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




Local Government Finance Act 1982 17, General Rate Act 1967 20(1)


England and Wales


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 . .
CitedIn Re Smith and Fawcett Ltd CA 1942
Directors to act Without Collateral Purpose
The primary duty of a director imposed by the general law is that he should act in what he considers to be the best interests of the company, and not for any collateral purpose. That duty is a subjective one that depends on the directors exercising . .
CitedJeffs and Others v The New Zealand Dairy Production and Marketing Board and Others PC 13-Oct-1966
(New Zealand) . .
CitedLeary v National Union of Vehicle Builders 1971
The court faced questions on a trades union’s decision as to the membership of the applicant.
Held: As a general rule, ‘a failure of natural justice in the trial body cannot be cured by a sufficiency of natural justice in an appellate body.’ . .
CitedCalvin v Carr PC 15-Jan-1979
(New South Wales) It was argued that a decision of the stewards of the Australian Jockey Club was void for having been made in breach of the rules of natural justice.
Held: The stewards were entitled to use the evidence of their eyes and their . .
CitedCouncil of Civil Service Unions v Minister for the Civil Service HL 22-Nov-1984
Exercise of Prerogative Power is Reviewable
The House considered an executive decision made pursuant to powers conferred by a prerogative order. The Minister had ordered employees at GCHQ not to be members of trades unions.
Held: The exercise of a prerogative power of a public nature . .

Cited by:

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The applicants appealed the refusal of judicial review of the refusals of their appeals against exclusion from school.
Held: The Act provided a full appeal procedure from the initial decision of the school’s head teacher, first to the . .
CitedCentre Reinsurance International Co and Another v Curzon Insurance Ltd ChD 12-Feb-2004
It was a necessary part of the system of statutory transfers of insurance obligations under the Act, that the rights should be transferred before exhaustion of any policy excess, and notwithstanding the insolvency. The rights (inchoate at this . .
CitedRegina v District Auditor, Gateshead ex parte Judge P CA 8-Nov-1996
The objector sought leave to appeal. He had objected to spending on a war memorial. The district auditor when declining to intervene had given his reasons. The claimant objected that he should have waited before giving those reasons.
Held: . .
CitedAttorney General’s Reference (No 3 of 2003) CACD 7-Apr-2004
Police Officers had been acquitted of misconduct in public office. They had stood by in a police station custody suite as a prisoner lay on the floor and died.
Held: The trial took place before R -v- G which had overruled Caldwell. The . .
CitedSecretary of State for the Home Department v SP CA 21-Dec-2004
The applcant, a girl aged 17 was in a young offender institution. She complained that she had been removed to segregation without first giving her chance to be heard. The respondent argued that there were sufficient post decision safeguards to . .
CitedTangney v The Governor of HMP Elmley and Another CA 29-Jul-2005
The claimant was a serving a life sentence. During prison disciplinary proceedings he was refused legal and other assistance, and an outside tribunal on the basis that since any finding would not lead to any loss of remission or extra time, his . .
CitedRegina v Civil Service Appeal Board, Ex parte Cunningham CA 1991
The court considered the effect of a disciplinary board failing to give reasons. The absence of any right to appeal may be a factor in deciding that reasons should be given. If it is ‘important that there should be an effective means of detecting . .
CitedRegina v Ministry of Defence ex parte Colin James Murray QBD 15-Dec-1997
The defendant sought judicial review of his court-martial and of the confirming officers. He said the court should have heard that he committed the offence whist intixicated after taking an anti-malarial drug. The court dd not explain why it had . .
CitedBetterment Properties (Weymouth) Ltd v Dorset County Council ChD 2-Mar-2007
The company sought an order removing some 46 acres of land from designation as a village green. The claimant sought the amendment of the register. The parties disputed what evidence beyond that available to the committee making the decision should . .
CitedRegina v Secretary of State for Wales Ex Parte Emery CA 9-Jul-1997
The applicant had sought to have included in the definitive map, a local footpath, and now challenged refusal to include it.
Held: A public right of way may be created by dedication or it may be deemed after actual use by the public over . .
CitedLawrence v Financial Services Commission PC 14-Dec-2009
(Jamaica) The appellant challenged a fixed penalty notice issued in respect of a financial services allegation, saying that it had been made without him having been allowed opportunity to be heard by an impartial tribunal.
Held: Actions under . .
Lists of cited by and citing cases may be incomplete.

Local Government, Administrative, Natural Justice

Updated: 28 May 2022; Ref: scu.183208