Peters v London Borough of Haringey & Anor

Under sections 1 and 4 of the Localism Act 2011, a local authority’s purpose must be assessed by examining the overall purpose for which the challenged arrangements are undertaken. An incidental or ancillary intention to obtain a financial return does not create a commercial purpose where the dominant purpose is to pursue housing, employment, regeneration and other public objectives.

The consultation duty under section 3 of the Local Government Act 1999 concerns high-level policy and approach, and must generally be fulfilled before significant implementation expenditure and procurement commitments. The public sector equality duty requires due regard to equality considerations at the relevant decision-making stage; it does not require an equality impact assessment as such.

The claimant sought judicial review of decisions by the London Borough of Haringey Cabinet concerning the establishment of a 50:50 development vehicle with Lendlease Europe Holdings Ltd. The July 2017 decisions confirmed Lendlease as partner, approved the vehicle’s structure and documentation, and authorised related business plans.

Four grounds were advanced: that an LLP could not be used for a commercial-purpose venture under the Localism Act 2011; failure to consult under section 3 of the Local Government Act 1999; breach of the public sector equality duty; and failure to reserve the decision to full Council under the Local Authorities (Functions and Responsibilities) Regulations 2000. Delay and discretionary relief issues also arose.

The court refused permission on all grounds.

1. Commercial purpose. The relevant question under section 4(2) of the Localism Act 2011 was the Council’s purpose in entering the HDV arrangements, not Lendlease’s purpose or the HDV’s purpose considered in isolation. Section 4(2) required an overall assessment of the thing being done and the purpose for which it was done. The dominant-purpose approach in R v Southwark Crown Court ex parte Bowles [1998] AC 641 was persuasive.
2. The Council’s dominant purpose was to use and develop its land to achieve housing, affordable housing, employment and regeneration objectives. The anticipated profits, improved rents and financial returns were consequences of obtaining best consideration and acting prudently. They were incidental or ancillary and did not amount to a commercial purpose. The LLP structure was therefore not unlawful on the merits, although the challenge was also out of time.
3. Consultation. Section 3 consultation concerned the high-level policy or approach, not the detailed terms of the eventual arrangements. The duty arose by February 2015, or at latest November 2015, when the Council decided to pursue an overarching 50:50 development vehicle and commence procurement. Applying R(Nash) v Barnet LBC [2013] EWCA Civ 1004, the July 2017 decisions were distinct later implementation decisions and did not restart time. The claim was out of time, with substantial prejudice also weighing against an extension.
4. Equality duty. Section 149 of the Equality Act 2010 imposed a duty to have due regard, not a freestanding duty to produce an equality impact assessment. The Council considered equality issues at the appropriate level in 2015 and again through detailed assessments in July 2017. Further assessments could be undertaken for particular site transfers.
5. Decision-maker. The July decisions were executive decisions. Although important and financially consequential, they did not formulate a plan or strategy for the control of borrowing, investments or capital expenditure within regulation 4 of the Local Authorities (Functions and Responsibilities) Regulations 2000. They therefore did not require determination by full Council.