England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
HIGH COURT OF JUSTICE
ON APPEAL FROM THE BIRMINGHAM COUNTY COURT
Mr Matthew Brunning sitting as Deputy Circuit Judge
Claim No 7BM73811

		Appeal No: B5/2008/2769 Royal Courts of Justice, Strand, London, WC2A 2LL
		20 October 2009

The Master of the Rolls:

1. This appeal is brought by Birmingham City Council ("the Council") from a decision given on 8^th October 2008 by Mr Matthew Brunning, sitting as a Deputy Circuit Judge in the Birmingham County Court. The appeal raises the question whether a tenancy granted by a local housing authority, which, at least on the face of it, is a secure tenancy under section 79 of Part IV of the Housing Act 1985, is nonetheless void, because it was granted to someone who had not been selected in accordance with the authority's housing allocation scheme, pursuant to Part VI of the Housing Act 1996. The claim, which relates to seven different tenancies granted on behalf of the Council, proceeded below on the basis of assumed facts, which were mostly agreed, although it also depended on findings made by the Judge.

The factual and procedural background

2. The individual responsible for the grant of each of the seven tenancies, Mr Asaf Rasool, was employed by the Council in the Mirfield Housing Team in the Hodge Hill District of Birmingham, as an officer in the housing department concerned with allocations of residential accommodation. In that capacity, he was responsible for arranging viewings and lettings of residential properties owned by the Council. As well as arranging lettings to people who were not existing Council tenants, he also had the role of processing applications by existing Council tenants to exchange their current properties for different properties. In accordance with the requirements of Part VI of the 1996 Act, the Council had a detailed housing allocation scheme, which had been adopted in 2005 (and was to be subsequently revised in 2007). This scheme ("the Scheme") included provisions for identifying those applicants for housing to whom priority was to be accorded when accommodation became available for letting ("the voids policy"), and also extended to applications from existing Council tenants to exchange their accommodation.
3. On learning that accommodation which had been let by the Council had become empty, Mr Rasool "was able to obtain keys before receipt could be logged and to bypass [the Council's] voids policy [and was then] enabled to let properties to a tenant of his choice", to quote from the judgment below. Among the people to whom properties were let in such circumstances were the respondents, to whom tenancies were granted between May 2005 and March 2006. Since then, each of the respondents has remained in possession of their respective property, occupying the same as a home, and, as far as one can see, paying the rent and observing the terms of the tenancy.
4. As the Judge went on to explain, a full report subsequently commissioned by the Council established that Mr Rasool's "misconduct" in effecting lettings of residential properties to applicants for accommodation (such as the respondents) who did not have priority under the Scheme was enabled by what were described as "fundamental weaknesses in procedures as well as poor management arrangements". Later in his judgment, the Judge said that, while there was a "shadowy suggestion" of such wrongdoing in relation to the grant of another tenancy which Mr Rasool was responsible for allocating, the Council could not establish any payment being made (or other improper inducement or benefit being proffered or given) to Mr Rasool by any of the respondents in return for the grant of their respective tenancies.
5. Accordingly, each of the respondents was granted a tenancy of residential accommodation owned by the Council, arranged by Mr Rasool, acting on behalf of the Council, in circumstances where he knowingly and intentionally failed to select any of the respondents in accordance with the Scheme, but where none of the respondents was implicated in such wrong-doing. The Judge concluded that each of the tenancies was nonetheless a valid secure tenancy binding on the Council, and was not granted in circumstances which justified the seeking of possession. He therefore struck out the Council's claim.
6. On behalf of the Council, Mr Arden QC contends that, contrary to the conclusion of the Judge, each of the purported tenancies was void, and that therefore none of the respondents had a valid tenancy of their respective accommodation; and that the Council is therefore entitled to possession. This argument is essentially based on the provisions of Part VI of the 1996 Act, which is titled "Allocation of Housing Accommodation". (It should be added that Mr Arden took no separate point as to Mr Rasool's authority to act as he did).

Part VI of the Housing Act 1996

7. Part VI of the 1996 Act, begins with section 159, the first three subsections of which are in these terms:

"(1) A local housing authority shall comply with the provisions of this Part in allocating housing accommodation.

(2) For the purpose of this Part a local housing authority allocate housing accommodation when they –

(a) select a person to be a secure … tenant of housing accommodation held by them;

(b) nominate a person to be a secure … tenant of housing accommodation held by another person;

(c) nominate a person to be an assured tenant of housing accommodation held by a registered social landlord.

(3) The reference in subsection (2)(a) to selecting a person to be a secure tenant includes deciding to exercise any power to notify an existing tenant … that his existing tenancy is to be a secure tenancy … ."

8. Secure tenancies are tenancies which satisfy the conditions referred to in section 79 in Part IV of the 1985 Act, and they apply to a high proportion of residential tenancies where a local authority is the landlord; all the seven tenancies in the present case are, if effective, secure tenancies. Possession can normally only be obtained against a secure tenant if at least one of the grounds specified in schedule 2 to the 1985 Act is established. Those grounds include ground 5, which entitles a landlord to seek possession against a secure tenant where the landlord was induced to grant the tenancy "by a false statement made knowingly or recklessly" by or on behalf of the tenant, but the court can only make an order for possession on this ground if it is reasonable to do so, by virtue of section 84(2)(a) of the 1985 Act. Most tenancies granted by registered social landlords are assured tenancies under the Housing Act 1988, which affords fairly similar protection to tenants.
9. Section 159(5) of the 1996 Act excludes the application of the provisions of Part VI to cases where the allocation is to someone who is already a secure tenant, provided that it is not pursuant to his application. Section 160 sets out other circumstances in which the provisions about allocation in Part VI do not apply. Section 160A, added by the Homelessness Act 2002, provides that housing accommodation should not be allocated to any person who is "ineligible" – effectively persons subject to certain types of immigration control or guilty of anti-social behaviour.
10. Section 167(1) of the 1996 Act requires every housing authority to have an "allocation scheme", whose function is to "determin[e] priorities, and … the procedure to be followed, in allocating housing accommodation". The ensuing subsections, many of which have been added or amended by the 2002 Act, set out various stipulations as to what should be included in such schemes. Many of these relate to the provision of information about, and in connection with, the scheme, and to identifying categories of person to whom some degree of preference should be accorded. Thus, section 167(2) requires every scheme to "be framed so that reasonable preference is given" to certain specified categories of applicant.
11. Section 167(8) of the 1996 Act, which is particularly strongly relied on by the Council on this appeal, states that a "housing authority shall not allocate housing accommodation except in accordance with their allocation scheme."

The arguments in outline

12. If these provisions, properly interpreted, mean that housing authorities are only empowered to grant tenancies of residential accommodation strictly in accordance with the terms of their housing allocation scheme, there would, at least in the absence of the Human Rights Act 1998, be a powerful argument for saying that a purported grant of a tenancy of such accommodation, other than accordance with the scheme, would be ineffective. That is because, on the basis of such an interpretation, a housing authority, which is a creature of statute with no inherent powers, would not have the legal capacity to grant such a tenancy: accordingly, it would seem to follow that such a purported grant would be ultra vires and therefore void. Such a conclusion would appear to be supported by the reasoning of this court in Credit Suisse v Allerdale Borough Council [1997] QB 306 and Stretch v West Dorset District Council (1998) 77 P&CR 342.
13. If this argument were correct, I would have been unimpressed with the point that the tenancies in the present case would nonetheless survive on the ground that they are secure tenancies which could only be determined in accordance with the provisions of Part IV of the 1985 Act. As I see it, at least as at present advised, if the authority had no capacity to grant a tenancy they had purported to grant, then there would be no valid tenancy, and therefore no secure tenancy with the protection granted by Part IV of the 1985 Act. However, there is no need to decide that point on this appeal. Equally, it is unnecessary to decide whether, if the tenancies are indeed void, the respondents were nonetheless licensees of their respective properties, although I am currently inclined to be sceptical about that point as well. Nor is it necessary to address what appears to me to be a rather more complex and difficult point, namely, whether, if the seven purported tenancies in this case were otherwise void, they should nonetheless be treated as valid because of the respondents' human rights. In this connection, the respondents invoke article 1 of the first protocol to, and article 8 of, the European Convention, and they rely on the decisions of the European Court of Human Rights in, respectively, Stretch v United Kingdom [2004] 38 EHRR 196 and McCann v United Kingdom [2008] ECHR 385.
14. The reason that it is unnecessary to address these three points raised on behalf of some or all of the respondents is that the two alternative propositions which essentially form the basis of the Council's case on this appeal are, in my opinion, both wrong. The first, and, I think primary, proposition is that allocation under Part VI of the 1996 Act extends to, or includes, the actual grant of a tenancy, and, therefore, if a secure tenancy is granted by the Council of accommodation, which should, by virtue of Part VI, have been allocated under the terms of the Scheme, that tenancy will be void unless the accommodation had been allocated strictly in accordance with the terms of the Scheme. The second proposition is that, even if allocation and grant are separate concepts, the grant by the Council of a secure tenancy of accommodation, which should have been allocated pursuant to the Scheme under the provisions of Part VI, will be void unless the accommodation has been allocated strictly in accordance with the terms of the Scheme. I shall deal with these two propositions in turn.

Allocation under Part VI of the 1996 Act does not include the grant of a tenancy

15. In my view, the first proposition inappropriately elides the Council's statutory duty to allocate residential accommodation in accordance with the Scheme and the Council's ability to dispose of residential accommodation by way of a secure tenancy in accordance with its statutory powers. As to the statutory duty, I have already referred to the relevant provisions in Part VI of the 1996 Act governing a housing authority's duty so far as allocation of residential accommodation is concerned.
16. The provisions governing a local authority's powers to dispose of residential property are, at least primarily, to be found in Part II of the 1985 Act, which is titled "Provision of Housing Accommodation". Section 32(1) states that (subject to an exception which is irrelevant for present purposes) "a local authority have power by this section, and not otherwise, to dispose of land held by them for the purposes of this Part" (i.e. effectively "for housing purposes" - section 20). Section 32(2) provides that such a disposal "may be effected in any manner, but, subject to subsection (3), shall not be made without the consent of the Secretary of State". Subsection 32(3) provides that no consent is required for "for the letting of land under a secure tenancy …".
17. I should also refer to section 44(1) of the 1985 Act, which provides that a "disposal of a house by a local authority made without the consent required by section 32 … is void" unless it is the letting of a single dwelling to one or more individuals.
18. It seems to me that Part II of the 1985 Act and Part VI of the 1996 Act are concerned with different, if in practice often closely connected, activities. Part II of the 1985 Act regulates the power of a local authority, such as the Council, to effect disposals (including sales and lettings) of housing accommodation, and prescribes the consequences of any failure to comply with its regulatory regime. On the other hand, Part VI of the 1996 Act is concerned with requiring local housing authorities, such as the Council, to prepare housing allocation schemes and to allocate housing in accordance therewith. In other words, Part VI of the 1996 Act is concerned with, indeed limited to, establishing and then managing priorities between applicants for residential accommodation (which may or may not be owned by the local authority in question) as it becomes available for letting, which effectively is preliminary to, and not part of, the actual letting of such accommodation, which is governed by Part II of the 1985 Act.
19. This analysis seems to fit with the natural reading of the provisions of Part VI of the 1996 Act together with those of Part II of the earlier 1985 Act. The 1985 Act, unlike the 1996 Act, addresses the issue of grants of tenancies (and other disposals) in terms, and gives a pretty free hand to a local authority so far as disposal by way of secure tenancies is concerned; indeed, it seems to be concerned to protect an individual to whom a single unit of residential accommodation is let, even if it is not by way of a secure tenancy, as it provides that failure to comply with the sole statutory prerequisite, Ministerial consent, will not invalidate such a tenancy. On the other hand, Part VI of the 1996 Act is concerned not with disposals, or even with the grant of tenancies, but rather with policy and management decisions, and the provision of information, relating to the identification of priorities as between competing prospective tenants; in other words, with what Mr Luba QC, who appears for the majority of the respondents, refers to as "managing the queue of hopeful applicants seeking a social housing home".
20. I appreciate that such a distinction between allocation and disposal (at least where the tenancy is granted by the allocating authority) can be characterised as rather technical, and that it might appear at first sight to be rather artificial. Allocation is a preliminary step to disposal, and, as Mr Arden says, allocation of accommodation owned by the allocating authority to a specific applicant will normally lead to a disposal by the authority, namely the grant of a secure tenancy of that accommodation to that applicant. However, the distinction is not only supported by a number of specific features of the statutory provisions, as I hope to demonstrate, but it also reflects reality. As Mr Luba says, there will in practice be occasions where there is an allocation without a disposal: the most obvious examples are allocations of accommodation to a specific applicant, who decides not to accept it, or where the allocating authority change their mind.
21. This distinction between allocation under Part VI of the 1996 Act and disposal, or grant, under Part II of the 1985 Act is supported by a number of features of Part VI of the 1996 Act. First, there is the definition of allocation in section 159(2)(a): it involves "select[ing]" a person to be a secure tenant of the authority: that suggests selecting an applicant to be considered for a grant, and not the grant itself. The selection, at least in this context, is not the same as a grant. Thus, as already mentioned, there is no warrant for suggesting that it could give rise to any sort of right enforceable in private law, for instance a right to be granted a tenancy, let alone a right to be granted a tenancy of specific accommodation. On the other hand, a grant of a tenancy would most certainly give rise to private law rights. Of course, an applicant, who is selected and is not then offered accommodation, may, in some circumstances, be able to seek redress from the Administrative Court in public law, but, to put it at its lowest, as discussed below, that does not assist the Council's case on this appeal.
22. Secondly, there are paragraphs (b) and (c) of the section 159(2) of the 1996 Act. They plainly do not cover the actual granting of a tenancy: the nomination process must inevitably be different from the grant, as the projected grantor (be it another authority or a social landlord) and the nominating authority would always be separate and independent of each other, and there is no inherent reason why the latter should be obliged to the former to grant a tenancy to a nominee applicant nominated by the nominating authority. On that basis, it seems improbable that paragraph (a) of section 159(2) should be interpreted as extending to the grant of a tenancy to the applicant selected under an allocation scheme.
23. Thirdly, there are a number of different cases, namely those mentioned in sections 159(5) and 160 of the 1996 Act, where the statutory provisions relating to an allocation scheme do not apply. It cannot be denied that, in such cases, any secure tenancy granted by the authority concerned would be a disposal made pursuant to, and governed by, section 32 of the 1985 Act. While it would be possible for some secure tenancies to be granted by a local authority pursuant to the 1985 Act and others pursuant to the 1996 Act, it seems to me that that would be rather a strange situation.
24. Accordingly, what happened in each of the present cases was a breach of the statutorily prescribed procedure for selecting an applicant to be a secure tenant of available accommodation, not a purported disposal by way of the grant of a secure tenancy other than in accordance with statutory requirements. It follows that the first basis on which the Council's case is advanced must be rejected. However, this analysis does not deal with the alternative basis.

A tenancy granted to a person not selected in accordance with Part VI is effective

25. Relying in particular on section 167(8) of the 1996 Act, the Council's second proposition is that where a secure tenancy is granted by a housing authority (other than a tenancy granted to a person within the statutory exceptions in sections 159(5) and 160), it will be void unless the tenant had been selected strictly in accordance with the authority's allocation scheme. While there are arguments which support that contention, and they have been forcefully advanced by Mr Arden, I have come to the conclusion that this contention must also be rejected.
26. If Part VI of the 1996 Act was concerned with regulating the actual grant of tenancies, then section 167(8) might, as I have mentioned, be invoked to say it was ineffective. But that is because it would have been the actual grant of the tenancy which the Council would not have had capacity to make. Like the option in Stretch 77 P&CR 342 and the guarantee in Credit Suisse [1997] QB 306, the grant of the tenancy would have been ultra vires the Council.
27. However, what the Council did in this case was to fail to comply with statutorily required procedures leading up to the grant of the tenancy, rather than with any statutory requirements relating to the grant of the tenancy itself. At least on the face of it, and subject to examining the relevant statutory provisions to see if they point to a different conclusion, the correct analysis appears to me to be this. The Council's failure related to allocation, which is a purely public law obligation and is essentially procedural in nature, and, accordingly, the allocation remained effective – at least unless and until it was set aside by the court; in those circumstances, it would seem to follow that the subsequent grant of the tenancy, although effected pursuant to the defective allocation, was not ultra vires, at least unless the terms of the 1996 Act clearly so provide.
28. In other words, the fact that the anterior public law procedural requirement of compliance with the Scheme was not complied with by no means necessarily means that the subsequent grant of a tenancy was invalid. Although the issue on this appeal was not directly in point in that case, it is worth referring to the illuminating discussion in the judgments of Neill and Hobhouse LJJ in Credit Suisse [1997] QB 306, 343A-344C and 355G-357E respectively. For present purposes, the important point about those passages is that they tend to support the contention that the fact that a procedural course taken by a public body which is unlawful in the sense of being susceptible to judicial review does not mean that any action taken by the body on the basis of that procedure must be outwith the capacity of, or ultra vires, the authority.
29. Consideration of the provisions of Part VI of the 1996 Act appears to me to reinforce, rather than to undermine, this prima facie view. Thus, it is hard to see how, as a matter of law, the grant of a secure - or an assured - tenancy to an individual by another authority - or a registered social landlord - falling within section 159(2)(b) - or section 159(2)(c) - could be void simply because the individual was not nominated in accordance with the nominating authority's policy. It would be strange if a different result in those circumstances obtained under section 159(2)(b) and (c) from that under section 159(2)(a). Mr Arden argued that the grant of a tenancy falling within section 159(2)(b) or (c) could be void for failure to comply strictly with the requirements of the relevant allocation scheme, but that seems to me to be improbable, and, if it does indeed follow from the Council's case on this appeal, section 159(2)(b) and (c) would still call into question that case. In relation to tenancies granted pursuant to either of those paragraphs, both the landlord and the tenant will normally have been unaware of, and not responsible for, any failure by the nominating authority to comply with its allocation scheme. It would therefore be remarkable if, possibly many years after the grant of the tenancy, facts, which were unknown and in practice normally unknowable by either party, could come to light to show it had always been void.
30. Further, section 167(8) of the 1996 Act is worded markedly differently from section 44 of the 1985 Act. Section 44 specifically provides that certain disposals which do not comply with the requirements of section 32 will be "void", subject to certain specified exceptions. The language of section 167(8) of the 1996 Act is rather different. It merely stipulates, in negative language, how an authority should allocate its housing. As Sedley LJ said in argument, its inclusion in Part VI of the 1996 Act appears to be consistent with, indeed I consider it has been included to give effect to, a Parliamentary desire to emphasise that a housing authority should not merely take into account their scheme when allocating accommodation, but should positively follow the scheme. Indeed, those drafting the 1996 Act must have had in mind the provisions of the 1985 Act. The two statutes are both concerned with public housing, and the 1996 Act has a number of references to, and provisions which modify or repeal, provisions of the 1985 Act, including section 106, which is concerned with "[i]nformation about housing allocation", and was amended and added to by, and pursuant to, the 1996 Act. Accordingly, one would have expected the later 1996 Act to provide expressly, like the 1985 Act, that a tenancy granted other than in accordance with its provisions, would be void, if that had been Parliament's intention.
31. Indeed, the notion that a tenancy, which was granted other than pursuant to the provisions of Part VI of the 1996 Act, is void seems to me to be rather inconsistent with the thrust of Part II of the 1985 Act. Section 32 of the 1985 Act appears to give a housing authority a pretty free hand when it comes to granting secure tenancies. Further, although it expressly provides that other tenancies not granted in accordance with the statutory formalities, are "void", section 44 ensures that, in the case of any other tenancy of a single unit of residential accommodation, an authority's failure to comply with the sole statutory precondition, namely obtaining Ministerial consent, will not lead to the tenancy being ineffective. In these circumstances, it is unlikely that Parliament can have intended that failure to comply strictly with the provisions of the 1996 Act, which contain no references to voidness, should nonetheless lead to any resultant tenancy being void.
32. Ground 5 of schedule 2 to the 1985 Act ("ground 5"), as discussed in Islington London Borough Council v Ukcac [2006] EWCA Civ 340, [2006] 1 WLR 1303 provides another reason for concluding that the grant of a secure tenancy to someone who has not been selected strictly in accordance with the authority's allocation scheme is nonetheless effective. It seems clear from the reasoning in that case that a secure tenancy granted by an authority pursuant to a misrepresentation by the tenant is valid. Yet, as I think Mr Arden accepted, such a tenancy would ex hypothesi have been granted other than strictly in accordance with the terms of the authority's allocation scheme, which means that it should be void, if the Council's submission is correct. Even ignoring that point, ground 5 would produce a rather odd result if the Council is correct: a secure tenancy granted pursuant to a misrepresentation by the tenant would be determinable only if the court thought it reasonable, whereas a secure tenancy granted pursuant to an innocent misallocation, of which the tenant was ignorant and had no responsibility for, would be void.
33. Mr Arden made the point that there was no provision in the housing legislation equivalent to section 167(8) of the 1996 Act until 1996, and that Parliament, when considering that statute as a bill, may simply have overlooked the existence and implications of a provision such as ground 5 in a schedule to a statute passed more than ten years earlier. That is conceivable, but, at least in so far as this argument relates to ground 5, it is inconsistent with the basis of the reasoning of this court in Islington [2006] 1 WLR 1303. Further, as already explained, those drafting the 1996 Act must have been aware of the detailed provisions of the 1985 Act.
34. This brings me to a further reason for rejecting the Council's analysis, namely its impracticality and unattractiveness. If it could be shown that the grant of a tenancy had been pursuant to a failure to follow the relevant allocation scheme, then that tenancy would, on Mr Arden's argument, turn out to be void, even if the failure had been relatively minor and had arisen out of an honest misunderstanding, and even if the tenant had been wholly innocent of any responsibility for the failure and had lived in the accommodation concerned for many years. Indeed, it seems to me that Mr Luba and Mr Nicol, who appears for some of the respondents, are probably right to suggest that it would also follow that a tenancy granted pursuant to a selection in accordance with a scheme which was unlawful (e.g. on grounds of irrationality) would also be a nullity. That is a far from fanciful hypothesis – Mr Nicol identified eight such reported cases, including R(A) v Lambeth London Borough Council [2002] EWCA Civ 1084, [2002] HLR 54 (although see now R(Ahmad) v Newham London Borough Council [2009] UKHL 14). It seems to me very unlikely that the legislature could have intended such a result, and I refer again to section 44 of the 1985 Act, which undermines the notion that the drafter of the 1996 Act could simply have overlooked the point.
35. It is true that this conclusion means that the grant of a secure tenancy by a housing authority to an ineligible person would apparently be effective. However, if such a tenant had obtained the tenancy by concealing his ineligibility, ground 5 could normally be relied on to justify a claim for possession, and, if the tenant was not responsible for any misrepresentation, the fact that his tenancy survives is not particularly surprising.
36. I also accept Mr Arden's argument that this reason for rejecting the Council's case is weakened, albeit only to some extent, by two points he makes. First, if a tenancy granted pursuant to an allocation not in accordance with the authority's allocation scheme is void, then it better ensures that the integrity of the scheme, and the priorities enshrined in it. If such a tenancy is effective, an applicant more deserving than the tenant will have been deprived of the accommodation in question. While that is regrettable, the applicant in question will have a home (as otherwise he would be able to rely on the homelessness provisions in Part VII of the 1996 Act) and will retain his priority position for the future, and it remains the fact that an innocent tenant would otherwise be deprived of what may have been his home for a substantial time. Secondly, Mr Arden says that, in many cases where, on the Council's case here, a tenancy turns out to have been void, the Council may conclude that a fresh tenancy of the same accommodation could validly be granted to the tenant under the void tenancy. So it may, but in many cases the facts may not justify such a conclusion, and, in any event, in every such case, the tenant would be at the mercy of the Council.
37. For these reasons, which are a rather extended version of the much more pithily expressed views of Sedley LJ, I reject the Council's second proposition, namely that, on the basis that allocation and grant are separate concepts, the grant of a secure tenancy by an authority to someone to whom accommodation has been allocated inconsistently with the authority's scheme does not thereby render the tenancy void or ineffective.

Conclusion and disposition of the appeal

38. Accordingly, I am of the view that the two propositions on which the Council's case depends are wrong. It is right to add that the reasoning which justifies rejection of the second proposition might well defeat the Council's appeal, even if they had established their first proposition, namely that allocation under Part VI of the 1996 Act, at least in relation to accommodation to be let by the allocating authority, extends to the grant of a secure tenancy.
39. My conclusion does not deprive section 167(8) of the 1996 Act of any effect. As already explained, if an authority failed to allocate housing accommodation in accordance with their allocation scheme, an applicant who was prejudiced thereby could apply to the Administrative Court, seeking for instance, an order that the allocation in question be set aside. Such an applicant would, of course, have to act quickly if he wanted to stop a specific tenancy being granted; but, even if the application was made too late (or failed on grounds of discretion), it would still presumably have the effect of ensuring that the authority observed the terms of their scheme in the future.
40. The Judge reached the same conclusion on the basis that the reasoning of this court in Islington [2006] 1 WLR 1303 applied. In that case, it was held that, where a tenancy had been obtained by misrepresentation, a landlord could not invoke the common law remedy of rescission, as it had been impliedly excluded by Parliament by the inclusion of ground 5 in the 1985 Act. That reasoning, however, does not apply to a claim based on lack of capacity, but I accept, as already mentioned, that the Council's case on this appeal does not lie very happily with the decision in Islington [2006] 1 WLR 1303. I note that it was suggested in that case at paragraphs 31 and 48, that ground 5 may well benefit from further Parliamentary scrutiny, but nothing appears to have happened so far in that connection. For my part, I would support those observations, whose good sense is reinforced by the facts of this case.
41. The Judge also relied on the decision of this court in Akinbolu v Hackney London Borough Council (1996) 29 HLR 259, a case concerned with the grant of a secure tenancy to a homeless, but ineligible, person, pursuant to Part III of the 1985 Act (now Part VII of the 1996 Act). It is true that the court in that case rejected the appellant's contention that the tenancy was void, but the argument was very differently based from that of the Council on this appeal – see 29 HLR 259, 265. However, as with Islington [2006] 1 WLR 1303, the Council's case here does not sit very happily with the actual outcome in Akinbolu 29 HLR 259, albeit that decision was concerned with a different aspect of a housing authority's duties – namely under what is now Part VII of the 1996 Act, rather than Part VI.
42. Neither the decision in Islington [2006] 1 WLR 1303 nor our conclusion on this appeal by any means necessarily imply that, in a case where both the applicant and an officer of the authority are involved in dishonestly enabling the applicant to obtain a tenancy, the authority would be precluded from setting aside the tenancy or treating it as void. It may be arguable that ground 5 could be interpreted to cover such a case (in which case the reasoning in Islington [2006] 1 WLR 1303 would appear to apply), or it may very well be that the reasoning in this judgment could be distinguished where the tenant is dishonestly involved in the inappropriate allocation. These are issues which would have to be considered as and when such a case arises.
43. Equally, it should be emphasised, that this is a case where the selection of the applicants in breach of the terms of the allocation scheme was made by a person to whom, as Mr Arden accepts, the Council had properly delegated the tasks of granting residential tenancies on its behalf. Different considerations would presumably apply where a tenancy had been purportedly granted by a person with no such authority, even if he had been employed by the Council.
44. For these reasons, I would dismiss this appeal.

Lord Justice Sedley :

45. I agree that this appeal fails for the reasons given by the Master of the Rolls, but I take the liberty of putting his second reason in my own words.
46. Mr Arden's most radical submission has been that, even assuming allocation and grant to be legally discrete functions, nothing can come of nothing: if the allocation is a legal nullity, so must be a grant predicated on it. In my opinion neither the premise (in the present case) nor the conclusion (as a proposition of law) is sound.
47. Section 167(8) does not say, as it could easily have done, that any allocation made in breach of a scheme is void. Its evident purpose is to require local authorities to abide by their own schemes, and thereby to take away any discretion of which applicants or their local councillors might otherwise have tried to take advantage. The consequences of a departure from a s.167 scheme are therefore not prescribed by statute and are a matter for the common law.
48. What then is the effect of a departure from the scheme? Clearly if an allocation bears what Lord Radcliffe in Smith v East Elloe RDC [1956] AC 736 called the brand of invalidity on its forehead (if, for example, it was issued by the doorkeeper) it is of no legal effect. But that will be because it does not even purport to be a lawful allocation. By contrast where, as here, it is made by an officer of a department empowered to make allocations, it is in my present view legally effective unless and until it is revoked; and the ability to revoke it must evaporate once a tenancy is granted or the allocation otherwise becomes spent. It is on ground 5 alone, if it applies, that the lessor can thereafter recover possession.
49. Even if an allocation is void, I do not therefore accept that this produces a domino effect in relation to official acts based on it. As Lord Browne-Wilkinson said in Boddington v British Transport Police [1999] 2 AC 143, 164, subsequent recognition of the invalidity of an ultra vires act "cannot rewrite history as to all other matters done in the meantime in reliance on its validity." This must be especially the case where, as here, a public authority is relying on its own illegality to unravel otherwise perfectly lawful arrangements on which the wellbeing of individuals now depends.
50. I too would therefore dismiss this appeal.

Mr Justice Owen

51. I agree with both judgments.