing a moratorium on "qualifying debts" for a period of 1 year at the end of which the debt is discharged from the specified qualifying debts: ss 251H and 251I.
18. Section 251G, which broadly mirrors s285, provides that, during the moratorium, the creditor to whom the specified qualifying debt is owed "has no remedy in respect of the debt" (subs (2)(a)) and may not commence a creditor's petition in respect of it or otherwise commence any action or other legal proceedings against the debtor for the debt, except with the permission of the court (subs (2)(b))."
(a) the application does not meet all the requirements imposed by or under s.251B;
(b) any queries raised with the debtor have not been answered to the satisfaction of the OR within such time as he may specify when they are raised;
(c) the debtor has made any false representation or omission in making the application or on supplying any information or documents in support of it.
(1) an application for a DRO must be made to the OR through an approved intermediary;
(2) it must include -a) a list of the debts to which the debtor is subject at the date of the application, specifying the amount of each debt (including any interest, penalty or other sum that has become payable in relation to that debt on or before that date) and the creditor to whom it is owed;b) details of any security held in respect of any of those debts; andc) such other information about the debtor's affairs (including his creditors, debts and liabilities and his income and assets) as may be prescribed;
(3) any fee required in connection with the application by an order under section 415 has been paid to such person as the order may specify. Section 251B also provides that the rules may make further provision as to -a) the form of an application for a debt relief order;b) the manner in which an application is to be made;c) information and documents to be supplied in support of an application. Thus any provisions made by the rules as to those matters are requirements imposed by or under section 251B.
- Section 251C(5) provides that the OR must refuse the application if he is not satisfied that –
a) the debtor is an individual who is unable to pay his debts;b) at least one of the specified debts was a qualifying debt of the debtor at the application date;c) each of the conditions set out in Part 1 of Schedule 4ZA is met.
Section 251C(6) provides that the OR may refuse the application if he is not satisfied that each condition specified in Part 2 of Schedule 4ZA is met.
Section 251C(7) provides that if the OR refuses an application he must give reasons for his refusal to the debtor in the prescribed manner.
- Schedule 4ZA Part 1 sets out the conditions which must be met. Part 2 sets out what are described as "other conditions". They are the conditions in respect of which by virtue of section 251C(6) the OR may but not must refuse the application for a DRO if he is not satisfied that each of them is met.
- The conditions set out in Part 1 are as follows:
"1. (1) The debtor—(a) is domiciled in England and Wales on the application date; or(b) at any time during the period of three years ending with that date—(i) was ordinarily resident, or had a place of residence, in England and Wales; or(ii) carried on business in England and Wales.(2) The reference in sub-paragraph (1)(b)(ii) to the debtor carrying on business includes—(a) the carrying on of business by a firm or partnership of which he is a member;(b) the carrying on of business by an agent or manager for him or for such a firm or partnership.
Debtor's previous insolvency history2. The debtor is not, on the determination date—(a) an undischarged bankrupt;(b) subject to an interim order or voluntary arrangement under Part 8; or(c) subject to a bankruptcy restrictions order or a debt relief restrictions order.3. A debtor's petition for the debtor's bankruptcy under Part 9—(a) has not been presented by the debtor before the determination date;(b) has been so presented, but proceedings on the petition have been finally disposed of before that date; or(c) has been so presented and proceedings in relation to the petition remain before the court at that date, but the court has referred the debtor under section 274A(2) for the purposes of making an application for a debt relief order.4. A creditor's petition for the debtor's bankruptcy under Part 9—(a) has not been presented against the debtor at any time before the determination date;(b) has been so presented, but proceedings on the petition have been finally disposed of before that date; or(c) has been so presented and proceedings in relation to the petition remain before the court at that date, but the person who presented the petition has consented to the making of an application for a debt relief order.5. A debt relief order has not been made in relation to the debtor in the period of six years ending with the determination date. Limit on debtor's overall indebtedness6. (1) The total amount of the debtor's debts on the determination date, other than unliquidated debts and excluded debts, does not exceed the prescribed amount.(2) For this purpose an unliquidated debt is a debt that is not for a liquidated sum payable to a creditor either immediately or at some future certain time. Limit on debtor's monthly surplus income7. (1) The debtor's monthly surplus income (if any) on the determination date does not exceed the prescribed amount.(2) For this purpose "monthly surplus income" is the amount by which a person's monthly income exceeds the amount necessary for the reasonable domestic needs of himself and his family.(3) The rules may—(a) make provision as to how the debtor's monthly surplus income is to be determined;(b) provide that particular descriptions of income are to be excluded for the purposes of this paragraph. Limit on value of debtor's property8. (1) The total value of the debtor's property on the determination date does not exceed the prescribed amount.(2) The rules may—(a) make provision as to how the value of a person's property is to be determined;(b) provide that particular descriptions of property are to be excluded for the purposes of this paragraph."
- The conditions set out in Part 2 are as follows:
"9. (1) The debtor has not entered into a transaction with any person at an undervalue during the period between—(a) the start of the period of two years ending with the application date; and(b) the determination date.(2) For this purpose a debtor enters into a transaction with a person at an undervalue if—(a) he makes a gift to that person or he otherwise enters into a transaction with that person on terms that provide for him to receive no consideration;(b) he enters into a transaction with that person in consideration of marriage or the formation of a civil partnership; or(c) he enters into a transaction with that person for a consideration the value of which, in money or money's worth, is significantly less than the value, in money or money's worth, of the consideration provided by the individual.10 (1) The debtor has not given a preference to any person during the period between—(a) the start of the period of two years ending with the application date; and(b) the determination date.(2) For this purpose a debtor gives a preference to a person if—(a) that person is one of the debtor's creditors to whom a qualifying debt is owed or is a surety or guarantor for any such debt, and(b) the debtor does anything or suffers anything to be done which (in either case) has the effect of putting that person into a position which, in the event that a debt relief order is made in relation to the debtor, will be better than the position he would have been in if that thing had not been done."
- Section 251X(1) provides that "the determination date" in relation to a DRO or an application for a DRO means the date on which the application for the order is determined by the OR.
- Section 251D sets out a number of presumptions which are to apply to the determination of an application for a DRO. They are in the following terms:
"(2) The official receiver must presume that the debtor is an individual who is unable to pay his debts at the determination date if—(a) that appears to the official receiver to be the case at the application date from the information supplied in the application and he has no reason to believe that the information supplied is incomplete or inaccurate; and(b) he has no reason to believe that, by virtue of a change in the debtor's financial circumstances since the application date, the debtor may be able to pay his debts.(3) The official receiver must presume that a specified debt (of the amount specified in the application and owed to the creditor so specified) is a qualifying debt at the application date if—(a) that appears to him to be the case from the information supplied in the application; and(b) he has no reason to believe that the information supplied is incomplete or inaccurate.(4) The official receiver must presume that the condition specified in paragraph 1 of Schedule 4ZA is met if—(a) that appears to him to be the case from the information supplied in the application;(b) any prescribed verification checks relating to the condition have been made; and(c) he has no reason to believe that the information supplied is incomplete or inaccurate.(5) The official receiver must presume that any other condition specified in Part 1 or 2 of Schedule 4ZA is met if—(a) that appears to him to have been the case as at the application date from the information supplied in the application and he has no reason to believe that the information supplied is incomplete or inaccurate;(b) any prescribed verification checks relating to the condition have been made; and(c) he has no reason to believe that, by virtue of a change in circumstances since the application date, the condition may no longer be met.(6) References in this section to information supplied in the application include information supplied to the official receiver in support of the application.(7) In this section "specified debt" means a debt specified in the application."
- Information required in the application includes amongst other things (a) the total amount of the debtor's income from any source; (b) the source and amount of the income; (c) particulars of expenditure which the debtor claimed necessary to meet the monthly reasonable domestic needs of the debtor and the debtor's family, including the object and amount of that expenditure; (d) the total amount available for any source to meet those needs; (e) particulars of the debtor's property and its total estimated value. (See Rules 5A.3(2)(h) to (l); 5A.8(2), 5A.9 and 5A.10)
- The maximum amount of the debtor's debts prescribed by paragraph 6(1) of Schedule 4ZA, the maximum amount of monthly surplus income prescribed by 7(1) and the maximum total value of property prescribed by paragraph 8(1) are set out in the Insolvency Proceedings (Monetary Limits) Amendment Order 2009 paragraph 3(b). They are respectively £15,000, £50 and £300.
- Section 251E(5) provides that the rules may make provision as to certain steps to be taken by the OR or the debtor on the making of a DRO. Subsection 6 provides that those steps may include in particular notifying each creditor to whom a qualifying debt specified in the order is owed of the making of the order and its effect, the grounds on which a creditor may object under section 251K and any other prescribed information.
- Sections 251F, G and I set out the effects of a DRO once made. Section 251F provides that if immediately before a DRO is made other debt management arrangements are in force in respect of the debtor they shall cease to be in force when the DRO is made. Other debt management arrangements are defined as an administration order under Part 6 of the County Courts Act 1984, an enforcement restriction under Part 6A of that Act and a debt free payment plan arranged in accordance with a debt management scheme that is approved under chapter 4 of Part 5 of the Tribunals Courts and Enforcement Act 2007.
- Section 251G provides that a moratorium commences on the effective date for a DRO in relation to each qualifying debt specified in it. During the moratorium the creditor to whom a specified qualifying debt is owed (a) has no remedy in respect of the debt, and (b) may not commence a creditor's petition in respect of the debt or otherwise commence any action or other legal proceedings against the debtor for the debt, except with the permission of the court and on such terms as the court may impose. Further if on the effective date a creditor to whom a specified qualifying debt is owed has any such petition, action or other proceeding pending in any court, the court may (a) stay the proceedings or (b) allow them to continue on such terms as the court thinks fit. Nothing in that section affects the right of a secured creditor of the debtor to enforce his security.
- Section 251I provides that subject to exceptions set out in that section at the end of the moratorium applicable to a DRO the debtor is discharged from all the qualifying debts specified in it. One of the exceptions is that if the DRO is revoked by the court under section 251M after the end of the moratorium period, the qualifying debts specified in the DRO shall so far as practicable be treated as though the discharge of the debtor from all the qualifying debts specified in the order provided by section 251I had never applied to them.
- Section 251H deals with the length of the moratorium period. Section 251H(1) provides that the moratorium continues for the period of one year beginning with the effective date for the order unless it (a) terminates early or (b) is extended by the OR under that section or by the court under section 251M. Section 251H(2) provides that the OR may only extend the moratorium period for the purpose of
a) carrying out or completing an investigation under section 251K;b) taking any action he considers necessary (whether as a result of an investigation or otherwise) in relation to the order; orc) in a case where he has decided to revoke the order, providing the debtor with the opportunity to make arrangements for making payments towards his debt.
Subsection (3) provides that the OR may not extend the moratorium period for the purpose of carrying out or completing an investigation under section 251K without permission of the court. Subsection (4) provides that he may not extend it beyond the end of the period of three months beginning after the end of the initial period of one year and subsection (5) provides that it may be extended more than once but that any extension (whether by the OR or by the court) must be made before the moratorium would otherwise end.
- Section 251M(6)(d) provides that on an application under section 251M made to the court by any person who is dissatisfied by any act, omission or decision of the OR in connection with a DRO or an application for such an order, the court may extend the moratorium period applicable to the DRO.
- Section 251J (2) provides that the debtor must
a) give to the OR such information as to his affairs,b) attend on the OR at such times,c) do all such other things, as the OR may reasonably require for the purpose of carrying out his functions in relation to the application or, as the case may be, the DRO made as a result of the application.
- Section 251K deals with objections and investigations. It is in the following terms:
"(1) Any person specified in a debt relief order as a creditor to whom a specified qualifying debt is owed may object to—(a) the making of the order;(b) the inclusion of the debt in the list of the debtor's qualifying debts; or(c) the details of the debt specified in the order.(2) An objection under subsection (1) must be—(a) made during the moratorium period relating to the order and within the prescribed period for objections;(b) made to the official receiver in the prescribed manner;(c) based on a prescribed ground;(d) supported by any information and documents as may be prescribed;and the prescribed period mentioned in paragraph (a) must not be less than 28 days after the creditor in question has been notified of the making of the order.(3) The official receiver must consider every objection made to him under this section.(4) The official receiver may—(a) as part of his consideration of an objection, or(b) on his own initiative,carry out an investigation of any matter that appears to the official receiver to be relevant to the making of any decision mentioned in subsection (5) in relation to a debt relief order or the debtor.(5) The decisions to which an investigation may be directed are—(a) whether the order should be revoked or amended under section 251L;(b) whether an application should be made to the court under section 251M; or(c) whether any other steps should be taken in relation to the debtor.(6) The power to carry out an investigation under this section is exercisable after (as well as during) the moratorium relating to the order.(7) The official receiver may require any person to give him such information and assistance as he may reasonably require in connection with an investigation under this section.(8) Subject to anything prescribed in the rules as to the procedure to be followed in carrying out an investigation under this section, an investigation may be carried out by the official receiver in such manner as he thinks fit."
- Section 251L deals with the power of an OR to revoke or amend a DRO. It is in the following terms:
"(1) The official receiver may revoke or amend a debt relief order during the applicable moratorium period in the circumstances provided for by this section.(2) The official receiver may revoke the order on the ground that—(a) any information supplied to him by the debtor—(i) in, or in support of, the application, or(ii) after the determination date,was incomplete, incorrect or otherwise misleading;(b) the debtor has failed to comply with a duty under section 251J;(c) a bankruptcy order has been made in relation to the debtor; or(d) the debtor has made a proposal under Part 8 (or has notified the official receiver of his intention to do so).(3) The official receiver may revoke the order on the ground that he should not have been satisfied—(a) that the debts specified in the order were qualifying debts of the debtor as at the application date;(b) that the conditions specified in Part 1 of Schedule 4ZA were met;(c) that the conditions specified in Part 2 of that Schedule were met or that any failure to meet such a condition did not prevent his making the order.(4) The official receiver may revoke the order on the ground that either or both of the conditions in paragraphs 7 and 8 of Schedule 4ZA (monthly surplus income and property) are not met at any time after the order was made.For this purpose those paragraphs are to be read as if references to the determination date were references to the time in question.(5) Where the official receiver decides to revoke the order, he may revoke it either—(a) with immediate effect, or(b) with effect from such date (not more than three months after the date of the decision) as he may specify.(6) In considering when the revocation should take effect the official receiver must consider (in the light of the grounds on which the decision to revoke was made and all the other circumstances of the case) whether the debtor ought to be given the opportunity to make arrangements for making payments towards his debts.(7) If the order has been revoked with effect from a specified date the official receiver may, if he thinks it appropriate to do so at any time before that date, revoke the order with immediate effect.(8) The official receiver may amend a debt relief order for the purpose of correcting an error in or omission from anything specified in the order.(9) But subsection (8) does not permit the official receiver to add any debts that were not specified in the application for the debt relief order to the list of qualifying debts.(10) The rules may make further provision as to the procedure to be followed by the official receiver in the exercise of his powers under this section."
- The powers of the court in relation to DROs are set out in section 251M. They are as follows:
"(1) Any person may make an application to the court if he is dissatisfied by any act, omission or decision of the official receiver in connection with a debt relief order or an application for such an order.(2) The official receiver may make an application to the court for directions or an order in relation to any matter arising in connection with a debt relief order or an application for such an order.(3) The matters referred to in subsection (2) include, among other things, matters relating to the debtor's compliance with any duty arising under section 251J.(4) An application under this section may, subject to anything in the rules, be made at any time.(5) The court may extend the moratorium period applicable to a debt relief order for the purposes of determining an application under this section.(6) On an application under this section the court may dismiss the application or do one or more of the following—(a) quash the whole or part of any act or decision of the official receiver;(b) give the official receiver directions (including a direction that he reconsider any matter in relation to which his act or decision has been quashed under paragraph (a));(c) make an order for the enforcement of any obligation on the debtor arising by virtue of a duty under section 251J;(d) extend the moratorium period applicable to the debt relief order;(e) make an order revoking or amending the debt relief order;(f) make an order under section 251N; or(g) make such other order as the court thinks fit.(7) An order under subsection (6)(e) for the revocation of a debt relief order—(a) may be made during the moratorium period applicable to the debt relief order or at any time after that period has ended;(b) may be made on the court's own motion if the court has made a bankruptcy order in relation to the debtor during that period;(c) may provide for the revocation of the order to take effect on such terms and at such a time as the court may specify.(8) An order under subsection (6)(e) for the amendment of a debt relief order may not add any debts that were not specified in the application for the debt relief order to the list of qualifying debts."
- Section 251N is headed Inquiry into debtor's dealings and property. It is in these terms:
"(1) An order under this section may be made by the court on the application of the official receiver.(2) An order under this section is an order summoning any of the following persons to appear before the court—(a) the debtor;(b) the debtor's spouse or former spouse or the debtor's civil partner or former civil partner;(c) any person appearing to the court to be able to give information or assistance concerning the debtor or his dealings, affairs and property.(3) The court may require a person falling within subsection (2)(c)—(a) to provide a written account of his dealings with the debtor; or(b) to produce any documents in his possession or under his control relating to the debtor or to the debtor's dealings, affairs or property.(4) Subsection (5) applies where a person fails without reasonable excuse to appear before the court when he is summoned to do so by an order under this section.(5) The court may cause a warrant to be issued to a constable or prescribed officer of the court—(a) for the arrest of that person, and(b) for the seizure of any records or other documents in that person's possession.(6) The court may authorise a person arrested under such a warrant to be kept in custody, and anything seized under such a warrant to be held, in accordance with the rules, until that person is brought before the court under the warrant or until such other time as the court may order."
The 2010 Act
- Section 149 of the 2010 Act replaced and widened the existing duties on public sector bodies to take active steps to avoid discrimination and promote equality. Section 149(1) imposes on a public authority in the exercise of its functions a duty to have due regard to the need to –
a) eliminate discrimination, harassment, victimisation and any other conduct that is prohibited by or under the Act;b) advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it;c) foster good relations between persons who share a relevant protected characteristic and persons who do not share it.
- Section 149(2) imposes on a person who is not a public authority but who exercises public functions to have due regard, in the exercise of those functions, to the matters mentioned in section 149(1).
- Section 149(3), (4) and (5) further define the content of the public sector equality duty imposed by section 149(1) as follows:
"(3) Having due regard to the need to advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it involves having due regard, in particular, to the need to—(a) remove or minimise disadvantages suffered by persons who share a relevant protected characteristic that are connected to that characteristic;(b) take steps to meet the needs of persons who share a relevant protected characteristic that are different from the needs of persons who do not share it;(c) encourage persons who share a relevant protected characteristic to participate in public life or in any other activity in which participation by such persons is disproportionately low.(4) The steps involved in meeting the needs of disabled persons that are different from the needs of persons who are not disabled include, in particular, steps to take account of disabled persons' disabilities.(5) Having due regard to the need to foster good relations between persons who share a relevant protected characteristic and persons who do not share it involves having due regard, in particular, to the need to—(a) tackle prejudice, and(b) promote understanding."
- Section 149(6) provides that compliance with the duties in section 149 may involve treating some persons more favourably than others but that that is not to be taken as permitting conduct that would otherwise be prohibited by or under the Act.
- Section 149(7) provides that the relevant protected characteristics include disability.
- Section 149(9) provides that Schedule 18 has effect. Paragraph 3 of Schedule 18 excludes the application of section 149 as follows:
(1) Section 149 does not apply to the exercise of –a) A judicial function;b) A function exercised on behalf of, or on the instructions of, a person exercising a judicial function.
(2) The references to a judicial function include the reference to a judicial function conferred on a person other than a court or tribunal.
- Section 150 identifies the public authorities on whom a public sector equality duty is imposed by section 149(1) and also, by defining what constitutes a public function, those persons on whom when exercising such functions section 149(2) imposes such a duty.
- Section 150 provides:
"(1) A public authority is a person who is specified in Schedule 19.(2) In that Schedule—Part 1 specifies public authorities generally;Part 2 specifies relevant Welsh authorities;Part 3 specifies relevant Scottish authorities.(3) A public authority specified in Schedule 19 is subject to the duty imposed by section 149(1) in relation to the exercise of all of its functions unless subsection (4) applies.(4) A public authority specified in that Schedule in respect of certain specified functions is subject to that duty only in respect of the exercise of those functions.(5) A public function is a function that is a function of a public nature for the purposes of the Human Rights Act 1998."
- The OR is not listed in Schedule 19 and is thus not a public authority for the purposes of the 2010 Act. No public sector equality duty is therefore imposed on the OR by section 149(1).
- As regards section 149(2) it is common ground between the parties that the OR in taking a decision to revoke a DRO exercises a public function for the purposes of section 149(2). That is no doubt on the basis that section 6 of the Human Rights Act 1998, which concerns public authorities, defines in subsection (3) a public authority as including "(a) a court or tribunal and (b) any person certain of whose functions are functions of a public nature, …"
- Thus the question whether in taking the decision to revoke the claimant's DRO the OR was subject to the public sector equality duty by reason of section 149(2) turns on the question whether section 149 did not apply to the decision by reason of paragraph 3(1) of Schedule 18 of the Act.
- Schedule 18 lists various exceptions to the application of the public sector equality duty set out in section 149. By reason of paragraph 1 of Schedule 18 section 149 does not apply, so far as relating to age is concerned, to the exercise of certain functions concerning children. By reason of paragraph 2 in relation to the exercise of certain immigration and nationality functions the public sector equality duty is modified in certain respects. By reason of paragraph 4 section 149(2) does not apply to persons listed to whom it would otherwise apply in the exercise of certain functions to which it would otherwise apply. They include parliamentary and security institutions. I have set out the terms of paragraph 3 above.
- When the OR decided to revoke the claimant's DRO was she exercising a judicial function within the meaning contemplated by paragraph 3 of Schedule 18 to the 2010 Act so that she was not subject to the public sector equality duty by reason of section 149(2) of the 2010 Act?
The parties' submissions
- In his opening skeleton argument Mr Redpath on behalf of the OR submitted that a useful definition of what constitutes a "judicial act" is to be found in R (Wexford Co Council) v Local Government Board  2 IR 349. In that case Palles CB at page 373, citing May CJ in The Queen v Corporation of Dublin 2 LR IR 371 at 376, 377 said:
"It is established" says May, C.J. (2), "that the writ of certiorari does not lie to remove an order merely ministerial, such as a warrant; but it lies to remove and adjudicate upon the validity of acts judicial. In this connection the term 'judicial' does not necessarily means acts of a Judge or legal tribunal sitting for the determination of matters of law; but, for the purpose of this question, a 'judicial' act seems to be an act done by competent authority, upon consideration of facts and circumstances, and imposing liability or affecting the rights of others.""
- The Defendant's primary contention was that the test for "judicial function" is that encapsulated in the definition adopted by Palles CB. Mr Redpath submitted that a judicial function connotes carrying out judicial acts. Palles C.B. considered that the essential element which makes the determinations of a tribunal "judicial" is that the body carrying out the function "should have power by its determination within jurisdiction, to impose liability or affect rights." By that he said he meant that the liability is imposed or the right is affected by the determination only and not by the fact determined, so that the liability will exist or the right will be affected on her, even though the determination is wrong in law or in fact. (ibid 373-374).
- Mr Redpath submitted that in the context of the DRO legislation it is possible to infer the judicial element from the nature of the OR's powers to make, revoke or amend a DRO since a DRO clearly and directly affects the property rights of third party creditors. Indeed it goes further than that. In certain circumstances it is capable of determining them. In determining whether to make such orders the OR acts "judicially".
- Mr Redpath in further written submissions prepared for the adjourned second day of the hearing relied on what he described as Lord Reid's explanation in Ridge v Baldwin  AC 40, at 75-76 of similar inferences drawn by Bankes LJ in Rex v Electricity Commissioners, Ex parte London Electricity Joint Committee Co.  1 KB 171 at 198, 206-7:
"In Rex v Electricity Commissioners, Ex parte London Electricity Joint Committee Co. the commissioners had a statutory duty to make schemes with regard to electricity districts and to hold local inquiries before making them. They made a draft scheme which in effect allocated duties to one body which the Act required should be allocated to a different kind of body. This was held to be ultra vires, and the question was whether prohibition would lie. It was argued that the proceedings of the commissioners were purely executive and controllable by Parliament alone. Bankes L.J. said:"On principle and on authority it is in my opinion open to this court to hold, and I consider that it should hold, that powers so far-reaching affecting as they do individuals as well as property, are powers to be exercised judicially, and not ministerially or merely, to use the language of Palles C.B., as proceedings towards legislation."So he inferred the judicial element from the nature of the power. And I think that Atkin L.J. did the same. …And a later passage in his judgment convinces me that he, like Bankes L.J., inferred the judicial character of the duty from the nature of the duty itself. Although it is long I am afraid I must quote it:"In the present case the Electricity Commissioners have to decide whether they will constitute a joint authority in a district in accordance with law, and with what powers they will invest that body. The question necessarily involves the withdrawal from existing bodies of undertakers of some of their existing rights, and imposing upon them of new duties, including their subjection to the control of the new body, and new financial obligations. It also provides in the new body a person to whom may be transferred rights of purchase which at present are vested in another authority. The commissioners are proposing to create such a new body in violation of the Act of Parliament, and are proposing to hold a possibly long and expensive inquiry into the expediency of such a scheme, in respect of which they have the power to compel representatives of the prosecutors to attend and produce papers. I think that in deciding upon the scheme, and in holding the enquiry, they are acting judicially in the sense of the authorities I have cited.""
- The jurisdiction conferred on the OR under the DRO regime is broadly consonant with the jurisdiction conferred on the court. Indeed it would be surprising if the court, unaffected by any duties imposed by the 2010 Act, was able to revoke a DRO (or indeed make any other order permitted under the DRO jurisdiction) in circumstances where the OR, because of the effect of such duties, could not. That would be to create an unnecessary and irrational mismatch as to relevant factors for what is essentially the same issue.
- To illustrate the latter point in the context of this case, Mr Redpath submitted that if the OR's decision were quashed on the ground that she did not give due regard to one or more of the matters specified by section 149(1) of the 2010 Act, the County Court, to which the OR has made a cross application for the revocation of the DRO, would be unaffected by any public law equality duty when reaching its decision whether to revoke the DRO. Indeed it would be wrong for the court in reaching its own decision whether to revoke to take into account whether or not the OR had taken such matters into account.
- Mr Redpath submitted that analogies with legislation conferring discretion on public bodies to make decisions in other contexts, such as social housing or education, are of no real assistance in determining the nature of the jurisdiction conferred on the OR under the DRO regime. The jurisdiction to confer DROs is essentially sui generis.
- Mr Redpath had an alternative submission based on authorities which he contended support the proposition that the OR in carrying out activities as an officer of the court is thereby carrying out a judicial function – see Bottomley v. Brougham  1 KB 584, per Channell J at 587 – 598; In re John Tweddle and Co Ltd per Farwell LJ at 706 and In re Arthur Williams and Co per Cozens-Hardy MR at 93. He submitted that the OR would be exempt from the provisions of section 149 of the 2010 Act by virtue of acting on behalf of a person exercising a judicial function. Thus even if Parliament did not, contrary to his primary submission, intend in the 1986 Act by creating the DRO regime to confer both the jurisdiction and judicial function directly on the OR, it follows that in performing her duty in making orders under the 1986 Act she is exercising functions under the DRO regime as part of judicial bankruptcy proceedings and is therefore acting in a judicial capacity just as when she carries out her investigative functions.
- Thus Mr Redpath's alternative submission was that a "judicial function" should have a wider definition as follows:
"A "judicial function" means the carrying out of "judicial acts", being acts by a competent authority, upon consideration of facts and circumstances, and imposing liability or affecting the rights of others, including anything done by, on behalf of, or on the instructions of, a competent authority, the main purpose of which is to facilitate the exercise by that authority of judicial acts."
- Mr Redpath submitted that if acts falling within the wider definition encompassed in the words emphasised did not constitute acts carried out in exercise of a "judicial function" there would be an irrational inconsistency between the fact that the exercise by the OR of such ancillary powers to facilitate judicial acts would be subject to the public law equality duty whereas the exercise of the principal judicial acts such as making or revoking a DRO would not be subject to it. Parliament cannot have intended there to be two fundamentally different routes to decision making in relation to the same judicial act depending on which function was being exercised. This was a similar point to the submission that Parliament cannot have intended that a DRO could be revoked by two public bodies, one of whom, the Court, would not be bound by the public sector equality duty whereas the other, the OR, would.
- Mr McCormack on behalf of the Claimant submitted that in deciding whether to revoke a DRO the OR is not exercising a judicial function. She is merely exercising a discretionary power afforded to her by statute, in this case section 251L of the 1986 Act. Palles CB's definition of a judicial act as an act done by competent authority upon consideration of the facts and circumstances and imposing liability or affecting the rights of others is not a proper basis for a definition of judicial function within the meaning contemplated by paragraph 3 of Schedule 18 of the 2010 Act.
- He submitted that in making the decision whether to revoke the DRO the OR no more exercises a judicial function than does a planning inspector or a homeless review officer or a Secretary of State or any of a range of other public servants. All are charged with making discretionary decisions which, although impacting directly on the civil rights of an individual applicant, also tangentially impact on the civil rights of others too. The fact that a decision may affect the rights of others is not sufficient to render the decision making power a judicial function. Indeed Mr McCormack positively relied on the fact that section 251L of the 1986 Act confers a discretionary power rather than a mandatory duty to revoke on the OR as being inconsistent with the OR exercising a judicial function.
- Thus he submitted that the OR is not obliged to revoke a DRO once she becomes aware that the relevant conditions are not being met. She simply has a power to do so. If for example during the moratorium period it comes to the OR's attention that in the case of a particular debtor the relevant income thresholds are exceeded, if that threshold is only just crossed for example by a few pence, the OR might well elect not to exercise the discretion to revoke. Or there may be some particular reason why a debtor has an income exceeding the relevant threshold for a given month even if for other months or at other periods she has less disposable income available to her. He submitted that it is well within the bounds of the OR's discretion to decide not to revoke in such circumstances. Nor does the fact that the Court retains a supervisory jurisdiction over the OR determine the question whether a decision to revoke a DRO constitutes the exercise of a judicial function.
- Mr McCormack submitted that Palles CB's definition of a judicial act is not a rule capable of general application in the modern era. Prior to the decision of the House of Lords in Ridge v Baldwin  AC 40, the courts had restricted judicial review to cases in which the proposed defendant was acting judicially or quasi-judicially and it is in that context that the decision in Wexford has to be seen. However after Ridge v Baldwin it became progressively clearer that judicial review was equally available in respect of what had been judicially understood to be administrative, discretionary decisions as well as those which were judicial and imperative – see for example R v Secretary of State for the Home Department ex parte Bugdaycay  AC 514 at 535 F-H.
- Thus at the time Wexford was decided in 1902 it was crucial to decide whether the decision in question was a judicial act (hence the qualifications in the passage of Palles CB's judgment cited: "in this connection" and "for the purposes of this question") because the answer to that question determined the question of the court's jurisdiction.
- Mr McCormack submitted that there is a whole range of public law decisions made "by competent authority, upon consideration of facts and circumstances, and imposing liability or affecting the rights of others" which would not in ordinary modern parlance be deemed "judicial decisions", but which might well be so under the Wexford rule. Application of the Wexford definition to paragraph 3 of Schedule 18 of the 2010 Act would drain section 149 of a great deal of its potency. It would irrationally restrict the applicability of the public sector equality duty to those public authorities or bodies exercising public functions which would, prior to Ridge v Baldwin, have been deemed to have been performing administrative acts or "acts ministerial". All those bodies whose decisions could be characterised as judicial or quasi-judicial by that old test would queue to be so defined, the better to escape the reach of that duty.
- If it were sufficient for a decision to be a judicial function that it merely affects the rights of others a range of discretionary public law decisions would be excluded from the public law equality duty which it cannot reasonably be argued ought to fall outside the definition. Mr McCormack gave as examples a decision by the Secretary of State for the Home Department whether to grant an individual leave to remain in the UK, which would or could affect the Article 8 rights of the individuals' family members or the decision of the reviewing officer in Pieretti v London Borough of Enfield  EWCA Civ 1104  2 All ER 642 as to whether the Claimant was intentionally homeless which could affect the amount of council housing available to other people in the area. Other examples were a decision of a probation officer deciding on the terms of a prisoner's licence, a Department for Work and Pensions officer deciding a claim for benefits, the licensing committee of a local authority and the official of a local authority deciding whether to make a possession claim or to grant an occupier a tenancy. All the decisions made in those example would easily satisfy the Defendant's proposed narrow definition based on Palles CB's test in Wexford. A construction of the 2010 Act which had the effect of taking them outside the scope of one of its most important provisions should not lightly be contemplated.
- In response to that submission Mr Redpath towards the end of the hearing amended his proposed definition of judicial function by substituting the word "determined" for the word "affected" so as to distinguish the examples cited by Mr McCormack from what he submitted is one of the key features which characterises the exercise by the OR of the power to revoke a DRO.
- Mr McCormack suggested the following definition for those bodies other than courts or tribunals exercising "judicial functions" for the purposes of paragraph 3 of Schedule 18:
"Bodies or authorities, other than courts or tribunals, making decisions of a type, and in a manner akin to those made by a court or tribunal"
- That definition he submitted placed the focus on the adjudicative nature of the judicial function. A court or tribunal will determine some sort of contest between two or more parties, and resolve it in some sort of judicial process. Other bodies do so too; though not perhaps being formally capable of description as a court or tribunal. So Courts Martial would fall within the definition of bodies exercising a judicial function: see the explanatory Notes to the 2010 Act, para 921, where that is offered as the sole example of a body fulfilling the definition. So to might a coroner's court, the Parole Board, or a Prison Adjudicator.
- In further written submissions prepared for the adjourned second day of the hearing Mr Redpath addressed the question whether some of the powers conferred on the OR by the 1986 Act do not when they are exercised by the OR constitute a judicial function because they do not involve imposing liability or affecting the rights of others. He cited the power to extend the moratorium period (section 251H(2)), including as appropriate applying to the court for permission to extend the moratorium period (section 251H(3)), the power to apply to the court for directions or for an order in relation to any matter arising in connection with the DRO (section 251M(2)) and the power to apply to the court to inquire into a debtor's dealings and property (section 251M).
- He submitted that while the main purpose of a judicial function is to carry out judicial acts, there may be activities which are proper or relevant to the fulfilment of that main purpose and whose aim is to facilitate judicial acts, which would fall within the concept of "judicial function" even though those activities of themselves do not affect the rights of others.
- Such activities, he submitted, would include the power of the OR to investigate during or after the moratorium relating to the DRO any matter which appears to the OR to be relevant to the making of a decision whether (i) the order should be revoked or amended under section 251L, (ii) an application should be made to the court under section 251M or (iii) any other steps should be taken in relation to the debtor (section 251K(4) – (6)). The OR may also require any person to give her such information as she may require in connection with such an investigation.
- He submitted that the fact that a power to enquire may form part of the judicial function is illustrated by way of analogy with the jurisdiction conferred on the Pensions Ombudsman, whose functions are defined by section 146 of the Pensions Schemes Act 1993 (as amended). The Pensions Ombudsman has power to "investigate and determine" a variety of complaints or disputes defined in that section. In that context Mr Redpath submitted such inquisitorial powers clearly serve the main purpose of the Pension Ombudsman's jurisdiction, which is to determine complaints or disputes. Both the investigative and the determinative acts are constitutive elements of the Pension Ombudsman's official function.
- Mr Redpath relied in this context on a number of authorities in which the doctrine of absolute privilege was considered in the context of the exercise by the OR of statutory functions in bankruptcy and insolvency proceedings. Thus in Bottomley v Brougham Channell J considered whether the OR in carrying out investigative functions came within the doctrine of absolute privilege. He held:
"I think, in the first place, that the official receiver has a statutory duty to inquire in a judicial way into certain matters by the Act of 1890, and that in performing that duty he is acting in a judicial capacity. It is quite true that the report is made ex parte, but that makes no difference. A judge in hearing an ex parte application is still acting as a judge, and the absolute privilege applies quite as much as when he is hearing a case in which both parties appear. The fact that this was a preliminary inquiry equally does not prevent it being a judicial enquiry. An inquiry before a magistrate on a charge of murder, for instance, which he has certainly no power to deal with, and as to which he is only inquiring in a preliminary way whether there is a case for committing the accused person for trial, is clearly a judicial proceeding although it is preliminary to trial. It is strongly contended on the part of the plaintiff that there is mischief and danger in allowing absolute privilege in this case, because it is an ex parte statement, and the person against whom the charge is made has no opportunity of meeting it; it appears to me, however, that the answer to that is the very fact that it is preliminary, and that it does lead to further inquiry upon which that person does have that opportunity of explaining and giving his view of the matter, and that, it being obviously known by anybody who sees or reads the report of the official receiver that, qua report, it will lead to future proceedings in which the report may be entirely displaced, that really prevents any serious mischief arising from applying this doctrine to such a proceeding as this. I think, therefore, that this report may be considered to be absolutely privileged on the footing of its being the judgment of a judicial officer upon a matter entrusted to him for inquiry. 587, 588".
- However Channell J then proceeded to give an alternative ground for holding that the OR attracted absolute privilege which proceeded on the arguably opposite premise that the function which the OR was exercising was more analogous to that of a prosecutor than a judge. He held:
"But, even if that is not sound, there is the further ground that the report of the official receiver may be treated, not so much as the judgment in a judicial proceeding, but as the initial stage of proceedings in the winding-up Court, which clearly is a Court. It is the information upon which the proceedings take place and it is made by the official receiver under a statutory duty. It seems to me to come within the authority of the case of Lilley v Roney 61 L.J. (Q.B.) 727, and to be a much stronger case, because in that case complaint by a person who considered himself aggrieved by the conduct of a solicitor – a complaint which was the initiation of proceedings before the Law Society – was held to be privileged as being the commencement of proceedings of a legal character. I quite agree that there the privilege was rather the privilege of a litigant than the privilege of the judge; it was the privilege of a man who was starting proceedings. It is perhaps not quite accurate to say the official receiver is in any sense a litigant, but when he comes before the winding-up Court upon the examination no doubt he is, in one sense, a party to the proceedings; he is, as it were, appearing for the prosecution. It is much the same as when the Attorney-General appears upon an information filed by the Attorney-General; he is then a party to the proceedings possibly, not a litigant, and I should say certainly not acting as a judge, but I do not see that that much affects the matter here. In presenting this report the official receiver is informing the Court of alleged matters for inquiry, and so initiating a judicial enquiry; and it seems to me to be entirely analogous to what was held to be absolute privilege in Lilley v Roney, and to be a stronger case. It was done in the course of the performance of a duty imposed upon him in his position of officer of the Court. It is much like the report of an official referee, or someone of that sort, to whom matters are referred to report to the Court. I suppose no one would doubt that those reports were privileged." (588-589)
- In In Re John Tweddle and Company Ltd  2 KB 697, the Court of Appeal held that in conducting a public examination of a director of a company which has been wound up pursuant to a duty imposed on him by section 8(4) of the Companies (Winding-up) Act 1890, the official receiver was merely discharging a statutory duty of a judicial or a semi-judicial character, from which it followed that the court had no jurisdiction to order him personally to pay the costs of the examinations. By contrast it was also held that the court did have jurisdiction to order him to pay the costs of unsuccessfully opposing in the County Court an application by the examined director for an order exculpating him from a charge of fraud on the ground that in choosing of his own motion to oppose the application in the County Court the official receiver has accepted the position of a litigant.
- Cozens-Hardy M.R. said that section 8 of the 1908 Act imposed on an official receiver where there had been an order for winding-up a company certain statutory duties. First he had to submit a preliminary report to the court and then if he thought fit he might make a further report stating whether in his opinion any fraud had been committed by any director or other officer of the company in relation to the company and any other matters which in his opinion it was desirable to bring to the notice of the Court. Cozens-Hardy M.R. said that despite the words "he may if he thinks fit" it could not be disputed that it was the duty of the official receiver to make a further report if he thought circumstances required it.
- Section 8(4) of the 1908 Act imposed what Cozens-Hardy M.R. described as a positive obligation from which he could not escape to take part in the examination of such a person if he had been directed by the Court to attend to be publicly examined and provided that he might, if specially authorised by the Board of Trade to do so, employ a solicitor with or without counsel. Cozens-Hardy M.R. said:
"Again there is no discretion in the matter; he is merely a public official discharging public duties for the public welfare. The liquidator may attend, but he need not attend, and so may a creditor or contributory." (702)
- Cozens-Hardy M.R. said that the person examined might at his own cost employ a solicitor and that a proviso to section 8 stated:
"Provided always that if such a person is, in the opinion of the Court, exculpated from any charges made or suggested against him, the court may allow him such costs as the Court in its discretion may think fit."
- Cozens-Hardy M.R. held:
"I am unable to read section 8 and the duties which are imposed upon the official receiver thereby without being impressed with the fact that the official receiver is merely discharging a statutory duty of a judicial or a semi-judicial character when carrying that section into effect, and that the present case falls within the well-settled principle that a person in that position is not liable to an action for damages, and is not liable, even though he may have been negligent in the discharge of those duties, unless there is something also to be found either in his subsequent conduct or proceedings or in the statute itself; unless that can be found, there is no ground for making him liable in any way. But then it is said – and this is really the main difficulty in the case – True it may be that but for the proviso the innocent director might have no rights to claim costs against anybody; but here you do find that this proviso says that, with regard to such a person who is in the opinion of the Court exculpated from any charges made or suggested against him, "the Court may allow him such costs as the Court in its discretion may think fit." Mr Gore-Brown very properly and very forcibly attaches great importance to the judgment of Lord Herschell in Ex Parte Barnes  AC 146, particularly to that passage in which he points out that the provisions of the section would operate very harshly unless you found it is a provision that a man when exculpated should be allowed to have his costs. But that phrase "should be allowed to have his costs" is, it seems to me, a very peculiar wording indeed if it were intended to impose a personal liability upon an officer of the Court – not a litigant, but an officer of the Court – who was merely discharging a duty as to which he has no option and no discretion, whereas they are apt words if the only effect of the proviso is to say that the Court in whose custody and control the assets and the affairs of the company are may, if it thinks fit, out of the assets in its hands "allow" him such costs as the court in its discretion thinks fit. It really seems to me that if that be the true meaning and effect of the section you do not infringe upon the principle, to which I attach very great importance, namely the absolute freedom from liability of persons in a judicial or semi-judicial character against whom no complaint is made; and at the same time you do give the innocent director, not, I agree, complete indemnity, because in this case as in many others there are no assets of the company out of which he would get his indemnity; but where there are assets he would get an indemnity, and Parliament has thought fit to enable, not the person who has conducted the examination and has heard what the implicated director said, but the final Court which has charge of the winding-up, to say if any allowance should be made to the innocent director in respect of the costs.I think, therefore, that there was no jurisdiction to order the official receiver to pay the costs of and incidental to the attendance at the public examination." (703, 704)
- Cozens-Hardy M.R. then distinguished the position of the official receiver in responding to the director's application to the County Court for a declaration that he was exculpated. He said:
"In the present case it is a little complicated by the same person being the official receiver and the liquidator, but if, as might very well be the case, the official receiver had been one person and the liquidator had been another, I can see no justification for serving the official receiver, a mere officer of the court discharging certain duties, with any such notice of motion. There is no duty imposed upon the official receiver to take any subsequent proceedings by way of defending his rights or otherwise. He has discharged his duty when he has obtained the order for examination and has conducted the examination. The Court, if it thinks fit, may desire that notice of an application for exculpation should be served upon him; but it is a very different thing to say that the applicant, the innocent director, is entitled to bring the official receiver before the court and ask definitely for costs against him. Unfortunately here, the official receiver, who is also a liquidator, took (no doubt in perfectly good faith) a view which seems to me irregular, and in that sense improper. He accepted the position of a litigant. He appeared on the hearing of this application; he argued against the application; he tried to persuade the county court judge that Mr Easton was not entitled to be exculpated, and having taken up that position in a matter in which he was served and in which he did not allege to the county court judge that he ought not to have been there at all, it seems to me the case is one in which he appears as respondent to a proceeding in the court in which he argues against the application, and argues unsuccessfully and in the view of the learned judge wrongly. That being so, I see no reason to doubt that the learned county court judge had jurisdiction to order him to pay the costs of the application for exculpation; and certainly if he had jurisdiction to make the order, as I think he had, it is not a matter for appeal or one in which we should in any way interfere.I think, therefore the appeal ought to be allowed to the extent only of the costs of the application for exculpation. With that exception I think the appellant must bear them." (705 – 706)
- In a concurring judgment Farwell LJ said that the appointment of an official receiver was a novel office created by the 1890 Act and that in considering that Act one could see that he was intended to act in lieu of the liquidator to some extent but also to act as official receiver in a different capacity under section 8. He held:
"But when one comes to consider s.8 of the Act of 1890 different considerations arise. Channell J has held in the case of Bottomley v Brougham that the official receiver is acting in a judicial capacity in making his report and his further report and in conducting the examination under that further report, and his view has been adopted and affirmed by the Court of Appeal in Burr v Smith  2 KB 306. It appears to me to follow that the official receiver is acting in a capacity which renders it impossible for any Court to visit him with costs any more than it could visit the judge himself who makes the order. The duty is cast on the official receiver first of making his report and stating whether in his opinion further inquiry is desirable; next that he may also, if he thinks fit, - and it has already been pointed out that if he thinks fit then it becomes his duty to do it, - make a further report stating that in his opinion fraud has been committed by a director, promoter, or officer of the company, naming the person whom he considers implicated.Now those are functions of a judicial character which are cast upon him, not in the liquidation of the company for the benefit of the assets, but primarily at any rate for the protection of the public….I think, therefore, that the Solicitor-General was right in the distinction that he drew between duties which are duties of the liquidator for the purpose of getting in assets, dividing them and paying the debts, being the duties of the liquidator proper, and the duties cast upon the official receiver for the first time by this section, which are duties in the interests of the public rather than in the interests of the company.That being so, it appears to me to follow that the Court can no more make the official receiver who has acted in this way liable for the costs of proceedings so taken by him on the direction of the Act than the Court can make the judge himself who under sub-s.3 directs that the inquiry shall take place, or under sub-s.6 puts questions to the person examined as he may think fit.Channell J. has already likened the case of the official receiver to that of the official referee when under an order of the Court he is called upon to inquire and report. It is very much the same thing; I cannot see on what ground it can be suggested that the official referee could be liable for the costs of anything he did in that judicial capacity, and I think the official receiver stands in the same position." (706-708)
- In In Re Arthur Williams and Co  2 KB 88 an official receiver applied to the court for an order of adjudication against a man who was alleged in an affidavit sworn by a partner of a firm against which a receiving order had been made to be the senior partner. The registrar, having found that the man was not in fact a partner of the firm, dismissed the application for adjudication and ordered the official receiver to pay the costs. The Court of Appeal held that the registrar had jurisdiction to make that order. Cozens-Hardy M.R. held:
"I do not think anything would be gained by going over the ground which I attempted to cover in In Re John Tweddle & Co. There was no difference of opinion in the Court: it was the decision of all members of the Court. They laid down, not for the first time, I think, that where an official receiver, or an official liquidator (for this present purpose I will call him the official receiver), is simply performing duties which are obligatory upon him in a judicial, or quasi-judicial, character, he is not to be made to pay costs, because he is acting in the performance of his official duty; but whenever the moment comes when he does that which he is under no obligation to do, although he is empowered to do it if he thinks fit, and has a right to do it, then his protection as a judicial officer, or a person of a semi-judicial character, ceases, and the Court has the same jurisdiction to deal with him as with anybody else. Now applying that principle to the present case, how does the matter stand? It is quite clear from the Act and the Rules that, assuming a receiving order has been made against A.B., there are several persons who may apply for adjudication: the debtor himself, the petitioning creditor, or any creditor, and the official receiver. It is within the official receiver's power, if he think fit, to make the application. But I cannot find a trace of any obligation imposed upon him to do so. … but then it is said that the machinery of the bankruptcy legislation will not work unless the official receiver does, as in 90 – 9 out of 100 cases he does, take the more or less formal step to obtain adjudication after the receiving order. That may be so, but I can find nothing to support the suggestion that in doing a thing which any one of several persons may equally well do he is doing something so much in the public interest and for the purpose of giving effect to the general policy of the Bankruptcy Act, that he should be protected as though he were acting in a judicial or semi-judicial capacity." (93-94)
- In Burr v Smith  2 KB 306 the Court of Appeal held that an action could not be brought against an official receiver for a statement made in his capacity as official receiver and contained in a report made under the 1890 Act. After setting out the relevant statutory prohibitions, Fletcher Moulton LJ said, at page 311:
"I have no doubt that official receivers are officers of the Court which has to deal with the liquidation of companies, that is to say, of this Court, and that, in cases of the compulsory liquidation of the company, as these were, the official receiver is acting as an officer of the Court in performing the statutory duty imposed on him by s.3 of the First Schedule. It would be a perilous duty, if the contention for the plaintiff were well founded, because it necessitates his stating with the greatest frankness all the matters which he may have ascertained of the kind referred to by the section. In doing that he is performing his duty as an officer of the Court in connection with an inquiry which may, in my opinion, rightly be termed a judicial inquiry for the purposes of the law of libel. I have no doubt that the performance of such a duty is a matter which is absolutely privileged."
- Farwell LJ said at 315:
"It seems to me that the officers so appointed, and by whom these reports have to be prepared, are treated by the Act as performing their duty as officers of the Court. Until I heard the suggestion of counsel for the defendants during the argument, I was not aware that it had ever been doubted that officers appointed under section 27 are officers of the Court, although they are appointed by the Board of Trade. They are appointed to assist the Court in the execution of the Act, and in my opinion the defendant Smith, in making the report which he did, was acting as an officer of the Court, and was as such entitled to absolute protection from any action for libel."
- In Mond v Hyde  QB 1097 the Court of Appeal held that the getting in of a bankrupt's estate for the purpose of being distributed to the creditors is part of the bankruptcy proceedings, and therefore the official receiver in bankruptcy as an officer of the court, is immune from suit in respect of statements made by him in his capacity as such, even if made negligently. Beldam LJ, in the lead judgment, said that the powers and duties of official receivers and trustees were further extended by Part IV of the Rules of 1952. From rule 317 it was clear that an assistant official receiver was an officer of the court and similarly subject to the directions of the DTI. Bankruptcy proceedings begin with the issue of the petition. Thereafter under the provisions of the Act of 1914 and the Rules of 1952 the official receiver and trustee on appointment act as officers of the court both in connection with proceedings "in court" and in their powers, duties and functions in the bankruptcy proceedings generally. (1109 D – E).
- Beldam LJ said that it was now well settled that in a court of law solicitors, counsel, witnesses and judges are immune from action for statements made in the course of the proceedings even if made negligently. He cited Kennedy v Hilliard (1859) 10 ICLR 195, 209 as authority for the proposition that this was a rule of law founded on public policy which requires that a judge in dealing with the matter before him, a party in preferring or resisting a legal proceeding, and a witness in giving evidence, oral or written, in a court of justice shall do so with his mind uninfluenced by the fear of an action for defamation or a prosecution for libel. (1109 H).
- Beldam LJ referred to Lord Esher M.R. in Royal Aquarium and Summer and Winter Gardens Society Limited v Parkinson  1 KB 431 at 442 who, in speaking of the absolute privilege applying to statements made in judicial proceedings said:
"It is applicable to all kinds of courts of justice, but the doctrine has been carried further, and it seems that this immunity applies wherever there is an authorised inquiry which, though not before a court of justice, is before a tribunal which has similar attributes. In the case of Dawkins v Lord Rokeby, L.R. 8 Q.B. 255 the doctrine was extended to a military court of inquiry. It was so extended on the ground that the case was one of authorised inquiry before a tribunal acting judicially, that is to say, in a manner as nearly as possible similar to that in which a court of justice acts in respect of an inquiry before it. This doctrine has never been extended further than to courts of justice and tribunals acting in a manner similar to that in which such courts act." (1111F – 1112A)
- Beldam LJ then cited the two extracts from the judgments of the Court of Appeal in Burr v Smith which I have set out and said that in that case the Court held that an action could not be brought against an official receiver for a statement made in his capacity as official receiver and contained in a report made under the 1890 Act. Beldam LJ held that the immunity from suit recognised in Burr v Smith extended to the statements made by the official receiver in the circumstances of Mond v Hyde for the following reasons:
"By their nature bankruptcy proceedings tend to be protracted, with substantial parts of the procedure being carried out under the control and direction of the court rather than at a formal hearing or proceeding. Moreover, in carrying out his functions as an officer of the court, the official receiver will have to embark on many inquiries and make many statements which are not formally part of the proceedings. In Burr v. Smith  2 KB 306 the statement made by the official receiver in the report made under the Companies (Winding up) Act 1890 was clearly a statement made not only in the course of, but for the purpose of, the proceedings. So in bankruptcy proceedings if a statement is made by an official receiver not only in the course of, but for the purpose of, court proceedings it must prima facie come within the absolute protection from action. The rule, being a rule of public policy, requires proper justification and I bear fully in mind the recent observations of this court in Waple v. Surrey County Council  1 WLR 860 that the court should be slow to extend the scope of absolute privilege given to statements made in the course of judicial or quasi-judicial proceedings." (1112G-1113A)"The reasons given in Burr v. Smith  2 KB 306 were (1) that the duty exercised by the official receiver necessitated him stating with the greatest frankness all the matters that he may have ascertained referred to in the section; and (2) that he is performing a duty as an officer of the court in connection with an inquiry which might rightly be termed a judicial inquiry.Having regard to the extensive inquiries which an official receiver would be required to make, for example on reporting to the court under section 26(2) of the Act of 1914 as to the bankrupt's conduct and affairs, including his conduct during the proceedings, and having regard to the facts referred to in section 26(3), it seems to me that the need for the official receiver to be able to state with the greatest frankness all the matters he may have ascertained is of itself a sufficient justification for holding that statements made in the course of such a report should be entitled to absolute privilege and the official receiver immune from action in respect of them. The administration of justice would be as seriously impeded if this were not the case as in the case of statements made which form part of an investigation carried out by the Serious Fraud Office: see Taylor v. Director of Serious Fraud office  4 All E.R. 887. In that case a letter written by an investigating lawyer employed by the Serious Fraud Office and a file note made by her came into the hands of the plaintiff, who alleged that they were defamatory. The court dismissed the plaintiff's action. Kennedy L.J. stated that the plea of absolute immunity was entitled to succeed since the documents were prepared by a person as part of the process of investigating a crime or possible crime and the administration of justice would be seriously impeded if investigators could not operate freely without fear of becoming involved in litigation." (1113G-1114C)"To be afforded immunity from suit in respect of the statement made, the official receiver must be acting in the course of the bankruptcy proceedings and within the scope of his powers and duties. In the preparation of his reports, which are to be accepted as prima facie evidence, statements which he makes are it seems to me as much in need of immunity as statements made by a witness in the preparation of a proof of evidence or in the course of investigating offences of fraud. In the present case the official receiver was acting pursuant to his duty under rule 351(4) of the Rules of 1952 "to give [the trustee in bankruptcy] all such information respecting the bankrupt and his estate and affairs as may be necessary or conducive to the true discharge of the duties of the trustee.The getting in of the assets of the bankrupt's estate for the purpose of being distributed to the creditors is part of the bankruptcy proceedings and accordingly I would hold that in making the statements on which reliance is placed by the appellant the official receiver is entitled to immunity from suit." (1115H-1116B)
- Mr McCormack submitted that the reason why the Court of Appeal in Mond v. Hyde held that the OR in that case was immune from suit in respect of statements made by him was that they were statements made by him in his capacity as OR acting in the course of the bankruptcy proceedings and within the scope of his powers and duties and the getting in of a bankrupt's estate for the purpose of being distributed to his creditors was part of bankruptcy proceedings. As an officer of the court the OR was immune.
- Mr McCormack submitted that that situation needs to be contrasted with the present in which the OR was not providing a statement as part of a statutory duty to assist a court which was itself conducting a judicial function. A decision to revoke a DRO is a discretionary decision which is not cast upon the OR as a part of, or as an adjunct to, an existing judicial process. The OR is not bound to revoke even where the statutory limits are exceeded.
- Mr McCormack contrasted the basis on which immunity was granted to the OR in Mond v. Hyde with that on which the Court of Appeal in Jones v. Department of Employment  QB 1 held that an officer who had refused the Claimant's claim for benefits and against whom the Claimant sought to bring a claim to negligence did not attract immunity from suit. In that case the Court of Appeal held that the officer who was employed as an adjudication officer to decide benefits claims in accordance with the legislation did not discharge a judicial function when he did so. Rather he acted in an administrative capacity.
- Mr McCormack submitted that there were striking similarities between that situation and the case of an OR deciding whether to grant a DRO. In both cases the decision maker is appointed to determine whether applicants qualify for a particular "benefit" (a welfare benefit payment in Jones and the DRO in this case). In both cases a set of statutory preconditions for the receipt of that benefit are set out and the application must be dealt with in accordance with them. In neither case is the decision maker "adjudicating" between the applicant and anyone else. In each case the decision maker must make appropriate enquiries to determine whether the conditions are met. In each case there are rights to appeal to a court or tribunal for a dissatisfied applicant. Finally although these comparisons are most striking in respect of the DRO application process, they are equally applicable in respect of the revocation process. There an additional factor is that the OR has discretion whether to revoke or not to revoke: see sections 251L(1) and (4).
- As a fallback argument Mr Redpath submitted that if his alternative suggested definitions of judicial function were wrong an alternative approach would be to infer the judicial character of the OR's DRO functions from the attributes of the jurisdiction created by the DRO legislation. He suggested that in light of the OR's power to make orders several of the broad tests for identifying judicial functions set out in the chapter headed "Classification of Functions" in Appendix II of De Smith Judicial Review 7th Edition are satisfied. Thus the test of conclusiveness, namely whether the performance of the function culminates in a binding order that has conclusive effect is satisfied. A DRO has "the force of law without the need for confirmation of adoption by any other authority and cannot be impeached (if the OR has acted within her jurisdiction) indirectly in collateral proceedings". That characteristic is said by De Smith generally to be regarded as one of the essential features of judicial power (B-021).
- Mr Redpath submitted that the test of "trappings and procedure" is also satisfied. (B-022). De Smith identified a number of special characteristics which distinguish the manner in which the courts proceed. They determine matters in cases initiated by parties; they must normally sit in public, they are empowered to compel the attendance of witnesses who may be examined on oath; they are required to follow the rules of evidence; they are entitled to impose sanctions by way of imprisonment defined damages or mandatory or prohibitive orders and to enforce obedience to their own commands. Mr Redpath relied on the fact that the OR may only make a DRO upon determination of a formal application (section 251B-C). In the determination of such applications the OR is bound to apply certain evidential presumptions (251D). The OR is required to consider any objections raised by any creditor specified in the DRO (section 251K(3)). The OR may investigate certain matters identified in section 251K(5). The OR may apply to the court for directions or make an order in relation to any matter arising in connection with a DRO (section 251M). The OR may also apply to the court to enquire into a debtor's dealings and property.
- Mr Redpath submitted that the test of "interpretation and declaration" is also satisfied. De Smith stated that a tribunal or other deciding body is likely to be held to be acting in a judicial capacity when, after investigation and deliberation, it determines an issue conclusively by the application of a pre-existing legal rule or another objective legal standard to the facts found by it. De Smith also stated that there is an obvious difference of substance and degree between a decision that X is or is not liable to pay a certain tax in respect of a particular transaction and a decision that it is in the public interest that Y should or should not be granted an office development permit. In the first case the function is typically judicial: in the second the function is typically administrative in as much as it entails the exercise of almost unfettered discretionary power. The wider the "public policy" content of an administrative discretion, the more reluctant may the courts be to require the repository of the direction to "act judicially" according to natural justice. (B-029). Although the OR's jurisdiction is quite narrowly defined Mr Redpath submitted that the above appear to be apt ways to describe what happens when the OR makes a relevant order.
- As the above summary of the parties' submissions demonstrates questions as to what is meant by "judicial acts", "judicial capacity" and "judicial functions" may arise in a wide variety of factual and legal contexts. Not surprisingly what is said in one context to be an important or even conclusive factor may not necessarily be an important or conclusive factor in another context.
- Thus for example there was much discussion of two strands of authorities which considered the legally distinct questions of the circumstances in which an OR may attract immunity from suit and the circumstances in which certain decisions are or are not amenable to judicial review. In each of those contexts there is an underlying public policy which has played an important part in fashioning the approach of the courts to distinguishing between acts or capacities which are said to be judicial and those which are not.
- That is well illustrated by Mond v. Hyde in which the underlying principle behind the conferring of absolute privilege was identified by Beldam LJ as being the need to avoid a serious impeding of the administration of justice. In that example it is in my judgment significant that the privilege attached not only to statements made by the OR but also to statements which form part of an investigation carried out by the Serious Fraud Office or indeed statements made by a witness in the preparation of a proof of evidence or in the course of investigating offences of fraud. The rationale of that public policy is the need to ensure that the relevant maker of a statement is able to state with the greatest frankness all the matters he may have ascertained without fear of being sued. It is in my judgment by no means obvious that the same or even a similar public policy underlies the statutory exclusion of the application of the public sector equality duty in the case of a public authority or person exercising a public function who is exercising a judicial function. Indeed as a matter of common sense it would seem to me that the reverse is the case.
- By contrast a somewhat different policy appears to have informed the approach to the question as to the circumstances in which an OR should or should not be liable for an order for costs incurred by a third party as a result of his actions. In that context a distinction was made between acts done by an OR which he was bound to do as part of his statutory duty in the public interest and acts which he was free either to do or not to do in the same way as if he had been an ordinary litigant or an liquidator acting in the interests of creditors. In the case of the latter category of acts there is no policy reason why he should escape personal liability for his decisions.
- Again there is in my judgment no obvious reason why similar policy considerations should necessarily apply in the context of distinguishing between those functions exercised by public authorities or persons exercising public functions which should attract the public sector equality duty and those to which it should not apply.
- I also consider that in the absence of any decided cases which have considered this specific question it is prudent to avoid attempting general definitions of judicial functions. Mr McCormack cited a number of examples of situations in which decisions are taken which he submitted ought to attract the public sector equality duty and which Parliament is to be taken as having intended should attract it. His purpose was to argue by analogy that if the decision makers in those examples were not exercising judicial functions within the meaning of paragraph 3 of Schedule 18, as he submitted they were not, there is no material distinction which would justify or suggest a different conclusion in this case. In considering those submissions it is in my judgment important to bear in mind that there may be a variety of factors in any particular statutory context which are relevant to considering whether in any particular case the functions in question are judicial. In the absence of specific and detailed information and submissions it is therefore desirable if possible to avoid expressing general conclusions as to the position in other contexts.
- In my judgment it is important to focus on the particular function exercised by the OR which is alleged to attract the public sector equality duty, what would be the consequences of it being held to attract that duty and whether such consequences are likely to have been intended by Parliament. This in turn involves considering the nature and policy of the public sector equality duty and the policy or principle underlying the Parliamentary intention to exclude it in the case of the exercise of a judicial function including a judicial function conferred on a person other than a court or tribunal.
- Section 149(6) provides that compliance with the public sector equality duties may involve treating some persons more favourably than others. Although the duty is not framed in terms of achieving a particular outcome, it is thus expressly contemplated that compliance with the duties set out in section 149 may involve and thus, arguably require not only a different outcome to that which would have occurred in the absence of the duty but an outcome which involves treating some persons more favourably than others. Thus for example the duty to have due regard to the need to take steps to meet the needs of a disabled person includes having due regard to the need to take steps to take account of a disabled person's disabilities.
- It is not difficult to see why it was considered inappropriate as a matter of policy for such a duty to be imposed on judges in the exercise of their function of deciding civil or criminal cases before them. Inherent in the rule of law is the proposition that it is the function of a judge to apply the relevant law to the facts of a particular case in front of him or her and to do so even-handedly without regard to the nature, identity or particular characteristics of any of the parties or persons appearing in front of him or her.
- Further there is a myriad of situations in which a judge is required by the law, whether derived from statute or binding authority, to reach a specified conclusion. In such a situation application of the public sector equality duty would come into head on conflict with the judge's obligation to apply the law binding on him or her without regard to any other considerations. The only way in which the public sector equality duty could be reconciled with the obligation of the judge to reach a conclusion which the application of the relevant mandatory provisions of the law would otherwise require him or her to reach would be to construe "due regard" in every such situation as meaning "no regard".
- Further there are many areas of the law where as a matter of policy the law favours legal certainty. The law of contract is an obvious example. If a judge were obliged to apply the section 149 duty to those parts of the law of contract whose provisions reflect the public policy in enabling parties to contract having legal certainty as to their rights and how they will be enforced by the courts in the event of dispute, either the judge would be bound in every such case to conclude that "due regard" means "no regard" or he would be obliged to make inroads into the public policy behind legal certainty.
- There are of course many situations in which judges in hearing civil or criminal cases are vested, whether by statute or binding authority, with discretion. Although in such cases the conflict between the judge's duty to apply the relevant law to the facts and his or her duty to apply the public sector equality duty might not necessarily arise in such acute form, there would still be scope for conflict. There may for example be many legal situations in which it is clear from the circumstances or context that the factors by reference to which a judge is obliged to exercise a discretion are circumscribed and in particular such that if the discretion were to be exercised in a manner dictated by having due regard to the matters set out in section 149 it would lead to a result considered to be unfair or even open to challenge on appeal or judicial review absent the statutory obligation to have regard to such matters.
- Moreover even if there were no scope for such conflict in cases where a judge exercised a discretion, the fact is that the exclusion of the section 149 duty in the case of judges exercising judicial functions is absolute and unqualified and in my judgment plainly extends to such cases. As it seems to me it follows that Parliament considered that as a matter of policy there should be an absolute exclusion of the section 149 duty in the case of judges deciding cases, irrespective of whether the decision is one which the judge is bound to make or one which he or she reached in whole or in part as a matter of the exercise of judicial discretion.
- It would certainly offend common sense to suggest that a judge deciding a case expressly on the basis of the exercise of a discretion was for that reason not exercising a judicial function. A decision to refuse an application for an injunction on the grounds of delay is no less an exercise of a judicial function than a refusal of an injunction on the ground that the claim discloses no reasonable cause of action.
- It is of course open to Parliament to fetter judicial discretion or to require it to be exercised in a particular way or indeed to remove judicial discretion and require a judge to reach particular conclusions in particular situations in accordance with statute. Indeed that happens all the time. However that is very different from requiring judges, as would have been the case but for the exclusion in paragraph 3 of Schedule 18, to have regard to a particular set of matters in every single decision in every kind of case which they ever have to decide.
- Allied to this aspect of public policy which in my judgment explains the exclusion of section 149 in the case of judges exercising judicial functions, if not central to it, is the fact that part of what judges do is to determine the rights and liabilities of people. Usually they determine the rights and liabilities of people who appear in front of them whether in a civil or criminal case. However in some situations they may determine the rights and liabilities of persons who are not before the court. An obvious example is an order freezing a person's assets made on an ex parte application. Even though that person has a right to apply later to set aside the freezing order, until and unless the order is set aside the order has determined his right to dispose of his assets as he wishes and indeed it may deprive him forever of disposing from in a particular way such as acquiring a unique asset which is only available in the period between the making and setting aside of the order. Although the context was different it is of interest that in Bottomley v Brougham Channell J held that the fact that the OR made a report ex parte made no difference to the fact that in performing his statutory duty to enquire in a judicial way into certain matters under the Act of 1890 he was acting in a judicial capacity. "A judge in hearing an ex parte application is still acting as a judge and the absolute privilege applies quite as much as when he is hearing a case in which both parties appear".
- It is in the nature of civil litigation that it is the judge's duty to determine the rights and liabilities of the parties in accordance with the relevant law and the parties are entitled to expect and the rule of law depends on the certainty that the judge will do so. In that vital respect the process by which a person's rights and/or liabilities are determined with binding legal effect is in my judgment materially different from the very many situations in which in the public sector public bodies take decisions which may foreseeably or even inevitably have an impact on or affect one or more individuals. Often such decisions involve difficult questions of allocating scarce resources. The application to such decisions of the public sector equality duty does not involve the same conflict as that to which I have referred in the context of judicial decision making.
- It is against this background that it is necessary to address the question whether an OR in revoking a DRO is exercising a judicial function as contemplated by paragraph 3(1)(a) of Schedule 18 so that section 149 does not apply to it. Paragraph 3(2) makes it plain that the dis-application of section 149 is not confined to the exercise of a judicial function exercised by a court or tribunal but extends to the exercise of a judicial function conferred on other persons. In considering whether in any given case a person exercising a public function is exercising a judicial function within the meaning of paragraph 3(1)(a) it is in my judgment necessary to have regard to the policy reasons behind the exclusion of the section 149 duty in the case of the exercise of a judicial function.
- Where a DRO is made it has a number of automatic legal consequences. Any other debt management arrangements which were in force immediately before the DRO was made cease to be in force when it is made (section 251F). A moratorium commences on the effective date for the DRO during which all creditors to whom specified qualifying debts are owed have no remedy in respect of the debts and may not commence a creditor's petition in respect of them or otherwise commence any action or other legal proceedings against the debtor for the debts except with the permission of the court and on such terms as the court may impose (section 251G). At the end of the moratorium applicable to a DRO the debtor is discharged from all the qualifying debts specified in the order (section 251I).
- It is thus clear beyond argument that the making of a DRO affects the rights of creditors to whom a specified qualifying debt was owed immediately prior to the making of the DRO. Indeed, although a DRO may be revoked, inter alia in response to an objection to the OR by a person specified in the DRO as a creditor to whom a specified qualifying debt is owed, it is not in my judgment inaccurate to say that a DRO determines the rights of such a creditor. If the DRO is not revoked or amended the determination has the consequences to which I have just referred. If it is subsequently revoked or amended the creditor's rights are still determined, albeit only as regards the period between the making and the amending or revoking of the DRO.
- The rubric on top of section 251C of the 1986 Act is: "Duty of official receiver to consider and determine application" (emphasis added). Section 251C(3) provides that the OR must determine an application for a DRO by deciding whether to refuse the application and if he does not refuse it by making a DRO in relation to the specified debts he is satisfied were qualifying debts of the debtor at the application date. It also provides that he may only refuse the application if he is authorised or required to do so by any of the following provisions of section 251C. In particular by virtue of section 251C(5) the OR must refuse the application if he is not satisfied that the debtor is an individual who is unable to pay his debts, that at least one of the specified debts was a qualifying debt of the debtor at the application date and that each of the conditions set out in Part 1 of Schedule 4ZA is met. Examples of the conditions in Part 1 of Schedule 4ZA which allow for no element of discretion on the part of the DRO are that the debtor is domiciled in England and Wales on the application date, that he is not on the determination date an undischarged bankrupt, that the total amount of the debtor's debts on the determination date does not exceed the prescribed amount and that the total value of the debtor's property on the determination date does not exceed the prescribed amount.
- It is thus clear that in circumstances in which the DRO is not satisfied on the evidence that each of those conditions is met the OR is under a mandatory statutory obligation to refuse the debtor's application for a DRO. If, in exercising his statutory power under section 251C to consider the debtor's application and determine it by deciding whether to refuse it or not, the OR were subject to the section 149 duty, there would be a conflict between the OR's duty to comply with section 251C on the one hand and the duty to have due regard to the matters set out in section 149 on the other. That conflict could only be resolved either by the OR acting in breach of the mandatory duty imposed on him by section 251C(5)(c) or by the OR being obliged to conclude that the "due" regard required to be given to the section 149 matters is in fact "no" regard. That would in effect be to render the section 149 duty wholly redundant.
- It is in my judgment clear that Parliament intended that there should be an absolute prohibition on the making of DRO in circumstances where the conditions in Part 1 of Schedule 4ZA are not met. This is therefore in my judgment an example of precisely the kind of situation which illustrates the policy lying behind Parliament's intention that the section 149 duty should not apply to the exercise of a judicial function. If the duty under section 251C had been imposed on a judge rather than an OR there can in my judgment be no question but that the making of a decision to revoke on the basis that the judge was not satisfied that the conditions in Part 1 were met would be the exercise by the judge of a judicial function to which by reason of paragraph 3 of Schedule 18 of the 2010 Act the section 149 duty did not apply.
- One of the conditions in Part 1 of Schedule 4ZA is that the debtor's monthly surplus income if any on the determination date does not exceed the prescribed amount. The monthly surplus income is defined as the amount by which a person's monthly income exceeds the amount necessary for the reasonable domestic needs of himself and his family. In determining whether that condition is met the OR must form a judgment as to what amount is necessary for the reasonable domestic needs of the debtor and his family. Although that does not involve an element of discretion on the part of the OR, there is not the same obvious conflict between the duty on the OR to be satisfied that the condition is met on the one hand and a duty to have due regard to the matters set out in section 149 on the other. It might be said that in considering what are the reasonable domestic needs of the debtor and his family there could be scope for having due regard to the section 149 matters. However it would in my judgment be a nonsense to suggest that if the section 251C duty had been imposed on a judge rather than the OR the judge would be exercising a judicial function within the meaning contemplated by paragraph 3 of Schedule 18 of the 2010 Act when considering whether the other conditions in Part 1 were met but was not exercising such a judicial function when considering whether the debtor's monthly surplus income did not exceed the prescribed amount. Indeed this well illustrates the point I made earlier that when a judge decides a case wholly or in part by exercising a discretion or forming a judgment which may allow for a margin of appreciation that does not mean that he is for that reason not exercising a judicial function.
- Does the fact that the statutory power to make a DRO is conferred on the OR rather than on a judge lead to a different result? In my judgment the answer to that is clearly no. No less than if the power had been conferred on a judge, the effect of the OR's decision whether to make a DRO or not has the effect of determining certain rights and liabilities of the debtor and the specified creditors. The latter is of particular significance in this context. Unlike in the examples cited by Mr McCormack where the relevant decision may have an adverse impact on or indirectly affect the interests of third parties or even their Article 8 rights under the ECHR, the making of a DRO has a direct and legally binding effect on the creditor's legal rights. Before the DRO he may have had a number of legally enforceable rights including a legally enforceable debt. The direct effect of the making of the DRO is to qualify, suspend and ultimately, if the DRO is not revoked, terminate his right to enforce his debt.
- Although the process by which a DRO is made does not involve an adversarial hearing at which the creditor is entitled to be heard, Parliament has provided that his legal rights may not be qualified or terminated unless certain conditions are met. Whether those conditions are met is to be decided by the OR and in making his decision he is bound to apply a number of statutory evidential presumptions set out in section 251D. The 1986 Act and the rules made thereunder make provisions for the procedure to be followed before a DRO can be made and the Act provides that it is the duty of the OR to "determine" the debtor's application in accordance with the provisions of section 251C.
- In considering and determining an application for a DRO the OR must consider and assess a number of prescribed matters and form judgments as to whether certain conditions are satisfied. In addition section 251C(4) confers on the OR a discretion as to whether to refuse or to grant the application if the application does not meet all the requirements imposed by or under section 251B, if any queries raised with the debtor have not been answered to the satisfaction of the OR within such time as he may specify when they are raised or if the debtor has made any false representation or omission in making the application or in supplying any information or documents in support of it. The process thus involves a mixture of mandatory and discretionary provisions. That is a not uncommon characteristic of the tasks which judges have to perform when exercising judicial functions. Neither the fact that part of the process may involve a discretionary element nor the fact that it does not involve an adversarial procedure in my judgment prevents the conclusion that what is involved is the exercise by the OR of a judicial function any more than they would if the function was being carried out by a judge.
- As to the lack of an adversarial procedure as I have already suggested there is an analogy with the hearing by a judge of an ex parte application. The fact that it is ex parte does not mean that the judge is not exercising a judicial function. It just means that persons whose legal rights are affected and may be determined by the ex parte order have a right to apply later to have the order discharged. In the case of a DRO a creditor who is aggrieved by the making of the DRO has the right under section 251K to object to the making of the DRO or the inclusion of a particular debt owed to him in the list of the debtor's qualifying debts or to the details of the debt specified in the order. Such an objection must be made to the OR in the prescribed manner and the OR must consider every objection made to him under section 251K. The OR may then as part of his consideration of an objection carry out an investigation of any matter that appears to the OR to be relevant to the making of any decision as to whether the DRO should be revoked or amended under section 251L, whether an application should be made to the court under section 251M or whether any other steps should be taken in relation to the debtor. Moreover a creditor who is dissatisfied by any act, omission or decision by the OR in connection with a DRO may make an application to the court and on such an application the court may quash the whole or part of any act or decision of the OR and/or make an order revoking or amending the DRO. (Section 251M).
- In my judgment the same or at any rate sufficiently similar policy reasons which would disapply the section 149 duty if the power to make a DRO order had been conferred on a judge rather than an OR apply and point to the conclusion that when making a DRO an OR is exercising a judicial function within the meaning of paragraph 3 of Schedule 18.
- I am of course concerned in this case not with the making of a DRO but with its revocation. There are some differences between the provisions for making and revoking of a DRO by the OR. However it would in principle be surprising if in deciding whether to make a DRO the OR was exercising a judicial function to which the section 149 duty does not apply whereas in deciding whether to revoke it he or she was not exercising a judicial function so that the section 149 duty did apply. Further there is the striking feature of the statutory scheme for the revocation of DROs that power to revoke a DRO is conferred on both the OR and the court. It is common ground between the parties that the court when deciding whether to exercise its power to revoke a DRO under section 251M is exercising a judicial function so that the section 149 duty does not apply. The court is thus free to disregard entirely the matters identified in section 149 in reaching its decision. It would in my judgment be even more surprising in those circumstances if the OR when deciding whether to exercise his or her power to revoke a DRO under section 251L is not exercising a judicial function so that he or she is under a duty to have due regard to the matters identified in section 149. It is inherent in the section 149 duty that there may be circumstances in which the effect of the duty will be to lead to a different decision to that which would have been made in the absence of the duty. It follows that in any such situation on identical facts a different decision might be made depending on whether it is made by the OR or the court. Such an anomalous state of affairs in my judgment argues strongly against Mr McCormack's submission that when deciding whether to revoke a DRO the OR is not exercising a judicial function.
- This is particularly so given that the most likely and obvious circumstance in which the question whether a DRO should be revoked is likely to arise is in response to an attempt by an affected creditor to have the DRO revoked. There are two routes open to such a creditor to seek to have a DRO revoked. One is to make an objection to the OR under section 251K to the making of a DRO, the inclusion of a particular debt in the list of debtor's qualifying debts or the details of the debt specified in the order. The OR must then consider that objection and may as part of his consideration carry out an investigation as to whether the DRO should be revoked or amended and may then revoke or amend the DRO under section 251L. Alternatively the creditor may apply to the court if he is dissatisfied by any act, omission or decision of the OR in connection with the DRO or the application for it and the court on such an application has the power under section 251M(6)(e) to make an order revoking or amending the DRO.
- Faced with those two alternative routes to seeking an order revoking a DRO why would a creditor opt for the OR route if he would be faced with an additional but avoidable hurdle in the form of persuading the OR that having due regard to the section 149 matters should not lead the OR to decide against revoking the DRO.
- Mr McCormack's answer to this point was the submission that any apparent anomaly or inconsistency arising out of the fact that the court when deciding whether to revoke a DRO is not subject to the section 149 duty is illusory. That is because by the time the court comes to decide whether to revoke the DRO or not the OR must have played some part in the process and in doing so will have been exercising a public function subject to the section 149 duty. That is so whether the OR is the applicant under section 251M(2) or whether the application is made by anyone else such as a creditor under section 251M(1). In the latter case the applicant is required by Rule 5A19(a)(2) of the Insolvency Rules to send notice of the application to the OR. In either case Mr McCormack submitted that the public sector equality duty would be engaged. In the former the OR in deciding whether to make an application to the court with a view to securing an order revoking a DRO would be exercising a public function but not a judicial function. In the latter case in deciding whether to take part in the proceedings or not the OR would again be exercising a public function but not a judicial one. Assuming that the OR fully complies with the section 149 duty the product of that compliance could be produced before the court and account taken of it when the court's decision whether or not to revoke is taken (my emphasis). The court cannot close its eyes to the product of the OR's compliance with the section 149 duty just because it is not itself subject to that duty.
- That submission is of course based on the premise that a decision by the OR whether to make an application to the court under section 251M or whether to take part in proceedings initiated by someone else's application to the court for an order revoking a DRO are not decisions taken in the exercise of a judicial function. If that premise is wrong the submission falls away. The same applies to a decision by the OR whether to carry out an investigation pursuant to the powers conferred by section 251K(4) of any matter that appears to the OR to be relevant to the making of a decision whether to apply to the court under section 251M.
- Mr Redpath accepted that where the OR makes an application to the court under section 251M(2) the OR is not exercising a judicial function unless the application is for directions from the court to tell the OR how the OR should exercise her functions. Thus as I understood him he accepted that an application by the OR to the court for an order that a DRO should be revoked is not an application made by the OR in exercise of a judicial function. I did not understand him to make a similar concession in respect of a decision by the OR to carry out an investigation under section 251K(4) where such an investigation would be with a view to deciding whether the OR should revoke the DRO under section 251L as distinct from a decision as to whether the OR should apply to the court under section 251M for the court to make such an order.
- Mr Redpath submitted that it is of no consequence that in making an application to the court with a view to the court revoking a DRO and/or in investigating with a view to deciding whether to make such an application the OR may be under a section 149 duty because the scope of any such investigation is defined by investigating matters relevant to the exercise by the court of its discretion whether to revoke a DRO. Since the court in making its decision is not subject to the section 149 duty and would not be bound to have due regard to the matters identified in section 149 the scope of any investigation carried out by the OR would be qualified or limited by reference to matters relevant to the court's prospective decision.
- While I entertain some doubts as to the validity of the latter argument, I do not accept Mr McCormack's general submission on this point for a number of reasons. First it does not seem to me self evident that no application for an order revoking a DRO can find its way to the court without there having been an investigation by the OR. If the OR is served by a creditor with notice of an application to the court for an order revoking a DRO it does not follow that even if the OR's decision whether to seek to join in the proceedings is subject to a section 149 duty that that necessarily entails an obligation on the OR to carry out an investigation into the matters identified by section 149.
- Second, even if the result of the OR complying with a putative section 149 duty is that the product of that compliance (if any) could be produced before the court and account taken of it when the decision by the court whether or not to revoke is taken, it does not follow that the court when exercising its decision whether to revoke would be bound to have the same due regard to those matters as would the OR if he or she were taking the decision whether to revoke under section 251L (assuming that the OR in making that decision was bound to have due regard to the section 149 matters). Thus if the only ground for challenging a decision by the court to revoke a DRO is that it failed to have due regard, in the sense specified in section 149 and elaborated in judicial decisions, to the section 149 matters the challenge would fail. Precisely the same challenge would be bound to succeed if a decision to revoke was made by the OR under section 251L. The whole point about the section 149 duty is that it imposes an additional obligation on a decision maker.
- Third, the anomaly or inconsistency point is not the only matter supporting the conclusion that in deciding whether to revoke a DRO under section 251L the OR is exercising a judicial function. Critical to that conclusion in my judgment is the fact that a decision whether to revoke a DRO no less than a decision whether to make a DRO is one which imposes liabilities and/or determines rights. If a DRO is revoked it restores to the creditor the right to enforce his debt and renders the debtor liable to repay it. If revocation is refused, the creditor's right to enforce his debt remains suspended and ultimately subject to being discharged at the expiry of the moratorium. It is common ground that the same or similar decision when made by the court pursuant to the power conferred on it by section 251M is one made in the exercise of a judicial function. There is nothing in my judgment in section 251L to support a conclusion that the same policy reasons which lie behind the disapplication of the section 149 duty to the court when it reaches its decision do not point to the need to disapply the section 149 duty.
- It is true that unlike the decision whether to make the DRO section 251L does not contain provisions which make it mandatory for the OR to revoke a DRO. There are three grounds on which the OR may revoke a DRO in section 251L and each of them is discretionary. However for the same reasons to which I have already referred in the context of my conclusion that when deciding whether to grant a DRO the OR is exercising a judicial function in my judgment the fact that the decision involves an element of statutory discretion is not of itself inconsistent with the decision being one made in exercise of a judicial function.
- One of the grounds on which the OR may revoke a DRO under section 251L is that he should not have been satisfied that the conditions specified in Part 1 of Schedule 4ZA were met. One of those conditions is that on the determination date the amount by which the debtor's monthly income exceeded the amount necessary for the reasonable domestic needs of himself and his family exceeded the prescribed amount. Let it be supposed that a DRO has been made by the OR in circumstances where the OR was satisfied that the debtor's surplus income did not exceed the prescribed amount but an objection is made by a creditor on the basis that, unknown to the OR, in fact the debtor had an undisclosed additional income of £100 a month. On its face that evidence would support the conclusion that the OR should not have been satisfied that the monthly surplus income condition was met. If the additional income had been disclosed prior to the making of the DRO the OR would have been bound to refuse to make the order. It would have been no answer for the debtor to point to section 149 matters in support of an argument that a DRO should be made because the OR was not subject to a section 149 duty. It would be anomalous in those circumstances if at the stage of considering whether to revoke the order the OR were for the first time subject to a duty to have regard to the section 149 matters if the consequence of that duty might or could lead to the conclusion that for that reason alone the DRO should not be revoked.
- As it seems to me McCormack's strongest submission was that based on the decision of the Court of Appeal in Jones v Department of Employment. In that case Glidewell LJ said that the recorder against whose judgment the Department appealed considered that the major if not the sole point on which he had to make his decision was whether the adjudicator's function was of a judicial character so as either to come within section 2(5) of the Crown Proceedings Act 1947 or to be subject to an alleged immunity at common law of persons acting in a judicial capacity. It was on that ground that he gave his decision in favour of the Plaintiff.
- Glidewell LJ stated that the question was whether an adjudication officer deciding whether or not to allow a claim for unemployment benefit is discharging responsibilities of a judicial nature. Counsel for the Plaintiff submitted that he is not and that his functions are administrative. He argued that responsibilities of a judicial nature involve a contest between two parties, which is resolved by a person involved in some sort of judicial process. The adjudication officer, it is true, is making a decision, but a decision on a claim made by one party. The position no doubt becomes different at the appeal stage. By then there are two parties, the adjudication officer being one party to the proceedings. Counsel cited in support of his argument the passage following from the judgment of Diplock LJ in Reg v. Deputy Industrial Injuries Commissioner, Ex parte Moore  1 QB 456, 486:
"Section 45 of the Act requires that all claims to benefit shall be submitted to an insurance officer, a civil servant appointed by the Minister. His duties are administrative only; he exercises no quasi-judicial functions, for there is, at this stage, no other person between whose contentions and those of the claimant he can adjudicate. He must form his own opinion as to the validity of the claim and for this purpose he may make whatever inquiries he thinks fit. If he is satisfied that the claim ought to be allowed in whole, he may allow it, and his decision is final; but if he disallows it in whole or in part he must give his reasons in writing and the claimant has a right of appeal to a local appeal tribunal. From a decision of a local appeal tribunal there is a further right of appeal…to the commissioner or a deputy commissioner. In dealing with appeals of these kinds the insurance tribunal, namely, the local appeal tribunal or the commissioner or deputy commissioner as the case may be, is exercising quasi-judicial functions, for at this stage it has conflicting contentions before it, those of the claimant and those of the insurance officer who has disallowed the whole or part of the claim." (17E-G).
- Glidewell LJ said that he agreed with the submission of counsel for the Plaintiff in that respect and said that if he did not he believed the matter was concluded by the passage from the judgment of Diplock LJ in Ex parte Moore. He stated:
"The insurance officer in that decision is the statutory predecessor of the present adjudication officer. In his judgment the recorder said:"In my judgment, it is clearly open to argument as to whether or not the adjudication officer is performing a judicial function. I incline to the view that he is not. I think that he is performing an administrative function. At the outset, there is no dispute. The adjudication officer hears no evidence. He can obtain evidence from the employer but there is no real procedure for him to refer back to the claimant evidence he has obtained from the claimant [sic]. I think the adjudication officer probably acts in an administrative way. It is only when an appeal goes before the appeal tribunal, that responsibilities of a judicial nature arise."For my part I agree with this reasoning and I conclude that the adjudication officer is not discharging responsibilities of a judicial nature. Accordingly I think the recorder was correct in refusing to strike out the particulars of claim on this ground and, if the matter rested there, I would dismiss the appeal." (17G-18C).
- The question addressed by the Court of Appeal in Jones arose in the context of section 2(5) of the Crown Proceedings Act 1947 which provided:
"No proceedings shall lie against the Crown by virtue of this section in respect of anything done or omitted to be done by any person while discharging or purporting to discharge any responsibilities of a judicial nature vested in him, or any responsibilities which he has in connection with the execution of judicial process." (17A).
The context was thus similar to that considered in Mond v Hyde and the authorities concerned with immunity from suit or absolute privilege.
- As I have already indicated it is in my judgment necessary when considering the meaning of the words "the exercise of a judicial function" in paragraph 3 of Schedule 18 of the 2010 Act to have particular regard to the policy underlying the exclusion in such cases of the section 149 duty which would otherwise apply to a person exercising a public function. Different policy considerations in my judgment arise.
- Further there is in my judgment a material difference between the function of the adjudication officer in Jones and that of the OR when exercising his or her statutory power to decide whether to revoke a DRO. The function of the former is confined to deciding whether or not to allow a claim for unemployment benefit. The effect of the latter is not so narrowly confined. Not only is the decision of the OR not made in response to a claim by the debtor for a benefit but it directly affects and in my judgment determines the rights of a creditor or creditors as well as the rights and liabilities of the debtor. If the DRO is revoked the existing right of the debtor to relief from enforcement of the debt is replaced by a liability to pay it, and the creditor's original right to enforce the debt is reinstated. If it is not revoked, the debtor's existing right to relief from enforcement is vindicated and the creditor's right to enforce the debt remains suspended and liable to be extinguished at the end of the moratorium period. It is in the very nature of a DRO and an order revoking a DRO that they affect and at least temporarily determine competing rights and liabilities of the debtor and creditor(s).
- Moreover unlike the position of the adjudication officer in Jones there will be many occasions on which, in exercising the power conferred by section 251L to decide whether or not to revoke a DRO, the OR will have conflicting contentions before him or her, namely those of the debtor and those of a creditor or creditors upon which he must adjudicate. Even if there are no such contentions, the OR is effectively adjudicating as between the competing actual or contingent rights of the debtor and the creditor(s).
- The statutory scheme provides that a creditor to whom a specified qualifying debt is owed may object to the making of a DRO, the inclusion of a debt in the list of the debtor's qualifying debts or the details of the debt specified in the order. The objection must be made specifically to the OR and must be made in the manner prescribed by Rule 5A.14 of the 1986 Insolvency Rules, based on a ground prescribed therein and supported by any information and documents prescribed therein.
- The grounds prescribed by Rule 5A.14 are that—(a) there is an error in, or an omission from, something specified in the debt relief order;(b) a bankruptcy order has been made in respect of the debtor;(c) the debtor has made a proposal under Part 8 of the Act;(d) the official receiver should not have been satisfied that (i) the debts specified in the order were qualifying debts of the debtor as at the application date;(ii) the conditions specified in Part 1 of Schedule 4ZA to the Act were met;(iii) the conditions specified in Part 2 of that Schedule were met or that any failure to meet such condition did not prevent him or her from making the order;(iv) the condition in paragraph 7 of that Schedule was not met at any time after the order was made; (v) the condition in paragraph 8 of that Schedule was not met at any time after the order was made. The OR must consider every such objection and may then investigate any matter which appears to him or her relevant to deciding inter alia whether the order should be revoked by the OR under section 251L or whether an application should be made to the court under section 251M.
- If, after considering an objection in accordance with section 251K, the OR is minded to revoke or amend the debt relief order, he or she shall send to the debtor particulars of—(a) the objection; (b) the grounds and facts upon which the creditor relies; and (c) the address to which the debtor's comments must be sent, and invite the debtor to comment on them. (Rule 5 A.15.2).
- Before deciding whether to revoke or amend the debt relief order, the official receiver shall consider any comments made by the debtor, provided they are made within 21 days after the particulars were sent to the debtor. (Rule 5 A.15.3).
- Thus if the OR in such a case decides that the appropriate course is for him or her to decide whether to revoke or amend the DRO under section 251L the OR will in effect be adjudicating upon the rival contentions of the aggrieved creditor(s) on the one hand and the debtor on the other assuming that the latter objects to the DRO being revoked. In that situation in my judgment the function exercised by the OR is far removed from that exercised by the adjudication officer in Jones. There are before the OR in those circumstances or maybe conflicting contentions upon which the OR must adjudicate for the purpose and with the effect of determining the conflicting actual and contingent rights of the debtor and creditor(s).
- It is true that there may be circumstances, of which the present case is an example, where the OR's exercise of the section 251L power is not initiated by or exercised in response to an objection made to the OR by an aggrieved creditor. However even in such a case it remains the case that, as distinct from the position in Jones, the decision is one which determines the rights of creditors as well as those of the debtor and involves the OR in adjudicating between those conflicting or competing rights.
- This is reflected in the fact that if the OR decides to revoke the DRO pursuant to the powers under Section 251L then, subject to Rule 5A.27, he or she must as soon as reasonably practicable after deciding to revoke it (a) send notice of the decision to revoke to (i) the debtor; and (ii) any creditor specified in the debt relief order as a creditor to whom a qualifying debt is owed; and (b) upon the revocation taking effect, provided that information concerning a debt relief order has not been deleted under Rule 6A.5B, cause the entry in the individual insolvency register relating to the debt relief order to be amended accordingly. (Rule 5 A.16.1).
- It would in my judgment be perverse if Parliament intended that in exercising the power to revoke a DRO the OR should be under the public sector equality duty where the decision whether to revoke is initiated by an aggrieved creditor but not where it is in response to information which comes to the OR from some other source.
- I accept that some of the points to which I have drawn attention apply with greater force to the exercise by the OR of the power to revoke a DRO than to the power to make it, although there may be circumstances in which even at that earlier stage the OR is in possession of information and/or contentions by creditors who are opposed to the making of a DRO. Nonetheless they are in my judgment persuasive points.
- Finally the court in Jones was not confronted with the anomaly which in my judgment would result if Mr McCormack's submissions were correct, namely that on precisely the same facts there would be two routes open to an aggrieved creditor seeking revocation of a DRO (to the OR under section 251K or to the court under section 251M) which could lead to diametrically opposite outcomes because the decision maker on one route (the OR) would be subject to the section 149 duty whereas the decision maker on the other route (the court) would not.
- For these reasons I am not satisfied that the decision of the Court of Appeal in Jones v. The Department of Employment compels the conclusion, which I would not otherwise consider to be the right conclusion, that in exercising the power under section 251L to decide whether to revoke a DRO, the OR is not exercising a judicial function.
- For all these reasons I am satisfied that the answer to the question posed by the first issue is that when deciding whether to revoke the DRO the OR was exercising a judicial function within the meaning contemplated by paragraph 3 of Schedule 18 to the 2010 Act and that accordingly in making that decision she was not subject to the public sector equality duty under section 149 of that Act.
THE SECOND ISSUE
- The second issue raised in this claim is whether, if the OR was subject to the public sector equality duty when deciding whether to revoke the DRO, she failed to comply with that duty. As already mentioned this question would only fall to be decided if the first issue were decided in favour of the Claimant. There are circumstances in which a court will answer a question even though it does not arise on the basis of the findings which it has made in respect of a prior question. If it does so it is normally with a view to the possibility that its finding on the prior question may be overturned on appeal.
- In the particular circumstances of this case in my judgment it would not be proportionate to embark on a hypothetical analysis of this second issue.
- As already mentioned the OR first indicated that if the revocation of the DRO was challenged by a claim for judicial review it would be suspended pending determination of the judicial review proceedings and subsequently issued a counter-application dated 31 August 2012 in the County Court proceedings seeking an order that, in the event that her decision to revoke the DRO were to be quashed in these judicial review proceedings, the court should revoke it on the ground that the Claimant's monthly surplus income exceeded the relevant limits prescribed by the 1986 Act during the moratorium period.
- In her witness statement dated 24 August 2012 in support of that cross-application Ms Butler stated that she considered that it would have been an improper exercise of her discretion to revoke the DRO had she ignored the fact that the Claimant's income position had materially changed so that she was now in excess of the prescribed statutory limits which could justify the continuation of the DRO. She did not accept that the Claimant's reasonable domestic needs had so changed that her monthly surplus income fell within the prescribed limits during the moratorium period. Whether or not her physical and/or mental conditions were as she initially claimed or as they subsequently appeared to be as suggested by her GP's letter dated 3 April 2012 and whether or not any of those conditions amounted to a disability, as originally conceded in reaching her decision to revoke, she did not consider that they provided a proper basis to permit the continuation of the DRO.
- Even if I were to hold upon examination of the parties' submissions and the evidence that, if I am wrong in concluding that the section 149 duty did not apply to the OR's decision whether to revoke the DRO, in those circumstances the OR was in breach of that duty, and even if my conclusion on the first issue were to be overturned on appeal, the position would remain that the OR's application to the County Court to revoke the DRO would fall to be determined by a County Court judge who would not be subject to the public sector equality duty.
- In her witness statement dated 7 July 2012 served in these proceedings Ms Butler said that even having considered the additional financial information and information related to the Claimant's disability which had been supplied after the decision to revoke was made, her decision to revoke remained unchanged. In particular even based on the financial information which the Claimant and her representatives had more recently disclosed she considered that during the moratorium period her "monthly surplus income" materially exceeded the statutory limit. She added that even assuming that she were not excluded from the public sector equality duty in exercising the jurisdiction to revoke a DRO and assuming that the Claimant was a disabled person as she claimed, she did not consider the fact of such disability justification for her not reaching the same decision to revoke the DRO in this case.
- It is of course right that in considering whether there has been a breach of the public sector equality duty, it is not normally a defence for the decision taker subsequently to say that, even though he or she did not have due regard to the Section 149 matters, nonetheless with the benefit of hindsight the same decision would have been made even if due regard had been had to those matters. If the effect of quashing in these proceedings the OR's decision to revoke the DRO were or could be that the matter would be remitted to her to reconsider whether to revoke the DRO, this time discharging the section 149 duty, that might well be the appropriate order, absent the court being satisfied that she would inevitably reach the same decision. However as it is it is common ground that that would not be a possible outcome in this case because the statutory period within which the OR had jurisdiction to revoke the DRO has expired.
- If the OR's order were to be quashed on appeal from this judgment, the position would thus be that the OR's cross-application dated 31 August 2012 to the County Court under section 251M, seeking an order to revoke the DRO (in the event that her decision to revoke the DRO were to be quashed in these judicial review proceedings) on the ground that the Claimant's monthly surplus income exceeded the relevant limits prescribed by statute during the moratorium period would fall to be determined by the County Court judge.
- As already mentioned it is common ground that the County Court judge in determining the OR's application under section 251M would not be subject to the section 149 duty. Of course it would be for the County Court judge to determine that application. However in the light of the OR's evidence it does not seem to me that, particularly as the Claimant would be deprived of the argument that the judge would be bound to have due regard to the section 149 matters, the Claimant's prospects of successfully resisting that application, viewed in the light of the information available at present, are such as to render a quashing of the OR's decision to revoke the DRO in these proceedings pursuant to a successful appeal on the first issue an outcome likely to be of more than academic interest.
- There is in those circumstances no small element of doubt as to whether any practical useful purpose would be served by my further lengthening this judgment by a consideration of the second issue. Accordingly I decline to do so.
- For the reasons set out above in my judgment this application for judicial review is not well founded and must be dismissed.