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Neutral Citation Number: [2015] EWHC 98 (Admin)
Case No: CO/977/2014

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT

Royal Courts of Justice
Strand, London, WC2A 2LL
7 January 2015

B e f o r e :

THE HONOURABLE MR JUSTICE MCCLOSKEY
____________________

Between:
THE QUEEN
ON THE APPLICATION OF SARA HILLSDEN


Claimant
- and -


EPPING FOREST DISTRICT COUNCIL
Defendant

____________________

Mr Jan Luba QC and Ms Bethan Harris (instructed by Edwards Duthie Solicitors) for the Claimant
Mr Stephen Knafler QC (instructed by Corporate Support Services, Epping Forest District Council) for the Defendant
Hearing dates: 25 & 30 September 2014

____________________

HTML VERSION OF JUDGMENT
____________________

Crown Copyright ©

    The Hon. Mr Justice McCloskey :

    [I] INTRODUCTION

  1. By this application for judicial review, Sara Hillsden (hereinafter "the Claimant") challenges a decision of the Defendant, Epping Forest District Council ("the Council"), described in the Judicial Review Claim Form in the following terms:
  2. "Decision not to consider whether or not the Claimant's circumstances were exceptional and that she should be treated as eligible for an allocation despite her not fulfilling the Defendant's residency criteria in its allocations scheme."

    Within these words one finds two of the key ingredients in the matrix of these proceedings, each uncontroversial: the Claimant did not fulfil the Council's residency criteria and her quest to secure an allocation of housing from the Council was refused in consequence. Permission was granted following an oral renewal hearing. It was not submitted on behalf of the Council that the proceedings have been rendered academic by either the Claimant's subsequent altered housing circumstances or the imminent advent of a new scheme.

    [II] FACTUAL FRAMEWORK

  3. The following facts are not in dispute. The Claimant, who then resided in public housing in the London Borough of Newham with her daughter (now aged 15 years), was desirous of moving to live near her aunt in the Council's area. On 14 October 2008, she applied to and was registered on the Council's housing allocations scheme. Some three years later, in 2011, her daughter (then aged 12) was the victim of certain conduct and incidents rendering her unable to attend school for around one year. On 31 May 2012, following advice from Social Services and the involvement of the Child Mental Health Services, the Claimant relinquished her secure tenancy and moved to privately rented accommodation in the Council's area. She continued to be registered on the Council's housing allocations scheme. On 31 May 2013, she was first moved to "Band 3". She made bids periodically for properties under the scheme, was among the top five bidders for certain properties and, in one instance, was the second highest.
  4. On 15 April 2013, at a meeting of the Council's Cabinet, it was decided to adopt a revised Allocations Scheme (hereinafter "the impugned Scheme"), implementation to be effected on 01 September 2013. On 21 May 2013, the Claimant was notified by letter of the impugned Scheme and was informed that she was not a qualifying person. Notwithstanding, on 31 May 2013, her priority in the extant Scheme improved from "Band 5" to "Band 3". On 11 June 2013, the Claimant appealed against the notification of 21 May 2013. While the initial response to the appeal was encouraging, on 17 July 2013, the Claimant having re-registered, the Council advised her that she was ineligible under the impugned Scheme. On 05 August 2013, a further appeal by the Claimant was rejected. On 05 December 2013, the Council reiterated its decision. Ineligibility, in this context, denotes that the Claimant did not satisfy the qualifying criteria and, hence, was not a qualifying person, with the result that she was not eligible to be admitted to the Council's housing register.
  5. Thus, to summarise, the Council has consistently maintained the stance that the Claimant, by virtue of the terms of the impugned Scheme, does not qualify for admission to its Housing Register and, therefore, cannot be considered for allocation of any Council or registered social landlord (per s 159 of the Housing Act, 1996). The Council's successive refusal decisions were expressed in a series of letters to the Claimant.
  6. [III] THE IMPUGNED DECISION

  7. At this juncture, it is convenient to consider the Council's letters to the Claimant. First, by letter dated 05 August 2013, the Council informed the Claimant of the following:
  8. "Under the new Scheme, which comes into force on 01 September 2013, in order to be a qualifying person to join the list you must have three years continuous residency. If you are already on this list you must have 2 years continuous residency. According to our records, you have not been resident in our District for sufficient time. As a result, I am afraid I have no alternative but to agree with the decision that you are not a qualifying person to remain on our register from 01 September 2013."

    With the assistance of the Citizens Advice Bureau, the Claimant appealed against this decision. This generated a further letter from the Council, dated 05 December 2013, stating, inter alia,

    "On 01 September 2013, the Council's revised Housing Allocations Scheme came into force. Under the Local Eligibility Criteria any applicant who was on this list at the time the new scheme came into force must have 2 years residency to remain on the list. Unfortunately, your client does not meet this aspect of the Criteria .
    If any person does not meet with the Residency Criteria, then their circumstances are not taken into account as there is no exception to this nor any other aspect of the Local Eligibility Criteria. .
    In her letter, [XY] refers to paragraph 3.25 of the 'Allocation of Accommodation Guidance for Local Authorities in England' which states that there may be exceptional circumstances where it is necessary to disapply these criteria in the case of individual applicants. The Council's Cabinet decided that there should be no exceptions to the Residency Rules. I am therefore not authorised to take any other circumstances into account."

    In the pre-proceedings correspondence which followed, the Claimant's solicitors drew attention particularly to paragraph 7.2 of the impugned Scheme (infra). The Council did not respond directly to this.

  9. The Council's evidence includes two witness statements of its Assistant Director (Housing Operations) (hereinafter the "Assistant Director"), who is the author of the impugned Scheme. The deponent explains the gist of the impugned decision in these terms:
  10. "Under the new Scheme, which came into force on 01 September 2013, in order to be a qualifying person to join the list an applicant would need to have three years continuous residency. However, as the Claimant was already on the Register under the old rules, she would have needed to have 2 years continuous residency. According to our records, the Claimant had not been resident in our District for sufficient time. As a result . she was not a qualifying person to remain on our Register from 01 September 2013."

    The Assistant Director further explains that in devising the impugned Scheme, one of the aims was to formulate clear qualifying criteria, in the interests of clarity and expedition. A further aim was to formulate clearly defined exceptions. The practical implications of the new Scheme were considered:

    ". It was believed at least 3,000 home seekers would no longer qualify ..
    Like many others, [the Claimant] previously qualified and was now excluded and, like many others, had pressing reasons for wanting to reside in the Council's area."

    On 15 April 2013, the Council resolved that the new "local eligibility criteria" should be threefold. First, all new applicants for inclusion in the Housing Register must have lived within the Council's District for at least the three immediately preceding years. Second, they must have a demonstrated housing need, in accordance with the relevant assessment mechanism. Third, they had to satisfy a lack of resources requirement. All existing applicants who had resided within the Council's district for less than 2 years were to be withdrawn from the Register.

  11. In his second witness statement, the Assistant Director avers that in devising the impugned Scheme the relevant statutory guidance (hereinafter "the Ministerial Guidance") was considered. This is a statutory guidance formulated by the Department for Communities and Local Government under section 169 of the Housing Act 1996 (infra). It was promulgated in June 2012 and was supplemented by further statutory guidance in December 2013. It was directed to all local housing authorities. In the context of these proceedings, the Ministerial Guidance contains three particularly significant provisions. The first of these is paragraph 3.18 which, under the rubric of "Qualification", states
  12. "housing authorities may only allocate accommodation to people who are defined as 'qualifying persons' (section 160ZA(6)(a)). Subject to the requirement not to allocate to persons from abroad who are ineligible and the exception for members of the Armed and Reserve Forces in paragraph 3.27 below, a Housing Authority may decide the classes of people who are, or are not, qualifying persons."

    Paragraph 3.25 provides:

    "Whatever general criteria Housing Authorities use to define the classes of persons who do not qualify for social housing, there may be exceptional circumstances where it is necessary to disapply these criteria in the case of individual applicants. An example might be an intimidated witness who needs to move quickly to another local authority district. Authorities are encouraged to make explicit provision for dealing with exceptional cases within their qualification rules."

    This is followed by paragraph 3.26:

    "As with eligibility, Authorities are advised to consider whether an applicant qualifies for an allocation at the time of the initial application and when considering making an allocation, particularly where a long time has elapsed since the original application."

    This is the Ministerial Guidance which applied at the time when the impugned Scheme was adopted by the Council.

  13. The second witness statement of the Council's Assistant Director refers to the Ministerial Guidance in these terms:
  14. "I took note of what the Guidance said about making provision for discretion to be exercised in individual cases, inter alia at paragraph 3.25. I knew, however, that it was Council policy that whilst the Council wanted to provide for discretion to be exercised in limited circumstances, in the case of qualifying individuals, it wanted clear rules that left no room for doubt about whether an individual qualified in the first place."

    Thus, it is averred, what the Guidance said about discretion in individual cases was considered, but duly rejected, by the Assistant Director in devising the impugned Scheme. The Council policy, to which the Assistant Director sought to give effect in formulating the Scheme, was that there should be no discretion in the matter of qualifying in the sense explained in [4] above. Thereafter, post-qualification, the intention was to make provision for the exercise of discretion in specified limited circumstances viz-a-iz qualifying persons only.

    [IV] THE IMPUGNED SCHEME

  15. As already noted, the impugned Scheme is dated 01 September 2013. It is entitled "Epping Forest District Council Housing Directorate Housing Allocations Scheme". In the Introduction it is stated:
  16. "This Housing Allocations Scheme has been formulated in accordance with the provisions of the Housing Acts 1996, as amended by the Homelessness Act 2002, the Localism Act 2001, the Allocation of Accommodation Guidance for Local Housing Authorities in England (DCLG June 2012) and other relevant legislation."

    The practical operation of the Scheme is explained in paragraph 4.1:

    "The Council operates a Choice Based Lettings Scheme where all vacant properties are advertised to applicants on the Council's Housing Register on a website and a two weekly Property List giving details of location, type, rent, service charge and landlord of the available accommodation. Applicants can apply for a property by 'expressing an interest' (or) 'bidding' either on the website, by post, telephone or text .
    [4.2] Applicants are restricted to 'bidding' for properties for which their household has an assessed need. At the end of the two weekly 'bidding' cycle, the Council analyses the 'bids' received and the Allocations Team within the Housing Options Section allocates each property following a prioritisation and selection process in accordance with this Allocations Scheme. In general terms, the property is offered to the applicant in the highest band, who has been registered on the Housing Register the longest, who had 'bid' for the specific vacancy."
  17. The provisions of Section 7 are arranged under the heading "The Housing Allocations Scheme". In the opening sentence the following aim is expressed:
  18. "This Housing Allocations Scheme is framed so as to secure that the categories of applicants set out in section 166(A) of the Housing Act 1996 are given reasonable preference."

    In paragraph 7.3, it is explained that the Scheme embraces vacancies in the Council's own housing stock and those in accommodation in the Council's District belonging to other Registered Providers (housing associations). Per paragraph 7.4, the Scheme applies to all home seekers on the Council's Housing Register on the effective date (01 September 2013) and those who apply subsequently. Paragraph 7.5 contains a series of exclusions from the Scheme, such as where the death of a tenant gives rise to a tenancy succession, none of which is germane in the present context. The provisions of the impugned Scheme of most significance in the present context are the following. First, in paragraph 7.2 it is stated:

    "The Council recognises that there may be some exceptional circumstances not covered by the Scheme. In such instances, the Director of Housing will have delegated authority to make decisions, as he considers appropriate."

    Then in paragraph 14.1, under the banner "Local Eligibility Criteria", it is provided:

    "The Council has a Local Eligibility Criteria which is in place to prevent applicants joining the Housing Register who have no realistic prospects of being housed, in order to remove any expectations. Within this Housing Allocations Scheme, those who do not meet the criteria are classed as persons not qualifying." [My emphasis.]

    This is followed by:

    "14.2 The following classes of persons will not qualify for inclusion on the Council's Housing Register .
    Residency Criteria
    14.3 Any applicant/s who has lived in the Epping Forest District for less than three continuous years immediately prior to their date of registration, with the exception of the following .."

    There follows a table of six categories which include, for example, serving and former members of the Armed Forces. Finally, per paragraph 27.1, the Scheme is to be reviewed after twelve months of operation.

    [V] STATUTORY FRAMEWORK

  19. The subject of housing allocation schemes is regulated by statute. Every such scheme ("HAS") must be considered in this context.
  20. The principal measure of primary legislation is the Housing Act 1996 (the "1996 Act"). This was amended substantially by the Localism Act 2011 (the "2011 Act") to which reference is made in the Housing Minister's foreword to the Ministerial Guidance in these terms:
  21. "Social housing is of enormous importance the way it is allocated is key to creating communities where people choose to live and are able to prosper. Under the previous Government housing waiting lists almost doubled ..
    Through the Localism Act 2011 we have introduced the most radical reform to social housing for a generation. The new freedoms in the Localism Act which allow Councils to better manage their waiting lists and promote mobility for existing social tenants came into force on 18 June 2012. This guidance will assist Councils to make full use of these new freedoms and the existing flexibilities within the allocation legislation to encourage work and mobility and to tailor their allocation priorities to meet local needs and local circumstances."

    The relevant amended provisions of the 1996 Act came into operation on 18 June 2012. They are contained in Part 6, the subject matter whereof is "Allocation of Housing Accommodation". Section 159 provides, in material part:

    "(1) A local housing authority shall comply with the provisions of this Part in allocating housing accommodation .
    (7) Subject to the provisions of this Part, a local housing authority may allocate housing accommodation in such manner as they consider appropriate."

    This is followed by section 160 which prescribes a series of cases which are excluded from the allocation provisions of Part 6. Section 160ZA, which was inserted by the 2011 Act, provides, under the title "Allocation Only to Eligible and Qualifying Persons: England", provides, where material:

    "(6) Except as provided by subsection (1), a person may be allocated housing accommodation by a local housing authority in England (whether on his application or otherwise) if that person
    (a) is a qualifying person within the meaning of subsection (7), or
    (b) is 1 of 2 or more persons who apply for accommodation jointly and 1 or more of the other persons is a qualifying person within the meaning of subsection (7).
    (7) Subject to subsections (2) and (4) and any regulations under subsection (8), a local housing authority may decide what classes of persons are, or are not, qualifying persons.
    (8) The Secretary of State may by regulations
    (a) prescribe classes of persons who are, or are not, to be treated as qualifying persons by local housing authorities in England, and
    (b) prescribe criteria that may not be used by local housing authorities in England in deciding what classes of persons are not qualifying persons."

    Specific provision is then made for the procedure to be followed where an authority decides that an applicant for housing accommodation is not a "qualifying person".

  22. The subject matter of section 166A is "Allocation in accordance with allocation scheme England". It provides:
  23. "(1) Every local housing authority in England must have a scheme (there 'allocation scheme') for determining priorities, and as to the procedure to be followed, in allocating housing accommodation."

    In the immediately ensuing provisions, the obligatory contents of every allocation scheme are prescribed. Thus, in summary, every allocation scheme must include a statement of the authority's policy concerning choice of housing accommodation and the expression of preference by applicants and the scheme must secure that reasonable preference is given to specified classes of persons, such as the homeless. The remainder of section 166A specifies various provisions which every scheme either (i) must or (ii) may contain. This is followed by section 166A(11):

    "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."

    Section 166A(12) prescribes certain matters to which the authority must have regard in devising or modifying its allocation scheme. By section 166A(13), there is a specified form of obligatory consultation. The final provision of section 166A is the following:

    "(14) A local housing authority in England shall not allocate housing accommodation except in accordance with their allocation scheme."

    The final material provision of the 1996 Act, as amended, is section 169:

    "(1) In the exercise of their functions under this Part, local housing authorities shall have regard to such guidance as may from time to time be given by the Secretary of State."

    The Ministerial Guidance noted in [7] above was made in the exercise of this power.

  24. Throughout Part 6 of the 1996 Act, as amended, there is a series of powers conferred on the Secretary of State to make regulations. Nothing turns on any of these subordinate statutory measures in the determination of the issues arising in these proceedings.
  25. [VI] THE CLAIMANT'S CHALLENGE

  26. The Claimant's challenge has evolved somewhat following the initiation of these proceedings. Ultimately, with appropriate amendments, it is threefold. First, it is contended that paragraph 7.2 of the impugned Scheme empowers the Council's Director of Housing to disapply the eligibility criteria, enshrined in Section 14, in an exceptional case, thereby rendering the impugned decision unlawful. Second, in the event of the first challenge failing, it is contended, in the alternative, that the impugned Scheme is unlawful because it unlawfully fetters the Council's statutory powers. An unexplained departure from the Ministerial Guidance represents the third and final contention. This is supplemented by the contention , couched in the further alternative, that that the impugned scheme is unlawful (in whole or in part) because of the absence of a residual discretion to disapply the qualifying criteria in exceptional circumstances.
  27. The First Issue

  28. Two aspects of the impugned Scheme are uncontroversial. The first is that a person who applies to the Council seeks to acquire the status of qualifying person. The second is that if this status is acquired, the effect of this is that the successful applicant is included in the Council's Housing Register. Thereafter, the qualifying person has the possibility of being allocated accommodation from the Council's housing stock. Whether such allocation is achieved and the terms in which it is made are matters governed by the Scheme.
  29. As regards the first issue, the parties are separated by a bright luminous line. The Claimant's case is that paragraph 7.2 of the impugned Scheme endowed the Council with a discretion to admit her to its Housing Register under the rubric of "exceptional circumstances". The Council's riposte is that no such discretion exists, the operation of paragraph 7.2 being confined to decisions on housing allocation to qualifying persons. The one matter on which the parties are agreed is that this limb of the Claimant's challenge raises a question of construction. Specifically, how is paragraph 7.2 of the impugned Scheme to be construed?
  30. Developing the first limb of the Claimant's challenge, Mr Luba QC (appearing with Ms Harris of Counsel) submitted that paragraph 7.2 should be construed as conferring an overarching discretion which is not emasculated by the residency criteria contained in paragraph 14.3. Reliance was placed on the sequential structure of the Scheme, together with the absence from paragraph 7.2 of any reference to paragraph 14.3. It was contended that the construction and meanings advocated in the Council's witness statements are not reflected in the wording of the Scheme. The Claimant's argument also prayed in aid paragraph 3.25 of the Ministerial Guidance:
  31. "Whatever general criteria housing authorities use to define the classes of persons who do not qualify for social housing, there may be exceptional circumstances where it is necessary to disapply these criteria in the case of individual applicants .
    Authorities are encouraged to make explicit provision for dealing with exceptional cases within their qualification rules."

    These provisions, Mr Luba submitted, contemplate both explicit exceptions to the general eligibility, or qualifying, rules and a residual discretion to consider whether there are special circumstances warranting a deviation therefrom in any particular case. It was submitted that this residual, or overarching, discretion is precisely what paragraph 7.2 confers.

  32. On behalf of the Council, Mr Knafler QC submitted that paragraphs 7.1 7.4 of the impugned Scheme are to be construed in what he described as the "narrow" sense viz being confined and directed exclusively to the cohort of qualifying persons. He contrasted the language of paragraphs 14.1 and 14.2 of the Scheme, which includes the terms "applicants joining the Housing Register .. persons not qualifying .. persons will not qualify for inclusion on the Council's Housing Register". He highlighted the detailed nature of the Section 14 regime, contending that it enshrines an extensive series of criteria governing the acquisition of qualifying status for inclusion in the Housing Register. Mr Knafler's submission was that the words "Housing Allocations Scheme" and their derivatives in the provisions of Section 7 are also to be construed narrowly, applying only to those persons who have secured qualifying status.
  33. In determining this issue, I consider it preferable to disregard the averments in the Assistant Director's witness statements relating to the intentions of the Council to which the impugned scheme was, it is said, designed to give effect. Had I been prepared to consider them, these aspects of the Council's evidence would have to be treated with some circumspection given that it was deemed necessary to prepare a second witness statement for the purpose of both clarifying and augmenting the first. Furthermore, there is a risk that averments of this kind will, inadvertently or otherwise, be self-serving, the more so when they cannot be tested by reference to contemporaneous records and in the absence of cross-examination More fundamentally, the impugned Scheme is a solemn, formal instrument made in the exercise of an enabling provision contained in primary legislation. Its formulation and adoption are the product of a statutory duty imposed on every local housing authority by section 166A of the 1996 Act, as amended, following the obligatory consultation required by section 166A(13). The construction of the Scheme is a pure question of law for the Court. This entails an exercise which, in my view, is objective, detached and clinical in nature. I consider that this exercise should not be influenced by any ex post facto statements of subjective or corporate intention on the part of a Council employee. For these reasons, I do not take into account those aspects of the Council's evidence.
  34. I approach this issue as one of construction. I consider that the impugned Scheme is not to be construed with the formalism or rigidity applicable to an exercise in statutory construction or the construction of a legal instrument such as a contract or a will. It is of a somewhat different species. While not overlooking that it is made pursuant to primary legislation, it is, nonetheless, an instrument which has to function in the real world of anxious home seekers and busy Council employees. Its target audience is not that of lawyers or Courts and the associated forensic dissection characteristic of these agencies on the stages where they ply their respective trades. It is to be construed in this context, therefore, employing a certain degree of latitude and flexibility. Furthermore, it is to be evaluated as a whole and in the context of the statutory overlay.
  35. Adopting this approach, the main element of the construction exercise entails juxtaposing sections 7 and 14 of the Scheme. Paragraph 7.1 is a statement of intent which refers to section 166A of the 1996 Act. Though not fully expressed, this is clearly a reference to section 166A(3), whereby every scheme of this kind shall be framed so as to secure that reasonable preference is given to various categories of home seekers. In my judgment, the statement in paragraph 7.1 clearly contemplates home seekers who have qualified for consideration under the impugned Scheme. No question of according preference can logically arise in the case of applicants who do not qualify for consideration. I consider that, in the same vein, the "exceptional circumstances" dispensation, or discretion, embodied in paragraph 7.2 is directed to qualifying persons. This construction is firmly supported by the second sentence of paragraph 14.1, which states:
  36. "Within this Housing Allocations Scheme, those who do not meet the criteria are classed as persons not qualifying."

    This is followed by:

    "14.2 The following classes of persons will not qualify for inclusion on the Council's Housing Register."

    These provisions are framed in uncompromising and unambiguous terms. They disclose no intention to reserve to the Council any power, or discretion, of relaxation or dispensation. Their language confounds the contention that they are to be read as if followed by words such as "subject to the exceptional circumstances dispensation contained in paragraph 7.2 above". Had it been intended to include a dispensation of this kind, in the matter of qualifying to be admitted to the Housing Register, one would have expected the inclusion of language of this type or some other clear reference to paragraph 7.2 or the inclusion in paragraph 14 of the substance of paragraph 7.2. None of these relatively unsophisticated mechanisms has been adopted. All of these considerations militate against the construction advocated on behalf of the Claimant. I further consider that if the intention underlying paragraph 7.2 had been to empower the Director of Housing to make "decisions" about exceptional admission to the Housing Register, this would have been clearly stated and would also have found some expression in paragraph 14.1. Finally, I concur with Mr Knafler that the various components of section 14 have the clear flavour, thrust and texture of hard edged rules.

  37. Accordingly, I conclude that paragraph 7.2 of the impugned Scheme does not permit the invocation of exceptional circumstances or authorise any related decision in the matter of seeking the status of a qualifying person, that is to say a person who qualifies for admission to the Council's Housing Register. Rather, paragraph 7.2 invests the Council's Director of Housing with a discretion to make housing allocation decisions in exceptional cases falling outwith the accommodation allocation provisions of the Scheme in respect of persons who, by virtue of satisfying the qualifying criteria, have been admitted to the Council's Housing Register. This I consider to be the construction which accords with the "reasonable and literate person" test, per R (Raissi) v Secretary of State for the Home Department [2008] QB 836, at [125].
  38. The Second Issue

  39. The second issue is a live one on account of my rejection of the first limb of the Claimant's challenge. It is whether the impugned Scheme had to compulsorily include provision for a residual discretion to admit to the Housing Register applicants who do not satisfy the "Local Eligibility Criteria" viz the qualifying criteria. This issue focuses attention closely on the relevant provisions of the 1996 Act. It is agreed by both parties that the question which this aspect of the Claimant's challenge poses has not been considered in any decided case
  40. Approaching this question from, firstly, the perspective of statutory construction, I consider that the housing accommodation allocation regime established by Part 6 of the 1996 Act has the following main components:
  41. a) In allocating housing accommodation, every local housing authority ("LHA") must comply with the provisions of Part 6: per section 159(1).

    b) Every LHA is empowered to allocate housing accommodation in such a manner as it considers appropriate however, this is "subject to" the provisions of Part 6: per section 159(7).

    c) A LHA shall not allocate housing accommodation to certain classes of persons, who are decreed ineligible: per section 160ZA(1).

    d) While the determination of what classes of persons constitute "qualifying persons" is a matter for each LHA, this is subject to four limitations the last mentioned exception viz section 160ZA(1), section 160ZA(2), section 160ZA(4) and, finally, any regulations made by the Secretary of State under section 160ZA(8): all of these restrictions are enshrined in section 160ZA.

    e) It is obligatory for every LHA to have a HAS. Fundamentally, every such scheme is designed to determine priorities in the allocation of accommodation and the procedure to be followed in accommodation allocation decisions: per section 166A(1).

    f) It is obligatory for every such scheme to contain certain provisions: per section 166A(2), (3), (9) and (10).

    g) Certain other types of provision within the schemes are optional, to be included or, as the case may be, excluded in the LHA's discretion: see section 166A(3)(i) (iv), section 166A(5) and section 166A(6).

    h) Where the Secretary of State has, by regulations, prescribed the principles to be observed in the procedure to be followed, every LHA's scheme must be framed in terms compatible therewith: per section 166A(10).

    i) The formulation of the principles on which the scheme is to be framed is a matter for the LHA, subject to the foregoing provisions of section 166A and any regulations made thereunder: per section 166A(11).

    j) It is obligatory for every LHA, in devising or modifying a housing allocation scheme, to have regard to the matters specified in section 166A(12).

    k) Procedurally, it is obligatory for every LHA to consult in accordance with section 166A(13) before adopting or significantly changing its housing allocation scheme.

    l) A LHA shall not allocate housing accommodation exception in accordance with its HAS: per section 166A(14).

    m) In devising its HAS, every LHA must have regard to the Ministerial Guidance: per section 169(1).

  42. The analysis above demonstrates the extent to which a LHA has freedom to choose the contents of its housing allocation scheme and to make housing allocation decisions. Some measure of liberty and choice is indeed conferred by the legislature. However, this is explicitly constrained in the respects specified in the legislation and, further, by regulations to be made by the Secretary of State. Part 6 of the 1996 Act, as amended, regulates these matters in clear and comprehensive terms. There is nothing in the governing legislation which requires a LHA to include within its housing allocation scheme provision for the discretionary admission to the Housing Register of applicants who do not satisfy the qualifying criteria. No such duty is imposed by the 1996 Act. This is the first obstacle confronting this aspect of the Claimant's challenge, signalling an unpromising start for the quest.
  43. As the submissions of Mr Luba unfolded, it appeared to me that their central thrust was that the duty for which the Claimant contends, namely a requirement to make provision in the LHA to accommodate applicants who do not satisfy the eligibility criteria, is to be found in principles of public law. While I have considered the arguments of Mr Luba in full, I shall endeavour to identify their main ingredients. One of the main contentions advanced is that the impugned Scheme, in the respects under scrutiny, is incompatible with the "British Oxygen" principle. While this is frequently one of those taken as read principles in the world of judicial review, it is instructive to reflect a little more closely on its genesis and scope. In British Oxygen Co Limited v- Minister of Technology [1971] AC 610, the relevant Minister was empowered by statute to make discretionary grant payments to business persons whose industrial processes fell within the terms of a statutory scheme. The case is less memorable for one less glamorous aspect of what it decided, namely that the Appellant's tankers and hydrogen trailer assembly did not rank as "machinery or plant" within the relevant statutory provision and, thus, were not eligible for grant payments. This was the primary ground on which their application for grant had been refused by the public authority.
  44. More pertinently, the authority further decided that no grant would be payable in respect of the Appellant's single gas cylinders having regard to the Minister's general policy to withhold grant aid for items or articles costing less than 25.00. However, the single gas cylinders were indeed plant within the embrace of section 1(1) of the statute. They cost some 20.00 per unit and the Appellant had expended over 4 million in their acquisition during a three year period. The complaint was that the Respondent's refusal to pay any subsidy in respect of these items was unlawful, as it reflected an inflexible policy to subsidise anything costing less than 25.00. The starting point in Lord Reid's analysis was the statute. This conferred on the Respondent a discretion to make payments in respect of qualifying items: see page 623H. A key consideration was the absence of any indication in the statute of the circumstances in which a grant should be paid: this, I consider, requires some emphasis. Thus, in the absence of statutory constraint, it was permissible to devise a related Ministerial policy. Lord Reid, having noted that the statutory discretion must not be exercised either in bad faith or unreasonably, at page 625C, continued:
  45. "But the circumstances in which discretions are exercised vary enormously ..
    The general rule is that anyone who has to exercise a statutory discretion must not 'shut his ears to an application' ..
    I do not think there is any great difference between a policy and a rule. There may be cases where an officer or authority ought to listen to a substantial argument reasonably presented urging a change of policy. What the authority must not do is to refuse to listen at all."

    Within this passage are the fons et origo of the celebrated "British Oxygen" principle.

  46. Ascertainment of the true character and contours of this principle requires careful analysis. In my view, the essence of the principle is as follows. A decision which is the product of an inflexible rule or policy adopted by a public authority governing, or informing, the exercise of its statutory discretion, in circumstances where the statute allows its adoption, is liable to be held unlawful, since the discretion must not be fettered in this way. The main reason for this, in my estimation, is that decisions of this kind defeat the intention of the statute and do not represent a true and proper exercise of the discretion conferred by Parliament. In De Smith's Judicial Review (7th Edition) a somewhat different rationale is offered, at paragraph 9-005:
  47. "The underlying rationale of the principle against fettering discretion is to ensure that two perfectly legitimate values of public law, those of legal certainty and consistency (qualities at the heart of the principle of the rule of law), may be balanced by another equally legitimate public law value, namely that of responsiveness."

    While this analysis does not mirror precisely that which I have formulated above, it nonetheless illustrates the elasticity of general principles of public law.

  48. Thus, at heart, the "British Oxygen" principle applies to contexts where a statutory discretion is to be exercised. The Claimant is unable to point to a discretion of this kind in the relevant statute. As the analysis of the governing statutory regime in [25] above demonstrates, the absence of a residual, or overarching, discretionary provision in the impugned Scheme is not attributable to the erection by the Council of some inflexible rule or policy relating to how it will exercise a statutory discretion. I consider that the legislation did not give the Council a choice in this respect. Thus it cannot be said that the absence of such a provision from the impugned Scheme is incompatible with the terms of the legislation. I consider that the fundamental duty imposed on the Council was to devise a HAS which accords with the multiple requirements of the statutory regime. The Claimant's challenge fails to identify any disharmony or incompatibility in this respect. The essence of the Claimant's case is that the Council has acted unlawfully by failing to confer on itself an overarching, or residual, discretion to be exercised when making decisions on who is a qualifying person. The requirement to include a provision of this nature cannot be linked to any statutory obligation or discretion to do so. Thus there is a fundamental flaw in the Claimant's challenge. As this analysis demonstrates, the "British Oxygen" principle is not engaged. As Mr Knafler put it, this is not "British Oxygen" territory. I consider this submission well made.
  49. Another of the central planks of the Claimant's case is the decision of the House of Lords in R (Ahmad) v Newham LBC [2009] UKHL 14. This concerned the previous version of section 166A (then section 167) of the 1996 Act. Common to both versions are the threefold requirements that a LHA must have a scheme for determining priorities and procedures in the allocation of its housing, it must not allocate housing except in accordance with such a scheme and its power to devise its own scheme and to decide the applicable principles is subject to the provisions of the statute and any regulations made by the Secretary of State. Each scheme was also required to give reasonable preference to certain categories of persons, by section 167(2), now section 166A(3). A challenge was made to this aspect of the Respondent Council's Scheme.
  50. Notably, both parties sought to rely on this decision. It undoubtedly confirms that a HAS is, in principle, vulnerable to challenge on the well established public law ground of irrationality. However, it is clear from the decision that a challenge of this species will have difficulty in succeeding. It is equally clear from the decision that an ultra vires challenge is also, in principle, available. One of the themes of the decision is the degree of latitude available to every LHA in framing its scheme. The conceptual explanation for this is neatly expressed in the opinion of Lord Scott, at [7]:
  51. "The unfortunate fact of the matter is that where a council is faced, as this appellant council is faced, with a demand for council housing that greatly exceeds the available housing stock, there is no allocation system that can be devised to avoid hard cases .."

    Two basic touchstones for measuring the legality of such a scheme are also encapsulated in the same passage:

    "The section 167(1) scheme devised by the Appellant council complies with the statutory requirements of the 1996 Act, as amended, and, insofar as its provisions for the allocation of housing to those in the section 167(2) priority band are concerned, cannot . be described as irrational or unlawful."

    The degree of latitude available to housing authorities in devising their allocation schemes also features in the other opinions of the House: see, for example, per Baroness Hale at [16] and, in trenchant language, Lord Neuberger at [25]:

    "The allocation of social housing is a difficult and potentially controversial matter, which gives rise to very hard choices, at all levels of decision making, whether strategic, policy or specific. Social housing is an increasingly scarce (and correspondingly valuable) resource, for which demand considerably outstrips supply, in some areas (such as Newham) by an enormous margin, even if one restricts one's assessment of demand to those whose claims would be characterised by most people as very pressing."

    In the next passage, Lord Neuberger speaks of the "considerable discretion" accorded to LHAs in the formulation of their allocation policies, subject of course to the statutory constraints which have been devised from time to time.

  52. The steep hurdle confronting an irrationality challenge to a scheme of this kind emerges with particular clarity in the opinion of Lord Neuberger, at [49] [55]. This further supports the proposition that the twin touchstones for measuring the legality of such schemes include those of ultra vires and irrationality. While, during the course of the hearing, I suggested to Counsel that other public law grounds of challenge such as bad faith or improper motive or, indeed, a breach of section 6 of the Human Rights Act 1998 might also, in principle, be sustainable, it is unnecessary to decide this issue in the present case. I also derive from Ahmad support for Mr Knafler's submission that the rules contained in housing allocation schemes may lawfully be of the hard edged variety: see [15] [16] and [51] especially. My review of the decision in Ahmad impels to the conclusion that it contains nothing which supports the Claimant's challenge.
  53. Mr Luba's arguments also prayed in aid the decision in R (Conway) v Charnwood BC [2002] EWHC 43 (Admin). In that case, the Council refused to admit the Applicant to its housing register because she did not comply with an age eligibility criterion enshrined in its revised policy. Significantly, the allocation policy under scrutiny was not governed by what the Judge describes as "the mandatory provisions for a local authority's allocation of accommodation, by reference to a housing register and a scheme for determining priority, under Part VI of the Housing Act 1996". As a result, the challenge proceeded within a public law framework, shaped particularly by the principle that the Council did not have an unfettered discretion: see particularly [16] [17]. The rule, or criterion, which operated to exclude the Applicant from admission to the Council's housing register was framed in inflexible terms. Wilson J, finding in favour of the Applicant and quashing the impugned decision, stated at [22]:
  54. "I am clear that it would be unlawful for the Defendants to apply their new policy in such a way as to preclude their acceptance of an application which fell foul of it but of which the circumstances were exceptional."

    This statement is to be understood within the context which I have sketched above. I am satisfied that it does not provide authority for the proposition that a HAS made under the current incarnation of Part 6 of the 1996 Act must, in its provisions for qualification for admission to the housing register, contain an overriding, or residual, discretionary dispensation. Its ratio decidendi cannot be applied to the matrix of the present challenge. Stated succinctly, this decision is not an authorative guide to the correct construction of the current legislation.

  55. Given my analysis of the decision in Conway, I consider that Mr Luba's further, related argument based on the Barras principle (see [1933] AC 402) is of no avail to the Claimant. The thrust of this principle is that where a statute employs language with a previous legal history, this may be relevant to its interpretation. In Bennion, Statutory Interpretation ( 6th edition), page 550, it is stated:
  56. "Under the Barras principle, where an Act uses a form of words with a previous legal history, this may be relevant in interpretation. The question is always whether or not Parliament intended to use the term in the sense given by this earlier history."

    Mr Luba's submission was that in enacting the amended version of Part 6 of the 1996 Act in June 2012, Parliament must be presumed to have been aware of the decision in Conway and, armed with such knowledge, has essentially repeated the former statutory wording. The essence of Mr Knafler's argument, which I prefer, was that this principle has no application since the decision in Conway does not provide a clear and authorative interpretation of the earlier corresponding statutory provisions. He referred the Court to the decision of the House of Lords in Galloway v Galloway [1956] AC 299, in particular the speeches of Lord Oaksey and Lord Radcliffe, at pages 317 and 320 respectively. I consider that this submission prevails.

  57. Mr Luba's related argument focuses on section 167ZA(7) of the 1996 Act which, for convenience, I reproduce:
  58. "Subject to subsections (2) and (4) and any regulations made under subsection (8), a local housing authority may decide what classes of persons are, or are not, qualifying persons."

    It was submitted that the earlier corresponding statutory provisions relating to qualifying persons had been interpreted in the previous version of the statutory code of guidance. If one pauses at this juncture, the immensity of the obstacles confronting this argument quickly becomes apparent. The version provided to the Court is in a loose-leaf format with the earliest pages stamped "Revised 20 December 1996" and with replacement pages stamped with later dates. This, it was submitted, formed part of the pre-enacting history of which Parliament must presumptively have been cognisant. It is important to identify clearly the origins, nature, purpose and limitations of this code. First, it was made under sections 169 and 182 of the 1996 Act. Second, its author is a Government Minister. Third, it is an instrument of guidance. Fourth, it does not bind local housing authorities: rather, their obligation is to have regard to it. The legal character of the instrument emerges emphatically in the opening paragraph:

    "The Code is not, however, a substitute for the legislation: it gives guidance on how local authorities should discharge their functions and apply the various statutory criteria in practice."

    In this passage the Code has, commendably, avoided the temptations of self-aggrandisement. I consider this succinct statement to be an accurate exposition of the Code's legal status.

  59. I consider it an elementary proposition that an instrument of this kind, created pursuant to an enabling power contained in a statute, cannot operate as a guide to the meaning of the parent statute. There can be no presumption, or principle, that in enacting the current Part 6 of the 1996 Act Parliament must have supposed that this instrument was otherwise. Given the factors which I have highlighted, I accept Mr Knafler's submission that this instrument does not engage the Barras principle, particularly since it cannot and does not rank as an authorative judicial interpretation of the same or similar words or expressions used in the corresponding provisions of the earlier statute. Finally, and in any event, this earlier code went no further than, per paragraph 4.29, merely encouraging LHAs to make provision for exceptional cases in devising their rules for admission to the housing register. In this respect, the earlier code does not differ in substance from the corresponding provision in its June 2012 successor (cf paragraph 3.25).
  60. The submissions of both Counsel touched on certain other reported cases. I derive no assistance from the inconclusive and obiter statement contained in R (Giles) v Fareham BC [2003] HLR 36, at [9]. Similarly, I find nothing in R (Elias) v Secretary of State for Defence [2005] IRLR 788, a race relations case, illuminating the correct approach to this aspect of the Claimant's challenge. Another first instance decision, Kabashi v London Borough of Redbridge [2009] EWHC 2984 (Admin) is also of limited assistance, being a mere illustration of the Ahmad principles in a particular context and a rejection of an irrationality challenge. The decision in R (Nichols) v Security Industry Authority [2007] 1 WLR 2067 is more in point. This was an unsuccessful challenge to a policy made pursuant to primary legislation based on the no fettering of discretion principle. The challenge foundered on the rock that the operation of this principle was defeated by the statutory framework, as the following passages show:
  61. "[60] However, in this instance Parliament has deliberately, by section 7, conferred a rule making power on the authority. It is for the authority to draw up what it believes are the appropriate criteria for the grant of licences .
    [62] . The statutory context must be examined with great care. In this case . the statutory context empowers the authority to make the commission of certain serious criminal offences an absolute bar to obtaining a licence to work as a door supervisor. The rule is intra vires and rational. Not to have such a rule in respect of offences of such great gravity would tend to undermine a fundamental aim of the 2001 Act and such a failure would be truly vulnerable to challenge on grounds both of ultra vires and Wednesbury irrationality."

    I concur with the learned deputy Judge's formulation of principle and, in particular, the pre-eminence given to the governing statutory regime.

  62. I would summarise my determination of this (the second) aspect of the Claimant's challenge in this way. First, there is no provision in the relevant primary legislation which, expressly or impliedly, obliges a LHA to include within its HAS a provision whereby it reserves to itself an overarching, or residual, power (or discretion) to admit to its housing register applicants who do not satisfy the specified qualifying criteria. Second, while the statute may empower a LHA, at its discretion, to include a provision of this kind in its scheme, this fails to make good the Claimant's challenge, as this rests on duty rather than discretion. Third, neither a duty nor a discretion to devise a provision of this kind can be derived from the operation of any principle of public law. Finally, the Claimant's challenge finds no support in any principle of statutory interpretation. Accordingly, the Claimant's contention that the Council's HAS is unlawful must fail.
  63. The Final Issue

  64. My analysis of the third, and final, limb of the Claimant's challenge is that it comprises the following inter-related elements:
  65. (a) In devising the impugned scheme, the Council failed to have regard to the Ministerial Guidance.

    (b) The impugned scheme is not compatible with the Ministerial Guidance.

    (c) It is incumbent on the Council to justify this incompatibility and it has failed to do so.

    I shall consider each element in turn.

  66. Properly analysed, I consider the first element of this aspect of the Claimant's challenge to be based on assertion. The first question to be addressed is whether the assertion is made good. By well established principle the onus rests on the Claimant in this respect. In Re SOS Application [2003] NIJB 252, a planning judicial review, the Applicant contended that a planning decision was unlawful by reason of, inter alia, the planning authority's asserted failure to have regard to certain considerations. Permission to apply for judicial review was refused and this was upheld on appeal. Delivering the judgment of the Court of Appeal, the Lord Chief Justice stated, at [19]:
  67. "It is for an applicant for leave to show in some fashion that the deciding body did not have regard to such changes in material considerations before issuing its decision. It cannot be said that the burden is imposed on the decider of proving that he did do so. There must be some evidence or a sufficient inference that he failed to do so before a case has been made out for leave to apply for judicial review." [Emphasis added.]

    While permission to apply for judicial review has, of course, been granted in the present case, I consider that this principle applies with full force at this, the substantive, stage. In cases where an issue of this kind arises, I consider that the decision of the Court of Appeal in Balog v Birmingham City Council [2014] HLR 14 may be viewed as an illustration of the Court's resistance to microscopic and forensic analyses of the decisions of public authorities, particularly in certain contexts: see [51].

  68. The first infirmity in this aspect of the Claimant's challenge , in my view, is exposed in the following excerpt from Counsel's skeleton argument:
  69. "Despite the opportunity to submit further evidence, the Defendant has been unable to demonstrate that the relevant passage [paragraph 3.25] was brought to the attention of the Cabinet Lead for Housing, the Scrutiny Committee which formulated the Scheme or the Cabinet which adopted it
    In the absence of any evidence that the relevant passage in the Guidance was expressly considered and the total absence of any evidence of any explanation as to why it was departed from [the Court should infer that] . the Scheme was adopted in ignorance of, or in disregard of, the relevant guidance."

    I consider that this passage betrays the misconception which is highlighted in the SOS decision. It is not for the Council to demonstrate that the Ministerial Guidance was taken into account in devising and adopting the impugned Scheme. Rather, the onus rests on the Claimant to establish the converse. This is a matter of evidence and proof. The Claimant invokes no evidence in support of her assertion and I am satisfied that the failure which she advances cannot properly be inferred from the evidence available. Accordingly, this aspect of the Claimant's challenge fails at the first hurdle. Whichever evidential approach is adopted, I consider that the Claimant's case cannot prevail. In the alternative, I accept Mr Knafler's submission that the evidence supports the conclusion that the Councillors had regard to the Ministerial Guidance in substance.

  70. I consider that this discrete challenge fails on the further, free standing ground that the impugned Scheme does not, as the Claimant contends, depart from the Departmental Guidance. As I have already emphasised in [35] above, this is an instrument of mere guidance. Furthermore, the statute does not provide that LHA's must give effect to it: rather, section 169(1) of the 1996 Act spells out clearly that the duty on the LHA is to have regard to the Ministerial Guidance. Thus I consider it misconceived to complain of a failure to comply with the Guidance and to assert an alleged departure from its terms. This assessment is reinforced by the contrasting terms in which the public authority's duty was framed in R v Islington LBC, ex parte Rixon (1998) 1 CCLR 119, at 123 124 especially. Thirdly, and in any event, I consider that the impugned Scheme does not depart from the suggested Guidance in the manner alleged. Paragraph 3.25 of the Guidance encouraged LHAs to include within their scheme qualification rules "explicit provision for dealing with exceptional cases". This I consider to be an exhortation, nothing more and nothing less. It cannot be sensibly construed in any other way. Thus there is no disharmony, no incompatibility. Indeed, I would go further. Even if this were framed in terms purporting to require, or oblige, LHAs to include such a provision in their schemes, the statutory duty on LHAs, which by section 169(1) is to have regard to the guidance, would be unaffected.
  71. Accordingly, the final aspect of the Claimant's challenge must fail.
  72. [VII] CONCLUSION

  73. Following the hearing, the Court of Appeal decision in R (Jakimaviciute) v Hammersmith and Fulham LBC [2014] EWCA Civ 1438 was helpfully brought to my attention by the parties. This concerned a challenge to a specific provision in the Defendant Council's HAS whereby persons belonging to a defined class were excluded from qualifying for registration. The Claimant made the case that the Council's statutory power to formulate qualification criteria, under section 160ZA(7), is subject to the duty imposed by section 166A(3) to secure that the scheme affords reasonable preference to specified classes of home seekers. The Claimant succeeded. In essence, the basis upon which the challenge prevailed was that the impugned provision of the HAS was considered incompatible with the reasonable preference statutory duty. The Council had, in substance, acted ultra vires. I have concluded that this decision does not illuminate any of the issues thrown up by the Claimant's challenge and neither party sought to augment their arguments by reliance upon it.
  74. My attention was also drawn to the decision of the Court of Appeal in Nzolameso v City of Westminster [2014] EWCA Civ 1383. This case, in brief compass, concerns the personal duty owed by a local housing authority to a homeless person under section 193 of the 1996 Act and the considerations which can be lawfully reckoned in the authority's evaluation of whether it is reasonably practicable to offer to such person accommodation in its own district. I do not read this decision as sounding on any of the issues to be determined in these proceedings.
  75. As I have rejected all aspects of the Claimant's challenge, no question of granting discretionary relief arises, with the result that Mr Knafler's further submission relating to whether the Council is empowered to amend the impugned Scheme retrospectively, which was not the subject of elaborate argument, seems to me rendered moot.
  76. ORDER

  77. The Claimant's application for judicial review is dismissed.
  78. ADDENDUM

  79. Judgment was handed down in draft on 06 January2015. I approve the revised order furnished by the parties' representatives subsequently. The time for appealing will run from 19 January 2015.
  80. I also dealt with permission to appeal at the subsequent hearing, refusing the application. I have been provided with the official transcript thereof. This records, accurately, my ruling. I repeat my assessment that while paragraphs 2 and 3(a) of the application have the potential to rank as points of law of general importance, I consider it preferable for the Court of Appeal to make its own evaluation.
  81. This is the approved judgment of the court.


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