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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Findlay, Re Application for Judicial Review [2006] ScotCS CSOH_188 (06 December 2006) URL: https://www.bailii.org/scot/cases/ScotCS/2006/CSOH_188.html Cite as: [2006] CSOH 188, [2006] ScotCS CSOH_188 |
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OUTER HOUSE, COURT OF SESSION [2006] CSOH 188 |
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P1273/06 |
OPINION OF LORD HODGE in the cause JOHN (as executor of the late Robert Findlay) Petitioner; in Petition for
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Petitioner: Sir Crispin Agnew Q.C.,
Respondents: Mrs. S.P.L. Wolffe, Advocate; Simpson &
Marwick WS
[1] The
petitioner is the son and surviving executor of the late Robert Findlay ("Mr
Findlay"), who was the owner of Redhouse Farm, judicial review
which was settled when respondents by letter
dated
judicial review
arises from decisions
taken by the respondents in this context.
[2] The
judicial review
application challenges two decisions of the respondents taken
in December 2005 and March 2006 respectively.
The first decision was to impose as a condition of an offer to extend
the timescale in which the sale could be completed that the respondents would
review
the price agreed in April 2005.
The second decision, which the executors challenged if the first
decision was valid, was the respondents' stipulation of a price at which the
field would be sold without giving the executors any opportunity to negotiate
on the price.
[3] This
judicial review
application raises two main issues. The first is the way in
which the Crichel Down circular should be interpreted. The second is the relationship of the
obligations arising as a result of the respondents' undertaking to operate the
procedures in the circular with their statutory duty, under section 74(2) of
the Local Government (
The
Crichel Down circular
"the guidelines reflect another policy objective also: that the former owners of land which had earlier been compulsorily purchased for purposes of ... development and is now not needed for that purpose should ordinarily be given the first opportunity to buy back what had been their land at its full current open market value, taking account of development prospects.
The public interest underlying this policy is obvious also. When land is compulsorily purchased the coercive power of the state is used to deprive a citizen of his property against his will. He is obliged to take its assessed value whether he wants to or not. This exercise is justified by the public intention to develop the land in the wider interests of the community of which the citizen is part. If, however, that intention is not for any reason fulfilled, and the land becomes available for disposal, common fairness demands that the former owner should have a preferential claim to buy back the land which he had been compelled to sell, provided he is able and willing to pay the full market price at the time of re-purchase, that price reflecting the development potential of the land."
Factual
Background
[6] After
the settlement of the first judicial review
application in November 2002, there
appears to have been a hiatus until
"It is believed that all services are available close to the site. Drainage pipes appear to be present running parallel to, and just within, the eastern boundary of the site. ... Developers must contact service providers and SEPA directly for their specific requirements. ... Interested parties must satisfy themselves on all matters relating to ground conditions and services."
Sir Crispin Agnew QC accepted on behalf of the petitioner that the agreement which I mention in the following paragraph was reached on the basis that it was for the executors to satisfy themselves as to these matters.
[10] The respondents replied by letter dated judicial review
application, I quote
the material parts of the letter. In it
the respondents' solicitor stated:
"I have been instructed by my client Service, Property Management, to advise you that they are prepared to extend the long-stop date until 31st March 2006 but on the strict understanding that you will confirm in writing that you accept and will respond with expediency [sic] to the following:
1.
The Council reserves the right to review
the purchase
price.
2. You will provide copies of all correspondence and documentation to date between your client and/or Boyack Holmes and Scottish Water as well as copies of any future correspondence between these parties. The purpose of this proviso being that the Council need confirmation that everything possible has been and is being done to resolve the Scottish Water issue.
3. You will provide confirmation that the sale to Mr Findlay is not conditional upon Boyack Homes (or any other developer) securing permission for their proposed development of this site."
"The Council's
position is noted. I take it that in
considering any review
of the purchase price regard would have to be had to the
timescale with[in] which we are able to settle the transaction and also if the
Scottish Water Assessment discloses some major problem that is something which
the Council may have to take into account."
[13] On judicial review
.
[14] The executors' solicitors replied by letter of judicial review
of the respondents' decision. On
"It is the Council's view that the Crichel Down Rules have been exhausted in terms of the Scottish Executive Circular 39/1992 and on the basis that there has been failure to agree the purchase price.
The Council
reserved the right to review
the purchase price and put in place the long-stop
date of 31st March 2006 in my letter to you dated 4 January 2006 and
thereafter increased the price in terms of the letter by Scott Hughes [the
respondents' valuer] to you dated 10 March 2006. You advised your clients did not accept the
revised price in your letter of
My instructions are that the Council is now considering marketing the site for sale."
The parties never concluded missives for the re-purchase of the field.
Parties'
submissions
[15] Sir Crispin Agnew QC for the petitioner advanced four principal
submissions. First, he submitted that
the Crichel Down rules did not envisage an agreed price being unilaterally
changed. Thus the respondents had acted ultra vires in imposing a condition for
the review
of the price when granting an extension of the long-stop date on 23
December 2005. In the course of the
debate he revised the formulation of this submission, acknowledging that it was
not a matter of ultra vires but a
breach of the petitioner's legitimate expectations arising out of the
respondents' undertaking to comply with the Crichel Down rules. He referred to R (Bibi) v Newham London
Borough Council [2002] 1 WLR 237. In
support of his submission that the date of valuation envisaged in the Crichel
Down rules was either the date when the former owner stated his intention to
re-purchase or, in this case, the date when the price was agreed in April 2005,
he referred to R v Commissioner for the New Towns ex p Tomkins
(above), Manchester City Council v Secretary of State for the Environment (1987)
54 P & C R 212 and Stannifer
Developments Ltd v Glasgow
Development Agency 1998 SCLR 870 and 1999 SC 156. He also referred to the English Crichel Down
rules (circular 06/2004), in which in the Annex giving guidance to Government
departments it is suggested (at p.120) that current market value means the
market value at the date of receipt by the disposing department of the former
owner's intimation of intention to purchase.
The respondents had acted on a misconception of their statutory duty to
achieve the best consideration that could reasonably be obtained. They had fulfilled that duty in agreeing the
price in April 2005 and were under no continuing duty thereafter.
[16] Secondly, he submitted that if the respondents were entitled to bring the re‑purchase negotiations to an end in December 2005, they required to give reasonable notice of their intention to do so, by giving an ultimatum such as was sanctioned in the law of contract in Rodger (Builders) Ltd v Fawdry 1950 SC 483. He referred also to Burns v Garscadden (1901) 8 SLT 321. The respondents had not done so, depriving the executors of an opportunity to complete the transaction.
[17] If, contrary to his first submission, the respondents were empowered
to review
the price, he submitted, thirdly, that they acted unlawfully in
imposing an increased price unilaterally and in failing to give the executors,
who had been advised that the market had not moved to the extent that the
respondents claimed, an opportunity to negotiate the price. This was envisaged in the Crichel Down rules,
which the respondents purported to follow until their letter of 25 April 2006.
In any event they purported to reserve the right to
review
the price and it was
implicit in the word "
review
" that they would negotiate the price with the
executors. Finally he submitted that it
was unfair and Wednesbury unreasonable
for the respondents to impose such a price increase on a take it or leave it
basis. It was unfair in the context that
the executors had not been given the opportunity, by means of an ultimatum, to
complete the transaction in December 2005 at the April 2005 price. It was also
unfair because, if the executors did not take the field at the revised price,
the respondents would gain the benefit of the drainage impact assessment for
which the developers had paid.
[18] Sir Crispin invited me to reduce the decision of December 2005
to review
the price and the decision of March 2006 to increase the price. He submitted that the court should order the
respondents to complete the conveyance of the land at the April 2005 price
within a reasonable period which the court should fix. In any event, if the respondents were
entitled to
review
the price after 31 December 2005, he submitted that the
court should order them to negotiate a price for the land with a valuation date
of 1 January 2006, which he submitted was when the executors had been in a
position to settle the transaction.
[23] Finally, Mrs Wolffe submitted that there had been no unfairness
in the way in which the respondents had acted.
The initial judicial review
in 2002 and the passage of time until
December 2004 caused no unfairness as at all times the executors were entitled
to re-purchase the field only at current market value and would have sold on in
that market. The respondents did not
gain from the developers' expenditure on the drainage impact assessment as the planning brief required any
purchaser to satisfy himself on that matter.
The respondents had given the executors between January and December
2005 to negotiate binding missives and the executors could have acted more
promptly. As a fall back she submitted
that if the respondents were held to have been Wednesbury unreasonable in seeking to revalue the field, the court
should withhold any remedy; if the executors' solicitor had demurred to the
respondents' reservation of the right to
review
the price as a condition for
granting the extension of time from 31 December 2005, the respondents would
simply have refused to grant an extension.
She referred to King v East Ayrshire Council 1998 SC 182.
Decision
"In all legitimate expectation cases, whether substantive or procedural, three practical questions arise. The first question is to what has the public authority, whether by practice or by promise, committed itself; the second is whether the authority has acted or proposes to act unlawfully in relation to its commitment; the third is what the court should do."
Taking that first question, I am satisfied that the undertaking which the respondents gave in their letter of 19 November 2002, in which they promised to dispose of the field in accordance with the Crichel Down rules, committed them to complying with those rules in giving the executors an opportunity to re-purchase the late Mr Findlay's field. The undertaking was clear and unambiguous. Using the terminology of Lord Woolf in R v North and East Devon Health Authority ex p Coughlan [2001] QB 213 CA, which Mrs Wolffe produced in her bundle of authorities, I consider that the undertaking gave rise to both procedural and substantive legitimate expectations. The expectation was procedural in so far as the undertaking was to comply with those rules in disposing of the field; it was substantive in that the respondents undertook to give the executors an opportunity to re-purchase.
[25] As there was a legitimate expectation of a substantive benefit, the relevant issues are (i) whether by their acts or omissions the respondents frustrated that expectation and (ii) if so, whether the frustration of the expectation was so unfair as to amount to an abuse of power. See ex parte Coughlan (above) in which Lord Woolf discusses, among others, the Revenue cases, In re Preston [1985] AC 835 and R v IRC ex p MFK Underwriting Agents Ltd [1990] 1 WLR 1545. In assessing whether there has been an abuse of power, it is necessary for the court to consider the legitimate expectation in the statutory context in which the public authority was operating and to ask whether there is any overriding public interest which justified its dishonouring the undertaking and thus frustrating the expectation. It is clear that that the executors could have no legitimate expectation that the respondents would be held bound in fairness by their undertaking if the undertaking was or had become inconsistent with their statutory duties - see Ali Fayed v Attorney General (above), Lord President Cullen at paragraphs 118-119, and R v Devon County Council ex p Baker [1995] 1 All ER 73, Simon Brown J at 88-89, whom Lord Woolf cited with approval in ex parte Coughlan (above) at paragraph 73.
[27] As mentioned in paragraph 19 above, Mrs Wolffe referred me to R v Secretary of State for Defence ex parte Wilkins and in particular to an obiter dictum by Moses J at p.182 in which he referred to R v Monopolies and Mergers Commission ex parte South Yorkshire Transport [1993] 1 WLR 23 in support of the view that there might be a range of interpretations which a decision maker might properly adopt. I did not derive much help from this passage in which Moses J recorded a party's submission and accepted it only as a fallback. But it is a succinct statement of an approach to the interpretation of the Crichel Down rules and there are other cases which bear on the correct approach for the courts to take in relation to the interpretation by public authorities of policy documents. I invited counsel to comment on the Scottish case, Freeport Leisure plc v West Lothian Council 1999 SC 215 and the following English cases: Northavon District Council v Secretary of State for the Environment [1993] JPL 761, Virgin Cinema Properties Ltd v Secretary of State for the Environment [1998] 2 PLR 24, R v Derbyshire County Council ex p Woods [1998] Env LR 277 and R v The Secretary of State for the Environment, Transport and the Regions and Kettering Borough Council ex parte Tesco Stores Ltd [2001] JPL 686.
[31] The court will interfere with a decision based on the
decision-maker's interpretation of the relevant wording of such a document only
if he has given the words a meaning which they could not properly have or has
restricted their meaning in a way which the breadth of their terms could not
justify (Northavon District Council (above)
at 763-764). The court has first to
determine as a matter of law what the words are capable of meaning. In many cases, some understanding of the
thought and purposes behind the policies will be needed in order to determine
the scope of the words used in the policy document. Particularly where a policy document uses
open textured criteria which require the decision maker to make a qualitative
judgement
, regard must be had to the policy context as well as the ordinary and
natural meaning of the words used. If
the words are capable of bearing more than one meaning, the court will then
consider whether the interpretation which the decision-maker has adopted is
within the range of meanings which the words are capable of bearing. Only if the decision-maker's interpretation
is outside that range or is otherwise perverse or Wednesbury unreasonable (for example because it is unduly
restrictive having regard to the breadth of the words used) does the court have
grounds to interfere with the decision, as only then has there been an error of
law. See R v Derbyshire County Council
ex p Woods (above) Brooke LJ at 290-291; ex parte Tesco Stores Ltd (above) Keene J at 692.
[33] Interpretation of policy documents is primarily a matter for
the decision-maker also because of the broad texture of the words which
policy-makers often use in such documents.
But there is no complete dichotomy of approach between documents which
of themselves have legal effect and policy documents which do not. In some cases, statutory criteria are so
imprecisely worded that there is a range of conclusions which a decision-maker
can reach in applying the criteria to the facts of a particular case without
committing an error of law.
Interpretation of the words of the statute is a question of law but
there may be no single exclusively correct interpretation where the words are
imprecise. Where a statute uses language
whose breadth calls for an exercise of judgement
by a decision-maker, the court
will not interfere with a decision where the decision-maker remains within the
permissible field of that
judgement
.
There the court exercises self-restraint as the decision is at least in
part a question of law, but the court declines to substitute one view of the
meaning of the words for another tenable interpretation. Thus in R
v Monopolies and Mergers Commission
ex p South Yorkshire Transport Ltd (above), the House of Lords recognised
that the Monopolies and Mergers Commission had a margin of judgment in deciding
what amounted to "a substantial part of the United Kingdom" in section 64(3) of
the Fair Trading Act 1973; see Lord Mustill at 32-33. See also Freeport
Leisure Ltd (above) at 221G. Thus
documents which have legal effect may use words whose breadth gives the
decision-maker or party to a contract a degree of discretion in interpretation
with which a court will not interfere by imposing its own view of the meaning
of the words.
[34] The Crichel Down circular is a policy document. Some passages of the Crichel Down rules are
not capable of bearing a wide range of meanings. For example the timetable in paragraph 18 for
the agreement of heads of terms is unambiguous.
Where a former owner had a legitimate expectation that a public
authority would apply the Crichel Down rules, if that authority were
unilaterally to allow less time than the paragraph envisaged, that decision
would be open to challenge if it frustrated the legitimate expectation. Other passages or phrases involve issues of
judgement
. For example, there will be a
range of values which different professional valuers may reasonably and
honestly put forward as the current market value. Significantly, there are many matters on
which the Crichel Down rules are silent.
One of those is the date at which the land should be valued. It is clear that there must be a valuation
date to enable the price to be agreed in order to comply with the timetable set
out in paragraph 18. I consider that the
English guidance, which states that it is the date on which the former owner
indicates that he wishes to purchase, is an appropriate arrangement if the
parties have not agreed another date. In
this case the parties valued the land as at April 2005 and I see nothing
objectionable in that.
[38] The public authority by agreeing a sale at current market value
in accordance with the guidance in paragraph 24 and the procedures in paragraph
18 of the Crichel Down rules acts in accordance with its duty to obtain
best consideration at that time.
Thereafter the public authority must allow the would-be purchaser a real
opportunity to complete the transaction within a reasonable time. What is a reasonable time will vary from case
to case. When land prices are reasonably
static, the public authority may allow more time for completion without
creating a conflict with its statutory duty than when prices are moving upwards
rapidly. If parties enter into binding
missives of sale, the matter is then governed by contract. If there are no missives of sale, the public
authority, having set a reasonable timescale and having allowed the would-be
purchaser that time to conclude missives and to complete the transaction, is
entitled to review
the market value of the land. Where the public authority has reliable
evidence that the market value of the land has increased materially since the
price was agreed under paragraph 18 of the Crichel Down rules and has already
given the would-be purchaser a reasonable opportunity to conclude missives and
complete the transaction, it would have to
review
the price in order to comply
with its statutory duty. The respondents
did so in this case. Alternatively, on
expiry of the time limit the public authority could dispose of the land on the
open market.
[40] The respondents' decision to continue to take forward the
proposed transaction with the executors after review
the value. The respondents
could, consistently with the policy in the Crichel Down rules, have invited
negotiations on the reviewed open market value.
But they were entitled to interpret the policy underlying the Crichel
Down rules as requiring them merely to offer to complete the transaction at the
then current market price.
[41] The executors did not pursue their assertion that the price
which the respondents specified was not supported by the evidence of the market
and was therefore not the current market value.
Instead they challenged the respondents' entitlement to alter the price
from that which had been agreed in April 2005 and advanced that as their
principal submission in this judicial review
.
[42] I am not persuaded that the respondents have resiled from their
undertaking or otherwise frustrated a legitimate expectation. Nor have they acted unfairly in such a way as
to amount to an abuse of power. The
petitioner's application therefore fails.
While the court has a discretion to withhold a remedy when a judicial
review challenge has been made out (London
& Clydeside Estates Ltd v
Aberdeen District Council 1980 SC (HL) 1 at 31 and King v East Ayrshire Council (above)), that
issue does not arise in this case.
Conclusion