Joyce, R (on the application of) v Watkinson

A local authority’s authorising resolution need not identify the precise statutory power under which proposed action is taken. Failure to do so does not, by itself, invalidate the resolution, the action or expenditure. The essential questions are whether the authority possessed the power in fact and whether it exercised that power lawfully. Identifying the power will generally be good practice because it assists scrutiny of the applicable criteria and the legality of the decision. In an appeal concerning audited expenditure, the court may also consider the authority’s reports, minutes, officers’ evidence, transactional documents and audit sampling. There is no appeal against a district auditor’s decision not to issue a public-interest report or advisory notice where the statutory scheme provides no such right.

The claimant objected to Sefton Borough Council’s audited accounts under the Audit Commission Act 1998. Her objection concerned expenditure on voluntary acquisitions of residential properties under the Housing Market Renewal Initiative. She argued that the Council’s resolutions were unlawful because they did not expressly identify the statutory power, principally section 227 of the Town and Country Planning Act 1990, relied upon for the acquisitions.

The District Auditor rejected the objection and declined to apply for a declaration that the expenditure was contrary to law. The claimant appealed under section 17(3) and also sought to challenge the refusal to issue a report under section 8 and an advisory notice under section 19A. The central issues were whether express statutory identification was legally required and whether the additional decisions were appealable.

1. Appeal under section 17(3). The appeal was dismissed. There is no statutory or common-law requirement that a local authority’s report or resolution identify the specific statutory power under which proposed action is taken. Nor does the omission automatically invalidate the decision or expenditure.
2. The material question is whether the authority had power to act and exercised that power lawfully. For voluntary acquisitions, the relevant inquiry was whether the acquisitions were for a purpose falling within section 226 of the Town and Country Planning Act 1990, not whether the resolution expressly referred to section 227. Express identification of the power is usually good practice because it assists scrutiny of the correct statutory criteria and any allegation of irrationality.
3. The absence of an express reference did not prevent effective audit. A district auditor could examine the authority’s available powers, reports and minutes, question officers, inspect transfer documents and sample transactions. The evidence showed that those methods had been used and disclosed no substantive illegality.
4. There was no appeal against the District Auditor’s decisions not to issue a report under section 8 or an advisory notice under section 19A of the Audit Commission Act 1998. Those parts of the appeal were therefore dismissed as a matter of principle.
5. Even if express reference to section 227 had been legally required, the court would not have made a declaration under section 17 because no substantive illegality had been established and the auditor had no reason to doubt the legality of the expenditure. The respondent was awarded his costs in principle, subject to detailed assessment.

• High Court (Administrative Court): The claimant appealed under section 17(3) of the Audit Commission Act 1998 against the District Auditor’s decision of 24 January 2006 not to seek a declaration that the expenditure was contrary to law. The appeal was dismissed. The challenges concerning sections 8 and 19A were also dismissed as not appealable.