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  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 , Lord Collins at - and Rix LJ at -. There was also some criticism of the Divisional Court for focusing on the wrong question; see - and .
Let’s start with Elias LJ’s lead judgment, then Lord Collin’s concurring judgment, before considering Rix LJ’s dissent.
Elias LJ first outlined the role of RSLs in social housing. In brief:
- It is Government policy to provide social housing .
- RSLs were regulated by the Housing Corporation .
- RSLs are subject to detailed housing management guidance, which is approved by the Secretary of State .
- Ss 8-10 of the Housing Act 1996 impose further regulation on RSLs .
- RSLs are subsidised by public funds through Housing Corpn grants .
- They have an important role in assisting LAs to carry out their statutory housing policies; this is not simply through choice, but through legislation .
- Many LA properties are being transferred to RSLs .
- Certain statutory powers are bestowed on RSLs, eg in relation to anti-social behaviour .
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 - to the existing case law on the HRA: Aston Cantlow v Wallbank  UKHL 37 and YL v Birmingham City Council  UKHL 27. He also noted Poplar Housing and Regeneration Community Association Ltd v Donoghue  QB 48. At  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” . This, and the third of Elias LJ’s propositions above must be right.
At - 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  Elias LJ acknowledges that there are observations in YL and Aston Cantlow that would appear to suggest it was. However, at  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  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 -. 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. ()
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  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”.
Where it all gets really interesting is Rix LJ’s dissenting view. At  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 ) that in R (Ahmad) v Newham  UKHL 12 Baroness Hale emphasised that the provision of housing is not a government function.
At  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 .
- He can find no support in Servite, Aston Cantlow, Poplar or YL .
- 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) .
- 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” .
- It does not follow that termination is automatically a public function simply because allocation is .
- There is nothing special about the regulation that covers social housing; large parts of commercial life are covered by regulation .
- 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” .
- The main sources of capital finances are private lenders and house sales . 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 .
- 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 .
- 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 .
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 . 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  does not, for me, mean that all of the remaining 36% are necessarily not social housing.
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  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  and , but to the extent that Elias LJ and Lord Collins differ I prefer Lord Collins’ view – see .
I’m also not sure about Rix LJ’s point on charitable status in . 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?