Lloyd v McMahon: HL 12 Mar 1987

The district auditor had issued a certificate under the 1982 Act surcharging the appellant councillors in the sum of 106,103, pounds being the amount of a loss incurred or deficiency caused, as the auditor found, by their wilful misconduct.
Held: An aggrieved objector to local government spending should pursue his rights under the Act and not by way of seeking judicial review.
the requirements of fairness depend on the character of the decision-making body, the kind of decision it is to make and the legal framework within which it operates.
Lord Keith said: ‘It is, however, my opinion that the particular appeal mechanism provided for by section 20(3) of the Act of 1982, considered in its context, is apt to enable the court, notwithstanding that it finds some procedural defect in the conduct of an audit which has resulted in a certificate based on wilful misconduct, to inquire into the merits of the case and arrive at its own decision thereon. Section 20(3)(b) empowers the court to ‘confirm the decision or quash it and given any certificate which the auditor could have given.’ The relevant rules of court enable a rehearing of the broadest possible scope to take place . . In the circumstances, it would be quite unreasonable and not in accordance with the intendment of the enactment to hold that the court, where an issue is raised as to the fairness of the procedure adopted by the auditor, is confined to a judicial review species of jurisdiction so as to have power only to quash or affirm the auditor’s certificate without entering upon its own examination of the merits of the case. No doubt there may be cases where the procedural defect is so gross, and the prejudice suffered by the appellant so extreme, that it would be appropriate to quash the auditor’s decision on that ground. But in my opinion the court has a discretion, where it considers that justice can properly be done by its own investigation of the merits, to follow that course.’
Lord Bridge said: ‘My Lords, the so called rules of natural justice are not engraved on tablets of stone. To use the phrase which better expresses the underlying concept, what the requirements of fairness demand when any body, domestic, administrative or judicial, has to make a decision which will affect the rights of individuals depends on the character of the decision-making body, the kind of decision it has to make and the statutory or other framework in which it operates. In particular, it is well-established that when a statute has conferred on any body the power to make decisions affecting individuals, the courts will not only require the procedure prescribed by the statute to be followed, but will readily imply so much and no more to be introduced by way of additional procedural safeguards as will ensure attainment of fairness.’ and ‘In every case it must be for the court, as a matter of discretion, to decide how in all the circumstances its jurisdiction under section 20(3) can best be exercised to meet the justice of the case. But I am clearly of opinion that when the court has, as here, in fact conducted a full hearing on the merits and reached a conclusion that the issue of a certificate was justified, it would be an erroneous exercise of discretion nevertheless to quash the certificate on the ground that, before the matter reached the court, there had been some defect in the procedure followed.’
Lord Templeman said: ‘The task of the court was to ‘give any certificate which the auditor could have given’ (section 20(3) of the Act of 1982). The court was not concerned with any defects in the procedure adopted by the auditor because those defects (if any) did not hamper the prosecution or conduct of the appeal. Different considerations apply if a statute only allows an appeal to a court on a question of law, or entitles or obliges the court of law to rely on the facts found by the tribunal. And the defects in the inquiry conducted by the tribunal may be so prejudicial to the aggrieved person that the court in its discretion may decide to quash the decision and not to proceed with an appeal on the merits in the absence of the views of the tribunal after a proper inquiry. In the present case the Divisional Court was entitled to consider the appeal on its merits and on the basis of the evidence presented to the court.’
Lord Bridge, Lord Keith, Lord Templeman
[1987] AC 625, [1987] UKHL 5, [1987] 1 All ER 1118, [1987] 2 WLR 821
Bailii
Local Government Finance Act 1982 17, General Rate Act 1967 20(1)
England and Wales
Citing:
Appeal fromLloyd v McMahon CA 1986
Councillors had been surcharged by the district auditor. The Act provided for an appeal to the High Court by anyone ‘aggrieved’ by the decision of an auditor, and further provided that on the hearing of the appeal ‘the court may confirm, vary or . .
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(New Zealand) . .
CitedLeary v National Union of Vehicle Builders 1971
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These lists may be incomplete.
Updated: 26 December 2020; Ref: scu.183208