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CASE NO: QBCOF 1999/0380/C
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEENS BENCH
DIVISION (MR JUSTICE HIDDEN)
ROYAL COURTS OF JUSTICE
STRND, LONDON WC2A 2LL
FRIDAY 17 MARCH 2000
Before:
LORD JUSTICE PILL
LORD JUSTICE MUMMERY
AND
SIR RONALD WATERHOUSE
__________________________
The Queen
-v-
Appellants
London Borough of Greenwich
Respondents
Ex p Glen International and Anor
_________________________
(Transcript of the Handed Down Judgment of
Smith Bernal Reporting Limited, 180 Fleet Street
London EC4A 2HD
Tel No: 0171 421 4040, Fax No: 0171 831 8838
Official Shorthand Writers to the Court)
_________________________
Mr Andrew Arden QC and Mr Christopher Baker (Instructed by the London Borough
of Greenwich, SE18 6PW) appeared for the Appellants
Mr Richard Drabble QC and Mr Gregory Jones (Instructed by Bowling & Co, E15
1NG) appeared for the Respondents
_________________________
Judgment
As Approved by the Court
Crown Copyright ©
LORD JUSTICE PILL:
This is an appeal against a judgment of Mr Justice Hidden given on 23 June
1998 whereby he quashed decisions of the London Borough of Greenwich ("the
Borough") rejecting the application of Glen International Ltd ("the first
respondent") and Mrs Vijaya Radia ("the second respondent") for renovation
grants for properties they owned. The first respondent's properties are at
22/22A Fairthorn Road, London, SE7, and 146 Herbert Road, London, SE7 and the
second respondent's property is at 31 Gurdon Road, London, SE7. The case turns
upon the construction of provisions in Part VIII of the Local Government and
Housing Act 1989 ("the Act") which has been repealed since the relevant
applications for grant were made. The Borough, who are the local housing
authority under the Act, refused to approve what were claimed to be mandatory
grants in that the relevant works were done to comply with notices under
section 189 or section 190 of the Act. There is a criminal sanction for
non-compliance with such notices.
The points now arising are such that the basic facts can, with the help of a
case synopsis helpfully provided by Mr Arden QC, counsel for the Borough, be
stated briefly. Notices under one or other of the above sections of the Act
were served. They required works to be done to render the premises either fit
for human habitation or because they were in a state of disrepair. Dates were
given by which the work was to be completed. Applications for grant were made
while the relevant provisions of the 1989 Act were still in force.
Points were taken by the Borough as to the validity of the applications. These
included, in the case of the Herbert Road and Gurdon Road premises, claims that
the estimates from two different contractors for the cost of carrying out the
relevant works, said to be necessary by reason of section 102 of the Act, had
not been provided. In the case of Fairthorn Road, the single point taken,
permission to take it having been given by this court, is that the renovation
grant is not payable because the relevant work had been completed before the
application was made. The applications were formally rejected by letters dated
5 July 1996. Following a reconsideration, a further letter rejecting the
Herbert Road and Gurdon Road applications was sent on 4 August 1997.
We were told by counsel that the provision for mandatory grants in the 1985
Act involved the payment of very substantial sums of money to landlords. Two
strands of thought emerge from the now repealed provisions. The first is that
grants should be paid to cover the cost of works done to render premises
habitable or to put them in repair. The second is that to safeguard public
funds proper procedures should be followed by applicants. The Borough accept
the existence of the mandatory element in the statute but claim that the
conduct of the respondents, in part by their agent, has been such that the
mandatory grants are not payable. Insofar as is material, section 102 of the
Act provides:
"(1) No grant shall be paid unless an application for it is made to the local
housing authority concerned in accordance with the provisions of this Part and
is approved by them.
(2) An application for a grant shall be in writing and shall specify the
premises to which it relates and contain--
(a) particulars of the works in respect of which the grant is sought (in this
Part referred to as `the relevant works');
(b) unless the local housing authority otherwise direct in any particular case,
at least two estimates from different contractors for the cost of carrying out
the relevant works;
(c) particulars of any preliminary or ancillary services and charges in respect
of the cost of which the grant is also sought; and
(d) such other particulars as may be prescribed.
(3) ... .
(4) The Secretary of State may by regulations prescribe a form of application
for a grant and an application for a grant to which any such regulations apply
shall not be validly made unless it is in the prescribed form."
The Secretary of State has made regulations under section 102(4) and the
prescribed application form was a somewhat elaborate document requiring that a
substantial amount of information is given.
By virtue of section 101(1) grants are payable "towards the cost of works
required". Preliminary conditions for the making of a grant are set out in
sections 103 to 106. Certain dwellings and works are excluded from grant aid by
provisions of section 107, which does not apply to applications the authority
"are required to approve by virtue of section 113 below". Other restrictions
appear in the following sections. It is conceded that the present applications,
if they are applications within the meaning of the Act, are "landlords'
applications" within the meaning of section 110(1).
The respondents claim that the Borough are under a duty to approve the
applications by reason of the provisions of section 113. That provides insofar
as is material:
"(1) ... a local housing authority shall approve an application falling within
section 110(1) above (in this section referred to as a `landlord's
application') if completion of the relevant works is necessary to comply with a
notice or notices under one or more of the following provisions--
(a) section 189 of the Housing Act 1985 (repair notice requiring works to
render premises fit for human habitation);
(b) section 190 of that Act (repair notice in respect of premises in state of
disrepair but not unfit) and:
(c) ... ."
Section 115 of the Act provides for discretionary as distinct from mandatory
approval of certain other applications for a grant. Section 116 provides that
the applicant shall be notified, as soon as reasonably practicable, and, in any
event, not later than six months after the date of the application concerned,
whether the application is approved or refused. Sub-section (2) provides,
inter alia, that where an authority decides to approve an application
for a grant, they shall determine the amount of the expenses which in their
opinion are properly to be incurred in the execution of the eligible works and
the amount of the grant. There is also provision in the section for
re-determining the estimated expenses and the amount of the grant in certain
circumstances. Section 117 provides for the manner of payment of grants. By
virtue of sub-section (3), payment is conditional upon "(a) the eligible works
or the corresponding part of the works being executed to the satisfaction of
the authority; and (b) the authority being provided with an acceptable invoice,
demand or receipt for payment of the works ... in respect of which the grant or
part of the grant is to be paid". Section 134 makes provision for the
recalculation, withholding or repayment of grants in certain circumstances.
It is also necessary to refer to section 108 even though by its terms it does
not apply to applications under section 113. Insofar as is material, the
section provides:
"(1) Subject to sub-sections (2) and (3) below, a local housing authority may
not approve an application for a grant if the relevant works have been
commenced before the application is approved and shall serve a notice of
refusal to that effect on the applicant.
(2) Sub-section (1) above does not apply to --
(a) ...
(b) an application which the local housing authority are required to approve by
virtue of section 113 below.
(3) Where the relevant works have not been completed, the authority concerned
may approve the application for a grant if they are satisfied that there were
good reasons for beginning the works before the application was approved."
For present purposes, it is not necessary to set out in detail the issues of
fact between the parties. In the case of Herbert Road, the Borough accept in
their decision letter that "two estimates were submitted with the grant
application". They contend however that both firms of contractors were run by
and were under the control of a single individual and that the requirements of
section 102(1) had not been satisfied. In a further letter of 4 August 1997,
the Borough have raised other questions on the genuiness of the estimate. In
the case of Gurdon Road, the Borough claim that no estimate was provided by the
applicant, in spite of reminders. All that had been submitted was "an invoice
for completed works, after the work had been done". The Borough accept that, in
other cases, they have exercised the discretion apparent in section 102(2)(b)
to dispense with two estimates but they were not prepared to exercise that
discretion in these cases.
The reason for the Borough refusing to pay the renovation grants is set out in
the letter of 4 August 1997:
"I do not accept your analysis of section 108 of the Act; [a reference to
section 113 may also have been intended] nor that, in any event, that section
can be relied upon to render valid an invalid application. Whatever the timing
of the application, the authority is entitled to insist upon a valid
application for grant assistance. Your contention would result in the position
that an applicant could submit an application in any form he chose, failing to
comply with any of the statutory requirements, and that the authority would
nevertheless be bound to approve the application. I do not accept that this is
so."
For the respondents, Mr Drabble QC submits that in purporting to insist on two
estimates before, or at least during, the carrying out of the relevant work,
the Borough have misconstrued the statutory scheme. That scheme envisages
applications for mandatory grants consequent upon Housing Act notices being
made after the works have been commenced and even completed. The Borough should
ask itself whether the applicants have expended monies in carrying out repairs
required by them under the Housing Act and, if so, whether the cost was
reasonable. If satisfied on both issues, they are required to pay the
renovation grant. It has been no part of the Borough's decision making process
that the repairs have been unsatisfactory or otherwise not in accordance with
the Housing Act notices.
Mr Arden submits that there is no application within the meaning of section
113 in the absence of compliance with section 102. Failing an exercise of
discretion in the applicants' favour that section requires the application to
contain "at least two estimates from different contractors". The requirement
for the estimates is repeated in the regulations made under section 102(4). The
word "estimate" is to be distinguished from the word "invoice" and contemplates
a document prepared before the work is done. It is further submitted that the
Borough were entitled to decline to exercise their discretion not to require
two such estimates. Estimates give the local housing authority the opportunity
to consider the reasonableness of the sum later claimed as the cost of the
work. Moreover, a construction of the statute which permits claims to be made
after, and even long after, the work is done deprives the authority of the
opportunity to consider the quality and value of the work. That might require
investigation while the work is in progress. The applicant should not be
entitled to claim at a time of his choosing. In certain circumstances, the
amount payable under a grant may depend upon the applicant's means at the
relevant time.
Mr Arden relies upon the use of the present tense (the words "is necessary")
in section 113(1). Works cannot be said to be necessary if they have already
been done. The present and future tenses are also used, with respect to the
work, where the authority receive, without having served a section 189 or
section 190 notice, an application for a renovation grant under section 112.
They may determine, for example, that "completion of the relevant works will
cause the dwelling to be fit for human habitation". (Section 112(2)(b)).
For the respondents, Mr Drabble accepts that the word "estimate" in section
102(2)(b) does contemplate a document which looks to future work. He accepts
that section 108(1) states that an authority cannot approve a grant if the
relevant works have commenced before the application is approved. He points out
however that the sub-section expressly does not apply to section 113
applications (section 108(2)(b)) and, moreover, it opens the door, in
sub-section (3), to approving grants in discretionary cases when works have
commenced. In such circumstances, an "estimate" will be inappropriate and the
requirement for estimates cannot have been intended to be universal. The more
general point is made that the mandatory character of grants where section 189
or section 190 notices have been served and compliance will, in the public
interest, often be necessary within a short period, requires that an
application under section 113 should not to be treated as invalid by reason of
the lack of the estimates mentioned in section 102.
I substantially accept the submissions of Mr Drabble and hold that the judge
came to the correct conclusion. The argument that the succeeding sections in
Part VIII of the Act are predicated on an application which, at the outset,
complies with the terms of section 102 is not without force but regard must be
had to the plain intention in Part VIII to make the approval of certain grants
mandatory. That intention appears in section 113 and in the exclusion of
mandatory grants from the restrictive provisions in section 108 (and section
107). These are applications which the authority are "required to approve".
Moreover, the fact that the discretion in section 102(2) to waive the estimates
requirement may be exercised at a later stage runs counter to the suggestion
that an application which does not contain estimates is inevitably invalid.
Once it is accepted, as in my judgment the statutory scheme requires it to be,
that mandatory grants are payable by operation of the provisions in sections
113, 116 and 117, section 102 cannot be read so as to require that "no grant
shall be paid" if estimates were not contained within the application, when
made. That requirement is not universal. Safeguards for public funds appear in
the provisions of section 116(2)(b) and section 117(3). I cannot hold that the
inclusion of estimates, which by definition involve an assessment of future
work, are a pre-condition to the operation of the subsequent sections. The
discretion the authority has in section 102(2)(b) to dispense with estimates
becomes, in the case of mandatory grants, an obligation if the purpose of the
scheme is to be achieved. The application is to be treated as valid and the
obligation in section 113 to approve it is not defeated on the ground that the
prescribed form of application did not contain two estimates.
I do not accept the submission that the use of the present tense in section
113(1) (the words "is necessary"), and elsewhere, involve a finding that the
application for a grant under that section must be made before the relevant
works are complete. The sub-section refers to notices served under section 189
and section 190 of the Act. When those notices are served, the "relevant work
is necessary" to comply with them and the use of the present tense is
appropriate to recognise that. Its use in that context does not bear upon the
timing of the grant application. The Fairthorn Road application was validly
made.
In relation to Herbert Road and Gurdon Road, the judge stated that the Borough
"fettered its discretion in failing to consider its power under the Act to
waive the requirement for two estimates under section 102. [The Borough]
wrongly considered itself bound by section 102 of the Act to conclude that no
grant shall be paid unless at least two estimates from different contractors of
the cost of carrying out the relevant works had been provided with the grant
application. That was an error of law". I would go further in these two cases.
In the circumstances, and for the reasons given, I would hold that the Borough
had no discretion to refuse to approve the applications by reason of the
absence of estimates contained in the applications under section 113, when
made.
Nothing I have said should be taken to encourage late applications or
applications lacking particulars. Late applicants can expect their claims for
payment to be very carefully scrutinised under sections 116 and 117 of the Act.
Moreover, a form of application might be so deficient in its contents as not to
be an application within the meaning of section 113.
I would dismiss the appeal.
LORD JUSTICE MUMMERY:
I agree.
SIR RONALD WATERHOUSE:
I also agree.
Order: Appeal dismissed with costs. Leave to appeal to House of
Lords refused. (Order does not form part of the approved judgment)
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