Belated, I know, but this is the first chance I have had to really look at the judgment in Weaver (R) v London & Quadrant Housing Trust [2008] EWHC 1377 (Admin).

Ground 8 and Legitimate Expectation

First the substantive ground of challenge – that the use of Ground 8 mandatory possession claims by L&Q Housing Trust amounted to breach of the claimant’s legitimate expectation and/or convention rights.

This was based upon LQHT’s terms and conditions, which said that they would comply with the Housing Corporations regulations and guidance. Housing Corp guidance says that ‘before using Ground 8, associations should first pursue all other reasonable alternatives to recover the debt’. The Claimant argued that reasonable alternatives included agreement on paying arrears, money judgment, or discretionary possession claim on grounds 11 or 12. Seeking to avoid Postponed Possession Orders was, in effect, saying that the judicial discretion would not be properly exercised. LQHT’s practice, it was claimed, was solely to use Ground 8.

L&Q denied that they had a policy to only use Ground 8. That use of Ground 8 resulted in a high level of payment of arrears prior to hearing and was thus an effective tool. L&Q denied that the contractual term involved could give rise to legitimate expectation – it was a statement of intent or target duty. It was not specific enough to give rise to an expectation – the specific guidance was not prescriptive and the language vague. In any case, there was no evidence of reliance.

L&Q said they had pursued all reasonable alternatives in this case, and use of grounds 11 or 12 prior to the use of ground 8 could not be considered to be a required reasonable alternative.

On the facts of this case, where there was a history of substantial and repeated defaults on agreements, the Court found that L&Q was entitled not to consider using ground 11 or 12.

Moreover, the Court found that the wording of the guidance was too broad to allow solely the claimant’s interpretation and, as the passage in the terms and conditions was not contended to be contractually binding, it could not be treated as having the qualities that would justify enforcing it as a legitimate expectation, particularly as there was no evidence that the Claimant was even aware of the term.

The claim failed.

Comment

I think L&Q were, to some extent fortunate in the challenge they faced. Legitimate expectation was always going to be difficult to establish on the back of Housing Corp guidance. I was rather surprised to see it as the sole ground of challenge. I suspect that L&Q also managed to obfuscate their actual practice somewhat in evidence. Certainly what was put forward in evidence differs from what tenant-side advisors encounter. But there we are.

There may be enough in the specifics of this case to distinguish it in future, as LQHT’s behaviour in regard to this specific tenant clealry shaped the Court’s attitude to the overall challenge – there had been repeated attempts to recover arrears and come to agreements, as well as repeated NSPs, sufficient to bolster LQHT’s claim that this was a weapon of last resort.

There may also be further evidence on L&Q’s use of ground 8 that may support challenges on other bases. I don’t think that this one ends the JR and ground 8 possibilities.

Subject to Judicial Review

More significant in the broader scheme of things, of course, is that L&Q were found to be a Public Authority amenable to judicial review in its housing function.

L&Q’s argument was that they were not a public authority. While certain functions were certainly public, such as its statutory function in relation to anti-social behaviour orders, or specific statutory delegations by local housing authorities, the main function of managing and allocating its own housing stock was not public.

Public funding grants were received but this was not determinative of public function. Provision of housing is not a public function like provision of education or social care. Moreover, the relationship between Claimant and LQHT was contractual, which was at the core of R v Servite Houses, ex p Goldsmith [2001] LGR 55, as approved in YL v Birmingham City Council [2007] 3 WLR 112. RSLs have private law status and being subject to detailed regulation does not point to them being public authorities, as found in YL v Birmingham.

LQHT argued that even if allocation was a public function, the termination of tenancy was not. it was a management decision governed by contract. Since the decision in Peabody Housing Association Ltd v Green (1978) 38 P&CR 644, only Poplar Housing and Regeneration Community Association Ltd v Donoghue [2002] QB 48 had suggested that termination of a tenancy by an RSL could be a public function, and Poplar Housing turned very much on its specific facts.

The Claimant argued that Peabody was prior to the explainsion of Judicial Review and Servite was decided prior to the introduction of the HRA. The Claimant applied YL v Birmingham and argued that LQHT was carrying out a overnmental function, the management and allocation of stste-subsidised housing (cf Novoseletskiy v Ukraine (2006) 46 EHRR 53). LQHT received substantial capital grants from public funds. RSLs were established under the Housing Act 1996 in order to deliver affordable housing and funded by Government to that purpose. Management of housing, including the setting of rents, is subject to the Housing Corp guidance.

The Claimant also pointed out the LQHT irself allocates and manages public housing resources in the public interest, albeit not strictly by delegation of functions, but Strasbourg case law on delegation of powers (e.g. Wos v Poland) was relevant. LQHT was entrusted with public funds and required to use them in the public interest. Unlike Southern Cross in YL, it is non-profit-making and not acting out of private, commercial motivations.

Deciding to grant or terminate tenancies are therefore decisions concerning the allocation of public housing resources.

The Claimant also argued that providing housing to priority applicants under the LA allocation scheme was pursuant to s.8 Housing Act 1996 and a duty under s.170 HA 1996. The Court found this misconceived, a duty to co-operate under s.170 is not a statutory duty to grant a tenancy.

Likewise, the Court ignored arguments on the government accepting that RSLs were ‘bodies governed by public law’ for the purposes of EU directives on procurement. The government’s view did not determine the position and EU law was not Convention or human rights law.

The Court found that LQHT was a public authority in its housing function, citing the following reasons:

• LQHT is different to an ordinary commercial business by the nature of its activities and the contexts in which it operates.
• LQHT is non-profit-making charity acting for the benefit of the community, so lacks the private and commercial features that feated in YL v Birmingham.
• LQHT operates in the social rented sector which is not merely subject to detailed regulation (pace Southern Cross in YL) but is permeated by state control and influence with a view to meeting the Government’s aims for affordable housing and in which RSLs work beside local authorities and can be said in a real sense to take their place,
• Control and influence is exerted through the Housing Corporation. While stautory guidance is non-binding, there is clear indirect pressure on RSLs to comply. The extent of control and influence being exampled by the approach towards implementation of policy on rent setting and the general statements in the Code of Guidance.
• Particularly important – the nature and extent of public subsidy of LQHT, in common with other RSLs. In particular, the receipt of capital grants, esepcially social housing grants under s.18 HA 1996. Very large sums are involved. That they are for particular developments, rather than block grants, makes no odds. The funds are directed towards increasing social housing stock and are one means by which the state accomplishes this. While private funding is also important and RSLs aren’t the only receipient of funds, LQHTs business as a whole is heavily subsidised by the state due to the role played in implementing policy. A clear case of “the injection of capital or subsidy into an organisation in return for undertaking a non-commercial role or activity of general public interest (YL v Birmingham at 105).”
• Also relevant is that a ‘significant’ proportion – 10% – of LHQT’s housing stock was ex-local authority following voluntary transfer. While clearly not the same as Poplar Housing, which was formed for the specific purpose of stock transfer, this still reflected the fact that RSLs are performing functions of the same type as local authorities.
• The duty of co-operation with Local Authorities under s.170 HA 1996 means that RSLs don’t have a purely commercial relation with local authorities, but operate under a statutory framework. Over half LQHT’s new lettings were nominations from LAs.
• That serving a notice to quit was not a statutory power but a private law right did not prevent an RSL being a public authority. If allocation is a public function, it would be wrong to separate out ‘management’ including termination as private. Allocation and management are part of a single function.

For these reasons LQHT is a public authority in the meaning of s.6(3)(b) Human Rights Act 1998.

If it is a public authority for the purposes of the HRA, then it should be equally amenable to judicial review on conventional public law grounds.

Comment

I don’t think that this list should be taken as a set of necessary conditions for public authority status. Clearly some elements were more persuasive to the Court than others. For instance – the ex-local authority housing stock point. This is clearly a different point to that made in Poplar Housing, as here it is, in effect, simply further support for the idea that RSLs are performing the same type of housing function as local authorities. So, I can’t see how much, or indeed whether, ex-local authority housing stock is in possession of an RSL being a crucial determinant for their status as public authority. The main point is surely the level of public funding/subsidy and the level of state guidance/direction involved.

It would be difficult, I suspect, for any RSL to argue that its position is so significantly different to that of LQHT as to not be a public authority. But no doubt some will try.

While the headline is susceptibility to Judicial Review, it is also worth noting that, at almost the same moment that an amendment to the Housing and Regeneration bill to make RSLs subject to the HRA failed, this judgment states clearly that, in their housing functions, RSLs are indeed subject to the HRA.

A few months ago, this might not have been a big deal, but post McCann, it may turn out to be significant. Proportionality in the mandatory possession process anyone?

I know that a number of RSLs have been quietly settling prospective JR claims, precisely to avoid a full hearing on their status as public authorities. I suspect L&Q are not very popular at the moment with their fellow RSLs. There will no doubt be an appeal of that finding, which also opens the prospect of a cross appeal by the Claimant. Interesting times.