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|Neutral Citation Number:  EWCA Civ 1467
|Case No: B2/2013/0232
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM NORTHAMPTON COUNTY COURT
MR RECORDER MAXWELL QC
|Royal Courts of Justice
Strand, London, WC2A 2LL
|19th November 2013
B e f o r e :
LORD JUSTICE JACKSON
LORD JUSTICE FLOYD
SIR DAVID KEENE
| LEICESTER CITY COUNCIL
|- and -
(Transcript of the Handed Down Judgment of
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Mr David Carter and Ms Sally Blackmore (instructed by Leicester City Council) for the Appellant
Mr Philip McLeish (instructed by Howells LLP) for the Respondent
HTML VERSION OF JUDGMENT
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Lord Justice Jackson:
- This judgment is in seven parts, namely:
Part 1. Introduction,
Part 1. Introduction
Part 2. The facts,
Part 3. The possession proceedings,
Part 4. The appeal to the Court of Appeal,
Part 5. The first three grounds of appeal,
Part 6. The fourth ground of appeal,
Part 7. Conclusion.
- This is an appeal by Leicester City Council ("the Council") against the dismissal of its claim for possession of 35 Martival, Leicester.
- The issues in this appeal are (i) whether the Council acted unlawfully in deciding to evict the widow of the former tenant and her two children without first considering the option of granting a fresh tenancy to the widow; (ii) whether the Council can rely upon procedural omissions by the widow in circumstances where the Council had misled her about what the procedure could achieve.
- The defendant in the action and respondent in the Court of Appeal is Mrs Claire Shearer. Mrs Shearer was the wife of James Shearer, who died on 27th or 28th February 2011.
- The Housing Act 1996 ("the 1996 Act") sets out the statutory obligations of the Council in relation to housing. I shall refer to the provisions of that Act as they were at the time of the events in issue.
- Section 159 (1) of the 1996 Act provides:
"A local housing authority shall comply with the provisions of this Part in allocating housing accommodation."
- Section 166 (3) of the 1996 Act provides:
"Every application made to a local housing authority for an allocation of housing accommodation shall (if made in accordance with the procedural requirements of the authority's allocation scheme) be considered by the authority."
- Section 167 of the 1996 Act provides:
"(1) Every local housing authority shall have a scheme (their "allocation scheme") for determining priorities, and as to the procedure to be followed, in allocating housing accommodation.
(6) Subject to the above provisions, and to any regulations made under them, the authority may decide on what principles the scheme is to be framed."
- Pursuant to its statutory obligations the Council published an Allocations Policy. This sets out the rules under which the Council allocates social housing properties.
- Part 2 of the Allocations Policy provides that all applicants for social housing must apply to put their names on the housing register. Paragraph 2.4 of the Allocations Policy states:
"All applications must have the correct supporting proofs in order for the application to be deemed as complete. Details of the required proofs can be found on the application form."
- Paragraph 2.6 of the Allocations Policy provides that everyone who submitted a completed application will be duly considered.
- Part 3 of the Allocations Policy sets out a banding scheme. Each applicant is placed in one of five bands according to their needs and circumstances. Under part 5 of the Allocations Policy, when accommodation becomes available appropriate applicants are invited to bid for it. If two or more persons in the highest band bid for a property, the applicant who has been on the register for the longest period will be awarded an introductory tenancy of that property.
- Paragraph 5.6 of the Allocations Policy provides:
In limited circumstances the Council may allocate properties directly to applicants outside of the Choice Based Letting Scheme. Illustrative examples of Direct Lets are as follows:
• Where an allocation is required to ensure protection of the public for example following a request made by a multi-agency public protection panel meeting.
• Where a customer has been referred as part of the Witness Protection Scheme.
• Where a Leicester City Council tenant's home is being repaired and they need to be moved from the property on a temporary or permanent basis.
• Where a targeted offer is made to an applicant living in a Council clearance area.
• Where there are exceptional circumstances that merit priority rehousing associated in managing risks, emergencies and making best use of management stock."
- It is clear that paragraph 5.6 of the Allocations Policy is a special provision which will only operate in particular or exceptional circumstances. The five bullet points set out in that paragraph are "illustrative examples" of such circumstances.
- The Council has two separate departments which deal with housing issues. The Housing Options Department deals with the allocation of social housing to applicants. The Housing Services Department deals with the administration of tenancies and also the recovery of possession, if the need arises. The Council's Director of Housing is in charge of both departments.
- I shall refer to the European Convention on Human Rights as "ECHR". Article 8 of ECHR provides:
"(1) Everyone has the right to respect for his private and family life, his home and his correspondence.
(2) There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others."
- After these introductory remarks I must now turn to the facts.
Part 2. The facts
- In April 2005 the defendant married Mr James Shearer. She and her daughter Ella (then aged 2) went to live with Mr Shearer and his mother, Patricia Baxter, at 35 Martival, Leicester. That property was owned by the Council and Mrs Baxter was the secure tenant. In May 2005 Mrs Baxter died and Mr Shearer succeeded to her tenancy by statute.
- The defendant and Mr Shearer had a child together, Leah, who was born on 22nd March 2007.
- In January 2010 the defendant left 35 Martival because of Mr Shearer's violence. She and the children went to live at 45 Fastnet Road, Leicester. The defendant took a shorthold tenancy of that property.
- From January 2010 to February 2011 the defendant resided wholly or mainly at 45 Fastnet Road. The two girls regularly went to stay with Mr Shearer at 35 Martival. Over Christmas 2010 the defendant and the children all went to stay at 35 Martival. Mr Shearer was in hospital during this period.
- In late February 2011 the defendant terminated her tenancy of 45 Fastnet Road and for a very short period went to stay at 73 Croyland Green, Leicester. This was a property which her brother owned. On the weekend of Saturday 26th and Sunday 27th February 2011 the defendant was staying at 73 Croyland Green together with her husband. On the evening of Sunday 27th February the children were away. The defendant and her husband had a meal and went to bed. When the defendant awoke on Monday 28th February she found that Mr Shearer was dead. He had hanged himself during the night.
- On or about 28th February 2011 the defendant and her children moved back into 35 Martival. On 7th March 2011 the defendant attended the Council's offices and had a meeting with Mr Jay Rughani in the Housing Services Department. She said that she would like to continue living at 35 Martival as a tenant following the death of her husband.
- Mr Rughani told the defendant that it would not be possible for her and the children to continue living at 35 Martival. He advised the defendant to complete an application form seeking new Council accommodation and to contact the Housing Options Department for further advice.
- On the 21st March 2011 the defendant completed and submitted an application form for Council accommodation for herself and her children. She stated that her current address was 35 Martival.
- On 24th March 2011 the Housing Options Department wrote to the defendant asking her to provide the following supporting evidence: proof of identification, for example a copy of her passport or similar documents or a driving licence; recent copy of a child benefit entitlement letter or bank statement; two different proofs of her current address, for example a benefit letter, a wage slip, a utility bill, a tenancy agreement or a bank statement.
- The defendant never supplied the proofs which were requested. It is clear from the various notes and correspondence in the bundle that Council officials led the defendant to believe that whatever property may be allocated to her, it could not be 35 Martival.
- The defendant for her part was determined to remain at 35 Martival. This was the address where she had lived with her husband through good times and bad. It had been her children's main home for most of their lives. Even during the period of Mr and Mrs Shearer's separation the girls had spent some time at 35 Martival with their father.
- Thus a stalemate was reached. Mr Rughani made a number of home visits to the defendant at which he stressed to her that she and the children would have to leave 35 Martival. At trial the recorder found as a fact that in the course of his dealings with the defendant Mr Rughani gave no thought to the possibility that the defendant might qualify for a direct let under paragraph 5.6 of the Allocations Policy. The explanation for this omission is that Mr Rughani was in the Housing Services Department, not the Housing Options Department. He only had a general understanding of the Allocations Policy.
- On the 19th June the defendant sent a nine-page handwritten letter to the Council. In this letter the defendant set out her circumstances. She made a powerful plea that she and the children should be allowed to stay at 35 Martival.
- Upon receipt of the defendant's letter, Mr Rughani prepared a report setting out the history of events to date. This was circulated to his colleagues. Mr Andy East, a team leader in the Housing Services Department, considered this report. On 4th July he sent the following email to Mr Supria, a more senior official in the department:
"I have also attached the email from the City Mayor's office that includes the letter received from Mrs Shearer.
There appears to be 2 options to consider:
(1) Proceed with ending the tenancy of the deceased Mr Shearer, via NTQ to Public Trustee, followed by legal action to re-gain possession of 35 Martival from Mrs Shearer. At the same time trying to assist her in her housing application.
(2) A direct let for Mrs Shearer to take on the tenancy of 35 Martival. Her housing application qualifies her for a 2 bed house. 35 Martival is a 2-bed house.
In my opinion a direct let would be a quicker route to re-house Mrs Shearer and her family. It does however risk creating a precedent for an estranged spouse with no right of succession, who has previously moved out, to move back in following death of the tenant to re-claim a tenancy.
Perhaps the very sensitive circumstances of this case could act as a caveat to prevent it being applied in other future cases, avoiding the setting of a precedent?"
- Mr Supria discussed the matter in depth with Mrs Desor, who was head of the Housing Options Department. On 7th July 2011 Mr Supria replied to Mr East as follows:
"She [Mrs Desor] is clear in that we must always follow due processes that we have, even when the circumstances appear exceptional; otherwise we are vulnerable to criticism or worse fraudulent behaviour. This was the case in Nottingham. I do not mean you or your Team in any way, I mean generally that if we disregard the Allocations policy or 'how access to public sector housing is governed in statute', then we are vulnerable and culpable.
Therefore we recognise the mitigating circumstances and sympathise with the family however we must treat her in accordance with written and agreed allocation processes. In brief
(1) She is not the secure tenant of the said dwelling
(2) She has no security and would not have succeeded to the tenancy
(3) She has no tenancy in law so she is an unauthorised occupant which we have tolerated
(4) Proceed with ending the tenancy of the deceased Mr Shearer, via NTQ to Public Trustee, followed by legal action to re-gain possession of 35 Martival from Mrs Shearer. At the same time you must try to assist her in her housing application and make a referral to Housing Options.
(5) During this period she will be assessed and given appropriate advice by HOC. She will be assessed if she is homeless, in priority need or not. If so, she will be awarded the appropriate points which will assist her to move into the most appropriate accommodation. Hopefully this can be done in a swift manner which would negate the need for litigation.
(6) Again we can be supportive, but following due processes."
- In other words, Mr Supria and Mrs Desor had decided that the way forward was to require the defendant to leave 35 Martival, rather than to make a direct let under paragraph 5.6 of the Allocations Policy.
- The Council served a notice to quit on the Public Trustee and the personal representatives of Mr Shearer, in order to bring Mr Shearer's tenancy to an end. Whether this was necessary in circumstances where Mr Shearer had been deceased for four months is not an issue into which I need venture.
- On many occasions Council officials urged the defendant to provide the proofs which the Council had requested in its letter dated 24th March 2011. At the same time it was always made clear to the defendant that the sole purpose of these formalities was so that she could be considered for other accommodation. The defendant was determined to stay where she was. Therefore she did not provide the proofs requested and the stalemate continued.
- In those circumstances the Council commenced possession proceedings, in order to force the defendant to vacate the property.
Part 3. The possession proceedings
- By a claim form issued in the Leicester County Court on 20th September 2011 the Council claimed an order for possession of 35 Martival.
- The proceedings followed a tortuous course, which I do not need to trace for present purposes. The defendant originally defended the claim on the basis of ECHR article 8. At a directions hearing on 8th March 2012 the possibility was raised of the action settling by means of a direct let under paragraph 5.6 of the Allocations Policy. Unfortunately the solicitors on both sides misunderstood what had been discussed on that occasion. The action moved inexorably forwards.
- Eventually the action came on for trial before Mr Recorder Maxwell QC sitting in the Northampton County Court on 10th and 11th October 2012. At this stage the defendant was relying to some extent on ECHR article 8, but principally on a public law defence. The essence of the public law defence was that the Council's decision to bring possession proceedings was flawed, because the Council had not given any or any proper consideration to the possibility of making a direct let to the defendant under paragraph 5.6 of the Allocations Policy.
- Having regard to the House of Lords' decision in Wandsworth LBC v Winder  AC 461, the Council does not dispute that a public law defence is, in principle, available to the defendant in possession proceedings brought by a local authority. The Council contends that, on the facts, such a defence cannot be made out in the present case.
- At the trial the Council called Mr Rughani and Mrs Desor as witnesses. The only witness for the defence was the defendant herself. Matters were explored in considerable detail. Indeed the oral evidence occupied two full days. Counsel subsequently submitted their closing submissions in writing.
- The recorder handed down his reserved judgment on 10th January 2013. He dismissed the Council's claim. I would summarise the recorder's findings and reasoning as follows:
i) The defendant was a trespasser at 35 Martival. She was not and never had been a tenant of the property. Nor was she living there with the permission of the Council.
ii) In those circumstances the defendant could not establish an article 8 defence of the kind envisaged by the Supreme Court in Manchester City Council v Pinnock  UKSC 45;  2 AC 104.
iii) The Council identified the possibility of making a direct let to the defendant. However, the Council never gave proper consideration to taking this course.
iv) If the Council was going to give serious consideration to the question whether there were exceptional circumstances which merited making a direct let, there were a number of matters which it would have needed to investigate and consider. For example, it should have contacted the Social Services Department, who had had extensive contact with the family. It should have asked the Social Services Department about the vulnerability of the children and the effects of requiring them to move. The Council did not investigate or consider any matters of this nature.
v) If the Council felt unable to pursue the option of a direct let because the defendant had not submitted the requisite proofs, then the Council should have told the defendant that the proofs were needed for this purpose.
vi) The Council failed to do this. Instead the Council misled the defendant into believing that the sole purpose of the proofs was for the purpose of re-housing the defendant away from 35 Martival.
vii) If the Council had acted properly and lawfully, then the defendant would have submitted the necessary proofs; the Council may then have decided to make a direct let of 35 Martival to the defendant.
- Having carried out that analysis, the recorder reached the following conclusion in paragraph 101 of his judgment:
"So in the light of all those circumstances, in my judgment it cannot seriously be argued that a reasonable Authority would without more on the facts known have refused or omitted to exercise its discretion to grant a Direct Let. I regard that refusal or failure to consider the possibility of a Direct Let had an impact on the decision to seek possession and that failure has had an improper fettering of the discretion. It is a lack of exercising the discretion. It is a removal from the discretion to be exercised of an investigation of the matters which were appropriate to be looked at. That vitiates and compromises their decision to seek possession."
- The Council was aggrieved by the recorder's decision. Accordingly it appealed to the Court of Appeal.
Part 4. The appeal to the Court of Appeal
- By an appellant's notice filed on 31st January 2013 the Council appealed to the Court of Appeal against the recorder's decision on four grounds, namely:
"1. He misdirected himself by deciding that the Appellants had a power to make the Respondent an allocation of accommodation by way of a direct let of 35 Martival, Leicester LE5 0PJ in circumstances where she had failed to comply with the requirements of their allocations scheme.
2. His finding that the Respondent was not obliged to provide the Appellants with the proofs in support of her application for an allocation of housing accommodation was irrational, in particular:
(a) he failed to have regard to the provisions of the Appellant's allocation scheme; and
(b) her motive for not providing them was irrelevant.
3. He misdirected himself by deciding that the Appellants were obliged to make inquiries to determine whether the Respondent's circumstances were such as to justify making her an allocation of accommodation by way of a direct let of 35 Martival.
4. His finding that the Appellants had decided to reject the possibility of making the Respondent an allocation of accommodation by way of a direct let of 35 Martival was irrational because it was not supported by the evidence."
- The first three grounds are closely interlinked. They are all variants of the proposition that the Council was obliged to abide by its published Allocations Policy. The defendant did not make an application in proper form as prescribed by the Allocations Policy. Therefore the Council could not offer, or even seriously consider offering, a direct let to the defendant.
- The fourth ground raises a separate issue, which will require an examination of some of the evidence adduced at trial.
- At the hearing of the appeal Mr David Carter appeared for the Council, leading Miss Sally Blackmore who had appeared below. Mr Philip McLeish appeared for the defendant/respondent, as he did in the court below. I am grateful to counsel for their helpful oral and written submissions.
- Given the structure of this appeal, it makes sense to deal with the Council's first three grounds of appeal together.
Part 5. The first three grounds of appeal
- Mr Carter begins his submissions by drawing attention to sections 159, 166 and 167 of the 1996 Act. Under these provisions the Council is obliged to have an allocations scheme for determining priorities and the procedure to be followed in allocating housing. The Council is obliged to consider every application which is made in accordance with the procedural requirements of its allocations scheme.
- The Council's scheme is contained in its Allocations Policy, the relevant parts of which are set out in Part 1 above. As Mr Carter rightly says, there is no challenge to the lawfulness of this scheme.
- Mr Carter contends that the Council was obliged to comply strictly with the provisions of the Allocations Policy. This was necessary both as a matter of statutory obligation and for the purpose of treating all applicants fairly. In this case the defendant failed to provide the various proofs, which were expressly required by paragraph 2.4 of the Allocations Policy and by the instructions in bold printed on the application form. The council repeatedly requested these proofs both by letter and orally at various meetings. In those circumstances the defendant's application for accommodation submitted on 21st March 2011 could never be dealt with. The Council could not assign the defendant to one of the five bands and invite her to bid for suitable properties as they became available. Nor could the Council make a direct let to the defendant under paragraph 5.6 of the Allocations Policy. Indeed the Council was not obliged even to make the inquiries which would be appropriate before it decided whether to make a direct let.
- Accordingly, says Mr Carter, the judge fell into error in criticising the Council for failing to take these steps.
- Mr Carter points out that officials in the Housing Services Department advised the defendant to go and consult the Housing Options Department for advice on how to proceed. The defendant did not do so. Therefore the difficulty in which the defendant found herself was entirely of her own making.
- I do not accept these submissions. At all stages in the story Council officials gave firm advice to the defendant that there was no question of her being able to remain at 35 Martival. It was made clear to her that the most she could achieve by submitting proofs or by visiting the Housing Options Department was to pursue an application for different accommodation.
- No Council official ever told the defendant that if she made an appropriate application, the Council might be able to make a direct let to her of 35 Martival.
- Mr Carter, when pressed in argument, accepted that certain letters from the Housing Services Department to the defendant did mislead her in this respect. He says that this misinformation was due to the separation between the Housing Services Department and the Housing Options Department. He submits that if only the defendant had persevered, she would have received correct advice from the Housing Options Department.
- I am afraid this will not do. The defendant was a vulnerable person who had suffered much during her adult life. I need not recount the details. The culmination of her troubles was the suicide of her husband. The defendant found the body after he had hanged himself. The defendant was living on benefits and bringing up two young children as a single mother with, it would seem, little outside help. The defendant cannot be expected to appreciate that one housing department of the Council was giving her wrong advice, but that another housing department of the same Council might give her different and correct advice.
- In my view the Council effectively prevented the defendant from providing the necessary proofs by the misleading advice which it gave to her. The consequence of the misleading advice was that the defendant did not pursue any further the application which she had sent to the Housing Options Department on 21st March 2011.
- Mr Carter rightly points out, on the basis of the authorities, that a public law defence to a possession claim will only succeed in exceptional circumstances. This is especially so if the defendant is a trespasser.
- I accept that submission. The facts of the present case, however, are exceptional. In the desperate situation in which the defendant found herself in 2011 she had a respectable case for receiving the benefit of a direct let under paragraph 5.6 of the Allocations Policy. The Council officials to whom she spoke did not tell her this. Indeed they told her precisely the opposite.
- A public authority cannot rely upon an applicant's non-compliance with procedural requirements, when the authority has itself caused that non-compliance.
- An additional feature of the present case is that the Council was well aware of the defendant's circumstances. It already knew all of the matters of which it was requesting formal proof (identity of the applicant, details of the children and current address). This is a case in which the Council wrongly allowed form to prevail over substance.
Part 6. The fourth ground of appeal
- The judge's finding of fact, which the Council attacks in its fourth ground of appeal, is based upon the exchange of emails between Mr East and Mr Supria in early July 2011. These emails are set out in Part 2 above.
- Mr Carter has addressed to us an ingenious argument to the effect that the exchange of emails does not record or evidence a decision against making a direct let to the defendant. He points out that one department of the Council was dealing with possession proceedings, whereas another department would be responsible for deciding whether to make a direct let. The Housing Services Department had decided to "regain possession of 35 Martival from Mrs Shearer": see numbered paragraph (4) of Mr Supria's email. That decision did not, however, preclude the possibility of the Housing Options Department making a direct let to the defendant. I do not accept that argument. It would be absurd for one department of the Council to obtain a court order evicting the defendant from 35 Martival and then for another department of the Council to grant her a tenancy of the same property.
- Mr Supria's email of 7th July was written after his discussion "in depth" with Mrs Desor. That conversation is recorded in the first sentence of the email. Mrs Desor said in evidence a year later that she could not remember the conversation, but that takes matters no further. Mr Supria was available to give evidence, but the Council chose not to call him. It is clear that the email of 7th July was written after a detailed discussion between a senior official in the Housing Services Department and the head of the Housing Options Department.
- The recorder concluded that after cursory consideration the Council rejected the option of making a direct let (judgment paragraph 70). In my view that was an entirely proper conclusion for the recorder to reach. The recorder's conclusion gains support from the subsequent conduct of the Council. Council officials never indicated to the defendant that there was any prospect of a direct let. Instead they advised her to apply for re-housing in different accommodation.
- In the course of his submissions Mr Carter took us to some passages in the oral evidence of Mr Rughani and Mrs Desor. These passages concerned the division of functions between the Housing Services Department and the Housing Options Department. These passages also referred to the limitations on the expertise of the officials in both departments.
- In my view none of these passages rebut the natural inference to be drawn from the exchange of emails on 4th and 7th July. I reject the fourth ground of appeal.
Part 7. Conclusion
- For the reasons set out in Parts 5 and 6 above, I am not persuaded by any of the Council's grounds of appeal.
- The facts of this case constitute exceptional circumstances, which plainly merited consideration under paragraph 5.6 of the Allocations Policy. Of course, the Council was not bound to make a direct let of 35 Martival to the defendant. But it was under a duty to give serious consideration to doing so. The Council cannot rely upon the defendant's failure to comply with the procedures set out in the Allocations Policy in circumstances where the Council had caused that non-compliance.
- In commencing possession proceedings against the defendant without giving any or any proper consideration to the option of making a direct let under paragraph 5.6 of the Allocations Policy the Council acted unlawfully.
- I agree with the recorder's decision for the reasons which he gave. If my Lords agree, this appeal will be dismissed.
Lord Justice Floyd:
- I agree.
Sir David Keene:
- I also agree.
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