Macleod, R (on the application of) v The Governors of the Peabody Trust [2016] EWHC 737 (Admin)

Ever since R (Weaver) v London and Quadrant Housing Trust [2010] 1 WLR 363 (our report) there has been an ongoing issue as to whether housing associations (or specific housing associations) were public bodies both for the purposes of the Human Rights Act and public law/judicial review. On the whole, it has been taken that the terms of the Weaver decision in the Court of Appeal meant that it was probable that they were, given that the judgment in Weaver relied on the following (from our report):

There is significant reliance on public funding; L&Q operates in very close harmony with local government, although it does not directly take its place; the provision of subsidised housing, as opposed to the provision of housing itself, is a function which can properly be described as governmental; L&Q acts in the public interest and has charitable objectives; and it is subject to intrusive regulation on allocation and management, not just regulation designed to ensure transparency or proper standards of performance.

Weaver did not make a blanket decision for all Housing Associations, though. Clearly some, particularly smaller associations, would not have the same factors. However, Housing Associations were then found to be subject to judicial review in McIntyre & Anor, R (on the application of) v Gentoo Group Ltd [2010] EWHC 5 (Admin) (our note), prone to public law defences in Eastland Homes Partnership Limited v Sandra Whyte 2010 EWHC 695 (QB) (our note) and Human Rights defences in Lawal & Anor v Circle 33 Housing Trust [2014] EWCA Civ 1514 (our note) and West Kent Housing Association Limited v Haycraft [2012] EWCA Civ 276

But now Macleod complicates the picture. The Peabody Trust was found not to be a public body for the purposes of judicial review, at least for the particular housing stock involved in this case.

Mr M had applied for judicial review of Peabody’s decision on a proposed mutual exchange.

Mr M had been a tenant of the Crown Estate Commissioners, as a ‘keyworker’, paying a rent above social rent levels. In February 2011, the CEC estate was transferred to Peabody for £140 million. Included in the transfer were restrictions on letting to anyone other than ‘keyworkers’ in most cases, a mechanism for determining rent, up to a maximum of 80% of market rent, and enhanced succession rights.

Peabody defended the judicial review in large part on the basis that it was not a public body amenable to judicial review.

The Court’s findings are succinct. On the arguments advanced by Mr M:

The arguments raised on behalf of Mr Macleod which run contrary to my conclusion – and the reasons I reject them – are as follows:

Because CEC was and is a public body, Peabody was in the same position as any RSL which takes a large-scale transfer of public housing stock.
This proposition depends upon a conclusion that CEC was a public body and that the properties of which Mr Macleod’s was one consisted of public housing stock. For the reasons already given I am not satisfied that those factors are made out on the evidence before me.

Peabody is regulated as a private registered provider of social housing and has statutory powers over and above the powers available to private landlords.
This proposition would carry significant weight in relation to Peabody’s general stock. The properties transferred from CEC fall into a different category.

Peabody receives state subsidy by way of grants and to separate the properties transferred from CEC is to ignore the realities of the situation.
Such separation is not unrealistic for the reasons already given. Lord Justice Elias in Weaver did not reject the notion of different considerations applying to different parts of the housing stock let by a provider.

Peabody has charitable status.
This is a matter to take into account but it does not of itself signify that Peabody is a public body in relation to the properties transferred from CEC.

(A small pause to add a note of incredulity on the conclusion or lack of one on the CEC being a public body. It is extremely hard to see how it couldn’t be).

So, on Peabody’s status, at least in relation to this specific stock:

It is important to note that the general principles enunciated by Lord Justice Elias in Weaver have to be applied to the facts of each particular case. Weaver did not decide that all RSLs are public bodies. On the facts of this case I am not satisfied that Peabody was exercising a public function in relation to the tenancy of Mr Macleod. I take into account the following factors.

Peabody purchased the properties from CEC using funds raised on the open market, not via any public subsidy or grant.

Although the properties were not let a full market rent, it is not clear that they were pure social housing. The key workers for whom the property was reserved included those with a family income of up to £60,000 per annum. The commercial housing market in London adequately serves the needs of those workers. Very many workers in occupations not covered by the nomination agreement relating to the CEC properties are served by the open market. The provision of below market rent properties for such workers does not fall within the definition of social housing in the Housing and Regeneration Act 2008: see Section 69.

Unlike the RSL in Weaver Peabody had no allocation relationship with any local authority. It was not acting in close harmony with a local authority to assist the local authority to fulfil its statutory duty.

Rents for the properties transferred from CEC are not subject to the same level of statutory regulation as social housing in general.

True it is that some public function was fulfilled by the provision of homes for key workers in London. However, in my judgment the cumulative effect of the various factors in the circumstances of this case does not have the sufficiency of public flavour which Lord Justice Elias found in Weaver. In Weaver Lord Justice Elias noted that it will not follow that all tenants of an RSL will be able to claim the benefit of a public law remedy just because the RSL is exercising a public function in relation to some or even most of its tenants.

As a result, the claim failed. But in any event, the court would not have found for Mr M on the asserted failure to follow policy, fettering of discretion and breach of Public Sector Equality Duty.

Comment

While this decision is clearly consonant with Weaver, it does leave a rather curious position in which some tenants of Peabody are not tenants of a public body, while others – the social rent tenants – quite possibly are (assuming Weaver factors are present). Some tenants would potentially have recourse to judicial review, public law and human rights defences, while other tenants of the same landlord would not.

It is not stretching the imagination to see this situation replicated across other HAs. And it does raise a very interesting question over the position of ‘affordable’ rent housing.

I suspect that this case will also increase the willingness of housing associations to run a ‘not a public body’ argument, meaning a ‘first hurdle’ of establishing public status will be more common in JR/public law/HRA cases.

Quite where the reclassification of housing association debt as ‘public sector debt’ by the Office of National Statistics leaves the position is anyone’s guess. The ONS reached that decision

because of government consent powers over asset disposals and the restructuring and winding up of housing associations, as well as ministers’ powers to appoint managers and officers to landlords. 

This one will run and run…