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Cite as: [1999] EWHC Admin 484

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PARLIAMENTARY COMMISSIONER FOR ADMINISTRATION EX PARTE BALCHIN AND OTHERS, R v. [1999] EWHC Admin 484 (24th May, 1999)

IN THE HIGH COURT OF JUSTICE CO 3552/97

QUEEN'S BENCH DIVISION
(CROWN OFFICE LIST )



Royal Courts of Justice
Strand
London WC2

Monday, 24th May 1999


B e f o r e:


MR JUSTICE DYSON

- - - - - - -

REGINA

-v-


PARLIAMENTARY COMMISSIONER FOR ADMINISTRATION
EX PARTE BALCHIN AND OTHERS

- - - - - - -

(Computer-aided Transcript of the Stenograph Notes of
Smith Bernal Reporting Limited
180 Fleet Street, London EC4A 2HD
Telephone No: 0171-421 4040/0171-404 1400
Fax No: 0171-831 8838
Official Shorthand Writers to the Court)

- - - - - - -

MR C GEORGE QC and MR B PAYTON (instructed by Kenneth Beavis & Co, Chelmsford) appeared on behalf of the Applicant.

MR D ELVIN (instructed by The Treasury Solicitors) appeared on behalf of the Respondent.






J U D G M E N T
(As Approved)
Crown Copyright
Monday, 24th May 1999

1. MR JUSTICE DYSON: Mr and Mrs Balchin were at all material times the owners and residential occupiers of 'Swans Harbour', Beech Rd, Wroxham, which immediately abuts the line of a road proposed to be constructed pursuant to the Norfolk County Council (Side Roads) Order 1990, and an associated compulsory purchase order and scheme ('the Orders'). They objected to the Orders on the grounds of the impact of the route on their house. A public local inquiry was held in 1990. The Inspector reported to the Secretary of State for Transport. In his report of 2 February 1991, he concluded that the decision should be in favour of the Eastern Route, and he recommended that the Orders be confirmed. At paragraph 11.47, he drew attention to the "particularly adverse effect" which the Eastern Route would have on Swans Harbour and another property, and he expressed the hope that the plight of the owners of these two properties would be looked on sympathetically by the Norfolk County Council ('the Council').


2. The position at that time was that there was power in a highway authority to acquire by agreement land the enjoyment of which was seriously affected by the carrying out of highway construction works, or the enjoyment of which was seriously affected by the use of a highway which the authority had constructed or improved (section 246(2) of the Highway Act 1980). The Act was amended with effect from 25 September 1991 when section 246(2A) came into force. This amendment was introduced by section 62 of the Planning and Compensation Act 1991, and it provided that:

"Where the highway authority propose to carry out works on blighted land for the construction or improvement of a highway, they may acquire by agreement land the enjoyment of which will in their opinion be seriously affected by the carrying out of the works or the use of highway...."

3. The new provision was accompanied by Circular 15/91 from the Department of the Environment, which is an explanation of the 1991 Act, and which stated:

"Authorities will wish to consider exercising their discretionary powers to acquire property seriously affected -- or likely to become seriously affected -- wherever this is warranted to alleviate associated hardship."

4. On 17 January 1992, the Department of Transport ('DOT') issued a press release about the extended powers to buy property affected by road building conferred by section 246(2A). Attached to the press release was a copy of the guidelines that had been issued by the DOT as to how it would exercise its discretion to purchase under the new statutory power. Paragraph 1 stated that the Department would use its discretion in any case where it judges that it would be intolerable for the occupier to remain in the property during the works or once the road was open.


5. In March 1992, officials in the Local Authority Orders Section ('LAOS') started to consider the Inspector's report. On 20 May, a case officer in LAOS prepared a detailed submission for the Minister and recommended that the Orders be confirmed, stating inter alia that the objectors (who included the Balchins) had expressed the view that the Council should be directed to purchase all the properties seriously affected by the proposals. The Minister was made aware of the plight of the Balchins. In May 1992, he described their situation as "very tough", and he was moved to ask how the DOT "could ensure that the council helps". A background note was prepared for the Minister which emphasised that the question of compensation was strictly a matter between the Balchins and the Council. The note also stated that Mr Balchin might be entitled to claim compensation under Part I of the Land Compensation Act 1973, but that such claims were not normally made until 12 months after the date on which the new road was opened. This was plainly not a reference to the 246(2A) power.


6. The decision letter of the Secretary of State was dated

3 June 1992. It accepted the Inspector's recommendations, and recorded that the Secretary of State had sympathy for the plight of the owners. At paragraph 62, it said that, whilst these matters were not for his consideration here, the Secretary of State was confident that the Council would give them "early consideration". On 2 July 1992, the Minister wrote to Mr Howell MEP, who had taken up the Balchins' cause. The Minister said that, since the property was not directly the subject of compulsory purchase, the Secretary of State had no power to take the Balchins' "dilemma" into consideration. He added:
"Clearly, Mr Balchin will need to pursue the question of compensation with Norfolk County Council as he may at the very least be able to claim under Part I of the Land Compensation Act 1973. Given the somewhat exceptional circumstances one might hope that Norfolk would treat his situation with the utmost sympathy not to mention urgency. Here again however, as a local authority sponsored scheme I am afraid the Secretary of State has no power to intervene."

7. The Minister copied this correspondence to the Chief Executive of the Council. On 16 July, the Chief Executive wrote a letter to the Minister, which it is common ground is confused and confusing. It said that the Council had had good reasons "up to now" for rejecting the request to buy the Balchins' property. There was no statutory duty to buy the property, and no power to do so merely on grounds of sympathy. It is clear that, in writing this letter, the Chief Executive displayed ignorance of the power conferred by section 246(2A). The Minister wrote a brief letter in reply, but did not draw attention to section 246(2A). On 20 August, the Minister wrote to Mr Howell saying that there was nothing that the DOT or any other Government Agency could do to help Mr Balchin at that stage.



8. The Minister asked for further advice on Mr Balchin's eligibility for compensation under the 1973 Act. LAOS advised that it was open to the Council to buy the property. This was using the powers given by section 246(2), and not 246(2A) of the Highways Act 1980. LAOS advised the Minister that, although they were in favour of this course of action, they could not foist it on the Council. On 24 September 1992, the DOT sent copies of booklets explaining land compensation to the MEP: the booklets contained information about the section 246(2A) powers.


9. On 1 October, the Council's Planning and Transportation Committee agreed that the question of compensation for Swans Harbour would be dealt with in accordance with the timescale dictated by the 1973 Act, ie in the light of the physical factors evident after the scheme had been in operation for one year. On the same date, the Chief Executive conveyed that decision to the Minister, saying that in effect the Council was maintaining its refusal to buy the property. After receipt of this letter, DOT officials said in a background note to the Minister that they could have no quarrel with the basis of this decision, and that the Council's desire not to set a dangerous precedent was also "perfectly understandable".


10. On 14 December 1992, Mr Balchin's bank wrote to the Council asking whether consideration had been given to acquiring the property under section 246(2A). In reply, the Council officer said that, as far as he was aware, that had not been considered, but that the Council's agreement would be most unlikely.


11. The Balchins' house was blighted by the proposed works. The proposed plan for the Bypass showed that the road would abut Swans Harbour on an embankment some 6 metres in height, and the embankment would lie about the same distance from the nearest windows of the house. There is no doubt that the Balchins have suffered very considerable harm as a result of their house being blighted by the proposed works. It is unnecessary to go into the details. In about June 1996, the scheme was abandoned by the Council.


The first report by the Parliamentary Commissioner for Administration ('the Commissioner')

12. The Balchins complained to the Commissioner in about early 1994 that there had been maladministration on the part of the Secretary of State in confirming the Orders without seeking an assurance from the Council that they would receive adequate compensation for the effect of the road on their home. The Commissioner reviewed the history of the matter. In relation to the period up to the date of the decision letter of 3 June 1992, he concluded that there had been no maladministration on the part of the Secretary of State. He held that the Secretary of State was under no obligation to seek assurances from the Council before deciding to confirm the Orders, and the issue of compensation was not a matter for him. Once he had issued his decision letter, the jurisdiction of the Secretary of State was at an end. Nevertheless, the Commissioner considered the question why the officers of the DOT did not raise the possibility of the Council purchasing the property under section 246(2A) of the Highways Act. The answer that they gave was that this would have been "overstepping the mark", an answer which the Commissioner said that he found "unconvincing", particularly as there was no evidence that the officials ever actually considered the possibility of discretionary purchase (paragraph 25). He accepted, however, that even if the officers had raised this possibility, the Council would have refused such a purchase. This conclusion was based on the fact that the Council had made such a response in reply to the letter dated 14 December 1992 from Mr Balchin's bank.


Judicial review of the Commissioner's first decision

13. The Balchins sought judicial review of the decision on three grounds:

(i) by limiting himself to the question whether the DOT had met its legal obligations, the Commissioner had artificially limited and so misconstrued the meaning of maladministration;
(ii) the Commissioner's conclusion that there had been no maladministration in the Secretary of State's failure to link his decision on confirmation to the Council's attitude to compensating the Balchins was based on a misapprehension of his lawful power; and
(iii) upon the evidence and findings set out in his report, the Commissioner could not properly reach any conclusion other than that the Balchins had sustained injustice in consequence of maladministration.

14. Sedley J gave judgment on 25 October 1996. He rejected grounds 1 and 3. In relation to ground 2, he also rejected the argument advanced on behalf of the Balchins that the Commissioner should not have accepted the Department's view that it would have been an unacceptable use of the Secretary of State's powers to make his confirmation of the Orders conditional on the Council's deciding to exercise its powers in a certain way. Sedley J did, however, uphold a refined version of the second ground of challenge. What he said was this::

"I have hesitated long before concluding that, notwithstanding the very wide area of judgment and discretion given to the Commissioner by the Act, he has been led by a scrupulous regard for his jurisdictional remit, excluding as it does local government, into a failure to consider the relevant fact of Norfolk's attitude - now with a view to deciding whether it was unlawful or even (to use his own neologism) maladministrative but in order to decide, as his own findings made it necessary for him to do, whether the Department of Transport ought in response to have drawn the council's attention to its new power to acquire blighted property and perhaps also to its obligation to consider exercising it. In other words, once Norfolk's apparent disregard of its obligations was established by him, the Commissioner could not properly avoid the question whether correct advice with the imprimatur of central government might have made a difference.

Whether the Department's undoubted failure to tender such advice amounted to a maladministration and whether, if it did, it caused injustice to the Balchins remains entirely a question for the Commissioner. My decision is limited to holding that in declining to consider the ostensible propriety of Norfolk County Council's negative attitude to its compensatory powers and its amenability to correction by the Department, the Commissioner omitted a potentially decisive element from his consideration of whether the Department of Transport had caused injustice to the Balchins by maladministration in its dealings with the county council."

The second report by the Commissioner

15. This is dated 14 July 1997, and is the subject of the present judicial review challenge. This report was not written by the same Commissioner as the first one. In the second report, the Commissioner repeated many of the findings that had been made in the first report, but he also recorded certain fresh findings in the light of evidence that had not been adduced before the first Commissioner. This included at paragraph 22 comments made to him by the Permanent Secretary of the DOT in the following terms:

"He said in DOT's view it had been reasonable and proper for them to have assumed that the council were aware of the extension to their previous powers. DOE had informed local authorities of the new legislative provision through DOE Circular No 15/91, issued on 4 September 1991, which had included an annex drawing specific attention to the extended powers. In addition, DOT had issued a press notice in January 1992 signalling their own intention to consider using the new powers on merit by reference to published guidelines. That press notice had been widely reported at the time. DOT saw it as the duty of the council to ensure that they were aware of statutory powers available to them. It was reasonable for DOT to expect the council to be aware of both the circular and the press notice. The Permanent Secretary considered that DOT had discharged their duty to provide advice and guidance; that DOT had acted properly and within statutory authority; and that there was no case of maladministration for them to answer."

16. At paragraph 26, the Commissioner summarised the issues before him as being "whether what DOT did or did not do amounted to maladministration; and if it did, whether the Balchins suffered injustice as a consequence". That summary is impeccable, and Mr George does not contend otherwise. The Commissioner went on at paragraph 27 to say that, in the light of the judgment of Sedley J, he considered three questions, namely:

"i. Would it have made any difference if the council had received specific advance from DOT reminding them of the existence of their new discretionary power of advance purchase and of their responsibility to consider exercising it?

ii. Did DOT's admitted omission to tender such advice at any stage amount to maladministration?

iii. If DOT's omission did amount to maladministration, did it cause injustice to the Balchins?"

17. At paragraph 28 and 29, the Commissioner examined the events up to 3 June 1992. He found nothing in the actions of the Department which could be fairly called maladministrative. He said:

"28..... The adverse effect on the Balchins if the scheme was confirmed and what could be done to alleviate it was part of the balance of advantage and disadvantage which the Secretary of State had to consider. The Secretary of State identified the Balchins' plight along with other matters as being of sufficient weight to draw explicitly to the council's attention - and did so (paragraph 13). In acting in that way he was using his own discretion; his legal responsibility was to consider the Inspector's report and to decide whether the Orders should be confirmed, with or without modifications, or be refused (paragraph 5). It would nevertheless have been open to him to exercise his discretion in other ways; he might, for instance, have written to the council before he gave his decision asking whether they intended to give sympathetic consideration to the Balchins' plight, or he might have said that, while he was minded to confirm the Orders, before he did so he wished to know whether the council intended to give sympathetic consideration to the Balchins' plight. In either case he could have mentioned the existence of the new powers explicitly. (The court has confirmed that my predecessor was entitled to accept DOT's view that it was not open to them to go so far as to make the Secretary of State's confirmation of the various Orders conditional upon the council deciding to exercise their powers of compensation in a particular way. Put simply, that was a matter on which it was for the council, not DOT, to reach a decision.) It was open to the Secretary of State to bring to the attention of the council the Balchins' plight in the way that he did. I consider that any failure to consider employing other methods was not maladministrative.

29. Was the Secretary of State at fault in not referring explicitly to the new discretionary powers available to the council, either before or at the time when his decision letter was sent to the council? Although the council had by then twice refused assistance to the Balchins, that was before they came into possession of the new powers. Between the time when the Inspector completed his report in February 1991, and the Secretary of State made his decision in June 1992, DOE had sent to all local authorities, including the council, in September 1991 (paragraph 22) a circular drawing attention to the extended powers, a fact of which DOT were aware. I consider that at that stage DOT had no reason to suppose that the council's consideration of the courses open to them would not take due account of the new powers by then available to them. DOT's response to the plight of the Balchins' as identified in the Inspector's report was, I consider, within the responsible range of responses open to them given their knowledge at that time. I consider that the decision DOT reached on the handling of the compensation issue the Inspector had raised was one they were entitled to take; and I have discerned no maladministration in the way it was taken."

18. In paragraph 30, he addressed the question whether there had been maladministration after 3 June 1992, and concluded that there had not. The paragraph was in the following terms:

30. What of DOT's responsibility once they became aware, from the letter of 16 July 1992 from the council's Chief Executive, that the council still might not be minded to take action to ease the Balchins' plight, or after 1 October 1992 when the council told them that the question of compensation would be addressed under the timescale dictated by the Land Compensation Act? It should have been clear to DOT by then that, for whatever reason, the council were not contemplating the use of the new powers to purchase Swans Harbour on a discretionary basis - a response which Mr Justice Sedley called 'on the face of it highly questionable'. After 3 June, of course, the various Orders had already been confirmed, and the Secretary of State had become functus officio , with no legal powers to impose his view on the council. What remained to him was the power of persuasion. The Minister, who had by then become involved and who was sympathetic to the plight of the Balchins, sought to exercise that persuasive power to some degree when copying the correspondence containing his clear personal view to the council on 2 July (paragraph 15). He asked for further advice in August (paragraph 17) and considered officials' further advice after the council's unfavourable decision of 1 October was known (paragraph 18). In the event DOT chose not to exercise their powers of persuasion further; and at no time did they draw the council's attention explicitly to the new discretionary powers, though they had sent the MEP booklets containing information about them on 24 September. Those were discretionary decisions for DOT; and I find no maladministration in the way they were taken.

19. The part played by paragraph 31 in the Commissioner's reasoning was in dispute before me. At this stage, I shall merely set it out (together with the final paragraph).

"31. What would have been the outcome if DOT had sought to put more pressure on the council and in particular had confronted them explicitly with their responsibility to consider the use of the new discretionary powers? It is impossible to be certain; but the evidence of the council's consistent stance in relation to the Balchins' repeated requests leads me to the view that even if DOT had drawn the council's attention formally to the availability of the new powers at some stage that would not in the event have made a difference. My grounds for that conclusion are the council's repeated rejection of the Balchins' requests on financial grounds (paragraph 9, 16 and 18) and their reaction to the bank when the new power was raised with them (paragraph 19). The council at no time rejected the requests on the grounds that they had no powers to acquire the property: the extension of their powers was unlikely to be perceived as sufficient reason for them to change their attitude. I comment here that, if the Balchins had considered that, in persisting with their refusal to ease their plight, the council were acting unlawfully or maladministratively given the availability of the new powers, they could have had recourse at that stage to the courts or to the Local Government Ombudsman.

Conclusion
32. Having considered the complaint afresh in the context of the Mr Justice Sedley's judgment, the approach adopted by the council and, in particular, the answers to the three questions I raised at paragraph 27, my conclusion is that DOT's admitted omission to draw to the council's attention the new power of discretionary purchase did not amount to maladministration; that the way DOT pursued their wish to assist the Balchins both before and after the issue of the Secretary of State's decision letter was within their discretionary powers and that it was not maladministration on their part not to have done more; and finally that even had I found maladministration, which I have not, I do not believe that if DOT had handled the matter differently the council would have reached a different conclusion. Much as I sympathise with
Mr and Mrs Balchin, I do not uphold their complaint."

20. In summary, therefore, it will be seen that the Commissioner gave separate consideration to the issues by reference to the period before and after the 3 June 1992, and in respect of each period found that there had been no maladministration by the Secretary of State either by act or omission. There is a dispute between the parties as to whether the Commissioner dealt with the question of whether, if there had been any maladministration, it caused any injustice to the Applicants.


The powers and functions of the Commissioner

21. These are subject to the Parliamentary Commissioner Act 1967 which, so far as material, provides:

"5 Matters subject to investigation
(1) Subject to the provisions of this section, the Commissioner may investigate any action taken by or on behalf of a government department or other authority to which this Act applies, being action taken in the exercise of administrative functions of that department or authority, in any case where-
(a) a written complaint is duly made to a member of the House of Commons by a member of the public who claims to have sustained injustice in consequence of maladministration in connection with the action so taken; and
(b) the complaint is referred to the Commissioner, with the consent of the person who made it, by a member of that House with a request to conduct an investigation thereon.

(5) in determining whether to initiate, continue or discontinue an investigation under this Act, the Commissioner shall, subject to the foregoing provisions of this section, act in accordance with his own discretion; and any question whether a complaint is duly made under this Act shall be determined by the Commissioner.

10 Reports by Commissioner
(1) In any case where the Commissioner conducts an investigation under this Act or decides not to conduct such an investigation, he shall send to the member of the House of Commons by whom the request for investigation was made (or if he is no longer a member of that House, to such a member of that House as the Commissioner think appropriate) a report of the result of the investigation or, as the case my be, a statement of his reasons for not conducting an investigation."

The grounds of challenge to the second decision

22. It is submitted by Mr George QC that the Commissioner erred in law in relation to maladministration in that (i) he left out of account material considerations relating to the acts and omissions of the DOT; (ii) his reasoning was inadequate; and (iii) his conclusion was irrational. It is further submitted that the Commissioner found that no injustice had been sustained by the Balchins, and that in relation to this finding, (iv) the Commissioner misconstrued the meaning of injustice; (v) left out of account material considerations in relation to the question of what the likely response of the Council would have been if the Secretary of State had sought to persuade it to exercise its powers under section 246(2A); (vi) failed to consider whether the loss of a chance could constitute injustice; (vii) his reasoning was inadequate; and (viii) his conclusion was irrational.


Maladministration

Omitting material considerations .

23. The principal submission of Mr George is that the Commissioner overlooked two important factors when reaching his decision on maladministration. The first is what Mr George called the Department's "collective amnesia" of the existence of section 246(2A). The first Commissioner had, at least impliedly, found that the DOT had overlooked the existence of the section when dealing with the Balchins' case. At paragraph 25 of his decision, the first Commissioner noted that, while the Department continued to express sympathy for the Balchins, they did not raise the possibility of the Council exercising its powers under section 246(2A). He then said:

"When my officers asked why the Department did not raise that, officials said that to have done so would have been overstepping the mark. In view of the content of the Minister's letter of 2 July (paragraph 15) (copied to the Council) I find that unconvincing, particularly as there is no evidence that LAOS, apart from the incorrect reference to the possibility of purchase under the Land Compensation Act (paragraph 17) ever actually considered the possibility of discretionary purchase."

24. At page 928 of his judgment, Sedley J referred to this paragraph of the decision, and said that the Commissioner found the truth to be that the existence of the section 264(2A) "was simply overlooked."


25. It was no doubt partly in response to this finding of the first Commissioner, highlighted as it was by the judge, that the Permanent Secretary made the comments that are recorded at paragraph 22 of the second decision, and which I have already quoted. It was implicit in these comments that the Permanent Secretary was saying that the DOT had not overlooked the existence of the section 246(2A) power, but that it had decided that, for the reasons given, it was not necessary to remind the Council about it. The Commissioner clearly accepted the views of the Permanent Secretary. I refer to the passage at paragraph 29, where he says that the Circular was sent to all local authorities in September 1991, "a fact of which DOT was aware"; and "I consider that at that stage DOT had no reason to suppose that the council's consideration of the courses open to them would not take due account of the new powers by then available to them". Again, at paragraph 30, when referring to what was happening in October 1992, the Commissioner says: "in the event DOT chose not to exercise their powers of persuasion further.." The use of the word "chose" is significant.


26. Thus, in accepting what he had been told by the Permanent Secretary, the Commissioner impliedly found that there was no collective amnesia. In so doing, he was disagreeing with the first Commissioner, who had not had the advantage of hearing what the Permanent Secretary had to say. In these circumstances, it seems to me that it is wrong to say that the Commissioner overlooked the collective amnesia for which Mr George contends. He considered it, and found that it did not exist.


27. I turn to the second matter said to have been overlooked. This is the fact that the Minister was keen to ensure that the Council helped the Balchins. Mr George submits that the importance of this is that it formed a crucial part of the context in which the reasonableness of the response of the DOT had to be judged. The Commissioner made no reference to this in his findings which run from paragraph 25 to the end of the document. But he did refer to the point at paragraph 15 of the decision. Moreover, it was obvious from the correspondence, some of which was signed by the Minister himself, that he was anxious to persuade the Council to help the Balchins. There is no reason to suppose that the Commissioner did not have this in mind when considering whether there had been maladministration.


28. Accordingly, I reject Mr George's first submission.


Reason challenge

29. The principal submission of Mr George here is that it is impossible to know how the Commissioner came to find (as I have held that he did) that the DOT did not overlook the existence of section 264(2A). He must have based himself on the evidence of the Permanent Secretary, and yet, when that evidence is analysed, it could not reasonably have justified the finding. Mr Elvin concedes that those in proximity to the Minister in the handling of the Balchins' case (including the officials of LAOS) were ignorant of, or had forgotten about, section 246(2A), and that, hardly surprisingly, the Minister himself was in the same position. Mr Elvin suggests, however, that there may have been others in the DOT dealing with the matter who were aware of the section, and that the Permanent Secretary had them in mind when he gave his evidence.


30. In my judgment, Mr George has identified a real flaw in the reasoning of the Commissioner which goes to the heart of the decision. It is not in dispute that the duty of the Commissioner in relation to reasons was to address the principal important controversial issues, but not every single point raised by the parties: see by analogy Bolton Metropolitan Borough Council -v- The Secretary of State [1995] 3 PLR 37, 43C. There can be no doubt that the state of knowledge of the DOT was a principal controversial issue before the Commissioner. The Department was faced with a finding by the first Commissioner that it had overlooked the existence of the power at the material time. That was plainly very damaging from the Department's point of view. On the other hand, if the second Commissioner could be persuaded that the power had not been overlooked, then that would substantially improve the chances of avoiding a finding of maladministration. That is why the evidence of the Permanent Secretary was so important.


31. The words attributed to the Permanent Secretary in paragraph 22 of the decision seem to me to have been carefully chosen. Nowhere does he say expressly that those who were handling the Balchins' case were aware of the existence of section 246(2A). But he clearly implies that the DOT was aware of the section, since otherwise he could hardly have said that it was reasonable "in DOT's view" to have assumed that the Council was aware of the power. It would appear that the Commissioner did not explore with the Permanent Secretary the state of knowledge of those in the DOT who were actually dealing with the Balchins' case. But, in my view, if he had thought about the picture that was disclosed by the contemporaneous documents that were before him, he would surely have pressed the Permanent Secretary on this point. This is because the documents pointed very strongly to the conclusion that those involved with the case had indeed overlooked the existence of the power. Moreover, as Mr George points out, those documents must be viewed against the background that the Minister had made it clear to his officials that he wanted to know how the DOT could "ensure" that the Council helped the Balchins.


32. I have already referred to some of these documents. The background note of May 1992 referred to a claim for compensation under Part 1 of the 1973 Act. It seems to me that, if the writer of this note had section 246(2A) in mind, he would have referred to it in this document. The same point can be made about the Minister's letters to Mr Howell of 2 July and 20 August, and his response to the Councils' confusing letter of 16 July. Likewise the further advice given by LAOS to the Minister (referred to at paragraph 17 of the Commissioner's decision) that the Council had the power to acquire the Balchins' property under section 246(2). As we have seen, the first Commissioner did raise with the DOT the question of why section 264(2A) was not mentioned in these documents, and was given the explanation of "overstepping the mark", which he found "unconvincing". The second Commissioner did not raise this question. But it was a critical question, since the answer to it would cast shafts of light on the issue of whether those in the Department who were handling the Balchins' case were aware of section 246(2A).


33. In the result, the Commissioner made no finding as to whether any, and if so which, of the officials in the Department who were handling the Balchins' case were aware of section 264(2A). In my judgment, this is a crucial omission. It was immaterial that there were some officials within the Department who were aware of the section at the material time. What mattered, for the purpose of an inquiry into whether there had been maladministration in failing to seek to persuade the Council to exercise its power under section 246(2A), was whether those who were dealing with this case were aware of it. The reason why this omission is so important is that the documents make it overwhelmingly likely that all of those persons overlooked the existence of the power at the material time.


34. In short, the finding that the DOT did not overlook section 246(2A) was at the heart of the Commissioner's conclusion that there was no maladministration. It was this finding that enabled him to conclude that the decision reached by the DOT was "within the reasonable range of responses open to them given their knowledge" and "one they were entitled to take" (paragraph 29). It is not possible to say what conclusion he would have reached on the issue of maladministration if he had found that those handling the Balchins' case had overlooked section 246(2A). I think that the Commissioner was unwittingly led into error by the rather unspecific evidence of the Permanent Secretary. It is possible that, as Mr Elvin suggests, there were persons in the DOT handling the Balchins' case who had not overlooked section 264(2A). But if that is so, there is no trace of them in any of the material that has been placed before me. Moreover, given the close interest shown by the Minister, and the terms in which his various letters were expressed, the hypothesis suggested by Mr Elvin is inherently unlikely. This emphasises the shortcomings in the reasoning of the Commissioner's decision.


35. In reaching the conclusion that the decision on maladministration is flawed, I am very conscious of what Sedley J referred to as "the very wide areas of judgment and discretion given to the Commissioner by the Act" (page 929). I have had regard to the warning as to the limited scope for interference by the courts in these cases given by the Divisional Court in R -v- Parliamentary Commissioner ex parte Dyer [1994] 1 WLR 621. But that was a case in which the ground of challenge was about the manner in which the Commissioner handled the complaint. Simon Brown LJ said that the Act gave the Commissioner a broad discretion as to the scope of any investigation, and the way in which he conducted it. It is not, however, disputed by Mr Elvin that a decision of the Commissioner is susceptible to a reasons challenge, where there is real doubt in relation to the principal controversial issues as to what was decided and why: see Clarke Homes Limited -v- The Secretary of State [1993] 66 P&CR 263, 271-2.


36. Mr Elvin also relies on the passage in the judgment of Sir Thomas Bingham MR in R -v- Ministry of Defence ex parte Smith [1996] QB 517, 554-556 that "the greater the policy content of a decision, and the more remote the subject matter of a decision from ordinary judicial experience, the more hesitant the Court must necessarily be in holding a decision to be irrational". He submits that the court should be particularly reluctant to interfere with decisions of the Commissioner, since they are "policy laden". I would not quarrel with this as a general rule. But where the court finds that there is a real shortcoming in the reasoning of the Commissioner, it seems to me that it is not passing judgment on the substance of a policy decision. It is criticising the reasoning on grounds which do not depend in any way on the policy element of the decision.


37. Finally, I should mention a submission made by Mr Elvin that to quash the second decision would be an abuse of process. He submits that, where the challenge to the second decision effectively raises matters which were or ought to have been raised during the first judicial review proceedings, it is an abuse of process and contrary to good administration to raise them during subsequent judicial review proceedings. This submission was principally directed to the challenge in the present proceedings in so far as it is based on alleged irrationality. Mr Elvin rightly accepts that this argument cannot avail him in relation to the reasons challenge, since the reasoning of the second decision was materially different from that of the first decision.

38. In the result, the challenge to the finding that there was no maladministration succeeds on the reasons point. It is, therefore, unnecessary for me to deal with the arguments on irrationality.


Injustice

39. The first question is whether the Commissioner made any finding on injustice at all. Mr Elvin submits that he did not. I do not agree. As Mr George points out, at paragraph 32, the Commissioner refers to his answers to the three questions that he raised at paragraph 27. The third of these asked whether, if DOT's omission amounted to maladministration, it causes injustice to the Balchins. On any fair reading of paragraphs 31 and 32 of the decision, it seems clear to me that the Commissioner decided that no injustice was caused to the Balchins because he did not believe that, even if the DOT had handled the matter differently, the Council would have reached a different conclusion. In other words, even if the DOT had sought to persuade the Council to exercise its powers under section 246(2A), the Council would have refused to do so, so that no injustice was suffered by the Balchins.


40. The first submission of Mr George is that the Commissioner misdirected himself as to the meaning of injustice. At page 926 of his judgment, Sedley J said this of injustice:

"Less judicial attention had been devoted so far to the meaning of 'injustice' in the legislation, but de Smith, Woolf and Jowell, Judicial Review of Administrative Action (5th ed.) write at paragraph 1-102:

''Injustice' has been widely interpreted so as to cover not merely injury redressible in a court of law, but also 'the sense of outrage aroused by unfair or incompetent administration, even where the complainant has suffered no actual loss' (citing Mr RHS Crossman, speaking as Leader of the House of Commons).

41. It follows that the defence familiar in legal proceedings, that because the outcome would have been the same in any event there has been no redressible wrong, does not run in an investigation by the Commissioner."

42. I did not understand Mr Elvin to take issue with this statement of the meaning of injustice, and I see no reason to disagree with it. If that is wrong, then I would accept Mr George's alternative submission that the meaning of injustice is ambiguous, in the sense that it is equally capable of being limited to, or importing considerations which are wider than, financial loss. On that basis, regard can be had to what Mr Crossman said in Parliament when promoting the 1967 Act. What he said was:

"We have not tried to define injustice by using such terms as 'loss or damage'. These may have legal overtones which could be held to exclude one thing which I am particularly anxious shall remain -- the sense of outrage aroused by unfair or incompetent administration, even where the complainant has suffered no actual loss. We intend that the outraged citizen who persuades his Member to raise a problem shall have the right to an investigation, even where he has suffered no loss or damage in the legal sense of those terms, but is simply a good citizen who has nothing to lose and wishes to clear up a sense of outrage and indignation at what he believes to be a maladministration."

43. Mr Elvin submits that it is a matter for the Commissioner to decide what amounts to injustice in any particular case, and that it was open to him to decide that there was no injustice on the grounds that, even if there had been no maladministration on the part of the Secretary of State, that would have made no difference so far as the Balchins were concerned.


44. The Commissioner did not expressly direct himself in his decision as to the meaning of injustice. Mr George submits that the Commissioner must have treated injustice as limited to financial loss, since, if he had regarded injustice as including a sense of outrage aroused by unfair or incompetent administration, he would surely have found statutory injustice in this case. I cannot accept this submission. I agree that the Balchins had an extremely powerful case on outrage. They had been ruined financially by the proposed road scheme, and had received no compensation from the Council. I accept that if he had addressed his mind to the issue of outrage, the Commissioner might well have taken the view they had suffered injustice if (contrary to his findings) there had been maladministration. But I find it impossible to say that he would have been bound so to conclude. Accordingly, I do not find not that the Commissioner's findings on injustice show that he must had misdirected himself.


45. Mr George next seeks to challenge the Commissioner's finding that it was unlikely that, if they had been made aware of section 246(2A) by the DOT, that would have made any difference. He submits that this finding is flawed, since it is based on irrelevant considerations, namely (i) the repeated rejections of the Balchins' requests on financial grounds, and (ii) the Council's reaction to the request by Mr Balchin's bank. Mr George points out that the earlier rejections were before the Council had the power to purchase under section 246(2A), and there was no consideration by the Council of the bank's request, merely a response from a Council officer. These are fair points to make, but in my judgment, they are not of such potency as to lead me to conclude that the Commissioner's finding is erroneous in law. He was entitled to reach the conclusion that he did. There was material on which he could base a finding that the Council was reluctant to purchase the property. The finding that he made was no more than that the extension of the Council's powers was "unlikely to be perceived as sufficient reason for them to change their attitude". I can see nothing wrong with that finding.


46. Mr George also mounts a reasons challenge, and in my judgment, this is well-founded. I have already made the point that the Balchins had a very strong case on outrage. They had been financially ruined by the proposed scheme, and the Minister had made it clear to his officials that he wanted to ensure that the Council helped them. And yet, ex hypothesi, in its dealings with the Council over the Balchins' case, the DOT overlooked the existence of the only power which, if invoked, could have helped them. It is not possible to know what view the Commissioner had as to how bad a case of maladministration this would have been, and how intense a sense of outrage it would have aroused, on the assumption (contrary to his findings) that the DOT did overlook the power and was guilty of maladministration.


47. This leads me straight to the question of the adequacy of the Commissioner's reasons. He could have simply refused to deal with the issue of injustice on the grounds that his findings of maladministration were sufficient to dispose of the matter. But I have rejected Mr Elvin's argument that this is what he did. On that footing, Mr Elvin seeks to oppose this application for judicial review on the grounds that the Commissioner's decision on the injustice point is fatal to the Balchins' challenge. It is clear that the issue of injustice was one of the principal controversial issues, and the Commissioner was required to give reasons in relation to it, which were sufficient to enable the parties to know what he decided, and why. In my judgment, since the case on outrage was so strong, the Commissioner should have made it clear that he had considered it, and why he had decided that it did not involve injustice in this case. The failure to mention it leads to the reasonable suspicion that he failed to have regard to it at all, or that, if he did, his reasons for concluding that there was no injustice would not bear scrutiny. In my view, this reasons challenge is justified. I would rest this part of my decision on the simple fact that the Commissioner should have dealt expressly with the outrage point.


48. Mr George has a yet further submission. He says that, at the very least, the Balchins suffered the loss of a chance of the exercise of the power under section 246(2A) by reason of the DOT's maladministration. The Commissioner was not able to find that it was certain that the Council would have refused to exercise the power if asked to do so by the DOT. It would appear that he concluded on the balance of probabilities that the Council would not have reached a different conclusion even if the DOT had handled the matter differently. Mr George argues that the loss of a chance is a loss recognisable in law, even if that chance is less than 50%. He cites private law cases such as Allied Maples Group Limited -v- Simmons & Simmons [1995] 1 WLR 1601, 1614 C to D. He submits that the Commissioner should at least have considered the possibility of injustice in terms of the loss of a chance, and that his failure to mention it is a further manifestation of inadequacy of reasons. I rather doubt whether the Commissioner was obliged to address the issue of loss of a chance, although I can see no reason why, if he thought it appropriate, he could not have found that the loss of a chance did give rise to injustice. I would not have found against the Commissioner on the grounds that he did not deal with the issue of a loss of a chance in his decision.


Conclusion

49. It is particularly unfortunate that, for a second time, a decision of the Commissioner on this affair has been quashed. I am extremely conscious of the constraints that are placed on a court in reviewing decisions of a Commissioner. It is, however, common ground that the decisions of the Commissioner are susceptible to judicial review, and that a reasons challenge will succeed in circumstances such as I have found to exist in the present case, namely where there has been a failure to give reasons for findings on a principal controversial issue. For the reasons that I have attempted to give, this application succeeds, and the decision must be quashed.


50. MR GEORGE: My Lord, there is just one matter, could I mention it? It is on page one of your Lordship's decision. Three lines from the bottom, where you refer to the "Circular" as being "an annex" to the 1991 Act. It is of course a free-standing document, an explanation of the Act, and I wonder if your Lordship would like to take that matter into consideration. I do not want it later to be suggested that you were viewing the circular as itself having statutory force as part of the Act.


51. MR JUSTICE DYSON: Certainly, it has not formed any part of the ratio of my decision as I think must be obvious. What should I say.


52. MR GEORGE: Substitute the word "explanation".


53. MR JUSTICE DYSON: Which is an "explanation of".


54. MR GEORGE: My Lord, I seek the orders in the form they are set out at page 1 of the bundle, namely an order of certiorari and an order of mandamus to be considered.


55. My Lord, so far as costs. My Lord, I seek that the Respondent pay the Applicant's costs and my Lord, to include, expressly, the costs of the hearing before Sullivan J. That matter is referred to at page 45 of the bundle where they were expressly reserved.


56. MR ELVIN: My Lord, it is accepted that the costs should include those.


MR JUSTICE DYSON: Yes.

57. MR GEORGE: My Lord, also legal aid taxation of the Applicant's costs.


MR JUSTICE DYSON: Yes.

58. MR ELVIN: My Lord, I have two points to make: firstly, I would submit mandamus is not required to be issued here, it is inconceivable that a Parliamentary Commissioner requires an order of mandamus to be required to redetermine the matter. Clearly certiorari will lie and I submit that is sufficient.


59. Secondly, the question of costs, my Lord, I do resist a full costs application for the following reasons: firstly, your Lordship has found against the Commissioner on the ground of inadequate reasons. I see how your Lordship puts the matter. The reasons issue, as your Lordship well knows, forms only one part of a series of arguments which took a considerable amount of time and evidence, and the reasons issue itself only formally became part of the challenge when your Lordship granted leave to include it within the 86A last Wednesday. It is true that it was prefigured in my learned friend's skeleton at the leave stage in front of Sullivan J, but it has formed a very much subordinate part of the Applicant's case and your Lordship has found that it is the principal ground. Indeed, as your Lordship will recall, the whole purpose of my running the abuse argument was because of the significant part which irrationality played in the original challenge.


60. My Lord, cutting the matter short, therefore, I would submit that justice ought to be done particularly having regard to the new principles and the overriding objective which in the matters looking at issues such as proportionality and fairness, a proportionate award in this case would be one-third or one-half of the Applicant's costs in this case, given that the reasons challenge was only a subordinate part of the main challenge.


61. MR GEORGE: My Lord, so far as mandamus, in the circumstances, I do not press that given----


MR JUSTICE DYSON: I do not think mandamus is required.

62. MR GEORGE: My Lord, that plainly is not required. My Lord, so far as the partition of costs. I remind your Lordship first of all of the irrationality point. Your Lordship has expressly said it is simply not necessary to go on to determine that matter. Therefore, it is not open to my friend, as it were, to approach the matter upon the basis that that matter has been decided against me.


63. My Lord, I fail to see that there is any way in which I could have approached a reasons challenge more briefly than in the way in which I dealt with the whole matter. Your Lordship will recall when it came to irrationality, I said, there was not anything to be added. We have been through all the matters; in other words, the basic material on reasons and irrationality, I think it entirely lay on top of one another, it was the same basic material I had to take your Lordship through.


64. My Lord, similarly, so far as my first ground of challenge about omitting the collective amnesia point. Again, my Lord, that material had to be covered for the reasons -- it is crucial to your Lordship's determination on the reasons and again, as your Lordship pointed out to me very early on, there is a huge overlap in these particular matters. My Lord, in my submission, there has been no addition to the costs nor, to say that reasons is raised late, true as a pure pleading point but, my Lord, my friend admitted there was a substantial section in the skeleton argument before Sullivan J precisely dealing with reasons and, indeed, in the skeleton argument from my friend, no suggestion that reasons had not been pleaded could not be raised instead of paragraph 36----


65. MR JUSTICE DYSON: Mr George, I do not think I need to trouble you further. I think you are entitled to your costs.


66. MR ELVIN: My Lord, I have an application for leave to appeal. My Lord, I put it on these two basis: firstly on the reasons issue, in my submission, having regard to the Dyer principle (which I appreciate your Lordship expressly takes into account) in my submission, there is a reasonable ground for taking the matter to appeal on this basis. As your Lordship recalls in Dyer, Simon Brown LJ left it to the Ombudsman to formulate the issues. My Lord, the issue which is relevant in this case, as your Lordship has found is issue 27(2), namely the principal issue was whether the emission to give express advice on section 246(2A) was maladministrative. My Lord, in my submission, there is a reasonable ground for argument having regard to Dyer and, indeed, ex parte Smith as to whether the duty to give reasons includes the duty to give reasons for subordinate findings of fact which comprise one subissue of the border issue which the Ombudsman set for himself in that issue because than finding of fact is only one small element in one part of the tapestry which goes to form that wider question.


67. MR JUSTICE DYSON: I did not think it was a small part. I thought it was a very large part.


68. MR ELVIN: Your Lordship has found as your Lordship has found, but I simply say there is an arguable point on that, because it is nonetheless still one part of the broader issue, and the broader issue is that admission. My Lord, having regard to the strictures in ex parte Dyer tied into ex parte Smith which strictures your Lordship accepted, I would submit there is certainly an arguable ground, at least for appeal, on that issue, and it is of some importance, as your Lordship will recognise, so far as the Commissioner is concerned.


69. My Lord, my second ground is on the injustice issue. My Lord, as I submitted to your Lordship last week, the Ombudsman once he finds there is no injustice does not have to go any further. I appreciate your Lordship has found against me on the construction point but, my Lord, in my submission, it would not be right to quash the decision in part on the basis relating to injustice, where the Ombudsman did not need to go any further. Indeed, in ex parte Bradford (a point I raised in paragraph 33 of my skeleton argument) the Court of Appeal said just that so, again, my Lord, I would submit that the consequences which your Lordship has set out in terms of the injustice issue are ones which are at least reasonably arguable and matters which, again, having regard to the important of the issues, so far as the jurisdiction is concerned, are ones which should be left to go forward.


70. MR JUSTICE DYSON: Do you want to say anything, Mr George?


71. MR GEORGE: I would resist that strongly. So far as reasons, your Lordship has found that the matter on which your Lordship has based himself was a principal matter, and my Lord that could not be otherwise, given the paragraph of Mr Norwood's letter which had raised the particular matter and so forth. My Lord, in those circumstances, that ground should -- dressed up as if in some way it brings in Dyre or ex parte Smith , it does not bring in those at all, it is merely an application to found facts of law determined by the House of Lords on which my friend himself was relying. My Lord, so far as the injustice matter. Again, your Lordship has found a failure of reasons in that regard. My Lord, my submission again is, this is not an arguable matter.


72. MR JUSTICE DYSON: Mr Elvin, the view I take is that I was applying the authorities which you said I should apply in relation to reasons, to the facts of this case. I appreciate this may be an important case from the Commissioner's point of view, but I think that you ought to ask for leave from the Court of Appeal and I refuse leave.


MR ELVIN: So be it, my Lord.


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