Access all Areas: The Ghost of Woolworths
Victor Smith ponders a recent case which suggests that the 2002 decision in Woolworths, may still be unduly influential despite the Court of Appeal having declared it to be wrongly decided. First published in the New Law Journal with Part 1 at (2023) 173 NLJ 8011 p9 and with Part 2 at (2023) 173 NLJ 8012 p11.
Ever since the troublesome decision of the Divisional Court in Brighton and Hove City Council v Woolworths plc [2002] EWHC 2565 (Admin), (2003) 167 JP 21 (Woolworths'), there has been doubt as to whether, notwithstanding the clear words of s 222 Local Government Act 1972 ('s 222') ('LGA'), local authorities have a power to prosecute for offences alleged to have been committed outside their area. Section 222(1) provides: 'Where a local authority consider it expedient for the promotion or protection of the inhabitants of their area ... they may prosecute or defend or appear in any legal proceedings …' Accordingly, it ought to follow that, subject to the expediency test of whether a prosecution promotes or protects the inhabitants of their area, it matters not where the offence or cause of action took place. Woolworths, however, decided that a prosecution for an offence outside a local authority's area 'could not ex hypothesi' satisfy the expediency test.
It took well over 14 years before the Court of Appeal, in R v AB [2017] EWCA Crim 534 ('AB'), affirmed that Woolworths was wrongly decided. However, the sketchy facts of the recent cases of R (City of York Council) v AUH; R (Birmingham City Council) v BIY [2022] EWCA Crim 1113 ('York' and 'Birmingham') suggest that courts of first instance, at least, may still be haunted by Woolworths.
Woolworths and section 222
Woolworths plc was prosecuted by the Council for breaching a suspension notice which prohibited them from supplying or exposing for supply certain toys, without the local authority's consent, contrary to s 14(6) Consumer Protection Act 1987 ('CPA'). The stores in which it was alleged there had been a breach of the notice were located not only in Brighton and Hove, but also in the areas of South Gloucestershire, East Sussex and London. The justices dismissed the informations relating to those offences alleged to have been committed outside the Council's own area on the basis that, firstly, suspension notices were not effective outside of their area and secondly, the Council, which had relied for its authority to prosecute on alleged delegated authority from those other authorities under s 101 LGA, had not proved that there had been such delegation.
On the Council's appeal by way of case stated, Field J held that: 'S 14(1) [CPA] does not in terms limit the power of … a local authority, to issue a suspension notice only in respect of its area. … In my opinion the fact that by s 14(6) it is a criminal offence for a person to contravene a suspension notice does not require that the plain and ordinary meaning of s 14(1) be departed from. … The scope of the power conferred by s 14, he said, 'is to be found in s 14 alone.' On the second question, of their power to prosecute, the Council argued, contrary to the position it took at first instance, that it was not necessary to show that the informations had been laid under delegated powers from the local authorities where the suspension order had been allegedly breached because it had the power under s 222 to prosecute in its own right. Field J, with whom Laws LJ agreed, said:
'The power to prosecute a breach of a suspension notice … is derived from the duty to enforce imposed by s 27(1)(a) [CPA], and that duty is a duty to enforce within the area of the weights and measures authority. It follows, in my view, that South Gloucestershire, East Sussex and London had the power to prosecute for the alleged breaches of the suspension notice which occurred in their areas and that the [Council] had no such power. I also accept [Woolworth's] submission that the [Council] had no power to prosecute in its own right breaches of the suspension notice which occurred outside its area because such a prosecution could not ex hypothesi be expedient for the promotion or protection of the interests of the inhabitants of its area as required by s 222(1) of the 1972 Act.'
Implicit in what Field J said was his view that where Parliament confers an enforcement duty upon a local authority it impliedly also bestows a corresponding power to enforce. However, he did not just say that there was a power to prosecute, derived from the duty to enforce, he said that 'the power' was derived therefrom. It seems that it was based on that hypothesis that he concluded the expediency test in s 222 could not be met. However, on the plain and ordinary meaning of s 222, the only caveat on a local authority's power to prosecute is that they consider it 'expedient for the promotion or protection of the inhabitants of their area'. Just because the 'duty' on a local authority to enforce a provision may carry with it an implied power to prosecute in relation to that duty does not mean that a general 'power' to prosecute, conferred quite separately by another statute, is limited by the scope of the specific duty. Field J gave no justification for conflating the duty in the CPA with the power in the LGA. He gave no other explanation for determining that prosecutions for offences outside of the Council's area could not, in the circumstances of the case or otherwise, be expedient for its own inhabitants. Absent any consideration of that question, Field J effectively held that a prosecution by a local authority for an offence committed outside of their area could never meet the expediency test. The only other hypothesis to which Field J might have been referring was based on the wording of s 222 itself. In that event, however, it means he was directly misconstruing s 222.
Pre-Woolworths authorities
Upon whatever premise Field J's hypothesis was based, it was expressed without reference to any precedents.
In Mole Valley District Council v Smith (1992) 90 LGR 557 ('Mole Valley'), two local authorities applied for injunctions to restrain Smith and others from using land as caravan sites. Lord Donaldson MR, in the Court of Appeal, said:
'It is not for the courts in these proceedings to review the decision of the plaintiff councils under [s 222] to bring these proceedings on the basis of the councils' view that to do so was "expedient for the promotion or protection of the interests of the inhabitants of their area." … where the balance of the public interest lies is for the plaintiff councils to determine and not for this court.'
This exposition of the law was followed by Brooke LJ, in London Borough of Barking & Dagenham v Jones [1999] All ER (D) 923 ('Barking'). There, the local authority applied for an injunction, inter alia, to restrain Jones from persisting in breaches of the Trade Descriptions Act 1968 ('TDA') by falsely describing the printer cartridges he sold as being capable of producing more copies than they were and as having a longer shelf life than they did and being new when they were not. Jones successfully argued in the High Court that, as none of the complainants were in the local authority's area, it could not be said that the injunction was being sought for the protection of the inhabitants of that area as required by s 222. On appeal to the Court of Appeal, Brooke LJ said:
'S 222 gives a local authority power to bring proceedings like these in their own name where they "consider it expedient for the promotion or protection of the interests of the inhabitants of their area". It is for the local authority to make this judgment, not for the court, and the judge misdirected himself as to his proper role when he questioned whether the inhabitants of Barking were truly being served by the issue of these proceedings in the way which the section required, and impliedly gave the answer "no" to that question.'
The local authority's power under s 222(1) was held in R v Jarrett and Steward (1997) 161 JPN 816, to be wide enough to enable a local authority to prosecute a car dealer for the common law offence of conspiracy to defraud, by car clocking, even though the duty imposed by s 26 TDA was limited to prosecuting offences under that Act within their area. The defence argued that the local authority's power under s 222 was limited to matters relating to the interests of local inhabitants such as nuisance, highways and boundary disputes. Rose LJ, however, decided that: 'So far as [s 222] is concerned, there is … no warrant for limiting in any way the words of the section which, on their face, are extremely wide.'
In R v Richards [1999] Crim LR 598, the defendant was convicted of conspiracy to defraud by clocking cars. Richards argued on appeal that the prosecution had not shown that it had given proper consideration to s 222(1) before instituting the prosecution. Hidden J held that:
'The fact that [the informant] must have been considering what was expedient for the inhabitants of the area is to be inferred … from the fact that, after laying informations on a number of specific offences contrary to the [TDA] he then … for and on behalf of [the local authority], laid the information alleging the conspiracy to defraud. It is hard … to consider any way in which he could have come to that decision without specifically taking into his consideration the interests of the inhabitants of the area in not being deceived by a conspiracy to defraud by clocking the second-hand cars that were exposed for sale to the inhabitants in the area. We consider, in any event, that the presumption [given in the maxim omnia praesumuntur rite esse actum] arises in this case.'
The erosion of Woolworths
In R (Donnachie) v Cardiff Magistrates' Court & Another [2009] EWHC 489 (Admin) ('Donnachie'), Donnachie faced allegations that the application of false trade descriptions to certain clocked motor vehicles were attributable to her neglect, contrary to ss 1 and 20 TDA. She contended that the informations were void ab initio because, relying on Woolworths, the Council had no power to prosecute offences said to have been committed outside Cardiff. Sweeney J, said it was common ground that a local authority's power to prosecute such offences may arise in three ways: '(i) By necessary implication from the duty to enforce the provisions of the [TDA] within its area. (ii) By delegation of the power from other local authorities, by virtue of s 101 [LGA]. (iii) Where it is otherwise "expedient for the promotion or protection of the interests of the inhabitants of their area", by virtue of s 222.' It was therefore accepted that the implied power to prosecute arising from the duty to enforce was distinct from the general power under s 222.
The analysis of Woolworths, given on behalf of Donnachie was that 'despite the risk that the dangerous toys bought in Filton, Rye, Hastings and Enfield could have ended up in Brighton and Hove, the court nevertheless ruled that, ex hypothesi, s 222(1) was of no application.' In response, Sweeney J said: 'However, in that case, the level of risk, and hence the need for protection from it, was negligible. In those circumstances, in my view, it is hardly surprising that the court concluded that s 222 was of no application. The facts in this case are very different.' It follows that Sweeney J's decision that the Council had the power to prosecute in Donnachie by virtue of s 222(1) was reached by distinguishing Woolworths on its facts in relation to the expediency test. There was no recognition by Sweeney J that Field J in Woolworths had given no apparent consideration to whether the expediency test was made out on the facts of that case. Notably, Sweeney J made no observations about the merits of Field J's hypothesis. Nonetheless, entirely inconsistent with that hypothesis, Sweeney J concluded his judgment, with which Leveson LJ agreed, by saying, inter alia:
'S 222(1) is extremely widely worded, there is no warrant for limiting its terms, thus the Council may prosecute any [emphasis added] legal proceedings, provided that on proper grounds they "consider it expedient for the promotion or the protection of the interests of the inhabitants of their area".'
In Oldham Metropolitan Borough Council v Worldwide Marketing Solutions Limited and Kay [2014] EWHC 1910 (QB) ('Oldham'), the Council had obtained an undertaking from the company, which had its registered office in its area, not to engage in advertising prohibited by the Business Protection from Misleading Marketing Regulations 2008 ('BPMMR') such as falsely purporting to be affiliated to Google. When the company breached its undertaking, the Council sought an injunction. The company, whilst accepting the breach, maintained that as it had ceased to trade in the Council's area and was not trading there at the time of the breaches, the Council had no power to bring the proceedings. Phillips J noted that the implied power of the Council arising from its duty to enforce the BPMMMR, pursuant to reg.13(2) thereof, only applied within the Council's area. Absent delegated authority from the authorities in whose areas the breaches occurred under s 101 LGA, he said that the 'power to seek an injunction can only arise, if at all, from s 222(1).' In common with Sweeney J in Donnachie, Phillips J therefore silently departed from Field J's hypothesis in Woolworths in so far as it may have been predicated on the basis that the power in s 222(1) 'derived from' the duty to enforce. Phillips J decided that the Council was 'fully entitled to conclude that bringing these proceedings was expedient in the interests of the inhabitants' of its area. He said:
'In the Donnachie case the fact that the taxi business was operating in Cardiff was regarded as self-evidently sufficient to satisfy s 222(1), but it was not suggested that such local activity was necessary. On the contrary, the Divisional Court emphasised the width of the section and of the power it confers. In my judgment, a local authority can properly take into account broader considerations of how to promote or protect the interests of its inhabitants, not limited to situations where unlawful activity is continuing or contemplated within its area.'
It is unfortunate that whilst both Sweeney J in Donnachie and Phillips J in Oldham referenced the ruling in Woolworths that 'ex hypothesi, s 222(1) was of no application', neither of them explored what the hypothesis was or whether it had any merit. Neither of them disavowed Field J's judgment. On the other hand, they both made it clear that a local authority could, subject to the expediency test, use its s 222 power to prosecute even outside of its area.
The demise of Woolworths
The scope of s 222 fell to be decided again by the Court of Appeal (led by Thomas LCJ) in AB. The Council in that case (for the borough of Thurrock), set up a fraud investigation department which took on outside work in order to provide funding. It agreed to act for the Legal Aid Agency. The Council laid informations alleging offences of conspiracy to defraud and acting to pervert the course of public justice. The defendants were said to have submitted false legal aid payment claims and forged client files to the Agency. The defendants appealed against the ruling of the judge who rejected their submission that the Council was acting outside their s 222 powers. The Court of Appeal said:
'The power under s 222 arises by reference to a consideration of expediency; the expediency must be for the promotion or protection of interests. The interests are those of the inhabitants of the local authority's area. If those elements are satisfied, then the local authority may prosecute. Relevant considerations are not limited strictly by geography. In so far as it was suggested in Woolworths that a breach outside a local authority's area could "ex hypothesi" not be expedient for the purpose of s 222, it was wrongly decided …'
Thus, albeit without an exploration as to what exactly Field J's hypothesis was, the Court of Appeal put an end to the notion that a prosecution could never meet the expediency test if it was for an offence committed outside the local authority's area. The Court said: 'Each case will turn on its own facts, but … the court should be slow to interfere, given the very broad power given to a local authority under s 222.' Ultimately however, AB was not decided in the Council's favour.
The Court reviewed the dicta of Brooke LJ in Barking where, with reference to Mole Valley, he appeared to say that the courts could not interfere with a local authority's decision on the expediency test. The Court said that, in Mole Valley, 'there had been no attempt to ask the court to conduct a judicial review of the councils' decisions to bring those proceedings' and that, in Barking, 'Brooke LJ appears to have been saying no more than that the (incorrect) approach of the judge below was to seek to substitute his own opinion for that of the local authority, rather than to review it.' The Court, in AB, concluded that:
'… the court has jurisdiction to review the Council's decision to prosecute. However, that is an exercise to be carried out sparingly and within the parameters of the very broad discretion granted to the Council under s 222. There is, however, a high hurdle to be overcome before the court will interfere with a local authority's exercise of discretion under s 222.'
Thus, although the court can review a local authority's decision under s 222, it should only do so where that decision was so unreasonable that the court should interfere. The Court held that it was unreasonable to prosecute on the basis that it was in the interests of the inhabitants of the area because everyone might benefit from the legal aid system not being defrauded:
'For the requirements of s 222 to be met, the interests of the inhabitants of Thurrock must be engaged over and above their interests merely as ordinary citizens of the nation. The clear policy of the LGA, as reflected in the wording of s 222, was that the power in question was being conferred for the benefit of the inhabitants of Thurrock as such.'
The Court also rejected the decision to prosecute as being reasonable on the basis that the inhabitants of Thurrock benefited from the Council acting for financial gain: 'Otherwise, s 222 would empower any local authority to offer a prosecution service (or indeed a defence service) to any individual or organisation prepared to pay for it. This cannot have been Parliament's intention.' The Court went on to say that the Council's provision of a national prosecutions unit not only fell 'well outside the scope of s 222, but that it would be harmful to the public interest to have such a unit established as an alternative to the CPS.'
The ghost of Woolworths
In the York and Birmingham cases the local authorities had each sought to prosecute offences alleged to have been committed outside their respective areas. York City Council commenced proceedings alleging a conspiracy to defraud using a bogus model agency. Prospective models 'from across England', having responded to advertising on social media and the like, were invited to free test shoots and allegedly subjected to high pressure selling of digital photographs for the portfolios they would need to join the agency and become professional models. In the second case, Birmingham City Council alleged offences of unlawfully engaging in the activities of an unlicenced consumer credit business contrary to s 39(1) Consumer Credit Act 1974 and unauthorised money lending, contrary to s 23(1) Financial Services and Markets Act 2000. The trial judge, in the first case, stayed the proceedings as an abuse of process on the basis that the Council had not satisfied the expediency test in s 222. Likewise, the trial judge, in the second case concluded that the expediency test in that case had not been met. However, he found that the Council had power to prosecute pursuant to para 46(1), sch.5 to the Consumer Rights Act 2015 ('para 46') which gave local weights and measures authorities in England and Wales the power to prosecute consumer offences, allegedly committed outside their area. The issue for the Court of Appeal was whether that power was subject to the expediency test in s 222 or whether it was a freestanding power.
Burnett LCJ, giving the Court of Appeal's judgment, said that s 222 provided a general power whereas para 46 was an example of a specific power. He noted that s 30 Animal Welfare Act 2006 ('s 30') ('AWA'), which provided that 'a local authority in England or Wales may prosecute proceedings for any offence under this Act', was another example of a specific power. The Court agreed with the obiter observations of Wyn Williams J in Lamont-Perkins v RSPCA [2012] EWHC 1002 (Admin), who said of s 30:
'… this express provision is included so as to avoid any suggestion that a local authority has power to prosecute under the [AWA] only if the requirements of s 222 … are satisfied. S 222 … empowers a local authority to prosecute only if it considers it expedient for the promotion or protection of the interests of inhabitants in its area. If s 30 … did not exist there might be scope for considerable argument about whether a local authority could satisfy s 222 … if it decided to prosecute in an animal welfare case. S 30 removes the scope for such argument and in my judgment is included within the [AWA] deliberately so as to remove the scope for such an argument.'
Likewise, Burnett LCJ concluded that 'the clear words of para 46 … empower a local weights and measures authority to prosecute for consumer offences allegedly committed in a part of England or Wales which is outside the authority's area, without reference to s 222 …'
As the Court of Appeal in York and Birmingham found that the two local authorities had power to prosecute outside their respective areas, by virtue of para 46, it did not consider whether the respective courts of first instance were justified in finding that the s 222 expediency test was not met and there is nothing in the judgment to indicate why the respective trial judges had so concluded. In York, the cross-boundary investigation was funded as an 'Operation' by the National Trading Standards Board. In Birmingham, the investigation was undertaken by the Illegal Money Lending Team, operated by Birmingham City Council but, funded by central Government.
It may be that as, in each case, the Council relied for their authority to prosecute on para 46, they did not expressly consider the expediency test (or indeed the need for delegated authority under s 101 LGA). However, it does not seem that it was on that basis that the trial judges ruled against them. Rather, it was because 'the prosecution did not satisfy the expediency test'. On the face of it, neither prosecution appears to have been so unreasonable as to enable the courts to review the Councils' decisions or overcome the high hurdle, referred to in AB, before the court could interfere with the discretion of the Councils. Unlike in AB, the Councils were prosecuting offences within their expertise and the field of their statutory duties.
There is no indication in the judgment as to how the defendants' money lending activities in Birmingham may have affected the local inhabitants. In York, however, the would-be models were attracted by means of national advertising and the victims came from across England. If Woolworths has been truly laid to rest, the trial judge in York should have been guided by the judgment of Phillips J in Oldham, endorsed in AU as 'the most useful recent summary'. Particularly relevant are the words: '… there is no basis for limiting the matters the local authority may consider to activities taking place within the relevant area or directly affecting its inhabitants.' Even if no inhabitant of York had yet become a victim of the bogus model agency, the risk that, absent a prosecution, they would be ensnared in the future was just as great. The inhabitants were not just interested as citizens of the nation, but subject to a real and continuing danger. One has to wonder whether the 'ex hypothesi' decision in Woolworths has been completely exorcised.
Victor Smith is author of Consumer Crime Cases, a digest of over 1300 appeal cases focused on, but not restricted to, trading law prosecutions (www.consumercrime.co.uk).