England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
AND ON APPEAL FROM WILLESDEN COUNTY COURT
HHJ McDowall
8WI01562
AND ON APPEAL FROM CENTRAL LONDON COUNTY COURT
HHJ Mitchell
8CLO6126, 8CLO6311 and 8CLO775

		Royal Courts of Justice Strand, London, WC2A 2LL
		20/08/2009

Lord Justice Stanley Burnton :

Introduction

1. These appeals have been heard together because they all raise an issue of practical importance to local authorities in relation to the administration of the statutory homelessness scheme under Part VII of the Housing Act 1996 ("the Act"). A number of authorities, including the London Borough of Brent ("Brent"), have contracted out some or all of the reviews they are required to carry out under section 202 of the Act. We were told that there have been inconsistent decisions in the county court as to the lawfulness of such contracting out.
2. The appeals are:

(1) By Michaela De-Winter Heald against the order dated 12 January 2008 of HH Judge McDowell sitting in Willesden County Court dismissing her appeal under section 204 of the Act.

(2) By Salsam Al-Jarah, Nasrin Begum Ahmad and Yordanos Kidane against the orders dated 9 December 2009 of HH Judge Mitchell sitting in Central London County Court dismissing each of their appeals under section 204.

3. In all of the cases before us, the reviews were carried out by Mr Minos Perdios, who describes himself as a director and the controlling shareholder of Housing Reviews Ltd. In each case, he upheld Brent's original decision.
4. The Appellants contend that it was unlawful for Brent to contract out the carrying out of its reviews, with the result that the reviews carried out in each of their cases were themselves ultra vires and unlawful. They also contend that there was an appearance of bias on the part of Mr Perdios which meant that their reviews were not fairly conducted and that their rights under Article 6 of the European Convention on Human Rights were infringed.

The facts

(a) Michaela De-Winter Heald

5. On 19 May 2006 Ms Heald approached Brent for housing assistance under Part VII of the Act, claiming to be homeless or threatened with homelessness. By letter dated 26 May 2006, pursuant to section 184 Brent informed her that she was found to be not in priority need, and she was therefore refused accommodation. She exercised her right under section 202 to request the review of that decision. That decision was reviewed on three occasions. The first review decision was withdrawn by Brent and the second was quashed by the county court. The third, which is the subject of this appeal, was notified to Ms Heald by letter dated 26 March 2008.
6. Each review was undertaken by Mr Perdios. Each decision letter was on Brent notepaper, and he signed each of them as "Minos Perdios Reviews Manager". The letter dated 26 March 2008 complied with the formal requirements of the Act. It upheld the original decision that Ms Heald was not in priority need; it gave substantial reasons for that finding, and stated that the Council would provide only advice and assistance.
7. Ms Heald exercised her right of appeal to the county court under section 204. Her appeal came before HH Judge McDowell on 12 January 2009. She took as a preliminary point the question whether Brent had in fact carried out a lawful review of her claim. She contended that it had not done so, since it could not have lawfully delegated the review to someone who was an outsider, i.e., to someone who was not an officer or employee (or presumably a councillor) of the local authority.
8. Mr Perdios made a witness statement for the purposes of the appeal. In it he described himself as an independent reviews manager. His company, Housing Reviews Ltd ("HRL"), had carried out some 3,500 homelessness appeals: in fact, all were carried out by him. HRL was currently instructed by 13 local authorities to carry out reviews of their homelessness decisions. He exhibited a copy of the contract between his company and Brent dated 2 September 2005. The contract was for a period of one year. He said that a short term contract, on the same terms as the original contract, had been agreed between Brent and his company from the expiry of the original agreement until a new formal contract had been signed on 11 April 2008.
9. Mr Perdios accepted that his decision letter did not make it clear that he was not an officer or employee of Brent, but he said that the decision was that of Brent and her appeal would be against Brent and not him or HRL.
10. The contract between Brent and HRL consisted of Conditions of Contract, a Specification for Housing Decision Reviews and Appeals and Articles of Agreement. The Conditions of Contract run to 37 pages. The principal obligation of HRL is in condition 3.1:

The Contractor shall provide the Service during the Contract Period and in accordance with these Conditions, the Specification and all relevant legislation, in a proper, skilful and professional manner and in accordance with the written instructions and to the reasonable satisfaction of the Authorised Officer.

11. I suspect that the Conditions of Contract were Brent's standard terms adapted, to some extent at least, to the contract with HRL. It was certainly long on the obligations of HRL and the rights of Brent and short on Brent's own obligations. The Service was defined as the Housing Reviews and Appeals Service to be provided by HRL under the contract. The Authorised Officer was Ernest Amoako, Brent's Assessment Manager. The contract did not require Brent to instruct HRL to carry out all or any minimum number of reviews, but condition 25.4 conferred on Brent the power to terminate the contract on 1 month's notice if it "should omit or require HRL to cease to provide a substantial part of the Service". In addition, there was provision for termination of the contract for cause.
12. The Specification incorporated in the contract set out in its Introduction the background to the contract:

Brent Council receives approximately 3000 applications a year from people seeking assistance under either the Housing Act 1996 Part 6 (Allocation of Housing Accommodation) and 7 (Homelessness) or the Homeless Act 2002. The demand for housing in Brent far exceeds the amount of permanent accommodation Brent Council has available. There are some inevitable and difficult problems that result from this, including the need to ration very scarce resources, manage Applicant expectations and the necessity to provide temporary accommodation for homeless households. ...

…

The Service is currently provided by an external contractor who also provides a similar service to two other London boroughs. Brent Council has an administrative officer within the Housing Resource Centre whose sole responsibility it is to co-ordinate and correlate with the contractor all housing review information and matters. This entails dealing with all written and verbal communication with Applicants and their Advocates, as well as serving as the main link between Brent Council and the contractor. In addition, Brent Council has an Assessment Manager who decides whether Brent Council grants an Applicant temporary accommodation pending the outcome of the applicant's review and/or appeal.

13. The "external contractor" referred to was in fact none other than HRL. The last paragraph of the Introduction was a useful summary equally applicable to the service provided under this contract. The Role of HRL was set out under paragraph 4:

The Contractor shall effectively discharge Brent Council's duty under sections 167 (4A) and 202 of the Housing Act 1996 by making and detailing all relevant enquiries, writing Decision Review letters and adhering to all the relevant legislative and other legal requirements ... and in accordance with Brent Council's Decision Review policies and procedures and any guidance which may be issued by the government in relation to aspects of the Service.

The Contractor shall complete Decision Reviews within 30 calendar days of the application being made to Brent Council where no further enquiries need to be made.

In cases where further enquiries are necessary and Decision Reviews cannot be completed within 30 calendar days, the Contractor shall make a request to the Applicant (or Advocate) for an extension to the 56 calendar day period (which is the maximum period permitted by the legislation).

The Contractor shall liaise with Brent Council's Legal Services in relation to section 204 county court appeals and provide written statements to support legal challenges or judicial review cases.

The Contractor shall handle requests for extensions of time from Applicants (or Advocates).

The Contractor shall, where necessary, conduct interviews/meetings with Applicants (or Advocates).

The Contractor shall engage the services of a translator/interpreter where necessary. Fees for translation … may be reclaimed from Brent Council …

the Contractor shall make recommendations to Brent Council concerning the final outcome of Decision Reviews.

14. Paragraph 6 included the following:

The Contractor shall appoint a named person to serve as a Review Manager who shall be responsible for delivering the Service. The Review Manager is required to have expert knowledge of the statutory review provisions of the Housing Act 1996 Parts VI (Allocation of Housing Accommodation) and VII (Homelessness), the Homeless Act 2002, the non-statutory Appeals policies and procedures established by Brent Council, any other relevant legislation and related case law, as well as any guidance which may be issued by the government relating to aspects of the Service. The Review Manager is required to have a comprehensive understanding of housing needs and resource allocation.

The Review Manager was and is Mr Perdios. Paragraph 7 of the Specification required HRL to have the capacity to complete a minimum of 87 review decisions per month if required.

15. Mr Amoako also made a witness statement, but it adds little.
16. We have before us a copy of Brent's report, produced in 2005, that led to the decision to contract out reviews of its housing decisions. The report was not before the County Court judge, and is of interest only by way of background. It stated:

The Review Manager, assisted by and Administrative Officer, receives an average of 10 requests for decision review from dissatisfied applicants every week, but he is unable to complete about half that number and, clearly, has no capacity to meet the statutory 8 week deadline in most cases, let alone deal with any unexpected influx of review requests (As an example, there were 52 requests still pending review as that 19 November 2004).

The report estimated that Brent would receive more than 500 review requests per year, of which only about 260 could be determined, there being no capacity to deal with the remaining 240 requests. Interestingly, against the heading "independence/neutrality", the report stated, for in-house review "N/A" but against external review "Will give the process a degree of independence".

17. Having heard argument, the judge gave a short judgment in which he said that he preferred the arguments of counsel for Brent, on the basis of which a review had been carried out which could be the subject of the appeal. He gave no further reasons for his conclusion.
18. The judge proceeded to hear argument on the substance of the appeal. Having done so, he held that the review decision was not marred by any legal error, and he dismissed the appeal.

(b) Salsam Al-Jarah, Nasrin Begum Ahmad and Yordanos Kidane

19. Ms Al-Jarah had requested a review of the suitability of temporary accommodation provided by Brent. The decision on the review was contained in a letter dated 7 August 2008 on Brent notepaper signed "Minos Perdios Reviews Manager". It rejected her contention that the accommodation was unsuitable. She duly appealed to the county court. Her case was heard together with those of Ms Ahmad and Ms Kidane, and the evidence of Brent and Mr Perdios was common to all three cases.
20. Ms Ahmad had requested review of Brent's decision that she was not homeless. Mr Perdios' decision letter was dated 7 August 2008; he upheld the earlier decision. The letter was on Brent notepaper signed in the same way as that of Ms Al-Jarah.
21. Ms Kidane had requested a review of the temporary accommodation provided by Brent on the basis that it was unsuitable. The decision letter, on Brent notepaper signed by Mr Perdios in the same way as that to Ms Al-Jarah, was dated 2 October 2008. The letter set out the information Mr Perdios had obtained, including the medical information. He rejected her contention that the accommodation was unsuitable, and gave reasons for doing so.
22. The grounds of their appeals before HH Judge Mitchell were:

(1) Someone who was not directly employed by a local authority is not an appropriate person to deal with a review.

(2) The review decisions were misleading and untrue because Mr Perdios held himself out as an employee or officer of Brent promulgating a decision of Brent.

(3) His role was tainted by apparent bias because:

(a) His website boasted a success rate that could only be achieved by making decisions adverse to applicants.

(b) "Seeking freelance employment infringes Article 6 of the European Convention on Human Rights because Mr Perdios justifies the continuance of his precarious employment on a success rate helpful to his employer."

(c) "It is not obvious to a fair and impartial observer whether or how the terms of regulation 2 of the Allocation of Housing and Homelessness (Review Procedures) Regulations 1999 have been met, if, contrary to his website, Mr Perdios is properly identified as the respondent's review manager."

23. Ms Al-Jarah, Ms Ahmad and Ms Kidane also contended that the substantive decisions made by Mr Perdios were the subject of legal errors.
24. The evidence before HH Judge Mitchell included a print-out of the HRL website. The home page states:

Since 2001 we have been providing an independent housing reviews (Sec 202 Part VI Housing Act 1996) service to local authorities. As service providers we carry out reviews on behalf of local authorities in an efficient and effective manner with only little administrative back-up required from the local authority.

We have dealt with over 3500 reviews with unparalleled success. Out of these cases, 158 have been appealed in the County Court with 95% of cases successfully defended. Furthermore, 45 re-reviews have been required to be carried out. Judges in both the County Court and Court of Appeal have commended my work.

In the Court Appeal case, Griffin v City of Westminster 2004 EWCA Civ 108 Lord Justice Kennedy stated,

"the review officer gives his reasons for reaching that conclusion in an exemplary fashion."

In the Central London County Court case of Amnsor v City of Westminster, HHJ Roger Cooke stated that he was,

"impressed with the detail in the review decision".

If you are looking to contract out your s202 functions or you need temporary assistance to help clear a backlog we can meet your needs. We can also provide a full training programme for your homeless and prevention officers and carry out audits of homeless decisions

25. The website lists 16 local authority clients. The service is described as follows:

The terms and conditions by which the Housing Reviews Ltd and the Local Authorities work together to enable the Council to effectively discharge its statutory duty under Section 202 Housing Act 1996 are as follows.

Obligations of Housing Reviews Ltd.

1. To effectively discharge the duty under Section 202 Housing Act 1996 on behalf of the Local Authority making and detailing all relevant enquiries, writing review decision letters and adhering to the requirements set out in Regulation 8.

2. To carry out all relevant enquiries in relation to making a review decision.

3. To request an extension to the 56-day period where necessary and provide reasons for this request.

4. To liaise with Legal Service in relation to Section 204 County Court Appeals.

5. To complete a review within 30 days when no further enquiries are

required to be made.

6. To identify shortfalls and provide training to housing staff for a fee to be agreed depending on the requirements.

Obligations of the Local Authorities

1. To provide a copy of the applicant's housing application when they request a review.

2. To send Regulation 6/acknowledgement letters to the applicant acknowledging their request for a review.

3. To update the Housing Reviews spreadsheet and Council housing computer database when a review request is made and when a review has been completed.

4. To provide administrative support when cases need to be referred to the Council's Medical Advisor.

5. To provide access, where possible, to the Council's housing computer database.

26. The training page of the website is as follows:

Training for Local Authority Homeless Officers.

We provide a comprehensive training programme for local authority homeless officers.

The training programme is called 'Investigating Homeless Applications and Writing Decision Letters - A Practical Guide'.

[Diagram or picture not reproduced in HTML version - see original .rtf file to view diagram or picture]Course Aims: The course aims to assist caseworkers involved in assessing applicants in relation to applications made under Housing Act 1996 by providing them with a practical guide in investigating homeless applications taking into account case law, the legislation and other recent developments regarding homelessness and allocations. The course will also provide ideas on writing s184 decision letters.

Too often courses do not provide homeless officers with the tools needed to be able to make adequate enquiries, be able to obtain all the relevant information during the crucial initial interview through effective questioning and use the information obtained to write a 'watertight' s184. This course will provide those tools as it focuses on the practical side of making enquiries and asking the 'right' questions. Knowing what to ask and what enquiries to make is crucial to arriving to a reasonable and correct decision. This is irrespective of whether you are investigating homelessness, eligibility, priority need, intentionality or local connection.

The course also provides practical advice on how to write a 'watertight' s184. Officers will have the opportunity to scrutinise some 'model' bad s184 decisions.

27. As in the case of Ms Heald, Mr Perdios made a witness statement. It was broadly similar to that in the case of Ms Heald, but there were differences. He said that his decisions in the cases of Ms Al-Jarah and Ms Kidane had been approved and adopted by an officer of Brent, Kevin Coleman. In relation to the figures on the website, he said:

9. I wish to make a clear explanation of the figures/statistics given on the first page. Over 3,500 reviews have been dealt with. Of those cases, 158 had been appealed to the County Court. In 5% of those cases were appeals allowed, and in 95% of those cases, my decision was successfully defended.

10. There reference to 45 "re-reviews" is a reference to 45 out of the 3,500 and not 45 out of 158. Of the 3,500 reviews which I have conducted only 45 of them have been required to be carried out again. These were not cases where appeals were allowed, but cases where representatives of the Authority concerned asked me to carry out a fresh review. In many of the cases, new facts may have arisen, the applicant/appellant might have had a change in circumstances, or further investigations might have revealed something which had not been appreciated earlier. It should not be inferred that those 45 cases were ones in which the original decision had been found to be in error.

28. Mr Perdios referred to the allegation that his letters did not make it clear that he was not an employee or officer of Brent. He denied that any deception was involved. He said that HRL was instructed by a number of local authorities, particularly in the London area, was well-known amongst members of the legal profession concerned with homelessness appeals. When instructed to do the review, he wrote a letter to the applicant or his or her solicitors to invite representations which gave his Company's address, telephone and fax numbers and gave his e-mail address as mperdios@housingreviews.co.uk. He asserted that it was clear from such letters that he did not work for the local authority.
29. In a second witness statement, dated 24 November 2008, Mr Perdios added to the statistics:

3. I have carried out 1020 reviews on behalf of the London Borough of Brent. Out of these I have overturned approximately 12%. I have also withdrawn a further 5% of s.184 and referred them back to the caseworker in instances where I have felt that they have not been procedurally fair.

30. Mr Amoako also made a statement. He referred to the applicable legislative provisions and exhibited with the contractual documentation between Brent and HRL. He said that under the contract Mr Perdios made recommendations, so that:

12. Thus, it remains open to the Authority not to accept Mr. Perdios' "decision" in any given case. His "decisions" are not, of course, initially decisions until and unless they are accepted and adopted by the Authority. Until then they are merely "recommended decisions".

13. In each case the decision recommended by Mr Perdios is open to consideration by an officer of the Authority. The review functions carried out by Mr Perdios fall into two different discrete types: (i) homelessness reviews and (ii) suitability reviews.

14. In relation to suitability reviews (i.e. suitability of accommodation) Mr Kevin Coleman of Authority who is the Re-housing Manager, is the responsible officer on behalf of the Authority. This was the case with the suitability appeals of both A1 and A2.

15. In relation to homelessness reviews, I have the function of accepting or not accepting the recommended decision. Of course, if I were ever to consider that any recommended decision showed any bias against the applicant, I would not approve it. I have never formed such a view of any or Mr Perdios' recommended decisions. However in practice, when the Authority receives Mr Perdios' recommended decisions, generally by e-mail, they are routinely adopted. The Authority has confidence in Mr Perdios. Part of the reason for the sub-contracting arrangement in the first place, was so that the relevant officers of the Authority, who are busy people, did not have to address the reviews themselves.

31. Mr Coleman made a witness statement. He said:

6. When Mr Perdios carries out a review on a suitability issue, I am authorised to exercise the function, on behalf of the Authority, of deciding whether his recommended decision is to be accepted. Whilst it is open to me, or any other relevant officer, not to adopt Mister Perdios' recommended decision, I have to accept the account of what happens in practice set out in Mr Amoako's statement.

7. Of course, if I ever were to consider that any recommended decision showed any bias against the Applicant, I would not adopt it on the Authority's behalf. I wish to make it clear, however, that I have never formed such a view of any of Mr decisions.

32. In his judgment, the judge referred to the statutory provisions, which I shall so far as necessary set out below, and to the judgments in Starrs v Ruxton [2002] HRLR 191, Runa Begum v Tower Hamlets LBC [2003] AC 430, Porter v McGill [2002] 2 AC 357 and Feld v Barnet [2005] HRLR 9. He held that the legislation permitted contracting out, and that Mr Perdios was not apparently biased. He then considered the individual cases before him and held that none of the review decisions was the legally defective. Accordingly, he dismissed all three of the appeals. As in the case of Ms Heald, there is no appeal against his findings on the substantive issues before him.

The applicable legislation

33. Part VII of the Act is a comprehensive code setting out the obligations of local housing authorities such as Brent to persons who are homeless or threatened with homelessness. Section 184 of the Act imposes a duty on a local housing authority that has reason to believe that an applicant may be homeless or threatened with homelessness to make such inquiries as are necessary to satisfy itself whether he is eligible for assistance and, if so, whether any, and if so what, duty is owed to him under Part VII. In the instant cases, no question arose as to eligibility. The duty owed by a local housing authority to an applicant depends on whether he or she became homeless intentionally (as to which see sections 190 and 191) and whether he or she is in priority need for accommodation, as to which see section 189. If the authority is satisfied that an applicant is in priority need and is not homeless intentionally, it is under a duty (unless it refers the application to another local housing authority) to secure that accommodation is available for occupation by him or her: section 193. The authority is under a duty to inform the applicant of its decision.
34. Sections 202 and 203 of the Act are as follows:

202 Right to request review of decision

(1) An applicant has the right to request a review of—

(a) any decision of a local housing authority as to his eligibility for assistance,

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

(c) any decision of a local housing authority to notify another authority under section 198(1) (referral of cases),

(d) any decision under section 198(5) whether the conditions are met for the referral of his case,

(e) any decision under section 200(3) or (4) (decision as to duty owed to applicant whose case is considered for referral or referred), or as to the suitability of accommodation offered to him, as mentioned in section 193(7),

(f) any decision of a local housing authority as to the suitability of accommodation offered to him in discharge of their duty under any of the provisions mentioned in paragraph (b) or (e).

(2) There is no right to request a review of the decision reached on an earlier review.

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

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

203 Procedure on a review

(1) The Secretary of State may make provision by regulations as to the procedure to be followed in connection with a review under section 202.

Nothing in the following provisions affects the generality of this power.

(2) Provision may be made by regulations—

(a) requiring the decision on review to be made by a person of appropriate seniority who was not involved in the original decision, and

(b) as to the circumstances in which the applicant is entitled to an oral hearing, and whether and by whom he may be represented at such a hearing.

35. The Secretary of State has exercised the powers conferred by section 203 by making the Allocation of Housing and Homelessness (Review Procedures) Regulations 1999 ("the 1999 Regulations). Regulation 2 is as follows:

Where the decision of the authority on a review of an original decision made by an officer of the authority is also to be made by an officer, that officer shall be someone who was not involved in the original decision and who is senior to the officer who made the original decision.

36. Section 70 of the Deregulation and Contracting Out Act 1994 provides, so far as is relevant:

Functions of local authorities.

(1) This section applies to any function of a local authority—

(a) which is conferred by or under any enactment; and

(b) which, by virtue of section 101 of the Local Government Act 1972 or section 56 of the Local Government (Scotland) Act 1973 or section 38 or 380 of the Greater London Authority Act 1999 (arrangements for discharge of functions by local authorities), may be exercised by an officer of the authority; and

(c) which is not excluded by section 71 below.

(1A) …

(2) If a Minister by order so provides, a function to which this section applies may be exercised by, or by employees of, such person (if any) as may be authorised in that behalf by the local authority whose function it is.

37. Section 79 of that Act defines "function", in relation to a local authority, as including "any power to do any thing which is calculated to facilitate, or is conducive or incidental to, the exercise of a function".
38. Pursuant to the powers conferred by sections 70 and 77 of the 1994 Act, the Secretary of State made the Local Authorities (Contracting Out of Allocation of Housing and Homelessness Functions) Order 1996 ("the 1996 Order"). Regulation 3 is as follows:

Any function of an authority which is conferred by or under Part VII of the Act (Homelessness) except one which is listed in Schedule 2 to this Order, may be exercised by, or by employees of, such person (if any) as may be authorised in that behalf by the authority whose function it is.

39. Schedule 2 is headed "Homelessness functions of a local housing authority excluded from contracting out" and is as follows:

Functions conferred by or under any of the following provisions of the Act

(a) section 179(2) and (3) (duty of local housing authority to provide advisory services)

(b) section 180 (assistance for voluntary organisations)

(c) section 213 (co-operation between relevant housing authorities and bodies).

The parties' submissions in this court

40. On behalf of the Appellants it is submitted that the carrying out of a review is not a "function" that can be contracted out. Article 6 requires that expression to be read down, so that statutory reviews comply with its requirements. The contracting out of any part of the review process is unlawful, whether the reviewer makes the review decision for the authority or whether he merely carries out an investigation of the facts and makes a recommendation to the authority (which is what Mr Amoako said happens in the case of Brent). Someone such as Mr Perdios, who is not an employee or officer of a local housing authority, is not democratically accountable in the way such an employee or officer is. Furthermore, he does not have the independence required for the lawful carrying out of a quasi-judicial function. In this particular case, although it is not suggested that Mr Perdios is personally biased against applicants, his company's website implies, if it does not expressly state, that he sees his function as rejecting applicants' review applications whenever possible in a manner that cannot be challenged in the courts. Thus there is an appearance of bias and lack of independence. Moreover, his company's contract with Brent confers no security on the company or him, so that he lacks the independence and appearance of independence required for the lawful performance of the review function. In addition, his decision letters are misleading and render his decisions unlawful.
41. In addition, Mr Carter on behalf of Ms Heald submitted that HH Judge McDowall's reasons for rejecting the submission that Brent could not lawfully contract out their review function were inadequate.
42. On behalf of Brent, Mr Broatch submitted that contracting out of reviews are expressly authorised by the statutory provisions referred to above, that it did not involve a breach of Article 6, and that Mr Perdios' decisions were not affected by any relevant apparent bias or lack of independence.

Discussion

43. It is, I think, important to bear in mind that there are two issues that require consideration. The first is whether a local housing authority may lawfully delegate the performance of its reviews or any part of a review to a person who is not an officer or employee. The second is whether a review carried out by that person satisfies the requirements of Article 6, assuming it to be applicable. If delegation is impermissible as such, even delegation to an unquestionably independent and impartial tribunal would be unlawful. If delegation is permissible, there is an issue as to whether the delegation results in a procedure that as a whole complies with Article 6. The two issues are inter-related, because it is submitted that the fact that contracting out leads to a procedure which does not comply with Article 6, requires the court to read down the 1996 Order so as to exclude reviews from the scope of "functions".
44. On the first issue, whether apart from Article 6, delegation is permissible, subject to the authorities to which I refer below, I should have thought that the legislative provisions to which I have referred are quite clear. The carrying out of reviews under sections 202 and 203 of the Act is a function of a local housing authority under Part VII; regulation 3 of the 1996 Order authorises such functions to be carried out by an employee, such as Mr Perdios, of a person (which includes a company: see Schedule 1 to the Interpretation Act 1978) authorised in that behalf by the local housing authority concerned. The word "functions" in this context "embraces all the duties and powers of a local authority; the sum total of the activities Parliament has entrusted to it. Those activities are its functions." (Hazell v Hammersmith and Fulham LBC [1992] 2 AC 1, 29, per Lord Templeman, with whom the other members of the Appellate Committee agreed.) The extension of "functions" to incidental powers by section 79 of the 1994 Act is not presently relevant. It is significant that the functions expressly excepted by the 1996 Order from the contracting-out power do not include the review function; and it follows that the review function may be contracted out. It is not disputed that Brent has authorised HRL to carry out wholly or in part its review functions in relation to the reviews it has referred to it; and it is not disputed that Mr Perdios is its employee. It follows that, reviews could be lawfully contracted out to be carried out by him, unless he does not have the necessary independence and impartiality or the appearance of those qualities.
45. However, there have been conflicting judicial statements on the desirability or undesirability and the lawfulness or unlawfulness of local housing authorities contracting out the review function. None of these statements are binding on this Court, but they are of weighty authority and must be considered.
46. In Adan v Newham LBC [2001] EWCA Civ 1916 [2002] 1 WLR 2120 the Court of Appeal held that the county court has no power to direct a local housing authority how to carry out a review. Thus any statement as to the lawfulness of delegation or contracting out was obiter. Brooke LJ at paragraph 44 considered that the 1996 Order authorised the contracting out of reviews, as did Hale LJ at paragraph 76 and David Steel J at paragraph 94. Their observations on the requirements of Article 6 have been overtaken by the decision of the House of Lords in Runa Begum v Tower Hamlets LBC [2003] UKHL 5 [2003] 2 AC 430.
47. In Runa Begum, the applicant challenged the review decision of the local authority as to the suitability of the accommodation it had offered her under Part VII on the basis that, because issues of fact had arisen, it did not comply with Article 6; and she contended that (as had been envisaged by Hale LJ in Adan) the authority should have delegated the review to an independent tribunal. The House of Lords held that the procedure for determining the suitability of the applicant's accommodation, viewed as a whole, including the right of appeal to the county court, complied with Article 6, assuming (but not deciding) that it applied. Lord Bingham said:

8. Is this quality of review sufficient to meet the requirements of article 6(1) on the assumption that a "civil right" is in issue? It is plain that the county court judge may not make fresh findings of fact and must accept apparently tenable conclusions on credibility made on behalf of the authority. The question is whether this limitation on the county court judge's role deprives him of the jurisdiction necessary to satisfy the requirement of article 6(1) in the present context.

    9. In approaching this question I regard three matters as particularly pertinent:

    (1)  Part VII of the 1996 Act is only part of a far-reaching statutory scheme regulating the important social field of housing. The administration of that scheme is very largely entrusted to local housing authorities. While the homelessness provisions are of course intended to assist those individuals who are or may become homeless, there is a wider public dimension to the problem of homelessness, to which attention was drawn in O'Rourke v Camden London Borough Council [1988] AC 188 at 193 C-E.

    (2)  Although, as in the present case, an authority may have to resolve disputed factual issues, its factual findings will only be staging posts on the way to the much broader judgments which the authority has to make. In deciding whether it owes the full housing duty to an applicant under section 193(1) the authority has to be "satisfied" of three matters and "not satisfied" of another. Under section 193(7)(b) the authority ceases to be subject to the full housing duty if it is "satisfied that the accommodation [offered to the applicant] was suitable for [the applicant] and that it was reasonable for him to accept it." Thus it is the authority's judgment which matters, and it is unlikely to be a simple factual decision. This is exemplified by the letter of 27 July 2001 written to Runa Begum by Mrs Hayes following the review, which included this passage:

"I consider that the property offered is both suitable for you and your children in that the physical attributes are in accordance with the Council's Allocation Criteria, and I further consider that it is reasonable to expect yourself and your household to occupy the property offered as I consider that the area in which Balfron Towers is located is no different to any other area within the London Borough of Tower Hamlets . . ."

(3)  Although it seems to me obvious, as I have said, that the reviewer is not independent of the authority which employs him or her, section 203 of the 1996 Act and The Allocation of Housing and Homelessness (Review Procedures) Regulations 1999 (S1 1999/71) do provide safeguards that the review will be fairly conducted. Thus the reviewer must be senior to the original decision-maker (section 203(2)(a), regulation 2), plainly to avoid the risk that a subordinate may feel under pressure to rubber-stamp the decision of a superior. The reviewer must not have been involved in making the original decision (section 203(2)(a), regulation 2), to try to ensure that the problem is addressed with a genuinely open mind. The applicant has a right to make representations, and must be told of that right (regulation 6(2)). Such representations must be considered (regulation 8(1)). The applicant is entitled to be represented (regulation 6(2)). If the reviewer finds a deficiency or irregularity in the original decision, or in the manner in which it was made, but is nonetheless inclined to make a decision adverse to the applicant, the applicant must be informed and given an opportunity to make representations (regulation 8(2)). The reviewer must give reasons for a decision adverse to the applicant (section 203(4)). The applicant must be told of his right to appeal to the county court on a point of law (section 203(5)). These rules do not establish the reviewer as an independent and impartial tribunal, but they preclude unreasoned decision-making by an unknown and unaccountable bureaucrat whom the applicant never has a chance to seek to influence, and any significant departure from these procedural rules prejudicial to the applicant would afford a ground of appeal.

10. In the course of his excellent argument, Mr Paul Morgan submitted that where, as in the present case, factual questions rise they should be referred for decision by an independent fact-finder. This solution received some support from the Court of Appeal in Adan v Newham London Borough Council [2002] 1 WLR 2120, [2001] EWCA Civ 1916. I have very considerable doubt whether the resolution of applications for review, or any part of such process, is a function of the authority within the scope of article 3 of The Local Authorities (Contracting Out of Allocation of Housing and Homelessness Functions) Order 1996 (SI 1996/3205), from which authority to refer was said to derive. But even if that question were resolved in Runa Begum's favour, the proposed procedure would, in cases where it was adopted, (a) pervert the scheme which Parliament established, and (b) open the door to considerable debate and litigation, with consequent delay and expense, as to whether a factual issue, central to the decision the reviewer had to make, had arisen. I fear there would be a temptation to avoid making such explicit factual findings as Mrs Hayes, very properly, did.

11. In relation to the requirements of article 6(1) as applied to the review by a court of an administrative decision made by a body not clothed with the independence and impartiality required of a judicial tribunal, the Strasbourg jurisprudence (as in relation to "civil rights") has shown a degree of flexibility in its search for just and workmanlike solutions. Certain recent authorities are of particular importance: Zumtobel v Austria (1993) 17 EHRR 116 at 132-133, para 32; ISKCON v United Kingdom (1994) 18 EHRR CD 133 at 144-145, para 4; Bryan v United Kingdom (1995) 21 EHRR 342 at 354 (concurring opinion of Mr Bratza) and p 361, para 47; Stefan v United Kingdom (1997) 25 EHRR CD 130 at 135; X v United Kingdom (1998) 25 EHRR CD 88 at 97; Kingsley v United Kingdom (2000) 33 EHRR 288 at 302-303, paras 52-54; (2002) 35 EHRR 177 at 186-188, paras 32-34. None of these cases is indistinguishable from the present, but taken together they provide compelling support for the conclusion that, in a context such as this, the absence of a full fact-finding jurisdiction in the tribunal to which appeal lies from an administrative decision-making body does not disqualify that tribunal for purposes of article 6(1). This is a conclusion which I accept the more readily because it gives effect to a procedure laid down by Parliament which should, properly operated, ensure fair treatment of applicants such as Runa Begum.

48. The principal opinion was that of Lord Hoffman. He said:

 46. It therefore seems to me that it would be inappropriate to require that findings of fact for the purposes of administering the homelessness scheme in Part VII should be made by a person or body independent of the authority which has been entrusted with its administration. I certainly see nothing to recommend the recourse to contracting out which was suggested by the majority in Adan's case. Some of the arguments against it are well made by Hale LJ at p 2144, paras 77-78. Four points seem to me important. First, if contracting out is not adopted across the board, it would be bound to generate disputes about whether the factual questions which had to be decided by the housing officer were sufficiently material to require contracting out. Secondly, if it were adopted in every case, it would add significantly to the cost and delay. Thirdly, it would mean that the housing officer, instead of being able to exercise his discretionary powers, such as whether he considered accommodation suitable for the applicant, on a first-hand assessment of the situation, would be bound by a written report from the independent fact finder. Fourthly, I am by no means confident that Strasbourg would regard a contracted fact finder, whose services could be dispensed with, as more independent than an established local government employee. In Adan's case, at pp 2134-2135, para 44, Brooke LJ declined to become involved in "the practical difficulties that may arise when trying to ensure that the third party has the requisite independence" but they are worth thinking about.

49. Lord Millett did, however. He said:

97. It was suggested that where, as in the present case, factual disputes arise for decision, the case should be referred to an external fact-finder independent of the local housing authority. Like my noble and learned friend Lord Bingham, I doubt that the exercise of quasi-judicial powers is a function of the authority within the meaning of the relevant Order, which is concerned in very general terms with deregulation and the subcontracting of ordinary local authority functions. But in any case I do not see how a person appointed ad hoc by the authority directly concerned and lacking any kind of security of tenure could constitute an "independent … tribunal established by law" as required by article 6(1). Moreover, while the legality of farming out the decision-making function in relation to disputes of fact which arise in the course of the hearing is open to doubt, there can be no doubt that it would create an administrative nightmare. It is notable that Parliament has established no similar procedure for any of the great number and variety of decisions that it has devolved to administrative bodies.

50. Before us, it has not been argued that a decision made by Mr Perdios, if considered and adopted by an officer of Brent, as stated by Mr Amoako and as reflected in the last sentence of paragraph 4 of the contractual Specification, does not result in Brent being, or not being, "satisfied" for the purposes of Part VII, for example section 193(1) and (7) and section 195(1). As I read Lord Bingham's opinion, the basis of his expressed doubt as to the lawfulness of contracting out is the statutory requirement that the authority should be "satisfied" or not, as the case may be. Lord Hoffman's concerns were in part with the practicalities and possible inefficiencies of contracting out, matters which have been convincingly addressed in Brent's evidence. With the greatest of respect to Lord Millett's opinion, given that the 1996 Order specifically excludes certain statutory functions from contracting out, it is difficult to say that it is "concerned in very general terms with deregulation and the subcontracting of ordinary local authority functions". Despite the very great respect that I pay to any statement of Lord Bingham, Lord Hoffman or of Lord Millett, it seems to me that the 1996 Order is indeed clear and permits contracting out of reviews.
51. Does a third party review necessarily infringe Article 6, assuming it to apply? In my judgment, the starting point for consideration of this issue must be that, on the authority of Runa Begum, a review carried out by an employee of a local housing authority does not infringe Article 6, even though that employee is not independent. It is therefore necessary to compare the independence and impartiality of a person to whom the review function is contracted out with those of an employee.
52. I do not see that a third party should necessarily be any less impartial than an employee. Whether he can be regarded as less independent may depend on the particular facts, and in particular the terms of the contract between the authority and the third party. It is possible to build into a contract a high degree of independence on the part of the third party, for example by prescribing a long contractual term that is terminable only for serious breach. To do so would, however, bring into play another of the Appellants' objections to contracting out, namely that the third party is not democratically accountable. Democratic accountability was stated to be a feature relevant to compliance with Article 6 by Lord Hoffman (with whom all the members of the Appellate Committee agreed) in Runa Begum at paragraphs 35 and 43 and in Alconbury [2001] UKHL 23 [2003] 2 AC 295 at paragraph 110.
53. The difficulty with this part of the argument of the Appellants is that the decision on review is, on any basis, that of the authority. Brent accepted the decisions made by Mr Perdios as its own. It is democratically accountable for the efficiency and fairness of its review procedures. It is therefore irrelevant that someone like Mr Perdios to whom a review is contracted is not democratically elected or directly democratically accountable. Indeed, on one view the fact that he is not democratically accountable will tend to make him more independent than someone who is democratically accountable. It follows that I do not see that contracting out is necessarily precluded by the lack of independence of a third party reviewer.
54. I am fortified in my view that in principle reviews may be contracted out by the terms of regulation 2 of the 1999 Regulations, set out above, to which Lord Bingham referred in his opinion in Runa Begum at paragraph 9(3). It assumes that both the authority's original decision and the review decision may be made by someone who is not an officer of the authority. The Appellants' suggestion that the person other than an officer whom the Regulations envisage could be a councillor is, I think, unrealistic. Moreover, a decision by an elected councillor, whose tenure depends on his re-election (and/or on his re-selection by his political party), would be even less independent than that of an employee, and a councillor may be even more influenced by the financial implications of an acceptance of a duty to accommodate (or of the electoral implications of a refusal), and therefore be more likely to be said to be biased.
55. In addition, the conclusion that contracting out is permissible is consistent with the Homelessness Code of Guidance for Local Authorities issued by the Secretaries of State for Communities and Local Government and of Health under section 182 of the 1996 Act. Paragraph 21.3 states:

The [1996] Order provides that the majority of functions under Part 7 can be contracted out. These include:

…

carrying out reviews of decisions;

…..

56. I turn to consider whether provisions of HRL's contract demonstrate a lack of sufficient independence. The contract is short term, and can be determined at any time by Brent under clause 25.4. The company has no real security of tenure. It cannot be said to have anything like the qualities of independence expected of a tribunal or court. Against this, the fact that the company carries out reviews for a significant number of authorities confers a certain independence in relation to each of them. Moreover, an employee during the initial period of his employment may have no security of tenure, and if his work is not to the liking of his superiors or political masters he may be moved sideways and his role as reviewer terminated. His promotion will depend on his superiors' or political masters' contentment with his work. I do not think that the differences between the position of HRL and Mr Perdios on the one hand, and that of an employee or officer of an authority on the other, are such as materially to affect overall fairness of the review process.
57. I turn to the question of apparent bias. The test for apparent bias is well established: "Would a fair-minded and informed observer conclude that there was a real possibility, or a real danger, the two being the same, that the tribunal was biased?" See Lord Hope in Porter v Magill [2001] UKHL 67 [2002] 2 AC 357 at paragraph 102, citing Lord Phillips MR in Re Medicaments [2000] EWCA Civ 350 [2001] 1 WLR 700 at paragraph 85. The Appellants rely on the statements on the HRL website. They say that the reference to 3500 reviews having been carried out with unparalleled success is to successful rejection of applications, rather than successful fair completion of reviews. I do not accept this interpretation. I do not see why Mr Perdios should be more concerned to reject an application than the local authority that instructs him. I do see that local authorities are interested in avoiding appeals to county courts, with the legal costs and work involved, and even more interested in any appeal failing, so that they do not incur in addition to their own costs of the appeal to the county court a liability to pay the costs of the successful applicant and the costs of carrying out the review again. Success, in this context, should be judged by the acceptance by the parties, or, if there is an appeal, by the judge, that a review has been lawfully and fairly carried out. I note that the training page of the website states: "Knowing what to ask and what enquiries to make is crucial to arriving to a reasonable and correct decision." The italics are mine. I do not think that an objective and well-informed observer would think that there was a real danger of bias on the part of Mr Perdios, and I would therefore reject the contention that the review decisions in these cases were marred by his apparent bias.
58. I would also reject the submission that the sheer numbers of reviews carried out by Mr Perdios show that he does not adequately consider each review. Whether he does so or not will appear from his decision letter; those in the present cases were considered by the county court judges to give adequate reasons for the authority's decisions, and there has been no appeal from those findings.
59. The decision letters in the present cases did give the impression that Mr Perdios is an officer of Brent. I agree that they were misleading. They should not be. If they were materially misleading, that might give rise to a ground for judicial review. But if, as I consider, Brent were entitled to have the review carried out by Mr Perdios, the false impression given by the letter was immaterial: if the letter had fully set out his status, there would have been no cause for complaint. So I think there is nothing in this point.
60. Lastly, there is the submission that His Honour Judge McDowall failed to give sufficient reasons for his decision on the contracting-out issue. I agree that he did not. It is not sufficient for a judge to state that he prefers the submissions of one side as against those of the other without giving reasons for that preference. However, we have reviewed all the evidence and the arguments before him. In my judgment, he came to the correct conclusion, albeit insufficiently reasoned. The complaint as to the inadequacy of the judge's reasons has become academic.
61. For the above reasons, I would dismiss these appeals. I do so without regret. Brent, who accept and adopt the results of Mr Perdios' inquiries and his recommendations, evidently consider that he provides an efficient service that deals with reviews expeditiously and at a reasonable cost. If his decisions are accepted by Brent and upheld by the county court, it is because his decision letters address the issues raised by applicants and the information put before him and which he obtains and reach sensible conclusions. It has not been suggested that he is guilty of actual bias, which would in any event be a ground for appeal before the county court judge. Ultimately, I do not see that the decisions in the present cases were made by someone who was materially less independent than an officer of the authority itself. I do not think that the Court should be astute to strike down an arrangement that seems to work well in practice.

Sir Simon Tuckey :

62. I agree.

Lord Justice Sedley :

63. For the reasons given by Lord Justice Stanley Burnton I agree that these appeals fail. I add a few words because of the concern expressed obiter in Runa Begum by Lord Bingham and Lord Millett, and to some extent by Lord Hoffmann, as to whether the legislation authorises the contracting out of what is on any view a quasi-judicial function.
64. Local government has long since been divested of most of its adjudicative powers. The modern forum for the exercise of such powers is an independent tribunal. But by virtue of primary legislation important decisions which can make the difference between a home and the street for thousands of people every year have been consciously placed and kept within the administrative framework of local government, with recourse to the courts on process only and not on merits.
65. It is into this framework that the power to contract out has been introduced. Certain functions are exempted from the power, but the review of homelessness decisions is not one of them. One understands very well why members of the Appellate Committee were dubious, even so, about the contracting out of an adjudicative function as if it were the town hall catering contract. But the fact is that it is difficult to envisage a process less compatible with Article 6 than the in-house review by one official of another official's decision on an issue on which the local authority, through both of them, sits as judge in its own cause. Starting from such a low base, delegation of the review function to a competent outsider on the kind of terms we have seen in this case, whatever its weaknesses, probably offers more in the way of independence and impartiality than the in-house system.
66. Like Lord Justice Stanley Burnton I think Brent needs to sort out whether it has devolved the entire review decision to HRL, in which case Mr Perdios' description of himself is probably correct, or whether his determinations have some provisional status which leaves the final decision in Brent's hands. But the issue does not go to the legality of contracting out the review function.