Also of note, Lord Neuberger observes:

that the decision of the Court of Human Rights in Cosic v Croatia appears to be inconsistent with the most recent House of Lords authority, Doherty v Birmingham City Council [2008] UKHL 57 and seems to have put the onus back on the English courts to ensure that Article 8 is properly taken into account in possession proceedings.  In this regard, he refers to the recent interesting article on the subject by HHJ (Nic) Madge – “Article 8 – la lutta continua”

Lord Neuberger would seem to be suggesting that the Art 8 and proportionality issue will be heard in the Supreme Court, despite the recent refusal of permission in Central Bedfordshire. While someof us may think this is inevitable sooner or later, this acknowledgment of the issue is very interesting indeed.

Mind you, on reading, and with all due respect to both HHJ Madge and Lord Neuberger, and naturally all due modesty, it may be that our most recent post on the Quarter pounder or Royale question by Dave is a tad more up to date. I’ve also just seen that there is also an overview, although lacking detail, in the 1 December 2009 Solicitors Journal here (currently available without subscription, I think).

“the application did not raise an arguable point of law of general public importance which ought to be considered by the Supreme Court at this time.”

Now, where to put the emphasis in that sentence? For me, I’d have thought that the ‘general public importance’ was a given, so the weight is on no ‘arguable point of law’.

The Government has released its response [link to PDF] to the Parliamentary Joint Committee on Human Rights report of 2007. Yes, 2007. The report that was released prior to the Lords judgment in YL v Birmingham City Council and the changed law in respect of care homes providing Local Authority contracted services in Health and Social Care Act 2008.

So, the Government notes the concerns that the Courts’ approach to what constitutes a public function for the purposes of the HRA is apparently too much guided by judicial review precedent and not enough focused on a ‘functional approach’ to the definition. It had followed the 2004 report’s recommendations that it should intervene in a suitable case to put this view and intervened in YL.

Now, the Government takes the view that having intervened in YL, unsuccessfully, and changed the law on care homes, what more can it really be asked to do. Yes, it is a bit disappointed too, but it cleared up the specific YL mess didn’t it? Isn’t that enough?

On the view that it isn’t really enough, because YL still covers all those other contracted out provision situations apart from the specific care home one, the Government takes the view that, well, yeah, whatever… At least YL clarified the law, apart from the specific situation it decided upon, where we changed the law.

On housing, at para 72:

There is no evidence that Parliament gave any considered view during the passage of the Human Rights Bill as to whether the provision of social housing is a function of a public nature. The Government’s view at this time is that the provision of housing by a landlord is not inherently a function of a public nature, even though a local authority can also arrange for the provision of housing. One needs instead to consider in the round the features of the function of providing social housing. On this basis, the Government’s view is that the balance of these features indicate that it is not a function of a public nature. To reach this conclusion based on this reasoning is not at all incompatible with the position that the Government has consistently taken on the interpretation of section 6 of the Human Rights Act, including before the House of Lords in the YL case.

But what of Weaver v L&Q, you might ask? The only mention is at para 100. Here it is:

Furthermore, the Government is considering the recent judgment of the Court of Appeal in R (Weaver) v London & Quadrant Housing Trust, which may be heard in due course by the Supreme Court. The Government nevertheless remains firmly committed to consulting on this issue.

So, they are considering and consulting while at the same time having the view that ‘the function of providing social housing [...] is not a function of a public nature’.

There is more, of course, but largely more of the same, so forgive me for not going into detail.

What is not at all clear, but definitely a question arising is if Weaver v L&Q does go to the Supreme Court, will HMG be intervening? And if so, in which way?

It will be remembered that Mrs Weaver was a tenant of L&Q.  L&Q sought to evict her, relying on Ground 8.  She resisted this, claiming that she had a legitimate expectation that they would use Grounds 10 or 11 first and that the eviction engaged Article 8 of the European Convention of Human Rights.  The High Court rejected any suggestion of a legitimate expectation.  Because of the way that it was advanced the Article 8 claim fell as well, but the Divisional Court went on to decide that L&Q was a hybrid public authority for the purposes of the HRA and it was amenable to judicial review.  The Divisional Court did this through an Order, so that L&Q could appeal this finding.  There is a palpable sense of irritation in the Court of Appeal with the way that this litigation has panned out; see Elias LJ at [6], Lord Collins at [87]-[91] and Rix LJ at [104]-[115].  There was also some criticism of the Divisional Court for focusing on the wrong question; see [53]-[57] and [114].

Let’s start with Elias LJ’s lead judgment, then Lord Collin’s concurring judgment, before considering Rix LJ’s dissent.

Social Housing

Elias LJ first outlined the role of RSLs in social housing.  In brief:

• It is Government policy to provide social housing [8].
• RSLs were regulated by the Housing Corporation [9].
• RSLs are subject to detailed housing management guidance, which is approved by the Secretary of State [10].
• Ss 8-10 of the Housing Act 1996 impose further regulation on RSLs [11].
• RSLs are subsidised by public funds through Housing Corpn grants [12].
• They have an important role in assisting LAs to carry out their statutory housing policies; this is not simply through choice, but through legislation [13].
• Many LA properties are being transferred to RSLs [14].
• Certain statutory powers are bestowed on RSLs, eg in relation to anti-social behaviour [16].

He then went on to some identifying features of L&Q, such as its charitable status, the origins of some of its housing stock, and the source of some of its funding.

Human Rights Act

The crucial battleground is s. 6 of the HRA.  The relevant subsections are:

(1) It is unlawful for a public authority to act in a way which is incompatible with a Convention right.
…
(3) In this section “public authority” includes—
…
(b) any person certain of whose functions are functions of a public nature,
but does not include either House of Parliament or a person exercising functions in connection with proceedings in Parliament.
…
(5) In relation to a particular act, a person is not a public authority by virtue only of subsection (3)(b) if the nature of the act is private.

Elias LJ then moved on at [30]-[40] to the existing case law on the HRA: Aston Cantlow v Wallbank [2003] UKHL 37 and YL v Birmingham City Council [2007] UKHL 27.  He also noted Poplar Housing and Regeneration Community Association Ltd v Donoghue [2002] QB 48.  At [41] Elias LJ concluded his journey through the authorities:

I would draw these tentative propositions from this analysis.  First, the source of the power will be a relevant factor in determining whether the act in question is in the nature of a private act or not.  Second, that will not be decisive, however, since the nature of the activities in issue in the proceedings is also important.  This leads on to the third and related proposition, which is that the character of an act is likely to take its colour from the character of the function of which it forms part.

Elias LJ characterised the essential question as “whether the act of terminating the tenancy is a private act”, but this must be done by considering the “context in which the act occurs; the act cannot be considered in isolation” [66].  This, and the third of Elias LJ’s propositions above must be right.

At [68]-[72] Elias LJ finds that L&Q’s function of allocating and managing housing is of a public nature.  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.

This still leaves the central question of whether the termination, involving the exercise of a contractual power, is solely a private act.  At [73] Elias LJ acknowledges that there are observations in YL and Aston Cantlow that would appear to suggest it was.  However, at [76] he says:

In my judgment, the act of termination is so bound up with the provision of social housing that once the latter is seen, in the context of this particular body, as the exercise of a public function, then acts which are necessarily involved in the regulation of the function must also be public acts.  The grant of a tenancy and its subsequent termination are part and parcel of determining who should be allowed to take advantage of this public benefit.  This is not an act which is purely incidental or supplementary to the principal function, such as contracting out the cleaning of the windows of the Trust’s properties. That could readily be seen as a private function of a kind carried on by both public and private bodies.  No doubt the termination of such a contract would be a private act (unless the body were a core public authority.)

At [80] he moves on to consider whether HRA protection should extend to all L&Q tenants in social housing, or only those in properties acquired as a result of  state grants.  Elias LJ thinks that it should be the former: “The effect of the grant is not merely to assist the Trust (and other RSLs similarly placed) in being able to provide low cost housing to the tenants in the  properties acquired by the grant; it necessarily has a wider impact, and bears upon its ability to provide social housing generally.”  However, the HRA will not extend to those tenants who are not in social housing, but are paying market rents [81]-[82].  Elias LJ says that this is not the equivalent of the possible unattractive consequences of YL; “it merely mirrors the current distinction between those housed in local authority accommodation, who do have human rights protection with respect to evictions, and those housed in the private sector who do not”.

Elias LJ holds, as the Divisional Court did, that this all means that L&Q is subject to JR, as L&Q did not seek to argue otherwise.

Finally, and crucially, he points out that this judgment does not mean that every RSL will be in the same position as L&Q:

For example, a potentially important difference is that apparently some RSLs have not received any public subsidy at all, and arguably – and I put it no higher than that – their position could be different. ([84])

Support

Lord Collins broadly agrees with Elias LJ.  He points out that the added protection may not be worth all that much to tenants in the light of Kay.  At [100] Lord Collins goes further than Elias LJ and says that “It is not easy to envisage circumstances where an act could be of a public nature where it is not done in pursuance … of public functions”.

Dissent

Where it all gets really interesting is Rix LJ’s dissenting view.  At [116] he turns to consider the effects of the jurisprudence of the European Court of Human Rights.  He records that the asked Counsel what the Strasbourg court had said about non-governmental providers of social housing, but was told that there were no relevant cases.

Rix LJ goes on to consider R v Servite Houses ex p Goldsmith (2001) 33 HLR 35 and Poplar in a bit more detail, before providing his own analysis of Aston Cantlow and YL.  He then noted (at [146]) that in R (Ahmad) v Newham [2009] UKHL 12 Baroness Hale emphasised that the provision of housing is not a government function.

At [147] he then concludes that he did not consider L&Q’s “decision to terminate Mrs Weaver’s tenancy by seeking possession from the court on mandatory ground 8 justified by her non-payment of rent is properly to be categorised as the exercise of a function of a public nature rather than a private act arising out of contract.”  Rix LJ relied on ten factors:

1. Strasbourg jurisprudence did not support the contrary conclusion [148].
2. He can find no support in Servite, Aston Cantlow, Poplar or YL [149].
3. Arguments in the instant case had been inappropriately influenced by the structure of the dispute in YL.  There had been too much focus on s.6(3)(b) and not enough on s.6(5) [150].
4. He is distinctly unhappy about viewing “management and allocation” as an all-embracing public function, that includes termination – “the acceptance that management of social housing is essentially a single integrated function of a public nature is most unlikely to be correct” [151].
5. It does not follow that termination is automatically a public function simply because allocation is [152].
6. There is nothing special about the regulation that covers social housing; large parts of commercial life are covered by regulation [154].
7. There is nothing about the nature of L&Q, or the typical RSL, to suggest that the everyday administration of tenancy agreements is a function of a public nature.  L&Q is a charity, with independent corporate status, an independent board, and owned by private shareholders.  Indeed, ”the world of charity is essentially private” [155].
8. The main sources of capital finances are private lenders and house sales [156].  While public subsidy is an important factor in the overall assessment, such matters are relative.  Public finance is an element in the equation, but Rix LJ would be sceptical about allowing it to play a dominant role in the assessment [157].
9. In YL, Lord Neuberger had said that the competing views about policy made it a neutral factor.  Rix LJ would add to Lord Neuberger’s policy arguments for not viewing a function as one of a public nature a further argument; namely that the experience and efficiency of the private sector may be to the public benefit [158].
10. Public welfare concerns for those in need of social housing can be addressed in a variety of ways; it is unnecessary to artificially classify private contractual decisions as being of a public nature to address these public welfare concerns [159].

Rix LJ takes issue with the Divisional Court’s declaration for not being clear that it is L&Q’s social housing that is at issue [151].  To the extent that L&Q has some non-social housing then this is a fair criticism, but it seems clear that the reference in the declaration should be taken to be a reference to the management and allocation of social housing stock.  It is not clear that the existence of market rent properties owned by L&Q was even put to the Divisional Court.  If it wasn’t then the word “social” would have been superfluous anyway.  Rix LJ suggests later on in the same paragraph that some 36% of L&Q’s properties are outside of the sphere of social housing, but it seems to me that this conclusion does not necessarily follow from the facts.  Just because in a given year some 64% of L&Q’s new lettings were the result of LA nominations [24] does not, for me, mean that all of the remaining 36% are necessarily not social housing.

Preliminary Comments

There is a lot to deal with here and what follows is simply my initial thoughts, so all comments welcome.

It’s probably clear that I prefer the reasoning of the majority, but I still think that there is a lot of value in Rix LJ’s dissenting judgment.  I suspect that his could be an important view as this debate rolls on.

As was suggested in the write-up of the original judgment this case still leaves room for individual RSLs to argue that they are in some way distinct from L&Q and don’t therefore quite cross the threshold to be considered as carrying out public functions.  That will presumably be argued a lot in the ensuring JR and HRA claims against RSLs.

Elias LJ’s conclusion at [80] that this should cover all of L&Q’s social tenants has to be right.  To hold otherwise would draw an unnatural, and difficult to identify, distinction.

There is, understandably, a lot of reliance on YL.  That’s as it should be.  Just because I think that YL was wrongly decided, doesn’t mean that precedent should be abandoned.  What surprises me is that there is no mention of the fact that the Health and Social Care Act 2008 has reversed the result of YL.  Clearly s. 145 of that Act does not change the test in respect of s. 6 HRA; that work appears to be on the back-burner for the time being, although a consultation is still rumoured before the end of the year.  But what, at least in my opinion, s. 145 does do is demonstrate that the executive and the legislature have shown that the result that the House of Lords came to in applying the facts of YL to the test was wrong.  Public policy dictates that providing accommodation, together with care, in a care home is a function of a public nature.  Legislation now explicitly says that because the courts failed to realise it.

I’ve said above that I agree with Elias LJ at [41] and [66], but to the extent that Elias LJ and Lord Collins differ I prefer Lord Collins’ view – see [100].

I’m also not sure about Rix LJ’s point on charitable status in [155].   I merely pose as a thought whether the presence of the Charity Commission as a regulator should influence this.  I’m not sure of the answer, but the Charity Commission was not considered in YL or Heather, other than in a fleeting reference in Heather as to whether the proceedings required their permission.

Lying beneath all of this is still seems to be the same arguments of public policy that have exercised the courts when considering s. 6 right from the start.  That perhaps is a debate for another day.

Anyway, I would imagine that this will be making an appearance in the new Supreme Court before long – doesn’t the Guildhall look nice with the boards taken down?

This was the Court of Appeal hearing of L&Q’s appeal of the High Court finding that it was a public authority in its housing function, subject to judicial review and the HRA.

Result – L&Q lost. They are indeed a public authority in their housing function.

But there is a lot in the detail – our full report to come.

So… House of Lords anyone?

[Edit. OK, one the one hand, the NL team are fighting over who gets to write up the detailed post, and on the other, we're struggling with who has time to do it soonest. Maybe Friday evening, maybe Saturday, but it is coming, we promise.]

Thanks to Ethan at ‘That Snail..’ for passing on unconfirmed news (aka a rumour) that London & Quadrant have decided not to appeal R(Weaver) v L&Q, which, lest anyone forget, was the landmark decision on RSLs being public bodies in their housing function for the purposes of judicial review.

If true, this is a surprise, to put it mildly. Does anyone have confirmation?

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.

Weaver (R) v London & Quadrant Housing Trust [2008] EWHC 1377 (Admin)

Full notes tomorrow, but the headline is:

L&Q is a public authority in its housing function for the purposes of Judicial Review.

Use of ground 8 possession claims is not a breach of legitimate expectation.

there was ‘no basis’ to the belief that giving associations a duty to act in accordance with ECHR rights would change their status from private to public ‘for any purpose other than the applicability of the Human Rights Act’.

So there. But while this is not a bad idea at all, at least as far as it might help with the most egregious forms of RSL behaviour, it is unlikely to make it into the Housing bill at this stage (even though it is being frantically amended).