Tort Law

Porter v. Magill

[2001] UKHL 67; [2002] 2 AC 357

Facts

• Westminster City Council was controlled by a political majority led by Dame Shirley Porter.
• The council adopted a policy for selling council houses in selected marginal electoral wards.
• The policy became known as the “homes for votes” scheme.
• Its purpose was found to include increasing the number of owner-occupiers believed likely to vote for the governing political party.
• Valuable public housing resources were therefore directed partly by electoral considerations rather than lawful housing policy.
• The district auditor, John Magill, investigated the scheme.
• He found that Porter and another councillor had engaged in wilful misconduct causing substantial financial loss to the council.
• They were subjected to a surcharge requiring repayment.
• The councillors challenged:
o the finding of wilful misconduct;
o causation and quantum of loss; and
o the auditor’s impartiality.
• Although the case primarily concerns public law and local-government finance, it appears in the Tort Law syllabus for wilful misconduct and responsibility for abuse of public power.

• What constitutes wilful misconduct by a public office-holder.
• Whether deliberate or reckless misuse of power causing financial loss supports personal liability.
• Whether the auditor’s decision was invalid because of apparent bias.
• Whether “wilful misconduct” is a separate private-law tort.

• Wilful misconduct involves more than ordinary error or negligence.
• It may be established where a public official:
o knowingly acts unlawfully;
o deliberately disregards legal duties; or
o acts with reckless indifference as to whether the conduct is lawful.
• The misconduct must cause the public loss for which the official is charged.
• Wilful misconduct in this setting is a statutory basis for surcharge and public accountability, not a general independent tort available in every private dispute.
• Apparent bias exists where a fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility of bias.

• The housing policy was not merely a mistaken political judgment.
• Evidence showed that electoral advantage was a central objective.
• Public housing powers had to be exercised for lawful housing and local-government purposes.
• Using them to manipulate voting patterns was an improper purpose.
• Porter and the other councillor were found to understand, or recklessly disregard, the unlawfulness of the scheme.
• The sales caused the council financial loss by disposing of housing assets and implementing the targeted programme.
• Their personal participation connected the misconduct with that loss.
• The House of Lords also considered public statements made by the auditor.
• Applying the fair-minded-observer test, it concluded that the process was not invalidated by apparent bias.
• The case therefore demonstrates a level of wrongdoing substantially beyond negligence: conscious or reckless abuse of legal power.
• It should not be cited as creating a free-standing tort of “wilful misconduct” between private persons.

• The House of Lords upheld the essential findings of wilful misconduct and the surcharge liability.
• The councillors had deliberately or recklessly used public powers for an improper electoral purpose.
• Their conduct caused compensable loss to the council.
• The challenge based upon apparent bias failed under the fair-minded and informed observer test.