• In the case of Bromley LBC v Greater London Council 1983 1 AC 768 it was found that Greater London Council were in breach of its statutory duty and fiduciary duty to balance the interests of ratepayers and transport users fairly.

Facts of the Case

  • The Greater London Council in accordance with a resolution passed in implementation of an election manifesto issued a precept to all London boroughs to levy a supplementary rate of 6.1p in the pound to enable the Greater London Council to finance by grant to the London Transport executive the cost of reducing London transport bus and tube fares by 25%.
  • The London Borough of Bromley applied for judicial review by way of certiorari.
  • The decision of the Divisional Court of the Queen’s Bench Division refusing the application was reversed by the Court of Appeal which quashed the percent to zero.

Issues in Bromley LBC v Greater London Council 1983 1 AC 768

  • The main issue in this case was whether Greater London Council were able to increase their rates imposed on London Boroughs.

Held by House of Lords

  • Appeal dismissed.

Lord Wilberforce

  • Greater London Council owed a fiduciary duty to the ratepayers to have regard to their interests and further on the true construction of the Transport (London) Act 1969, in particular sections 1,2,3,4,5,6,7 and 11, the Greater London Council and the London Transport Executive were under obligations to conduct transport services on business principles attempting to avoid a deficit and that accordingly, although grants might be made for revenue as well as capital purposes, ensuring so far as practical, that outgoings were met by revenue both the Greater London Council and the London Transport Executive had acted ultra vires.
  • “It makes no difference on the question of legality… whether the impugned action was or was not submitted to or approved by the relevant electorate: that cannot confer validity upon ulta vires action… the Greater London Council in so far as it considered that it has a commitment bring about the reduction in fares, regardless of other considerations misdirected itself in law” p.814 A

Lord Diplock and Lord Brandon of Oakbrook

  • “The G.L.C. was in error in believing itself bound to implement the manifesto approved by the electorate (post, pp. 829E-F, 830G -831A, 853A-B). Per Lord Diplock. The Act must be considered, not in isolation, but in the light of the structure and status of the G.L.C. as a local authority implying limitations not expressed in the Act and though the Act conferred on the G.L.C. considerable powers to determine fares and to make grants on revenue account to finance present and any prospective deficits, this precept represented a thriftless use of money in breach of its fiduciary duty to the ratepayers.” (post, pp. 821E-H, 823A-B, 826H – 827C, E – 828A, 830D-F)