This was a judicial review of LB Enfield’s plans for borough wide additional HMO licensing and selective licensing of all PRS properties. It did not go well for Enfield, who appear to have not quite grasped the consultation requirements.

Regas, R (On the Application Of) v London Borough of Enfield [2014] EWHC 4173 (Admin)

Mr Regas is a landlord with a single property in Enfield. He acted partly in person and partly with two different legal teams. Enfield’s proposed scheme was passed by the Council on 9 April 2014 and confirmed by the Scrutiny Committee on 30 April 2014.

After a lengthy permission stage, involving a trip to the Court of Appeal and a further decision by Enfield on the additional scheme, what remained where the following grounds of challenge.

1. The consultation process conducted pursuant to section 56(3) (additional licensing) and section 80(9) (selective licensing) 2004 Act was inadequate and unlawful in that certain people likely to be affected by the schemes were not consulted as required by statute. In particular that no attempt was made to consult those people living, working or otherwise affected in neighbouring boroughs who were likely to be affected
2. Enfield failed to consult for the period of time required by the Secretary of State in his General Approval 2010 as a condition of his approval for the additional and selective licensing schemes with the result, it is said, that neither scheme has the approval of the Secretary of State as required by the 2004 Act

Enfield’s consultation was as follows:

Between 15 November and 16 December 2013, a “listening and engagement” exercise was undertaken on Enfield’s behalf by a market research company, Opinion Research Services (“ORS”) during which meetings were held with local residents, landlords and agents to consider whether there was evidence of antisocial behaviour among private sector tenants and whether the introduction of licensing would in principle, be beneficial in resolving such issues.

Then, between 2 January and 28 February 2014 there was a formal consultation exercise on the formulated licensing proposals. According to Enfield’s evidence, the consultation, which included some six events (3 for landlords and agents, 3 for tenants and stakeholders) and a telephone survey, was publicised:

by a number of means including on Enfield’s website. […] I confirm that the website publicity inviting representations were available for the public view from 15 November 2013 until mid March 2014. In addition, Enfield Council carried out a market and communications campaign that included:

The distribution of a borough wide leaflet to 140,000 residents and businesses in Enfield from 13 January 2014 until the end of the consultation
Posters were displayed in Council buildings, libraries and GP surgeries in the borough from 20 January 2014.
Adverts were placed in the Enfield Independent, the Londra Gazete and Parikiaki newspaper, the latter two which are widely circulated in London.
Distribution of 3,000 leaflets to landlords from 27 January 2014.
Large street posters board by JCDecaux were used throughout the borough from 28 January to 10 February 2014.
Emails and letters were sent to landlords and agents some of which were operating businesses outside the borough from 1 February 2014.
Between 20 January and 3 February 2014 various messages were publicised to Enfield Council staff using internal channels of communication.
A Press release was circulated to recipients listed on pages 22-26 of SM1 on 31 December 2013.
Some online news websites such as “this is Local London” “Landlord Today” ran features about the consultation on their websites. Screen shots of those are at pages 27-28 of SM1.
The consultation invited representations from anyone interested in the proposal, and was not limited to residents of Enfield. A number of letting agents conducting business in areas other than Enfield were invited to take part in the consultation process in addition to other organisations whose clientele extend beyond Enfield’s borders. I exhibit at pages 20.9-22.1 of SM1 a list of all the organisations invited to the consultation forums and the mode of invitation, sign-in sheets from the public meetings showing attendance by representatives of organisations such as the Citizen’s Advice Bureau and a list of those who confirmed attendance at the public forums held on 11 and 12 February 2014.
Representations were received from two national organisations representing
landlords. [NLA and RLA]

On ground 1 the Court endorsed the Supreme Court’s confirmation of the ‘Sedley criteria’ in R (Moseley) v Haringey London Borough Council [2014] UKSC 56:

First, that consultation must be at a time when proposals are still at a formative stage. Second, that the proposer must give sufficient reasons for any proposal to permit of intelligent consideration and response. Third,… that adequate time must be given for consideration and response and, finally, fourth, that the product of consultation must be conscientiously taken into account in finalising any statutory proposals.

In this case, section 56(3) [additional licensing] and 80(9) [selective licensing] of Housing Act 2004 both contained a requirement to:

take reasonable steps to consult persons who are likely to be affected by the designation;

In this case, the Court found that people who lived or operated in areas of other boroughs adjoining Enfield would clearly be affected. Enfield had made no targeted attempt to obtain consultation responses outside of Enfield – leaving it to chance if such people were to see a reference in media beyond the borough. Enfield’s proposals were for borough-wide schemes, and there were clear reasons for considering that there may be effects on adjoining areas.

I have reached the conclusion in the present case that the class of persons likely to be affected by the designation plainly included those residents, businesses, landlords and agents who live or operate in immediately adjoining parts of other local authority areas. To my mind it is plain that these groups were likely to be affected and should have been consulted and no thought was given, as it should have been, to the likely impact on those outside the borough who would be affected but were not protected by the proposals. After all, as is plain from Enfield’s own documentation to which I have referred, the rationale for deciding to impose both additional and selective licensing schemes across the whole of Enfield was at least in part to prevent bad landlords and indeed tenants simply moving to an unlicensed area within Enfield. That concern applies with equal force to the adjoining parts of the neighbouring boroughs. There is no justification as it seems to me for Enfield to treat people in the immediate vicinity but who happen to be located outside the borough differently from those within the borough yet they have not been consulted in any meaningful way and accordingly I conclude that the statutory precondition contained in section 56(3) 2004 Act has not been met.

Further, the Secretary of State’s own Guidance makes specific reference to the need for consultation to extend to local residents and those who operate businesses or provide services in the surrounding area outside the proposed designation but who will be affected by the designation.

Accordingly, the 9 April 2014 decision was not based on adequate consultation.

On ground 2, the Secretary of State’s ‘General Approval’ of licensing schemes, issued in 2010, states

The general approval described in paragraphs 2 and 3 is not given in relation to a designation in respect of which the local housing authority has not consulted persons who are likely to be affected by it under section 56(3) or section 80(9) (a) of the Act for not less than ten weeks.

Enfield’s formal consultation took place between 2 January 2014 to 28 February 2014, about 8 weeks. Enfield sought to argue that the ‘listening and engagement exercise’ that ran between 15 November and 16 December 2013 formed part of the statutory consultation. But this did not find favour.

the statutory consultation requirement cannot be satisfied by a general engagement and listening exercise but requires a draft proposal which would require some precision in the identification of what is to be designated and its consequences so that the extent of the effect on the people can be appreciated. In addition, it is hard to see how adequate steps could be taken to consult with the persons affected unless they knew the likely licence conditions that would be imposed. That level of detail was conspicuously lacking in the first phase undertaken by Enfield and, in the circumstances, Enfield’s argument cannot prevail, falling foul as it does, of the second of the Sedley principles.

So, the consultation period was less than 10 weeks, and therefore the licensing schemes di not fall under the Secretary of State’s ‘general approval’.

The relief granted, despite Enfield’s pleas that it would cause substantial prejudice, and that significant steps had been taken to implement the scheme, was to quash the Council’s decision to adopt the schemes as unlawful, until such time as lawful consultation had been carried out and approval obtained for a lawful licensing scheme.

Comment

Though this claim was issued before R (Moseley) v Haringey in the Supreme Court, it is clear that Moseley sets the bar for future challenges to consultations, as in this case. While the 10 week requirement was in effect statutory, the extent of the consultation and who was consulted was addressed (and failed) under the ‘Sedley Principles’. Any local authority carrying out a consultation, whether statutory or not, would be wise to have those principles at the forefront of their minds.

Although there was much dispute during the consultation period about the nature and substance of Enfield’s evidence in support of the licensing schemes, this JR did not address that. It was successful on the formalities of consultation, rather than the considerations underlying the scheme. If Enfield re-consult, it may be that other issues will arise.