R v Richmond Upon Thames London Borough Council, Ex parte McCarthy & Stone (Developments) Ltd (McCarthy & Stone (Developments) Ltd v Richmond upon Thames London Borough Council)

A public authority may impose a pecuniary charge only where Parliament has authorised that particular charge in express words or by necessary implication. Necessary implication imposes a rigorous standard. It is insufficient that charging would be reasonable, convenient or conducive to providing a service.

The subsidiary power in section 111(1) of the Local Government Act 1972 permits activities which facilitate, are conducive or incidental to the discharge of a statutory function. It does not ordinarily authorise a charge merely because the charge supports an ancillary service. Such a charge is incidental to the incidental activity, rather than to the statutory function itself. A public authority cannot avoid these limits by offering a discretionary service on contractual, take-it-or-leave-it terms.

The local planning authority adopted a policy of charging developers £25 for consultations with planning officers before formal applications for planning permission. The developers paid for two consultations under protest and sought judicial review of the authority's decision to continue charging.

Popplewell J dismissed the application. The Court of Appeal unanimously dismissed the developers' appeal in [1990] 2 WLR 1294. Although giving preliminary advice facilitated the authority's planning functions, the central issue was whether section 111(1) of the Local Government Act 1972 expressly or by necessary implication authorised the authority to charge for that advice.

1. The appeal was allowed unanimously. Lord Lowry delivered the leading speech. Lord Mackay of Clashfern LC, Lord Bridge of Harwich, Lord Brandon of Oakbrook and Lord Ackner agreed with his reasons. The authority's decision was quashed, and the House declared that it had no power to charge a fee for answering enquiries or requests for information before a planning application.

2. Per Lord Lowry, a public authority seeking to impose a charge must demonstrate clear statutory authority for the particular charge. Authority may arise by necessary implication, but that is a rigorous test. Reasonableness, convenience and a relationship to a discretionary service do not suffice. The principle exemplified by Attorney-General v Wilts United Dairies Ltd applied equally to central and local government.

3. Section 111(1) of the Local Government Act 1972 codified the common-law subsidiary-power doctrine. Determining planning applications was a function of the authority. Giving pre-application advice facilitated, was conducive and incidental to that function, but was not itself a function. Charging for that advice was, at best, incidental to an incidental activity. It was not shown to be incidental to the discharge of the planning function itself.

4. Per Lord Lowry, a distinction between obligatory and discretionary functions did not establish a general power to charge for discretionary services. Parliament had enacted express charging powers for many discretionary functions. Nor could the authority create a charging power by offering an optional public service on contractual, take-it-or-leave-it terms. That approach conflicted with the rule that an agreement cannot validate a payment which the authority had no power to require.

5. Lord Lowry rejected the developers' separate construction of section 111(3). That subsection regulates raising money through rates, precepts or borrowing, and lending money. It neither prohibited every service charge nor affirmatively authorised the charge in issue. Section 150 of the Local Government and Housing Act 1989 was not a reliable guide to the meaning of section 111, although it provided a future regulatory mechanism for charging.

1. House of Lords: Allowed the appeal unanimously. Set aside the orders of the Court of Appeal and Popplewell J, quashed the local authority's decision and declared that it had no power to charge for pre-application enquiries or information.
2. Court of Appeal: Slade and Mann LJJ and Sir David Croom-Johnson unanimously dismissed the developers' appeal: [1990] 2 WLR 1294.
3. High Court, Queen's Bench Division: Popplewell J dismissed the application for judicial review.