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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> James v Hertsmere Borough Council  EWCA Civ 489 (02 April 2020)
Cite as:  WLR(D) 211,  1 WLR 3606,  EWCA Civ 489,  WLR 3606
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ON APPEAL FROM THE CENTRAL LONDON COUNTY COURT
Recorder Richard Methuen QC
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE PETER JACKSON
LORD JUSTICE HADDON-CAVE
| Gerald James
|- and -
|Hertsmere Borough Council
Ranjit Bhose QC and Riccardo Calzavara (instructed by Hertsmere Borough Council) for the Respondent
Hearing date : 17 March 2020
Crown Copyright ©
Covid-19 Protocol: This judgment was handed down remotely by circulation to the parties' representatives by email, release to BAILII and publication on the Courts and Tribunals Judiciary website. The date and time for hand-down is deemed to be 10:30am on Thursday, 2 April 2020
Lord Justice Peter Jackson:
(1) The preamble recited that the Council wished to commission RMG to provide a homelessness review service in accordance with the Conditions, the Service Specification, Schedules and any Appendices. The Service Specification included this sentence:
"RMG will carry out section 202 Housing Act 1996 reviews selected by Hertsmere Quality and Reviews team over a 12 month period. Hertsmere will acknowledge the requests for review and immediately send the referral by email to RMG Ltd."
The syntactical ambiguity in the first sentence will be noted. The Appellant argues that in order to fall within the terms of the contract, and hence be authorised, reviews must be carried out and completed within 12 months, while the Council argues that reviews selected during the 12 month period must be carried out to completion and will be authorised even if that happens after the 12 months have expired.
(2) The contract contains a number of definitions. These include that the Commencement Date shall be the date on which RMG started to supply services, in fact 18 September 2017. The expression "Term", which appears at a number of points in the contract, was defined as "the period the service shall be provided by the Service Provider from the commencement of the Service to the completion of the work required under the Contract".
(3) Clause 3.1 defines the "Contract Term" as
"the period from the commencement date to 11 April 2017 unless terminated in accordance with Clause 15 of this agreement. The parties may by agreement extend the Contract Term by periods of up to 12 months at a time, subject to a maximum including the contract term of 3 years."
It is common ground that this should be read as if 11 April 2017 read 11 April 2018. Accordingly the initial contract term was from 18 September 2017 to 11 April 2018. It will be recalled that the 56 day review period in the Appellant's case ended on 5 April 2018 but the review was not completed until August 2018. The review process therefore straddled the period before and after the initial contract term.
(4) Clause 3.3 states that "It is anticipated that the value of work will not exceed £25,000 but that is entirely within the Authorised Officer's discretion".
(5) Clause 4.1 provides that "During the Term" RMG was to devote such time, attention and abilities to the provision of the Services as the contract required.
(6) Clause 4.9 provides that RMG was required to assist the Council in defending any statutory appeal or judicial review proceedings in respect of the review decisions and would receive a fixed fee for doing so.
(7) Clause 6.1 entitles RMG to payment for services rendered in accordance with a schedule of fixed fees that specifies the cost per unit of completed work.
(8) Clause 7.1 concerns the Authorised Officer, who is the person named in the Contract "or such other person nominated in writing by the Council from time to time to act in the name of the Council for the purposes of the Contract". By Clause 7.3 the Authorised Officer was entitled to monitor the performance of the Services. The officer named in the Contract was the Housing Operations Manager, Mr Idris Kargbo. He was in theory answerable to the Housing Services Manager, who was answerable to the Director of Environment, whom was in turn answerable to the Chief Executive. However, by March 2018 neither intermediate post was filled.
(9) Clause 14 provides for the termination of the contract for cause and Clause 15 provides for the consequences of termination. These include the return of work-in-progress and a settling up. Clause 15.3 provides:
"The termination of the Contract, howsoever arising, shall be without prejudice to any rights or obligations theretofore accrued or to any provisions which are expressed to be performed after or to survive the termination of this Contract."
(10) Clause 20 provides that:
"A variation to this Contract (including to the scope and nature of the Services) shall only be valid if it has been agreed in writing and signed by both parties. "
The contract contains a requirement for an act to be recorded in writing in nine other miscellaneous contexts, though not, as has been seen, at Clause 3.1 concerning extensions.
The appeal to the county court
(1) Mr Kargbo: "As Authorised Officer under that contract, in/around March 2018 I verbally agreed an extension with RMG for a further 12 months commencing 12th April 2018."
(2) Mr Graham: Responsibility for the contract had fallen directly on him in the absence of intermediate officers. "It was always my intention that Idris Kargbo would perform all of my functions in relation to the agreement including, giv[en] his performance monitoring role, taking the decision on behalf of the Council as to whether it should be extended." For the avoidance of doubt, his statement of 22 November 2018 formally confirmed his approval of the agreement he signed and of its extension for a year by Mr Kargbo.
(3) Councillor Bright: Although he considered that the extension of the contract to have been in order, on 22 November 2018 he ratified both the initial contracting out to RMG until 11 April 2018 and the extension until 11 April 2019. This decision was published on 3 December 2018 and became effective and binding so far as the Council was concerned from 11 December 2018.
"31. In other words, even if Mr Kargbo should have been further authorised in writing to take the decision to agree an extension, and even if the extension to the contract should have been reduced to writing, it is clear that these were matters of form and not substance.
32. It is plain that it was the intention of the Respondent Authority to authorise RMG Limited to carry out its functions under section 202 for the initial period of the contract and for the further period of 12 months from 12 April 2018. If there were any irregularities in the process these were cured by the decision of Mr Bright.
33. The first ground of appeal therefore fails."
The appeal to this court
(1) The jurisdiction under s. 204 did not extend to a challenge to the lawfulness of the contracting out. That issue could only be pursued through judicial review in the High Court, and the Recorder should have so held. This is the argument fleetingly advanced below.
(2) It is sufficient for it to be lawful that the review was begun during the initial period of the contract even though it was not completed until a later date.
(3) Mr Kargbo had authority to agree to extend the contract, and to do so orally. These are issues (a) and (b) as considered by the Recorder.
(4) The extension was validly ratified by the Chief Executive (as well as by the Leader) on 22 November 2018.
(1) Did the county court have jurisdiction to consider the contracting-out issue on appeal?
(2) Was it sufficient for the review process to have started, but not to have been completed, during the initial contract period?
(3) Was Mr Kargbo authorised to agree an extension?
(4) Did an agreement to extend the contract have to be recorded in writing?
(5) Was the review decision validly ratified by the Leader or by the Chief Executive?
Did the county court have jurisdiction to consider the contracting-out issue?
"204 Right of appeal to county court on point of law.
(1) If an applicant who has requested a review under section 202—
(a) is dissatisfied with the decision on the review, or
(b) is not notified of the decision on the review within the time prescribed under section 203,
he may appeal to the county court on any point of law arising from the decision or, as the case may be, the original decision."
"The history of section 204 of the Housing Act 1996 is that, until the Act came into force, applications for judicial review were regularly being made to the High Court where a person who was in need of accommodation sought to obtain the assistance of the courts to prevent local authorities ceasing to accommodate them. The remedy of judicial review in those circumstances was often not appropriate because High Court proceedings are not the right forum in which to resolve the delicate issues which arise out of local authorities' responsibilities for providing accommodation
Judicial review was not appropriate because of the need for relief to be provided at extremely short notice, sometimes from applicants in parts of the country a considerable distance away from the High Court in London. Parliament, therefore, intervened by transferring the general jurisdiction of the High Court to the county court by the provisions of section 204 of the 1996 Act. That gave the county court jurisdiction to deal with appeals on any point of law which means that the county court's powers will be similar to those of the High Court on judicial review."
"In my view, the law is … that "a point of law" includes not only matters of legal interpretation but also the full range of issues which would otherwise be the subject of an application to the High Court for judicial review, such as procedural error and questions of vires, to which I add, also of irrationality and (in)adequacy of reasons."
And he continued at 314-315:
"As to policy, the introduction by section 204 of the Act of 1996 of the new right of appeal to the county court in homelessness cases was intended to transfer from the High Court to the county court the main strain of the High Court's otherwise onerous task of judicial review of those decisions for which section 202 provides. I say "transfer ... the main strain" of such jurisdiction to the county court, because the Act does not deprive the High Court of its traditional jurisdiction in such matters. Such jurisdiction simply becomes residual; that is, it has become normally inappropriate to grant judicial review in them because there is now another, and generally more appropriate, avenue of challenge… It cannot have been intended that certain pockets of the High Court's jurisdiction, such as irrationality, should remain its exclusive preserve, thus giving rise to two, often overlapping, modes of challenge to a housing authority's decisions under section 202: cf. Chief Adjudication Officer v. Foster  A.C. 754, 766-767, per Lord Bridge of Harwich. Moreover, a moment's thought indicates that it is in the area of irrationality that the county court is every bit as qualified as, or better than, the High Court to evaluate the strength or weakness of local decisions under challenge. It would be absurd if the new Act were construed so as to give the county court its head on matters of legal interpretation, but not on challenges based on irrationality.
There is another reason why the draftsman cannot have contemplated two concurrent, either separate or overlapping, forms of challenge to a local housing authority's decision on homelessness – timing. It is clearly desirable, in the public interest as well as that of applicants, that such challenges are resolved quickly and cheaply… hence the time limit, without power to the county court to extend it, of 21 days for appeal to the county court prescribed by section 204(2). The looser time constraints of R.S. C., Ord. 53, r. 4 and the leave threshold in judicial review would frustrate that clear statutory objective if it could be overridden every time there is a complaint of irrationality in addition to and supposedly distinguishable from, an error of law. For the same reason and save in the most exceptional circumstances, the residual jurisdiction of the High Court should not be regarded as a backstop for the appellate jurisdiction of the county court under section 204 where the applicant for housing assistance has failed to appeal a review decision within the 21 days' time limit. If there is to be any relaxation of that limit it would be better for Parliament to put it under the control of the county court."
"On the first main issue on this appeal, the breadth of the county court's jurisdiction under section 204 of the Act, I agree with everything said by Auld L.J. and therefore with the conclusion of the judge. The jurisdiction of the county court is at least as wide as that of a court of judicial review."
"Although the County Court's jurisdiction [under s. 204] is appellate it is in substance the same as that of the High Court in judicial review: Nipa Begum v Tower Hamlets LBC  1 WLR 306. Thus the court may not only quash the authority's decision under s 204(3) if it is held to be vitiated by legal misdirection or procedural impropriety, or unfairness or bias or irrationality or bad faith, but also if there is no evidence to support factual findings made or they are plainly untenable; or … if the decision maker is shown to have misunderstood or been ignorant of an established and relevant fact."
"16. Notwithstanding the apparent breadth of this appellate jurisdiction, Mr Bhose submits that the Appellants' challenge to the contracting out process cannot raise "any point of law arising from" the review or original decision because there is a distinction between errors of law which might lead to such decisions, and errors which flow from them. Put another way, the errors in the instant case, if they exist, are antecedent rather than consequent.
17. I simply cannot accept the Respondent's submissions on this issue. The point has not previously arisen for judicial determination but in broad terms it is quite clear both on principle and authority that the statutory appeal on a point of law in this class of case is designed to operate in exactly the same way as judicial review, and that any ultra vires issue (in the sense explained by the House of Lords in Anisminic) is therefore capable of being taken. I discern no merit in the argument that "arising from" should be read restrictively. Furthermore, had there been any merit in this somewhat arid and technical point I could always have reconstituted myself as an Administrative Court possessing the judicial review jurisdiction which Mr Bhose agrees is ample enough to encompass challenges of this nature. In my judgment, s. 204 is sufficiently broad to permit Mr Vanhegan to raise the various matters which he seeks to under the umbrella of the common issues, and I must therefore proceed to address the merits of his case."
"41. Indeed, it would also enable a general challenge to those policies to be brought by way of judicial review. In some ways this might be preferable to a challenge by way of an individual appeal to a county court. But it may not always be practicable to mount a judicial review of an authority's policy, and an individual must be able to rely on any point of law arising from the decision under appeal, including the legality of the policy which has been applied in her case."
"90. I cannot leave this case without expressing my disquiet that such wide ranging challenges to the actions of a local authority as Mr Smith has argued are permitted to arise in appeals under section 204 of the Housing Act 1996. The scope of such an appeal was not argued in De-Winter Heald and although in Tachie Jay J held that such arguments were available to an appellant under section 204, I would not regard the point as by any means settled. The original right to apply to the Administrative Court for judicial review was transferred to the county court because county courts were thought to have expertise in housing, not in administrative law generally. The right of appeal against a decision on review is a right limited to a point of law arising from the review decision, whereas in substance the points raised are challenges to Haringey's antecedent decision to contract out its functions. The right of appeal under section 204 is unfettered, whereas an applicant for judicial review requires the permission of the Administrative Court. Time for the making of an appeal under section 204 runs from the date when the appellant is notified of the review decision, whereas the substantive decision to contract out may have been made many years beforehand; and an application for judicial review would therefore be out of time. In addition challenges to public procurement decisions are in general susceptible to challenge under the prescriptive regime laid down by the Public Contracts Regulations 2015. Mr Vanhegan referred us to the decision of this court in R (Chandler) v Secretary of State for Children, Schools and Families  EWCA Civ 1011,  PTSR 749. In that case it was decided that a person might be able to challenge a public procurement decision by judicial review if he has a sufficient interest in compliance with the public procurement regime in the sense that he is affected in some identifiable way; and that he may have such an interest if he can show that performance of the competitive tendering procedure might have led to a different outcome that would have had a direct impact on him: see . This is certainly not an invitation to pursue technical points that do not affect the individual. Mr Smith was entitled to a decision which was lawful in the sense that the test required by the Housing Act 1996 had to be correctly applied, irrespective of the person who applied it. This question was not, however, formally in issue on this appeal and Mr Vanhegan fairly argued that we ought not to decide it. I reluctantly agree; so what I have said on this topic is entirely obiter (a practice which I usually deprecate)."
"I would not embark on resolving this controversy in the present case… it is not necessary for the disposal of the appeal. Resolving it should wait for a case where it is or may be determinative."
(1) The plain meaning of the words of the section makes clear that jurisdiction is confined to a point of law arising from the review decision. The section focuses on the period of time between receipt of the statutory review request, when the authority's obligation to review its original decision is triggered (s. 202(4)), and the notification of the statutory review decision, when its obligation is discharged (s. 203(3)).
(2) The reasoning in Panayiotou is to be preferred to the decision in Tachie for the reasons given in the later case.
(3) If the county court's jurisdiction extends to enabling applicants to challenge the exercise by authorities of Housing Act functions, it would potentially extend to other legislation. In this case, that includes local authority constitutions, delegation, and the lawfulness of decisions on ratification, which may be divorced in time or in substance from the decision under appeal. This militates against the presumption of regularity and affords insufficient protection of the public interest. It is unlikely to have been Parliament's intention when conferring this new jurisdiction upon the county court.
(4) This conclusion does not give rise to any tension with the guidance in Nzolameso. The Council accepts that in so far as the reviewing officer applies a policy the s. 204 jurisdiction extends to a challenge to that policy because it forms part of the reasoning. But that is not this case.
(1) Under section 204(1), the county court has jurisdiction in relation to any point of law. This wording is wide enough to cover a challenge by a homeless applicant that the person who took the relevant decision had no power to do so. That approach is supported by Nipa Begum, Runa Begum, Tachie and Nzolameso.
(2) There are practical reasons why this interpretation is to be preferred:
(a) The purpose of s. 204 was to transfer these cases from the High Court to the county court. This would be undermined by the return of homelessness appeals to the Administrative Court. As was intended, the county court now has pre-eminent experience in dealing with these applications.
(b) The permission stage in judicial review would frustrate the clear statutory objective of an unconditional right of appeal in respect of homelessness decisions.
(c) One purpose of s. 204 was for challenges to review decisions to be brought quickly, more cheaply and more locally. This would be undermined if a contracting out challenge carried the judicial review time limit (3 months for judicial review rather than 21 days under s. 204). Also, proceedings in the High Court take longer because there are a smaller number of hearing centres and judges than the county court. They are also likely to require applicants to travel further.
(d) Splitting jurisdictions duplicates court costs and time.
"10. The court's task is to ascertain the objective meaning of the language which the parties have chosen to express their agreement. It has long been accepted that this is not a literalist exercise focused solely on a parsing of the wording of the particular clause but that the court must consider the contract as a whole and, depending on the nature, formality and quality of drafting of the contract, give more or less weight to elements of the wider context in reaching its view as to that objective meaning."
Was it sufficient for the review process to have started, but not to have been completed, during the initial contract period?
Was Mr Kargbo authorised to agree an extension?
Did an agreement to extend the contract have to be recorded in writing?
Was the review decision validly ratified by the Leader or by the Chief Executive?
Lord Justice Haddon-Cave
Lord Justice McCombe