In Babakandi v Westminster CC [2011] EWHC 1756 (Admin), Mr Babakandi made a bold challenge to Westminster’s allocation scheme (bold, as in post-Ahmad v Newham LBC) together with other grounds.  Westminster now has a choice-based lettings scheme based on banding applicants in categories A-C (A being the highest) and a different category for sheltered schemes.  When a property becomes available, it is allocated to certain bands depending on projections in the annual report (which is subject to monitoring).

In essence, Mr Babakandi was living in a tiny flat with his wife and two daughters.  The flat was severely overcrowded.  He applied for a transfer in May 2009  and is still waiting to be transferred. He was initially placed in Band B.   One reason why he may still be waiting is because he racked up rent arrears – well, when I say “racked up”, he had £222.32, which would hardly be enough to persuade a DJ to grant a possession order on – but Westminster’s scheme refused to allow their tenants with rent arrears to bid for properties (as entitled to do: s 167(2A)).  He was subsequently allowed to bid again after the Director of Housing removed his suspension.  In January 2009, before Mr Babakandi applied for a transfer, Westminster, promoted 44 severely overcrowded households into the highest band; they did the same in January 2010 and included Mr Babakandi’s application, so that he was moved to Band A.  The letter itself suggested that Mr Babakandi would be re-included in the scheme (ie the restriction on his bidding would be removed).

There were three grounds of challenge: the general one – which was based on a lack of transparency arising from the quota system, a failure to identify the criteria on which properties would be allocated to which bands, a the lack of basis in the scheme for the promotion of the severely overcrowded households, and the denial of Mr Babaknadi from the quota allocation; the second ground was that Westminster had fettered their discretion by applying a blanket ban on applicants with rent arrears; and the third ground was that Westminster had created a legitimate expectation that Mr Babakandi would be entitled to bid so that his his exclusion for the rent arrears was overwritten so to speak.

In a judgment which is quite remarkable in a way for the lack of citation of authority (Ahmad is referred to only through the 2009 DCLG guidance) and the only other authority cited is the North and East Devon Health authority case on legitimate expection, Nicol J rejected Mr Babakandi’s grounds.

On the first ground, Nicol J accepted that the scheme might not be as transparent as it might be because of the quotas and matching of properties with bands, “… but the authority was entitled to decide that this disadvantage was outweighed by the advantage of a more equitable distribution of its scarce accommodation” (at [20]).  The scheme had to be considered as a whole, and incorporate not just the scheme itself but also the annual reports, which, Nicol J said, is not unlawful.  It should be noted that Nicol J was “unclear” about how widely the annual report had been disseminated (see s 167(7)) but that didn’t matter as Mr Babakandi had been advantaged by his promotion (at [21]; note to self: it may matter in other cases).  On the question of matching, provided it is monitored as the code of guidance suggests:

[matching] does not necessarily mean that there has been an infringement of the statutory requirement to give “reasonable preference” to the groups specified in s.167(2). I do not interpret this obligation as meaning that such preference must be given at all times and in relation to all properties. It is sufficient if such preference is given over the course of a reasonable period. There is no evidence that the group of which the Claimant was part was not given such a reasonable preference. (at [22])

On the rent arrears suspension ground, Nicol J accepted Westminster’s submissions that automatic suspension had practical advantages (it is swift and effective, for which read efficient), and there was discretion in the Director of Housing where there were exceptional circumstances.  Simply because the criteria for exceptional circumstances were not set out did not make this part of the scheme unlawful.  The argument that the policy was uncertain (eg the “rule” that rent arrears of less than a week would not “usually” be taken into account) was, therefore, rejected.

On legitimate expectation, Nicol J held that the terms of the letter moving Mr Babakandi to Band A did not create a legitimate expectation that the rent arrears bar would be removed, but was addressing his move to Band A.  It was a standard letter to all of the households being moved up, and was not designed to deal with the individual circumstances of each applicant.  It did not create a clear and unambiguous legitimate expectation.

Mr Babakandi’s challenge was, therefore, unsuccessful.  The council did have the grace to say that it looks like Mr Babakandi’s wait for a transfer is coming to an end as he is now near the top of the list.

Of the grounds, and reading between the lines, there are three points by way of comment:

(1) There is something interesting going on in this case (at least the first two grounds) about the detail required in the specification of allocations schemes.  This is something on which we have paused for thought in the past, and on which the cases are less than clear (see our notes on R (Van Boolen) v London Borough of Barking & Dagenham [2009] EWHC 2196 (Admin)) but it isn’t clear that Nicol J really grappled with that issue.  It goes to the very heart of the transparency argument being run for Mr Babakandi.  On the first ground, it is (in my view) clearly right that authorities can’t be expected to specify at the outset their matching criteria because the purpose of matching is to be sensitive to the ongoing context, but, that having been said, one could (should?) do rather more to expose the formula for deciding those criteria, which properly should also be subject to consultation.

(2) More by way of observation, Nicol J’s version of truth on the meaning of reasonable preference shows just how far we have travelled since the heady days of R(A/Lindsay) v Lambeth LBC [2002] HLR 57.

(3) I can’t help feeling that Mr Babakandi had a right to have the decision to exclude him from bidding due to rent arrears reviewed (s 167(4A)(c) and (d)) but it was not clear from the report whether he had been informed of, or exercised, that right before the Director of Housing decided to remove that exclusion in his case.  I suppose, in one sense, it didn’t matter for Mr Babakandi as his suspension had been removed.  There’s a more general point here: the Part 6 review seems (to me) to be unexplored territory in the cases on allocations.  I’m sure that there is a simple answer why it isn’t discussed in the cases (as opposed to the extensive discussion of the Part 7 review process), but perhaps somebody would clarify that for me.  My suspicion is that many authorities’ standard letters don’t tell applicants about the right to review such a decision, but it’s easy for me to say that from my ivory tower and without any evidence to back that suspicion up.  I wish somebody would run such a challenge to expose the fact that the 1997 review regulations don’t apply to Part 6 applications, as they were made on the basis of section 164, 1996 Act, which itself was repealed in the Homelessness Act 2002.