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England and Wales High Court (Administrative Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Administrative Court) Decisions >> Littlewood & Anor v Powys County Council [2015] EWHC 2125 (Admin) (23 July 2015)
URL: http://www.bailii.org/ew/cases/EWHC/Admin/2015/2125.html
Cite as: [2015] EWHC 2125 (Admin), [2015] WLR(D) 336
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QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Strand, London, WC2A 2LL |
||
B e f o r e :
____________________
| CHRISTIAN LITTLEWOOD and ANGIE LITTLEWOOD |
Claimants |
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| - and - |
||
| POWYS COUNTY COUNCIL |
Respondents |
____________________
Mr W. Robert Griffiths QC and Miss Nicola Strachan (instructed by Powys County Council) for the respondents
Hearing dates: 14th and 15th July 2015
____________________
Crown Copyright ©
- The single issue in this claim for judicial review may seem a narrow one, but it is regarded as very important by both parties. The Powys County Council (Powys) have recently become 'the lead enforcement authority' who exercise and discharge regulatory powers and duties throughout the United Kingdom in relation to estate agency work pursuant to the Estate Agents Act 1979, as amended (the Act). One such power is the power to make an order prohibiting a person from doing any estate agency work at all, or from doing estate agency work of a description specified in the order. Powys have devised and promulgated a process or procedure whereby this power will be exercised in two stages. The first stage is an investigation by an investigator. The second stage is a decision by an adjudicator. The Act provides that the person affected, being a person in respect of whom Powys propose to make such an order (as these claimants both are), may give notice that he wishes to make representations orally why the order should not be made, in which case Powys shall arrange for the oral representations to be heard. Each of these claimants has given such notice. Powys propose that the oral representations of the claimants will be heard directly, face to face, by the investigator, and that the adjudicator will not meet or see or hear directly from the claimants, but will be supplied with a tape or other audio recording and verbatim transcript of the oral representations. The claimants seek that they are permitted to make oral representations directly and face to face to the adjudicator. Powys contend that on its proper construction the Act does not require the adjudicator to hear oral representations face to face, and that their proposed procedure is permissible and lawful. Mr Jonathan Ashley-Norman, on behalf of the claimants, contends and submits that on its proper construction the Act requires that the oral representations are heard directly and face to face by the adjudicator, being the effective decision maker.
- So the issue is a short one. May the oral representations be heard by the investigator? or must they be heard directly and face to face by the adjudicator himself ?
- This case does not concern what has been referred to as a "sparse" or "minimalist" statutory regime under legislation from the Victorian era. It concerns precise and relatively detailed provisions of a relatively modern statute. In my view it turns upon pure statutory construction of the relevant parts of the Act.
- So far as is material, the Act as currently in force provides as follows:
- Three amendments since the Act was originally enacted are of relevance to this case and should be noted. First, the phrase and concept of the "lead enforcement authority", viz Powys, was substituted for references to the "Director General of Fair Trading", or the "Director", wherever they occurred, with effect from 1 April 2014. Second, the opening words of section 3(1)(a) as originally enacted were "has been convicted of". The words "has committed" were substituted with effect from 1 October 2008. So since that date the trigger fact under section 3(1)(a) is not limited to the fact of conviction (which is essentially established by a certificate or memorandum of conviction) but may extend to the fact that the person has committed, though not been convicted of, an offence mentioned in the following sub paragraphs (i) (iii). That may require a process of fact finding by the lead enforcement authority (viz the adjudicator) before the authority/adjudicator can be "satisfied" that the person has committed the offence. Third, in section 7, which provides for appeals, the appeal was originally to the "Secretary of State". References to the "First-tier Tribunal" were substituted for the "Secretary of State" with effect from 1 September 2009. On behalf of Powys, Mr Robert Griffiths QC and Miss Nicola Strachan place some emphasis and reliance upon the fact that the Act now provides for an appeal into the fully judicial tribunal system. When the Act, including Schedule 2, was first enacted, however, and for the next 30 years, the appeal lay to the Secretary of State.
- I stress, and in no way diminish or overlook, that the essential question is the construction of the Act as it was enacted in 1979, the relevant parts of which I have set out above. However it may illuminate how the issue has arisen, although it does not illuminate the task of construction, if I narrate the subsequent procedural history.
- Under the Act as enacted in 1979 the powers and duties now conferred and imposed upon Powys were conferred and imposed upon the Director General of Fair Trading, and he discharged them for over 30 years. They include the power to make prohibition orders under section 3 of the Act. No one requires to be qualified or licensed to do estate agency work (as defined in section 1 of the Act) and the starting point is that anyone can do it. But pursuant to section 3 of the Act, the Director General of Fair Trading was empowered to make an order under that section prohibiting an unfit person from doing any estate agency work at all, or estate agency work of a description specified in the order. The Act itself makes no provision for, nor any reference to, an "investigator" or an "adjudicator" and, indeed, apart from the provisions of Schedule 2 upon which this case focuses, makes very little reference to the decision making procedure or process. However the Office of Fair Trading (OFT) devised a procedure, which it and the Director General operated, in which there was an investigation stage by what they chose to call an investigator, and a decision making stage by what they chose to call an adjudicator, who effectively exercised the statutory power of the Director General to make a prohibition, or serious, but less severe, warning order.
- The most recent document published by the OFT descriptive of the procedure is that dated July 2003 and now at claimants' bundle, Tab 21, pages 254-259. As it is now obsolete and was in no sense whatsoever statutory material, it is sufficient merely to summarise its effect. It clearly stated in paragraph 1 that "It is the adjudicator who decides, on behalf of the OFT, whether to make the proposed order." So the adjudicator was (just as the adjudicator appointed by Powys now is) the actual decision maker. The document very clearly stated and described in paragraph 4 that if the person affected wanted to make oral representations, these would be made directly to the adjudicator at a hearing, where a lawyer and others could attend and speak; and it gave some detail as to making arrangements for the date and venue of the hearing and other matters. It is therefore quite clear that, under the procedure devised and operated for many years by the OFT, it was directly to, and face to face with, the actual decision making adjudicator that oral representations were made, including the giving (informally) of evidence by the person affected and any witnesses. Mr Ashley-Norman submits that that was what the Act required and still does require. On behalf of Powys, Mr Griffiths and Miss Strachan submit that that was merely the way in which the OFT and its Director General chose to operate the relevant parts of the Act, but that the Act did not, and does not, require that if the person affected wishes to make representations orally (which they agree he then has a right to do) such representations must be able to be made directly and face to face to the adjudicator.
- On and with effect from 1 April 2014 the relevant functions and powers and duties of the Director General of Fair Trading were statutorily transferred from him to Powys who had successfully bid for them in public competition. In the process there was substituted for all references to the Director General of Fair Trading in the Act a reference to "the lead enforcement authority" which, in turn, is now defined in section 33(1) of the Act as meaning in that Act Powys County Council. All counsel agree that for the purposes of this case and any consideration of the Act, the phrases "the lead enforcement authority" and "Powys County Council" are synonymous and interchangeable.
- The published Tender document, now at claimants' evidence bundle, Tab 11, pages 123-137, indicates that annual funding would be available to the successful tenderer at the rate of £178,000 annually for three years (with additional money in 2013 and 2014) but that the functions did not appear very burdensome. At internal pages 13 and 14 of the Tender document, now bundle pages 135 and 136, the OFT indicated that they had two investigators, one adjudicator, one senior adjudicator and various legal, managerial and administrative staff, all working very part time on this work and with a total full time equivalent of 2.05 people. Annexe B, at internal page 12, now bundle page 134, gave the numbers of prohibition and warning cases "taken" over each of the previous 6 years between 2007 and 2012, and the UK average is about 10 cases per annum, although none in 2011. (The Annexe is headed " over past 5 years" but clearly records 6.)
- It was, and is, clearly open to Powys to devise, promulgate, and operate their own process and procedure, provided only that it complies with the requirements of the Act and is otherwise lawful. Powys have done so. They have chosen to replicate the concepts and the titles of investigator and adjudicator. They currently have a list of five adjudicators. Although the statutory decision maker is the lead enforcement agency/Powys County Council itself, Powys clearly delegate the actual decision making in any given case to the adjudicator. That is very clear from a number of documents, and Mr Griffiths and Miss Strachan do not suggest otherwise. Powys have published a document dated 28.4.14 headed "National Trading Standards . The Estate Agency Act 1979 Notice of proposal your right to make representations", now at claimants' bundle, Tab 1, pages 95- 102. This clearly refers under paragraph 1 on internal page 2, bundle page 96, to " an adjudicator who will decide on behalf of Powys County Council whether the proposed order should be made." At paragraph 9 on internal page 5, bundle page 99, it states that "A record of the adjudicator's decision is entered " in the statutory register. A standard form document issued by Powys on 5 June 2014, now at claimants' bundle Tab 4, pages 124- 127, headed "Note in relation to hearings" clearly states in the first bullet point under the heading "After the hearing" on internal page 3, bundle page 126, that "It will be the Adjudicator alone who makes the decision about your case ". Finally, I have been supplied with two actual adjudications, each dated 12 February 2015, and each made by Ms Sue Bolter in the cases of Mohinder Basra and Yasmin Thomas. I have been told that although Powys have identified or appointed five adjudicators, Ms Bolter is the only one who has actually been asked to do any adjudications to date (since April 2014) and she has done about 11 so far. Her documents begin "I hereby make a prohibition order under section 3 of the Estate Agents Act 1979 in respect of " and contain a repeated final sentence to the same effect and using the first person singular.
- The two documents published by Powys dated 28.4.14 and 5 June 2014, to which I have recently referred, both make quite clear that if the person affected asks, as he is entitled by the Act to do, to make oral representations at a hearing, then that hearing will be before the investigator. The document dated 5 June 2014 continues on internal page 2, bundle page 125, under the heading "At the hearing" and in the second and third bullet points:
- Under the heading "After the hearing" on internal page 3, bundle page 126, the document continues:
- The case along with your representation and any evidence provided will be passed to the Adjudicator. It will be the Adjudicator alone who makes the decision about your case he or she will not be influenced by anyone else. In particular, the Adjudicator has not been involved in the investigation of the matters giving rise to the hearing, and has not seen any information about the investigation other than that which has been sent to you with the Notice. If further information is required by the Adjudicator they will write to you to request this. If, at any stage, further information should come to the attention of the Adjudicator then it will be sent to you and you will have the opportunity to make further representations about it."
- Pausing there, there is no reference in that published document to the actual tape or other recording of the "hearing" before the investigator being supplied to, or listened to by, the adjudicator. The document describes the purpose of recording the whole hearing as being "to assist the clerk in [the] task" of "[taking] a written note of the hearing". The document does say more generally that "The case along with your representation and any evidence provided" will be passed to the adjudicator.
- Mr Ashley-Norman was retained at an early stage by the claimants on a direct access basis to assist them, and represent them in relation to the whole section 3 prohibition process. Early in 2015 he engaged in written and email communication with Powys to which it is not necessary to make any detailed reference. Essentially, he challenged the lawfulness of the investigator rather than the adjudicator hearing, directly and face to face, the oral representations. Certain other issues were raised as to the identity and independence of the adjudicator which are irrelevant to this judicial review and judgment.
- In the upshot, Mr Robert Brown, the in-house solicitor for the National Trading Standards Estate Agents Team at Powys, wrote a letter to Mr Ashley-Norman dated 11 March 2015 and now at claimants' bundle, Tab 8, pages 134-136. In that letter Mr Brown deals with certain points previously made by Mr Ashley-Norman in a pre action protocol letter and, in effect, describes how Powys propose to handle the claimants' cases. Since that letter moves beyond what is stated in the above published documents, it represents, in effect, the position and decision letter of Powys upon which they now take their stand. Mr Brown says, amongst other matters, the following:
- Pausing there, two important matters emerge from those passages of that letter. First, the stress and emphasis upon maintaining the independence of the adjudicator, who may be "external" but may also be "internal" to Powys, as, for instance, Ms Sue Bolter is, being their Head of Regeneration Property and Commissioning. It is because of their laudable desire to maintain a "Chinese wall" between the investigation and adjudication stages that Powys are so insistent that the oral representations should be heard directly and face to face by the investigator and not by the adjudicator. Second, the letter makes plain (as I unhesitatingly accept) that notwithstanding the language of the document dated 5 June 2014, quoted above, the "full recording" of the oral representations will be listened to in full by the adjudicator. In this way, in the contention of Powys and Mr Brown, and now of Mr Griffiths and Miss Strachan, the representations and any evidence ("witnesses") will be fully "heard" by the adjudicator.
- It is not necessary to make more than brief reference to the facts and chronology of the present case. The claimants are a husband and wife who are estate agents, trading through a limited company. In October 2010 they both pleaded guilty to certain offences of insider dealing. The husband was sentenced to 3 years and 4 months' actual imprisonment. The wife was sentenced to 12 months' imprisonment, suspended for 2 years. A large confiscation order was made, which has been paid in full. These facts clearly fall within the trigger in section 3(1)(a) of the Act. As a result, in December 2014 Powys served notices upon each claimant pursuant to paragraph 2(1) of Schedule 2 to the Act informing them of their proposal to make prohibition orders under section 3. The claimants, advised and represented by Mr Ashley-Norman, each gave notice pursuant to paragraph 2(3)(b) of Schedule 2 that they wished to make representations orally as well as in writing. The dispute then ensued as to whether these representations will be heard directly and face to face by the investigator, as Powys maintain is permissible and lawful; or by the adjudicator, as the claimants and Mr Ashley-Norman assert that Schedule 2 to the Act requires. There have been other disputes or skirmishes between the claimants and Powys to which I need not refer. As I understand it, the claimants of course admit their convictions. They wish to adduce evidence and arguments to the effect that those convictions are now in the past and do not impact upon their fitness now to carry on their current business by their current business model which, they say, does not involve holding any clients' funds.
- The core argument of Mr Ashley-Norman is that, Powys having structured their procedure into an investigation stage by an investigator, and an adjudication stage by an adjudicator (a dichotomy which he does not challenge), the Act, and in particular Schedule 2, require that it is the adjudicator who hears their oral representations directly and face to face. He bases that argument upon construction of the Act itself, which I will later address.
- In his pleadings and his written skeleton argument dated 30 June 2015, Mr Ashley-Norman does rely additionally or alternatively on "common law rules" as to fairness, and/or upon rights under the European Convention on Human Rights. I have not permitted him to develop these additional or alternative arguments. As I have already observed, the legislation in point is topic specific, precise and relatively detailed. If it requires a direct, face to face hearing by the adjudicator, being the effective decision maker, then that is dispositive of this claim. If it does not, then I am not prepared to by-pass or sideline such specific and relatively detailed legislation by resort to other sources of law. Parliament having legislated in detail, the will and intention of Parliament should be determinative. The question for me is to ascertain what that will and intention is. As it was put by the Divisional Court whilst considering the Burials Act 1857 in the case of Plantaganet Alliance Ltd v Secretary of State for Justice etc. etc [2014] EWHC 1662 Admin at paragraph 89:
- On behalf of Powys, Mr Griffiths and Miss Strachan equally root their argument in construction of the Act. They also strongly emphasise the context. They stress the "general duties" on Powys under section 25 of the Act "generally to superintend the working and enforcement of this Act"; and their duty under section 25 (2) to keep under review and advise the Secretary of State about relevant developments and the working and enforcement of the Act, having regard "both to the national interest and the interests of persons engaged in estate agency work and of consumers". They submit and I agree that all these duties are paradigm examples of administrative functions. Their over arching submission is that the claim of the claimants and the case of Mr Ashley-Norman amounts to an impermissible "attempt to judicialise a regulatory procedure". (See paragraph 9 of the Detailed Grounds for contesting the claim).
- Mr Griffiths submitted that the process is not "adversarial". No evidence is orally presented against the persons affected and there is no cross examination of anyone, although questions may be asked in clarification. Mr Ashley-Norman countered that by saying that from the perspective of his clients it certainly feels very adversarial, and he emphasised the contents and language of the "Notice of proposal to make a prohibition order " first sent to each claimant in December 2014. These include at paragraphs 22-25 what Powys County Council "contend", namely that the offences and also other matters "demonstrate there would be significant risk to consumers if you were allowed to carry on estate agency work " Mr Ashley-Norman submits that although the general functions of Powys under the Act may be administrative in character, the process when a notice of proposal to make a prohibition order is served then becomes clearly adversarial. Powys make their contentions. The person affected then has to deny, explain, justify or otherwise defend them.
- In my view this somewhat semantic dispute whether or not the process is "adversarial" is arid and not relevant to outcome in this case. The process is certainly inquisitorial in that Powys have to investigate and reach conclusions as to facts, including the fact of unfitness, and then make a discretionary decision which involves an exercise of judgment, since section 3 (2) employs the words "may make an order".
- Mr Griffiths and Miss Strachan rightly stress that under the Act the person or body charged and empowered with making the decision and making the order under section 3 was the Director General and is now Powys. They cite the long stream of authority to the effect that an administrative decision maker is entitled to make a decision without himself seeing the person affected. A Chief Constable may dismiss an officer on the basis of written material provided to him. A Director of Social Services routinely makes profound decisions as to families on the basis of documents, without personally meeting anyone. They cite passages from Local Government Board v Arlidge. In that case in the Court of Appeal, at [1914] KB 160, Vaughan Williams LJ at page 180 and Hamilton LJ at pages 191 193 made very clear (and this part was not reversed on appeal) that there was no right in the administrative context "to see the judge [viz the decision maker] face to face or to address him viva voce." In the same case in the House of Lords, at [1915] 1 AC 120 at page 132, Viscount Haldane LC sharply distinguished between "administration" and "the exercise of judicial functions"; and continued that when a body such as the Local Government Board has the duty of enforcing obligations of the individual which are imposed in the interests of the community, "Parliament must be taken in the absence of any declaration to the contrary to have intended it to follow the procedure which is its own, and is necessary, if it is to be capable of doing its work efficiently."
- Mr Griffiths and Miss Strachan submit, therefore, that although the Act affords the right, if requested, to make representations orally, it would be counter to a long stream of authority to be prescriptive as to the actual person to whom these representations are made face to face, and that the procedure of Powys is "its own", unless Parliament has expressly otherwise provided.
- Mr Griffiths and Miss Strachan cite, too, observations of Lord Clyde in R (Alconbury) v Secretary of State for the Environment [2003] 2 AC 295 in which he said at page 343H that although "Members of the administration may be required in some of their functions to act in a judicial manner . they are not judges and their determinations on matters affecting civil rights and obligations are not to be seen as judicial decisions . the eventual decision is an administrative one."
- I bear these and all the other passages cited at length in the written Skeleton Argument of Mr Griffiths and Miss Strachan dated 7 July 2015 firmly in mind. I strongly caution myself against viewing this case from the perspective of a judge, or of the court based arena in which I daily work, and against the error or heresy of "judicialising a regulatory procedure".
- The power to make an order under section 3 is conferred upon "the lead enforcement authority", viz Powys. But whilst Mr Griffiths is correct to stress that the statutory decision making person or body was the Director General and is now the Powys County Council, Parliament is unlikely to have contemplated or intended that the Director General personally would have made the decision in every case, still less that the Powys County Council in plenary session of its councillors would now do so. In other words, Parliament must, when enacting Schedule 2, have contemplated and intended that decisions would actually be taken by officers, or staff or other persons, whom I will call the effective decision maker. The Act makes no express provision at all for a dichotomy between investigation and adjudication, and no provision for an investigator or an adjudicator. This is merely the procedure and machinery devised or selected, first by the Director General and now by Powys "of its own". But it has the effect that the person whom Powys choose to call the adjudicator is the effective decision maker. Although the function is administrative and regulatory, the effective decision maker, viz the adjudicator, is clearly required "to act in a judicial manner" and certain qualities of a judicial kind are required of him. That is quite plain from sections 3 (1) and (2) which require the decision maker to be satisfied, first, that one of the trigger facts in section 3 (1) is made out; and second, that the person is unfit to carry on estate agency work, fitness being a question of fact. If so satisfied, he then has to make a discretionary decision, which involves making a judgment, that the person should be prohibited.
- The right of the person affected is, under paragraph 2 (3) (a) of Schedule 2, to submit "his representations in writing as to why the order should not be made"; and under paragraph 2 (3) (b) "to give notice to [Powys], if he thinks fit, that he wishes to make such representations orally."
- Pausing there, that sub paragraph which creates that right says nothing about "a hearing". The only right given by it is, as Mr Griffiths strongly submits, "to make such representations orally". So, submits Mr Griffiths, that is the extent of the right, and the extent of the duty upon Powys is, under paragraph 2 (3), to "arrange for the oral representations to be heard". The sub paragraph does not specify by whom.
- In my view, however, paragraphs 3 and 4 of Schedule 2, which are headed "Hearing of representations" clearly do contemplate a process or event which has the quality or hallmarks of a hearing, even if it is inquisitorial and not adversarial. The person affected must (unless he consents to a shorter period) be given at least 21 days' notice of the date, time and place at which his representations are to be heard. (Paragraph 3). By paragraph 4, "In the course of the hearing of oral representations" the person affected must be permitted to give evidence himself; any other person must be permitted to give evidence on his behalf; the person affected must be permitted to make representations; any other person must be permitted to make representations on his behalf; the person affected, or any other person, must be permitted to introduce documents for him.
- As I have already said, decision making under section 3 requires a three stage process. First, the decision maker must be satisfied that the person concerned has done or failed to do one of the trigger matters in section 3 (1) (a) (d). That clearly involves reaching a finding or conclusion of fact. Second, and next, the decision maker must be satisfied, as required by section 3 (2), that the person concerned is "unfit to carry on estate agency work generally or of a particular description". That clearly involves reaching a finding or conclusion of fact, whilst applying also an exercise of judgment. A person either is or is not "unfit", but fitness is not a hard-edged or black and white quality, so, at least in any marginal case, the decision maker has to exercise a judgment in deciding whether he is satisfied that the person is unfit. At that stage, however, the decision maker is not exercising a discretion. Third, and finally, and if so satisfied, the decision maker has to exercise an overall discretion in deciding whether or not to make a prohibition order and, if so, whether a blanket one under section 3 (2)(a) or a more specific one under section 3 (2) (b).
- At each stage of that process the content of the whole of "the hearing of oral representations" will, or may, be relevant. This includes the evidence (and Schedule 2 paragraphs 4 (1) and (2) each employ the word "evidence") of both the person affected and of any other person who gives evidence for him.
- It should further be noted that it is only in the context of "the hearing of oral representations" that Parliament has, by paragraph 4 of Schedule 2, made any express provision for "evidence", or evidence to be given by any other person, at all. In relation to the written process, paragraph 2 (3) (a) makes reference only to "his representations in writing" and paragraph 4 clearly indicates that Parliament distinguished between "representations" and "evidence", since the paragraph makes reference to each.
- When Parliament enacted paragraphs 2 4 of Schedule 2 it must have had a purpose in conferring the right for oral representations (which include the giving of evidence) to be heard and, indeed, apparently confining the adducing of evidence by any other person to a hearing of oral representations. That purpose can only have been, as it seems to me, because Parliament recognised or considered that there may be some advantage or benefit for the person affected, or some advantage to the reliability and quality of the ultimate decision making, from, if requested, representations being made and evidence being given orally. If there is no such advantage then, frankly, it is a pointless exercise. The observations of Vaughan Williams and Hamilton LJJ in Arlidge upon which Mr Griffiths and Miss Strachan place emphasis are, frankly, not in point. The issue in that case was whether there was any entitlement to a viva voce (their Lordships used the Latin) hearing at all. In this case, that cannot be an issue since Parliament has expressly so provided.
- The advantage perceived by Parliament in a hearing of oral representations, including evidence, can only be, as it seems to me, the perceived advantages which do or may ensue from the person who has to evaluate those representations and that evidence seeing and hearing directly from the person or persons making the representations and giving the evidence, and the opportunity for the person who has to evaluate the representations and evidence being able, if he wishes, to engage in some dialogue and/or ask questions, if only by way of clarification and not by way of cross examination.
- This view is fortified by the gravity of what the decision maker may have to decide. Quite apart from the overall gravity of the process to the person affected as well as to consumers and the national interest (the language of section 25), the fact finding stage may involve being satisfied as to serious matters. These included in section 3 (1) (b) of the Act as originally enacted, that the person concerned "has committed discrimination in the course of estate agency work". To reach a conclusion about that fact might require very careful evaluation indeed of evidence, including evidence given by or on behalf of the person affected at the hearing of oral representations.
- I simply cannot conceive that when Parliament enacted paragraphs 2 4 of Schedule 2 it can have contemplated, still less intended, that the hearing of the oral representations could take place before a different person than the person who was actually going to make the decisions as to the facts who, under the procedure devised of its own by Powys, is the adjudicator.
- (For the avoidance of misunderstanding, I here interpose that the position might be different if, under the procedure, one person made all the findings of fact and as to fitness, and another person made the third stage discretionary decision whether actually to make a prohibition order on the basis of the facts as already found. But that is not the procedure that Powys have devised, and is not the procedure proposed in the present case, and is not a procedure upon which I have heard any argument.)
- I absolutely accept the submission of Mr Griffiths that since there has been no material change in Schedule 2 since the Act was first enacted, the construction of that part of the Act must be the same now as it was in 1979. Nevertheless, my above conclusion is fortified by consideration of the amendment made to section 3 (1) (a) with effect from 2008 when the words were changed from "has been convicted of" to "has committed". A conviction generally proves itself by a certificate or memorandum of conviction, and the fact of conviction is scarcely capable of dispute. But for any person or body to decide that a person has committed an offence involving fraud or other dishonesty or violence when (for whatever reason) there is no conviction, is a serious matter, and in particular, evaluation of the component of dishonesty. When Parliament made the amendment in 2007 (taking effect in 2008) it could clearly also have amended Schedule 2 to the Act. It did not do so. In my view, the fact that it did not do so indicates that Parliament itself, in 2007, did not conceive or contemplate that Schedule 2 (which was being operated at that time by the OFT in the way I have described) might later be operated in the way for which Powys now contend.
- There are other, perhaps more peripheral, considerations. Paragraph 4 (2) of Schedule 2 provides that the authority "shall not refuse to admit evidence solely on the grounds that it would not be admissible in a court of law." I agree with the submission of Mr Ashley-Norman that that paragraph contemplates that there may be grounds upon which evidence should not be admitted, though not the "sole" ground mentioned in the paragraph. Someone has to be the arbiter of whether some evidence should or should not be admitted, and may indeed need to hear or consider some argument on the point. Under the procedure devised by Powys, that someone can only realistically be the adjudicator. I agree with Mr Ashley-Norman that if the giving of the evidence is separated out from the consideration of that evidence by the adjudicator, a protracted process could result around the application of paragraph 4 (2) and any issue as to admissibility.
- If Powys and Mr Griffiths and Miss Strachan are right that Schedule 2 does not require that the person before whom the hearing of oral representations physically takes place is the adjudicator himself, then logically the requirements of the Schedule are satisfied without the adjudicator receiving the actual audio recording. Indeed the procedure originally devised by Powys, as described in the document of 5 June 2014, does not envisage that the adjudicator will listen to the recording. In that document the purpose of the recording is "to assist the clerk" in the task of taking a written note of the hearing. The document expressly says that it is "this note" which will be used by the adjudicator to prepare the decision. Mr Brown's later letter of 11 March 2015, in which he says that the adjudicator will be supplied with, and will listen to, the recording itself, so that "the oral representations are "heard", in audio context, by the adjudicator" is, frankly, a retreat. In reliance upon that letter, Mr Griffiths and Miss Strachan make what is in reality a fall back submission that as the adjudicator or effective decision maker will himself "hear" the whole of the oral representations, including any evidence, by listening to the recording, the requirements of Schedule 2 are satisfied. In my view, if the perceived advantages which Parliament must have intended from a hearing of oral representations are those which I mention in paragraph 36 above, then merely to send the adjudicator a recording is, frankly, to subvert the intention and purpose of the Schedule. Further, if the occasion, or one of the occasions, upon which the lead enforcement authority "hears" the oral representations is the occasion upon which the adjudicator listens to the recording, then both paragraphs 3 and 5 of the Schedule become absurd. It would be absurd and impossible to give to the person affected not less than 21 days' notice of "the date, time and place at which his representations are to be heard" by the adjudicator. Adjudicators are obviously busy people who have to fit this important work around their other commitments, and may very reasonably decide to deal with "the paper work" or listening to the recording of any given case at a moment and at a place when they have a convenient opportunity. The idea of forecasting and giving notice even of the place, let alone the date or precise time is absurd. Paragraph 5 makes provision for adjourning "the hearing" in which case the person affected must be given reasonable notice of the date, time and place at which "the hearing" is to be resumed. If, on the argument of Mr Griffiths, the occasion upon which the adjudicator listens to the recording is itself an occasion which is "the hearing", then if the adjudicator broke off half way through and resumed the next day, paragraph 5 would not be complied with. We are now in the realm of fantasy.
- Mr Griffiths and Miss Strachan place some reliance on section 7 and the provision, now, of a right of appeal to the First-tier Tribunal where there would be a completely fresh, wholly judicial, decision making process and decision. They submit that that is relevant to any consideration of the overall fairness of the procedure, for example if considering whether the procedure as a whole is compliant with the European Convention on Human Rights. I accept that submission, but my decision is not based on consideration of the overall fairness of the procedure, nor on any provision of that convention, but on construction of what the Act itself requires and intends. In any event, it is Mr Griffiths who so firmly submits that the Act must be construed as at 1979, and at that time there was no provision for appeal to a judicial tribunal, but to the Secretary of State. Further, as Mr Ashley-Norman points out, significant consequences may follow from the making of a prohibition order in advance of any appeal taking place. Under section 8 of the Act, particulars of the making of the prohibition order must be entered on a public register in advance of any appeal being heard, since section 8 (2) (b) makes provision requiring the particulars to include a statement to the effect that an appeal is pending if one is. As Mr Ashley-Norman submits, however, the very fact of an entry on the register is potentially damaging to an estate agent, so fairness is required not only at the appeal stage but at every stage. Further, although paragraph 10 (1) of Schedule 2 has the effect that normally a prohibition order shall not come into operation until any appeal and any further appeal has been finally determined or the time for appealing has expired, paragraph 10 (2) provides that if the authority, effectively the adjudicator, is satisfied that there are special circumstances which require it, an order can come into operation immediately.
- If the Act permits Powys to adopt the procedure which they have adopted and now propose in this case, then I agree with Mr Griffiths that their reasons for doing so are irrelevant. As Viscount Haldane said in Arlidge, in the absence of any declaration to the contrary Parliament "must be taken to have intended [them] to follow the procedure which is [their] own." The expressed reason of Powys is, as appears from the letter from Mr Brown dated 11 March 2015, that it protects and reinforces the independence of the adjudicator from the investigation and the Team. As I have said, that desire is laudable. It is obviously important that the decision making process by the adjudicator is kept insulated and independent from any investigation process by the Team, and especially from the earlier decision making process of deciding to serve a notice under paragraph 2 (1) of Schedule 2 of the proposal to make a prohibition order. I, for my part, cannot see that the important independence of the adjudicator is in the least compromised by his actually hearing the oral representations and any evidence directly and face to face, rather than by listening to a recording. There is certainly no indication or evidence that throughout the period the OFT were operating the process any difficulty arose with regard to the actual or perceived independence of the adjudicator. Further, as Mr Ashley-Norman submits, the procedure proposed by Powys may actually "hobble" (as he puts it) the independence of the adjudicator since he has no control over the course of the hearing of oral representations.
- During the course of the hearing the mask did perhaps slip a little and it became apparent that Powys has resource concerns as well. They tendered on the basis of about 10 cases "taken" annually. But I have been told that since April 2014 they have already completed about 11 cases in which prohibition or other orders have been made, and they currently have no less than 41 investigations under way. Any current resource implications must, however, be irrelevant to what Parliament intended in 1979.
- For these reasons I conclude and hold that the procedure, which Powys currently propose to adopt in their consideration of whether or not to make prohibition orders in relation to either or both of the claimants, does not comply with the requirements of the Act and is unlawful. If (of which I entirely approve) Powys continue to delegate the making of the decisions to an adjudicator (or, as I have been told, a separate adjudicator in the case of each claimant) then it is that adjudicator (or these adjudicators) who must personally and face to face conduct the hearing of oral representations for the purpose of Schedule 2 to the Act. This claim for judicial review accordingly succeeds.
- I wish to stress very clearly that this is a decision which relates to the situation of these two claimants, and which may impact upon any current or future cases. I know nothing whatsoever about the circumstances of the about 11 cases which Powys have concluded to date, and I express and imply no view whatsoever as to the regularity of any of them. The present proceedings are essentially a pre-emptive judicial review to avert a future irregularity if Powys had adhered to their proposed procedure. In the case of the already concluded cases, any irregularity (if any) is likely to have been remediable by an in-time appeal pursuant to section 7 of the Act.
Mr Justice Holman:
Introduction and the issue
The relevant statutory framework
3. Orders prohibiting unfit persons from doing estate agency work.(1) The power of the [lead enforcement authority] to make an order under this section with respect to any person shall not be exercisable unless the [lead enforcement authority] is satisfied that that person
(a) [has committed]
(i) an offence involving fraud or other dishonesty or violence, or(ii) an offence under any provision of this Act, other than section 10(6), section 22(3) or section 23(4), or(iii) any other offence which, at the time it was committed, was specified for the purposes of this section by an order made by the Secretary of State; or(b) has committed discrimination in the course of estate agency work; or
(ba) has failed to comply with an undertaking accepted from him under section 217, 218 or 219 of the Enterprise Act 2002 and given in relation to estate agency work; or
(bb) has failed to comply with an enforcement order under section 217 of the Enterprise Act 2002 which was made against him in relation to estate agency work; or
(c) has failed to comply with any obligation imposed on him under any of sections 15 and 18 to 21 below; or
(ca) has engaged in estate agency work in relation to residential property in breach of the duty imposed by an order under section 23A(1) below; or
(cb) has failed to comply with any requirement imposed on him under section 9(1) or 11(1A)(b) below; or
(d) has engaged in a practice which, in relation to estate agency work, has been declared undesirable by an order made by the Secretary of State;
and the provisions of Schedule 1 to the Act shall have effect for supplementing paragraphs (a) and (b) above.
(2) Subject to subsection (1) above, if the [lead enforcement authority] is satisfied that any person is unfit to carry on estate agency work generally or of a particular description [it] may make an order prohibiting that person
(a) from doing any estate agency work at all; or
(b) from doing estate agency work of a description specified in the order;
and in determining whether a person is so unfit the [lead enforcement authority] may, in addition to taking account of any matters falling within subsection (1) above, also take account of whether, in the course of estate agency work or any other business activity, that person has engaged in any practice which involves breaches of a duty owed by virtue of any enactment, contract or rule of law and which is material to his fitness to carry on estate agency work.
.
5. Supplementary provisions as to orders under sections 3 and 4.
(1) The provisions of Part I of Schedule 2 to this Act shall have effect
(a) with respect to the procedure to be followed before an order is made by the [lead enforcement authority] under section 3 or section 4 above; and
(b) in connection with the making and coming into operation of any such order.
.
7. Appeals.
(1) A person who receives notice under paragraph 9 of Schedule 2 to this Act of
(a) a decision of the [lead enforcement authority] to make an order in respect of him under section 3 or section 4 above, or
(b) a decision of the [lead enforcement authority] under subsection (4) or subsection (5) of section 6 above on an application made by him,
may appeal against the decision to the [First-tier Tribunal] .
.
8. Register of order etc.
(1) The [lead enforcement authority] shall establish and maintain a register on which there shall be entered particulars of every order made by [it] under section 3 or section 4 above and of [its] decision on any application for revocation or variation of such an order.
(2) The particulars referred to in subsection (1) above shall include
(a) the terms of the order and of any variation of it; and
(b) the date on which the order or variation came into operation or is expected to come into operation or if an appeal against the decision is pending and the order or variation has in consequence not come into operation, a statement to that effect.
.
25. General duties of [the lead enforcement authority] .
(1) Subject to section 26(3) below, it is the duty of the [lead enforcement authority]
(a) generally to superintend the working and enforcement of this Act, and
(b) where necessary or expedient, [itself] to take steps to enforce this Act.
(2) It is the duty of the [lead enforcement authority] , so far as appears to [it] to be practicable and having regard both to the national interest and the interests of persons engaged in estate agency work and of consumers, to keep under review and from time to time advise the Secretary of State about
(a) social and commercial developments in the United Kingdom and elsewhere relating to the carrying on of estate agency work and related activities; and
(b) the working and enforcement of this Act.
Schedule 2 PROCEDURE ETC. Part I ORDERS AND DECISIONS UNDER SECTIONS 3, 4 AND 6 Notice of proposal 2.
(1) The [lead enforcement authority] shall give to the person affected a notice informing him of the proposal and of the [lead enforcement authority's] reason for it; but paragraph 1(2) above shall not apply for the purposes of this sub-paragraph.
(2) In the case of a proposal to make an order, the notice under sub-paragraph (1) above shall inform the person affected of the substance of the proposed order and, in the case of a proposal to make an order under section 3 of this Act, shall
(a) set out those matters falling within subsection (1) of that section which the [lead enforcement authority] intends should be specified as the grounds for the order, and
(b) specify any other matters of which the [lead enforcement authority] has taken account under subsection (2) of that section, and
(c) if the [lead enforcement authority] proposes to rely on section 4(3) of this Act to establish the unfitness of the person affected, state that fact.
(3) The notice given under sub-paragraph (1) above shall invite the person affected, within such period of not less than twenty-one days as may be specified in the notice
(a) to submit to the [lead enforcement authority] his representations in writing as to why the order should not be made or, as the case may be, should be varied or revoked in accordance with the application, and
(b) to give notice to the [lead enforcement authority] , if he thinks fit, that he wishes to make such representations orally,
and where notice is given under paragraph (b) above the [lead enforcement authority] shall arrange for the oral representations to be heard.
Hearing of representations 3.
Where the [lead enforcement authority] receives notice under paragraph 2(3)(b) above [it] shall give the person affected not less than twenty-one days' notice, or such shorter notice as the person affected may consent to accept, of the date, time and place at which his representations are to be heard.
4.
(1) In the course of the hearing of oral representations the [lead enforcement authority] shall, at the request of the person affected, permit any other person (in addition to the person affected) to make representations on his behalf or to give evidence or to introduce documents for him.
(2) The [lead enforcement authority] shall not refuse to admit evidence solely on the grounds that it would not be admissible in a court of law.
5.
If the [lead enforcement authority] adjourns the hearing [it] shall give the person affected reasonable notice of the date, time and place at which the hearing is to be resumed.
Decision 6.
(1) The [lead enforcement authority] shall take into account in deciding whether to proceed with [its] proposal any written or oral representations made in accordance with the preceding provisions of this Schedule.
..
Notification of decision 9.
(1) Notice of the decision to make the order, and of the terms of the order or, as the case may be, notice of the decision on the application for variation or revocation of the order, shall be given to the person affected, together with the [lead enforcement authority's] reasons for [its] decision, including the facts which in [its] opinion justify the decision.
(2) The notice referred to in sub-paragraph (1) above shall also inform the person affected of his right to appeal against the decision and of the period within which an appeal may be brought and of how notice of appeal may be given.
10.
(1) Subject to sub-paragraph (2) below, the order to which the decision relates or, as the case may be, any variation of an order for which the decision provides shall not come into operation until any appeal under section 7(1) of this Act and any further appeal has been finally determined or the period within which such an appeal may be brought has expired.
(2) Where the [lead enforcement authority] states in the notice referred to in paragraph 9(1) above that [it] is satisfied that there are special circumstances which require it, an order shall come into operation immediately upon the giving of notice of the decision to make it.
The legislative and procedural history
" A clerk will accompany the investigator in order to take a written note of the hearing. This note will be used by the Adjudicator to prepare the decision. Please note that the whole of the hearing will be recorded to assist the clerk in this task
Hearings are essentially informal. There is no rigid procedure The investigator will ask you questions but he or she will not cross-examine you "
"After the hearing
"Please note that the legislation permits "oral representations" and not a "oral hearing" though it is accepted the legislation does reference the adjournment of a hearing at Clause 5 of Schedule 2, but makes no prior reference to the convening of a hearing. It is accepted that further references to the word "hearing" are ambiguous within the legislation and in some contexts it should be interpreted as meaning "the receipt of sounds by the ear" and in other contexts as proceedings in a judicial forum.
We are satisfied that the legislation permits written and oral representations to be made to the adjudicator though the legislation is unclear as to the exact mechanism and, subject to the Wednesbury reasonableness test, as long as the adjudicator receives the written and, if elected, any oral representations then compliance with the legislation is apparent.
We disagree that any purported enquires into the veracity of the written representations is incumbent upon the investigator to scrutinise or to make comment upon the same. It is a matter for the adjudicator to assess the strength and weight to be applied to such evidence.
We disagree that the oral hearing is an "interview" per se, but more an opportunity for the respondents to provide any clarity to any points they have referred to within their written representations. It is however agreed that should any point remain unresolved the investigator would promote clarity and certainly would not treat the occasion as being an interrogation. The process of recording the oral representations is that they are "heard", in audio context, by the adjudicator and also provide clarity and certainty as to what exactly was spoken.
We assume you mean, at point 6, that an adjudicator would be absent at oral representations are made and can confirm this would be the case as the full recording of any oral representations would be made available for the adjudicator at a later date. The investigator denies expressing your assertion at Point 7 and has indicated that a clerk "could be present" though any notes taken would not constitute oral representations. It is denied that any notes would substitute the recording and any representations made by any witnesses will be fully "heard" by the adjudicator by way of the recording. This procedure was explained, and understood by you in your email of 6th February 2015.
The role of the adjudicator is independent of the Team and any adjudicator, who may or may not be in the employment of Powys County Council, is appropriately trained to adjudicate. Irrespective as to whether the adjudicator is internal or external they will not be provided with the "full" investigation file and only relevant information pertaining to the trigger event along with the representations written and oral where provided by the respondents. Until the file is passed for adjudication the adjudicator will have no knowledge of the case before them. For clarity the role of investigator in this matter has not been undertaken by an employee of Powys County Council but an employee of Anglesey County Council seconded to the Team. This is to maintain a "Chinese wall" between investigation and adjudication, preserving independence and impartiality.
We understand the Adjudicator has not yet been appointed though we can confirm that any appointee will not be, as always, a member of the Team."
The factual context of this case
The essential arguments and submissions
"Modern Parliamentary legislation tends to be detailed and complex and normally prescribes the processes, procedures and evidence to be followed and taken into account when statutory decisions are made. That being the case, there may be less scope for courts to read into modern statutes implied procedural obligations than in relation to statutes of greater antiquity."
Construction of the Act
Outcome