England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE ADMINISTRATIVE COURT/DIVISIONAL COURT
(Rt Hon Lord Justice Richards and Hon Mrs Justice Swift DBE)
Ref C1/2008/1638

		Royal Courts of Justice Strand, London, WC2A 2LL
		18/06/2009

LORD JUSTICE ELIAS :

1. The appellant in this case, the London and Quadrant Housing Trust ("the Trust"), provides social housing, which means housing at less than the market rate, to those in need. The Trust is a registered social landlord ("RSL"), being registered under the Housing Act 1996. The principal question in issue is whether, when terminating the tenancy of someone in social housing, the Trust is subject to human rights principles. The Divisional Court (Richards LJ and Swift J) held that it was. The Trust appeals that ruling and contends that it was not.
2. The case comes before the court in somewhat unusual and not altogether satisfactory circumstances. The respondent Mrs Susan Weaver, who was the claimant before the Divisional Court, is an assured tenant of the Trust. She was served with notice of possession for rent arrears. She wished to challenge that notice of possession on the basis that the Trust had acted in breach of a legitimate expectation arising out of Guidance issued by the Housing Corporation. She also contended that to evict her from her home would interfere with her rights under Article 8 of the European Convention on Human Rights. However, that argument was advanced in a way which also depended upon her being able to establish the legitimate expectation.
3. Even if a legitimate expectation could be established on the facts, the argument could successfully be advanced only if the Trust, in the exercise of its eviction powers, was a public body attracting the operation of judicial review principles. The Article 8 argument depended upon establishing that the Trust was a public authority within the meaning of section 6(3)(b) of the Human Rights Act 1998 and that the act of termination was not a private act within the meaning of section 6(5). The Trust contended that no legitimate expectation was created, and that in any event it was exercising purely private functions when it dealt with issues relating to the allocation and management of housing, and that all its acts in performance of those functions, including the termination of the tenancy, were private acts. Accordingly, it was subject to neither human rights nor judicial review principles.
4. The Divisional Court found that there had been no legitimate expectation created and therefore the case failed on the facts on both grounds. Strictly it was unnecessary for the court to determine the wider question raising the public law status of the Trust. However, the court did so. It held, contrary to the submissions of the Trust, that the Trust was a public authority under section 6(3)(b) arising from the exercise of its function of allocating and managing its housing, and that the act of terminating the tenancy was not a private act under section 6(5). The court also held that it was susceptible to judicial review principles in the exercise of that function.
5. Notwithstanding that they had succeeded in defending the particular application, the Trust wished to appeal that finding in relation to its status in public law. The Divisional Court granted permission to appeal and facilitated this by making a formal declaration, which could be the subject of challenge, in the following terms:

"(a) that the management and allocation of housing stock by the defendant (including decisions concerning the termination of a tenancy) is a function of a public nature, with the effect that the defendant is to be regarded as a public authority in that respect for the purposes of the Human Rights Act 1998, section 6(3)(b);

(b) that the defendant is accordingly amenable to judicial review on conventional public law grounds in respect of its performance of the above function."

6. I make two observations about the way the appeal has come before us. The first is that as Lord Collins of Mapesbury and Rix LJ note, the applicant no longer has any interest in the appeal, and as a consequence the issue has come before the court in a somewhat abstract and academic form. We have, however, had the benefit of argument from the Mr Drabble QC on behalf of the applicant (who has the benefit of protective costs order) as well as some very helpful written submissions from Mr Luba QC on behalf of the intervener, the Equality and Human Rights Commission. The second observation relates to the form of the declaration. It focuses on whether the Trust is a public body falling within section 6(3)(b) of the 1998 Act by virtue of its housing and allocation management functions. This reflects the way in which the issue was argued before the Divisional Court. It does not, however, satisfactorily encapsulate the real issue in the case which is whether the termination of this tenancy was a private act within section 6(5). I return to this point later in the judgment.

Social housing and registered social landlords.

7. In order to understand the background of this case I shall first consider the role of RSLs in the provision of social housing, and then consider the particular features of the Trust.

8. Social housing providers seek to provide affordable housing to those who cannot secure their housing needs in the market. It is government policy to provide such housing. Those on lower incomes are able to rent properties at below market value. RSLs provide about one half of the social housing in England and Wales.

7. RSLs were at all material times regulated in various ways by the Housing Corporation. This is an executive non-departmental public body responsible to the Secretary of State. It can determine standards of performance with respect to the provision of housing by RSLs; collect information as to the levels of performance achieved by them; and lay down guidance with respect, inter alia, to the management of housing accommodation. Although there is no specific obligation to follow the guidance, one of the functions of the Housing Corporation is to ensure that an RSL is properly managed, and in that context it may have regard to the extent to which guidance is followed.
8. Housing management guidance is the subject of consultation and approval by the Secretary of State. RSLs are subject to detailed guidance on a number of matters, including the terms of tenancies, the principles upon which the level of rents should be determined, and the way in which the power of eviction should be exercised. It was the guidance on evictions which was said to give rise to the legitimate expectation relied upon by the claimant in this case.
9. There is also statutory regulation through sections 8-10 of the 1996 Act restricting the power of RSLs to dispose of land or housing (although there is a wide range of exceptions); in general the consent of the Housing Corporation is required to any disposal.
10. RSLs also typically receive grants from the Housing Corporation in respect of expenditure incurred in connection with their housing functions. Generally grants are made to assist in the acquisition of specific housing stock. There is a bidding process in which interested RSLs submit bids, and the Housing Corporation assesses value for money and financial viability. Once the grant is made, the money has to be kept in the public domain. If the properties acquired with the grant are disposed of, the moneys received must be repaid, unless they are reinvested in further new homes available for social housing. A review of social housing legislation in 2007 found that the ratio of private finance to public funding was in the region of 2:1.
11. RSLs also have an important role in assisting local authorities to carry out their statutory housing policies. This is not simply a matter of choice but is the subject of legislation. A local authority must allocate houses in accordance with certain priorities. They are required by law to make an allocation scheme, and RSLs are the only body which they are statutorily obliged to consult before adopting a scheme. Section 170 of the 1996 Act requires RSLs to co-operate with local authorities if requested "to such extent as is reasonable in the circumstances" by offering accommodation to those with priority under the local authority's allocation scheme. Typically this co-operation is achieved by nomination agreements made between the authority and the RSL. In this way the RSL is deeply involved in assisting the local authorities in their obligations towards the homeless. Over half (some 54%) of RSL lettings in England are made to local authority nominees. A further 10% are made through allocations made pursuant to a common scheme in which the RSL and local authority are partners.
12. This relationship between RSLs and local authorities is reinforced by the fact that ownership of many local authority houses are being voluntarily transferred to RSLs, subject to the tenant's consent. Some 10% of the Trust's housing has been acquired in that way.
13. Mr Luba referred us to the following passage in annex 5 of the statutory Code of Guidance on Homelessness (July 2006) which succinctly summarises the increasingly important role which RSLs play in the field of social housing in the following terms:

"Virtually all provision of new social housing is delivered through RSLs and, under the transfer programme, ownership of a significant proportion of housing authority stock is being transferred from housing authorities to RSLs, subject to tenants' agreement. This means that, increasingly, RSLs will become the main providers of social housing. Consequently, it is essential that housing authorities work closely with RSLs, as well as all other housing providers, in order to meet the housing needs in their district and ensure that the aims and objectives of their homelessness strategy are achieved."

14. RSLs also have certain statutory powers, identical to those enjoyed by local authorities but not private landlords, empowering them to take action in respect of the conduct of their tenants. For example, they may apply for anti-social behaviour orders under Part 1 of the Crime and Disorder Act 1998, or for a parenting order under the Anti-Social Behaviour Act 2003 in respect of the parents of children causing a nuisance.

The Housing and Regeneration Act 2008.

15. Parts 1 and 2 of the Housing and Regeneration Act 2008 have restructured the system for providing social housing as from 1 December 2008. That Act has also for the first time provided a statutory definition of social housing and it is now a statutory prerequisite of registration as an RSL under section 112 of the 2008 Act that the body demonstrates that it provides accommodation at rents below market rates to those in housing need. The Act has split the roles of funding and regulation which were both formerly carried out by the Housing Corporation. Funding is now the province of the Homes and Communities Agency (HCA) and regulation is by the Regulator of Social Housing (RSH). However, the essential elements of the scheme remain the same as in the 1996 Act. The Secretary of State retains ultimate control since both bodies are funded by her and subject to guidance and specific directions from her (see sections 46-47 and 197).
16. It is not necessary to set out the effects of the 2008 Act in any detail. We are not directly concerned with it; this case must be determined by considering the position of the Trust under the 1996 Act. However, it is potentially significant to this extent: Mr Arden realistically accepts that if the termination of a tenancy is not a private act under the 1996 Act, then inevitably it will not be under the tighter regulatory regime of the 2008 Act.

The Trust.

17. The Trust was founded in 1973. It is a society registered under the Industrial and Provident Societies Act 1965, and thereby has corporate status. It is also a charity and is a housing association within the meaning of section 1 of the Housing Associations Act 1985. It is the parent body of a large group of companies some, but not all, of which are themselves either charitable bodies and/or registered social landlords.
18. The Rules of the Trust set out its powers and objects and provide for its business to be conducted by its Board and its shareholders. None of the Board members is a representative of a local authority or other public body, and no such authority or body has any controlling influence over the Board.
19. The Trust carries out a wide range of activities which include arranging and managing lettings, the acquisition of land, building homes for sale (either outright or with shared ownership), managing leasehold accommodation and managing market-level rented accommodation.
20. The Trust provides a number of different types of accommodation and services, under different tenures (including long leasehold), to various different groups. Most of its housing stock (including the accommodation provided to Mrs Weaver) was purchased in the open market. About 10% of its housing stock has been transferred from local authority ownership by way of large scale voluntary transfer.
21. The Trust is funded by the income it receives from rents, private borrowing and grants. The grants are principally social housing grants allocated by the Housing Corporation under section 18 of the Housing Act. In the two financial years 2004-2006 the Group, of which the Trust is the parent, borrowed £268.7 million by way of grants. This, however, accounts for less than half of the Group's capital finance, and the proportion of public finance is expected to drop to around 30% over the next five financial years, which would be fairly typical of the RSL sector as a whole. Private sources of finance include commercial loans and the proceeds of housing sales.
22. Control over the housing stock rests with the Trust but this is subject to allocation arrangements it makes with the local authorities. It has a number of nomination agreements. In the year ending March 2006 some 64 % of its new lettings were the result of nominations from local authorities.
23. The legal relationship between the tenant and the Trust is typically defined by the tenancy agreement and the standard tenancy conditions. In general the tenants hold their tenancy under a weekly agreement although there are some longer leases. The standard conditions set out the tenant's responsibilities in relation to paying the rent, and include a warning that if the rent is not paid, the Trust may apply to the court and seek eviction. That was the reason the Trust sought to evict Mrs Weaver in this case. She was more than eight weeks in arrears.

The statutory provisions.

24. Section 6(1) of the Human Rights Act 1998 provides that it is unlawful for a public authority to act in a way which is incompatible with a Convention right.

By subsection (3):

"...'public authority' includes -

(a)

(b) any person certain of whose functions are functions of a public nature"

This is subject to subsection (5):

"in relation to a particular act, a person is not a public authority by virtue only of subsection (3)(b) if the nature of the act is private."

25. The effect of these provisions is that some bodies, conventionally referred to as "core authorities", are public authorities for all purposes. They must at all times act in accordance with Convention rights; subsection (5) is inapplicable to such bodies. By contrast, subsection (3)(b) identifies and brings within the scope of the Act what is termed a "hybrid authority" i.e. one which exercises both public and private functions. Where its acts are in issue, the relevant question is whether the nature of the act is private. If it is then subsection (5) provides that it will not be deemed to be a public authority with respect to that particular act.
26. Accordingly, once it is determined that the body concerned is a hybrid authority - in other words that it exercises functions at least some of which are of a public nature - the only relevant question is whether the act in issue is a private act. Even if the particular act under consideration is connected in some way with the exercise of a public function, it may nonetheless be a private one. Not all acts concerned with carrying out a public function will be public acts. Conversely, it is also logically possible for an act not to be a private act notwithstanding that the function with which it is most closely connected is a private function, although it is difficult to envisage such a case. Such situations are likely to be extremely rare.
27. The concept of "functions" is not altogether straightforward, nor is the distinction between functions and acts. The difficulty was adverted to by Lord Neuberger in YL v Birmingham City Council [2007] UKHL 27; [2008] 1 AC 95, paragraph 130. He expressed the view that the former was more conceptual and noted that a number of acts may be involved in the performance of a function. In Hazell v Hammersmith and Fulham London Borough Council [1992] 2 AC 1, 29F Lord Templeman said that the word "functions", at least as to be construed in section 111 of the Local Government Act 1972, embraced:

"all the duties and powers of a local authority; the sum total of the activities Parliament has entrusted to it."

This would suggest that a function is a sub-species of those duties and powers; although whether and when a specific power or duty can be equated with a function is more problematic. The Divisional Court, in its declaration, referred to the act of termination of a tenancy as a "function".

The authorities.

28. There are two decisions of the House of Lords which inform the approach which courts should take when determining whether a body is a public body within the meaning of the Human Rights Act, namely Aston Cantlow and Wilmcote with Billisley Parochial Church Council v Wallbank [2003] UKHL 37; [2004] 1 AC 546 and YL, to which I have just referred. These decisions also deal with what is in my view the clearly related question whether a particular act is a private act within the meaning of section 6(5).
29. Aston Cantlow raised the question whether a parochial church council was a core public authority. The church council sought to compel the freehold owners of former rectorial land to pay for repairing the chancel of the local parish church. There was no doubt that under domestic law there was a civil obligation on the owners to meet this liability, and the only question was whether it could be said to infringe their human rights. The church council sought to enforce payment by exercising powers conferred upon them by section 2(2) of the Chancel Repairs Act 1932. The owners alleged that that the obligation involved an infringement of their right to the peaceful enjoyment of their property and constituted a breach of Article 1 of Protocol 1 of the Convention. This submission depended upon establishing that the parochial church council was a public authority under the Human Rights Act. Their Lordships concluded by a majority (Lord Nicholls of Birkenhead, Lord Hope of Craighead, Lord Hobhouse of Woodborough, Lord Rodger of Earlsferry; Lord Scott of Foscote dissenting) that it was not. It was neither a core nor a hybrid authority because it exercised no public functions, and therefore no human rights issue arose.
30. In the YL case the issue was whether a private company operating a care home for profit, Southern Cross Healthcare Ltd, was a hybrid public authority (it being accepted that it was not a core public authority.) As in this case, the actual decision in issue was whether a decision to evict a tenant from the care home was subject to the principles of human rights law. The claimant was 84 years old and suffered from Alzheimer's Disease. Southern Cross wished to remove her from the care home because of the inappropriate behaviour of her relatives. She had been placed in the care home by the local authority in accordance with their statutory duty to arrange for her care under section 21 of the National Assistance Act 1948. The authority paid her rent. If Southern Cross were a hybrid authority, then the claimant could seek to rely upon Article 8 rights unless the act of eviction was deemed to be a private one falling within section 6(5). The House of Lords held by a bare majority (Lord Scott of Foscote, Lord Mance and Lord Neuberger of Abbotsbury; Lord Bingham of Cornhill and Baroness Hale of Richmond dissenting) that it was not a hybrid authority and that the Article 8 argument could not be relied upon. It is to be noted that each of the judges in the majority agreed with each other's decision. (The actual decision in that case has now been reversed by statute: see the Health and Social Care Act 2008, section 145(1). However, plainly this does not in any way affect the binding nature of the reasoning of the majority of their Lordships.)
31. It is pertinent to note that it seems to have been assumed in YL that the issue whether it was a hybrid public authority rested upon whether its function of providing a place at the care home for applicants paid for by the local authority was a public function.
32. It is not necessary to analyse in detail the individual speeches of their Lordships in these two cases, not least because the principles which they establish are relatively clear and were not in dispute before us. The real issue lies not in identifying the principles, but rather in determining the result of their application to the particular circumstances of this case.
33. In my judgment, the following principles can be gleaned from these cases:

(1) The purpose of section 6 is to identify those bodies which are carrying out functions which will engage the responsibility of the United Kingdom before the European Court of Human Rights. As Lord Nicholls put it in the Aston Cantlow case at paragraph 6:

"the purpose is that those bodies for whose acts the state is answerable before the European Court of Human Rights shall in future be subject to a domestic law obligation not to act incompatibly with Convention rights."

Lord Rodger para 160, Lord Hope, para 52, Lord Hobhouse, para 87, and Lord Scott, para 129, were to the same effect. (Unfortunately, as Lord Mance pointed out in YL after analysing the Strasbourg jurisprudence, the case law from the European Court of Human Rights provides no clear guidance for gleaning how that test should be applied in a case such as this, where there is no formal delegation of public powers.)

(2) In conformity with that purpose, a public body is one whose nature is, in a broad sense, governmental. However, it does not follow that all bodies exercising such functions are necessarily public bodies; many functions of a kind historically performed by government are also exercised by private bodies, and increasingly so with the growth of privatisation: see Lord Nicholls in Aston Cantlow, paras 7 - 8. Moreover, this is only a guide since the phrase used in the Act is public function and not governmental function.

(3) In determining whether a body is a public authority, the courts should adopt what Lord Mance in YL described as a "factor-based approach" (para 91). This requires the court to have regard to all the features or factors which may cast light on whether the particular function under consideration is a public function or not, and weigh them in the round. There is, as Lord Nicholls put it in Aston Cantlow (para.12) "no single test of universal application". Lord Bingham in YL observed (para 5) that:

"a number of factors may be relevant, but none is likely to be determinative on its own and the weight of different factors will vary from case to case."

(4) In applying this test, a broad or generous application of section 6(3)(b) should be adopted: per Lord Nicholls in Aston Cantlow para 11 cited by Lord Bingham in YL, para. 4 and by Lord Mance at para..91.

(5) In Aston Cantlow Lord Nicholls said (para 12) that the factors to be taken into account:

"include the extent to which in carrying out the relevant function

the body is publicly funded, or is exercising statutory powers, or

is taking the place of central government or local authorities, or is

providing a public service."

Some of these factors were the subject of more detailed analysis in YL. I shall briefly deal with them.

(6) As to public funding, it was pointed out that it is misleading to say that a body is publicly subsidised merely because it enters into a commercial contract with a public body (Lord Scott, para 27; Lord Neuberger para 141). As Lord Mance observed (para 105):

"Public funding takes various forms. The injection of capital or subsidy into an organisation in return for undertaking a non-commercial role or activity of general public interest may be one thing; payment for services under a contractual arrangement with a company aiming to profit commercially thereby is potentially quite another."

To similar effect, Lord Neuberger opined that (para 165):

"it seems to me much easier to invoke public funding to support the notion that a service is a function of "a public nature" where the funding effectively subsidises, in whole or in part, the cost of the service as a whole, rather than consisting of paying for the provision of that service to a specific person."

(7) As to the second matter, the exercise of statutory powers, or the conferment of special powers, may be a factor supporting the conclusion that the body is exercising public functions, but it depends why they have been conferred. If it is for private, religious or purely commercial purposes, it will not support the conclusion that the functions are of a public nature: see Lord Mance in YL at paragraph 101. However, Lord Neuberger thought that the "existence of wide ranging and intrusive set of statutory powers …is a very powerful factor in favour of the function falling within section 6(3)(b)" and he added that it will often be determinative (para.167).

(8) The third factor, where a body is to some extent taking the place of central government or local authorities, chimes with Lord Nicholls' observation that generally a public function will be governmental in nature. This was a theme running through the Aston Cantlow speeches, as Lord Neuberger pointed out in YL, para159. That principle will be easy to apply where their powers are formally delegated to the body concerned.

(9) The fourth factor is whether the body is providing a public service. This should not be confused with performing functions which are in the public interest or for the public benefit. As Lord Mance pointed out in YL (para 105), the self- interested endeavour of individuals generally works to the benefit of society, but that is plainly not enough to constitute such activities public functions. Furthermore, as Lord Neuberger observed (para 135), many private bodies, such as private schools, private hospitals, private landlords, and food retailers, provide goods or services which it is in the public interest to provide. This does not render them public bodies, nor their functions public functions. Usually the public service will be of a governmental nature.

34. Their Lordships also identified certain factors which will generally have little, if any, weight when determining the public status. First, the fact that the function is one which is carried out by a public body does not mean that it is a public function when carried out by a potentially hybrid body. The point was powerfully and cogently made by Lord Scott in YL, paras 30-31. He highlighted the anomalies and absurdities that would result if this were the case. Second, it will often be of no real relevance that the functions are subject to detailed statutory regulation. Again, as Lord Neuberger pointed out in YL (para. 134):

"the mere fact that the public interest required a service to be closely regulated and supervised pursuant to statutory rules, cannot mean the provision of a service, as opposed to its regulation and supervision, is a function of a public nature. Otherwise, for example, companies providing financial services, running restaurants, or manufacturing hazardous materials, would ipso facto be susceptible to be within the ambit of section 6(1)."

35. Third, it is only of limited significance that the function will be subject to the principles of judicial review. The purpose of attaching liability under section 6 is different to the purpose of subjecting a body to administrative law principles, and it cannot be assumed that because a body is subject to one set of rules it will therefore automatically be subject to the other. So although the case law on judicial review may be helpful, it is certainly not determinative: see Lord Hope in Aston Cantlow (para 52) cited with approval by Lord Mance in YL (para 87).
36. It is also necessary to mention a Court of Appeal decision, Poplar Housing and Regeneration Community Association Ltd v Donoghue [2002] QB 48 in which the Court held that the RSL under consideration in that case was a public authority with respect to the exercise of its functions. This was, however, principally because the body was set up at the behest of a local authority which exercised considerable control over its activities. In YL both Lord Mance (para 87) and Baroness Hale (para 61) observed that this was not a proper basis for reaching that conclusion since the court focused on the historical ties and did not apply a functional test. However, they did not indicate whether the decision itself was correct notwithstanding the defective reasoning. Accordingly, I do not gain any assistance from that case.

What is a private act?

37. In both Aston Cantlow and YL there was some discussion whether, even if the relevant functions were public functions, the particular acts in issue were private acts. In Aston, all of their Lordships except Lord Scott expressed the view that the act of enforcing liability by the parish council was a private act. Lord Nicholls observed that the acts taken by the church council to compel the repair of the church was no more a public act than would be the enforcement of a restrictive covenant (para 16). Lord Hope held that the liability to repair the chancel arose as a matter of private law from the ownership of glebe land. He said that the "nature of the act is to be found in the nature of the obligation which the PCC is seeking to enforce. It is seeking to enforce a civil debt" (para 64). Lord Hobhouse's judgment was to the same effect on this point: para 90. Lord Rodger also considered that enforcing the liability was not a public function. He appears to have treated the act and the function as the same. Lord Scott dissented on this point. He held that the parochial church council was a hybrid public authority because the act of enforcing the liability to pay was a public function. Again, he did not draw any distinction between the concepts of function and act in this context.
38. In YL the majority held that the act of moving the claimant out of the home was a private act. Again, emphasis was placed on the private source of power in issue. Lord Scott, with whose judgment Lords Mance and Neuberger agreed, commented that the notice to terminate the tenancy agreement was a "contractual provision in a private law agreement" which in his view "could not be thought to be anything other than private." Lord Mance, although not expressly referring to section 6(5), likewise held that the "source and nature of Southern Cross' activities differentiates them from any "function of a public nature" (para 120). Lord Neuberger did not address this issue directly.
39. I would draw these tentative propositions from this analysis. First, the source of the power will be a relevant factor in determining whether the act in question is in the nature of a private act or not. Second, that will not be decisive, however, since the nature of the activities in issue in the proceedings is also important. This leads on to the third and related proposition, which is that the character of an act is likely to take its colour from the character of the function of which it forms part.

The decision of the Divisional Court.

40. It was conceded before the Divisional Court that the Trust is a hybrid authority on the basis that certain of its functions, in particular the power to obtain parenting orders and anti-social behaviour orders, are public functions. Nonetheless the argument developed before the court (and which is reflected in the form of declaration granted) focused on whether the Trust was a public authority by virtue of its housing and management functions. The key issue was perceived to be whether those functions constituted the exercise of a function or functions of a public nature. There was relatively little focus on section 6(5) and the question whether the termination of the tenancy was a private act.
41. In determining whether the allocation and management of housing was a public function, Lord Justice Richards, with whose judgment Swift J agreed, first analysed the decision of the House of Lords in YL, focusing solely on the speeches of their Lordships in the majority. In the light of that analysis, he identified certain features of the way in which the RSL carries out its functions which he considered to be germane to the decision he had to reach.
42. He accepted that the management and allocation of housing stock is not itself an inherently governmental activity, as indeed Mr Drabble had conceded. Plainly, this is something that private landlords also do. However, he considered that the context in which the RSL operates makes it different from the ordinary commercial provider; its non-profit making and charitable objects, whilst not indicative of being a public authority, at least placed the organisation outside the commercial sphere.
43. Furthermore, he thought it relevant that it operates in a particular public sector of social rented housing where there is extensive State regulation and where the RSL operates in close harmony with the local authority. RSLs make a significant contribution to meeting the Government's objectives with regard to affordable housing.
44. Richards LJ recognised that their Lordships in YL had said that merely because a body was subject to detailed regulation that did not mean that it operated in the public sector. However, the regulation of the level of rents and the fact - which the Divisional Court said was particularly important - that there was a very significant public subsidy of RSLs, and more specifically of this Trust, designed to contribute towards Government policy of providing low cost housing, were powerful factors in favour of treating the allocation and management functions as public functions.
45. Again, from time to time there is the voluntary transfer of housing stock to RSLs from the public sector. In this case some 10 per cent or so of the Trust's housing stock fell into that category. There is also the duty of co-operation imposed by section 170 which in practice limited the freedom to allocate and gave effect to the public interest.
46. The Divisional Court considered that as a consequence of these factors taken in the round, the function of management and allocation of housing stock should be subject to the principles of the European Convention.
47. Finally, the Divisional Court considered whether it might be said that the termination of the particular tenancy should be treated as an act of a purely private nature even if the general functions of management and allocation were of a public nature. This was dealt with very briefly. Lord Justice Richards considered that it would be:

"artificial to separate out the act of terminating a tenancy or indeed other acts in the course of management of a property from the act of granting a tenancy".

48. It was for these reasons that the Court granted the declaration in the terms which it did.

Discussion.

49. As I have indicated, the general scheme of the legislation is clear. If the authority is a core public authority, all its functions are public functions, as are all acts pursuant to those functions. It is a hybrid authority if only some of its functions are public functions. Even then, the particular act will not be subject to Convention principles if it is a private act.
50. Once the point was conceded and that concession was accepted by the court, the only relevant question is whether the relevant act - in this case the termination of the tenancy - is a private act. (It could, perhaps, have been suggested that the powers to obtain parenting orders or anti-social behaviour orders were simply powers and not functions, but that argument was never advanced.)
51. In my judgment, therefore, strictly the Divisional Court focused on the wrong question when it posed the issue whether the act of management and allocation of housing was a public function such as to render the Trust a hybrid public authority. In view of the concession, this point was not in issue and paragraph (a) of the Declaration is to that extent misleading. It suggests that it is the exercise of the housing and management functions which renders the Trust a hybrid public body whereas it was one in any event; and it fails directly to address the key question, and strictly the only question which had to be answered in order to determine whether the claimant's human rights were engaged, namely whether the act of termination was a private act (although the declaration does state that acts of termination are public functions).
52. Mr Drabble submitted that the approach adopted by the Divisional Court was the proper one because it has not been accepted by the Trust that it was a hybrid body with respect to its housing allocation and management functions. However, section 6 is not structured so as to ask whether the particular function in the context of which the disputed act takes place is a public function. Moreover, it may sometimes be an irrelevant question. For example, there may be cases where the court is persuaded that whether a particular function of a hybrid body is public or not is immaterial, since it is satisfied that the particular act in dispute is a private act in any event. In those circumstances, the function question does not strictly arise and need not be resolved.
53. However, I do not thereby suggest that the analysis of the Divisional Court was to no purpose. I accept that in order to determine whether the act of termination is a private act or not, it is necessary to focus on the nature of the act in the context of the body's activities as a whole. In most, if not all, cases that is likely to require a consideration of the nature of the function or functions to which the act is contributing. Plainly the power to seek an ASBO was of no assistance in answering whether the termination of the tenancy was a private act or not.
54. By contrast, the question whether the provision by the Trust involved the exercise of a function of a public nature was in my view, highly material to that question. In short, in my judgment the scrutiny which the Divisional Court gave to the housing functions of the Trust was relevant to the question whether the act of termination was private or not, but not to the question whether the Trust was a hybrid public authority.
55. It is plain that the Divisional Court did in fact in this case focus on the function of allocating and managing housing at least in part in order to assist it to reach a conclusion on the proper characterisation of the act of termination. I consider that it was right to do so. It may be that to describe that context by reference to allocation and management was not wholly apt: perhaps allocation alone would have sufficed. But I do not think anything significant turns on that. The important point, in my view, is to consider the act of termination in the wider context of the housing function being carried on by the Trust, whatever shorthand is used to describe that context.

The contending arguments.

56. The contending arguments can be relatively shortly stated. Mr Drabble submits that the analysis of the relevant facts demonstrates that most RSLs are in significant part publicly funded in order to fulfil an important function of government. It is an essential policy of government to provide social or subsidised housing, and RSLs are a vital instrument through which that policy is achieved. They are closely regulated and controlled in what rents they can fix and even the way in which they should carry out terminating tenancies. Whilst they do not stand in the shoes of local authorities, they work in very close harmony with them.
57. The obligation to co-operate results in significant limitations on the decision to allocate. Even absent any such duty, the decision who should be allocated the benefit of social housing, the terms on which he is offered it, and the decision to remove someone from it by terminating his tenancy, all involve the exercise of rights which, although private in form, are public in substance. They determine which particular individuals can benefit from the allocation of public funds. All these factors are in play with respect to this particular Trust.
58. Furthermore, the act of termination is closely and inextricably linked to the function of allocation. It would be highly artificial to separate it out and treat it as a private act merely because the tenancy itself was a contract. The Divisional Court was correct to say that the character of the function effectively defined the character of the act.
59. Mr Arden QC, counsel for the Trust, says that this argument is misconceived. The fundamental and elementary point, which the respondent does not challenge, is that the provision of housing is not a governmental function. That has very recently been confirmed by Baroness Hale of Richmond. In R (on the application of Ahmad) v The Mayor and Burgesses of the London Borough of Newham [2009] UKHL 12 in which she pointed out that no-one has a right to a house, and a local housing authority is under no general duty to provide housing accommodation. Many private and public bodies fulfil the function of providing housing.
60. Nor, says Mr Arden, is the case advanced by the fact that there is regulation of certain aspects of the way in which the Trust allocates and manages its housing functions. There has long been detailed regulation of tenancies both in the private and public sectors. Until 1988 rent officers would fix rents at levels which were often below what the market would bear, even in the private sphere. That would not have converted private landlords into bodies exercising public functions. Similarly, control over evictions has been exercised for decades. YL has emphasised that the mere fact of regulation tells us very little, if anything, of a body's status under section 6. It depends upon the nature and purpose of the regulation. This is not a case where the local authority has delegated its statutory powers to the Trust. The fact that both happen to be providing social housing is not enough to render the Trust's functions public.
61. In order to constitute a public body it is necessary for the state to have control over the exercise of the body's powers. Here it does not; it is for the Trust to determine who it shall house and on what terms. It may reach an agreement with the local authority about allocations, but this does not alter the fundamental point that it controls its own affairs and enters into its own contracts.
62. The tenant has no public law rights as against the Trust. Termination of the tenancy may confer fresh duties on the local authority, such as a duty to house a homeless person, and there may be claims against central government for housing benefit. But the relationship between the tenant and the Trust is entirely located in private law. It is governed by the terms of the tenancy (with such statutory overlay to confer security as Parliament has afforded) and these terms are not affected either by the nature of the Trust or the functions it performs.
63. For this reason, even if it can be said that the Trust is performing public functions with respect to the allocation and management of property generally, it is not doing so when it terminates a tenancy. This is par excellence the exercise of a private power in precisely the same way as the termination of the tenancy in YL was so characterised by Lord Scott.

Conclusions.

64. The essential question is whether the act of terminating the tenancy is a private act. When considering how to characterise the nature of the act, it is in my view important to focus on the context in which the act occurs; the act cannot be considered in isolation simply asking whether it involves the exercise of a private law power or not. As Lord Mance observed in YL, both the source and nature of the activities need to be considered when deciding whether a function is public or not, and in my view the same approach is required when determining whether an act is a private act or not within the meaning of section 6(5). Indeed, the difficulty of distinguishing between acts and functions reinforces that conclusion.
65. In this case there are a number of features which in my judgment bring the act of terminating a social tenancy within the purview of the Human Rights Act.
66. A useful starting point is to analyse the Trust's function of allocating and managing housing with respect to the four criteria identified by Lord Nicholls in paragraph 12 in the Aston Cantlow case, reproduced above. First, there is a significant reliance on public finance; there is a substantial public subsidy which enables the Trust to achieve its objectives. This does not involve, as in YL, the payment of money by reference to specific services provided but significant capital payments designed to enable the Trust to meet its publicly desirable objectives.
67. Second, although not directly taking the place of local government, the Trust in its allocation of social housing operates in very close harmony with it, assisting it to achieve the authority's statutory duties and objectives. In this context the allocation agreements play a particularly important role and in practice severely circumscribe the freedom of the Trust to allocate properties. This is not simply the exercise of choice by the RSL but is the result of a statutory duty to co-operate. That link is reinforced by the extent to which there has been a voluntary transfer of housing stock from local authorities to RSLs.
68. Third, the provision of subsidised housing, as opposed to the provision of housing itself, is, in my opinion a function which can properly be described as governmental. Almost by definition it is the antithesis of a private commercial activity. The provision of subsidy to meet the needs of the poorer section of the community is typically, although not necessarily, a function which government provides. The Trust, as one of the larger RSLs, makes a valuable contribution to achieving the government's objectives of providing subsidised housing. For similar reasons it seems to me that it can properly be described as providing a public service of a nature described in the Lord Nicholls' fourth factor.
69. Furthermore, these factors, which point in favour of treating its housing functions as public functions, are reinforced by the following considerations. First, the Trust is acting in the public interest and has charitable objectives. I agree with the Divisional Court that this at least places it outside the traditional area of private commercial activity. Second, the regulation to which it is subjected is not designed simply to render its activities more transparent, or to ensure proper standards of performance in the public interest. Rather the regulations over such matters as rent and eviction are designed, at least in part, to ensure that the objectives of government policy with respect to this vulnerable group in society are achieved and that low cost housing is effectively provided to those in need of it. Moreover, it is intrusive regulation on various aspects of allocation and management, and even restricts the power to dispose of land and property.
70. None of these factors taken in isolation would suffice to make the functions of the provision of housing public functions, but I am satisfied that when considered cumulatively, they establish sufficient public flavour to bring the provision of social housing by this particular RSL within that concept. That is particularly so given that their Lordships have emphasised the need to give a broad and generous construction to the concept of a hybrid authority.

Is termination of a tenancy a private act?

a tenancy
71. That still leaves the central question whether the act of termination itself can nonetheless be treated as a private act. Can it be said that since it involves the exercise of a contractual power, it is therefore to be characterised solely as a private act? It is true that in both Aston Cantlow and YL it is possible to find observations which appear to support an affirmative answer to that question. As I have said, in the YL case Lord Scott considered that the termination of the tenancy in that case was a private act, essentially because it involved the exercise of private rights. And in the Aston Cantlow case their Lordships focused on the private law source of the right being exercised in concluding that it was a private act.
72. Those decisions certainly lend force to the argument that the character of the act is related to and may be defined by the source of the power being exercised. Where it is essentially contractual, so the argument goes, it necessarily involves the exercise of private rights.
73. In my judgment, that would be a misreading of those decisions. The observations about private acts in Aston Cantlow and YL were in a context where it had already been determined that the function being exercised was not a public function. I do not consider that their Lordships would have reached the same conclusion if they had found that the nature of the functions in issue in those cases were public functions.
74. In my judgment, the act of termination is so bound up with the provision of social housing that once the latter is seen, in the context of this particular body, as the exercise of a public function, then acts which are necessarily involved in the regulation of the function must also be public acts. The grant of a tenancy and its subsequent termination are part and parcel of determining who should be allowed to take advantage of this public benefit. This is not an act which is purely incidental or supplementary to the principal function, such as contracting out the cleaning of the windows of the Trust's properties. That could readily be seen as a private function of a kind carried on by both public and private bodies. No doubt the termination of such a contract would be a private act (unless the body were a core public authority.)
75. In my opinion, if an act were necessarily a private act because it involved the exercise of rights conferred by private law, that would significantly undermine the protection which Parliament intended to afford to potential victims of hybrid authorities. Public bodies necessarily fulfil their functions by entering into contractual arrangements. It would severely limit the significance of identifying certain bodies as hybrid authorities if the fact that the act under consideration was a contractual act meant that it was a private act falling within section 6(5).
76. Assume, for example, that a local authority delegated some of its statutory functions to a private organisation, such as allocating housing to the homeless. As Lord Mance pointed out in YL, the express delegation of public functions in this way would certainly bring the delegatee within the range of bodies for whom the government would be liable under Strasbourg jurisprudence. It surely could not be said that the exercise of contractual powers necessarily involved in the performance of those functions and central to the concerns of the tenant, such as the termination of a tenancy, involved the exercise of private rights which thus escaped the purview of the Human Rights Act. In my judgment that would plainly be in breach of Convention principles.
77. It follows that in my view the act of terminating the tenancy of Mrs Weaver did not constitute an act of a private nature, and was in principle subject to human rights considerations. That may provide relatively limited protection in view of the decision of the House of Lords in Doherty v Birmingham City Council [2008] UKHL 57; [2008] 3 WLR 636, following Kay v Lambeth London Borough Council [2006] UKHL 10; [2006] 2 AC 465. But the claimant and others in a like situation are entitled to such protection as is available to them applying human rights principles.
78. A point which then arises is whether the protection afforded by the Human Rights Act will extend to all tenants of the Trust who are in social housing or only those in properties which were acquired as a result of state grants. I agree with the Divisional Court that it should be all those in social housing. The effect of the grant is not merely to assist the Trust (and other RSLs similarly placed) in being able to provide low cost housing to the tenants in the properties acquired by the grant; it necessarily has a wider impact, and bears upon its ability to provide social housing generally. Furthermore, it would be highly unsatisfactory if the protection of human rights' law depended upon the fortuitous fact whether a tenant happened to be allocated to housing acquired with a grant or not.
79. It does not follow, however, that all tenants of the Trust will receive the same protection. Mr Drabble conceded, I think probably correctly, that human rights' principles will not apply to those tenants of the Trust (a relatively small proportion, it seems) who are not housed in social housing at all. If the tenants are paying market rents in the normal way, then no question of subsidy arises. It is not obvious why the tenant should be in any different position to tenants in the private sector where human rights principles are inapplicable.
80. The effect of drawing this distinction does not lead to the unattractive consequence which would have resulted had the care home been held to have been a hybrid authority in YL, namely that two persons, each subject to the same level of care in the same care home, could be subject to different degrees of legal protection. Indeed, the distinction between those in social housing and those paying market rates merely mirrors the current distinction between those housed in local authority accommodation, who do have human rights protection with respect to evictions, and those housed in the private sector who do not.

Judicial review.

81. Both the Aston Cantlow and YL cases emphasised that it does not necessarily follow that because a body is a public body for the purposes of section 6, it is therefore subject to public law principles. The Divisional Court held, however, that in this case the two questions had to be determined the same way. Mr Arden does not now seek to contend otherwise. In my judgment, he was right not to do so.

Disposal.

82. Accordingly, I would dismiss this appeal. In my judgment the Trust is a hybrid public authority and the act of terminating a tenancy is not a private act. It does not necessarily follow, however, that every RSL providing social housing will necessarily be in the same position as the Trust. The determination of the public status of a body is fact sensitive. For example, a potentially important difference is that apparently some RSLs have not received any public subsidy at all, and arguably - and I put it no higher than that - their position could be different.

LORD COLLINS OF MAPESBURY:

83. I agree with Elias LJ that the appeal should be dismissed.
84. There are two preliminary comments to be made. The first relates to the question whether this appeal is likely to have any practical importance. In practice complaints by tenants of human rights violations on the part of local authorities or housing associations are most likely to centre on Article 8(1) of the European Convention on Human Rights. In Kay v Lambeth LBC [2006] UKHL 10, [2006] 2 AC 465 the House of Lords held that the right of a public authority landlord to enforce a claim for possession would in most cases be justifiable under Article 8(2). While that decision stands (Kay v United Kingdom is pending in the European Court of Human Rights) the practical implications of extending the protection of the Convention to tenants of RSLs must be very limited.
85. The second point relates to the context, or more accurately the lack of context, in which this appeal came to be heard. Before the Divisional Court Mrs Weaver lost comprehensively on the merits of her claim. She wholly failed in her claim that the Trust had evicted her in breach of a legitimate expectation arising out of Guidance issued by the Housing Corporation, and that to evict her from her home would interfere with her rights under Article 8. It was held that the claimed legitimate expectation that Housing Act 1988, sched 2, ground 8 (arrears of rent) would not be used was far too tenuous and general to be enforceable in public law, and there was in any event no breach of it. Mrs Weaver had not given evidence that she had the expectation alleged or that she knew of the term of the contract from which the expectation is said to have arisen. The expectation was simply an artificial construct derived from the standard terms and conditions and attributed to her, rather than a genuinely held expectation of her own. The finding that there was neither a legitimate expectation nor a breach of any legitimate expectation disposed of the argument under Article 8.
86. In reaching its conclusions the Divisional Court held that the Trust was subject to the Human Rights Act 1998 by virtue of section 6(3)(b) and (implicitly) that the act of termination of the tenancy was not a private act (section 6(5)). As Elias LJ has pointed out, strictly it was unnecessary for the court to determine the wider question raising the legal status of the Trust.
87. Normally the Trust would not have been in a position to appeal from that part of the reasoning, because of the fundamental rule of procedure that appeals lie against judgments or orders only, and not against reasons: Lake v Lake [1955] P 336; Supreme Court Act 1981, section 16. But because the Trust wanted to contest the Divisional Court's conclusion on that issue even if Mrs Weaver did not appeal (and not merely by way of a respondent's notice if she did appeal), the Divisional Court granted declarations (a) that the management and allocation of housing stock by the Trust (including decisions concerning the termination of a tenancy) was a function of a public nature, with the effect that the Trust was to be regarded as a public authority in that respect for the purposes of the Human Rights Act 1998, section 6(3)(b); and (b) that the Trust was accordingly amenable to judicial review on conventional public law grounds in respect of its performance of that function.
88. Whether a declaration should have been granted was of course a matter for the discretion of the Divisional Court, and there was no party at that stage, or on this appeal, with an interest in arguing that no such declaration should have been made. But the consequence of this procedural device is that this court is asked to determine the question of principle divorced from any plausible factual scenario in which the question might arise. In effect this court (by contrast with the Divisional Court) is being asked to give an advisory opinion. As Justice Heydon of the High Court of Australia has said in the context of findings which are not needed for the decision: "It is difficult to solve every aspect of a problem satisfactorily and conclusively when only one element of it is presented for concrete decision. Obiter dicta tend to share in the vice of, and even become, advisory opinions": (2006) 122 LQR 399, at 417.
89. The problem is particularly acute here, because this court is being asked to determine in the abstract an issue on which the Divisional Court did not focus explicitly, namely whether in the present context, even if the Trust is a "person certain of whose functions are functions of a public nature" within the meaning of section 6(3)(b), nevertheless it is not a public authority for present purposes because, in the words of section 6(5) "in relation to a particular act, a person is not a public authority by virtue only of subsection (3)(b) if the nature of the act is private." The question is this: even if certain of the functions of the Trust are functions of a public nature, is the termination of a tenancy in accordance with its terms a private act?
90. Richards LJ touched on the public or private character of the termination of the tenancy. First, in the only explicit reference to section 6(5) he set out the relevant parts of section 6 (at [25]). Second, he referred to the argument by Mr Drabble QC for Mrs Weaver (at [45]) that the acts of deciding to grant or terminate tenancies of social housing were decisions concerning the allocation of public housing resources and, as such, were not purely private in nature; that a decision to terminate a tenancy led to the withdrawal of a public funded resource from the tenant affected; that it was well established that decisions about eviction could have a public law character so as to be subject to the control of public law: e.g. Wandsworth London Borough Council v Winder [1985] AC 461 and Wandsworth London Borough Council v A [2000] 1 WLR 1246. Third, he referred (at [60]) in his conclusions to the fact that, on existing authority (Peabody Housing Association Ltd v Green (1978) 38 P&CR 644 and R v Servite Houses, ex p Goldsmith [2001] LGR 55), a decision by an RSL to terminate a tenancy was considered to be a matter of private, not public, law and not to be susceptible to judicial review; but he thought it better to leave the question of amenability to judicial review out of account when considering the issue of public authority, not least to avoid a danger of circularity of reasoning.
91. His conclusion on this aspect was (at [62]) that, if the allocation of housing stock by the Trust was a public function, then it would be wrong to separate out "management" decisions concerning the termination of a tenancy as acts of a purely private nature. The allocation and management of the housing stock were to be regarded as part and parcel of a single function or as closely related functions. It would be artificial to separate out the act of terminating a tenancy, from the act of granting a tenancy. The termination of a tenancy led to the withdrawal of a publicly funded or subsidised resource from the tenant and was likely to trigger fresh duties of the local authority, and had been recognised in the context of judicial review as involving decisions capable of having a public law character. If the Trust was a public authority in relation to the grant of a tenancy, then it was equally a public authority in relation to the termination of the tenancy.
92. It seems to me that the concession in the present case that the Trust is a "hybrid authority" which exercises both public and private functions does not assist in the application of section 6(5). It was conceded only that the Trust is a hybrid authority on the basis that some of its functions are public functions, such as the power to obtain parenting orders (Anti-social Behaviour Act 2003, sections 26B and 26C) and anti-social behaviour orders (Crime and Disorder Act 1998, Part 1). In addition, the Intervener, the Equality and Human Rights Commission, refers in its written submission to powers enjoyed by RSLs which are not otherwise available to private landlords, including the power to apply to a court to demote a tenant from assured status to the status of a demoted tenant (Housing Act 1988, section 6A, inserted by Anti-social Behaviour Act 2003, section 14(4)) and the ability to grant Family Intervention Tenancies (in conjunction with which occupiers undertake behaviour support programmes) (Housing Act 1988, sched 1, part 1, para 12ZA inserted by Housing and Regeneration Act 2008, section 297(2)).
93. Consequently, I do not consider that the reference to "functions of a public nature" in section 6(3)(b) becomes wholly irrelevant once that concession is made and that the focus is simply on section 6(5). It seems to me to be plain that the act in question must be an act in pursuance of the entity's relevant functions of a public nature. The fact that the Trust is conceded to perform functions of a public nature in relation to anti-social behaviour orders not only does not assist in determining whether the nature of the act of termination of a tenancy is private or public, but it deflects attention from what I consider to be an essential pre-requisite to consideration of the question in section 6(5), namely that the act is in pursuance of, or at least connected with, performance of functions of a public nature.
94. That does not conclude the matter, of course, because many acts which are in pursuance of performance of functions of a public nature will be private acts. Even if the provision of social housing were a public function, it could not be suggested that the termination of a contract with a builder to repair one of the houses in the housing stock was other than a private act.
95. In Poplar Housing and Regeneration Community Association Ltd v Donoghue [2001] EWCA Civ 595, [2002] QB 48 this court held that the housing association was a public authority for the purposes of section 6(3)(b). The court said (at [58]): "The renting out of accommodation can certainly be of a private nature. The fact that through the act of renting by a private body a public authority may be fulfilling its public duty, does not automatically change into a public act what would otherwise be a private act …" It said that the "more closely the acts that could be of a private nature are enmeshed in the activities of a public body, the more likely they are to be public" (at [65(v)]). In the result, the court held that the eviction of the tenant engaged Article 8(1) but that the obligation to make the eviction order under section 21(4) of the Housing Act 1988 was within Article 8(2). But the authority of this decision has been undermined by YL where it was said that it relied too heavily on the historical links between the local authority and the RSL, rather than upon the nature of the function itself which was the provision of social housing: Lord Scott at [61] and Lord Mance at [105]. See also Baroness Hale, dissenting, at [81].
96. In Aston Cantlow PCC v Wallbank [2003] UKHL 37, [2004] 1 AC 546 Lord Nicholls (at [16]) contrasted a private act with the discharge of a public function. Lord Hope (at [41]) said that whether section 6(5) applied to a particular act depended on the nature of the act which was in question in each case; and concluded (at [64]) that the nature of the act was to be found in the nature of the obligation which the PCC was seeking to enforce; it was seeking to enforce a civil debt, and the function it was performing had nothing to do with the responsibilities which were owed to the public by the state; accordingly section 6(5) applied and in relation to the act in question the PCC was not a public authority. Lord Hobhouse (at [89]) also emphasised the fact that the act was the enforcement of a civil liability, which was a private law obligation.
97. So also in YL v Birmingham City Council [2007] UKHL 27, [2008] 1 AC 95 Lord Scott (with whom Lord Neuberger and Lord Mance agreed) emphasised that the notice was served in purported reliance on a contractual provision in a private law agreement, and "its nature could not be thought to be anything other than private" (at [34]). Baroness Hale, dissenting, thought that an act in relation to the person for whom the public function is being put forward cannot be a private act for the purposes of section 6(5) (at [73]).
98. Elias LJ is of the view that the source of the power will be a relevant factor in determining whether the act in question is in the nature of a private act or not. I would go somewhat further. It is not easy to envisage circumstances where an act could be of a public nature where it is not done in pursuance, or purportedly in pursuance, of public functions.
99. I also agree with Elias LJ that the following features in particular are highly relevant to the question whether the functions of the Trust are public functions (although none of them on its own is in any sense conclusive): the substantial public subsidy which enables the Trust to achieve its objectives; the way in which the allocation agreements circumscribe the freedom of the Trust to allocate properties; and the nature of the regulation to which the Trust is subject. In addition, the vast majority of RSL tenants enjoy statutory protection as regards the circumstances in which a social housing tenancy may be terminated. Secure, assured and assured shorthold tenancies (the vast bulk of RSL tenancies) can only be determined by a process of service of statutorily prescribed notices, court proceedings and a court order which ends the tenancy: cf Doherty v Birmingham City Council [2008] UKHL 57, [2008] 3 WLR 636, at [100], per Lord Walker. Although I do not attach significance to the concession that the Trust is a hybrid authority because it can obtain anti-social behaviour orders, I do attach some significance to that power in conjunction with the other powers relied on by the Equality and Human Rights Commission and referred to above.
100. Consequently it does not follow that the termination of a tenancy is necessarily a private act simply because it originates from the exercise of contractual rights. In any event, I do not read Aston Cantlow and YL as doing more than treating the private law source of the right and obligation as a factor in determining whether the act is a private act or a public act. In my judgment the act of termination is inextricably linked to the provision of social housing as part of the Trust's public function. Consequently I have come to the conclusion that the Divisional Court's decision on this point was right.

LORD JUSTICE RIX:
 


101. I have read Lord Justice Elias's judgment in draft, and am most grateful to him for setting out the material in this case so clearly. I have the misfortune, however, to disagree with him, and with Lord Collins of Mapesbury, as to the disposal of this appeal.
102. There is something rather perplexing about this litigation. Mrs Weaver claimed judicial review of the Trust's decision to seek to terminate her tenancy on ground 8 of schedule 2 of the Housing Act 1988. That is a ground, premised on arrears of rent of more than 8 weeks, which provides the landlord with a mandatory basis for recovering possession; as contrasted with grounds 10 or 11, which grant to the court a discretion whether or not to enforce possession. Mrs Weaver alleged that the Trust's use of ground 8 instead of the discretionary grounds for possession was in breach of legitimate expectation and in breach of her rights under the Convention. It was common ground that if her argument based on legitimate expectation failed, she could not succeed in reliance on article 8 of the Convention.
103. Her case on legitimate expectation sought to rely on the assumed presence in the Trust's standard terms and conditions of its assured tenancy agreement of the following statement:

"In providing a housing service we will comply with the regulatory framework and guidance issued by the Housing Corporation."

The relevant guidance was to be found in Housing Corporation Regulatory Circular 07/04, issued in July 2004 under section 36 of the Housing Act 1996, and then in its replacement Circular 02/07. The key passage, under the heading "Clarification of the Corporation's expectations: evictions", provides –

"Before using Ground 8, associations should first pursue all other reasonable alternatives to recover the debt."

104. In the divisional court Richards LJ held as follows:

"85…the claimed legitimate expectation is far too tenuous and general in character to be enforceable in public law, and there was in any event no breach of it.

86. The claimant herself has not given evidence that she had the expectation alleged or even that she knew of the term of the contract from which the expectation is said to have arisen…Thus the expectation is simply an artificial construct derived from the standard terms and conditions and attributed to the claimant, rather than a genuinely held expectation of her own…

87. As to the representation itself…I do not think that it can be read as a clear, unambiguous and unqualified promise or commitment to do everything set out in the guidance issued by the Housing Corporation. The guidance is by its nature guidance, not prescription. The regulatory provisions to which I have referred place the Housing Corporation in a strong position to ensure that it is substantially followed, but there is nothing that turns it into the equivalent of a statutory rule-book, and the Housing Corporation looks not just at whether the guidance has been followed but at whether alternative action has been taken to achieve the same objectives…The statement in [the Trust's] standard terms and conditions cannot have been intended to give the guidance a status it does not have under the statute or in the Housing Corporation's own practice. At most, Mr Arden's description of it as a "target duty" is more apt. Moreover, if the statement has the character of a promise, there is no reason why it should not be treated as a contractual promise, since it features in the contractual terms and conditions; but it is no part of the claimant's case that the statement is contractually binding. If it lacks the qualities to give it contractual force notwithstanding that it is located in a contract, I am not satisfied that it can properly be treated as having the qualities that justify its enforcement in public law as a legitimate expectation…

89. Thus, even if I were to accept the existence of a legitimate expectation in terms of the relevant guidance, that is a promise or commitment on the part of [the Trust] to pursue all reasonable alternatives to recover the debt before using ground 8, I would not find a breach of it on the facts of this case…I do not accept that the pursuit of all reasonable alternatives requires possession proceedings to be brought first on ground 10 or 11 before reliance can be placed on ground 8…

90. Looking at the overall history of [the Trust's] dealings with the claimant, I am not persuaded that [the Trust] failed to use all reasonable alternatives to recover the debt before using ground 8. In particular, in the light of the history of substantial and repeated defaults, [the Trust] was in my view entitled to take the view that reliance on ground 10 or 11 did not provide a reasonable alternative means of recovering the debt, and its reliance on ground 8 was in the circumstances in accordance with the relevant guidance and justified…"

105. Richards LJ then turned to the "Convention issues" but said that his finding that there was neither a legitimate expectation nor a breach of any legitimate expectation "sinks the argument" (at para 94). As for a further more fundamental argument that the very statute under which the possession order was sought was incompatible with article 8, Richards LJ said that it would be better not to express any view on it, since it arose on an artificial assumption and would necessarily be obiter (at para 97).
106. I have set out the public law contentions and the divisional court's holdings on them because it seems to me that it is necessary to put the argument before us in context. That context was the complaint that the Trust's decision to use ground 8 (rather than another method of obtaining possession) to evict Mrs Weaver was illegitimate in public law and Convention terms because a provision of the tenancy promised, although not as a contractually binding undertaking, to use other methods first. The argument failed at every point. What is significant for present purposes is that it is said that the Trust did not live up to the legitimate expectations raised by its own contract. The complaint is not even that the Trust sought to obtain possession, but that it sought to do so by one lawful method (lawful that is subject only to the more fundamental argument, not reached by the divisional court, which would have attacked the statutory basis of ground 8) before first trying to do so by another lawful method which should, for reasons engendered by its own contract, have been preferred.
107. Mrs Weaver has not sought to appeal from those decisions which the divisional court reached having first found that the Trust was a public authority within section 6(3)(b) of the HRA 1998. She is no longer interested in this litigation.
108. It is, however, the divisional court's decision, along its route towards dismissing Mrs Weaver's claim, that the Trust was a public authority within section 6(3)(b), that is the subject-matter of the present appeal by the Trust. The only way such an appeal could have been promoted was to grant a declaration regarding the position under section 6(3)(b), and that is what the divisional court did. Its declaration is set out at para 5 above. It may be noted that the declaration is solely by reference to section 6(3)(b), and makes no mention of section 6(5). It may also be noted that the declaration is by reference to a single "function", namely "the management and allocation of housing stock…(including decisions concerning the termination of a tenancy)". It is said that such a function "is a function of a public nature". It appears that decisions concerning the termination of a tenancy are part of what is called the function of "the management and allocation of housing stock".
109. The declaration was fashioned to reflect the argument before the divisional court and its reasoning on that argument. The rival submissions of the parties before the divisional court are encapsulated in the following passages taken from the judgment of Richards LJ:

"44. Applying YL v Birmingham City Council, Mr Drabble submitted that [the Trust] is to be seen as carrying out a governmental function, namely the management and allocation of state-subsidised housing…

45. Further, the particular acts of deciding to grant or terminate tenancies of social housing are decisions concerning the allocation of public housing resources and, as such, are not purely private in nature…"

Those were the submissions made on Mrs Weaver's behalf. On behalf of the Trust, Mr Arden submitted that –

"48…certain of the functions of an RSL may be public functions: for example, its statutory function in relation to anti-social behaviour orders, or functions carried out pursuant to specific statutory delegations by local housing authorities…These specific situations are to be distinguished, however, from the RSL's function of managing and allocating its own housing stock…

51. Even if the allocation of housing is a public function, Mr Arden submitted that the termination of a tenancy is not: it is a management decision and is governed by the terms of the contract…"

110. On these rival submissions Richards LJ decided as follows:

"62. Reference to the termination of a tenancy brings me to a final point on this issue, which is that if the allocation of housing stock by [the Trust] is a public function, then it would in my view be wrong to separate out "management" decisions concerning the termination of a tenancy as acts of a purely private nature. The allocation and management of the housing stock are to be regarded as part and parcel of a single function or as closely related functions. It would be artificial to separate out the act of terminating a tenancy, or indeed other acts in the course of management of a property, from the act of granting a tenancy. Moreover, as Mr Drabble submitted, the termination of a tenancy leads to the withdrawal of a publicly funded or subsidised resource from the tenant and is likely to trigger fresh duties of the local authority, and has been recognised in the context of judicial review as involving decisions capable of having a public law character. If [the Trust] is a public authority in relation to the grant of a tenancy, then it is equally a public authority in relation to the termination of the tenancy.

63. For those reasons I accept the claimant's case that [the Trust] is for relevant purposes a public authority within s.6(3)(b) of the Human Rights Act 1998…"

111. Although Richards LJ nowhere in that passage mentioned section 6(5) (indeed, it is mentioned only very briefly in passing in para 25 of his judgment), I would be prepared to accept that in his critical para 62, where he considered whether terminating a tenancy or decisions concerning termination were "acts of a purely private nature", he was implicitly having regard to section 6(5)'s provision that

"in relation to a particular act, a person is not a public authority by virtue only of subsection (3)(b) if the nature of the act is private."

However, his reasoning was that it was artificial to separate the act of termination from the act of granting a tenancy. If, therefore, the latter was a public function, or part of the overall public function of "management of a property", then the former was as well.

112. In the light of the arguments addressed to this court, I am not surprised that section 6(5) figured so sparingly in the divisional court's judgments, for before this court too the submissions essentially focussed on section 6(3)(b) rather than on section 6(5). This was despite the fact that Mr Arden conceded (albeit Elias LJ has suggested, perhaps wrongly) that RSLs were hybrid public authorities within section 6(3)(b) because of their power to obtain ASBOs and parenting orders. However, he was at pains to resist any suggestion that the matter went further than that, or in particular that in matters of management or allocation RSLs had any public functions to perform of any kind whatsoever. Moreover, there was hardly any consideration of what was meant by the extremely broad expression "management" on the one hand, or on the other hand of what was involved in the much narrower field of terminating a tenancy (save in the context of the subsequent discussion of legitimate expectations). On the whole, submissions on all sides were addressed at a very broad level of abstraction. On one side it was being suggested that not only the Trust, but all RSLs, in all their activities, were acting as public authorities, whereas on the other side it was being suggested that (absent such peripheral matters as ASBOs and the like) RSLs were essentially commercial, albeit subsidised and regulated, entities. These were submissions at the extremes.
113. I said above that this is perplexing litigation. I have sought to illustrate what I mean by that. It is, in this court, litigation in which the respondent has no interest, having lost below and not appealed. The argument has proceeded in the main on the basis of an extremely broad canvas, without specific focus on the act of termination in this case or on the critical statutory provision, which is section 6(5), despite the concern there expressed that the focus be on the "particular act". Instead, opposing strategic positions have been taken up. In as much as "management" has been in question, there has been no real attempt to examine what is meant by that, or what is involved in it. No doubt it can cover a vast array of activity, from the purchase or development of housing to the repair of a leaking bathroom pipe in respect of a single tenancy. In as much as "allocation" and "termination" have been in question, there has been no real attempt to explain why termination of a tenancy by regard to its contractual terms is to be regarded as just the other side of the coin, or part and parcel of, a function of allocation, which is essentially pre-contractual. It has simply been regarded as such.

Strasbourg and domestic jurisprudence.

114. In this state of affairs, I ask myself first, what guidance is given by either Strasbourg or domestic jurisprudence.
115. I begin with Strasbourg jurisprudence. This is, in my judgment, a significant starting-point, because, as Elias LJ has pointed out (at para 35(1) above), the purpose of section 6 is to identify "those bodies for whose acts the state is answerable before the European Court of Human Rights" (per Lord Nicholls in Aston Cantlow at para 6). As Lord Hobhouse observed in the same case (at para 87), "The relevant concept is the opposition of the "victim" and a "governmental body". Moreover, we are required to take Strasbourg jurisprudence into account in determining any question which has arisen in connection with a Convention right: HRA 1998, section 2(1): see Lord Hope (ibid at para 51). See also Lord Rodger at para 163 and in YL Lord Neuberger at para 157.
116. What in this context is to my mind instructive is that there is no case, at any rate none has been cited, in Strasbourg jurisprudence in which the non-governmental provider of social housing has been the cause or object of a complaint of victimhood within the meaning of the Convention. The only Strasbourg case cited in the judgments of the divisional court is Novoseletskij v Ukraine (2006) 46 EHRR 53, where "a body responsible for the management and distribution of part of the state-owned housing stock was held by the Strasbourg court to be a governmental organisation for whose acts and omissions the state was liable" (at para 44 of the judgment below). However, that was because the organisation in question was part of that essential "core" or "governmental" fabric of the state which is at the heart of Convention liability for these purposes. The citation by Richards LJ of that case was simply of an element within the submissions of Mr Drabble below. When I enquired of Mr Arden generally as to what the teachings of Strasbourg jurisprudence might be about non-governmental providers of social housing, he told me that there were no relevant cases. He explained that by and large there was a distinction between countries of Eastern Europe, which had used municipalities to provide social housing, and the countries of Western Europe, where subsidised private social housing prevailed. The United Kingdom had recently moved from the Eastern to the Western European model. There were a number of Strasbourg cases concerning the provision of municipal housing, but that was all. Mr Drabble did not dispute this explanation.
117. I turn to domestic jurisprudence for assistance. I am grateful for the analysis performed by Elias LJ in respect of the two leading cases of Aston Cantlow and YL. We are to perform a multi-factorial assessment. However, how has this worked in practice? First, I remind myself of what Lord Nicholls said in Aston Cantlow at para 16:

"I turn next to consider whether a parochial church council is a hybrid public authority. For this purpose it is not necessary to analyse each of the functions of a parochial church council and see if any of them is a public function. What matters is whether the particular act done by the plaintiff council of which complaint is made is a private act as contrasted with the discharge of a public function."

That is of course a reference to the "particular act" in section 6(5).

118. In this context it is to my mind instructive, in a comparatively new field of enquiry, to try to see how the emerging principles have resulted in decisions. I approach the matter chronologically, while recognising that the law has been developing during the short period under review.
119. In R v Servite Houses and Wandsworth London Borough Council, ex parte Goldsmith and Chatting (2001) 33 HLR 35, Moses J had to consider the closure by a registered social landlord ("RSL") of its purpose-built registered care home which it had assured the applicants would be their home for life. Subsequently, however, financial losses led the RSL to decide to close it. Alternative arrangements were offered. The applicants sought judicial review on the ground that the decision to close was a breach of their legitimate expectations. Although Moses J was not operating under the HRA and its section 6, he applied a closely analogous test for susceptibility to judicial review, namely whether the RSL was performing a public duty under a statutory source for its powers or whether the source of the power it was exercising was only in contract (at paras 56/67). He concluded, albeit reluctantly, that it was the latter. It was true that the applicants had been placed with the RSL by Wandsworth LBC pursuant to a statute (sections 21 and 26 of the National Assistance Act, 1948); nevertheless, "Once the placement arrangements had been made the relationship between Wandsworth and Servite [the RSL] was commercial" (at para 90). The source of the RSL's powers was purely contractual and it owed no public law obligation to the applicants. Wandsworth's public law obligations were limited to an obligation to reassess the applicant's needs. The applications failed, although Moses J raised the question whether "the solution lies in imposing public law standards on private bodies whose powers stem from contract or in imposing greater control over public authorities at the time when they first make contractual arrangements" (at para 105).
120. In YL, Lord Mance referred to the judgment in Servite as illuminating and persuasive and clearly considered it to be correct. He observed that -

"the essentially contractual source and nature of Southern Cross's activities differentiates them from any "function of a public nature", even though it is (as often in the private sector) a matter of public concern, interest and benefit that reputable, efficient and properly regulated providers of such services should exist" (at para 120).

Lord Scott and Lord Neuberger agreed with Lord Mance.

121. In Poplar Housing and Regeneration Community Association Ltd v Donoghue [2001] EWCA Civ 595, [2002] QB 48 ("Poplar") the claimant was an RSL which was seeking possession from its tenant, the defendant. The tenant had originally been granted a tenancy by her local housing authority on an interim basis, while the question whether she was intentionally homeless was investigated. During her tenancy the property in which she lived (together with a substantial proportion of the authority's housing stock) was transferred by the local authority to the RSL, of whom she became a tenant under a periodic assured shorthold tenancy. In due course the local authority decided that she had become intentionally homeless. The RSL then sought possession of her home under section 21(4) of the Housing Act 1988 which provided for mandatory possession by a landlord who gave the requisite notice for seeking possession.
122. The question was whether the RSL was amenable to a complaint under article 8 of the Convention as a hybrid public authority pursuant to section 6 of the HRA 1998. This court, in its judgment given by Lord Woolf CJ, regarded inter alia the following features of the case as being relevant to that question (at para 65):

"(iii) The act of providing accommodation to rent is not, without more, a public function for the purposes of section 6…irrespective of the section of society for whom the accommodation is provided.

(iv) The fact that a body is a charity or is conducted not for profit means that it is likely to be motivated in performing its activities by what it perceives to be in the public interest. However, this does not point to the body being a public authority. In addition, even if such a body performs functions, that would be considered to be of a public nature if performed by a public body, nevertheless such acts may remain of a private nature for the purpose of sections 6(3)(b) and 6(5).

(v) What can make an act, which would otherwise be private, public is a feature or a combination of features which impose a public character or stamp on the act. Statutory authority for what is done can at least help to mark the act as being public; so can the extent of the control over the function exercised by another body which is a public authority. The more closely the acts that could be of a private nature are enmeshed in the activities of a public body, the more likely they are to be public. However, the fact that the acts are supervised by a public regulatory body does not necessarily indicate that they are of a public nature. This is analogous to the position in judicial review, where a regulatory body may be deemed public but the activities of the body which is regulated may be categorised private.

(vi) The closeness of the relationship which exists between Tower Hamlets and Poplar [the local authority and the RSL respectively]. Poplar was created by Tower Hamlets to take a transfer of local authority housing stock; five of its board members are also members of Tower Hamlets; Poplar is subject to the guidance of Tower Hamlets as to the manner in which it acts towards the defendant.

(vii) The defendant, at the time of transfer, was a sitting tenant of Poplar and it was intended that she should be treated no better and no worse than if she remained a tenant of Tower Hamlets. While she remained a tenant, Poplar therefore stood in relation to her in very much the position previously occupied by Tower Hamlets.

66. While these are the most important factors in coming to our conclusion, it is desirable to step back and look at the position as a whole. As is the position on application for judicial review, there is no clear demarcation line which can be drawn between public and private bodies and functions. In a borderline case, such as this, the decision is very much one of fact and degree. Taking into account all the circumstances, we have come to the conclusion that while activities of housing associations need not involve the performance of public functions, in this case, in providing accommodation for the defendant and then seeking possession, the role of Poplar is so closely assimilated to that of Tower Hamlets that it was performing public and not private functions. Poplar therefore is a functional public authority, at least to that extent. We emphasise that this does not mean that all Poplar's functions are public. We do not even decide that the position would be the same if the defendant was a secure tenant. The activities of housing associations can be ambiguous. For example, their activities in raising private or public finance could be very different from those under consideration here. The raising of finance by Poplar could well be a private function" (emphasis added)."

123. I would observe that in that reasoning this court, correctly in my judgment as subsequent House of Lords authority in Aston Cantlow and YL has shown, concentrated not so much on the question whether any functions of an RSL might be of a public nature, but on whether the particular act of seeking possession with which that case was concerned was of a public or private nature. It is clear that this court felt that it was highly relevant on the particular facts that provision (which had started with Tower Hamlets pending an investigation of intentional homelessness) and termination (which only occurred in the light of Tower Hamlets' decision that the defendant was intentionally homeless) were all part of the same function: see the passage emphasised in para 66 above. The fact that the RSL was a not for profit charity did not point to it being a public authority. The raising of private or public finance could well be a private function.
124. In YL, Baroness Hale (who was of the minority) observed that "it is the nature of the function being performed, rather than the nature of the body performing it, which matters under section 6(3)(b)" and commented in this connection that Poplar "had relied too heavily upon the historical links between the local authority and the registered social landlord, rather than upon the nature of the function itself which was the provision of social housing" (at para 61). Lord Mance (who was of the majority) was to similar effect (at para 105). While that criticism was made, there is no other direct guide in the speeches in YL as to the correctness of the decision in Poplar. Seeing that the subject matter of the criticism had been a significant factor in pushing this court in Poplar to its decision in what it regarded as a "borderline" case, it is possible to view the outcome there as of now uncertain authority. However, despite the criticism in YL, I have taken the liberty to quote extensively from Poplar because, together with Servite, it is the only prior authority cited to us concerning RSLs, and, in my judgment, its logic (a fortiori when the effect of the criticism is taken into account and the factor concerned is discounted) is that it was not the function of the provision of social housing which determined the result (which would have been a quite general point) but only the special circumstances of the case. I would regard Poplar, on the facts of the present case and in the light of the criticism of it in YL, as being helpful to the Trust. In particular it recognises (see para 65 (iii) of Lord Woolf's judgment) that providing accommodation to rent is not without more a public function, irrespective of the section of society for whom the accommodation is provided.
125. Not long after Poplar was decided, it was considered and distinguished in R (Heather) v. Leonard Cheshire Foundation [2002] 2 All ER 936. That was a fore-runner of the issue in YL. The Foundation, a large charity, operated a residential care home, which it had decided to close down, and so wished to relocate its residents. The claimants were residents for whom a local authority paid, being persons to whom the authority owed a duty to provide care and accommodation under the National Assistance Act 1948. Their argument that the Foundation owed them obligations under article 8 of the Convention on the basis that it was a hybrid public authority under section 6(3)(b) failed. Lord Woolf CJ again gave the judgment of this court, which also comprised Laws and Dyson LJJ. Lord Woolf said:

"35. In our judgment the role that LCF was performing manifestly did not involve the performance of public functions. The fact that LCF is a large and flourishing organisation does not change the nature of its activities from private to public. (i) It is not in issue that it is possible for LCF to perform some public functions and some private functions…While the degree of public funding of the activities of an otherwise private body is certainly relevant as to the nature of the functions performed, by itself it is not determinative of whether the functions are public or private…"

126. Next in the series of cases is Aston Cantlow [2004] 1 AC 546, the first of the two cases in the House of Lords which, although they do not concern RSLs, are the leading authorities on the principles for the application of section 6. It and YL have been analysed by Elias LJ, and I will not reduplicate that. However, it is instructive to stand back and try to see the essence of each of the cases in their decision-making process. In Aston Cantlow the parochial church council's appeal succeeded because the particular act concerned, the enforcement of the liability for the repair of the chancel, was an act of a private nature. As Lord Nicholls said:

"16. I turn next to consider whether a parochial church council is a hybrid public authority. For this purpose it is not necessary to analyse each of the functions of a parochial church council. What matters is whether the particular act done by the plaintiff council of which complaint is made is a private act as contrasted with the discharge of a public function."

Lord Nicholls, looking at the matter realistically, concluded that "there is nothing particularly "public" about this" (ibid). Similarly Lord Hope said that in the case of non "core" public authorities -

"Section 6(5) applies to them, so in their case a distinction must be drawn between their public functions and the acts which they perform which are of a private nature" (at 35).

His decision (at para 64) was that –

"The nature of the act is to be found in the nature of the obligation which the PCC is seeking to enforce. It is seeking to enforce a civil debt. The function which it is performing has nothing to do with the responsibilities which are owed to the public by the State."

Lord Hobhouse thought that it was not shown that PCCs perform any function of a public or governmental nature (at para 88). In any event, the section 6(5) question was to be answered in the defendants' favour:

"89…Is the nature of the relevant act private? The act is the enforcement of a civil liability. The liability is one which arises under private law and which is enforceable as a civil debt by virtue of the 1932 Act."

127. Finally, in YL [2008] 1 AC 95 the House of Lords had to consider whether a private company which had contracted with a local authority and the local NHS primary care trust to provide residential accommodation and care in its care home to an elderly woman, was subject to the HRA 1998 when it sought to terminate the contract (because of an irreconcilable breakdown in relations with Mrs YL's family). The House of Lords held by a narrow margin that it was not. The argument seems to have proceeded under section 6(3)(b) rather than under section 6(5). This was possibly because a declaration was sought by way of preliminary issue to the effect that in providing accommodation and care for the claimant the company was exercising public functions within section 6(3)(b) (see paras 1 and 76). It does not appear to have been contended that the act of termination was a particular act with a separate, private, status within section 6(5) irrespective of the section 6(3)(b) status of the company as a whole.
128. The position is more complex because of the division of opinion between their Lordships. It is convenient to consider the position of the minority first. Thus Lord Bingham defined the relevant function under investigation as follows:

"14. The nature of the function with which this case is concerned is not in doubt. It is not the mere provision of residential accommodation but the provision of residential accommodation plus care and attention for those who, by reason of age, illness, disability or any other circumstances are in need of care and attention which is not otherwise available to them."

Lord Bingham continued (at para 16):

"Counsel for the Birmingham City Council laid great emphasis on the fact that its duty under the Act [sections 21 and 26 of the National Assistance Act 1948] is to arrange and not to provide. This is correct, but not in my view significant. The intention of Parliament is that residential care should be provided, but the means of doing so is treated as, in itself, unimportant. By one means or another the function of providing residential care is one which must be performed. For this reason also the detailed contractual arrangements between Birmingham, Southern Cross and Mrs YL and her daughter are a matter of little or no moment."

Similarly, Lord Bingham said:

"20. When the 1998 Act was passed, it was very well known that a number of functions formerly carried out by public authorities were now carried out by private bodies. Section 6(3)(b) of the 1998 Act was clearly drafted with this well-known fact in mind. The performance by private body A by arrangement with public body B, and perhaps at the expense of B, of what would be a public function if carried out by B is, in my opinion, precisely the case which section 6(3)(b) was intended to embrace."

129. For Lord Bingham therefore, the matter was simply and clearly stated. The local authority (a "core" governmental authority) had a direct statutory duty to see to it that residential care (with special emphasis on care) was provided to Mrs YL. If that duty was delegated, at the local authority's expense, to a private company, it was still a public duty. Therefore the company, which was performing that duty, on payment, for the local authority, was a hybrid public authority under section 6(3)(b). No question arose under section 6(5). The termination of Mrs YL's care was necessarily the antithesis of that public duty.
130. Lord Bingham said he also wholly agreed with Baroness Hale (at para 2). She considered that she had amplified Lord Bingham's reasons (see at para 75). She explained the statutory framework in more detail and summed it up in these terms:

"52. At the same time, local authorities were placed under a duty to carry out an assessment of the need for community care services of any person who might be in need of them (section 47(1)(a) of the [Community Care Act 1990]) and then to decide whether those needs called for the provision by them of any such services: section 47(1)(b). "Community care services" include arranging or providing accommodation under section 21(1) of the 1948 Act: section 46(3). If the person may also need health care under the National Health Service Act 1977, the local authority must invite the relevant health body to assist in the assessment. A large slice of the social security budget was transferred to local authorities to enable them to meet these new responsibilities.

53. The appellant's case was a good example of how the system was supposed to work…The local authority arranged the placement with the care home provider and undertook to meet the charges under the tripartite contractual arrangements described above. The local authority has a continuing duty of assessment and remains responsible for the resident's welfare. The local NHS primary care trust assessed her health care needs, and found them to be in the high band, entitling her to a weekly contribution towards the nursing component in her care…"

Thus Baroness Hale's analysis is the same as Lord Bingham's, save that she also explains the ramifications of those statutory underpinnings which emphasise the importance of care.

131. Baroness Hale went on to draw analogies with Strasbourg jurisprudence concerned with the delegation by state bodies of their public duties to private bodies (at paras 56/57). As for section 6, she said this:

"65…While there cannot be a single litmus test of what is a function of a public nature, the underlying rationale must be that it is a task for which the public, in the shape of the state, have assumed responsibility, at public expense if need be, and in the public interest.

66. One important factor is whether the state has assumed responsibility for seeing that this task is performed…

67. Another important factor is the public interest in having that task undertaken. In a state which cares about the welfare of the most vulnerable members of the community, there is a strong public interest in having people who cannot look after themselves, whether because of old age, infirmity, mental or physical disability or youth, looked after properly. They must be provided with the specialist care, including the health care, that they need…

68. Another important factor is public funding. Not everything for which the state pays is a public function…But providing a service to individual members of the public at public expense is different. These are people for whom the public have assumed responsibility…

69. Another factor is whether the function involves or may involve the use of statutory coercive powers…

71. Finally, then, there is the close connection between this service and the core values underlying the Convention rights and the undoubted risk that rights will be violated unless adequate steps are taken to protect them."

She briefly referred to section 6(5) at para 73.

132. I have cited from the speeches of the minority at some length to demonstrate what, in my judgment, is clear from them: that, even though here and there some of the factors discussed by Baroness Hale may have limited application to the case presently before us, nevertheless there is nothing or little to suggest that their decision could be carried over into the facts of our case. The statutory underpinnings, the Strasbourg jurisprudence, and even the aspect of public funding are all fundamentally or at least significantly different.
133. I turn then to the speeches of the majority. It seems to me that the essential difference between them and the minority is that whereas the latter began with the statutory duties of the local authorities and considered that what followed was a delegation of duties to private bodies in circumstances where, because of the essentially non delegable nature of those duties, the state, albeit through the private body, had to remain responsible, the majority held that there was no real delegation of public functions, but only a contracting out of the provision of services, and that in this respect there was a great gulf between the obligations of the state and those of the private contractor. Lord Scott put the point in the following way:

"29. There are, in my opinion, very clear and fundamental differences. The local authority's activities are carried out pursuant to statutory duties and responsibilities imposed by public law. The costs of doing so are met by public funds, subject to the possibility of a means tested recovery from the resident. In the case of a privately owned care home the manager's duties to its residents are, whether contractual or tortious, duties governed by private law. In relation to those residents who are publicly funded, the local and health authorities become liable to pay charges agreed under private law contracts and for the recovery of which the care home has private law remedies…

30. As it seems to me, the argument based on the alleged similarity of the nature of the function carried on by a local authority in running its own care home and that of a private person running a privately owned care home proves too much. If every contracting out by a local authority of a function that the local authority could, in the exercise of a statutory power or the discharge of a statutory duty, have carried out itself, turns the contractor into a hybrid public authority for section 6(3)(b) purposes, where does this end?...

31. These examples illustrate, I think, that it cannot be enough simply to compare the nature of the activities being carried out at privately owned care homes with those carried out at local authority owned care homes. It is necessary to look also at the reason why the person in question, whether an individual or corporate, is carrying out those activities. A local authority is doing so pursuant to public law obligations. A private person, including local authority employees, is doing so pursuant to private law contractual obligations…"

134. Lord Scott then turned his attention to the impact of regulation (see Lord Mance's speech at para 79 for the extent of it) and found in it part of the private rights under contract, rather than a reason for an alternative regime of public law. He said:

"32. This regulatory framework is in place. A feature, or consequence, of it is that an obligation by Southern Cross to observe the Convention rights of residents is an express term of the agreement between the council and Southern Cross and YL. Any breach by Southern Cross of YL's Convention rights would give YL a cause of action for breach of contract under ordinary domestic law. No one has suggested that the contractual arrangements between the council and Southern Cross and between Southern Cross and YL are not typical. There is, in my opinion, no need to depart from the ordinary meaning of "functions of a public nature" in order to provide extra protection to YL and those like her…"

Those remarks have resonance for the contractual situation in the present case, to which I will return.

135. Finally, Lord Scott did reach, by reference to Aston Cantlow, the question under section 6(5), without mentioning it in terms. He said:

"34. As to the act of Southern Cross that gave rise to this litigation, namely, the service of a notice terminating the agreement under which YL was contractually entitled to remain in the care home, the notice was served in purported reliance on a contractual provision in a private law agreement. It affected no one but the parties to the agreement…"

136. Lord Mance began his analysis with the Strasbourg jurisprudence (at paras 92ff). He said that it lacked any case directly in point, but demonstrated two relevant principles. One was that the state may in some circumstances be responsible for failure to regulate or control the activities of private persons; the other was the state may in some circumstances remain responsible for the conduct of private law institutions to which it had delegated state powers. The first principle did not apply, because the company had no regulatory role. As for the second principle (which had clearly influenced the minority), this recognised that -

"there may be certain essentially state or governmental functions, particularly involving the exercise of duties or powers, for the manner of which the state will remain liable, notwithstanding that it has delegated them to a private law body."

However, that principle requires either that the body is established and capitalised by the state for state purposes and armed with state powers, or that the functions of the state are non-delegable. However, neither principle appeared to apply to private care homes or the provision of care and accommodation. Even where a body is provided with special powers, that did not mean that they amounted to functions of a public nature, as distinct from being conferred for private, religious, or purely commercial purposes.

137. Lord Mance then turned his attention to the statutory background to the company's role in that case (at paras 107ff). Even if a public authority had a duty to provide care and accommodation, it did not follow that its provision under contract by a private body was equally the performance of a public function, for on analysis some of the latter's functions and activities may be private in nature (at para 110). In that respect, Lord Mance critically said that he did not regard "the actual provision, as opposed to the arrangement, of care and accommodation for those unable to arrange it for themselves as an inherently governmental function" (at para 115). He added:

"116. In providing care and accommodation, Southern Cross acts as a private, profit-earning company. It is subject to close statutory regulation in the public interest. But so are many private occupations and businesses, with operations which may impact on members of the public in matters as diverse for example as life, health, privacy or financial well-being. Regulation by the state is no real pointer towards the person regulated being a state or governmental body or a person with a function of a public nature, if anything perhaps even the contrary. The private and commercial motivation behind Southern Cross's operations does in contrast point against treating Southern Cross as a person with a function of a public nature."

Moreover, while it is not possible to distinguish between paying and subsidised residents in a local authority care home, because the local authority is a core authority, it is incongruous to distinguish between self-paying and publicly funded residents in a private home (at para 119). He therefore concluded that the company in providing care and accommodation to YL in its home was not exercising functions of a public nature within section 6(3)(b). He did not consider section 6(5).

138. Lord Mance's analysis may be said to be essentially as follows. The provision under contract of care and accommodation by a private care home, run for profit, is essentially the carrying out of private and not public functions. The statutory background in the obligation of local authorities to arrange and provide such care and accommodation did not turn the provision of such services as distinct from their arranging into public functions. Regulatory supervision of private care homes did not lead in a different direction, if anything it confirmed his view. Neither did the public funding of YL's placement. It was incongruous to distinguish between privately and publicly funded residents. Strasbourg jurisprudence was consistent with his view. The contracting out of services otherwise provided under statute by a public authority was not such a delegation of non-delegable duties as to require a different solution.
139. Lord Neuberger considered the problem in three stages: first, on the particular facts of the case, secondly by reference to a policy argument concerning the contracting out of services which a core public authority is under a statutory duty to provide, and thirdly by reference to still wider issues of principle (at para 132). As to the first stage, he too emphasised that close and detailed supervision did not tell in favour of the company being a hybrid public authority: "There is no identity between the public interest in a particular service being provided properly and the service itself being a public service" (at para 134). Neither did the fact that services of the kind provided by the company were also provided by charities, ie operating in the public interest for the public benefit. Not only did that not affect those who provide such services on a commercial basis, but even in the case of charities it did not mean that provision of the services was a function of a public nature. Otherwise all charities (and all private organisations providing services which could be provided by charities) would be caught by section 6 (at para 135). Nor did the fact that such services were provided to the vulnerable: the need for particular protection went rather to the responsibility of government supervision (at para 136). Such factors were not irrelevant, but not persuasive. Lord Neuberger next considered three factors which were essential to Mrs YL's case. (1) As for statutory duties, they applied to the core authority, but only the duty to arrange was inherently of a public nature. (2) The public funding could not be a sufficient condition, otherwise everything and everyone paid for by a core authority would be drawn into the concept of a public function. (3) Similarly, the fact that the service could be provided by a core authority was not sufficient.
140. As for contracting out, this was not a case of the contracting out of a duty, since statute did not require the provision of care by the authority itself. In terms of public funding, it was easier to say that a general subsidy to the business as a whole could turn the business as a whole into a function of a public nature, than in the case of the funding of specific individuals. And in any event, Mrs YL continued to have her public law remedies against the local authority in respect of their continuing statutory duty to provide care and accommodation. In truth contracting out took the matter no further, otherwise the provision of meals or the repairing of buildings or the manufacture of military materiel would be caught. More generally, policy considerations concerning contracting out weighed in the opposite direction:

"It is thought to be desirable, in some circumstances, to encourage core public authorities to contract-out services, and it may well be inimical to that policy if section 6(1) automatically applied to the contractor as it would to the authority. Indeed, unattractive though it may be to some people, one of the purposes of contracting-out at least certain services previously performed by local authorities may be to avoid some of the legal constraints and disadvantages which apply to local authorities but not to private operators…[T]he fact that there are competing arguments makes it hard to justify the courts resolving the instant issue by reference to policy" (at para 152).

141. Finally, Lord Neuberger came to his "wider perspective" (at para 154). He considered that only some wider policy considerations, if available, could bolster the various factors that he had so far considered, even taken together, into a conclusion in favour of Mrs YL on the section 6(3)(b) issue. It was at this point that Lord Neuberger turned to Strasbourg jurisprudence and to previous authority in the form of Aston Cantlow for guidance. There was nothing in the former to support Mrs YL's claim, while dicta in Aston Cantlow emphasised the distinction between functions of an inherently governmental nature (such as running a prison, discharging a statutory regulatory regime or maintaining defence, see at para 166) and those that were not, such as maintenance or cleaning contracts (at para 162).
142. It was in this context that Lord Neuberger contrasted the public funding of an impecunious individual in YL with the situation where -

"the funding effectively subsidises, in whole or in part, the cost of the service as a whole…Thus, it appears to me to be far easier to argue that section 6(3)(b) is engaged in relation to the provision of free housing by an entity all of whose activities are wholly funded by a local authority, than it is in relation to the provision of housing by an independently funded entity to impecunious tenants whose rent is paid by the local authority."

143. In a final checklist, Lord Neuberger concluded that the following considerations, in no particular order, taken together led to his decision that the provision of care and accommodation by the company was not a function of a public nature within section 6(3)(b), despite being paid for by a local authority pursuant to its statutory duty: (a) the company's activities would not be subject to judicial review; (b) Mrs YL would not be treated by the Strasbourg court as having Convention rights against the company; (c) the company's functions with regard to the provision of care and accommodation would not be regarded as inherently governmental; (d) the company had no special statutory powers with regard to the provision of care and accommodation; (e) the care home was not funded by the local authority; (f) the rights and liabilities between the company and Mrs YL arose under a private law contract (at para 160). In essence, Lord Neuberger's analysis was very similar to that of Lord Mance.
144. Most recently, in R(on the application of Ahmad) v The Mayor and Burgesses of the London Borough of Newham [2009] UKHL 12, Baroness Hale of Richmond has emphasised that the provision of housing is not a government function. She said (at para 12) :

"Part VI of the Housing Act 1996 gives no-one a right to a house. This is not surprising as local housing authorities have no general duty to provide housing accommodation. They have a duty periodically to review housing needs in their area (Housing Act 1985, s 8). They have power to provide housing accommodation by building or acquiring it (1985 Act, s 9). They also have power to nominate prospective tenants to registered social landlords or to others. They are required to have an allocation policy which applies to selecting tenants for their own housing or nominating people for housing held by others (Housing Act 1996, s159(2)). But this does not mean that they have to have available any particular quantity of housing accommodation, still less that they must have enough of it to meet the demand, even from people in the "reasonable preference" groups identified in section 167(2). In some areas there may be an over-supply of council and social housing. In others there may be a severe under-supply. Newham is one of those others."

Baroness Hale emphasises the distinction between allocation and provision.

Discussion and conclusion.

145. Applying these analyses and considerations to the facts of the present case, I do not consider that the Trust's decision to terminate Mrs Weaver's tenancy by seeking possession from the court on mandatory ground 8 justified by her non-payment of rent is properly to be categorised as the exercise of a function of a public nature rather than a private act arising out of contract. In my judgment, although there may be strands based on a multi factorial approach to argue a conclusion to the contrary effect, the essential reasoning of our jurisprudence firmly supports the Trust's appeal.
146. First, Strasbourg jurisprudence does not suggest that the Trust is amenable to Convention liability or that the United Kingdom's liability can be invoked in respect of such an act.
147. Secondly, I cannot find in the decisions of domestic jurisprudence support for Mrs Weaver's case. Servite, which was approved by the majority of their Lordships in YL, runs contrary to the decision appealed against. Poplar, despite the criticism of it in YL and allowing full effect for that criticism, gives her case no principled support. Aston Cantlow emphasises both the importance of section 6(5) in the analysis and the significance of the Trust's claim being in support of a private contractual right. As for YL, the statutory underpinnings there, for the reasons preferred by the minority, were much stronger than in the present case, for statute required the provision of care to a vulnerable person in need of welfare services. Lord Bingham himself emphasised the significance for him of the facts that statute required the provision of services and that the services concerned went beyond the accommodation and extended to care for the particularly vulnerable. In the present case, however, it is quite clear and common ground that statute does not require the provision of housing accommodation (see para [44]), and there is no question of Mrs Weaver being a particularly vulnerable person to whom care and medical services must also be provided. I am doubtful that even the minority view in YL would support the divisional court's declarations.
148. Thirdly, it seems to me that the argument in this case, reflected in the judgments of the divisional court, has been inappropriately influenced by the structure of the dispute in YL. Because of the nature of the declaration there sought, and also perhaps because it was common ground that, if the provision of care and accommodation was required by statute and/or inherently of a public nature then it was irrelevant that the particular act in question was a decision to terminate the contract, the argument appears to have been essentially directed to section 6(3)(b). Alternatively, the width of the argument under section 6(3)(b) subsumed any question under article 6(5). However, as emerged in submissions before us, it is clear that in our case a major issue ought to be whether, even on the assumption that allocation is a function of a public nature, termination under the terms of the tenancy is of the same nature or alternatively is of the nature of a private act.
149. Fourthly, under the influence of the structure of the argument in our case, submissions have proceeded from the concept that "management and allocation" is an all-embracing public function which includes termination. Accordingly, the court has been encouraged to accept that if management (or allocation) is a public function, then the rest follows. I do not accept that that is a satisfactory way to analyse the housing function. It is to be noted that the declaration is not framed in terms of the "provision" of housing, nor in terms of social housing. "Management" is a vast and undifferentiated area which, as it seems to me, inevitably includes functions and acts which are most unlikely to be of a public nature: such as the commercial acquisition or even development of property, or the financing of it (even on the basis that public subsidy plays an important role, as to which see below), or the maintenance and repair of it, or the daily grind of administering a very substantial portfolio of property of all kinds. In my judgment, the acceptance that management of social housing is essentially a single integrated function of a public nature is most unlikely to be correct. Moreover, the Trust operates and manages substantial amounts of property outside the sphere of social housing, or where local authority allocation plays no role: see the figure of 36% implicit in the figure quoted at para 24 above. However, there has been hardly any examination of this issue of what "management" comprises in practice, and the divisional court has proceeded on the basis that management is essentially a function of either a public or a private nature and chosen between these extremes in favour of the former. It has seemed to me that both sides of this dispute have had an interest in advancing an argument which would dispose, once and for all, of the issue whether an RSL is for all purposes a hybrid public authority or not. I very much doubt, however, that such an issue can be debated in this way.
150. Fifthly, my concern becomes increasingly acute when the proposition is that because management is a public function, then allocation is, or perhaps vice versa, and because allocation is, therefore termination is. YL is clear authority for the proposition that even where a public authority has a statutory duty both to arrange and to provide care and accommodation for the most vulnerable of our society, the fact that the arrangement may be of an inherently governmental or public nature does not mean that their provision is. It seems to me that, as compared with the case of care and accommodation in a care home, a fortiori that is true of the case of housing, even social housing. Moreover, in as much as it is suggested that because allocation is a function of a public nature, therefore termination is, I would respectfully disagree. Allocation arises under arrangements made between an RSL and a local authority, where the local authority makes use of such arrangements to fulfil their statutory duty to have an allocation policy. However, once an allocation has been made and a prospective tenant has been accepted by an RSL as its tenant, the tenant then enters into a contractual tenancy with the RSL, and their relationship thenceforward is governed, just like any tenant's relationship with his or her landlord, by private law. That remains the case despite the relevance of regulation. Moreover, the statutes which govern the recovery of possession apply to an RSL's social housing tenancies and other landlords' tenancies alike. All the authorities I have considered stress the importance of private contractual rights. Poplar's decision was driven by very special factors.
151. While it is inevitable that core public authorities who enter into contractual tenancies are subject to the Convention, it seems to me to require special circumstances to impose Convention solutions on top of the working out of private law contracts of private bodies, even if such bodies are also in some respects hybrid public authorities. Admittedly the question can always arise whether a function of a public nature intrudes into the area of the contract and decisions which have to be taken under it. Where, however, as here, the contract concerned is one so well known to private/commercial life as a tenancy agreement, where such contracts are being entered into in almost identical or standard form with social housing tenants and non social housing tenants alike, it seems to me to be counter-intuitive to suppose that the working out of that contract as between a private (non-governmental) landlord and a tenant can depend on Convention rights. An exception might be where public functions fill the whole or a substantial space of that contract. I see no reason, however, for saying that that is the situation here. On the contrary, a contract like a tenancy contract, for all that it is hedged around by statutory provisions, is made for the specific purpose of determining the rights between the parties.
152. Sixthly, there is nothing special about the regulation which applies to social housing which to my mind changes that picture. The majority in YL thought that if anything regulation is needed for the very reason that, regulation apart, the relevant world is governed by private contract. It is certainly clear that very large parts of commercial life are regulated; and the place and space of regulation in such life is growing all the time. It is true that the modern regulatory regime of social housing controls or influences the rents charged (see para 17 above describing the 2008 Act) and that the essence of social housing as there formulated is that it is available at lower than market rents. That, however, is built into the tenancy agreement, which fixes the rent. Similarly, regulation may provide guidance for termination, such as the guidance which is in focus in these proceedings: "Before using Ground 8, associations should first pursue all other reasonable alternatives to recover the debt." However, it seems to me not to matter whether that is treated as part of the contract or not. If, as would appear to be the case, although the issue was only reached in the divisional court after a decision had been reached on section 6(3)(b), that guidance is part of the contract (see paras 3/5 above and the term "we will comply with the regulatory framework and guidance issued by the Housing Corporation"), then it is part of the bargain and Mrs Weaver has her contractual remedy. If, on the other hand, Mrs Weaver prefers, seeking a public law remedy outside contract, to say that that term lacks contractual force for all that it is located in the contract, then it would seem to me nevertheless that it would be incongruous on that account to bring into the world of private contractual rights and obligations an obligation which is referred to in the contract and could have been made part of it. As Richards LJ observed (see para 5 above): "if it lacks the qualities to give it contractual force notwithstanding that it is located in a contract, I am not satisfied that it can properly be treated as having the qualities that justify its enforcement in public law as a legitimate expectation…". It is noticeable that in YL the regulatory regime does appear to have been made part of the contract (see Lord Scott at para 32 of YL, cited at para [34] above).
153. Seventhly, there is nothing about the nature of the Trust, or the typical RSL, to promote the concept that in the everyday administration of its tenancy agreements it is performing functions of a public nature. Although it is a charity, it has independent corporate status and is conducted by an independent board of directors and owned by its private shareholders. As a charity, it operates for the public benefit rather than for commercial profit, but its operations are essentially in the private and business world, rather than in the world of government, for all that. Richards LJ in the court below and Elias LJ in this court consider that the Trust's charitable status places it outside the sphere of commercial providers. In my judgment, however, the world of charity is essentially private, and, although a charity does not operate for profit in the ordinary way, nevertheless when its function is to provide a service such as housing in return for the payment of rent and to do so on a substantial scale (the Trust owns 33,000 dwellings), it has to operate according to (for want of a better word) business disciplines or else it is very likely to fail. It seems to me that what Lord Neuberger said about charities at para 135 of YL puts them into the private world rather than into the world of those performing functions of a public nature. To similar effect is Lord Mance at para 110 of YL where he quotes Lord Woolf CJ in R (Heather) v. London Cheshire Foundation at para 15:

"If the authority itself provides accommodation, it is performing a public function…However, if a body which is a charity, like LCF, provides accommodation to those to whom the local authority owes a duty under s 21 in accordance with an arrangement under s 26, it does not follow that the charity is performing a public function."

There is no suggestion in YL or Heather that a charity is other than in the private world.

154. Eighthly, the majority of the Trust's capital finance comes from private lenders and the proceeds of housing sales, while a very substantial but decreasing minority comes from public grants. The grants are available to buy social housing. If the properties purchased with the grants are resold, the grants have to be returned, unless rolled over and used on the purchase of further social housing. The Trust's revenues come from its rents. The typical ratio of private finance to public grant across the RSL sector as a whole is 2:1. Richards LJ and my Lords in this court see the substantial degree of public subsidy in the form of the public grants as a significant factor in determining that everything that an RSL does by way of social housing it does in exercise of a public function. I accept that public subsidy is a factor in the overall assessment; and that Lord Neuberger says in YL that a general subsidy is in this respect more telling than the defrayment by the public purse of the cost of individuals (whereas Baroness Hale took the opposite view).
155. However, in my judgment such matters are relative and there is a danger in confusing form and substance. Public subsidy in its broadest sense comes in many different forms. Sometimes the state defrays the costs of individual consumers in need. Sometimes, by making grants to companies, it defrays the costs of particular products or services. Sometimes, by means of tax deductions, it defrays the cost to taxpayers generally of the acquisition of products (capital grants) or services (mortgage finance). Sometimes, as we have seen only recently, very large sums of general public subsidy are needed to prevent private financial institutions from collapse. It would be surprising to learn that these private institutions are hybrid public authorities. Where tax deductible capital grants are concerned, the public policy is to encourage efficiency and modernisation by reducing the cost of re-equipment. It is hard to say that one form of subsidy is essentially different from another. The state also uses taxation policy to raise revenues (as well as to expend subsidy) in the public interest: thus duty is raised from the manufacturers of alcohol and tobacco. In social housing, the role that public grants essentially play is to mediate between the commercial cost of housing, for which a lower than market price is to be paid in the form of rent by tenants, and the revenues obtainable from that rent. The overall effect is to lower the cost of borrowing across the board. There is no direct allocation, however, between the grant on any particular property and the rent payable. Mrs Weaver's home is in a building which the Trust acquired on the private market with private finance. On the other hand, the effect is also to subsidise the rents of social housing tenants. Whereas I accept that public finance is an element in the equation, I would be sceptical about allowing it, or any particular form of it, to play a dominant role in the assessment.
156. Ninthly, there is the difficult question of public policy addressed by Lord Neuberger in YL at para 152 (see para [40] above). His prescription is that the competing views about policy render this factor neutral. As such, they do not strengthen the case for hybrid status. I would add this further consideration. Lord Neuberger spoke of the policy of contracting out as being to avoid the legal constraints and disadvantages of operating as a core governmental authority. I would diffidently suggest that there is another, possibly even more significant, ambition of the policy of moving into the private sector what at some earlier period may have been carried on in the public sector. That is a recognition that, where large business operations have to be carried out, even when such operations are not governed purely by markets but have elements of social policy about them, they are better carried out by private expertise in the management of such operations, whose experience and efficiency nevertheless redound to the public interest.
157. Tenthly, and finally, the public welfare concern which all feel for those in need of social housing, and I mean to include government, the courts, the RSLs themselves and the public at large in that "all", is addressed or capable of being addressed in many different ways: in statutory provision, in regulation, in public subsidy, in the exercise of charitable status, in the contractual arrangements between local authorities and RSLs, in the form of tenancy agreements, in the expertise of RSLs, and in the ongoing duty of local authorities to assess and to allocate accommodation for those in need. It is, however, unnecessary to give to decisions, under contract, of an essentially private nature an artificial status as acts of a public nature or in performance of public functions, in order to ensure proper protection.
158. In sum, when I consider the various factors which the authorities teach us to consider, I can find insufficient to support the conclusion that in the exercise of its contractual rights under its tenancy agreement the Trust is acting in the public rather than in the private sphere, or in performance of a function of a public nature. While it is conceded by the Trust that in certain, limited but irrelevant respects the Trust is a hybrid public authority for the purpose of section 6(3)(b), I am sceptical how far the management of social housing by an RSL can be brought within the meaning of that sub-section. Even if allocation is to be brought within that subsection, that is not the same as provision of accommodation. In my judgment, however, for the purpose of section 6(5) the Trust's decision to exercise its contractual rights by invoking a claim for possession under ground 8 cannot be attacked in public law or by reference to the Convention.
159. For my part, therefore, I would allow this appeal. In the event, however, for the reasons given by my Lords, the appeal will be dismissed