Neutral Citation Number: [2014] EWCA Civ 397

Case No: C3/2013/1561
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM the UPPER TRIBUNAL (ADMINISTRATIVE  APPEALS CHAMBER) 
UPPER TRIBUNAL JUDGE JACOBS
C5/2009/0865
C5/2009/1855 
Royal Courts of Justice
Strand, London, WC2A 2LL

Date: Wednesday 2nd April 2014
Before:

MASTER OF THE ROLLS
LORD JUSTICE PITCHFORD
and
LADY JUSTICE RAFFERTY

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Between:

	Sharifa Mulla	Appellant	
	- and -		
	Hackney Learning Trust	Respondent	
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(Transcript of the Handed Down Judgment of
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David Wolfe QC (instructed by Tower Hamlets Law Centre) for the Appellant
Jennifer Thelen (instructed by Hackney Learning Trust) for the Respondent

Hearing date: 12 March 2014

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Judgment
Master of the Rolls: 
1.	Ms Mulla appealed under para 8(3) of Schedule 27 of the Education Act 1996 (“the Act”) to the First Tier Tribunal, Special Educational Needs and Disability (“the FTT”) against the decision of The Learning Trust of the London Borough of Hackney (“Hackney”) to refuse her request under para 8(2) of Schedule 27 that Hackney should change the school named in Part 4 of her son M’s Statement of Special Needs from I School (a special school maintained by Hackney) to RC School (a special school maintained by Islington Borough Council (“Islington”)).  M’s sister currently attends RC School. Hackney resisted this placement on the grounds that it would be incompatible with the efficient use of its resources.  The additional costs of acceding to Ms Mulla’s request were estimated at £26,000 per year.  These costs arose because, if M were to attend RC School, Islington would recoup the cost of his place from Hackney, together with an additional administration charge.  
2.	The FTT noted Ms Mulla’s desire for her children to attend the same school, difficulties in arranging transport and Ofsted reports for both RC School and I School.  They concluded at para 13 of their decision that they would have liked to allow the appeal and make the order sought by Ms Mulla.  But the costs of doing so would be “very substantial”, especially bearing in mind that M had nearly 10 years of schooling ahead of him.  There was no educational need to move him.  They were not able to conclude that the social and practical factors put forward by Ms Mulla outweighed the very considerable additional expense that would be incurred by Hackney if M were to be placed at RC School.  Accordingly, they dismissed the appeal.  I should point out that the inter-authority recoupment regime (which meant that RC School was more expensive from Hackney’s point of view, but hardly at all from the point of view of the public purse as a whole) no longer exists: see SI/2013/492.  But this change in the statutory regime does not affect the issues raised by this appeal.
3.	Ms Mulla appealed to the Upper Tribunal (Administrative Appeals Chamber) (Judge Edward Jacobs) on the grounds that the FTT had failed to consider the effect of section 9 of the Act.  She contended that section 9 required account to be taken of the cost to the public purse as a whole (and not only the cost to Hackney) of acceding to her preferred choice of school.  She argued that, if the FTT had properly taken account of section 9, they would have found that little or no additional public expenditure would have been incurred by placing M at RC School.  In the result, they should have held, in the light of the social and practical factors which weighed in favour of her choice, that RC School should have been named.  
4.	Judge Jacobs dismissed her appeal.  Before I come to his decision, I should refer to the material statutory provisions.
Relevant statutory provisions
5.	Section 9 of the Act provides:
“In exercising or performing all their respective powers and duties under the Education Acts, the Secretary of State and local authorities shall have regard to the general principle that pupils are to be educated in accordance with the wishes of their parents, so far as that is compatible with the provision of efficient instruction and training and the avoidance of unreasonable public expenditure.”
6.	Section 324 provides:  
“(1) If, in the light of an assessment under section 323 of any child’s educational needs and of any representations made by the child’s parent in pursuance of Schedule 27, it is necessary for the local authority to determine the special educational provision which any learning difficulty he may have calls for, the authority shall make and maintain a statement of his special educations needs.
(2)	The statement shall be in such form and contain such information as may be prescribed.
(3)	In particular, the statement shall—
(a)	give details of the authority’s assessment of the child’s special educational needs; and
(b)	specify the special educational provision to be made for the purpose of meeting those needs, including the particulars required by subsection (4).
(4)	The statement shall—
(a)	specify the type of school or other institution which the local authority consider would be appropriate for the child;
(b)	if they are not required under Schedule 27 to specify the name of any school in the statement, specify the name of any school or institution (whether in the United Kingdom or elsewhere) which they consider would be appropriate for the child and should be specified in the statement
………..
(7)   Schedule 27 has effect in relation to the making and maintenance of statements under this section.” 
7.	Schedule 27 makes provision for the making and maintenance of statements.  Para 2A(1) provides:
“A local authority shall not amend a statement except—
(a)	in compliance with an order of the Tribunal,
(b)	as directed by the Secretary of State under section 442(4), or
(c)	in accordance with the procedure laid down in this Schedule”.
8.	One of the situations in which Schedule 27 contemplates such an amendment is that stated in para 8 which provides:
“(1) Sub-paragraph (2) applies where –
(a)	the parent of a child for whom a statement is maintained which specifies the name of a school or institution asks the local authority to substitute for that name the name of a maintained school or maintained nursery school specified by the parent, and
(b)	the request is not made less than 12 months after –
(i)	an earlier request under this paragraph,
(ii)	the service of a copy of the statement [or amended statement] under paragraph 6,
(iii)	…
(iv)	if the parent has appealed [there is an appeal] to the Tribunal under section 326 or this paragraph, the date when the appeal is concluded,
whichever is the later,
(2) The [local authority] shall comply with the request unless –
      (a) the school is unsuitable to the child’s age, ability or    aptitude or to his special educational needs, or
      (b) the attendance of the child at the school would be incompatible with the provision of efficient education for the children with whom he would be educated or the efficient use of resources.
(3) Where [the local authority] determine not to comply with the request –
      (a) they shall give [notice in writing of that fact] to the parent of the child, and 
      (b) the parent of the child may appeal to the Tribunal against the determination.
				………..
(4)	On the appeal the Tribunal may –
(a) dismiss the appeal, or
      (b) order the [local authority] to substitute for the name of the school or other institution specified in the statement the name of the school specified by the parent.”
9.	Para 3(1) requires a local authority to make arrangements for enabling a parent of a child who is the subject of a proposed statement or proposed amended statement to express a preference as to the maintained school at which he wishes his or her child to be educated and to give reasons for that preference.  Subparagraph (3) provides: 
“Where a local authority make a statement in a case where the parent of the child concerned has expressed a preference in pursuance of such arrangements as to the school at which he wishes education to be provided for his child, they shall specify the name of that school in the statement unless—
(a)	the school is unsuitable to the child’s age, ability or aptitude or to his special educational needs, or
(b)	the attendance of the child at the school would be incompatible with the provision of efficient education for the children with whom he would be educated or the efficient use of resources.”
10.	It can therefore be seen that the language of para 8(2) is almost identical with that of para 3(3).   I shall explain the significance of this later.
The decision of Judge Jacobs
11.	The judge said that section 9 of the Act has no application to para 8(2) of Schedule 27.  The duty under para 8(2) is absolute: no other considerations can be taken into account.  At paras 28 and 29, he rejected the submission that there is implicit in para 8 a power to substitute the name of a school (the exercise of which engages section 9) where there is no duty to comply with a parent’s request because one or both of the conditions specified in para 8(2) is satisfied.  He therefore concluded at para 31 that section 9 is irrelevant in this case.  The only issue for the FTT was whether the conditions set out in para 8(2) applied.  If either or both did apply, Hackney was not under a duty to name the RC School.  If neither applied, it was under such a duty.  The FTT decided that one of the conditions stated in para 8(2)(b) applied because of the considerable additional expense that Hackney would have to bear if M were placed at the RC School.  Judge Jacobs said that, on the evidence, it was entitled to reach this conclusion.  It was not obliged, or indeed permitted, to consider section 9.  Accordingly, the appeal was dismissed.
The issues
12.	The issues (including those raised by Hackney by a respondent’s notice) are: (i) whether it is implicit in para 8 that section 9 is engaged in the performance of the duty under para 8(2); (ii) even if section 9 is not engaged by this route, whether it is engaged by virtue of section 324(4)(b); and (iii) if (i) or (ii) are answered in the affirmative, whether the decision of the FTT should be quashed.  
13.	It was held by the House of Lords in B v Harrow London Borough Council [2000] 1 WLR 223 that the expression “the efficient use of resources” in para 3(3)(b) of Schedule 27 refers only to the resources of the authority which is discharging functions under the Education Acts (as defined in section 573 of the Act) and not the resources of other public bodies.  Since the language of para 3(3)(b) and para 8(2)(b) is identical, it is clear that, for the purposes of para 8(2), the resources in the present case are those of Hackney and not those of Islington or any other public body whose financial position might be affected by the change in the name of school.  It has now been established by this court in Haining v Warrington BC [        ] that the phrase “public expenditure” in section 9 encompasses all public expenditure by any public body.    
The first issue
14.	Mr Wolfe QC submits that there is nothing in para 8(2) or elsewhere which states that, if the conditions in para 8(2)(a) or (b) are met, the local authority must reject the parental preference.  The local authority continues to have the power to accede to or reject the parent’s wishes.  Para 8(2) gives the local authority the power to accede to or reject the parent’s preferred school (and obliges it to accede in certain circumstances).  The paragraph does not mean that a local authority is bound to refuse the request unless required by para 8(2) to accede to it.  In exercising this power (like any other power under the Education Acts), the local authority is obliged by section 9 to have regard to the general principle set out in that section.  Mr Wolfe relies on Essex v SENDIST [2006] EWHC 1105 (Admin), [2006] ELR 452 where at para 31 Gibbs J said: 
“Insofar as those decisions do assist they show, in my judgment, that a two-stage test must be applied; that is, unless it can be shown that one of the exceptions in para 8 applies, parental wishes must be followed. Only if one or more exceptions do apply should the LEA or the tribunal, in the case of an appeal, carry out the sort of broad balancing exercise which would weigh the amount of resources involved in maintaining the child at a particular school, the relative merits of possible schools for the child and a broad range of relevant educational factors.”
15.	Gibbs J went on at para 32 to consider whether the extra expense of meeting the parental wishes was disproportionate.   Ms Thelen submits that Essex was wrongly decided.
16.	I see force in Mr Wolfe’s submission.  But I do not find it necessary to decide whether it is correct since, for reasons that I shall explain in relation to the second issue, I am in no doubt that section 9 is engaged by reason of section 324(4)(b).   
The second issue
17.	Mr Wolfe’s submission is short and simple.  Section 324(4)(b) provides that, if a local authority is not required under any provisions of Schedule 27 to specify the name of a school in the statement of special educational needs, it may specify the name of any school which it considers “would be appropriate for the child and should be specified in the statement”.  In support of the existence of this discretion, he relies on Richardson v Solihull Metropolitan Borough Council [1998] ELR 318 at p 330.  Accordingly, if by virtue of para 8(2) of Schedule 27, Hackney is not obliged to specify RC School, it retains the power to name that school for M if it considers that it would be appropriate to do so.  
18.	Ms Thelen accepts that section 9 is engaged where, by reason of para 3(3) of Schedule 27, there is no duty to name the school requested by the parent and the authority exercises its section 324(4)(b) power to name a different school (a power which she acknowledges exists where no duty arises under para 3(3)).  But she points out that para 3 is concerned with the choice of school, whereas para 8 is concerned with a change of named school.  She submits that section 9 is engaged only when a local authority is naming a school ie when para 3(3) is involved.  Para 8 is a narrow provision with more limited scope.   
19.	She relies on Slough Borough Council v C [2005] LGR 368, [2004] EWHC 1759 (Admin).  In that case, the Statement of Special Educational Needs specified a special school for the child.  The parents made a request under para 8 for a mainstream school to be substituted.  The council refused and the parents appealed.  The tribunal applied section 316(3) of the Act which provides that a child must be educated in a mainstream school unless it is incompatible with (a) the wishes of the parent or (b) the provision of efficient education for other children.  The tribunal allowed the appeal and ordered the statement to be amended to refer to a “mainstream school” in place of a “special school”.  
20.	The central issue was whether the tribunal was entitled to refuse to name a mainstream school only on the grounds set out in section 316(3) or on either of the grounds specified in para 8(2).  In allowing the council’s appeal, Richards J held at para 28 that the section 316 duty did not apply to a determination under Schedule 27.   He said that, if any of the para 8(2) conditions is met, an authority need not comply with the parental request and it does not have to go on to consider section 316(3).  He gave a number of reasons for his decision.  These included that (i) para 8 is very limited in scope, (ii) the tribunal’s power on appeal against a para 8 decision is also very limited and (iii) the overall similarity between pars 3 and 8 is not as great as might appear at first sight.     I would interpolate that the distinction between para 3 and para 8 is recognised by section 316A(3)(b) which provides that section 316 does not affect the operation of para 3 of Schedule 27.  
21.	An important element of Richards J’s reasoning was that the power to change the name of a school does not carry with it a power to change the type of school. Mr Wolfe does not criticise any aspect of his reasoning.  He submits that it has no application to the facts of the present case.  I accept his submission.  The request in the present case is not for a change of the type of school.  It is for a change of school of the same type.  It falls squarely within the scope of para 8.  
22.	I accept that there are differences between para 3 and 8, but I see no basis for saying that section 324(4) may be invoked where there is no duty to comply with parental wishes under para 3(3), but may not be invoked where there is no duty to comply with parental wishes under para 8(2).  Para 3(3) states that the authority shall “specify” the school preferred by the parent unless the specified conditions are met.  Para 8(2) states that the authority shall “comply” with the parental request unless the specified conditions are met.  There is no practical difference between these obligations.  The way in which the authority complies with the parental request under para 8(2) is to “specify” the substituted named school in the statement.  In principle, it is difficult to see why there should be a difference as regards the applicability of section 324(4) (and therefore also of section 9) between the two cases.     
23.	Ms Thelen did not suggest any reason why Parliament would have intended to afford an authority the opportunity to exercise the section 324(4)(b) power in relation to the choice of school for the purposes of making a statement in the first place, but to deny the opportunity in relation to a change of name during the life of a statement.  Para 3 and para 8 are both contained in Schedule 27 which is headed “Making and Maintenance of Statements under section 324” which has effect by virtue of section 324(7).  Why should the authority have the power to name a school which it considers would “be appropriate for the child” in relation to the choice of school (at the stage of making the statement) but not in relation to the change of a named school (during the maintenance of the statement)?   The desirability of ensuring that the school is appropriate for the child must be as compelling during the life of the statement as it is at the outset.  It is true that there is provision for reviews of educational needs (section 328).  But I do not consider that this is a sufficient reason for saying that Parliament cannot have intended the section 324(4)(b) power to be available to a local authority when responding to a request for a change of named school under para 8(1).  
24.	I would therefore allow Ms Mulla’s appeal.
The third issue
25.	By its respondent’s notice, Hackney argues that the FTT would necessarily have reached the same decision if they had directed themselves correctly and applied section 9 in this case.  For the reasons stated in Haining, the public expenditure stated in section 9 is any public expenditure incurred by any public body.  As applied to Ms Mulla’s case, this means that, in exercising the section 324(4)(b) power, the FTT should have considered the financial impact on both Hackney and Islington of placing M at RC School.   That exercise was not undertaken by the FTT or indeed by Hackney.  It is impossible for this court to say what the outcome of such an exercise would have been.  In my view, the decision of the Upper Tribunal must be quashed.  I would, therefore, remit the matter to the FTT for reconsideration in the light of this judgment.
Lord Justice Picthford:
26.	I agree.
Lady Justice Rafferty:
27.	I also agree.