| Date | 5 November 1997 |
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| Judgment | Trustees of the Denis Rye Pension Fund and Another -v- Sheffield City Council The Times, 20th August 1997 |
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| The Issue | Recovery of grant payments from Local Authorities following improvement works carried out under the Housing Acts. |
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| Implication |
Local Authorities may no longer be able to rely upon judicial review processes. Grant applicants may recover disputed grant payments by ordinary action in the High Court commenced by writ. |
printWhere an individual or company has a grievance against a Local Authority or other public body, our legal system has generally protected the latter from ordinary legal action being brought against them. In such situations Local Authorities and the like are generally protected under a procedure known as "judicial review". Judicial review enables the courts to regulate the decision making processes of such public bodies. Such proceedings are part of "public law" which concerns the relationship between the public and the state. By contrast, private law regulates legal relations between individuals or companies not involving the state. The protection afforded to such public bodies through the judicial review process is significant. A judicial review cannot be brought without first obtaining leave of the court. The principle which underpins this was established in the leading case of O'Reilly -v- Mackman in 1983, where it was established that it is contrary to public policy "and as such an abuse of the process of the court, to permit a person seeking to establish that a decision of a public authority infringed rights to which he was entitled to protection under public law, to proceed by way of an ordinary action and thereby to evade" the protection afforded to public authorities by judicial review. Nevertheless, this shield of judicial review, behind which Local Authorities have so often sheltered, has recently been dented in the case of Trustees of the Denis Rye Pension Fund -v- Sheffield City Council. The case concerned claims against the Council for the payment of improvement grants for work done by the pension fund to make premises fit for human habitation following the service of a Statutory Repairs Notice. The 1985 Housing Act and the 1989 Local Government and Housing Act contain the statutory scheme governing repair notices and the approval of grants. The Acts provide that if the building works are not completed to the satisfaction of the authority within the timescale set down, the authority may refuse to pay the grant. Firstly there had been considerable argument about whether the work undertaken by the pension fund had been completed by the appropriate date. The Master of the Rolls, Lord Woolf, sitting in the Court of Appeal, recognised the inherent difficulties in placing Local Authorities in a position where they had to decide whether completion of building works had or had not occurred. In the High Court it had been held that the authority should base such a decision only upon "an objective, factual and technical assessment". Lord Woolf recognised that this was perhaps to oversimplify the problem, and he accepted that "there will be room in some cases for the authority to exercise a limited degree of judgement particularly where there was no express or implied standard, such that the council would be entitled to set the standard subject to reasonableness". Continuing on this theme, Lord Woolf said "so far as the present actions are concerned there is no reason to think that when the quality of the work is examined against the particulars and estimates provided and any relevant specification, taking into account the actions of the council's inspectors, the question of whether the council could lawfully withhold its satisfaction will be resolved by determination of the factual position. This is the class of issue which, if it cannot be resolved by mediation, is ideally resolved by a court with the assistance of a report from a surveyor jointly instructed by both parties". Such processes were not, according to Lord Woolf, within the objective of judicial review. Nor was Lord Woolf particularly impressed that the process of approval of the building works might cause the grant applicant to be out of time for payment of the grant. The statutory code contained within the Housing Acts was designed to give the applicant the right to payment of the grant on compliance with the conditions contained in the legislation. "When this has happened the authority has no justification for refusing payment". In such a situation Lord Woolf had no doubt that the Local Authority's application that the matter should be heard in judicial review was misconceived. "In this situation I can see no reason why the landlord cannot bring an ordinary action to recover the amount of the grant which is unpaid as an ordinary debt. Judicial review was not intended to be used for debt collecting". This decision is likely to increase pressure on Local Authorities. The case may well reduce, or indeed remove in its entirety the safeguards of judicial review from the perspective of the Local Authority in many such cases dealing with, for example, the non-payment of grants.
CJ-9740
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