Wandsworth LBC v Winder (No 1) [1984] UKHL 2

House of Lords
Between
Wandsworth LBCAppellantWinder (No 1)Respondent
Before
Lord Fraser of Tullybelton
It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the said Order of Her Majesty's Court of Appeal of the 29th day of March 1984 complained of in the said Appeal be, and the same is hereby, Affirmed and that the said Petition and Appeal be, and the same is hereby, dismissed this House: And it is further Ordered, That the Appellants do pay or cause to be paid to the said Respondent the Costs incurred by him in respect of the said Appeal, the amount thereof to be certified by the Clerk of the Parliaments; and that the Costs of the Respondent be taxed in accordance with Schedule 2 to the Legal Aid Act 1974.Cler: Parliamentor:

HOUSE OF LORDS

MAYOR AND BURGESSES OF THE LONDON BOROUGH OF WANDSWORTH (APPELLANTS)

v.

WINDER (A.P.) (RESPONDENT)

Lord Eraser of Tullybelton Lord Scarman Lord Keith of Kinkel Lord Roskill Lord Brandon of Oakbrook

LORD FRASER OF TULLYBELTON

My Lords,The question is this appeal is whether it is an abuse of process for an individual, who claims that his existing rights under a contract have been infringed by a decision of a public authority, to challenge the decision in defence to an action at the instance of the public authority for payment, instead of by judicial review under R.S.C. Ord.53. The appeal is a sequel to the decisions of this House in O'Reilly v. Mackman [1983] 2 AC 237 , and Cocks v. Thanet District Council [1983] 2 AC 286 .Immediately before 6 April 1981, the respondent was, and had been for some time, the tenant of a flat at Tangley Grove in Wandsworth on a weekly tenancy at a weekly rent of £12.06. He had a secure tenancy in the sense of section 28 of the Housing Act 1980. The landlords were the London Borough of Wandsworth, the appellants. On 2 March 1981, the appellants gave notice to the respondent under section 40(1), (4) of the Act of 1980 that, with effect from 6 April 1981, the rent would be increased to £16.56 per week. The respondent regarded the increase as unreasonable and he so informed the appellants. He refused to pay the increased rent; instead he paid the old rent of £12.06 and an increase of 8 per cent which he regarded as reasonable. The following year in March, the appellants gave notice of a further increase in the rent to £18.53 with effect from 5 April 1982. The respondent again refused to pay the increased rent and paid only such rent as he considered reasonable.On 16 August 1982, the appellants took proceedings against the respondent in Wandsworth County Court claiming arrears of rent, and also claiming possession of the premises on the ground that the rent lawfully due had not been paid. Non-payment of rent is ground 1 for recovery of possession under Schedule 4 to the Act of 1980. The respondent defended the action on the ground that the appellants' decisions to make the increases, and the increases themselves, were ultra vires and void as being unreasonable. He also counterclaimed for a declaration that the notices of increase of rent were ultra vires and void and of no effect, and for a declaration that the rent payable under his tenancy was £12.06 per week.The action has caused a considerable divergence of judicial opinion so far. The appellants applied to strike out the paragraphs

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of the defence and counterclaim which asserted that the decisions and notices were void. Mr. Registrar Price dismissed the application to strike out. His Honour Judge White allowed the appellants' appeal against the registrar's order, and stayed the proceedings to allow the respondent to apply for leave to apply for judicial review out of time. The respondent did apply for such leave but his application was refused. He then appealed to the Court of Appeal and that court, by a majority (Robert Goff and Parker L.JJ., with Ackner L.J. dissenting) allowed his appeal against the order of Judge White.Until 6 April 1981, the respondent had a contractual right to occupy the flat, provided he paid the rent of £12.06 and complied with the other terms of the tenancy. That was an ordinary private law right under a contract. But by section 40 of the Act of 1980, the appellants were entitled to vary the terms of the tenancy unilaterally by a notice of variation, subject to certain conditions not here material. In addition to complying with the express statutory conditions, the appellants when they exercised their power under section 40(4) were also bound to act reasonably in the Wednesbury sense - see Associated Provincial Picture Houses Ltd, v. Wednesbury Corporation [1948] 1 KB 223 . That is made clear beyond doubt by the Housing Act 1957, section 111(1), which provides as follows:"111(1) The general management, regulation and control of houses provided by a local authority under this Part of this Act shall be vested in and exercised by the authority, and the authority may make such reasonable charges for the tenancy or occupation of the houses as they may determine." (Emphasis added).In Luby v. Newcastle-under-Lyme Corporation [1964] 2 Q.B. 64, 72, Diplock L.J. (as my noble and learned friend then was) referring to this provision, said:'"Reasonable' in the context in which it appears in section 111(1) of the Housing Act 1957, is in my view to be construed as the converse of 'unreasonable' in the sense in which it is used by Lord Greene M.R. [in the Wednesbury Corporation case [1948] 1 KB 223 , 229] ... The court's control over the exercise by a local authority of a discretion conferred upon it by Parliament is limited to ensuring that the local authority had acted within the powers conferred. It is not for the court to substitute its own view of what is a desirable policy in relation to the subject matter of the discretion so conferred. It is only if it is exercised in a manner which no reasonable man could consider justifiable that the court is entitled to interfere."The respondent seeks to show in the course of his defence in these proceedings that the appellants' decisions to increase the rent were such as no reasonable man could consider justifiable. But your Lordships are not concerned in this appeal to decide whether that contention is right or wrong. The only issue at this stage is whether the respondent is entitled to put forward the contention as a defence in the present proceedings. The appellants' say that he is not because the only procedure by which their decision could have been challenged was by judicial review

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under R.S.C., Ord. 53. The respondent was refused leave to apply for judicial review out of time and (say the appellants) he has lost the opportunity to challenge the decisions. The appellants rely on the decisions of this House in O'Reilly v. Mackman [1983] 2 A.C. 237 and Cocks v. Thanet District Council [1983] 2 AC 286 . The respondent accepts that judicial review would have been an appropriate procedure for the purpose, but he maintains that it is not the only procedure open to him, and that he was entitled to wait until he was sued by the appellants and then to defend the proceedings, as he has done.In order to deal with these contentions, it is necessary to consider what was decided by the House in those two cases. The question raised in O'Reilly [1983] 2 AC 237 was the same as that in the present case, although of course, the circumstances were different. In O'Reilly, at p. 274, Lord Diplock said:
"All that is at issue in the instant appeal is the procedure by which such relief ought to be sought. Put in a single sentence the question for your Lordships is: whether in 1980 after R.S.C., Ord. 53 in its new form, adopted in 1977, had come into operation it was an abuse of the process of the court to apply for such declarations [sc. that a decision of a public authority was void] by using the procedure laid down in the Rules for proceedings begun by writ or by originating summons instead of using the procedure laid down by Ord. 53 for an application for judicial review . . . ."
In that case four prisoners in Hull prison had started proceedings, in three cases by writ and in one case by originating summons, each seeking to establish that a disciplinary award of forfeiture of remission of sentence made by the Board of Visitors of Hull Prison was void because the Board had failed to observe the rules of natural justice. This House held that the proceedings were an abuse of the process of the court, and that the only proper remedy open to the prisoners was by way of judicial review under Ord. 53. There are two important differences between the facts in O'Reilly and those in the present case. First, the plaintiffs in O'Reilly had not suffered any infringement of their rights in private law; their complaint was that they had been ordered to forfeit part of their remission of sentence but they had no right in private law to such a remission, which was granted only as a matter of indulgence. Consequently, even if the Board of Visitors had acted contrary to the rules of natural justice when making the award, the members of the Board would not have been liable in damages to the prisoners. In the present case what the respondent complains of is the infringement of a contractual right in private law. Secondly, in O'Reilly the prisoners had initiated the proceedings, and Lord Diplock, throughout in his speech, treated the question only as one affecting a claim for infringing a right of the plaintiff while in the present case the respondent is the defendant. The decision on O'Reilly is therefore not directly in point in the present case, but the appellants rely particularly on a passage in a speech of Lord Diplock, with whose speech the other members of the Appellate Committee agreed, at p. 285D to the following effect:
"Now that those disadvantages to applicants [for judicial review] have been removed and all remedies for

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infringements of rights protected by public law can be obtained on an application for judicial review, as can also remedies for infringements of rights under private law if such infringements should also be involved, it would in my view as a general rule be contrary to public policy, and as such an abuse of the process of the court, to permit a person seeking to establish that a decision of a public authority infringed rights to which he was entitled to protection under public law to proceed by way of an ordinary action and by this means to evade the provisions of Ord. 53 for the protection of such authorities.
"My Lords, I have described this as a general rule; for though it may normally be appropriate to apply it by the summary process of striking out the action, there may be exceptions, particularly where the invalidity of the decision arises as a collateral issue in a claim for infringement of a right of the plaintiff arising under private law, or where none of the parties objects to the adoption of the procedure by writ or originating summons. Whether there should be other exceptions should, in my view, at this stage in the development of procedural public law, be left to be decided on a case to case basis - a process that your Lordships will be continuing in the next case in which judgment is to be delivered today [Cocks v. Thanet District Council [1983] 2 A.C. 2861."
The last paragraph in that quotation shows that Lord Diplock was careful to emphasise that the general rule which he had stated in the previous paragraph might well be subject to exceptions. The question for your Lordships is whether the instant appeal is an exception to the general rule. It might be possible to treat this case as failing within one of the exceptions suggested by Lord Diplock, if the question of the invalidity of the appellants' decision had arisen as a collateral issue in a claim by the respondent(as defendant) for infringement of his right arising under private law to continue to occupy the flat. But I do not consider that the question of invalidity is truly collateral to the issue between the parties. Although it is not mentioned in the appellants' statement of claim, it is the whole basis of the respondent's defence and it is the central issue which has to be decided. The case does not therefore fail within any of the exceptions specifically suggested in O'Reilly v. Mackman [1983] 2 AC 237 .Immediately after the decision in Q'Reilly, the House applied the general rule in the case of Cocks [1983] 2 A.C. 286. The proceedings in O'Reilly had begun before the Supreme Court Act 1981 (especially section 31) was passed. The proceedings in Cocks were begun after that Act was passed, but for the present purpose nothing turns on that distinction. Cocks was an action by a homeless person claiming that the local housing authority had a duty to provide permanent accommodation for him. The council resolved that the plaintiff had become homeless "intentionally" in the sense of the Housing (Homeless Persons) Act 1977. Consequently the plaintiff had no right in private law to be provided with permanent housing accommodation by the authority. The plaintiff raised an action in the county court claiming, inter alia, a declaration that the council were in breach of their duty to him in not having provided him with permanent accommodation.

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In order to proceed in his action he had to show as a condition precedent that the council's decision was invalid. This House held that the plaintiff was not entitled to impugn the council's decision in public law otherwise than by judicial review, notwithstanding that the effect of the decision was to prevent him from "establishing a necessary condition precedent to the statutory private law right which he [was seeking] to enforce." See per my noble and learned friend, Lord Bridge of Harwich, at p. 294E. The essential difference between that case and the present is that the impugned decision of the local authority did not deprive the plaintiff of a pre-existing private law right; it prevented him from establishing a new private law right. There is also the same distinction as in O'Reilly [1983] 2 AC 237 , namely, that the party complaining of the decision was the plaintiff.Although neither O'Reilly nor Cocks [1983] 2 AC 286 is an authority which directly applies to the facts of the instant appeal, it is said on behalf of the appellants that the principle underlying those decisions applies here, and that, if the respondent is successful, he will be evading that principle. My Lords, I cannot agree. The principle underlying those decisions, as Lord Diplock explained in O'Reilly [1983] 2 AC 237 , 284, is that there is a "need, in the interest of good administration and of third parties who may be indirectly affected by the decision, for speedy certainty as to whether it has the effect of a decision that is valid in public law." The main argument urged on behalf of the appellants was that this is a typical case where there is a need for speedy certainty in the public interest. I accept, of course, that the decision in this appeal will indirectly affect many third parties including many of the appellants' tenants, and perhaps most if not all of their ratepayers because if the appellants' impugned decisions are held to be invalid, the basis of their financial administration since 1981 will be upset. That would be highly inconvenient from the point of view of the appellants, and of their ratepayers, and it would be a great advantage to them if persons such as the respondent who seek to challenge their decision were limited to doing so by procedure under Ord. 53. Such procedure is speedy and avoids prolonged uncertainty about the validity of decisions. An intending applicant for judicial review under Ord. 53 has to obtain leave to apply, so that unmeritorious applications can be dismissed in limine and an application must normally be made within a limited period of three months after the decision which has impugned, unless the court allows an extension of time in any particular case. Procedure under Ord. 53 also affords protection to public authorities in other ways, which are explained in O'Reilly and which I need not elaborate here. It may well be that such protection to public authorities tends to promote good administration. But there may be other ways of obtaining speedy decisions; for example in some cases it may be possible for a public authority itself to initiate proceedings for judicial review. In any event, the arguments for protecting public authorities against unmeritorious or dilatory challenges to their decisions have to be set against the arguments for preserving the ordinary rights of private citizens to defend themselves against unfounded claims.It would in my opinion be a very strange use of language to describe the respondent's behaviour in relation to this litigation as an abuse or misuse by him of the process of the court. He did not select the procedure to be adopted. He is merely seeking to

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defend proceedings brought against him by the appellants. In so doing he is seeking only to exercise the ordinary right of any individual to defend an action against him on the ground that he is not liable for the whole sum claimed by the plaintiff. Moreover he puts forward his defence as a matter of right, whereas in an application for judicial review, success would require an exercise of the court's discretion in his favour. Apart from the provisions of Ord. 53 and section 31 of the Supreme Court Act 1981, he would certainly be entitled to defend the action on the ground that the plaintiff's claim arises from a resolution which (on his view) is invalid - see for example Cannock Chase District Council v. Kelly [1978] 1 W.L.R. 1, which was decided in July 1977, a few months before Ord. 53 came into force (as it did in December 1977). I find it impossible to accept that the right to challenge the decision of a local authority in course of defending an action for payment can have been swept away by Ord. 53, which was directed to introducing a procedural reform. As my noble and learned friend Lord Scarman said in Regina v. Inland Revenue Commissioners, Ex parte Federation of Self Employed [1982] A.C. 617, 6^7G "The new R.S.C., Ord. 53 is a procedural reform of great importance in the field of public law, but it does not - indeed, cannot - either extend or diminish the substantive law. Its function is limited to ensuring 'ubi jus, ibi remedium.'" Lord Wilberforce spoke to the same effect at p. 631 A. Nor, in my opinion, did section 31 of the Supreme Court Act 1981 which refers only to "an application" for judicial review have the effect of limiting the rights of a defendant sub silentio. I would adopt the words of Viscount Simonds in Pyx Granite Co.Ltd. v. Ministry of Housing and Local Government [I960] A.C. 260, 286 as follows:-
"It is a principle not by any means to be whittled down that the subject's recourse to Her Majesty's courts for the determination of his rights is not to be excluded except by clear words."
The argument of the appellants in the present case would be directly in conflict with that observation.If the public interest requires that persons should not be entitled to defend actions brought against them by public authorities, where the defence rests on a challenge to a decision by the public authority, then it is for Parliament to change the law.I would dismiss the appeal.

LORD SCARMAN

My Lords,I agree with the speech delivered by my noble and learned friend, Lord Fraser of Tullybelton. For the reasons he gives I would dismiss the appeal.

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LORD KEITH OF KINKEL

My Lords,I agree with the speech of my noble and learned friend Lord Fraser of Tullybelton, which I have had the opportunity of reading in draft, and for the reasons he gives I too would dismiss the appeal.

LORD ROSKILL

My Lords,I have had the advantage of reading in draft the speech delivered by my noble and learned friend. Lord Fraser of Tullybelton. I agree with it, and for the reasons which he gives I would dismiss this appeal.

LORD BRANDON OF OAKBROOK

My Lords,I have had the advantage of reading in draft the speech prepared by my noble and learned friend, Lord Fraser of Tullybelton. I agree with it, and for the reasons which he gives I would dismiss the appeal.

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Cited in 1 later judgment