Wednesday, 25 June 2008

RSLs are now public authorities for the purpose of JR

R(Weaver) v. London & Quadrant Housing Trust [2008]

Yesterday, in this purple patch of decisions (at least in quantity) for housing related law, the Administrative Court has held the following:

"...that a registered social landlord was a public authority for the purposes of the Human Rights Act 1998 in respect of the management and allocation of its housing stock (including the termination of a tenancy) and accordingly also amenable to judicial review on conventional public law grounds; but that there had been no legitimate expectation or any breach thereof in respect of the landlord's decision to serve on the Claimant tenant a notice of seeking possession in respect of rent arrears relying on Ground 8, Sched. 2, HA 1988." [Arden Chambers Eflash]

Right, I think I shall deal with this in two chunks. Firstly, the general facts and substantive grounds of challenge. Secondly, moving on to the more ‘meaty’ issues of public authority.


- Mrs Weaver, was an assured tenant at LQHT from 1993. She had been granted the tenancy via a nomination from the London Borough of Richmond-upon-Thames, and was the first tenant of the property in question following one of LQHT's purchasing schemes.

- W has 3 children, received welfare benefits are differing stages of the last decade, and since 2004 has had rent arrears. This led to the trust issuing possession proceedings, and the challenge that W undertook as to LQHT seeking an order for possession on the mandatory ground 8.

I do not want to go through all the facts, but pulled out some that set the seen, and may pull out some more as they become apparent.


1. The Substantive grounds of challenge:

C’s complaint relates to how LQHT proceeded when they issued proceedings in regards her rent arrears. Of the three grounds available to LQHT, i.e. ground 8 – the mandatory one, and grounds 10 & 11 – the discretionary ones, they opted to utilised ground 8 and that this was a breach of her legitimate expectation and in breach of her rights under the Convention.

We all know that the Housing Corporation (in its somewhat sparse and non-specific, sometimes) guidance wants associations to “pursue alternative interventions, retaining evictions as a last resort” [paragraph 1.2, Circular 02/07]. There is also a more relevant passage at paragraph 3.1.4 which states:-

“Before using Ground 8, associations should first pursue all other reasonable alternatives to recover the debt”.

The Claimant has attempted to argue that instead of going straight for a ground 8 mandatory possession, the RSL should seek to utilise reasonable alternatives – as per the Housing Corporation guidance. Obviously this would mean that the RSL must show that they have made previous agreements with the tenant to pay the arrears, a court claim for a money judgment has been sought, and that possession was sought on the discretionary grounds 10 and 11.

That argument would therefore mean that any RSL would have to engage with the tenant at the initial stage where rent arrears arise – this should be done anyway with at least holistic debt advice being offered, identifying any disability issues, and attempting to deal with the onset of arrears at an early stage. That should be built into all RSLs policy and procedures, the problem lies in the expense and waste of funds when pursuing the possession claims on grounds 10 and 11.

Ground 8 is draconian, in terms of its mandatory nature, but (unfortunately) tenants do push their luck to the extreme because the Courts on the whole will give them a number of second chances. However, it seems that if the Court of Appeal ruled in the Claimant’s favour, the whole system set up by the Housing Act may actually be displaced, requiring more new legislation once again in the housing sector.

Even with the evidence pointing to LQHT relying on ground 8 more so than grounds 10 and 11 in cases of high arrears, LQHT had already tried (unsuccessfully) to clear the debt, LJ Richards rejected the Claimant’s argument as to a disguised form of drafting in the witness statements.

The actual claim on the basis of breach of legitimate expectation was, thankfully, not upheld. It was “far too tenuous and general in character to be enforceable in public law”. The argument, however, has been raised and will probably be raised again in the future where the facts are stronger and more utilitarian towards the tenant, and a different result maybe seen.

2. Is LQHT a "public authority"?

A while back, relatively, when McCann v. The UK popped up I think I defined the “public authority” aspects of the Human Rights Act 1998 and how it corresponds with RSLs. A few weeks later I now find myself in the same position once again, how very strange.

For the purposes of “public authority”, the HRA 1998 makes it unlawful for the public authority to act in a way which is incompatible with the Convention rights (section 6(1)).

Section 6(3)(b) also provides that the public authority can include “any person certain of whose functions are functions of a public nature”.

Now, the dilemma arises where there are no schedules appended to the back of this piece of legislation – if there were life would be slightly less worrisome. Unlike the Race Relations Act or the Freedom of Information Act, the Government in all it’s wisdom has not given a list of “public authorities”.

None of us can have any doubt as to the public functions that many RSLs carry out, in a socio-economic model. But whether this actually qualifies in the legal arena has always been unclear, to say the least. What the Administrative Court have decided, and what C argued, is that although not a “core” public authority, LQHT (and many other RSLs I assume) are of the lesser “hybrid” or “functional” public authorities category. The Court held that for the purposes of management and allocation of housing stock LQHT was a public authority.

I am sure that sent quite a lot of the RSLs in the country in collective apoplexy. Significantly, the identified stock which originated from the public sector was only 10% - the Court deemed this a “significant” proportion of the total LQHT stock. It might not be as substantial as that evidenced in the Poplar Housing Association case, but it was “significant”.

The Court also point to the substantial grants that the Housing Corporation provided to LQHT – totalling some £268.7 million in the last two years. However, at paragraph 20 they state:

LQHT is funded by the income it receives from rents, by grants and by private borrowing. Its turnover in the two financial years 2004 to 2006 was £331.5 million, which consisted largely of rent receipts. During the same period it received from the Housing Corporation capital grants totalling “268.7 million. The evidence is that such grants are for particular development programmes, as opposed to generalised subsidy or block grants; and that private sources of finance (most commonly, commercial loans from banks, as well as proceeds from the sale of existing housing stock) have become the dominant component of its capital funding and are set to become even more so…”

Those two facts do not align themselves with the reliance on public funding or former public housing stock. If nothing else the trust seems to be minimising it’s reliance, and will probably continue to do so.

Moving back on track, YL v. Birmingham City Council formed the crucial building block on which the public authority argument was raised. Although the three cases of Peabody Housing Association Ltd v. Green, R v. Servite, ex p. Goldsmith, and Poplar Housing & Regeneration Community Association Ltd v. Donoghue were talked about in the judgment, it was YL that received the substantial consideration.

I wont dwell too long here (mainly because this post will get out of hand) but where BCC arranged for YL to be housed in a care home by a third party company, effectively outsourcing the work, the care home as a private company was deemed not be exercising a public function when it terminated the contract to house her. C, in the current case, argued that the facts of YL should be utilised to reach a contrary conclusion in the case of LQHT.

Unfortunately, even the submissions of Andrew Arden found little impact on the Court. He pointed out everything which he probably should of, but the court still made what will always be seen as a very sweeping judgment.

3. Is LQHT amenable to JR on a conventional basis?

Given that the Court held in favour of the hybrid public authority argument earlier on, it therefore follows that LQHT should be susceptible to judicial review on the basis of the management and allocation of housing stock functions.

That’s that then.


Helpfully Richards LJ assessed the likely impact outside of this case on his ruling that LQHT is a public authority in a limited scope:-

“…and I think it unlikely to be of great practical significance in many other cases...”

Unfortunately, everyone else thinks the opposite. Permission to appeal by LQHT (on the grounds of the public authority and JR statements) has been granted, so more fireworks shall be expected soon. But until then it seems that the RSLs, in a limited aspect are susceptible to being classed as public authorities under the HRA 1998.

Since quite a few RSLs will meet the “significant” value of 10%, that the Court has set, in regards of the former public housing ratio, god help them at present. Lets not get to overwhelmed, because this judgment here has yet to be tested in everyday case law (if that makes sense) and the appeal is yet to come. Given the impact that it will have on LQHT, it is undoubtedly going to be the case that they will push this as far as they can until they get the result that is suitable.

Given that we were waiting for Doherty to appear soon and deal with the questions that McCann raised a few weeks back, it now seems highly likely that it might answer some of the questions that this case has raised (indirectly I’ll grant you).

[sorry but I have had to cut this sort since I am at trial next week….busy busy busy…but I will come back and edit in some more little thoughts soon I hope]


Nearly Legal said...

Very interesting. I hope to really look at Weaver this weekend and you have intrigued me.

I think you are right that the particular challenge to ground 8 here was a weak one - legitimate expectation. I was surprised it was the only ground raised. I could imagine others. But I don't think that what was being asked for here was, in effect, anything more than that the rent arrears protocol should apply to ground 8 claims. Not a huge threat to RSLs in that respect.

However, being subject to JR is going to be a shock to RSLs, some of which have been able to get away with stunningly shoddy and unreasonable decision-making. I can't see the 10% 'qualification' of ex LA stock lasting for long as a boundary either (but I need to look at Weaver in detail).

Things are certainly going to be entertaining for solicitors for both RSLs and tenants for a while. This is not going to be of limited impact, assuming it gets past the Court of Appeal.

I suspect that tenant side solicitors are considerably more experienced at judicial review, having done a lot against LAs, so there may be a steep learning curve for some.

Interesting times...

Ethan said...

Very interesting times...

I think the Court had already made up its mind, at least thats how I read the judgment. The 10% qualification isn't de minimis certainly, but is not a "significant" portion of the housing stock.

...There just seems to be a lot that doesn't match up in the judgment. Most worrying of all is the Court's lack of understanding in what the impact of their judgment will be in the world outside their doors.

I'd be surprised if it doesn't get altered in some way by the Court of Appeal..

Anyway I hope you get through it this weekend, it really does send a shiver down your spine (whether good or bad i don't know!!)