His Honour Judge Holman :
- This case represents another chapter in the continuing debate about the scope of public law defences in possession proceedings. It is also concerned with the status of Registered Social Landlords (RSL) and, for good measure, raises for consideration, in addition, a concept which, so far as I am aware, has not received the attention of the higher courts (and, indeed, little scrutiny by the lower courts).
- The claim began in the County Court, but as part of the housekeeping at the start of the trial I transferred it up to the High Court, because the second of the criteria in paragraph 1.3 of Practice Direction 55 is satisfied. In addition it was conceivable that I might be asked to issue a certificate under section 12 Administration of Justice Act 1969. Counsel agreed that the transfer up did not create any jurisdictional differences, and that the case fell to be considered in the same manner as if it had remained in the County Court.
- There are witness statements from Scott Sadler, a nuisance response officer, John Critchley, a neighbourhood management team leader, who made three statements and the Defendant, who made two. None of the witnesses were called, as neither counsel wished to cross-examine. Mr McCormack did, however, seek permission to call the Defendant to ask further questions in chief. I refused this application on the basis that it was too late and not in the interests of justice. I will mention the particular areas when I deal with the chronology. The last witness statement from Mr Critchley appeared on the second day of the trial in specific response to my request for evidence as to an alleged agreement made in November 2009, as to the present state of the rent account and as to certain policy documentation. This in turn generated the second witness statement from the Defendant.
- During the first day Mr McCormack sought permission to re-amend his defence to re-introduce Article 6 of the European Convention on Human Rights. This was relied upon in the original defence, but expressly abandoned in the amended Defence, permission for which I had given in January 2010. As I recall, Mr McCormack also stated in court that day that Article 6 was no longer being pursued. He wished to go back to his original position on the basis that there was a dispute of fact revealed in an appeal panel's findings as to the efforts the Defendant had made to deal with rent arrears. Mr Whatley would have had to consider the position overnight, and I concluded that it was contrary to the overriding objective to allow the Defendant to change position again so late in the day.
- The general defence raised is that the decision to seek possession was unlawful, procedurally unfair, unreasonable and disproportionate. This is predicated on the basis that the Claimant was a public body for the purposes of judicial review and a public authority for the purposes of the Human Rights Act. There is a witness statement from Mr Critchley, which deals with the status and functioning of the Claimant. I do not need to consider it, because Mr Whatley, whilst reserving his position for higher courts, conceded that I am bound by the decision of the Court of Appeal in The Queen (on the application of Weaver) v London and Quadrant Housing Trust ( 1 WLR 363). The Claimant is in no better position than London and Quadrant, and accordingly is to be regarded as a public authority and a public body.
- In 2005 the Claimant granted a tenancy of 24 Tartan Street, Clayton, Manchester to the Defendant (The First Tenancy). The tenancy began on 22 August 2005 and is stated to be an assured shorthold weekly tenancy within the meaning of Section 19A Housing Act 1988, as amended. At the head of the first page of the agreement the following description appears: "Assured shorthold (Starter) tenancy".
- The agreement provides that as from 20 August 2006 the assured shorthold tenancy becomes an assured non-shorthold tenancy, unless one of the following situations applies before that date:
i) The landlord has started proceedings for possession against the tenant; or
ii) The landlord has served a notice under Section 21 Housing Act 1988 that the landlord requires possession and the landlord issues proceedings for possession within two months of the expiry of this notice; or
iii) The landlord has served a notice of an extension of no more than six months of the period of the assured shorthold tenancy agreement.
- The agreement then provides that in any of the circumstances set out at (i) to (iii) above the tenancy continues to be an assured shorthold tenancy until:
i) Two months from the expiry of the notice (if no proceedings are issued within that time); or
ii) The day after any proceedings are determined (if no possession order is made); or
iii) The tenancy is ended by a court order for possession; or
iv) A notice is served confirming the tenancy has been converted to an assured non-shorthold tenancy.
- The Defendant fell into arrears with her rent and the Claimant issued possession proceedings relying on Section 8 Housing Act 1988. On 24 May 2006 a possession order was granted at the Manchester County Court. It appears to have been intended as a postponed possession order, although a date for giving possession was fixed. Nothing turns on this. At the time the arrears were £803.42 and the Defendant was also ordered to pay costs of £150.00. During the hearing some disagreement emerged between counsel as to whether this order is still enforceable. However they clearly regarded this as a diversion from the issues in the claim and I heard no detailed submissions on the point. I therefore disregard it.
- By letter dated 30 May 2006 the Claimant extended the shorthold period of the First Tenancy to 20 February 2007.
- The Defendant did not comply with the order, but the Claimant did not take steps to enforce it. Instead it served a notice under Section 21 Housing Act 1988 dated 21 December 2006 giving notice that after 25 February 2007 the Claimant required possession of the property. The Defendant appealed the service of the notice, but this internal appeal was rejected, and proceedings were issued in the Manchester County Court using the accelerated procedure. An order for possession was made on 11 April 2007. It would appear that the order was not drawn promptly, and when it was ultimately issued it provided for possession to be given on 25 August 2007.
- The Claimant issued a warrant for possession, but did not proceed with it because the Defendant cleared the arrears in full on 1 October 2007.
- The Claimant then entered into a further starter tenancy agreement, which began on 8 October 2007 (The Second Tenancy). The trigger date for conversion to an assured non-shorthold tenancy was 6 October 2008. The Defendant signed an undertaking to accept special conditions in relation to this tenancy. These included a promise to pay the rent weekly as and when due, to engage with the rents team if there was a problem with the rent account to resolve the issue and to accept welfare and debt advice. She also acknowledged that the Claimant could use the accelerated possession procedure if she fell into arrears and that, if the Claimant took possession through rent arrears or any other breach of the tenancy, it would not consider rehousing her and she might be added to the rehousing review list.
- On 4 September 2008 Trish Bryant, a Housing Officer, wrote to the Defendant. She stated that the conduct of the Second Tenancy had been reviewed on 2 September 2008, and that it had been decided to extend it as a starter tenancy for a further six months. The reason for the decision was stated to be rent arrears and broken agreements. The "broken agreements" are not particularised. The letter stated that Trish Bryant felt that extending the starter tenancy a further six months would allow the Defendant to address these issues. It also advised her that there would be a further review on 3 November 2008 "where a decision will be made to either convert or terminate the tenancy." There is no evidence that a review took place in November, and it appears to be the case that this date was included mistakenly, it being intended that the review would take place shortly before the expiry of the extension.
- At the date of the extension the arrears of rent were £214.27. Thereafter in the period to mid-February the arrears fluctuated between £84.62 and £550.62. This fluctuation is explained in part by the fact that the rent falls due on a monthly basis in advance whereas Housing Benefit is paid every four weeks in arrear.
- On 23 February 2009 a number of significant events occurred. The Defendant's daughter Keeley entered into an Acceptable Behaviour Agreement with Manchester City Council, the East Manchester Youth Intervention Officer, the East Manchester Nuisance and Anti Social Behaviour Team and Greater Manchester Police. These agreements are in common use and are designed to avoid applications for an Anti Social Behaviour Order (ASBO). The contract was expressed to run from 18 February and was to be reviewed on 18 August 2009. Secondly, the Claimant gave the Defendant a further notice under Section 21 Housing Act 1988 requiring possession after 26 April 2009. At the time of giving this notice the arrears were £367.89. Thirdly, a separate letter was sent to the Defendant advising her that her tenancy had been reviewed on 20 February 2009 and that the Claimant had decided not to offer her an assured tenancy because of broken agreements to clear rent arrears and because of "anti social behaviour – neighbour nuisance". This letter enclosed a copy of the Claimant's "complaint policy" should the Defendant wish to appeal the decision.
- The document is not in fact entitled "complaint policy". The heading is "Eastlands Homes Starter Tenancy Appeals Procedure". It continues "you have a right to appeal if we decide to end your starter tenancy". It advises the tenant that the landlord aims to reply in writing to all appeals within 21 days. Further information is provided which includes the following:-
i) The tenant must appeal in writing within 14 days of service of the notice
ii) Appeals will be heard in person by an appeals panel consisting of two members of the Claimant's Board of Management and a Chief Executive or a Director, but not the Director of Neighbourhood Services
iii) Appeals will be heard and a decision reached at least two weeks before the notice to quit expires
iv) The Tenant has the right to attend the appeal hearing and to bring or to be represented by someone of their choice such as a legal representative, advice worker or friend. Written presentations and arguments can be submitted
v) The Claimant will give the tenant at least five days notice of the date, time and venue of the hearing
vi) Advance copies of any written evidence which will be referred to at the hearing will be supplied
vii) The Claimant will present its case at the hearing. The tenant will have an opportunity to ask questions and get clarification. The tenant may question anyone giving evidence. The tenant will then present his case.
viii) The appeals panel must decide whether the Section 21 Notice was served correctly, if it was appropriate in terms of the evidence provided and if the decision to end the tenancy will "stand up to scrutiny"
ix) The panel must establish the facts of the case that are not in dispute, resolve any facts that are disputed and relate those to the action the Claimant is taking to end the tenancy
x) On balance, after hearing from the tenant, the panel will need to decide whether the tenant has broken the tenancy agreement and, if so, whether the breach justifies eviction
xi) The Claimant will write to the tenant with the panel decision within seven days of the hearing. Whatever the decision, the tenant will be informed of what will happen next and "if the appeal fails, details of how they can appeal further if they wish"
xii) Reasons will be given for the appeal panel decision.
- The Defendant sent in a written appeal. It may have been outside the 14 day period but, whether it was or was not in time makes no difference, because the Claimant did not take the point. The appeal letter refers to housing benefit problems and to an agreement by the Defendant to pay £10 per week until the benefit issue had been sorted out. It refers to trying on several occasions to make an appointment with the Housing Officer but being unable to do so because the computer system had a virus. As to the anti social behaviour she refers to a warning to her daughter Keighley (sic). She states that this was the only time that the issue had been brought to her attention, and it would be unfair for her to lose her home on that account. She refers to receiving letters from Keeley's school about her good behaviour. She records that she is suffering from depression and this sometimes affects her ability to deal with issues as quickly as she should.
- The appeal letter was acknowledged by the Claimant on 30 April. On 5 May 2009 the Claimant wrote to the Defendant advising her that the appeal would take place on 12 May. The Defendant did not attend the appeal. John Critchley, Neighbourhood Management Team Leader, presented a written report. The minutes record that the panel asked questions. An up to date rent account was provided. This confirmed that the agreement to reduce arrears had not been adhered to. The arrears of rent at the time Mr Critchley prepared his written summary were £194.20. At 11 May they were £380.39. The minutes also record that the panel decided not to include anti social behaviour in their decision making, because there was only informal evidence and "on scrutiny there is nothing that can be formally evidenced". The panel noted that it was unusual for a starter tenancy to be extended more than once. There was no evidence that the Defendant had made "significant effort" to abide by the terms of her tenancy by keeping an up to date rent account. It concluded that an assured tenancy should not be awarded, an extension should not be granted and that terminating the tenancy was the appropriate course of action.
- The Claimant wrote to the Defendant on 15 May notifying her of the decision. The letter does not set out the reasons behind the decision to terminate the tenancy. It does record that Mr Critchley had presented his case and that the Defendant's appeal letter had been considered.
- The letter notified the Defendant that an application would be made to the Court to issue an eviction warrant. That is not what in fact happened. Instead the Claimant embarked on the present proceedings, which were issued on 22 May 2009. The claim is based on the Section 21 Notice dated 23 February 2009. It also records at section 8 as further information that the Defendant has accrued rent arrears and has failed to control her daughter who has committed anti social acts repeatedly.
- A defence was served in June 2009. It was amended with my permission on 15 January 2010.
- In November 2009 the Defendant made another agreement with the Claimant to pay £10 per week off the arrears. This agreement has not been met. In her further witness statement the Defendant accepted this. I regarded her explanation as of little moment. My direction for further evidence, when Mr Whatley raised the point, had been concerned with establishing as a fact that such an agreement had been made and not kept.
- In support of the contention that the decision of the Claimant to seek possession was unlawful, procedurally unfair, unreasonable and disproportionate, the particular allegations in the Amended Defence are:-
i) In conducting the appeal into the decision to serve the Section 21 Notice the Claimant failed to act in accordance with its own published policy. Four reasons are advanced:
a) failure to hear the appeal and promulgate a decision at least two weeks before the expiry of the Section 21 Notice
b) failure to supply advance copies of written or other evidence
c) failure to inform the Defendant how she might appeal further
d) failure to provide any proper reasons for the decision
ii) Failing to taking into account material considerations, in particular (a) the Defendant's recent payments to the rent account and (b) the level of arrears generally.
iii) Even if all relevant circumstances were taken into account the decision was one which no reasonable authority could have reached.
iv) Breach of the principles of natural justice in that the Claimant refused a reasonable request for the hearing to be adjourned, given that the Defendant had received less than seven days notice of it and had been unable to obtain legal advice prior to it.
v) Breach by the Claimant of its own policy on the use of starter tenancies in that it granted the Defendant a second starter tenancy.
- A further ground of defence raised is that a possession order would be an unnecessary and disproportionate interference with the Defendant's rights under Article 8, bearing in mind her personal circumstances including that the property has been her home since almost 2005, she has three dependent children, she has been unable to work due to a depressive illness since July 2007, the rent arrears have arisen due to housing benefit difficulties, she has made regular substantial payments towards her arrears and has ensured that her daughter refrains from getting involved in trouble. I do not need to address this, because Mr McCormack, whilst reserving his position for higher courts, conceded that, on the basis of the law as it presently stands, this line of argument is not open to the Defendant – see Kay v Lambeth LBC ( 2 AC 465) as amplified by Doherty v Birmingham CC ( 1 AC 367).
- Finally, for the avoidance of doubt, the Defendant contends that the claimant is both a public body amenable for judicial review and a public authority for the purposes of the Human Rights Act. As already noted, the Claimant accepts this for the purposes of the hearing before me, but reserves its position to argue otherwise elsewhere.
- I am accordingly confined to consideration of a public law judicial review type defence to the possession claim. This was articulated in Wandsworth LBC v Winder ( AC 461) and subsequently formulated as Gateway (b) in Kay. The decision to recover possession can be challenged by way of defence on the ground that no reasonable person would consider that decision justifiable and accordingly the decision constitutes an improper exercise of the authority's powers. Mr McCormack submitted that the challenge is not confined to Wednesbury unreasonableness, but embraces all conventional public law grounds such as bias, procedural unfairness, taking account of irrelevant matters, ignoring relevant considerations and breaching a legitimate expectation as well as irrationality. He cited, among other passages, paragraph 55 and the first sentence of paragraph 56 of Lord Hope's judgment in Doherty v Birmingham CC. He pointed also to the observations of Toulson LJ in Doran v Liverpool CC ( 1 WLR 2365), to the acceptance in that case by counsel that Doherty had widened the scope of Gateway (b) somewhat, and to the observations of Waller LJ in Central Bedfordshire Council v Taylor ( 1 WLR 446) at, especially, paragraphs 11 and 44.
- Mr Whatley argued first that the procedural aspects of the appeal were not amenable to attack. Developing the observations of Elias LJ at paragraph 41 in Weaver, he contended that there was no statutory framework, unlike introductory tenancies, and that the procedural aspects constituted a private act and ought not to be amenable to review. Those aspects should not be liable to be "picked apart" and, if it were otherwise, the consequence would be that the Claimant and others like it would cease to offer an appeal or review. I note that Elias LJ spoke only of "tentative propositions" and, given that Mr Whatley accepted that the substance of the appeal was amenable to review, it would be artificial in my view to treat the procedure differently. Indeed it could give rise to arguments as to what was procedural and what substantive. There is a need for simplicity.
- As to the intensity of the review, he contended for a "light touch". Starter tenancies were permitted by the Housing Corporation and needed to be readily terminable. Parliament had not precluded RSLs from using section 21. He relied also on the judgment of Stanley Burnton LJ in Manchester CC v Pinnock ( 1 WLR 713) at, especially, paragraphs 28 to 32 and 58 to 61. In that regard some care is required in my view, because the circumstances were different. Pinnock concerned a demoted tenancy, where there had already been a very rigorous examination of the facts by the court at the stage when it made the demotion order. That rigorous examination by the court does not occur in the case of starter tenancies (nor, indeed, introductory tenancies). As I see it a "light touch" constitutes an unwarranted gloss on the test which the court has to apply under the guidance in Kay and Doherty.
- In Smith v Buckland (also reported as Smith(on behalf of the Gypsy Council) v Evans) ( 1 WLR 661) Dyson LJ appears to have accepted that the challenge extends beyond Wednesbury unreasonableness. In my view I should follow this. At paragraph 40 (and I have underlined part of the sentence for emphasis) he said:
"This defence is based on conventional public law grounds, that is to say that the decision to recover possession was so unreasonable that no reasonable public authority could have made it or that it was unlawful for some other public law reason: see Kay at paras 110,118-190 and 207-212 and Doherty at paras 22(iii)(b), 37-40 and 61."
- Mr McCormack postulated that the court should in these circumstances ask itself whether the breach was material to the outcome. He argued that the failures in the appeal process which he had identified justified cumulatively, if not individually, the conclusion that the decision was flawed. Nevertheless, it is necessary to look at each criticism individually. I feel it appropriate to record, however, that the number of departures by the Claimant from its own policy is troubling. RSLs are expected to act in accordance with their procedures. It is almost inevitable that from time to time a mistake will occur but a proliferation of mistakes should not happen.
- It is undoubtedly the case that the appeal and promulgation of the decision did not take place at least two weeks before the section 21 notice expired. Mr McCormack complained that the failure to comply had the effect of reducing the time before the commencement of proceedings during which period the tenant could obtain advice. Mr Whatley drew an analogy with section 129 Housing Act 1996 which deals with introductory tenancies. He referred to The Queen (on the application of Chelfat) v Tower Hamlets LBC ( EWHC 313) in which Sullivan J addressed failure to carry out a review within the proper timescale from paragraph 23 onwards. I agree that the language of the appeal procedure in this context is directory rather than mandatory and in my view (adopting the terminology used by Sullivan J) the objectives of the review remained capable of being achieved. It is difficult to discern how the delay in hearing the appeal can have caused any meaningful prejudice to the Defendant. The important thing is that there was an appeal: if it was late on the part of the Defendant (as to which the position is not entirely clear) the panel did not hold this against her, concluding that it was not material: no steps were taken to issue the claim until after the appeal had been determined.
- Before I address the failure to send the Defendant copies of the evidence to be placed before the appeal panel, it is convenient to deal first with other criticisms made by Mr McCormack.
- The letter notifying the Defendant of the appeal panel decision plainly does not spell out the reasons. I concur with Mr Whatley that failure to give reasons can be over-interpreted. Too legalistic an approach should not be adopted. There are contemporaneous minutes of the panel hearing, which explain the panel's reasoning. The only point raised by Mr McCormack was that it was apparent from the minutes at item 1.11 that the appeal panel was aware that the Claimant had not followed its own procedures as to the timing of the hearing. He argued that the letter should have explained the reason for the panel excusing this. He argued that it was insufficient for the minutes simply to record that it was not considered material. In my view this is a point without substance. It is difficult to discern any prejudice to the Defendant.
- The matter of a further appeal is less straightforward. The Claimant's leaflet about the appeal, which was sent to the Defendant, clearly indicates that there can be a further appeal. Although Mr Whatley asserted that there was, in fact, no further appeal available, Mr Critchley's witness statements are silent on the point. No explanation is therefore available as to why the statement appears in the procedure document, if no further appeal was available. As Mr McCormack put it: what is the point of having a policy which envisages another appeal, if there is no prospect of there being one? Mr Whatley argued that this was not prejudicial to the Defendant. I find it difficult to accept this. Legitimate expectation comes into play. The potential for a further appeal may well influence the stance the tenant takes on the initial appeal.
- Criticism based on the Defendant's recent payments in respect of rent does not bear scrutiny. Although the arrears had fluctuated, the summary before the panel showed that she had paid £40 on 23 March 2009 and £50 on 23 February 2009, but the last payment before that was £85 on 27 October, although the agreement was to pay £10 per week.
- I will consider failure to consider the level of arrears generally at a later stage in conjunction with the failure to supply copies of the evidence.
- The generalised assertion that the decision to evict was one which no reasonable authority could have reached adds nothing.
- The pleaded allegation of refusing a reasonable request to adjourn the appeal is unsustainable. It is not supported by the Defendant's own evidence. There is no assertion in her witness statement that she asked for an adjournment because she was having difficulty getting advice in the short time available. Her criticism is that the Claimant did not offer her an adjournment. This was an area where Mr McCormack wanted to call the Defendant in order to elaborate. The risk of her simply adjusting her evidence to accord with the pleaded case was obvious. It also gave rise to a risk of a dispute arising as to what had been said. The witness statement is verified by a statement of truth and I saw no valid reason to seek to deviate from it.
- Mr McCormack submitted that it was implicit that the Defendant was asking for an adjournment and that the Claimant should have explained why the appeal panel had decided to proceed. Assuming that the call was made, it would be quite wrong in my view to categorise not offering to adjourn and/or not informing the appeal panel as being unreasonable.
- We then come to the attack based on the failure by the Claimant to adhere to its own policies by granting the Defendant a second starter tenancy. The bundle initially contained a document headed "Starter Tenancy Policy" but it only became operational in May 2009. It was therefore necessary to refer to an earlier policy document issued in November 2006, which was added to the bundle at pages 203 to 206. The options are to terminate, convert to a standard periodic assured tenancy or extend the starter tenancy for another 6 months. There is an explicit statement that at the end of this extension the tenancy must either be terminated or converted.
- There was the glimmer of a dispute of fact as to the circumstances surrounding the Second Tenancy. Mr Critchley's version is that, if she cleared the arrears in full, the Defendant would be offered a new starter tenancy. The Defendant's version is that she was simply told that, if she cleared the arrears, she could stay in the house. When she went to the offices to pay, the new agreement was presented to her. I concluded that this did not warrant investigation or elaboration, it being undoubtedly the case that the Defendant had signed not only the new agreement but also the additional page. There is no reason to doubt that she was perfectly content to sign.
- Mr McCormack submitted that the Defendant had a substantive (as distinct from procedural) legitimate expectation that, having paid off the arrears and being allowed to remain, her tenancy would be converted to assured status. The policy was not within her knowledge, but reliance was not an essential pre-requisite. What happened was to her detriment, because proceedings based on a section 21 notice are more difficult to defend than a claim for possession, if she was an assured tenant, where a suspended possession order was a highly likely outcome. He conceded that it was open to the Claimant to depart from the policy, but there was no evidence that the policy had been considered and there was an obvious need to explain the situation to the Defendant given that it was departing from the policy.
- Mr Whatley took me to paragraph 19 of the judgment of Schiemann LJ (as he then was) in R(Bibi) v Newham LBC ( 1 WLR 237) where he propounded three questions: to what had the authority committed itself?: had the authority acted unlawfully in relation to that commitment?: what should the court do? Given that the Claimant already held an order for possession, he argued that the Defendant could, on the state of the law at that time, have had no legitimate expectation of getting an assured tenancy. Furthermore Lord Fraser at page 504 in Wandsworth LBC v Winder referred to infringement of existing rights. The Defendant's existing right was to an assured shorthold tenancy. Accordingly, the Defendant's remedy, if she contended that she had been wrongfully subjected to another starter tenancy, would have been judicial review at the material time i.e. the autumn of 2007. I agree with Mr Whatley on this. I also agree with his final comments on the point. The Claimant offered a middle way to the Defendant, which she accepted. It is unreasonable in those circumstances for the Defendant to complain that she has been hard done by.
- It is equally beyond doubt that the Claimant failed to supply advance copies of the evidence. Mr Whatley formulated the test as: was this a failure so fundamental that it impugned the decision and the consequences of that decision? He conceded (quite correctly in my view) that, had the appeal proceeded on the basis of anti-social behaviour, this would have been an "unanswerable" flaw. The minutes demonstrate, however, that the panel concluded that there was no viable evidence of continuing anti-social behaviour and specifically excluded the allegation from consideration. The decision was based on the rent history. Mr Whatley submitted that the evidence would in reality have been in the nature of a common document. The rent account was available to either party at any time. The Defendant knew that there were arrears and that the issue was a long-running one. He contended that the Defendant had suffered no prejudice and provision of the evidence in advance would not have made any difference. He also noted that she had not complained of lack of evidence in her telephone call on the day before the appeal.
- I would be very reluctant to hold the failure of the Defendant to mention the lack of written evidence against her. As a general proposition tenants tend to be vulnerable. They cannot reasonably be expected to take every point that an experienced representative might take. It is a proper inference on the evidence in this case that, at the time she made the telephone call, the Defendant's primary concern was that she had been unable to obtain advice in the short time available. I would go further and add that the reasonable observer would have expected the appeal panel to have checked that the evidence had been supplied in advance. If told that the evidence had not been supplied, it would have been a very bold panel, which would have proceeded in such circumstances, and I venture to suggest that there is a very strong probability that the panel would have required this failure to be rectified.
- To my mind the submission of lack of prejudice, given that the only area of concern was the rent account, is a very slippery slope and ought not to be endorsed. The courts are entitled to expect that RSLs, in the same way as local authorities, will, for the protection of the interests of their tenants, adhere to their procedures. Not every failure will be significant, having regard to all the circumstances. The breach at paragraph 32 above is an obvious example. However, the provision of the evidence in advance is of obvious importance. Indeed I would hold that fairness dictates that it is essential that the tenant knows what material the landlord is proposing to put forward. It may, for example, give rise to a dispute of fact. Such disputes can arise even in the context of rent arrears. The tenant needs to be forewarned. It may also influence the tenant's decision as to whether or not to seek outside help.
- Consideration of what happened in this case is instructive. Apart from the anti-social behaviour issue, the summary prepared by Mr Critchley concentrates on the situation under the Second Tenancy. It records that the tenancy started on 8 October 2007. Payments made after that date are set out. Details of contacts are provided and there is reference to an agreement to pay £10 per week. The current arrears are stated to be £194.20 (a very modest sum in RSL terms). There is no mention whatsoever of the history prior to the Second Tenancy. If I turn then to the minutes of the appeal panel hearing, it seems clear that the previous history was taken into account. I derive this from item 1.5 (The panel asked questions about the background to the starter tenancy), item 1.7 (In addition there is a history of previous arrears) and item 1.9 (It was noted that it was unusual for a starter tenancy to be extended more than once, which was the case in this instance). Given that the Defendant was not there, the prejudice was palpable, and, even if she had been present, she would not have been aware from the summary that the discussion was going to range wider than the existing tenancy. The appeal panel also had to ask for the rent account to be produced.
- Into the equation I have also to add the Claimant's general policies. The documents bundle contained an item described as the Claimant's "Rent Arrears Escalation Procedure". The final page (page 135) does not appear on its face to be part of that document. It is an extract from another document, because the sheet commences with a heading numbered 6. It refers to dealing with rent arrears during "the probationary period". It says that the "Associations normal rent arrears procedure" must be used. The final paragraph is in bold type and reads:
"A Starter Tenancy can only be ended at the end of the 12 month period on the grounds of rent arrears if a full Possession Order is required. If a suspended Possession Order is required, court action must be taken through the normal route. Care must be taken to ensure that in respect of rent arrears Starter tenants are treated the same as Assured tenants – i.e. if we would normally be asking for a Suspended Possession Order for an Assured tenant, we must do the same for a Starter tenant."
- When it became clear that the page was not the last page of the Escalation Procedure, I asked for the full document to be produced. It could not be found. Mr Critchley then made his third statement (in which he also dealt with other matters, which appear in the chronology – the November 2009 agreement and the state of the rent account now). He states that the document is not a working document for staff. He is unable to identify the document but goes on to say that he agrees with it. He confirms that the Claimant applies the same criteria to both assured and assured shorthold tenancies. The Claimant looks at reasonableness and gives every opportunity for agreements to pay to be made. He continues: "This means that normally a section 8 notice is right. But sometimes a section 21 application is correct."
- It is then appropriate to look at the Escalation Procedure. Readers are referred on the first page to a number of links including the Claimant's Rent Arrears Policy. I asked for this document to be produced, but it could not be, and I have to record that I received no satisfactory explanation for this. I gave the Claimant until 4pm on February 25 to produce it, making it clear that if the document did not appear, I would deal with the matter on the information available, but would not draw any adverse inferences against the Claimant.
- The Escalation Procedure pack provides a very detailed, and indeed helpful, guide for staff as to the steps to be taken when an account falls into arrears. There is a careful step by step process consistent with the Claimant's obligations as an RSL. There are five alternatives at the court hearing stage: suspended possession order, immediate order, adjournment on terms, adjourn to a new date and withdrawn. The suspended possession order is described as "the most frequently requested resolution". The guideline for an immediate order is where the property is suspected to be abandoned or empty.
- On February 25 three further documents were received. They are respectively entitled Rent Arrears Policy, Corporate Debt Policy and Supporting Customers with Different Needs. I permitted the advocates to make further written submissions by reference to these documents, if they considered it appropriate. I intended that these be received by 5 March, but there was an unfortunate administrative misunderstanding, which necessitated extending the date to 19 March.
- The most instructive is the Rent Arrears Policy. Section 2 is headed "Aims and Objectives" and the penultimate bullet point reads: "Treating eviction as a last resort when clear and deliberate failure to pay is apparent". Section 3 is headed "Implementation" and paragraph 7 reads: "Possession proceedings will not be started against a tenant who can demonstrate that they have provided the local authority with all the evidence required to process a housing benefit claim or has a reasonable expectation of eligibility for housing benefit."
- I have underlined the words "and deliberate" for emphasis. They indicate that a distinction is to be made between those who cannot pay and those who will not pay. This is entirely consistent with the approach articulated in the Escalation Procedure pack.
- Mr McCormack inevitably used this material to support further submissions. In the light of The Queen (on the application of Weaver) v London and Quadrant Housing Trust ( 1 All ER 17) he did not go so far as to assert that the Defendant had a legitimate expectation that the Claimant ought necessarily to have acted in accordance with the policy. He contended that the policy should have been considered by the appeal panel and that it should have indicated why, in the light of the policy, the decision was made to upheld termination.
- There is no indication in the minutes that the attention of the appeal panel was drawn to the normal policy in relation to rent arrears. There is also no evidence that the appeal panel was asked to consider whether the failure by the Defendant to pay was deliberate. It had evidence before it to the contrary in that the appeal letter adverted to difficulties regarding housing benefit. These were important matters, because it was crucial for the appeal panel to be satisfied that there was good reason to depart from the normal policy. The modest size of the arrears at the time emphasised the need for careful scrutiny.
- Accordingly I conclude that the decision was one which no reasonable authority could have reached. The key elements are the failure to supply written evidence in advance, the broadening of the matters considered by the appeal panel beyond the information contained in the case summary, and most importantly the failure to consider the Claimant's clearly stated policy for dealing with rent arrears, which applied to starter as well as assured tenancies. Although it is of less moment I have also to bear in mind that the Defendant had a legitimate procedural expectation of a further appeal. Applying the questions in Bibi: the Claimant committed itself in its appeal procedure document to a further appeal, and it ignored this. Taken in isolation, the court might not interfere, but in the context of the existence of other criticisms it would, as I see it, be wrong to have no regard to it.
- Mr Whatley contended that, even if the decision at the appeal panel stage was flawed, the action of the Claimant in seeking a possession order could not be described as irrational, given the level of arrears owing at the date of trial and that the Defendant had failed to adhere to an agreement made in November 2009. This emanated from the proposition advanced by Mr McCormack, with which Mr Whatley concurred, that in most cases there will not be a single decision but a series of decisions which culminate in the recovery of possession. They include serving notice, deciding to uphold service of the notice at a review (whether the review is required by statute or adopted voluntarily), issuing proceedings, maintaining those proceedings in the light of developments after issue, enforcing the order, and deciding to resist an application for a stay. Thus, as he put it, "the process of recovery of possession is normally a continuum from the resolution to give a notice determining contractual rights up to the eventual execution of a warrant."
- Mr McCormack argued that Lord Hope should not be taken to have confined Gateway (b) to only some of these decisions. The observations of Toulson LJ in Doran v Liverpool CC at paragraph 60 suggest a contrary view, but the topic has received further attention in both Central Bedfordshire Council v Taylor and Barber v Croydon LBC ( EWCA Civ 51). In Taylor Waller LJ said this:
"I would accept that the likely assumption of the majority in Kay was that the relevant decision that could be the subject of judicial review was the original decision to seek possession. Furthermore, Toulson LJ was of the opinion in Doran that the court should not engage in a retrospective exercise by examining the facts as they are now found to be and asking whether the decision on those facts would have been lawful. [See paragraph 57 to 60]. He was also of the view that the remission in Doherty was for the purpose of examining the facts known to the public authority when it made its original decision. I respectfully suggest that there is a difficulty with this approach having regard to the fact that in these cases the burden is on the occupier to raise the circumstances on which he relies and because the approach perhaps does not recognise the possibility that a public authority may make a series of decisions in the light of the facts as they appear. If one looks at it on the basis that, once the public authority knows facts that it has not known up until they are revealed, the public authority is bound to take a further decision that avoids the concept of an exercise in retrospectivity.
An authority such as the council in the instant appeals may make a decision on the facts as known to it to send a letter seeking possession. Prima facie it has no obligation to find out what the true facts are and the burden is going to be on the occupier to demonstrate any grounds relied on as providing an Article 8 defence. If the occupier informs the public authority of relevant circumstances, the public authority will have to take a further decision as to whether to commence proceedings. If no letter is received and the facts are only divulged just prior to the hearing, the public authority in reality has to take a further decision as to whether to proceed. Indeed if the revelation is only during the hearing, the council in deciding to continue to press for an order takes yet a further decision. I do not see why if any one of these decisions could be shown to be "unreasonable" whatever that means (and I will come back to that), it could not be attacked.
If that is an appropriate analysis, because the county court is seized of the matter, it will be able to see whether there is an arguable case that in deciding even with the revelation of further facts to continue to seek possession is unreasonable. "
- In Barber Patten LJ observed:
"There is, however, a question of timing. The decision to serve the notice to quit was taken immediately after the incident on 22nd May was reported and before Mr Barber was interviewed. It therefore preceded any consideration of that explanation and was made without the benefit of the subsequent assessment by Dr Owen of Mr Barber's conduct and his responsibility for what occurred. In Doran v Liverpool CC Toulson LJ expressed the view that a decision to serve a notice to quit which was reasonable on the facts known to the local authority at the time could not be invalidated retrospectively by reference to facts subsequently established or discovered. This makes it important to identify the decision which is subject to challenge in possession proceedings by a local authority. In Doran the focus seems to have been on the decision to serve the notice to quit. But, in principle, there is no reason to stop at that point. In Kay Lord Hope spoke of the challenge under gateway (b) being to the decision of the local authority to recover possession. That process involves not only the service of a notice to quit as a necessary first step but also the commencement and conduct of the possession action thereafter. It seems to me that a local authority is bound to keep the position under review and to take into account any relevant facts which come to its notice at any stage in the proceedings. This process of review has two obvious consequences. The first is that it avoids any questions of retrospectivity by requiring the local authority to make a series of decisions which accommodate any new facts or other material relevant to its decision to seek possession. The second is that it allows the local authority to re-consider new material subsequent to its initial decision to terminate the tenancy and so avoid the charge that it has failed to take all relevant matters into account. By the same token, a decision to press ahead with possession proceedings taken following a re-consideration of the case subsequent to the notice to quit will be reviewable regardless of the legality of the earlier decision to commence the proceedings."
- I respectfully adopt the reasoning of Waller and Patten LJJ. Mr Whatley argued that the continuum cuts both ways. He suggested that the unlawful act (if there was one) was only potentially suspensory, and the circumstances had to be considered at the date of trial. He postulated as an example a situation where the arrears were £1000 at the service of notice, had been cleared at review stage (which would make the decision to proceed irrational) but had risen to £5000 by the hearing date.
- I reject this submission. Gateway (b) requires the authority to keep the situation under regular review. This is for the protection of the tenant and Gateway (b) provides a defence to the claim. If the authority makes a decision which no reasonable person would consider justifiable, the guillotine comes down, as it were. The decision in this case to issue proceedings is unlawful, and in my judgment is incapable of retrospective validation. As Mr McCormack pointed out, the appeal panel had two choices: either to uphold the decision to terminate or to overturn that decision. If it overturned it, then proceedings would not have been issued, and it followed that the Defendant would under the contractual terms become an assured tenant on 26 June 2009 (two months after the expiry of the section 21 notice).
- That result would not leave the Claimant without remedy. It would still be entitled at an appropriate time to issue possession proceedings but they would have to be based on the relevant Grounds in Schedule 2 Housing Act 1988.
- Accordingly, I hold that the defence is made out. There was an improper exercise of the Claimant's powers. I expressed certain views about remedy obiter in Manchester CC v Pinnock ( Manchester County Court, unreported) at paragraphs 72 and 73. Stanley Burnton LJ appears to have taken a similar view – see paragraph 52 of his judgment. Either the defence is made out or it is not. If not, a possession order must follow, but, if it is established, the consequence must be that the claim for possession falls to be dismissed. Having considered Barber beyond the extracts cited to me, I note also that Patten LJ makes it clear that the consequence of a successful defence is the dismissal of the claim for possession.
- Starter tenancies have not yet received the attention of the Court of Appeal. In addition, there are the other contentious issues on which both counsel have reserved their position. It is appropriate in these circumstances to grant permission to appeal.