EX PARTE MARTIN JOHN BAXTER AND THREE OTHERS
Constitution: Lord Justice GlidewellMr Justice Schiemann
|R - v - WALTHAM FOREST LONDON BOROUGH COUNCILEX PARTE MARTIN JOHN BAXTER AND THREE OTHERS(on their own behalf and on behalf of theWALTHAM FOREST RATEPAYERS ACTION GROUP)|
LORD JUSTICE GLIDEWELL: In these proceedings Mr Wadsworthapplies for an order of certiorari to quash a resolutionof the Council of the London Borough of Waltham Forest("the Council") dated 10 March 1987 making the generalrate for the borough for the rating year 1987/88. The Noticeof Motion also seeks an order quashing a further resolutionof the Council dated 9 April 1987 not to call a specialmeeting for the purpose of considering making a substituterate', and a declaration as to the council's duty when makinga budget for the year, but both of these forms of reliefare subsidiary to the first order sought. A further claimfor a declaration relating to the financing of revenue andcapital expenditure by a scheme of deferred purchase and parallel loan is not now pursued by the Applicants.
Of the four Applicants, Mrs Martin and Mrs Williamsare both residents and domestic ratepayers in the Boroughof Waltham Forest, Mr Baxter is a Director of a company whichis a commercial ratepayer in the borough, and Mr Hughes,who is a Solicitor, both lives and works in Chingford, inthe borough, and thus is a ratepayer in both capacities.
They bring these proceedings on behalf of the Waltham ForestRatepayers Action Group, a body which at the date of theapplication for leave to move for Judicial Review ( 4 June1987) had some 9000 individual members and 200 businessmembers. Mr Goudie, for the Council, accepts that the Applicants(whom I shall call collectively "the Ratepayers") are entitledto apply for the relief sought.
I should also note that Mr Goudie does not argue thatthis court should refuse the relief sought because anotherremedy is available to the Applicants viz an appeal to theCrown Court under section 7 of the General Rate Act 1967.Since the point was neither raised nor argued before us,despite the observations of the Court of Appeal inR v Chief Constable of Merseyside Ex Parte Calveley (1986)QB 424, 1 AER 257, it would not be right for this courtto refuse relief on this ground.
The Council's resolution of 10 March 1987 aside a rateof 302.5 pence in the pound for domestic hereditaments and321 pence for non-domestic, which represented increasesof 62% and 56.6% respectively on the rates for 198&A&7.Not surprisingly, the Council's decision to raise the rateby such substantial percentages resulted in a good deal ofconcern and opposition. This application is the legal expressionof that opposition.
The legal framework
The Council is a rating authority. Its duty to makea rate is imposed by section 2(1) of the General Rate Act1967, which provides:
For convenience, I repeat parts of my judgment in Smithv Skinner (1986) RVR
As is well known, it has been a major concern of thepresent government since it was first elected in 1979 toattempt to control the level of local authorities expenditure.This concern has resulted in three statutes, namely, part6 of the Local Government Planning and Land Act 1980 ("the1980 Act"), the Local Government Finance Act 1982 ("the1982 Act") which introduced substantial amendments to the1980 Act, and the Rates Act 1984 ("the 1984 Act"), Threeof the mechanisms by which this control is exercised arerelevant in the present case.
The third mechanism is the power given to the Secretaryof State by the 1984 Act to limit the rate in the £ whichan individual local authority can resolve to levy. Thisis the process which has come to be known as "rate capping".
By section 99 and paragraph 39(1) of Schedule 12 ofthe Local Government Act 1972, "all questions coming or arisingbefore a local authority shall be decided by a majorityof the members of the authority present and voting thereonat a meeting of the authority". The same rule applies tocommittees of the authority. It follows that a resolutionof a local authority is in practice the resolution of those,in the majority, who voted for it.
A further provision, which is relevant to one of MrWadsworth's arguments, is contained in section 13 of theRates Act 1984. This provides:
History of the Rate Resolution
Before May 1986 the Labour Party did not have controlof the council. The budget for 1986/87 was prepared bythe previous administration, and a rate was made in thesum of 20.5 pence in the pound. However, after the makingof that rate but before 8 Mar, 1986 the previous council hadpassed resolutions for increased expenditure the effect ofwhich was to add for the year 1987/88 to the expenditurealready committed by the 1986/87 budget, items totallingsome £2.6 million.
The elections for the Borough Council took place on8 May 1986. The Labour Party issued a manifesto duringthe election which contained the following paragraph:
At the election the Labour Party gained an absolutemajority on the council. The numbers of councillorsthereafter were Labour 31, Conservative 16, andAlliance 10, thus giving Labour an overall majority of 5.
Early in June 1986 the new council made a number ofdecisions which made further substantial additions toexpenditure in 1987/88. Taking account of the loss ofgrant, to which I shall refer later, the eventual costof these decisions was some £3.5 million. Approximatelyhalf of this increase related to additional expenditureon education.
On 23 June 1986 there was a meeting of the PolicyCo-ordinating Committee. Officers presented a reporton prospects for expenditure 1987/88. This report containedthe following passages :
In a section headed "Rate Capping" the officers advisedthe Committee that unless the government criteria for thechoice of authorities to be rate capped were drawn moretightly than they had been in the past, it would appearthat the council might avoid rate capping in 1987/88.This forecast has in the event proved to be accurate.
The Committee also had before it a Draft CorporatePlan, which was described as "a first attempt to definepriorities between council services and to link thesepriorities to the resources available". At that stage thepriorities were divided into two categories, namely agreedpriorities, being those to which the council was committedand for which resources had been provided, and prioritiesfor review being those which the council wished to pursuebut in respect of which no decisions had yet been taken.
The Committee agreed that the key issues identifiedin the draft Corporate Plan should be agreed and used asa basis for preparing proposals for the Policy Review andfor the assessment of budgetary priorities. The Committeerecommended also that the officers be asked to identifygenuine efficiency savings. The committee noted that onthe best assumption on existing council policies an increasein the rates of 35 pence (17%) seemed probable. The resolutionof the committee was approved by the council on 7 August1986.
On 25 September 1986 there was a meeting of the labourgroup. Since some of the submissions made by Mr Wadsworth,for the Applicants, are based upon the relationship betweenthe labour group, another body called the local governmentcommittee, and individual councillors in the majority partyI must start by describing these two bodies. The labourgroup consists of all the councillors who are members ofthe Labour Party and have accepted the Labour Whip. Counciland council committee meetings in Waltham Forest are normallyon a six week cycle i.e. there is approximately six weeksbetween each council meeting and the regular meetings ofeach committee. The labour group meets twice during eachcycle, once a day or two before the council meeting, andone once approximately half way through the cycle. Itsmeetings are attended not merely by its members but byapproximately ten other members of the Labour Party, whoare entitled to speak at the meeting but do not have a vote.The Local Government Committee is a joint committee consistingof representatives of the Labour Parties of the three parliamentary constituencies which make up the Borough of Waltham Forest.
Councillors are only members of the LGC if they are appointedas such by their respective constituency parties. However,from time to time councillors, particularly the leader ofthe council, are invited to attend meetings of the LGCand to address it. Councillors who are not in their ownright members of the LGC have no right to vote at itsmeetings.
At the meeting of the Labour Group on 25 September 1986,the group was addressed by the leader of the council, CouncillorGerrard, speaking from a prepared text of which copies areincluded in the documents before us. The document is entitled"Policy Review". In it, Councillor Gerrard made the followingpoints,
Councillor Gerrard concluded by describing three keydecisions. They were
The table which accompanied this document had columns showingthe makeup of the rate for 1986/87, with estimates of thelikely additions which would result from the three categoriesof development. The estimate at that time was that the "committed"items would result in a 32% increase in the rate, the "essential"items to a 40% increase and the remainder to a 59% increase.As will be seen this proved to be slightly optimistic butnot far short of the mark.
On 30 September 1986 there was a meeting of the LocalGovernment Committee. Councillor Gerrard addressed thecommittee in almost identical terms to those he had usedwhen addressing the labour group. The committee agreedthat it should "monitor the policy review and be consultedon priorities", and that there should be a special conferenceon the 15 November 1986 at which the chairman of committeesshould present papers outlining the work and priorities oftheir committees.
Officers then prepared a policy review paper, whichwas circulated to all members of committees together withthe draft Corporate Plan. By this time it was known thatthe council would not be rate capped for 1987/88, thoughthe paper made it clear that it had "only escaped the ratecapping criteria by the use of the special funds." Thepaper also forecast that on present levels of spending ifthe criteria remained unchanged, the council would berate capped in 1988/89. The paper identified the increasesin the rate which would result from the adoption of thedevelopments in the various categories of priority, as setout in the table to Council Gerrard's paper. The prioritieswere, however, redefined. Commitments became category A .
Category B, the former "essential" category was now describedas "major corporate priorities. Other proposals were classedas category C. At that stage it was estimated that for afull year category A would require an addition of 40% tothe rate, categories A and B together 49% and all threecategories 70%. In round figures, every additional £1 millionexpenditure was equivalent to an increase of approximately5 pence in the rate or 2.2%.
Towards the end of the paper the officers advised membersof the considerations they should bear in mind. They said:
The recommendations at the end of the paper were that
Armed with these documents the various committees thenconsidered the categorisation of items which came withintheir spheres. It was decided that the C category shouldbe sub-divided into C1, amounting to approximately 25% byvalue of the items, and C2, the remainder.
There was a joint meeting of the labour group and theLocal Government Committee on 11 November 1986. At thatmeeting recommendations were made that committees shouldmove a variety of items from the C category into the Bcategory. A subsequent meeting of the labour group acceptedthis recommendation, as it was described, and indeed addeda further four items which were to be,moved from the C tothe B category. These recommendations were acceptedin their entirety by the respective committees, and on the20 November 1986 the council at its meeting adopted committeeby committee these recommendations for categorisation.
Meanwhile the process of consultation with commercialand industrial ratepayers, required by the Act no doubt becauseas such ratepayers they are not local government electors,had started. Whether it was either in time or sufficientis another subject upon which Mr Wadsworth bases submissions.
On 11 November 1986 the Chief Executive wrote toapproximately 100 local companies, businesses and organisationsrepresenting commercial concerns to tell them that therewould be a meeting on 11 December 1986 to which they wereinvited, at which the council would outline its future plansand the ratepayers present would be invited to comment orto ask questions. On the same day there was a notice inthe local paper to the same effect. Two weeks later on25 November the Chief Executive wrote again to the samecompanies and businesses enclosing an agenda for the meetingtogether with the supporting papers. This included a memorandum on council spending and proposals for 1987/88,which described the three categories of developments, sothat final decisions had not been made on which of the itemswould be included in next year's budget and asked for commentsat the meeting of the 11 November. The memorandum was accompaniedby some 47 pages of detailed figures which would have enabledanybody who had time to consider the information about thecouncils proposals and the likely effect of various levelsof increased expenditure on the rates.
The meeting itself was duly held on 11 December 1986.I will refer later to the evidence contained in affidavitsas to what was said both at and after the meeting, and asto its effect.
On 10 January 1987 there was a further joint meetingof the labour group and the LGC, though only members of thecommittee voted at the conclusion of the meeting. CouncillorGerrard reported to the meeting, again from a written textof which we have copies. He made it clear that before anyof the expenditure was incurred for developments in categoriesA, B or C the cost of simply continuing services at theirexisting level (which he described as "our base positionfor next year") was some £4 million higher than had previouslybeen estimated. More than half of this figure was occasionedby the teachers pay award which would take effect from Januaryof 1987. In his comment at the end of the paper he saidamongst other things
The report was accompanied by a table, similar to that whichhe had previously presented but with larger figures containedin it. The meeting resolved in the following terms "thisspecial LGC calls on the labour group to implement thosedevelopments present in categories A,B and C1", and tointroduce a freeze on council rents. The labour grouplater accepted these recommendations.
On 14 January 1987 there was a meeting of the ResourcesStrategy Committee. This meeting received the minute ofthe Industrial Consultation Meeting on 11 December, andresolved that copies of it should be sent to those who hadattended the meeting and invited to submit written comments.These were to be submitted to a meeting of the committeeon the 25 February. Six companies and businesses in facttook the opportunity to comment.
As usual, the officers put a report before the committee,and the conclusions of the report are so important that Iset them out in full
The Officers recommended that dwelling house rent levelsshould be considered by the council, that the committee shouldagree to limit increase in services to category A i.e. thecommitted items, and that service committees should be askedto identify savings in preparing their budgets of at least3% of their allocations. I understand this last recommendationto be a request that they should consider saving expenditurefor any given level of services the saving to be at the rateof at least 3%.
The committee at its meeting noted the report of andthe comments made at the Industrial Consultation Meeting on 11 December. It also noted the impact of rate cappingon those authorities which had recently been rate capped
It recognised that spending even at the base positionin 1987/88 would almost certainly lead to the authoritybeing rate capped in the following year which would haveserious implications for the council. It recordedthe officers recommendations to which I have referred above,
It then recommended in accordance with the former decisionof the labour group that the budget allocations tocommittees should include items in categories A,B andC1 from the Policy Review, and that committees shouldexamine whether they could reduce their provisionalbudgets by
This recommendation related to a total reduction of 3%.It was also recorded that the officers had been asked toobtain legal advice relating to the above recommendationson both the projected general rate increase and the levelof housing rents.
On 15 January 1987 there was a meeting of the councilat which the recommendations of the Resources StrategyCommittee were approved and adopted, after ,a proposedamendment to them had been defeated.
On 22 January officers of the council and CouncillorGerrard attended a consultation with Mr Goudie, theirleading counsel, to seek his views in accordance with theresolution of the council. Without repeating in full
/Mr Goudie's views
(which slightly to my surprise have been put before usin the form of a note of the consultation) he did advisethat if the rents of council houses were not increasedat all, the rate increase might be open to challenge.
First the LGC executive on the 27 January, then theLabour group executive on the 24 February, and finallythe special Resources Strategy Committee and the counciladopted Mr Goudie's advice and accordingly it was resolvedthat rents should be raised by 65 pence per week.
The meeting of the labour group on the 24 Februarywas of course concerned with the major question of theamount of the rate to be set. It is clear from the recordwe have of this meeting that the members of the group werenot at one, and that some six or seven members both arguedand voted against so large an increase.
The final meeting of the Resources Strategy Committeebefore the making of the rate was on 25 February. Theeffect of the resolutions of the labour group was putfully and fairly before the committee in the Officersreport. In a paragraph headed "Fiduciary Responsibilities"the officers said
At the Special Meeting on 14 January 1987 the officers wereasked to seek legal opinion, regarding the council's rentand rate proposals. Reference has already been made tothe Housing Committees decision to increase rents fromApril 1987 in the light of the legal advice . "This legal advice was then summarised
In a passage dealing with rate capping, the officerssaid
They gave an example of a neighbouring authority whichhad been rate capped and said that if the same criteriawere applied to Waltham Forest, the council would haveto reduce its spending by some £25 million, an 18% cashreduction on the present budgeted spending level. The committeewas recommended to consider the legal advice, and to makedecisions about the estimates and the rate, with the figuresresulting from the resolution of the labour group being setout in detail.
The committee adopted that resolution, and on the10 March 1987 as I have already said the council, aftera debate and the moving of two amendments which were lost,resolved that a rate should be made at 321 pence in thepound for hereditaments other than domestic, and 302.5pence in the pound for domestic hereditaments . Atthat meeting the receipt of a petition from the Chamberof Commerce said to contain 23,500 signatures, together withanother petition of protest against the increase in therate containing 52 signatures, were reported.
At the meeting of the Resources Strategy Committee onthe 30 March 1987 the details of these petitions were noted.
On the 9 April 1987 a motion to make a substituted ratei.e. a rate at a lower level was defeated.
Mr Wadsworth advances the Ratepayers reasons why theCouncil's resolution to make the rate should be quashedunder the following heads;
1. The resolution resulting in so large an increasein the rate was irrational
a) in relation to the year 1987/88 and
b) because of the necessary implications for1988/89 and future years.
2. Councillors who voted for the resolution wronglyhad regard to a collateral matter, namely what theyregarded as commitments contained in the LabourManifesto. Alternatively, they were thus in breachof their fiduciary duty to their ratepayers.
3. Councillors who voted for the resolution wronglyhad regard to collateral matters, and/or improperlyfiltered the exercise of their discretion:
c) by acceptance of the Labour Whip, with theconsequent prospect of penalties if theydisregarded the whip; and/or
d) by wrongly accepting instructions from theLGC.
4. The council failed to consult industrial andcommercial ratepayers in the manner required bylaw.
I will consider these submissions under these four headings,although as Mr Wadsworth accurately says the first threeoverlap each other. Although Mr Wadsworth put his argumentsin the order in which I have set them out, it's convenientto consider first whether the Councillors who voted for therate resolution took into account collateral matters or hadimproperly fettered the exercise of their discretion. Ifwe find neither of these assertions to be made out, thenMr Wadsworth argues that the decision can only be consideredirrational. I shall therefore consider the issues in thatorder.
Before I do so, however, I remind myself of what itis we are considering. In the origin of this jurisprudence,the judgment of Lord Greene M.R,in Associated ProvincialPicture House v Wednesbury Corporation (1948) 1KB 223 CA.
he said at page 229;
At page 230 he said:
In the last paragraph of his judgment he summarised theprinciples as follows:
In Council of Civil Service Unions v Minister for the Civil Service (1985) AC374 Lord Diplock defined"irrationality" thus at page 410 F - G:
As to fiduciary duty of Councillors to the ratepayers in their area, and the effect of a party manifesto,the speech of Lord Diplock in Bromley LBC v GLC (1983) 1AC768 conveniently summarises the law at page 829 B:
I now turn to consider the arguments.
The Manifesto, and Councillors' fiduciary duty: It isclear from the passage I have quoted from the speech of LordDiplock in the Bromley LBC case that councillors who havebefore election issued a manifesto describing what policiesthey intend to pursue if they are in the majority after theelection are entitled to regard the carrying out of thosepolicies as a most important factor in their decision -making process. What they may not lawfully do is to regardthe manifesto as a commitment, and to seek to carry outthe policies in it regardless of any other considerations.Is it shown that this is what the Labour Councillors inWaltham Forest did?
I have already quoted passages from the address ofCouncillor Gerrard to the Labour Group Meeting of 25 September1986 setting out the necessity for categorising projectsin order of priority. The reports of the officers to thecommittees conducting the Policy Review in October/November1986 and to the Resources Strategy Committee on 25February 1987, which was before the council when it madethe rate on 10 March 1987, set out correctly and clearlythe matters Councillors were to take into account in reachingtheir decision, and advised them as to their fiduciaryduty .
We have evidence that the Labour Councillors did regardthe implementation of the policy in their manifesto as veryimportant. Councillor Gerrard made this clear in his papersaddressed to the Labour Group, and according to him Knight's affidavit, the Councillors present at the IndustrialConsultation Meeting on 11 December 1986 said as muchIn his first affidavit, Councillor Knight refers to themanifesto in the following words:
In the light of that evidence, I do not find Itpossible to infer that, despite what Councillor Gerrarddeposes, he and his colleagues had no proper regard totheir duties to the ratepayers. Indeed, so to find wouldinvolve not only disbelieving Councillor Gerrard (and therewas no application to cross-examine him on his affidavits),but would also mean that we concluded that the entire exerciseof categorising projects by order of priority was a sham.I cannot so find. Accordingly in my judgment the Ratepayerschallenge on this ground falls.
The Labour Whip and the Local Government Committee.The "fetter" issue
The law on this subject can be shortly stated. InBirkdale Electric Supply Co. v Southport Corporation (1926)AL 355 Lord Birkenhead referred at page 364 to
We were referred to a number of more recent decisionsof the courts in which this principle was in issue, namely,the judgments of Willis J in Lavender v MHLG (1970) 1 WLR1231, of Cooke J in Stringer v MHLG (1970) 1 WLR 1281 andof Woolf J (as he then was) in R v Amber Valley DC ex p.Jackson (1984) 3AER 501. I do not find it necessary to citefrom them, because they are all illustrations of the generalprinciple. Another authority to which Mr Wadsworth referred,the decision of this court in R v Hendon R.D.C. ex p. Chorley(1933) 2 KB 696, was on a different point, namely, theinvalidity of a decision of a council when a Councillor whovoted for the resolution had a financial interest whichdisqualified him by law and was otherwise biased. Sucha situation is not suggested here.
The evidence relating to the relationship between theLocal Government Committee and the Labour Group on theCouncil, and thus the council itself, can be: summarised shortly.The allegation is that, as in Lavender's case, the council,the elected decision - making body, has in practice givenits decision-making powers to an outside body, the L.G.C.,and has thus abnegated its statutory responsibility. Ifthat were proved to have happened, there is no doubt thatit would invalidate the purported decision of the Council.
The foundation of the Ratepayers' case on this issueis a short passage in a memorandum written by CouncillorSlack, dated 20 February 1987. This was submitted to themeeting of the Labour Group on 24 February 1987, at whichCouncillor Slack was one of six or seven councillors whovoted against the proposal to increase the rate by so largea proportion as 56.5% and 62%. Councillor Slack arguedin his memorandum that the task of ordering priorities betweencommittees had not been tackled at all, and continued:
In his first affidavit, Councillor Gerrard says that CouncillorSlack's reference to "instructions from the LGC" is inaccurate,and in his affidavit Cllr. Slack agrees that the phrase isan inaccuracy.
Mr Goudie, for the Council, points out that the minutesof the LGC and the Group normally speak of "recommendations"
on 10 March 1987 the six or seven opponents all voted withtheir colleagues in the Labour Group to make the rate.If they had not done so - if. indeed, they had all abstained- the remainder of the Labour Group would have been in aminority, by one or two votes, and the resolution would nothave been approved. Thus, submits Mr Wadsworth. if thevotes of the six or seven Labour opponents in favour of therate were cast only because they were fettered by the LabourWhip, or by fear of expulsion from the Labour Group, thepassing of the resolution is itself invalidated.
The Labour Group has adopted the form of Model StandingOrders recommended by the Labour Party's NationalExecutive. These include the following provisions:
The question is, why did the six or seven Councillorsvote with the majority at the Council Meeting on 10 March?
In his affidavit Cllr. Slack says :
Councillor Brind affirmed that:
Councillors Mrs Smith and Miles expressly agreed.
We granted an application by Mr Wadsworth for leaveto cross-examine Cllrs. Mrs Smith, Brind and Miles.Surprisingly, the application did not include Cllr. Slack.The reasons which the three Councillors gave in their oralevidence for voting with the majority at the council meetingon 10 March were:
Cllr, Mrs Smith - I voted as I did for the sake ofunity, which I regard as very important. When theGroup is working towards certain ends, it is importantto preserve the unity of the Group so as to giveconfidence to those who will receive the services.
Cllr. Brind If I decided not to vote with themajority I would feel obliged to resign from thecouncil. I was elected, not because of anyvirtues I might have personally, but as a LabourCandidate. Also, it was a bit melodramatic fora newly elected Councillor to take such drasticaction.
Cllr. Miles - After a fair and thorough debateat the group meeting, I felt bound by the normalprocedure of every political group of every councilin the country.
In his third affidavit, Councillor Gerrard explainsthe sanction which can be applied as follows:
We thus have evidence that the way in which the WalthamForest Labour Group operates is in accordance with theStanding Orders recommended by the Labour Party NationalExecutive, and is common to political groups of all politicalpersuasions in local authorities throughout the country.Indeed, if we did not have evidence to this effect, it wouldrequire a good deal of judicial self deception to pretendthat we did not already know it. I therefore agree withMr Goudie that if we are to quash the Council's resolutionon this ground, we should be casting doubt on the legalityof many procedures adopted by political groups of LocalCouncillors throughout the country.
If that were the correct decision, I should not hesitateto reach it however far-reaching the effect. But in myjudgment Mr Wadsworth's submissions on this issue are notwell bounded. If a Councillor genuinely believes that itis desirable that the party of which he or she is a membershould remain in power in a local authority district, andshould thus be able to pursue policies which he or she considersdesirable, these are not irrelevant considerations for theCouncillor to take into account when deciding which way tovote on a particular proposal which has the support of themajority of the party, but to which he is opposed. If heor she considers that the alternative to voting with themajority at the council meeting is to resign from the group,or from the council, that it is not an improper fetteron his decision. It may be that there are area of councildecision-making to which this general principle does notapply. Thus when a council is considering whether to grantplanning permission, a "party line" on the decision maywell be inappropriate. But as a general principle I believeit to be sound.
It follows, therefore, that even if I were to acceptMr Wadsworth's submission that, because six councillors votedcontrary to their own views, the resolution of the councilis thus rendered invalid and should be quashed (a propositionabout which I have considerable doubts), I do not accepthis submissions that their votes were fettered or took intoaccount irrelevant considerations I would thus reject hissubmissions under this head also.
This brings me to:
In addition to the documentary evidence, Mr Wadsworthrelies on certain oral evidence which is disputed. Accordingto Mr Innes, one of the deponents for the Ratepayers, ata meeting on 15 May 1987 a Cllr. Jacobs, one of the LabourGroup, when asked whether he considered a rise of 62%reasonable, answered that he recommended a rise of 30%.In his affidavit Cllr. Jacobs denies that he did sorecommend and denies that he said he did. I must acceptthis denial. Cllr. Jacobs concludes.
9. In paragraph 8 of his Affidavit. Mr Innes states that he understoodfrom the conversation that I and my colleagues considered that a62% rate increase was not a reasonable one but that we felt ourselves bound to implement our manifesto expenditure commitment rather thanto limit our expenditure plans to what could be financedby suchrate increase as we considered reasonable. I deny I ever made sucha statement or gave such an impression. Such a statement or impressionwould be untrue. I have on many occasions since the rate was fixedtried to explain my position on the level of the rate rise and Ican recollect doing so on this occasion. I stated that. on the faceof it, a 62X rate rise might seem unreasonable but» consideredin its context of the amount needed not only to maintain existingservices but to have a modest expansion, then such a rise was, andis, a reasonable one.
Councillor Gerrard says much the same. He deposes that hisexpressed view is that
I accept that Cllrs. Jacobs and Gerrard have accuratelyset out the views they expressed.
The officers' Report to the Resources Strategy Committeeon 14 January 1987 informed the Committee that a budget forexpenditure at base level (i.e. with no improvement inservices compared with the 1986/87 budget) would requirea rate 31.2% higher for non-domestic properties, and 34.3%for domestic. For base plus Category A development, thepercentages are 45.3 and 49.8. Councillors were alsoadvised that every additional £1 of expenditure would resultin a loss of grant of 62 pence. Thus to achieve £1 of extraexpenditure, a rate rise of £1.62 was needed. Altogether,at the rate of expenditure approved by the council, some£10 million of Rate Support Grant was withheld.
As to the future, Councillors were warned that, unlessthere were a General Election at which a Labour Governmentwere elected, or at least the Conservatives failed to gainan overall majority, they could confidently expect that thecouncil would be rate capped in 1986/89. This would inevitablymean a very considerable reduction in expenditure, and createenormous difficulties. Cllr. Slacks memorandum of February1987 describes what is then likely to happen as "crisismanagement".
Councillor Gerrard, in his second affidavit says:
In any event I took the view that even if in the relatively near futurethe level of services would again have to be pruned, nevertheless, the Councilwas still justified in taking the decision it did. It enabled the Council totake steps towards achieving the objectives which it considered to be in the..Interests of the community: even short-term improvements were better than noimprovements at all. I do of course agree that other Councillors could take aDifferent view and consider that the benefits would be of too short a durationto warrant the rate increase. This, however, was essentially a politicaldecision and the Majority Members finally rejected this argument.
6. In paragraph 11 of his first Affidavit Mr Grant argues that afterrate capping the reduction in expenditure levels would be in excess of 20%.This analysis does, of course, rely on certain crucial assumptions about theGovernment's policies which may indeed be wrong. But even assuming them to be correct, in my opinion a reduction of 20% could be achieved if it had to be.(Manifestly this would not be desirable, but staffing costs could besignificantly reduced if there was no other option. Moreover there may bemore scope than Mr Grant allows for for special financing measures to beadopted.
7. Accordingly I reject the view that the Councillors were not fully awareof the implication of rate capping. We knew very clearly what might result ifand when rate capping occurred. Indeed, we were also aware of the potentiallydamaging political repercussions of increasing services and later having tocut them back. As Councillor Slack indicated, this could prove politicallyunpopular with the electorate. However, we considered that a serious attemptshould be made to effect much needed improvements particularly in the areas ofeducation, housing and social services. In many of these areas even shortterm improvements could have a significantly beneficial effect upon therecipients of the Council's services for example housing repairs and schoolmaintenance. whilst we live in the shadow of rate capping, we had not beencapped and we did not consider that we ought to act as though we had.
Mr Wadsworth's submission, put shortly is that if theCouncil took into account all relevant and no irrelevantconsiderations, and was not fettered by the LGC or thestructure of the Labour Group, it made a decision so patentlywrong that no reasonable council could have made it. Itwas perverse and irrational.
There was some discussion during the course of argumentabout the principle of proportionality. By this I understandis meant an approach adopted in the Court of the EuropeanCommunities and in the Conseils d/Etat of France and someother civil law countries. The Court considers whether theadverse effects which the decision under challenge may haveon the rights, liberties or interests of persons affectedby it are wholly disproportionate to the purpose for whichthe decision was allegedly taken. So far this principlehas not, as so expressed, been adopted by the Courts of thiscountry. In his speech in the CCSU case, Lord Diplock referredto the possible adoption in future of this principle. Inthe present case, counsel relied upon traditional Wednesburygrounds, and did not seek to rely on any more extensiveprinciple.
The question we therefore have to answer is: was thedecision of the council so absurd, so unreasonable, that nosensible, reasonable person could have come to it? I acknowledgethe strength of the arguments that the the increase in therate is massive, that it will impose great burdens upondomestic and business ratepayers alike, and that if the council israte capped as seems very likely there will be great problemsin reducing expenditure again. Nevertheless I can onlyanswer the question I have posed, "No". I cannot say thatthe- Councils decision was irrational.
The complaint here is that though the council went throughthe ritual of consulting the representatives of commerceand industry, the ritual was a mere charade. The LabourGroup, it is alleged, had already decided what course itwould pursue, and nothing which was said at the meeting on11 December 1986 made the slightest impact on the minds ofLabour Councillors.
In Agricultural Board v Aylesbury Mushrooms (1972)1 WLR 190 Donaldson J as he then was, quoting a dictumof Morris J in 1948, said
I gratefully accept this definition.
The Secretary of State has issued a Code of Guidanceto Rating Authorities on this particular area of consultation.
On the face of it, the council complied with the advicegiven in that code. They supplied ample information tothose invited to the meeting. At the meeting itself it isclear that there was a full and forthright discussion, whichcan have left Councillors in no doubt about the views ofmost of those present. The minutes of the meeting werereported to the committee, and sent to those who attended.
Further representations were sought and received.
The real complaint is that the views expressed by ratepayersdid not result in a reduction in the rate the subject ofthe resolution. Unless it is to be said that no consultationprocess can be effective unless it results in some alterationto the terms of a proposal before it becomes a decision,I do not see how it can be said that this consultation wasa charade. Accordingly I would hold that this ground ofchallenge also fails.
For the reasons I have sought to give, I fear at toogreat length, I would refuse the application.
It is therefore unnecessary to consider the subjectof delay urged by Mr Goudie as a ground for refusing relief.I will comment only, without formally deciding, that in acase in which the application was made within the periodof 3 months referred to in R.S.C. 0.53 R.4, ifI had found that any of Mr Wadsworth's first three grounds(i.e. other than that based on consultation) were made out,I should have been loath to refuse him a remedy solely onthe basis of delay.