England and Wales High Court (Administrative Court) Decisions

Queen on the application of DOY v. Commissioner for Local Administration [2001] EWHC Admin 361 (27th April, 2001)

Neutral Citation Number: [2001] EWHC Admin 361

IN THE HIGH COURT OF JUSTICE CO/2243/2000

QUEENS BENCH DIVISION

(THE ADMINISTRATIVE COURT)

Royal Courts of Justice

The Strand

London WC2A 2LL

Friday 27^th April 2001

MR JUSTICE MORISON:

1. The factual background to this case is as follows. Mr Doy, the applicant, bought a four-bedroomed detached house in Copford, Essex in 1991 from a Mr Clark who had bought it new from the developers. The house was built on an old land-fill site and the garden was on top of what had been industrial land. There was an application for outline planning permission for development of the site in June 1986; outline permission was granted in December 1986 and detailed permission was granted on 29 September 1987. The landfill had been partly tipped with organic material which rotted and emitted methane gas. In 1994 the local planning authority, the Colchester Borough Council [the Council], informed the residents on the estate, including Mr Doy, that methane gas had been detected under and in some of the houses. Consultants were instructed and their report, following an extensive survey, showed the presence of gas over an extensive area and in due course excavation work had to be undertaken on the land which was then mostly undeveloped. There are escape pipes located in different parts of the estate and the evidence shows that Mr Doy's house is difficult to sell and his investment has been adversely affected. I recognise at once that the damage to the property value as a result of the stigma attaching to this estate is just part of the damage he has suffered by unknowingly buying a house on an estate with a severe gas problem. He has also suffered greatly from the worry and anger caused by what he perceives to be gross incompetence on the part of the planning authority, which failed to find out about the methane problem before giving planning permission for the development. As the law is presently understood to be, he has no remedy in the courts in respect of his losses.

2. But Mr Doy exercised his right to complain to the person, colloquially, known as the Local Ombudsman [Ombudsman], in respect of the failure by the planning authority to recognise the dangers and hazards of permitting a development on the site, without extensive remedial works first being carried out. That complaint was received by the Ombudsman in 1997 and he carried out a thorough investigation and concluded that whilst there was maladministration by the Council in relation to development on the land formerly used for industrial purposes, that maladministration caused the complainant no injustice. The complaint of maladministration in relation to the landfill area and the consequent methane contamination was rejected.

3. Mr Doy now complains that the Ombudsman has misdirected himself as to the legal definition of maladministration and has applied the wrong test. He also says that the conclusion he reached is perverse. In order to understand the nature of the challenge and the Ombudsman's response, it is necessary to identify the key passages in his final report.

Relevant planning controls and guidance:

4. In paragraph 2, the Ombudsman refers to the extensive inquiries which his office made "in order to identify the state of knowledge in 1986 [the year when outline permission for the development of the estate was granted] and to determine how similar issues were dealt with at the time by other agencies."

5. He then refers, extensively, to the planning law legislation [both primary and secondary] and to the advice and guidance issued by Government Departments which was either required to be taken into account or which were advisory only. Amongst the more relevant `compulsory' advice:

(a) a circular issued in 1977 which recognised the pressure on authorities to consider development of sites which were derelict or contaminated by chemical substances. Examples of such sites, listed in the Circular were

" ...old landfill sites (where spontaneous combustion may be a problem)."

The Circular announced the establishment of a body called the ICRCL from whom local authorities seeking to develop contaminated sites were invited to seek advice. This was a body designed to offer a central source of technical advice and guidance to Local Authorities rather than them needing to contact a whole variety of different Government Departments.

(b) a Circular issued in 1985 [1/85]. Paragraph 59 reads:

"Land formerly used for industrial purposes or for waste disposal can be contaminated by substances that pose immediate or long-term hazards to health or which may damage any buildings on such sites. In these circumstances, appropriate conditions may be imposed in order to ensure that the development proposed for the land will not expose future users or occupiers of the site, or any buildings or services, to hazards associated with the contaminants present ......Development of contaminated sites for purposes such as housing, gardens, allotments or agriculture may be undesirable unless suitable work is first taken. Sites which are known to be contaminated by substances that are flammable or likely to attack building material, or which release toxic or explosive gases, will normally require remedial action before any form of construction is commenced."

(c) as to the advisory Guidance Notes issued by ICRCL, the Ombudsman noted that prior to 1987 its Guidance Notes were not issued or distributed generally but provided only to those who made inquiries. In August 1987 these Guidance Notes were circulated to all local authorities in England and Wales and accompanied the Department of the Environment's Circular 21/87 which was issued after outline planning permission had been granted in this case. The Ombudsman noted that

"In general, this Circular is considered as a turning point in local planning authorities' awareness of the issues surrounding the development of contaminated land."

The Circular stated that contamination was a planning consideration which should be taken account of, but that responsibility for assessing the suitability of a site rested primarily upon the developer. The Circular identified the risk of landfill gas being emitted from these sites and which "may be particularly hazardous". The Circular went on to provide that

"Detailed professional advice on the specific problems of individual sites can be obtained from specialist consultants with appropriate experience. The ICRCL may be able to assist in defining the needs for and terms of reference of investigations carried out to determine the nature and significance of the contamination on such sites."

(d) Had the Guidance Notes been more widely circulated, the Local Authority in this case would have received that issued in May 1983 where the ICRCL state that whenever it is proposed to develop sites which have been used for industrial purposes or waster disposal "the possibility of its being contaminated must be considered" and the aim should "always be to check whether a site is contaminated before deciding on the form of development." "Flammable gases, eg methane, may be produced on sites formerly used for the disposal of domestic waste or other putrescible materials. These gases may migrate laterally or vertically for considerable distances. If they accumulate in a confined space beneath, or within, buildings, there may be a significant risk of explosion."

(d) The ICRCL guidance notes accompanying this Circular included "Notes on the Redevelopment of Landfill Sites". This document said that landfill sites were generally unsuitable for `hard' forms of development `unless appropriate remedial treatment' was carried out before construction started.

(e) It seems reasonable to assume that this 1987 Circular and the general circulation of ICRCL's guidance notes were prompted by an accident in 1986 which led to a public inquiry. A bungalow in Derbyshire was destroyed by an explosion in March, 1986. It had been constructed on a landfill site which had been operated as such for about 9 years. The cause of the explosion was identified as the ignition of methane gas which had migrated from the landfill site. The Inquiry looked at the state of knowledge of the risks of methane gas and its migration on a landfill site and concluded:

"With the exception of information derived from the report produced by the County Surveyors Society in 1982, it appears that those in possession of that knowledge took until the summer of 1986 to share it with those who needed to know. We were told that even as recently as the beginning of April 1986 enquiries by the County Council of the Department of the Environment following the explosion could identify no general body of knowledge on problems of landfill gas within the Department. On an aspect of waste management as important as this we were surprised that the Department was apparently not in a position to advise authorities when approached."

Facts relating to the site:

6. In paragraph 9 of his report, the Ombudsman summarised what he believed the factual background relating to the site, prior to its development. He noted that the County Council became aware in 1978 that the land was being tipped and that tipping had gone on without a licence for several years before that. A tipping licence was granted in 1979 and tipping ceased in the middle of 1980.

"There is no evidence that consent was expressly granted by either the Borough Council or the County Council for the use of any part of the land for the disposal of organic, chemical or domestic waste. Part of the land continued to be used for light engineering, woodworking and as a scrapyard with vehicle breaking whilst the landfill site was in operation. Authorised tipping ceased in June 1980. I have been unable to establish whether the Council was aware that unauthorised tipping on the site was taking place or if it did, that this might have included domestic waste. The only contemporaneous information I have obtained concerning this is a statement by the Council's Environmental Health Department when commenting on the planning application in 1978 for a waste disposal licence that it had been known, on occasions for domestic refuse to be blown from the tip into the gardens of nearby residents."

7. In 1987, engineers from the developers contacted the Environmental Health Department about testing the land. They found methane which was confirmed by a scientific officer for the County Council at a level of "1.6% methane (dodgy?) as 1/3 of lower explosive limit". Following a soil survey in 1988, the London Polytechnic concluded that there were low levels of methane on the site and that they were entirely due to natural occurrences. A former resident of a property on the site, complained that the houses had been built on a site which had for years been used for household and toxic factory waste. Back in the 1980s he wrote to the Council indicating that he had no objection to the development. In 1992, when part of the whole site was as yet undeveloped, boreholes were sunk and in 16 out of the 47 showed significant levels of methane gas, of which ten exceeded the lower explosive limit. There were discussions and meetings. In 1994, the Council instructed their own Consultants to carry out a desk study and initial landfill gas survey. And in that year, for the first time, the residents were informed that methane had been detected. Eventually, work was carried out to the Council's satisfaction, including the building of a venting trench and the removal of made-up ground and the re-filling of it with inert material. Mr Doy had successfully submitted to the District Valuer that his property should be reduced in banding for Council Tax purposes.

The planning application in 1986

8. The outline application showed that the development proposals were for a significant proportion of the houses to be erected on land previously used for tipping and industrial purposes with the remainder on land used as a market garden or for agriculture. This proposal received the support of the Council's officers who informed members that the eastern half of the site contained a mix of land uses including a substantial area of derelict land which was formerly a refuse tip. The advantage of the proposal was that these existing uses would be brought to an end; the area would be rid of an area which had been used for tipping and which remained in a "messy semi derelict state." Although, there was a section 52 agreement which called for the removal of rubbish and scrap metal on the surface of the development site, the Council did not require the developers or applicants for permission to carry out any investigation to see whether the site was suitable for development having regard to its previous uses.

Awareness of landfill gas as a material planning consideration in 1986

9. From inquiries pursued within the planning department, the Ombudsman discovered that none of the planning officers was aware of the ICRCL guidance notes.

10. From inquiries within the DETR it emerged that there was no recognised definition of contaminated land in 1986, and apart from Circular 1/85, the first specific guidance to planning officers was the 1987 Circular. From inquiries of Consultants who had investigated the site after the methane had been discovered, it was considered that the fundamental responsibility for ensuring that land was safe to build on lay with the developer but the developer was of the view that knowledge of the previous uses of the site was vital in assessing its suitability and that at no time had the Council made them aware that there could have been unauthorised tipping at the site. From other authorities who were contacted, it appeared that no planning permission before December 1986 had been subject to conditions aimed at reducing dangers from methane gas, although permission to develop a former chemical works was subject to a condition that a soil survey be carried out.

The issues before the Ombudsman

11. The Ombudsman identified three main questions:

(a) Was there maladministration in the way outline planning consent was dealt with in 1986?

(b) Did the Council fail adequately to discharge their building control and environmental duties to protect those who were living in houses built on the estate?

(c) Were the local authority searches made improperly responded to by the Council?

12. Of the three questions asked, the first is the most crucial for the purposes of these proceedings. The reasoning of the Ombudsman is contained in paragraphs 74 - 93 inclusive. I simply set out a summary of what he says in paragraphs up to paragraph 89, and, thereafter set out the paragraphs in full.

(1) "Methane is generated by the decomposition of organic material, and the association of methane with landfill sites or refuse tips had been known for some years before the outline application was considered by the Council. This site had a history of mixed uses on various parts of it but one of those, going back many years, had been for tipping, using old gravel pits and nearby land. Yet when the planning application was submitted to the Committee, although the tipping was referred to in the officers' report, the methane-generating possibilities of the former use were not referred to......

On the face of it, this appears to be a failure by the Council."

(2) In relation to material planning considerations in 1986, Governmental guidance was sparse. ICRCL advice in 1983 did not appear to have been widely disseminated or assimilated by Local Authorities, in general, or this Council in particular. "...I do not conclude that it was maladministration for the Council not to have been better informed about ICRCL guidance than the generality of local Government at the time."

(3) Circular 1/85 certainly should have been assimilated because it provided general guidance in planning conditions. Within the Council's knowledge were the Building Regulations of 1985 which alerted Councils to the dangers caused to health by ground contaminants which were likely to be found in sites that had previously been used for waste disposal or scrap yards.

(4) "Evidence from planners, civil servants, professionals and the journals of professional bodies is ...largely consensual that the awareness of decision-makers and those who had to advise them was not particularly high about the dangers of landfill methane. Despite Circular 1/85, the earliest example of relevant conditions being attached to the development of landfill sites that I have seen was nine months after this application was approved by the Council..... Circular 21/87 is generally considered to be a turning point in local government awareness of the dangers of developing contaminated land."

(5) "The Council knew that a significant part of the site to be used for housing was a mixed industrial area, including a brass foundry and a car breaker's scrapyard. The Council knew that these industrial uses were currently active because they had given the Council trouble as a source of neighbour nuisance for some years."

(6) Although the part of the site tpped represented about 10% of the whole, it represented a higher proportion of the land developed for housing since part of the developed site was open space. Tipping had ceased in 1980 and the waste licence issued was confined to non-organic material " and these conditions were designed to reflect what was known to have been recently tipped without authority on the site."

(7) However, the Council knew that before 1978 domestic refuse had been tipped without authorisation as neighbours had complained. This information was held by the Council's Environmental Health department. "...there is no evidence that Environmental Health was specifically asked for comments on the outline application. .... "On balance, I conclude that it [the Environmental Health Department] was aware of the application but chose not to comment."

(8) The County Council said nothing about the dangers of developing formerly tipped ground.

(9) The developers who bought a large part of the site in February 1987 could not have been aware "in advance of all the problems that were later to materialise at the site. Then, two years later, the remainder of the site was (being) sold to another firm of national house-builders and they, too, failed to recognise - well after the ... explosion [in Derbyshire] and Circular 21/87 and a host of other guidance - that this was a contaminated site which would involve them in considerable trouble."

"89. This, I think, is the crucial point. For the Council was in exactly the same position. Neither its planners nor its Environmental Health Department nor, it appears, at least at the stage of the outline planning application, its Building Control Department recognised this site as potentially contaminated at all. The Council knew it was a mess, and sought to have the surface of the site cleaned up through the Section 52 Agreement. But it did not connect the previous tipping - by then six years past and with a recent history of inert material only being permitted to be tipped there - with a propensity to generate methane. And it did not connect the other industrial users on part of the site with contamination that could have presented a problem during the development process. Was it maladministration not to do so?

90. In reaching a firm view on this point I have in effect to reconstruct events now over 13 years old, where the documentary record is unsurprisingly incomplete and when memories are dim or unobtainable. It seems to me that an authority at the cutting edge of planning practice in 1986 and fully alive to the emerging issues of the day might have identified that this site had the potential for generating methane, and so concluded that this was an application that should have been handled with caution. But I cannot judge the Council's performance against some counsel of perfection constructed in hindsight and, if it fails to come up to it, condemn it accordingly. Neither can I conclude that even a failure to adhere to good practice necessarily equates with maladministration. It would be harsh, in my view, to criticise as maladministration the failure to spot at that time something that none of the other very significant players in these events apparently viewed with alarm, even two or three years after the Council's decision to grant outline permission. Here, given the state of knowledge of contemporary planning authorities, the history of the site (especially its licence for tipping only inorganic waste with tipping ending some six years before), and the response to consultation on the application, I do not believe that the failure, at that point in time, to address the full implications of building on this site, at least in respect of methane, amounted to maladministration.

91. I do not, however, take a similar view of the Council's consideration of the implications of building houses on the industrial land. Here it knew what was going on at the site, because it had been attempting to ameliorate conditions there for neighbours for some years and because the uses were ongoing. While I can understand why the methane-generating possibilities of the site were not identified, I find it hard to accept that contaminants from industrial land were not given more attention by the Council's planners at the time, advised as they should have been by Environmental Health. Had the planners been so aware, then guidance in Circular 1/85 was clear: appropriate conditions might reasonably have been applied to any grant of permission to ensure that eventual occupiers of the buildings were not exposed to hazards from any contaminants present in the land; or the matter could have been included in a Section 52 Agreement. I think it highly unlikely that permission would have been refused for this reason alone, because clearly the Council wished to secure the opportunity to change the use of a site (or part of it) that had long been a problem. But I conclude that the failure to safeguard against the hazards of building on former industrial land by attaching appropriate conditions (in accordance with Circular 1/85) to the outline planning permission granted in December 1986, or to secure similar objectives by means of the Section 52 Agreement, was maladministration.

92. Whar injustice did this failure cause the complainants? I consider that the best that could have been achieved was that a condition would have been imposed (or the Agreement amended) to require the developer to survey the site and propose a method to remedy any contamination found, such method to be agreed with the planning authority. In fact, of course, such surveys were carried out. I have no reason to believe, given the state of knowledge within local authorities at the time, and given that most of the early surveys were commissioned by a national house-builder in whose interest it was to get things right, that the Council would have had cause to question the adequacy or sufficiency of the surveys carried out, or the remedies proposed for the contaminants found. Those contaminants included, from March 1987, organic material generating methane, sometimes at levels considered to be naturally occurring; and it seems eminently feasible that methane migration and build-up at various points of the site could have changed over time and may not have been uncovered by these early surveys. Other contaminants were also identified, including cadmium and lead. Consulting engineers variously recommended `dynamic compaction' or removal of material. All those recommendations seem to have been implemented. Again I see no reason to doubt, had the Council been made fully aware of these reports - which, without the maladministration I have identified, it should have been - that it would have declared itself satisfied by the remedial action proposed, and so considered the condition or Agreement complied with.

93. On balance, I cannot safely conclude that, had the maladministration I have identified not occured, there would have been any significant alteration in the course of events which eventually unfolded. On that basis I believe the complainants suffered no injustice from the maladministration I have identified".

The Parties' Submissions

13. In a conspicuously able argument, Mr David Wolfe submitted that the Ombudsman had misdirected himself as to the meaning of the word "maladministration" and how such was to be judged. In R v Local Commissioner for Administration for the North and East Area of England ex parte Bradford Metropolitan City Council [1979] QB 287, at 311 Lord Denning said that the proper construction of that word was undoubtedly a question of law and covered: "bias, neglect, inattention, delay, incompetence, ineptitude, perversity, turpitude, arbitrariness and so on" and Eveleigh LJ said, at page 314,

"Maladministration according to the Shorter Oxford English Dictionary means "faulty administration" or "inefficient or improper management of affairs, esp. Public affairs". The section therefore makes provision for investigation where a person claims to have sustained injustice as a result of inefficient or improper administration."

14. He submitted that the Ombudsman should have asked at every stage of his inquiry whether the Council's ignorance of, for example, ICRCL guidance was due to inattention, incompetence or ineptitude rather than by asking what other Local Authorities knew or did. The fact that there were other authorities who were as inept as this Council was not relevant or helpful when seeking an answer to the true question of incompetence. By asking the wrong question, the Ombudsman was applying a negligence test rather than himself setting the standards of competence to be expected from Local Authorities. The ICRCL guidance was clear, and directory in tone, and the Council would have been incompetent in their handling of the outline application had they been aware of it. It was no excuse for them to plead ignorance.

15. For the Ombudsman, Mr Ash QC submitted that Mr Doy was simply trying to re-run arguments which he had put to the Ombudsman and which he had considered carefully and exhaustively. The essential question was whether the Council had been guilty of maladministration given the level of knowledge of methane problems in landfill sites. It was entirely correct to look at the question without the benefit of hindsight. It would have been unfair and a misdirection had the Ombudsman looked at the case with 1999 eyes. It is obvious that what might be maladministration in 1999 might not be had the acts been done 15 years before. Standards change, as does scientific knowledge. If the council were not culpable for being unaware of the guidance, they could not be regarded as culpable for failing to act on it.

Decision

16. The principles of law that must be applied are well known and clear. In essence, the Ombudsman and not the court is the arbiter of what constitutes maladministration. The court's supervisory role is there to ensure that he as acted properly and lawfully. However much the court may disagree with the ultimate conclusion, it must not usurp the Ombudsman's statutory function. It is likely to be very rare that the court will feel able to conclude that the Ombudsman's conclusions are perverse, if only because he must make a qualitative judgment based upon his [his department's] wide experience of having to put mistaken administration onto one side of the line or the other. I have to say that in this case I would not have made the same judgment as the Ombudsman; but I am not asked to make any personal judgment and the real question is whether any reasonable Ombudsman was entitled to hold the view expressed in this careful report.

17. I can well understand Mr Doy's concerns about the Ombudsman's report. In a nutshell, the Ombudsman rejected the complaint relating to the refuse tip and methane, but accepted the complaint in relation to potential contaminants from the industrial land, but concluded that no injustice was suffered as a result.

18. He is right to say that there was material available and in the public domain to which this Council would have had access had it been more inquiring. In particular there were ICRCL guidance notes which were there for the asking and which, since 1983, at least, would have alerted the Council had they known of it and which would have required them to consider the possibility of contaminants by carrying out an investigation against a background that many of the materials on a landfill site are potentially combustible. As I read the report, the crucial question was whether it was properly to be described as incompetent that the Council were unaware of this guidance. It seems to me that one cannot get away from the fact that that question depends upon how the guidance was circulated and publicised. It was also relevant to ask what the state of play was with other authorities in order to check whether other authorities, although not circulated with them, had nonetheless been aware of them and had acted accordingly. I do not read the careful decision of the Ombudsman as `abdicating' responsibility for setting standards; on the contrary, I think he approached with care the standard of competence that he ought to apply and consulted widely and appropriately about it.

19. Looking back, with the benefit of hindsight, it may seem to most people that the Council overlooked what was staring them in the face. They knew about the refuse tip, though not its extent; on the other hand the methane tests done shortly after permission had been granted did not indicate a serious problem. No other authority had by that time imposed any planning conditions in connection with the gas potential of landfill sites. The truth is that Central Government encouraged the development of landfill sites before the methane problems had been recognised and it was only later, after the disaster in Derbyshire, that positive steps were taken to assess and avoid the potential problems. All this happened too late for Mr Doy and those others who are in the same position as him. In many senses, Mr Doy can complain that the law has not served him well. But I cannot make or bend the law to achieve a result that I think would repair the damage he has sustained.

20. I have concentrated only on the principal planks of Mr Wolfe's argument. The misdirection and perversity arguments fail and with reluctance, I must dismiss this application.

MR JUSTICE MORISON: For the reasons given in a written judgment, copies of which are available, I dismiss this application. But, as I indicate in the judgment, I do so with reluctance because I recognise the position that Mr Doy has found himself in, through no fault of his own, which I know has been troubling to him.

MR STRACHAN: I am grateful, my Lord. I appear on behalf of the defendant today for Mr Ash and Mr Corner. My Lord, could I just raise one or two matters in respect of judgment, if it is helpful to do that?

MR JUSTICE MORISON: Well, I think you can send them to me in writing. If there are typographical errors, which I am sure there will be, as other people in court will probably know, I regard myself as the world's most expensive typist but not always the world's best. I recognise that there are bound to be errors and so forth. If you have any points of substance----

MR STRACHAN: No, my Lord, they are simply typographical errors.

MR JUSTICE MORISON: Why do you two not, if you have the time, jointly produce a sheet for me and I will correct them all.

MR STRACHAN: I am grateful, my Lord.

MR JUSTICE MORISON: Thank you very much.

MR STRACHAN: My Lord, I do apply for the defendant's costs in this matter and, subject to what my learned friend says, I rely on the normal rule that costs should follow the event.

MR WOLFE: Well, my Lord, I do not think I can resist the absolute principle of that. What I do invite your Lordship to do is to consider extending your Lordship's discretion to order effectively a proportion of costs on a particular basis. My Lord will be familiar with the very wide discretion in the courts under CPR Part 44 to do that. I do so, in the sense, on this basis, my Lord. Firstly, your Lordship has quite rightly indicated your Lordship's reluctance. Your Lordship is fully aware not only of a background to Mr Doy bringing this but to the enormous personal detriment he has suffered both in the original action but also through bringing these proceedings, and your Lordship has seen how he has conducted himself entirely reasonably at every stage.

MR JUSTICE MORISON: Yes.

MR WOLFE: My Lord, also he has, as your Lordship has seen, financial losses in terms of his property which, as your Lordship points in the judgment, are unrecoverable by him in any other legal way. So this has been his remedy. So he has not had perhaps a tortious action that might otherwise have been available to him for reasons that your Lordship has canvassed already.

MR JUSTICE MORISON: Yes.

MR WOLFE: My Lord, I leave it to your Lordship's discretion as to how to approach it, but I make one observation about the other side's costs, or the other side's approach to litigation, which is this - and their conduct is a factor for your Lordship's discretion - the ombudsman chose and is entirely free to choose to be represented by a very senior Queen's Counsel and a junior of some 20 years. Now that is clearly - not clearly today, my Lord, but before your Lordship previously - a matter he is entitled to do. But, my Lord, in my submission, not perhaps at Mr Doy's expense.

So, my Lord, I ask your Lordship either to make an award of costs at some reduced proportion or, alternatively, perhaps, and/or on the basis that there should not be fees for both counsel on that basis.

MR JUSTICE MORISON: Mr Wolfe, for the reasons which I averted to my in my judgment, I certainly do not regard there as being inequality of arms in this case in terms of representation because of the way that you conducted yourself. But what I do think is that this might not be an appropriate case for any taxation to cover the costs of a Queen's Counsel and a junior. If I were to make an order for costs, without prying into personal circumstances, and you obviously do not need to answer this question, is there anything that I ought to be told about Mr Doy's own financial position?

MR WOLFE: My Lord, can I just take instructions upon that matter very briefly?

MR JUSTICE MORISON: Yes.

MR WOLFE: My Lord, the position is that Mr Doy, as your Lordship knows, is retired. In terms of the loss of value on his property, your Lordship has seen the valuation from the district valuer which gave a reduction of £150,000.

My Lord, in terms of the cost of this litigation, Mr Doy at an early stage consulted with the defendant to find out what their likely costs were to be in the event that he lost, with a view to taking out insurance cover. He was given a figure at that stage of £18,000 as being the other side's likely costs. He obtained cover at that level. Then, very close to the hearing, a revised estimate of the other side's costs were obtained which was much more substantial. He sought to cover the larger figure, but he has not been able to cover the whole of the larger figure. The larger figure is likely to be a pretaxation figure. But the premium, in the sense of his insurance premium, is something around £12,000. So his exposure, if you like, is the £12,000 premium plus the difference between the level of his cover and the other side's taxed fees.

So, in the event of - I suspect the position is this - taxation and your Lordship making a reduced order, his exposure is likely to be at a level of the premium plus.

MR JUSTICE MORISON: Would I be entitled to know what his insurance cover is?

MR WOLFE: My Lord, the figures that I have given you so far are clearly for the other sides's costs only.

MR JUSTICE MORISON: Surely.

MR WOLFE: His total cover, in other words his own costs and the other side's costs, is £41,000.

MR JUSTICE MORISON: What I am getting at, Mr Wolfe, as you probably have detected, is that if I were to make an order for costs I could impose a limit on the amount that should be recoverable against your client?

MR WOLFE: My Lord, yes.

MR JUSTICE MORISON: And that limit could be by reference to the amount that he has insured himself in relation to paying the other side.

MR WOLFE: My Lord, yes, the cover figure is the £41,000 I have given. My Lord, that covers, as I say, both sides' costs.

MR JUSTICE MORISON: I understand that. If I said, in round terms, I took a figure of £5,000 for your costs, which probably grossly underestimates the amount of time your solicitor has done and what you have done, that would be one way of doing it, or to find a figure of £35,000 which would be a £6,000 reduction but has some sort of roundness to it.

MR WOLFE: My Lord, that would leave Mr Doy with the insurance premium of £12,500/£13,000.

MR JUSTICE MORISON: That is correct, and any costs that he had to pay his side which was not included within the £6,000.

MR WOLFE: My Lord, could I canvass one variant on that which would be to order that an approach like that, or on the basis of not having a Silk and a leading junior, whichever is the lower?

MR JUSTICE MORISON: I think that becomes a very complicated order then. But I would be inclined to think that I could give an indication to -- I mean the costs will have to be assessed, will they not, subject to a detailed assessment. I think to some extent, I do not know to what extent, I can tie the hands of the assessor?

MR WOLFE: Your Lordship has a fairly wide discretion under CPR 44.3: proportion, amounts, and so on.

MR JUSTICE MORISON: Yes. So, I could say no allowance to be made for two counsel and that the amount that you should be required to pay after a detailed assessment should not exceed a particular sum?

MR WOLFE: My Lord, yes. My Lord, clearly I would wish to encourage your Lordship to set a lower sum given that Mr Doy is, in any event, going to be covering the insurance premium.

MR JUSTICE MORISON: I follow that. I think your solicitor may have been wanting to say something to you.

MR WOLFE: The breakdown my solicitor gave to the insurance company to get that £41,000 cover was £30,000 cover for the defendant's costs and £11,000 for our costs.

MR JUSTICE MORISON: I see, yes.

MR WOLFE: That was on the basis that they had given us a base of £32,000.

MR JUSTICE MORISON: Is that the only matter that I have to deal with?

MR WOLFE: My Lord, I have an application for permission to appeal, if your Lordship wants to deal with that now?

MR JUSTICE MORISON: Well----

MR WOLFE: Does that answer your Lordship's question?

MR JUSTICE MORISON: Yes, it does. Do you want to address me about that?

MR WOLFE: I can, my Lord. My Lord, I do not need to take your Lordship, I suspect, back to the real prospect test. I do so on two bases, my Lord. Your Lordship will recall that in a sense there were two themes to the ombudsman's report and two themes, therefore, to the challenge, one dealing with the maladministration finding and one dealing with the absence of injustice finding.

Your Lordship has found according to the maladministration finding and, reluctantly, dismissed my application on that. My Lord, I nonetheless say, in the light of your Lordship's reluctance, and I do not go into the detail, there is, in my submission, a real prospect of success on that. It is also, my Lord, in terms of the second limb of the permission test for the Court of Appeal a case where the wider interest, in my submission, would point to there being an appeal. This being a case which clearly goes to the way the ombudsman deals generally, more than generally, with a whole range of matters, whether he takes essentially an objective test of what is maladministration, or whether he looks to, as your Lordship put it, the general level of inept local authorities. That the maladministration----

MR JUSTICE MORISON: That is the crucial---

MR WOLFE: But, my Lord, also your Lordship will recall, it took a fair amount of time before your Lordship, the injustice element, looking, your Lordship will recall, perhaps in tedious detail, at the ICRI (?) guidance on surveys and surveys undertaken?

MR JUSTICE MORISON: That is right.

MR WOLFE: And playing through the chronology, and your Lordship had not, in my submission, dealt with that in any great detail at all. In my submission, Mr Doy should have the opportunity to canvass that matter before the Court of Appeal. It cannot again be said that he has no real prospect of success. Although clearly that is a matter which is specific to him, and I cannot argue that there is a wider public interest in that matter.

MR JUSTICE MORISON: I follow. Thank you. What do you say, Mr Strachan, about permission to appeal first of all?

MR STRACHAN: Well, my Lord, I put it very shortly. The terms of your Lordship's judgment are very clear in this case that your Lordship has reached the view that the Commissioner was entitled to the view he came to. My Lord, that really depends upon the facts of this case, and I simply submit to your Lordship that there is no reasonable prospect of a different result before the Court of Appeal and, on that basis, leave to appeal should be dismissed.

MR JUSTICE MORISON: Yes. What do you say as to costs, and if I told you what I had in mind then you can tell me what you would like to submit to me.

MR STRACHAN: Indeed.

MR JUSTICE MORISON: I have, as I think you will have detected, some considerable sympathy with Mr Doy's position that he finds himself in. I recognise the normal principle that he who wins gets his costs. I recognise also a principle that just because we are dealing with, if you like, an official who is paid out of public monies, it is inappropriate for the court to be careless in the orders it makes as to costs for that reason. I would not, of course, dream of doing that.

I think it is debatable as to whether two counsel were needed, and I would be minded to give a direction that they should assess the costs on the basis that only one counsel was appropriate. I think that might have the same effect as what I would also be inclined to do, which is to say that the costs, subject to the detailed assessment, should not, so far as Mr Doy is concerned, exceed £30,000, which is the figure that I have been told he has catered for. Would you like to take instructions?

MR STRACHAN: My Lord, could I just take instructions?

MR JUSTICE MORISON: Yes.

MR STRACHAN: My Lord, I have taken instructions. The position is, my Lord, that I do rely upon the normal principle which your Lordship has been through and, my Lord, I do request that there is no limitation in respect of two counsel. This was an important matter for the Commissioner and, my Lord, issues of importance were raised as to the way it fulfils its function and, indeed, that forms the basis of my learned friend's submission on appeal. My Lord, the Commissioner takes such challenges seriously and responded appropriately by taking advice from both leading and junior counsel and representations from them.

My Lord, in the circumstances, and given the complexity of the matter raised, and the importance of the issue raised, that was appropriate. My Lord, I understand that you are expressing reservations about two counsel but, my Lord, to some extent that is a matter which might more properly be dealt with in relation to assessment, at the assessment stage. What your Lordship does not have before you at the moment are the relative breakdown of costs attributable to the different counsel. It may well be, my Lord, that the person assessing the costs is able to come to a very sensible view looking at the work undertaken by each of those two counsel. My Lord, if you were to impose a limitation at this stage in relation to two counsel that might result in some artificial divide in relation to the work that has been undertaken.

So, my Lord, it is really a matter for detailed assessment and my learned friend is seeking to----

MR JUSTICE MORISON: What about the £30,000 point?

MR STRACHAN: My Lord, as regards the level of £30,000 my instructions are that, effectively, we are content with a limitation on £30,000. Could I indicate, my Lord, that I think my learned friend's objective may be achieved simply by the limitation of £30,000 rather than issues in relation to two counsel/one counsel.

MR JUSTICE MORISON: I think so, the less that he has to pay you I suppose the more he can pay his own side.

MR STRACHAN: Well, indeed, my Lord. But, my Lord, my submission is that would be, if your Lordship was minded to go down this route, the appropriate way to limit the costs.

MR JUSTICE MORISON: Mr Wolfe?

MR WOLFE: My Lord, yes, can I just deal with the two counsel point? Of course the ombudsman is entitled to turn up with two counsel. We cannot say anything about that. The question is where the costs of that lie and, in a sense, as is implicitly recognised, Mr Strachan puts the case for public interest in justifying two counsel which, in a sense, is my point on the appeal.

MR JUSTICE MORISON: Yes.

MR WOLFE: In terms of how your Lordship (..inaudible...) the taxation process. Clearly, if your Lordship makes an order cash limiting £30,000, that is elegant in simplicity but, my Lord, it is not, in my submission, unduly complicated by the second limb of your Lordship's contemplated order, nor does the point that my learned friend raise actually have any true anxiety because, in my submission, the taxing judge is not going to be troubled by an order that says "only one counsel" because, clearly, if one counsel does any particular piece of work then whichever of the two it was is entitled to be credited in the balance for that work.

The issue only comes at the point where they are duplicated. So if they advised jointly in consultation, or where they appeared before your Lordship jointly that is the point at which your Lordship's second limb would, of course, bite. So, the ombudsman would of course on the second limb be entitled to look for every piece of work to be covered but not for duplication. So I do encourage your Lordship to make the two-limbed order that your Lordship contemplated.

MR JUSTICE MORISON: Anything else, Mr Wolfe, you want to say about permission to appeal, or have you said it?

MR WOLFE: I think I have said it, my Lord.

MR JUSTICE MORISON: Thank you very much.

I refuse permission to appeal in this case because I am satisfied that any such appeal would stand no realistic prospect of success in the Court of Appeal, whether in relation to the main and potentially important issue of definition of maladministration, or in relation to what is effectively a perversity argument.

In relation to costs, I apply the general principle in this case that costs should follow the event, and I take no account of the fact that the Commissioner for Local Administration is paid out of public money. It is wrong for courts to waste public money by treating them differently from normal private litigants. Therefore, I make an order for costs against Mr Doy.

But there are two features about this case which are unusual. The first is that Mr Doy at the outset took sensible steps to find out what his potential risk in costs would be were he to proceed with his application and obtained insurance cover for the figure that he was then advised was the likely amount. That figure greatly increased from £18,000 to a much higher figure. He, therefore, sought to obtain increased insurance cover and eventually, for a premium of £12,000, he obtained cover worth £41,000, which covers not only his own costs but also any costs order that might be made against him. The second unusual feature is that this was a case where the ombudsman was represented by two senior and distinguished counsel, which no doubt is reflected in the amount of costs which the ombudsman will seek to recover from Mr Doy.

In relation to the second matter, I am satisfied that it would be inappropriate to require Mr Doy to pay the costs of two counsel. It seems to me that this was a matter, however important to the ombudsman, which could properly have been dealt with by one counsel. Therefore, I direct that on a detailed assessment no allowance should be made in the assessment for the cost of two counsel as opposed to just one.

Mr Wolfe has suggested to me that of the £41,000 insurance cover that Mr Doy has obtained, approximately £11,000 of it would be attributable to his own costs. Therefore, he asked me to limit effectively the amount of costs that can be recovered against Mr Doy to the figure of £30,000.

As I understand it, the ombudsman has no particular objection to limiting the amount of costs that he can recover to £30,000, but does so against the context that he strongly objects to the view which I have formed that I should direct the taxing officer to make no allowance for two counsel.

The order for costs that I make, therefore, is that the ombudsman should be entitled to his costs against Mr Doy. Those costs to be subject to a detailed assessment, and in the making of the assessment there be no allowance made for two counsel. Therefore, Mr Doy will not have to pay for two counsel. I direct that the amount overall that Mr Doy will be required to pay in relation to the ombudsman's costs, when they have been subject to a detailed assessment, is £30,000.

MR WOLFE: My Lord, I assume that is in respect of a limit of £30,000?

MR JUSTICE MORISON: Is that not what I said?

MR WOLFE: Quite.

MR JUSTICE MORISON: I did not quite, well it is plainly what I intended to.

MR STRACHAN: My Lord, I do need to ask your permission to appeal in respect of costs in the event of raising wider implications for the Commissioner.

MR JUSTICE MORISON: What, on the question of two counsel?

MR STRACHAN: Indeed, my Lord.

MR JUSTICE MORISON: Well, all right. Is there anything else you want to say in support of that?

MR STRACHAN: My Lord, simply that the issue is of some importance to way the Commissioner defends these types of cases.

MR WOLFE: My Lord----

MR JUSTICE MORISON: I do not need to trouble you, Mr Wolfe.

I have been asked for permission to appeal against that part of my order for costs which relates to two counsel. I regard that application as hopeless. It seems to me that any such appeal would stand no reasonable prospect of success. I have a general discretion in the matter. Just as I do not take into account against the Commissioner the fact that he is paid out of public funds, so also I take the view that just because he is paid out of public funds he is not entitled to the services of two counsel where only one would have done.

In my view, having regard to the issues in this case, one counsel would have been quite sufficient as it was for Mr Doy.

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