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Cite as: [2006] EWCA Civ 535, [2006] HLR 42

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		Neutral Citation Number: [2006] EWCA Civ 535
		Case No: B2/2005/1991, B2/2005/2082

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)

Royal Courts of Justice
Strand, London, WC2A 2LL

04/05/2006

B e f o r e :

LORD JUSTICE CHADWICK
LORD JUSTICE SEDLEY
and
LADY JUSTICE ARDEN
____________________

Between:

Case No: B2/2005/1991

ON APPEAL FROM THE WANDSWORTH COUNTY COURT
HIS HONOUR JUDGE ROSE
5WT 11271

	ADEL WILLIAM	Claimant/Respondent
	- and -
	LONDON BOROUGH OF WANDSWORTH	Defendant/Appellant

AND

Case No: B2/2005/2082

ON APPEAL FROM THE BRENTFORD COUNTY COURT
HIS HONOUR JUDGE MARCUS EDWARDS
4BF 06136

	DONNA BELLAMY	Claimant/Respondent
	- and –
	LONDON BOROUGH OF HOUNSLOW	Defendant/Appellant

____________________

Mr David Lintott (instructed by Ashfords, Ashford House, Grenadier Road, Exeter, EX1 3LH) for the Appellant, London Borough of Wandsworth
Mr Matthew Hutchings (instructed by Mr T M Welsh, Civic Centre, Lampton Road, Hounslow, TW3 4DN) for the Appellant, London Borough of Hounslow
Mr David Carter (instructed by Flack & Co, Gardiner House, 3-9 Broomhill Road, Wandsworth, London SW18 4JQ) for the Respondent, Adel William
Mr Jan Luba QC (instructed by West London Law Solicitors, Boundary House, Boston Road, London W7 2QE) for the Respondent, Donna Bellamy
Hearing date: 17 March 2006
____________________

HTML VERSION OF JUDGMENT
____________________

Lord Justice Chadwick:

These two appeals are from orders made in the county court on appeals under section 204 of the Housing Act 1996. They each raise the question whether the judge was correct to set aside a decision by the appellant council, as local housing authority, that the applicant had become homeless intentionally. When giving permission to appeal to this Court Lord Justice Neuberger directed that the two appeals be listed for hearing together.

The statutory framework

The duties cast upon a local housing authority in relation to homelessness are now found in Part VII of the Housing Act 1996 as amended by the Homelessness Act 2002. Section 183(1) of the 1996 Act provides that the provisions following that section apply where a person applies to a local housing authority for accommodation, or for assistance in obtaining accommodation, and the authority have reason to believe that he is or may be homeless or threatened with homelessness. Section 184(1) requires that, in such a case, the authority "shall make such inquiries as are necessary to satisfy themselves – (a) whether [the applicant] is eligible for assistance, and (b) if so, whether any duty, and if so what duty, is owed to him under the following provisions [of Part VII]". Section 182 of the 1996 Act requires that, in the exercise of their functions, the authority must have regard to such guidance as may from time to time be given by the Secretary of State.

On completing their inquiries the authority must notify the applicant of their decision and, so far as any issue is decided against his interests, must inform him of the reasons for their decision – section 184(3). A notice under section 184(3) must also inform the applicant of his right to request a review of the decision under section 202 of the 1996 Act. That section is in these terms (so far as material):

"202(1) An applicant has a right to request a review of –

(a) . . . ,

(b) any decision of a local housing authority as to what duty (if any) is owed to him under sections 190 to 193 and 195 and 196 (duties to persons found to be homeless or threatened with homelessness),

(c) . . .

. . .

(3) A request for review must be made before the end of the period of 21 days beginning with the day on which he is notified of the authority's decision or such longer period as the authority may in writing allow.

(4) On a request being duly made to them, the authority . . . concerned shall review their decision."

In carrying out their review the authority must comply with regulations made by the Secretary of State – section 203(1) of the Act. The regulations in force at the material time were those set out in the Allocation of Housing and Homelessness (Review Procedures) Regulations 1999 (SI 1999/71). On completion of the review the authority must notify the applicant of their decision – section 203(3) of the Act. If the decision is to confirm the original decision on any issue against the interests of the applicant they must notify him of the reasons for the decision - section 203(4); and they must inform him of his right to appeal to the county court on a point of law – section 203(5).

Intentional Homelessness

In order to satisfy themselves what duty (if any) is owed to an applicant whom they have found to be homeless, the authority must satisfy themselves whether or not the applicant became homeless intentionally. In such a case the inquiries to be made under section 184(1) of the 1996 Act must include "such inquiries as are necessary" for that purpose. The need for the authority to satisfy themselves as to intentional homelessness (or otherwise) arises from the different duties which are owed, on the one hand, to those who become homeless intentionally and, on the other hand, to those whose homelessness is not intentional. The different duties are set out in section 192 ("Duty to persons becoming homeless intentionally"), section 192 ("Duty to persons not in priority need who are not homeless intentionally") and section 193 ("Duties to persons with priority need who are not homeless intentionally").

The significant difference, in the present context, is that a person with priority need who has become homeless intentionally is owed only the limited duty set out in section 190(2): to secure that accommodation is available for his occupation for such period as the authority consider will give him a reasonable opportunity of securing accommodation for his occupation. That may be compared with the 'full' housing duty owed to a person in priority need whose homelessness is not intentional, which is set out in section 193(2): to secure that accommodation is available for occupation by the applicant. In practice, the difference is between providing temporary accommodation – perhaps in bed and breakfast or hostel accommodation – and providing long term accommodation – perhaps from the authority's own housing stock, or through a housing association.

The question whether the applicant has become homeless intentionally is for the local housing authority to determine. This is emphasised both by section 190(1) and by section 193(1):

"190(1) This section applies where the local housing authority are satisfied that an applicant is homeless and is eligible for assistance but are also satisfied that he became homeless intentionally."

"193(1) This section applies where the local housing authority are satisfied that an applicant is homeless, eligible for assistance and has a priority need, and are not satisfied that he became homeless intentionally."

Section 191 of the Act explains what is meant by "becoming homeless intentionally":

"191(1) A person becomes homeless intentionally if he deliberately does or fails to do anything in consequence of which he ceases to occupy accommodation which is available for his occupation and which it would be reasonable for him to continue to occupy.

(2) For the purposes of subsection (1) an act or omission in good faith on the part of a person who was unaware of any relevant fact shall not be treated as deliberate.

(3) A person shall be treated as becoming homeless intentionally if –

(a) he enters into an arrangement under which he is required to cease to occupy accommodation which it would have been reasonable for him to continue to occupy, and

(b) the purpose of the arrangement is to enable him to become entitled to assistance under this Part,

and there is no other good reason why he is homeless."

Section 191 must be read with the relevant code of guidance issued under section 182 of the Act and with the Homelessness (Suitability of Accommodation) (England) Order 1996 (SI 1996/3204).

Chapter 7 of the Homelessness Code of Guidance for Local Authorities, issued by the Secretary of State in July 2002, addresses 'Intentional Homelessness'. Paragraph 7.2 is in these terms:

"7.2 It is for housing authorities to satisfy themselves whether an applicant is homeless or threatened with homelessness intentionally. Generally, it is not for applicants to 'prove their case'."

Paragraph 7.4 requires that:

"7.4 Where reaching a decision that an applicant became homeless or threatened with homelessness intentionally, housing authorities must give clear reasons for their decision."

Paragraph 7.11 emphasises that the act or omission that led to homelessness must have been deliberate, and that applicants must always be given the opportunity to explain such behaviour: an act or omission is not to be treated as deliberate, even when deliberately carried out, if it was forced upon the applicant through no fault of his own – for example where non-payment of rent was the result of poverty. The concept of an act which is to be treated as non-deliberate although deliberately carried out is developed in paragraph 7.13:

"7.13 An applicant's actions may not amount to intentional homelessness where he or she has lost his or her home, or was obliged to sell it, because of rent or mortgage arrears resulting from significant financial difficulties, and the applicant was genuinely unable to keep up the rent or mortgage payments even after claiming benefits, and no further financial help was available. In such cases which involve mortgagors, housing authorities will need to look at the applicant's ability to pay the mortgage commitment when it was taken on, given the applicant's financial circumstances at the time."

But paragraph 7.14 confirms that an applicant's decision to sell his home in circumstances where he is under no risk of losing it, or an applicant's wilful and persistent refusal to pay rent or mortgage payments (resulting in the loss of the home), may be regarded as deliberate acts. Paragraphs 7.16 and 7.17 give guidance as to what is meant by an act or omission in good faith in the context of section 191(2) of the 1996 Act. They are in these terms (so far as material):

"7.16 Acts or omissions made in good faith where someone was genuinely unaware of a relevant fact must not be regarded as deliberate. A general example would be a situation where someone gave up possession of accommodation in the belief that they had no legal right to continue to occupy the accommodation and, therefore, it would not be reasonable for them to continue to occupy it. Acts made in good faith may include mistakes of fact but would not normally include mistakes of judgment based on an unrealistic degree of optimism (for example where an applicant had used his or her home as surety for a business venture that was not soundly based or which involved a high degree of risk). . . .

7.17 Particular examples of acts or omissions made in good faith might include situations where:

(i) a person gets into rent arrears, being unaware that he or she may be entitled to housing benefit or other social security benefits;

(ii) an owner occupier faced with foreclosure or possession proceedings to which there is no defence, sells before the mortgagee recovers possession through the courts or surrenders the property to the lender; or

(iii) a tenant, faced with possession proceedings to which there would be no defence, and where the granting of a possession order would be mandatory, surrenders the property to the landlord. Although the housing authority may consider that it would have been reasonable for the tenant to continue to occupy the accommodation, the tenant would not have become homeless deliberately if he had taken a contrary view in ignorance of material facts, e.g. the general pressure on the authority for housing assistance."

It is important to keep in mind that, although the Code gives guidance on how local authorities should discharge their functions under the 1996 Act and apply the various criteria in practice, "it is not a substitute for legislation and in so far as it comments on the law can only reflect the Department's understanding at the time of issue" – as the Secretary of State has recognised in paragraph 2 of the Introduction.

Article 2 of the 1996 Order requires the authority, when addressing the question whether it would be, or would have been, reasonable for a person to continue to occupy accommodation, to take into account whether or not the accommodation is affordable for that person. In particular the authority must have regard to the financial resources available to him and the costs of the accommodation.

As I have said, section 202 of the 1996 Act gives the applicant the right to require the authority to review a decision as to what duty (if any) is owed to him under section 190 to 193 of that Act. That will include a decision that the applicant became homeless intentionally. A decision that the applicant became homeless intentionally leads, necessarily, to a decision that he is not owed the 'full' housing duty under section 193(2) of the Act: the only duties owed to him are those set out in section 190.

The jurisdiction of the county court

Section 204 of the 1996 Act gives to the applicant who is dissatisfied with a decision made on a review under section 202 a limited right of appeal to the county court. The section is in these terms (so far as material):

"204(1) If an applicant who has requested a review under section 202 –

(a) is dissatisfied with the decision on the review, or

(b) . . .

he may appeal to the county court on any point of law arising from the decision…...

(2) An appeal must be brought within 21 days of his being notified of the decision . . .

. . .

(3) On appeal the court may make such order confirming, quashing or varying the decision as it thinks fit.

. . ."

It is not in dispute that the jurisdiction conferred on the county court by section 204 of the 1996 Act is akin to that exercised by the High Court on an application for judicial review. If authority be needed for that proposition it may be found in the decisions of this Court in R v Brighton & Hove Council, ex parte Naçion [1999] EWCA Civ 688 (1999) 31 HLR 1095 – see, in particular, the judgment of Lord Woolf, Master of the Rolls – and in Nipa Begum v Tower Hamlets London Borough Council [2000] 1 WLR 306; (1999) 32 HLR 445. The proposition was affirmed in the House of Lords in Runa Begum v Tower Hamlets London Borough Council [2003] UKHL 5, [7], [17], [73]; [2003] 2 AC 430, 439G, 443B, 457D.

The approach which a judge should adopt on an appeal under section 204 of the Act was explained by Lord Bingham of Cornhill in the Runa Begum case (ibid [7], 439G-440A):

"[The] court may not only quash the authority's decision under section 204(3) if it is held to be vitiated by legal misdirection or procedural impropriety or unfairness or bias or irrationality or bad faith but also if there is no evidence to support factual findings made or they are plainly untenable or (Secretary of State for Education and Science v Tameside Metropolitan Borough Council [1977] AC 1014 at 1030, per Scarman LJ) if the decision-maker is shown to have misunderstood or been ignorant of an established and relevant fact. In the present context I would expect the county court judge to be alert to any indication that an applicant's case might not have been resolved by the authority in a fair, objective and even-handed way, conscious of the authority's role as decision-maker and of the immense importance of its decision to an applicant."

Lord Bingham gave no encouragement to a suggestion that the judge was required to subject the authority's decision to "anxious scrutiny" or to an examination which was closer or more rigorous than that ordinarily to be applied when determining an application for judicial review (ibid, [7] 440A-B):

". . . I can see no warrant for applying in this context notions of 'anxious scrutiny' (R v Secretary of State for the Home Department Ex p Bugdaycay [1987] AC 514 at 531G, per Lord Bridge of Harwich) or the enhanced approach to judicial review described by Lord Steyn in R (Daly) v Secretary of State for the Home Department [2001] 2 AC 532 at 546-548. I would also demur at the suggestion of Laws LJ in the Court of Appeal in the present case ([2002] 1 WLR 2491 at 2513, [2002] EWCA Civ 239, paragraph 44) that the judge may subject the decision to 'a close and rigorous analysis' if by that is meant an analysis closer or more rigorous than would ordinarily and properly be conducted by a careful and competent judge determining an application for judicial review."

As I have said, when confirming the original decision on any issue against the interests of the applicant, the authority is required to give reasons for the decision reached on review – section 203(4)(a) of the 1996 Act. And the need to give clear reasons when reaching a decision that an applicant became homeless or threatened with homelessness intentionally is emphasised in paragraph 7.4 of the Code of Guidance. The essential requirements, in a homelessness case, were summarised by Lord Justice Parker in City of Gloucester v Miles (1985) 17 HLR 292, 302. The review decision "must state: (a) that the authority is satisfied that the applicant for accommodation became homeless intentionally; (b) when he or she is considered to have become homeless; (c) why he or she is said to have become homeless at that time, i.e. what is the deliberate act or omission in consequence of which it is concluded that at that time he or she ceased to occupy accommodation which was available for his or her occupation; and (d) that it would have been reasonable for him or her to continue to occupy it".

It is the third of those requirements which is likely to give rise to difficulty in practice: what is the deliberate act or omission in consequence of which the authority has concluded that the applicant ceased to occupy accommodation which was available for his accommodation? As Mr Justice Dyson pointed out in R v Hackney London Borough Council, ex parte Ajayi (1997) 30 HLR 473, 479:

"Questions of causation are notoriously difficult and, in my judgment, the Court should be slow to intervene to strike down the decisions of administrative bodies on such questions and should only do so in clear cases. I cannot accept that the effective cause should always be regarded in these cases as the chronologically immediate or proximate cause. In some cases, the cause closest in point of time will be regarded as the effective cause. . . . In others, the closest in time will not be so regarded".

It is trite law, as Lord Justice Schiemann observed in R v Brent London Borough Council, ex parte Baruwa (1997) 29 HLR 915, 929, that, where an authority is required to give reasons for its decision, it is required to give reasons which are proper, adequate, and intelligible and enable the person affected to know why they have won or lost. But he went on to say this (ibid):

"That said, the law gives decision makers a certain latitude in how they express themselves and will recognise that not all those taking decisions find it easy in the time available to express themselves with judicial exactitude."

There are observations to the same effect in the judgment of Sir Thomas Bingham, Master of the Rolls, in R v London Borough of Croydon, ex parte Graham (1994) 26 HLR 286, 291-292:

"[Counsel] . . . has reminded the court that these are questions for the housing authority and not the court. It is their judgment and not the court's that matters. He has further urged that one should not read a letter of this kind as a statute or even a planning inspector's decision letter and that one should not go through it with a tooth-comb in order to find fault. Nor, indeed, should one deny a reasonably liberal interpretation or elaboration of what lies behind it. I readily accept that these difficult decisions are decisions for the housing authority and certainly a pedantic exegesis of letters of this kind would be inappropriate. There is nonetheless, an obligation under the Act to give reasons and that must impose on the council a duty to give reasons which are intelligible and which convey to the applicant the reasons why the application has been rejected in such a way that if they disclose an error of reasoning the applicant may take such steps as may be indicated."

In R v Hillingdon London Borough Council, ex parte Puhlhofer [1986] 1 AC 484, 518F, Lord Brightman expressed the hope that there would be a lessening in the number of challenges mounted against local authorities endeavouring, "in extremely difficult circumstances", to perform their duties under the homelessness legislation "with due regard for all their other housing problems". He said this (ibid, 518B-E)

". . . I am troubled at the prolific use of judicial review for the purpose of challenging the performance by local authorities of their functions under the [Housing (Homeless Persons) Act 1977]. Parliament intended the local authority to be the judge of fact. The Act abounds with the formula when, or if, the housing authority are satisfied as to this, or that, or have reason to believe this, or that. Although the action or inaction of a local authority is clearly susceptible to judicial review where they have misconstrued the Act, or abused their powers or otherwise acted perversely, I think that great restraint should be exercised in giving leave to proceed by judicial review. The plight of the homeless is a desperate one, and the plight of the applicants in the present case commands the deepest sympathy. But it is not, in my opinion, appropriate that the remedy of judicial review, which is a discretionary remedy, should be made use of to monitor the actions of local authorities under the Act save in the exceptional case. The ground upon which the courts will review the exercise of an administrative discretion is abuse of power – e.g. bad faith, a mistake in construing the limits of the power, a procedural irregularity, or unreasonableness in the Wednesbury sense – unreasonableness verging on absurdity: see the speech of Lord Scarman in R v Secretary of State for the Environment, Ex parte Nottinghamshire County Council verging [1986] AC 240 247-248. Where the existence or non-existence of a fact is left to the judgment and discretion of a public body and that fact involves a broad spectrum ranging from the obvious to the debatable to the just conceivable, it is the duty of the court to leave the decision of that fact to the public body to whom Parliament has entrusted the decision-making power save in a case where it is obvious that the public body, consciously or unconsciously, are acting perversely."

The final sentence of that passage was adopted by this Court in R v Royal Borough of Kensington and Chelsea, ex parte Bayani (1990) 22 HLR 406, 409, para. (3) and in the Baruwa case to which I have already referred, (1997) 29 HLR 915, 920.

In Nacion (supra) Lord Woolf, Master of the Rolls, indicated that he (and the other members of that Court) had "reservations . . . as to how far those comments . . . were of general application". He had in mind, I think, that all justiciable grounds of intervention are available on an appeal under section 204 of the Act - as Lord Bingham was to emphasise in Runa Begum. Lord Brightman's comments in Puhlhofer must be read in the context in which they were made: that is to say, "Where the existence or non-existence of a fact . . . involves a broad spectrum ranging from the obvious to the debatable to the just conceivable". But there is, I think, nothing to suggest that, in distinguishing between the fact finding role which Parliament has entrusted to the local authority under Part VII of the 1996 Act and the role entrusted to the court under section 204 of that Act, those comments do not remain apposite. They were treated as authoritative in that context by this Court in Cramp v Hastings Borough Council, Phillips v Camden London Borough Council [2005] EWCA Civ 1005, [12], [2005] HLR 48. Where what is alleged is a misconstruction of ascertained facts, 'obvious perversity' is required before the court can properly interfere with the authority's findings of fact. The court must respect the role which has been entrusted to the authority by the provisions in Part VII of the Act.

I turn, now to the appeals which are before the Court

William v London Borough of Wandsworth

The underlying facts

Mr William applied to the London Borough of Wandsworth on 26 July 2004 for accommodation or assistance under Part VII of the 1996 Act. He did so because he was facing eviction on the following day under a court order obtained by his mortgagee, Southern Pacific Mortgage Limited ("SPML") from the one bed-roomed flat at 30 Spanish Road, London SW18 which he then occupied under a lease acquired in shared ownership with Landmark Housing Association.

The lease had been re-mortgaged to SPML on 13 June 2002 to secure an advance of £49,000. In his application for that mortgage Mr William had represented that he was in receipt of £20,000 per annum from his employment. That was untrue: he was unemployed at the time. By the end of May 2003 Mr William was in arrears in respect of monthly payments due under that mortgage in an amount of £1,850 or thereabouts. On 26 June 2003 SPML commenced possession proceedings. A possession order was made on 29 September 2003. Possession was to be given up on 24 November 2003. Mr William was evicted by the court bailiff on 27 July 2004.

On 26 August 2004 the authority notified the applicant that it had decided that he was homeless, eligible for assistance under Part VII, in priority need but intentionally homeless. The applicant sought a review of that decision under section 202 of the Act. On 9 December 2004 he was told that the reviews manager (Mr Adelaja) had decided to quash the decision; and that a fresh decision would be made.

The second decision was notified to the applicant by letter dated 1 March 2005. He was again informed that, although he was considered to be homeless, eligible and in priority need (because physically vulnerable), the authority were satisfied that his homelessness was intentional. The reason given was that "the real and effective cause of your homelessness was your failure to maintain payments on your mortgage, which led to the granting of a possession order on the basis of mortgage arrears". And it was said "had you not been evicted . . . [the Spanish Road] property would have remained reasonable and available for your continued occupation".

The letter of 1 March 2005 was signed by Mrs Wills, a caseworker employed in the authority's homeless persons unit. She set out, at some length, the factual background which had led to the possession order. The letter contains the following passages:

"You . . . remortgaged the property knowing that you would not have been able to afford the increased payments. . . . [Y]ou stated in interview on the 20th December [2004] that you could not remember when you resigned from your job, however you did confirm that when you remortgaged in July 2002 you knew that you were unemployed."

"This authority considers that you knew perfectly the risk you were taking, namely that you[r] property might be repossessed when you remortgaged your property without any income with which to pay for your mortgage. This was a deliberate act, as a consequence of which you ceased to occupy the accommodation which it would have been reasonable for you to continue to occupy."

"You confirmed the 25^th of August that the reason you were unable to pay your mortgage was because you spent your mortgage money on trying to access [an alleged inheritance of US$15,000,000] by opening a bank account with the Bank of Canada. You said that you were in effect spending money to get money. With this money you would have been able to pay off your mortgage. However it is now apparent that you were in receipt of benefits at this time and this authority deduces that you did not have the money to pay your mortgage."

"In the light of your admission, the council considers that as a result of your decision to remortgage your property whilst unemployed and in receipt of income support and incapacity benefit resulted in your inability to pay your mortgage. This was a deliberate act on your part, which subsequently caused Southern Pacific Ltd to apply for and be granted possession of your property."

"This council is also satisfied that, but for your deliberate decision to remortgage whilst unemployed and in receipt of income support and incapacity benefit [the] accommodation would have remained available for your continued occupation and was reasonable for you to continue to occupy."

The review decision

The applicant requested a review of the decision notified in the letter of 1 March 2005. On 20 April 2005 Mr Adelaja wrote:

"I have now concluded the Council's review and, having reviewed the file and taken full account of the representation set out in your letters and those of your representatives, the medical circumstances of your household and the contents of your housing file as well as all the information available to me, I am satisfied to uphold the earlier decision, as I agree that your deliberate act led to the loss of suitable accommodation, which was available for your occupation within the meaning of the legislation.

. . .

In coming to my decision I have had the Code of Guidance issued by the office of the Deputy Prime Minister to assist me in this case.

. . .

. . . I am satisfied to confirm the decision under review. This is because I agree that the circumstances in which you lost your last settled accommodation at Flat 30, 10 Spanish Road, SW18 2HY fulfilled the definition of intentional homelessness, set out at Section 191(1) of the [1996] Act."

Mr Adelaja went on to say that, as the decision was against the applicant's interests, he would give a detailed explanation of his reasons for reaching his conclusion.

That explanation extends over the remaining nine pages of the letter of 20 April 2005. I shall not attempt a summary; but it is necessary to identify and rehearse the following passages:

"I am satisfied that the real and effective cause of your homelessness was your failure to maintain your mortgage payments, which led to the granting of a possession order on the basis of mortgage arrears. A such, I have considered the circumstances which led to the possession order being granted, against the definition of intentional homelessness."

". . . I am satisfied that the decision to remortgage your property in June 2002 was a deliberate act on your part at a time when you were unemployed, and therefore would have been unaware that you would not be able to meet your mortgage repayment obligation."

". . . you informed this office that you were managing your mortgage repayments up to June 2002, when you re-mortgaged your home. You added that although it was a struggle financially, you were able to meet your housing costs."

". . . I am satisfied that any alleged financial difficulties you may have had was a result of your deliberate act in choosing to borrow money, particularly at a time when you were unemployed. In addition when you did obtain the second mortgage you failed to use it for its intended purpose (to meet your housing expenditure) opting to use the money to service other unspecified debts. I can find no reasoning from your account of events which could justify borrowing money and putting yourself in debt when you clearly realise you could not afford to repay the borrowed money without difficulty as you were unemployed."

"By your own admission, you failed to make the payment due in March 2003 because you had diverted the funds in an attempt to realise your alleged inheritance of over US$15m. Therefore, it is evident that your decision not to pay the mortgage due was a deliberate and calculated act. . . . You made a conscious decision to risk the loss of your home at the expense of a promissory inheritance, which proved to be false. In addition you provided false information to obtain a second mortgage and further worsen your financial obligations when you were clearly aware that you could not meet those obligations. Based on your own admission, you did not have any major problems in coping with your housing payments until you took a second mortgage in June 2002"

"I have considered whether [the Spanish Road] property was affordable. This property was a one-bedroom self-contained flat. The monthly mortgage and rent, including service charge . . . from 1^st April 2003, was approximately £380.65 and £199.51 respectively. You were in receipt of housing benefit of £137.02 per month, leaving a shortfall of £62.49 per month I have confirmed that an amount of £36.40 per month was being deducted from your housing benefit entitlement in order to recover an overpayment amount of approximately £1964.00 which you had received in your bank account. Hence the net shortfall to be met from your job seekers allowance was £26.09 (ineligible service charge) monthly. I have also established that the DWP were paying £32.23 per week from 20^th March 2000 towards interest only on your mortgage. Furthermore, I have confirmed that the rules governing entitlement to interest only mortgage payment from DWP changed adversely for mortgages agreed after 2^nd October 1995."

"It is the opinion of the Council that your failure to pay your mortgage is a deliberate act, which caused the loss of your accommodation. It is quite clear that you deliberately gave more preference to pursue an alleged inheritance than to pay your mortgage and housing costs."

"In the light of the information available to me, it is clear that your actions have directly led to the accumulation of an unreasonable level of arrears and your subsequent eviction and that there are no mitigating factors which would lead . . . the Council to come to an alternative decision."

"It is the decision of this Council, therefore, that although you are currently homeless, the actions that led to this situation were of your own making as you failed to attach any importance to your mortgage repayment. This deliberate action on your part led to the loss of your accommodation as a result of accruing mortgage arrears. The Council's decision is therefore that you have made yourself homeless intentionally."

The appeal to the Wandsworth County Court

The applicant appealed to the county court under section 204 of the 1996 Act His grounds of appeal – as appears from section 7 of the appellant's notice filed on his behalf on 25 April 2004 – were (a) that the authority had failed to make adequate inquiries into his circumstances and (b) that the authority had misdirected themselves as to the meaning of intentional homelessness for the purposes of Part VII of the 1996 Act.

The appeal came before His Honour Judge Rose on 3 August 2005. The judge rejected the contention that there was inadequate inquiry made by Mr Adelaja. He said this:

"It seems to me on the evidence that I have heard and read and on what was disclosed in the review decision, and having regard to the history of what I can only describe as rank dishonesty on Mr William's part, and his failure to back up his financial contentions with any evidence, that Mr Adelaja was perfectly entitled to conclude that he had made sufficient enquiries for the purpose of making the decision that he did, and I reject that part of the appeal."

There is no challenge to that finding.

The judge made no finding that the authority had misdirected themselves as to the meaning of intentional homelessness. Nevertheless, he allowed the appeal and quashed the review decision. He indicated in his judgment – although not in the order which he made on 3 August 2005 – that the matter "should be sent back to Wandsworth with a direction that a fresh review should take place, save that it is not incumbent upon Wandsworth to make further enquiries as to Mr William's financial position save and insofar as he discloses further information in the witness statement that he has made since the last review was carried out."

In the course of a short judgment the judge observed that he had difficulty in identifying, in the review decision of 20 April 2005, just what it was that Mr Adelaja thought constituted the act or omission "in consequence of which" the applicant ceased to occupy the Spanish Road property. Was it "the taking out of the second mortgage . . . that caused Mr William's inability to continue paying the mortgage". Or was it "a general inability or failure to pay the mortgage which caused the situation in which Mr William now finds himself". It was that perceived ambiguity which led him to allow the appeal. He held that:

". . . if there was this degree of ambiguity in [the review letter] it is virtually impossible to find on the balance of probabilities that the decision was predicated on the correct approach that is required under the 1996 Housing Act, so as to be able to pronounce with sufficient authority that the appeal should be dismissed."

In response to a request by counsel for the authority for further clarification of his reasons– and in anticipation of the further review which he expected to take place as a result of his direction that the matter be remitted for further consideration by the authority - the judge said this:

"If the respondent finds that the reason for classifying Mr William as being intentionally homeless is that at all relevant times he was capable of meeting his mortgage repayments but chose not to do so because he diverted money that would otherwise be ready and available to him to make those repayments for other purposes, be it for the settlement of debts with lesser priority, or that he chose to use monies for the purpose of chasing an alleged inheritance, albeit one that he considered himself genuinely was a genuine case rather than a fraud, then of course that should be stated and the reason predicated on that. If however the position is that it is the borrowing or the re-mortgaging of the property that predicated his inability to pay then of course it is highly possible that by virtue of the fact that he could not pay the mortgage in June 2002 and had to borrow money for it which he was then unable to pay in any event would be evidence of the fact that he genuinely was unable to pay the mortgage and was thus not intentionally homeless.

If it is the first then it seems to me to be an appropriate and unchallengeable finding having regard to the provisions of section 191. If it is the second then it seems to me erroneous.

The difficulty that I have found is that although there is evidence to support [counsel's] argument for the respondents that Mr Adelaja applied the correct test there is sufficient ambiguity in the decision that he made that concerns me sufficiently to allow the appeal that he may well have made his decision predicated on the wrong grounds."

By the order which he made on 3 August 2005 the judge allowed the appeal and quashed the review decision of 20 April 2005.

This appeal

In my view the judge was wrong to hold that the review decision left in doubt what act or omission it was that, in the judgment of the authority, had led to the applicant becoming homeless. The 'deliberate act' identified in the letter was the failure to pay monies due under the mortgage. This is stated in unequivocal terms:

"I am satisfied that the real and effective cause of your homelessness was your failure to maintain your mortgage payments, which led to the granting of a possession order on the basis of mortgage arrears.

. . .

It is the opinion of the Council that your failure to pay your mortgage is a deliberate act, which caused the loss of your accommodation.

. . . . .

It is the decision of this Council, therefore, that although you are currently homeless, the actions that led to this situation were of your own making as you failed to attach any importance to your mortgage repayment."

I accept, of course, that it was for the authority to explain why it took the view that the failure to pay monies due under the mortgage was 'deliberate' within the meaning of section 191(1) of the 1996 Act: or, to put the point the other way, why the failure to pay monies due under the mortgage was not properly to be treated as 'non-deliberate' – in the sense that it was forced upon the applicant through no fault of his own. The judge identified the point, correctly, when he said that it was for the authority to state whether it had found the applicant was capable of meeting his mortgage repayments but chose not to do. And the judge appreciated that it would have been open to the authority to find that the applicant had "diverted money that would otherwise be ready and available to him to make those repayments for other purposes" whether "for the settlement of debts with lesser priority" or "for the purpose of chasing an alleged inheritance". But the judge was wrong, as it seems to me, to take the view that the review decision failed to address that point. The authority had made its view clear in the following passages:

". . . when you did obtain the second mortgage you failed to use it for its intended purpose (to meet your housing expenditure) opting to use the money to service other unspecified debts.

. . .

By your own admission, you failed to make the payment due in March 2003 because you had diverted the funds in an attempt to realise your alleged inheritance of over US$15m. Therefore, it is evident that your decision not to pay the mortgage due was a deliberate and calculated act. . . . You made a conscious decision to risk the loss of your home at the expense of a promissory inheritance, which proved to be false."

The judge held, in effect, that that the authority had failed to explain, with sufficient clarity, that its finding of intentional homelessness was based upon its finding that the applicant had deliberately chosen not to use monies which were available to him – as a result of the remortgage of the property in June 2002 - pay monies due under the mortgage in March 2003. He was concerned, I think, that the authority had not distinguished, in their own mind, between the applicant's decision not to use monies which were available to him in March 2003 and the applicant's decision, in June 2002, to remortgage at a time when he was unemployed. The passages in the review decision which may have given rise to that concern can be identified:

". . . I am satisfied that the decision to re-mortgage your property in June 2002 was a deliberate act on your part at a time when you were unemployed, and therefore would have been aware that you were not able to meet your mortgage repayment obligation.

. . .

However, I am satisfied that any alleged financial difficulties you may have had [in March 2003] was as a result of your deliberate act in choosing to borrow money; particularly at a time when you were unemployed. . . . I can find no reasoning from your account of events which could justify borrowing money and putting yourself in debt when you clearly realised you could not afford to repay the borrowed money without difficulty as you were unemployed."

The judge's concern is, perhaps, understandable. But I am satisfied that it should not have led him to conclude that the review decision was equivocal as to the deliberate act on which the authority relied - the failure to pay monies due under the mortgage in March 2003 - nor to conclude that the review decision failed to explain why the authority took the view that that failure was properly to be treated as a deliberate act. It is, I think, important to read the decision letter as a whole and in the light of the facts which were known to both the applicant and the authority. Those facts are set out in the letter of 20 April 2005. They included the following: (i) the effect of the remortgage in June 2002 was that the applicant had increased his borrowing from £29,975 to £49,645 – that is to say, by some £20,000; (ii) that sum (£20,000 or thereabouts) was available to the applicant from June 2002 and there was no reason why it should not have been used to meet his commitments under the mortgage (approximately £400 per month) and other housing outgoings (£100 per month); (iii) the applicant knew, from June 2002, that his housing costs would have to be met and that those costs could not be met out of income while he remained unemployed; (iv) nevertheless he chose to apply the £20,000 that was then available to meet those housing costs for other purposes – whether in paying other debts (of which there was no evidence, save as to £3,909 owed to American Express and £2,800 owed in respect of overpaid housing benefit) or in pursuing a speculative inheritance. When set in that context it is, I think, clear that - in the passages which may have given rise to the judge's concern - the authority was doing no more than point out that the need to make provision for his increased housing costs out of the monies borrowed at the time of the remortgage in June 2002 was obvious and that, if the applicant found himself in financial difficulties in March 2003, those difficulties arose from his deliberate decision not to do so.

The judge accepted that, if that was the basis on which the authority had reached its decision that the applicant was intentionally homeless, that decision could not be challenged. It follows that he must be taken to have accepted that – on that basis – the authority was entitled to reach the conclusion (which it expressed in the review decision) that, in March 2003, the accommodation at the property was available and that it was reasonable for the applicant to continue to occupy it. There is no cross appeal on that point.

It follows that I would allow this appeal and set aside the order of 3 August 2005.

Post script

I should add this. It is plain that, when Lord Justice Neuberger gave permission for a second appeal in this matter on 1 November 2005, he did not know that – following the judge's order of 3 August 2005 quashing the review decision of 20 April 2005 - the authority had already carried out a further review of the decision notified on 1 March 2005. It is clear that the authority took the view that section 202(4) of the 1996 Act required it to do so in the circumstances that a request for review of the decision of 1 March 2005 had been made under section 202 of the Act and (following the order of 3 August 2005) there was no subsisting review decision in response to that request. It is also clear that both parties thought that the further review had to be carried out within eight weeks of the order of 3 August 2005 – either because that was what regulation 9(1) of the Review Procedures Regulations 1999 actually required in the circumstances or because that would be the limit of 'a reasonable time' by analogy with those regulations. In the event, a further review decision was notified to the applicant by letter dated 28 October 2005.

It seems to me unsatisfactory that an authority which is seeking to uphold a review decision which has been quashed by the county court – by an appeal to this Court - should be required, while that appeal (or an application for permission to appeal) is pending, to carry out a further review of the original decision; and doubly unsatisfactory if (as in the present case) the decision reached on that further review is itself made the subject of another appeal to the county court under section 204 of the Act. I can see no reason in principle why, in a case where an application for permission to appeal, or an appeal, from a review decision is pending in this Court, the parties should not take the sensible and obvious course of agreeing that performance of the duty imposed on the authority by section 202(4) of the Act should await the outcome of the application, or the appeal (as the case may be) : nor, if the parties will not take that sensible and obvious course, why the authority should not invite this Court (on the application for permission to appeal) to stay the effect of the order quashing the first review decision until after that application, or the appeal, have been determined.

Be that as it may, it seems to me to be verging on abuse for an authority to pursue an application for permission to appeal, or an appeal, without informing this Court that it has, in fact, carried out a further review and taken a further decision. That knowledge might well have led Lord Justice Neuberger to refuse permission to appeal: undoubtedly it would have been relevant to his decision whether or not to grant such permission. And, if this Court had been told, before it commenced hearing this appeal, that there was a further review decision which was itself under appeal in the county court (rather than learning of that at a late stage in the hearing), it might have taken the view that it was wrong to entertain this appeal; on the basis that the more appropriate course was to allow the matter to continue along that other route. In the event, we did not take that course: by the time we learnt of the true position it seemed more sensible to proceed to a determination of this appeal.

I mention these matters in order that local housing authorities, and those who advise homeless applicants, should be on notice that the situation which has been allowed to arise in the present case is unacceptable. It should not be allowed to arise in the future.

Bellamy v London Borough of Hounslow

The underlying facts

Ms Bellamy applied to the London Borough of Hounslow for accommodation and assistance under Part VII of the 1996 Act on 18 May 2004. She did so on the day that the property, 15 Benham Gardens, Hounslow, in which she had been living since 1985 was sold. She told the authority that her mother had sold the property and moved to Barbados – leaving her homeless. Her application was supported by a letter, dated 17 May 2004, signed by her mother, Mrs Josephine Simon, which was in these terms:

"With reference to my home 15 Benham Gardens . . . which has sold and now has a confirmed completion date of the 18^th May 2004.

My daughter Donna Simon has lived in my home . . . since 1985 and has paid me 200 pound cheque in rent per month as a tenant, over the past ten years. Please note that she has no claim on the sale of my property and will be in need of council accommodation from Tuesday 18^th May 2004. . ."

Neither the applicant nor her mother disclosed to the authority, at the time of the application, that the property had been registered in their joint names; that they were joint borrowers and so jointly liable to make monthly payments under the mortgage which had been taken out when the property was acquired; that the mother had moved to Barbados in 1998; and that the applicant had authorised the solicitors acting in the sale to pay to her mother the whole of the net proceeds (£162,267).

When those matters came to the attention of the authority they interviewed the applicant. They asked her why she had agreed to the sale of the property in circumstances that she knew that, upon sale, she would become homeless. She told the authority that she had assumed that "the council would be able to help me with a house". She agreed that the title deeds were in joint names and that, "on a legal basis", by agreeing to the sale she was giving up her share of the property. But she went on to say that: ". . . the family didn't see it that way. I have always thought of the property as my Mum's house".

On 3 August 2004 Mrs Pretorius, an officer in the authority's housing department, took a telephone call from Mrs Simon (then in Barbados). The note on the authority's file records that Mrs Pretorius was told that she, Mrs Simon, had added her daughter's name to the mortgage because "she was concerned that if anything happened to her and the house had to be sold she wanted to ensure that Donna received half the house".

The authority took the view that the applicant had become homeless intentionally. They notified the applicant of their decision in a letter dated 4 August 2004. They told her that they accepted that she was eligible for assistance under the Act, homeless and in priority need; but that they were satisfied that she had become homeless intentionally. . . "because you were the legal joint owner of this property [15 Benham Gardens] with your mother and you therefore had legal rights to prevent the sale". They wrote:

"It would have been reasonable for you to contest the sale and remain living in the property. You also agreed to pay your share of the equity from the sale of that property to your Mother . . . rendering you homeless and not in a financial position to secure your own alternative accommodation."

On 18 August 2004 the applicant requested a review of that decision. Her letter of that date emphasised that she considered that the property had belonged to her mother. She told the authority that the title (and the mortgage) were in joint names because "My Mum said this would help when she went away to Barbados in case anything happened to her". She enclosed a note from her mother of the same date sent by fax from Barbados. In that note Mrs Simon explained that "one of the reasons why I put Donna name on the property" was that, at the time, "Donna was a very healthy and positive daughter and as I was alone I thought if something happened to me she can carry on", with the help of her two siblings. A further reason was that "I was playing with the idea that I would return home as I was so fed up of London and the hardship and I wanted to be with my family." She went on to say that she had made the decision to sell because the property was run down and her daughter could not afford to maintain it. She wrote: "Donna knew that the property was never hers and I realize I had made a mistake to put her name on the property."

The panel met on 10 September 2004 to review the decision of 4 August 2004. The result of that review was notified by a letter dated 14 September 2004. After setting out the information which the review panel had taken into account, the letter continued:

"Having considered and balanced this information, the Panel has concluded that your current state of homelessness is a result of your decision to sell your jointly owned property without securing further long term accommodation for you and your household. Your mortgage lender and your solicitors have provided written confirmation that you received an equity of £162,266.99 between yourself and your mother, £81,133.49 each. The Council is satisfied that you are intentionally homeless as defined in Section 191(1) of the Housing Act 1996 (as amended by the Homelessness Act 2002) . . ."

There are then set out what the writer described as 'reasons of satisfaction'. Those reasons may be summarised as follows: (i) the applicant had cooperated fully in applying, in 1988, for a mortgage to assist in the purchase of 15 Benham Gardens; (ii) it would have been reasonable for the applicant to continue to occupy that property, having regard to the fact that (after the applicant's mother returned to Barbados) the applicant had let part of the property to help cover the cost of the mortgage repayments; (iii) the applicant's homelessness was caused by "your deliberate act of advising your solicitors to pay your share of the equity of £81,133.49 to your mother"; (iv) that deliberate act was made "by your free will" – there was no evidence to suggest that "you were forced to make such a decision or coerced to give your share of the equity to your mother". The letter concluded:

"Taking all the information into consideration together with the requirements of the housing legislation the Council are satisfied that you are 'Intentionally Homeless' due to a result of a deliberate act by yourself of agreeing to hand over your 50% share of the proceeds of the sale of your property to your mother Mrs J Simon by your free will. You were entitled to £81,133.49 for the sale of the property."

The applicant lodged an appeal from that decision under section 204 of the 1996 Act. In support of that appeal the applicant made a witness statement, dated 27 September 2004, in which she said this:

"2. Prior to presenting myself at the Homeless Persons' Unit for housing assistance, I was living in a property 15 Benham Gardens, Chiswick, W4 5JZ and this was a property that I considered as belonging to my mother. My mother purchased this property in August of 1988 and at this time I was only 18 years of age. My mother made the decision to include me as a joint owner of this property, even though I did not financially contribute and I never considered this property as belonging to myself and my mother. My mother had put all her life savings into this property and she considered this to be her retirement nest egg. After purchasing the property sometime in 1989, my mother returned to Barbados and she left myself and my brother living in the property.

3. The mortgage repayments for this property were around £489 per month and I had an arrangement with my mother where I paid her rent of £200 per month and she then supplemented the rest and paid this towards the mortgage.

4. During the time I was living at this property, my mother explained to me that she started to experience some financial problems and, as a result, had made the decision that she was going to sell her property and take her money back with her to Barbados. I did not feel that I had any power at all to stop her from doing this, as I had always considered that this property belonged to my mother. I did not believe that, as a daughter living in that property and not having contributed financially to the purchase of the property or considering myself to have any responsibility for the mortgage that I could have an interest and that I could stop her from selling this property. I therefore did not raise any objections and, as a result, my mother proceeded with the sale of the property and she paid off the outstanding mortgage of £41,805.72 to Birmingham and Midshires Building Society. She also paid off a number of other debts. . . . She had a remaining balance of £162,266.99 which she then took with her to Barbados."

The statement does not explain why the applicant, who had been a joint borrower of the funds advanced on mortgage for the purchase of the property and a person jointly liable to repay the monies secured by that mortgage, took the view that she had no responsibility for the mortgage debt. And, given that she was a joint borrower in respect of the mortgage monies, her statement that she had made no financial contribution to the purchase of the property must be understood as limited to her having made no contribution to the balance of the purchase price.

While the appeal against the authority's decision was pending the authority decided to withdraw the decision letter of 14 September 2004 and to carry out a further review of the decision notified on 4 August 2004. The authority gave as the reason for that further review: "to ensure Ms Bellamy that all the points raised in her appeal and witness statement dated the 27^th September 2004 have been fully addressed by the Council". The authority did not accept that the previous decision letter of the 14 September "was unlawful."

The review decision

The decision on further review was notified to the applicant by letter dated 15 November 2004. In that letter the authority set out the information which it had taken into account. That included the fact that the registered title was in joint names, the fact that there was no evidence that the applicant had contributed to the purchase of the property in 1988, and the fact that the applicant was paying £200 per month since 1994 "which could be viewed as, and for the reasons appearing below, the Council viewed as contributions to the mortgage repayments as a co-owner". The writer noted that "you have consistently stated that your and your mother's intention was that your mother would be in substance the sole owner of the property" and continued:

"The Council are satisfied that your mother's intentions in 1988 were that your mother was giving half the property to you, as her daughter, in order to set you up in life. Documentary evidence provided by Birmingham Midshires Mortgage lenders confirm that you had a legal right to the property under the legislation around joint home ownership. In addition to this, you mother has confirmed to this Council that she placed your name on the mortgage deeds, so you could deal with the sale of the property, 'should anything happen to her'. It is reasonable for the Council to conclude that this means you would obtain your share of the proceeds of the sale.

In the light of all this evidence, your statement that it was always intended that your mother was a sole owner of 15 Benham Gardens, Hounslow is rejected by this Council. I find that you were aware that you had a substantial interest in the property and that therefore you were aware that you had the right to object to the sale of the property.

The fact that the Birmingham Midshires or any other creditors did not take steps to obtain possession of the property as well as your financial ability to pay £200 per month to your mother, satisfies the Council that it was reasonable for you to 'continue to occupy' the property and the decision to sell the property was entirely a decision amongst the joint owners of the property.

Having considered and balanced this information, the Panel has concluded that you ceased to occupy 15 Benham Gardens, your last settled accommodation because you consented to the sale of the property. The Council has taken into consideration the point which you raised in your witness statement, that 'you did not believe you had the power to stop your mother from selling the property' but rejects this. The Council is satisfied that you were aware of all relevant facts.

Taking all the above information into consideration together with the requirements of the housing legislation the Council are satisfied that you are 'Intentionally Homeless' due to the result of your deliberate act in consenting to the sale of the property which the Council are satisfied that you had a financial beneficial interest in."

The effect of that letter was to confirm the decision, notified to the applicant on 4 August 2004, that the authority were satisfied that she had become homeless intentionally.

The appeal to the Brentford County Court

The applicant appealed to the county court from both the original decision notified on 4 August 2004 and from the review decision of 15 November 2004. For my part, I doubt whether section 204 of the 1996 Act confers a right of appeal from the original decision in circumstances where there has been a review decision under section 202 of that Act. The reference, in section 204(1), to an appeal from the original decision – in the context of the phrase "an appeal . . . arising from the decision [on the review] or, as the case may be, the original decision" – is, as it seems to me, included in order to make it clear that there can be an appeal from the original decision in the case (for which paragraph (b) of that sub-section provides) where the decision on the review has not been notified within the period prescribed under section 203 of the Act. Be that as it may, when the appeal came before His Honour Judge Marcus Edwards, on 6 September 2005, he treated it (correctly, as I think) as an appeal from the review decision of 15 November 2004.

The grounds of appeal were set out in an attachment to the appellant's notice under a number of paragraphs; but, in substance, there were two – (i) that the authority's conclusion that the applicant had a beneficial share in the property was perverse and so wrong in law and (ii) that the review panel had failed to give any reasons for rejecting the applicant's contention that she had no beneficial interest. But it may be that the second of those grounds was not pursued at the hearing before the judge: in paragraph 1 of the judgment which he delivered on 6 September 2005, he identified, as the sole issue on the appeal, whether the authority's decision that the applicant had a beneficial interest in the property was "obviously perverse".

The judge was conscious of the need for caution in a case where (as he put it) "joint owners sell a dwelling house in this country and the proceeds of sale, save for payment of a few debts, are sent overseas in circumstances where one joint owner is living overseas and the other joint owner makes a claim to be housed here as unintentionally homeless". He reminded himself of the passage in the speech of Lord Brightman in R v Hillingdon London Borough Council, ex parte Puhlhofer [1986] AC 484, 518, which I have set out earlier in this judgment. And he observed that "the test of obvious perversity is a very strict one".

The judge then addressed what he saw as the "important paragraphs in the review decision". His conclusions may, I think, fairly be summarised as follows:

(1) He accepted that it had been proper for the authority to take account of the fact that the applicant had been paying to her mother £200 per month since 1994 "which could be viewed as, and for the reasons appearing below, the Council viewed as contributions to the mortgage repayments as a co-owner". But he observed that payment of the £200 per month was "equivocal and consistent with the defendant being not a co-owner but a tenant.".

(2) He referred to the information, provided by the applicant's mother on 3 August 2004, that the applicant's name had been put on the title because Mrs Simon was concerned that "if anything happened to her and the house had to be sold she wanted to ensure that you received half the house"; and to the authority's view that it was the mother's intention that the applicant should benefit from the sale of the property. But he went on to say this (at paragraph 10 of his judgment):

"10. In my judgment the words quoted of the mother are not the same as saying that the applicant was to have an immediate, present, half share in the equity of the house as from 1988. Her words 'if anything happened to her' amounted in technical terms to a condition subsequent, which in the event did not occur. That is far from saying that the mother's intention or presumed intention was that the appellant should receive there and then a half share in the equity of the house."

(3) The judge then set out the first of the paragraphs in the passage which I have extracted from the decision letter at paragraph 54 of this judgment. He observed (at paragraphs 12 and 13 of his judgment):

"12. In my judgment there was no evidence before the respondents from which they could infer that the mother was giving half the property to the appellant, whether 'in order to set you up in life' or at all. It is true that the documentary evidence confirmed that the appellant had a legal right to the property, she was on the title and she was a co-mortgagor. The respondents go on to say that the mother had told the Council that she had placed the appellant's name on the mortgage deeds so that the appellant could deal with the sale of the property 'should anything happen to her'. In my judgment, it does not follow from that piece of evidence, or anything relating to it, that it was reasonable for the Council to conclude that that meant that the appellant would obtain her share of the proceeds of the sale.

13 It seems to me, reading the review decision as a whole, that the respondents did not consider the possibility that the appellant was a bare trustee. Indeed they may not even have been aware that that was a possibility from what is said later in the review decision. The purpose of appointing a bare trustee is a pragmatic one; the trustee can deal with the property in the event that anything happens to, in this case, the mother. A bare trustee would have had to do exactly what the appellant in fact did, namely, to deal with the property as requested by the mother, to agree and co-operate in the sale and agree to remit the proceeds of sale to the mother. The respondents seem not to have considered this possibility. The words 'should anything happen to her' again amount to a condition subsequent which never eventuated. The words rebut any idea or presumption of gift by the mother to the appellant of a present half share in the equity of the property."

(4) The judge then set out (at paragraphs 14, 15 and 17 of his judgment) the remaining paragraphs of the passage which (at paragraph 54 of this judgment) I have extracted from the review decision. He commented on those paragraphs:

"14. . . . In my judgment, there is no evidence from which those inferences of awareness or knowledge could be made. Further, the appellant had no 'right to object to the sale of the property'. If one joint owner wishes to sell the other joint owner is compelled to comply, subject to the latter's rights, if any, to a share in the equitable interest. In my judgment this misunderstanding, as I find it to be, by the Council as to her rights must have influenced the respondents' thinking because if they thought that she had the right to object to the sale when she did not they were under a misunderstanding as to the law.

15. . . .

16 Counsel for the respondents do not explain in what way it was reasonable for the appellant to 'continue to occupy' the property. The mother was entitled to sell it. The appellant could not thereafter 'continue to occupy' the property. It is true that if she had a beneficial half interest enforceable against the mother she could have obtained half the sale proceeds, but that is a different matter. Again, it seems to me that if they thought this way those thoughts must have influenced the respondents in coming to the decision which they did.

17. . . .

18. As I have already stated, the appellant was obliged to consent to the sale of the property if the mother wished to sell it. There was no voluntary aspect to this matter which could be held against the appellant. The appellant told the respondents that she did not have the power to stop her mother from selling the property and she was right to do so. It seems to me that there may be a misunderstanding as to the law on the part of the respondents in rejecting that proposition. When the Council say that they were satisfied that 'you were aware of all the relevant facts' I am not sure what those words mean, but I am satisfied there has been a genuine misunderstanding here about the legal position of the appellant."

It might, perhaps, be said that in addressing the question whether (if the applicant did have a beneficial interest in the property) she could, nevertheless, have been obliged to concur in a sale at her mother's request – as he did in the paragraphs which I have just set out – the judge was going outside the grounds of appeal in the appellant's notice. It is difficult to see how his conclusion that "if one joint owner wishes to sell the other joint owner is compelled to comply, subject to the latter's rights, if any, to a share in the equitable interest." falls within "the sole issue" which he had identified in paragraph 1 of his judgment. And it may be that the judge's decision to address an issue which was not raised in the grounds of appeal provides the explanation for the absence of any reference, in his discussion of that issue, to the provisions in sections 14 and 15 of the Trusts of Land and Appointment of Trustees Act 1996; although those provisions had been mentioned in the skeleton argument put before him on behalf of Ms. Bellamy.

The judge expressed his conclusion at paragraphs 19 and 20 of his judgment:

"19. In my judgment, the respondents were not entitled to make the inferences which they did on the evidence before them so as to conclude that the mother intended to give the appellant a half share of the equity in the property in 1988, nor is there any evidence on which they were entitled to reject the appellant's statement that it was always intended that the mother should be the sole owner of the property. Further, the respondents seem not to have considered or to have misunderstood at a number of points the appellant's position in law as joint owner of the legal title.

20 . In my judgment, the conclusion to which the respondents came and the reasoning by which they came to it was 'obviously perverse', consciously or unconsciously, in the context of ex parte Puhlhofer."

The judge then invited submissions as to the relief which he should grant: that is to say, whether he should quash the review decision and remit the request for review to the authority for further consideration or should vary the review decision so as to make a finding that the applicant was not intentionally homeless. He decided on the latter course; notwithstanding his acknowledgement that "that is a draconian step to take". He did so for the reason which he gave at paragraph 23 of his judgment:

". . . it would be futile to remit this matter for further consideration as only one outcome can reasonably be expected on the evidence before the respondents and before the court, as set out very fully in the appeal bundle, and that is: there is no evidence to support the finding that she was intentionally homeless. The evidence goes the other way, which is that what happened was that she was made unintentionally homeless when her mother had the property sold and the proceeds remitted to Barbados."

The order which the judge made on 6 September 2005 reflects that decision. It directs that the review decision of 15 November 2004 be varied so as to declare that the applicant did not become homeless intentionally.

This appeal

The authority appeals from the order of 6 September 2005. The grounds of appeal, set out under seven paragraphs in the appellants' notice, are summarised more succinctly at paragraph 2 of the skeleton argument. It is said that the judge was wrong to hold that the authority had erred in law. He was wrong to hold: (a) that it was obviously perverse for the authority to infer, contrary to statements made by the applicant, that, when the property had been conveyed into joint names in 1988, it had been Mrs Simon's intention to give the applicant a half share in equity; and (b) that the applicant's consent to the sale was involuntary on the basis that she was bound, as a matter of law, to give effect to her mother's wish that the property be sold.

It is, I think, impossible to support the judge's conclusion that, as a matter of law, if one joint owner wishes to sell property, the other joint owner is compelled to comply with that wish. Whatever may have been the position before the Trusts of Land and Appointment of Trustees Act 1996 – as to which, see In re Buchanan-Wollaston's Conveyance [1939] Ch 738 and Jones v Challenger [1961] 1 QB 176 – the position since that Act is that, on an application for an order that trustees of land concur in a sale, the court may make such order as it thinks fit: section 14(2) of that Act. In deciding what order to make the court is to have regard to the matters in section 15(1) of that Act. Those matters include (a) the intentions of the person or persons who created the trust, (b) the purposes for which the property subject to the trust is held and (c) the welfare of any minor who occupies or might reasonably expected to occupy any land subject to the trust as his home. The court will also have regard, of course, to the respective beneficial interests (if any) of those who seek (and of those who resist) a sale. It is pertinent to have in mind that a person who is beneficially entitled to an interest in possession in land subject to a trust of land (as defined in section 1 of the Act) is entitled by reason of his interest to occupy the land if the purposes of the trust include making the land available for his or her occupation: section 12(1) of that Act.

Had the judge accepted the authority's decision that the applicant was entitled to a half share in the property, he could not – as it seems to me – have gone on to hold that, as a matter of law, the applicant was bound to concur in a sale of the property. Nor could he have held that that it was inevitable that a sale would be ordered on an application to the court under section 14 of the Trusts of Land and Appointment of Trustees Act 1996. He would have been bound to accept that the authority's view – that it would have been reasonable for the applicant (who was about to bear a child) to remain in the property and contest any application for sale which the mother might make – was not open to challenge on the grounds of 'obvious perversity'. It was a view which a reasonable authority, directing itself correctly as to the law, could take.

The authority had rejected the applicant's contention, raised in her witness statement of 27 September 2004, that she believed that she had no power to stop her mother from selling the property. It is, I think, reasonably clear that the basis upon which the judge held that the authority were wrong to reject that contention was that they were mistaken in their view of the law. He thought that the applicant was correct in her belief that she had no power to stop her mother from selling the property; and that the authority were bound to accept that. If that is a correct analysis of the judgment on this point, the judge never considered the question whether the authority were entitled to reject a contention that (in effect) the applicant was under a genuine mistake as to her rights. That question was not raised in the grounds of appeal before the judge; and is outside the scope of the 'sole issue' which he identified. For my part, I can see no basis upon which the judge could have held that it was not open to the authority, who had interviewed the applicant, to hold that they did not believe her when she told them that she thought she had no power to object to a sale. That was a question for them.

I turn, therefore, to the question whether it was open to the judge to hold that the authority's decision that the applicant was entitled to a half share in the property – or to any beneficial interest in the property – was perverse, or (as the judge put it) 'obviously perverse'. It is important to have in mind the basis upon which the authority reached the conclusion which they did.

The authority regarded as significant the fact that the property was transferred into joint names on acquisition and the fact that the property was acquired with the assistance of a loan secured by a joint mortgage. They were, if I may say so, plainly entitled to regard those facts as significant. As this Court pointed out in Stack v Dowden [2005] EWCA Civ 857, [17], [25], where property has been transferred into joint names, it can usually be taken for granted that each was to have some beneficial interest in the property. Why should the property be conveyed into the name of someone who was to have no beneficial interest? A fortiori where each of the transferees assumes liability for the mortgage debt. Why should someone assume liability for the debt if he or she has no interest in the property? Of course, there may be answers to those questions. But there can be no doubt that they are questions which demand an answer.

The authority took the view that the answer was to be found in what they were told by Mrs Simon, both in telephone conversations and in writing. She had told them, in the telephone conversation on 3 August 2004 to which the review decision refers, that she had put the applicant's name on the title because 'she was concerned that if anything happened to her and the house was sold she wanted to ensure that [the applicant] received half of the house'. The authority took that as evidence that it was Mrs Simon's intention, at the time of the acquisition, that the applicant should have an equal beneficial share. That may or not have been a correct understanding as to what they were being told; but it cannot properly be characterised as 'perverse'. The judge was wrong to hold that "there was no evidence before the respondents from which they could infer that the mother was giving half the property to the appellant".

The judge's view was that, on a proper understanding of what they were told by Mrs Simon, the authority should have concluded that her intention that the applicant should have a half share was not to have effect until sometime in the future – "should anything happen to her". As the judge put it, those words "amounted in technical terms to a condition subsequent, which in the event did not occur": and "the words rebut any idea or presumption of gift by the mother to the appellant of a present half share in the equity of the property."

To my mind that is an artificial construction to put on the words used. It seems to me that a more natural interpretation of those words is that the applicant was to have a half share "should anything happen to me and the property has to be sold". At the time (1988) it is likely to have been in the contemplation of both mother and daughter that they would live together in the house until something should happen to Mrs Simon which led to the need to sell. But it is immaterial what I might think Mrs Simon meant; just as it is immaterial what the judge thought Mrs Simon meant. That was a question for the authority. The authority had had the advantage of hearing what was said in the context in which it was said; that is to say, in context of the telephone conversation on 3 August 2004. The question for the judge was not "what did Mrs Simon mean". The question for him was "was the authority obviously wrong in their understanding of what Mrs Simon meant". Although, earlier in his judgment, the judge had directed himself, correctly, that "the test of obvious perversity is a very strict one", it is difficult to avoid the conclusion that he had overlooked that direction when he came to address the question whether the authority were entitled to reach the decision as to beneficial interest which they did.

It is, perhaps, appropriate to add, for the avoidance of doubt, that I should not be taken to have decided that the authority was 'right' – in the sense that, if the decision had been made by a court in contested litigation between mother and daughter, an appellate court would uphold that decision – to decide that the applicant was entitled to a beneficial half share in the property. That is not the question before this Court on this appeal. For what it is worth, my provisional view, on the material before the Court, is that it would be surprising if, in contested litigation between mother and daughter, the daughter were held to have no beneficial share in the property. But, again, that is not a question which I need to decide. The relevant question is not whether the authority was 'right' – in the sense described – but whether it was open to them to reach the decision which they did. I have no doubt that that question must be answered in the affirmative.

The applicant has sought to support the judge's decision not only on the basis of the reasons which the judge himself gave but also on the basis of other grounds, set out (or to be set out) in a proposed respondent's notice which she seeks to file out of time and developed in the skeleton argument filed by counsel on her behalf. In the course of the hearing we indicated that we were not minded to give permission to file the respondent's notice. For my part, I would not refuse permission simply on the grounds of delay – although there has been substantial delay for which no adequate explanation has been given – but because the additional grounds on which the applicant seeks to rely were not raised on the appeal to the judge. Had those matters been raised at the proper time, the authority would have had the opportunity to meet them with evidence; and this Court would have had the benefit of the judge's findings on that evidence. To permit those matters to be raised at this stage would lead either to the need for this Court to make findings of fact – which it should be reluctant to do – or to the need to remit the matter to the county court so that that court can make the findings of fact which it could and should have been asked to make at the first hearing. In my view the latter course would be a disproportionate use of resources. On an appeal under section 204 of the Housing Act 1996 an applicant should bring before the county court all the matters on which he or she wishes to rely by way of challenge to the review decision.

In reaching that conclusion I have not overlooked the force of the criticism that the authority failed to make certain obvious inquiries as to the circumstances in which the property was acquired in 1988. The property was, it seems, acquired from the Council under the right to buy provisions in Part V of the Housing Act 1985. The starting point in any inquiry as to the beneficial interests of parties into whose joint names property has been transferred should be an examination of the transfer itself. It is in the transfer itself that the purchasers may be expected to declare what their beneficial interests are to be. And it might be expected that, where the property has been acquired from the Council, the authority will have no difficulty in obtaining a copy of the transfer for examination. In the present case there is nothing in the review decision to suggest that that obvious inquiry was made; or (if not) why it was not made. But that point was not taken before the judge on the section 204 appeal.

Had the point been taken the authority would have had an opportunity to meet it. It is reasonable to suppose that they would have put before the judge the material which they have now put before this Court. It is said that the purchase file (which had been reduced to microfiche) would have taken considerable time and effort to obtain. It would have been for the judge to consider whether that was a reasonable ground for not obtaining it. But, perhaps more pertinently in the present context, examination of the purchase file would have shown (i) that the transfer contained no declaration as to the trusts on which the property was to be held, but (ii) that in answer to the mortgagee's requisition on title – "what legal and equitable interest in the property has each of [the mortgagors]" – the solicitors then acting for Mrs Simon and the applicant replied: "beneficial owners". I am satisfied, therefore, that the applicant has suffered no prejudice by reason of the authority's failure to examine the purchase file in the course of their review under section 202 of the 1996 Act. Had they done so, their view that the applicant was intended to have a beneficial interest in the property would have been confirmed.

I would allow this appeal and set aside the order of 6 September 2005.

Conclusion

In my view each of the appeals before the Court should be allowed. The order of 3 August 2005 (in William v London Borough of Wandsworth) and the order of 6 September 2005 (in Bellamy v London Borough of Hounslow) should each be set aside. The review decisions of 20 April 2005 and 15 November 2004 (respectively) should be restored. It will follow that the decision of 28 October 2005 made by the authority in the William case is of no effect.

Lord Justice Sedley:

I agree with the judgment of Lord Justice Chadwick in relation to both appeals. In the case of London Borough of Hounslow v Bellamy, however, I want to add a word about the practice of filing witness statements in support of applications for permission to appeal to this court, particularly but not only where a second appeal is involved.

In the present case Neuberger LJ had before him not only Hounslow's grounds of appeal and skeleton argument but an accompanying witness statement of an officer of the council's homeless persons unit. This statement sets out, in addition to some undoubtedly relevant facts, a series of contentions in support of a second appeal which belong, if anywhere, in counsel's skeleton argument. It also includes some self-regarding remarks on behalf of the local authority which constitute neither evidence nor argument. Its final section makes suggestions about a judicial attitude or culture at Brentford County Court which Mr Hutchings has now, correctly, withdrawn.

In Cramp v Hastings BC, Phillips v Camden LBC [2005] HLR 786 another division of this court had before it a local authority officer's witness statement in support of an application for permission to bring a second appeal. The statement evidently contained a number of potentially material assertions of fact, and it is no doubt for this reason that no issue was taken on its admissibility.

Practitioners should nevertheless be conscious of an amber light here. First, witness statements are a proper vehicle for relevant and admissible evidence going to the issue before the court, and for nothing else. Argument is for advocates. Innuendo has no place at all. Secondly, where evidence is filed in support of an application made without notice, fairness requires it to be sent to the intended respondent. This court has power, where appropriate, to admit evidence or argument in response before deciding whether permission to appeal should be granted.

But here too restraint is needed. As Mr Luba has pointed out in the course of a helpful exchange of written submissions on this issue, many intended respondents, notably in this field, will be without legal representation or advice at the time when permission to appeal is sought. Such people will be at a disadvantage in dealing with a witness statement which is to be relied on in an endeavour to overturn a judgment which they have secured. This places on those preparing and submitting such evidence a particular responsibility to ensure that it is relevant to the specific question whether permission to appeal should be granted, and that it is not argumentative and so far as practicable not contentious.

Lady Justice Arden:

I also agree.