Allocation without Grant

Birmingham City Council v Qasim and others [2009] EWCA Civ 1080 may come as something as a surprise (at least, it did to me) and has rather a lot to say about the importance of allocation schemes under Pt 6, Housing Act 1996.

Birmingham had an employee who took it upon himself to create false computer entries in the BCC computer system, such that it enabled persons selected by the employee to become tenants of the authority. For example, he would find properties where tenants had recently died and then amend the housing file so that Mr X was shown as the joint tenant of Mrs Y and, hence, Mr X could inherit the tenancy by succession. These actions were carried out unlawfully and outside the allocation scheme (Pt 6, Housing Act 1996). When Birmingham discovered this, they issued possession proceedings against the ocupiers contending:

(a) that Grounds 1 or 5 covered this situation; and / or

(b) that because these tenancies had not been granted in accordance with the allocation scheme, they were void ab initio and, hence, there was no tenancy.

In the county court (noted by us here), one defendant (subsequently supported by the others) applied to strike out the claims. The Judge agreed, holding:

(a) that there was no evidence to support a claim under Grounds 1 or 5 (i.e. there was no evidence of personal wrongdoing by a tenant);

(b) the council could not rely on a public law invalidity argument as it was bound by Islington LBC v Uckac [2006] EWCA Civ 340, the effect of which was that the Grounds for possession were a self-contained code and no residual basis for permission existed.

The council appealed on (b) and contended that there had been an allocation otherwise than in accordance with the scheme published under Pt 6; that this was prohibited by s.167(8), Housing Act 1996 and, accordingly, that the subsequent tenancies were void – Credit Suisse v Allerdale BC [1997] QB 306.

The appeal was dismissed. The Court of Appeal – agreeing with the defendants – held that the power to grant a tenancy is conceptually separate from the duty to allocate in accordance with a published scheme. The power to grant was unfettered and found in Part 2, Housing Act 1985. The duty to allocate was in Pt 6, Housing Act 1996 and was merely about managing the queue of applicants. Any invalidity or illegality in the allocation did not subsequently affect any tenancy which had been granted.

If Parliament had intended illegality in the allocation to go to the validity of the grant, it would have said so in clear terms. It was unlikely that Parliament had intended that an authority could – years after a ‘tenancy’ had been granted – come along and seek possession based on an earlier error in the allocation process.

The remedy for a person aggrieved by an unlawful allocation was to seek to have that allocation quashed on judicial review prior to the grant of the tenancy.

I’m not sure that this is right, and I say this for a number of reasons:

(a) it does seem to drive a horse and coaches through both the statutory priority for certain classes of person contained in Pt 6 and, just as importantly, the exclusionary provisions in s.160A, 1996 Act. So, although a local authority cannot allocate to an ineligible person, they can still grant a tenancy. That is, with respect, a surprising conclusion;

(b) it seems unlikely that another person would ever know that there had been an unlawful allocation and even less likely that they’ll be able to get a quashing order from the Admin Court before the allocation goes on to become a grant;

(c) at a policy level, doesn’t this take all the ‘bite’ out of allocation schemes? What is the sanction for an authority which ignores it? What is the sanction for an employee (or councilor who pressures an employee?) who decides to bypass the policy?

I suspect that we’ve not heard the last of this case.

About J

J is a barrister in London. He loves service charges and all things leasehold law related. He also likes beating rogue landlords and mortgage companies.
Posted in Allocation, Housing law - All.

13 Comments

  1. I disagree. The distinction between lawful allocation and grant has to be right. Otherwise those LAs whose allocation schemes were found unlawful, either in operation or structure, would have failed to grant tenancies to everyone who got one during the relevant period, surely. Para 34 supports this.

    Also it is probably worth pointing out that the officer at the LA was one given the power to grant tenancies. Things could well be different if there was no delegated power to grant on the part of the officer (para 43). Or if there had been collusion and/or corruption on the part of the tenant and officer – but there ground 5 might come into play anyway.

    • I think that the CA is plainly correct.The reasoning is compelling. As I pointed out when we discussed the county court decision otherwise it would lead to bedlam.

      The old Port Talbot case provides the answer to any questions of collusion .The Admin Court can quash an allocation and a consequent unlawful grant .

    • It was the department, rather than the officer (para. 48) but I don’t see that anything turns on that. In the spirit of friendly debate, what then is the purpose of the scheme under Part 6 if not to regulate who actually gets properties?

    • But that remains true, the only lawful way to decide to whom to offer a tenancy is by the Part 6 scheme. If a local authority decides to grant tenancies outside that, it is acting unlawfully. I don’t think, see below, that the only viable challenge in such a situation is limited to one with the quashing of the grant as its object.

  2. And, thinking about the grant/allocation distinction, this has to be the case in the world of CBL. While the confusion of the two might make sense in a scheme of direct offers, it just doesn’t for CBL where an applicant may be allocated quite a few properties but grant happens only on acceptance by the tenant. If one accepts that an offer is not a grant, then allocation and grant are not identical.

    I think it is clear that this is not a licence for LAs to just grant tenancies willy nilly outside the scheme. Surely any indication that this was a deliberate act by the LA would leave them open to JR by anyone else applying for accommodation. It would not end the granted tenancy, but it would end such a by passing of the allocation scheme. (And be a suitable candidate for a penal notice, perhaps…).

    • But you’d have to get the JR in before the grant was completed and that simply isn’t realistic. Once it has been granted then the illegality in the allocation is irrelevant.

    • Oh yes, I agree a challenge to a specific individual grant by JR would be practically impossible, but it still isn’t a licence for LAs to grant other than via the allocation scheme. It would surely be possible to challenge any decision to behave in such a manner (thinking about your point c, above).

      The sanction against an employee would presumably be disciplinary – acting way outside their role – and on a LA, the usual for making an active decision to act unlawfully.

  3. Was that canvassed in argument though J ? In the Port Talbot case the grant had taken place. There is no reason why a grant cannot be quashed . The problem for the authority is that the court would be likely to refuse relief especially in relation to an innocent tenant.

    If there was obvious collusion however the court might think it proper to quash.

  4. I should just like to say – I have had a case of this sort (allocation by a rogue housing officer to, in my case, an ineligible person). We came up with many beautiful arguments, and won because the council backed down. We (at least, I) never thought of this split between allocation and grant.

    I agree with NL that it is also an immensely practical solution for these cases. Ground 5 is protection enough for local authorities against a complicit tenant. Everyone on the register would have the right to bring to account a complicit council.

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