England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM IPSWICH COUNTY COURT
(HIS HONOUR JUDGE THOMPSON)

		Royal Courts of Justice Strand, London, WC2A 2LL
		8th February 2007

Lord Justice Laws:

1. This is an appeal with permission granted by Auld LJ on 26 September 2006 against the judgment of HHJ Thompson given in the Ipswich County Court on 12 May 2006, by which he dismissed the appellant's appeal against a review decision of the respondent Local Housing Authority. That decision had been taken on 7 March 2006 under section 202 of the Housing Act 1996. It was to the effect that the respondent Authority did not owe to the appellant a duty under section 193 of the 1996 Act to provide her with accommodation as a homeless person because she had become homeless intentionally.
2. The homeless persons legislation is now contained in Part 7 of the 1996 Act as amended by the Homelessness Act 2002. It is not necessary to cite the statutory scheme at any length. If an applicant for housing under the scheme is found to be in what is called priority need, a term of art whose definition however I need not set out, then there is a duty upon the local authority to provide suitable accommodation unless they are satisfied that the applicant is intentionally homeless. Section 191(1) provides:

"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 have been reasonable for him to continue to occupy."

3. Section 202(1)(a) confers a right upon an applicant to request a review of:

"any decision of a local housing authority as to his eligibility to assistance under the scheme."

4. Section 202 subsection (4) imposes a duty to conduct such a review on a request being made.
5. Section 204 (1)(a) confers a right of appeal to the County Court upon an applicant who is dissatisfied with the decision on such a review. It is well settled that the County Court's jurisdiction under section 204 is a statutory form of judicial review (see for example Nipa Begum v The London Borough of Tower Hamlets [2000] 1 WLR 306).
6. The outline facts of the case are as follows. The applicant is a married lady with five children. The family lived in a house in Ipswich which they rented from the respondent council. There was a history of rent arrears. In March 2004 the applicant and her husband bought the house with the aid of a mortgage. The monthly repayments were significantly higher than the rent they had been paying, though they were at an initially discounted rate. At first repayments were made but the rate of interest was raised. Then in August 2004 the applicant's husband lost his job. He found other work but at a much lower rate of pay. Thereafter, the applicant and her husband fell into arrears with the mortgage. By February 2005 the arrears were over £2,000. On 1 April 2005 the mortgagee took possession proceedings. On 17 May 2005 a possession order was made requiring the appellant and her husband to give up possession on or before 14 June 2005. On 7 June 2005 they applied to the respondent council for accommodation pursuant to Part 7 of the Act. They were provided with interim accommodation on 14 June 2005.
7. After making enquiries as by section 184 of the Act they were required to do, the respondent on 20 October 2005 wrote to the appellant indicating their decision under Part 7, which was to the effect that the appellant and her husband were homeless or threatened with homelessness and in priority need but that they had become homeless intentionally. The reasons given for that conclusion were as follows:

"During your tenancy with Ipswich Borough Council you persistently failed to pay and were late paying rent lawfully due, even though your income was sufficient to cover your rent payments. You made the decision to buy your council property knowing that you already have a problem with your finances. You had difficulties paying your rent for the duration of your tenancy. You accepted the mortgage offer despite the monthly repayments being higher than your existing rent, £100 per month more than the initial estimate of £300 and £50 per month more than the £350 you thought that you could reasonably afford. You also took out an additional home improvement loan for new windows, doors, kitchen, bathroom, fences, patio and landscape garden. You were aware that the interest rates could go up and were aware that your home was at risk if you failed to keep up repayments on the mortgage or other loan secured on it.

"The accommodation lost at 411 Nacton Road, Ipswich, was available and reasonable for your continued occupation and was suitable for your needs. The council is satisfied that you lost this accommodation as a result of your deliberate actions, that is, knowingly taking on a mortgage where you would be unable to meet the monthly repayments."

8. The appellant instructed solicitors and sought a review under section 202. The review decision was in the first instance given in a letter dated 18 January 2006. The reviewing officer, Mr Turner, upheld the original decision having reviewed the facts in some detail. It is not necessary to set out his conclusion, given the events which happened thereafter. The appellant's solicitors submitted a draft Notice of Appeal to the County Court. The respondent authority responded to that on 3 February 2006 by withdrawing Mr Turner's review decision. The solicitors made further representations on 23 February and 2 March 2006 and a further review decision was issued on 7 March 2006. Again the reviewing officer, this time Mr Howarth, went into the facts in some detail. He said this after describing various materials in the case:

"Applying all of the above information to the legal test and the guidance that I have to consider I have concluded that your client's deliberate act in taking out the mortgage and her deliberate omissions (in failing to properly consider the implications of the mortgage that she was taking out) were not made in good faith for the following reasons:

"1. It must have been obvious to them that they had been struggling to pay the rent for years, even after Mr Watchman's income stabilised in December 2002.

"2. The schedule of expenditure which they appear to have prepared was clearly unrealistic, based upon their continued inability to pay their rent and they must have known it was unrealistic because they had been written to by the council about their rent arrears on many occasions.

"3. They did not even follow their own opinion (which in itself was far too optimistic) that they could afford £350 per month, and instead agreed to take on a mortgage that they knew was going to cost them at least £404 per month.

"4. They must have known that they also had other considerable debts including between £8,000 and £15,000 of unsecured loans and Council Tax arrears.

"5. A fairly limited consideration of the mortgage offer would have revealed that the interest rate on the mortgage was variable (not fixed) albeit that it was harder for your client to discover and understand the calculations of the interest rate and the length of time for which the rate would be discounted.

"6. Your client has admitted being told that the interest rate would go up 'a bit' but seems to have failed to ask the obvious questions of 'when?' and 'by how much?'

"7. They borrowed £6,000 more than they needed to in circumstances where even on their own calculations they knew that they would be financially stretched."

9. Then Mr Howarth dealt with a question which the solicitors had complained had not been addressed in the first review decision, namely whether the "chain of causation" (that is of the family's homelessness) was broken by the appellant's husband losing his job. As to that Mr Howarth said this, and what follows is critical to the issues on the appeal:

"I have considered this question carefully. There are factors both for and against a conclusion that Mr Watchman's unemployment broke the chain of causation and thus constituted a new and separate reason for your client's homelessness.

"The factors which support a finding that the unemployment broke the chain of causation are:

"1. Between March 2004 (when the mortgage was taken out) and August 2004 (when Mr Watchman lost his job) the mortgage payments were made in full and it was only after Mr Watchman's unemployment that arrears started to accrue.

"The factors which support a finding that the unemployment did not break the chain of causation are:

"1. Your client's previous financial history (and in particular her rent payment history) revealed a lengthy history of inability to pay debts on time and in full.

"2. Your client's other financial commitments, including her arrears of council tax and her unsecured loans made it obvious that she would eventually struggle to pay the mortgage, which was, even at the outset, about £124 per month more than her rent had been.

"3. A proper analysis of your client's financial circumstances at the time the loan was taken out (as detailed above) reveal a family who had clearly drastically overstretched themselves.

"4. A proper analysis of the mortgage that she was taking on would have revealed a strong likelihood of the mortgage payments increasing significantly to a point where they became unaffordable.

5. The fact that the mortgage payments increased to approximately £548 per month by June 2005 (almost £200 per month than your client ever thought the family could afford) suggests that it was inevitable that your client would eventually get into severe financial difficulties resulting in the loss of their home.

"Having weighed all of these factors up, I have concluded that Mr Watchman's unemployment did not break the chain of causation. A proper analysis of your client's financial position when the mortgage was taken out, and a proper consideration of the financial commitment they were taking on, reveal to me that it was inevitable that your client would get into severe financial difficulties within a relatively short period of the mortgage being taken out. My conclusion is that Mr Watchman's unemployment simply accelerated this process but did not actually cause it."

10. The appellant appealed against that decision to the County Court under section 204 of the Act. As I have said, the appeal was dismissed by HHJ Thompson on 12 May 2006 and that was the decision now under appeal to this court. The learned County Court judge expressed the issues before him thus:

"10. The issues which the appellant puts before the court are: (a) whether in deciding what the real and effective cause of the appellant's homelessness was, Mr Howarth misdirected himself by asking himself whether the appellant would have become homeless had her husband not lost his job in August 2004; (b) whether Mr Howarth's decision of the real and effective cause of the homeless was the taking out of a mortgage in March 2004 on the basis that that was Wednesdbury unreasonable and (c) if the court is satisfied that the secondary decision was unlawful, whether the court should grant the appellant relief and, if so, what relief…"

11. After a careful review of Mr Howarth's decision and the opposing arguments of the parties the judge found in favour of the respondents on the first two issues he had identified. Accordingly, the third issue (relief) did not arise and the judge dismissed the appeal.
12. The formulation put forward by Mr Carter of counsel for the appellant of the issues arising on the appeal precisely mirrors the first two issues articulated in the judge's judgment at paragraph 10 which I have read, as set out at paragraph 35 of Mr Carter's skeleton.
13. On the first issue thus formulated, Mr Carter says in paragraph 38 of his skeleton that Mr Howarth looked at factors which were in truth irrelevant to the question of a break in the chain of causation. Mainly he asked himself what would have happened if the appellant's husband had not lost his job; and he looked at the family's rent history and finances when the mortgage was taken on. On the second issue Mr Carter says that the five factors relied on by Mr Howarth as tending to show that the husband's unemployment did not break the chain of causation were not in truth relevant to that question. They were only relevant to the question whether taking on the mortgage in March 2004 was a deliberate act for the purposes of Section 191.
14. Before addressing the issues I should refer to the decision of their Lordships' House in Din v Wandsworth London Borough Council [1983] 1 AC 657, which was referred to the judge and figures in counsel's arguments. In that case a family were in financial difficulties and arrears of rent but because no proceedings had been commenced by their landlord, the local housing authority advised them to stay put. Against that advice they left the premises where they were living and moved into unsuitable accommodation. It was accepted that the landlord would probably have evicted them a few months later in any event. They applied for accommodation as homeless but the local authority decided that their homelessness was intentional. Their Lordships, Lord Russell of Killowen and Lord Bridge of Harwich dissenting, held that the council's decision was lawful. The reasoning of the majority is, if I may respectfully say so, crisply summarised in the headnote thus (page 657 g, h):

"In deciding whether the appellants became homeless intentionally, the housing authority had to look to the time of their action in leaving the accommodation they occupied and a subsequently hypothetical cause of homelessness did not supersede the actual cause represented by their action."

15. Mr Carter relies on the proposition that the material date for determining whether a person had become homeless intentionally was the date when the applicant actually left the accommodation. This, he says, supports his submission that Mr Howarth did not properly fulfil this exercise. Had he done so, he would have been driven to conclude that the cause of the family's homelessness was the husband's loss of his employment.
16. Now with great respect there is no reason in any way to cavil at the conclusion that the time of the homelessness occurring is the focus for the purposes of Section 191. But there is nothing in Din, as I see it, to suggest that anterior events may not be relevant, nor that an event of homelessness, like many events in the conduct of human affairs, may not have multiple causes. There is nothing to show in my judgment that Mr Howarth shut his mind to what happened at the time when the appellant became homeless; on the contrary, it is clear that he had regard to the whole picture. Did he make a legal mistake in addressing the question of a break in the chain of causation?
17. First, it seems to me the court needs to be cautious in dealing with these causation questions. In R v Hackney LBC ex p Ajayi [1997] 30 HLR 473, 479 approved by this court in Bellamy [2006] EWCA Civil 535 para 15, Dyson J, as he then was, said this:

"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 do so only 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."

18. Secondly, although expressions such as breaking the chain of causation have a longstanding currency in the law, they sometimes obscure more than they illuminate. The decision maker is looking for a substantial cause of the homelessness. Where more than one factor is at work in producing a particular event, here homelessness, and the court or other decision maker is enjoined by statute, here section 191, or by common law rule to decide whether a particular cause is to be attributed to the event in question, it will generally be necessary to consider the purpose and context of the relevant legal provision in arriving at a choice between one candidate for the role of cause and another.
19. One may see such an approach at work for example in a very different legal context from the present, namely the ascription of responsibility in tort for the development of mesothelioma cancer in cases where there are multiple defendants or potential defendants. I refer to Lord Bingham's speech in Fairchild [2003] 1 AC 32, not least where he cites a passage from the opinion of Lord Hoffmann in Environment Agency v Express Car Company [1997] 2 AC 22, 29. I need not, with respect, set it out.
20. Put broadly, the thrust of section 191 is to ascribe intentional homelessness to a person who on the facts is responsible for his homelessness by virtue of his own act or omission. This has to be borne firmly in mind in assessing Mr Howarth's conclusions in this case.
21. I also note the approach adopted in Longmore LJ's judgment in this court in Stuart v Lambeth Borough Council [2002] HLR page 40, citing Mr Richards QC as he then was in Ex Parte R [1997] 29 HLR 939, where a test of reasonable likelihood is discussed and applied.
22. What is called for, then, in a case where there are potentially multiple causes of an applicant's homelessness, is a careful judgment on the particular facts looking to see whether homelessness is shown to have been a likely consequence of the applicant's deliberate act, bearing in mind that it is the applicant's own responsibility for his homelessness that the statute is looking for. The precise question to be asked and answered of course relates to the time when the applicant in fact became homeless; that is the result of their Lordships' decision in Din. Adopting that approach, as it seems to me Mr Howarth was plainly entitled to consider what would have happened if the appellant's husband had not lost his job and to have regard to the family's rent history and finances at the time the mortgage was taken on.
23. Their Lordships' decision in Din shows nothing to the contrary. I do not accept that Mr Howarth has asked himself the wrong question. He has taken into account the antecedent history in deciding whether the appellant was made homeless, at the time she was made homeless, by virtue of her own act. That conclusion is not displaced by Mr Howarth's observation that the husband's unemployment accelerated the process. Mr Howarth was rightly considering whether the assumption of the mortgage was a substantial cause of the homelessness when it happened.
24. As I have indicated the essence of Mr Carter's case, elegantly developed this morning, is that the only cause of the appellant's homelessness on the facts here, at the particular time when that happened, was her husband's losing his job; but on that footing the whole antecedent history would surely be irrelevant. Such a position, far from being loyal to the words of section 191, in truth enjoins a blinkered approach which ignores the policy and objects of the statute.
25. So far as the second issue is concerned and Mr Carter's observations about the five factors taken into account by Mr Howarth, it seems to me those factors relied on by Mr Howarth plainly go to the responsibility of the appellant and her husband for their homelessness when it eventuated. They were factors making it reasonably likely that that event would happen. They were matters which disclosed that the substantial cause of this family's homelessness was their own act in taking out the mortgage.
26. For all those reasons it seems to me that the County Court judge was right to dismiss the appeal brought under section 204. I would dismiss the appeal to this court.

Lord Justice Carnwath:

27. I agree that the appeal should be dismissed. The judge decided the reviewing officer had made no error of law and that his conclusion could not be categorised as irrational. I agree.

Lord Justice Moore-Bick:

28. I also agree that the appeal should be dismissed for the reasons given by my Lord, Lord Justice Laws.

Order: Appeal dismissed.