Well, well, well. Or perhaps well, well, oh heck. The Court of Appeal has handed down its judgment in R (Weaver) v London & Quadrant Housing Trust [2009] EWCA Civ 587 and, by a majority, L&Q have lost.
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:
- Strasbourg jurisprudence did not support the contrary conclusion [148].
- He can find no support in Servite, Aston Cantlow, Poplar or YL [149].
- 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].
- 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].
- It does not follow that termination is automatically a public function simply because allocation is [152].
- There is nothing special about the regulation that covers social housing; large parts of commercial life are covered by regulation [154].
- 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].
- 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].
- 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].
- 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?
Re no mention of the overturning of YL by Parliament: Elias did mention it briefly at para 32, but said that it had no bearing on the fact that the reasoning in YL still bound him.
It might be something for the House of Lords to contemplate if it goes that far.
Will be interesting if the Lords give permission. It is just an academic point after all.
You’re quite right, Elias does mention that at the end of [32], don’t know how I could have missed that – blame it on it being 11.30 on a Friday night. Clearly the reasoning is still binding. My rather vague point on this is that the nature of the pros and cons test in YL adds up in a certain way that is conceptually underpinned by a policy assessment. I think that there could be an argument that s. 145 of the Health and Social Care Act is a challenge to that, in that the end result of their Lordships’ calculations was contrary to public policy. It’s something I need to think about more, but what I’m trying to suggest is that what subsequent political developments means is not that YL has been incorrectly applied in this case, but that the test, such as it was, in YL is wrong, not necessarily in a strict legal sense, but when regard is had to the purpose of the HRA.
I am not up to date with HA finance.What follows may no longer be the case
The govt controls on HA finance were such that the govt had full control on proceeds of all post Housing act 1974 funded property. It could require notional profits to be paid back to the Housing Corporation.
This was not applied to properties that were not post 1974 act granted properties.
Having regard to notional grants to do major works this might reduce the pool of “uncontrolled properties” to a quite limited no.
This could be a basis for contrasting those organisations who get money for services or grants to assist but can retain their fruits from regd HAs for whom the bulk if not all of their stock is treated as at the disposal of the govt
accordingly there might be a basis re the limited nos of properties without post 74act grant for the HAs to argue that not covered.
ps the govt also used to have a quality standard for whcih organisations coukld get a chartmark . “WHAT is Charter Mark?
Charter Mark is the government’s national standard for customer service for organisations delivering public services,
independently and rigorously evaluated and assessed ” regd housing associations were eligible for these and some awarded chartermarks. this is now being superseded
“As Customer Service Excellence was developed to replace Charter Mark, the scheme will be phased out over a period of time. Charter Mark applications are still welcome, however, the cut-off date for new applications is June 30th 2008. As a Charter Mark certification lasts for three years the scheme will officially close on 30th June 2011.”
Why well well and ‘heck’? We think it has been clear all along that RSLs had conditions and facilities and controls exercised by central Government which stood them apart from general industry.
The question should really be how did the Department of Communities and Local Government ever decide that RSLs were private companies in the first place ?
Lets recap. Many RSLs have emerged as a result of LSVT. While their residents were tenants of a council they were accorded full human rights. At the point of sale they lost them, none of the glossy literature told them of this !
The question in this respect must surely be, was this clandestine removal of residents’ human rights initself a denial of human rights? Or, to put it another way, what process is there in law. or commercial enterprise to remove the human rights of people who already have them ?
Sincerely
Vernon J Yarker
Chairman
The Sheltered Housing UK Association
Vernon, I think that the oh heck was because Rix LJ had a dissenting view which left open the possibility of an appeal to the Supreme Court by L&Q succeeding. Now we know that this isn’t the case.
With respect, your view on how obvious it is that RSLs should be public bodies doesn’t count. There is a complex set of case law behind this, including YL v Birmingham, that indicated that even private companies effectively carrying out functions at the behest of government or local authorities, weren’t carrying out a public function. I think that most, if not all of us involved in this blog are very happy with the outcome in Weaver.
By the way, it is, I think, unarguable that RSLs were not and are not private companies. However, and happily, the Court of Appeal found that, mostly, they are carrying out a public function in the provision of social housing.
As the person who wrote it I can say with hand on heart that NL is right, the “oh heck” was just a reference to Rix LJ’s view. I think that the right result was reached, although in a bit of an odd way, so it was just a comment on the judgments that I agreed with (Elias LJ and Lord Collins, “well, well”) and the one that I didn’t (Rix LJ, “oh heck”). Just a lame attempt to be vaguely amusing on what, I think, was a Friday evening.
“The question in this respect must surely be, was this clandestine removal of residents’ human rights initself a denial of human rights? Or, to put it another way, what process is there in law. or commercial enterprise to remove the human rights of people who already have them ?
One answer would be charity law as it is applied to almshouses.
Rix at [151] is the most relevant for me.
The initial allocation of a property by a RSL (that is duty bound to help the LA function) is arguably a public function. But that public function ends there. There is no duty on RSLs for the ongoing relationship between admission and tenancy end, or even the ending of that tenancy. To class the entire management of a RSL tenancy as a public function will fail and deserves to in the inevitable SC challenge that eventually comes.
JH, how definite of you. We will have to wait for quite some time for a Supreme Court case, I suspect, and in the meantime RSL’s housing function is public.
I’m interested in how you draw the conceptual distinction between allocation and the rest of housing management. I’d be grateful if you could explain further as this strikes me as distinct from Rix LJ’s view.
Housing management is not one function rather its an eclectic term for so many different functions. (Im trying to keep this in the same functional or task based analysis of Weaver).
So above I use that distinction to separate the ‘function’ of initial allocation of a tenancy by saying because a RSL has a ‘duty’ to help local authorities with housing / rehousing and its allocation of then this is arguable to be a public function.
Yet many other functions that come under the eclectic banner of ‘housing management’ I would strongly argue are not public functions. (Best kept garden competition anyone?) This is in my view what was meant by ” “the acceptance that management of social housing is essentially a single integrated function of a public nature is most unlikely to be correct” [151].”
In terms of my being definitive above, of course that is just my opinion that it will fail. Yet similarly if all RSLs housing management is public as you assert, then how can the Garbet case – that was deferred while Weaver was decided – duck around this?
The termination of a tenancy by a local authority has always been regarded as a public act challengeable by way of judicial review .
Although the Datafin principles and the case law in respect of Section 6 HRA 1998 are slightly different the basic question is the same – the decision to seek to terminate a tenancy involves the exercise of a public law discretion.
If the SC decides that RSLs are not public authorities then the ECtHR might well decide to be a little more explicit in its expression of ” any person ” who faces eviction from their home requires the proportionality of the eviction to be determined by an independent and impartial tribunal
JH – Housing management might cover a lot of different elements (although not, I’d say, best kept gardens), but some are clearly core. How do you distinguish between granting a tenancy and ending one, given that you say that grant could be/is a public function? What distinction makes one public and the other not in your view?
I keep being tickled by wondering if a *council* tenant winning best kept garden could ever be a HRA issue.
NL – If HAs have a duty to help councils with their (re)housing duties then any such duty concerns the offer and acceptance of a social tenancy. Once that is completed then what is the council duty to the HA tenant? I dont see any duty or expressed in Weaver terms ‘function of a public nature’ for the ongoing tenure.
So, the granting of a tenancy ends the public duty of the LA as fulfilled by the RSL.
The ongoing tenure in a RSL property doesnt hold any (public function) duties to the council – excepting illegal eviction.
A lawful eviction is a matter of fact and not a public duty on LAs as far as my knowledge of housing law and hence eviction is not a public issue – the effects of it maybe but the act of a lawfully conducted eviction is not a public function.
So – and accepting your point that housing management contains core functions and other (less core?) functions, then the only core function that is of a public nature in this is the start of the tenancy but not its ending and nothing inbetween.
Just out of interest: what is a “core” housing management function? And how do you establish it as core? For some HAs, I suspect (especially if you watch those telly programmes), gardening competitions are core functions.
I did use inverted commas…
But I’d say allocation, grant of tenancy, performance of covenants (by landlord and tenant), dealing with breach and termination would be pretty much core. Coffee mornings and flower judging, probably not. But if the Supreme Court says flower competitions are in, I’m not going to argue.
There’s a useful piece in the most recent Journal of Housing Law which covers this issue about the meaning of housing management, drawing on some of the definitions used in practice. If memory serves me right, there is no accepted definition of housing managment; core functions are said to include allocation, rent collection and arrears management, but not termination. It’s a movable feast at any rate (and I’m thinking in particular about changing definitions historically as well as current practice, such as the Irwell Valley gold standard approach to housing management).
I would define core functions as rent collection, managing the tenancy conditions or arrears and esate management. Non-core functions would be such matters as best kept gardens (that is non-tenancy matters.)
Yes its a vague definition but adequate one for sense of argument purposes.
My point above is that within the core functions sign-up of tenants has been judged in Weaver case to be public because that function is in furtherance of the RSLs ‘duty’ to help the LA with its mandatory duties. I go on to say that it is only at sign-up that the RSLs core housing management ‘duties’ coincide with actual LA legal duties.
Eviction – lawful eviction by RSL does not coincide with any mandatory duties on LAs and hence this is how i separate these core functions in terms of being potentially public (the majority view in Weaver) from the minority dissenting view that I contend is right in Rix LJs view at [151].
It is not a conceptual distinction but a factual one – in simple terms what the hell has a lawful eviction decision by a RSL got to do with the council – its effects will in homelessness terms but not the decision or function itself.
JH, Weaver, either in the majority or the minority, did not find that the public function was restricted to sign-ups under LA allocation/nomination. The reverse is true, both the majority and arguably Lord Rix thought that to distinguish between tenants of an RSL who were i) transferred from an LA under a stock transfer, ii) nominated to a tenancy via an LA allocation, iii) allocated a tenancy by the RSL directly with no LA involvement was not feasible. The only distinction admitted was with ‘non social’ full market rent AST tenancies with the RSL. This was why I was confused by your distinction. And I think you don’t go far enough. Allocation/nomination by an LA as a public duty, sure, but once you have admitted grant of tenancy by an RSL as a public function, the rest potentially follows – provision of the tenancy as public act arguably includes its ongoing management and its termination. So LA allocation/nomination as a public act, fine, but if an RSL is not a public authority in the exercise of its housing function, why should public function extend to the grant of tenancy which is, arguably, a mechanical response to the key decision/act of the LA to nominate?
But then, of course, RSL’s own social tenancy allocation policies are tightly regulated, as are many of the other management functions (Housing Corp as was, now TSA), including the kind of tenancy that can be granted, any introductory period, rent increases, and the grounds on which termination can be achieved and the extra statutory steps required – few of which apply to private tenancies, which is where Rix LJ at 154 is arguably in error.
As to ‘what the hell has a lawful eviction decision by an RSL got to do with the Council’, you are rather putting the cart before the horse. The issue in Weaver was not concerned solely or even primarily with whether the RSL was carrying out an activity on behalf of an LA. Ms Weaver was not an LA nominated tenant, as far as I know. The issue was whether, in the provision and management of social housing tout court, the RSL was carrying out a public function.
NL – I disagree and [152] clearly makes the point I was making in the distinction between sign up and termination.
“Moreover, in as much as it is suggested that because allocation is a function of a public nature, therefore termination is, I would respectfully disagree. Allocation arises under arrangements made between an RSL and a local authority, where the local authority makes use of such arrangements to fulfil their statutory duty to have an allocation policy. However, once an allocation has been made and a prospective tenant has been accepted by an RSL as its tenant, the tenant then enters into a contractual tenancy with the RSL, and their relationship thenceforward is governed, just like any tenant’s relationship with his or her landlord, by private law. That remains the case despite the relevance of regulation”
So the dissenting view did attempt to differentiate between sign-up and termination as public ‘functions’ and did say that IF sign-up was a public function then all that follows were private functions.
I think [152] actually makes my point – allocation in those circumstances is by the LA. Sign up by the RSL – i.e. entering into a contractural tenancy – is, on this view, distinct from allocation, which only gives rise to a ‘prospective’ tenant.
One of the reasons I raised the above issue was that for me “If” is a huge question in Rix LJ’s dissenting view. If allocation is of public nature etc.
LAs nominate and have nomination agreements with private landlords too. Are they therefore public authorities? Clearly they are not.
Also both RSLs and private landlords can refuse the nomination. Hence there is a major critical distinction between nomination/allocation and sign-up and the granting of tenure does not automatically follow from nomination – it is a distinct process (and function).
The fact that private landlords can grant tenancies after nomination makes the act of nomination arguablly not a public function in my view. I agree with you that nomination (the supposed public function that in my view Rix dissented to in [152]) only creates a prospective tenant but not a prospective social tenant as that allocation can be to a private landlord.
How it then follows that housing management in all its entirety is a public function is a huge step that I dont think is sustainable.
Moreover, if all RSLs housing management is a public function, how can the Garbet case (in which judgment was suspended until after Weaver) not concur with this view? If Garbet is bound by Weaver and Garbet didnt award a public remedy, then can it be said that RSLs housing management functions are public in nature?
It must be the case that the provision of a warden service has to be a core management function (resident or otherwise), so I disagree that housing management by RSLs is seen as a de facto public function.
A public law remedy in the form of a declaration, rather oddly, was granted in Garbet but without the court actually deciding that it was a public law issue. The Weaver point simply wasn’t decided either way, as the Court found that the specific claim – under the tenancy agreement – was properly a private law claim.
In short Garbet was a mess, and frankly casts no light whatsoever on this issue. I’m afraid your argument doesn’t get much or indeed any support from that case.