Peters v London Borough of Haringey & Anor

The claimant sought judicial review of Cabinet decisions (3 and 20 July 2017, following earlier steps) approving Lendlease as partner and establishing the Haringey Development Vehicle (HDV) principally as a 50/50 Limited Liability Partnership (LLP). The challenges advanced four grounds: (1) that the Council’s reliance on the general power of competence (section 1 Localism Act 2011) was excluded by section 4(2) because the Council was acting for a "commercial purpose" and so must act through a company rather than an LLP; (2) that the Council failed to comply with the consultation duty in section 3 Local Government Act 1999; (3) that the public sector equality duty in section 149 Equality Act 2010 had not been discharged; and (4) that the relevant decisions were reserved to full Council under Regulation 4 of the Local Authorities (Functions and Responsibilities) (England) Regulations 2000.

The judge analysed the statutory language and decision-making history. On the Localism Act point he applied a dominant-purpose approach: whether the Council’s purpose in entering the arrangements was a commercial purpose. He concluded the Council’s dominant purpose was non-commercial (to achieve housing, affordable housing, regeneration and socio‑economic aims) and any commercial element was incidental, so s4(2) did not require the use of a company. The LLP ground was judged to be reasonably arguable on its merits but the claim was refused permission as out of time and, on the merits, would have been dismissed in any event.

On the s3 consultation ground the court held the statutory duty to consult about high‑level arrangements arose by November 2015 (and at the latest February 2017), so challenges to the July 2017 decisions were out of time; permission was refused because of delay and prejudice to the Council and the private partner. On the s149 Equality Act ground the court found the Council had given due regard at the relevant stages (with EqIAs undertaken at appropriate levels and further EqIAs reserved for site‑by‑site decisions) and refused permission as lacking merit and out of time. Finally, on the Functions Regulations point the judge found the July decisions were not decisions "for the control of the authority’s borrowing, investments or capital expenditure" in the sense required to reserve them to full Council, so the Cabinet properly made them.

Background and parties: The claimant, a Haringey resident and campaigner, sought judicial review of Cabinet decisions confirming Lendlease as the preferred partner and approving the structure and documentation for the Haringey Development Vehicle (HDV). The HDV was to be a long‑term partnership to develop Council land for housing, regeneration and socio‑economic objectives.

Nature of the claim and relief sought: The claimant sought to quash the decisions on four legal grounds: (i) unlawful use of an LLP in circumstances requiring a company under the Localism Act 2011 because the Council was acting for a commercial purpose; (ii) failure to discharge the statutory consultation duty under section 3 Local Government Act 1999; (iii) failure to comply with the public sector equality duty under section 149 Equality Act 2010; and (iv) decisions taken by Cabinet when they should have been taken by full Council under the Functions Regulations 2000. The defendant (the Council) and the interested party (Lendlease) resisted permission and relief, also alleging undue delay and that relief should be refused under sections 31(6) and 31(3D) Senior Courts Act 1981.

Issues framed by the court:

• Whether the Council was "doing things for a commercial purpose" so as to require the use of a company under s4(2) Localism Act 2011, or whether its dominant purpose was non‑commercial.
• Whether the section 3 consultation duty had arisen and, if so, at what stage, and whether the claim was out of time or should be refused for delay and prejudice.
• Whether the Council had had "due regard" to the public sector equality duty at the relevant decision points.
• Whether the decisions amounted to formulation of a plan or strategy for the control of borrowing, investments or capital expenditure and therefore were reserved to full Council under Regulation 4.

Court’s reasoning and conclusions: The court took an overall/dominant purpose approach to s4(2) of the Localism Act. It examined the decision papers and process from February and November 2015 through the February and July 2017 Cabinet reports and the appended business plans and EqIAs. The judge concluded that the Council’s dominant purpose was non‑commercial — to secure housing, affordable housing, regeneration, jobs and socio‑economic benefits — and that any commercial consequences (returns, improved asset management) were incidental and part of prudent public asset management. Consequently s4(2) did not require the corporate form of a company rather than an LLP. The judge nonetheless refused permission on that ground as out of time, and would have dismissed it on the merits.

Regarding section 3 consultation, the court held the duty to consult about "high level" arrangements arose by November 2015 (or at the latest February 2017) and that the claimant’s challenge in August 2017 was too late. The judge declined to extend time given the prejudice, reliance and costs incurred by the Council and Lendlease. On the equality duty, the court found EqIAs had been repeatedly considered at appropriate stages (initial EqIA in 2015 and fuller assessments in 2017) and that further site‑specific EqIAs would follow; the PSED challenge lacked merit and was out of time. Finally, the judge found the Cabinet decisions did not amount to a plan or strategy "for the control" of borrowing, investments or capital expenditure in the sense that would reserve them to full Council; accordingly Cabinet was the correct decision‑maker.

Disposition: Permission to apply for judicial review was refused on all grounds and the claim was dismissed.

Permission to apply for judicial review was refused on all grounds and the claim dismissed. The judge held that (1) the Council’s dominant purpose in establishing and participating in the HDV was non‑commercial so section 4(2) Localism Act 2011 did not require the use of a company rather than an LLP, although the claim raising that point was refused as out of time (and would in any event have been dismissed on the merits); (2) any duty to consult under section 3 Local Government Act 1999 arose by November 2015 (or at the latest February 2017) so challenges to the July 2017 decisions were out of time and permission was refused because of delay and prejudice; (3) the public sector equality duty in section 149 Equality Act 2010 had been considered at the appropriate stages and the equality challenge lacked merit and was out of time; and (4) the Cabinet was the correct decision‑maker as the decisions did not fall within the Regulation 4 exception requiring full Council.