QUEEN'S BENCH DIVISION
Manchester Civil Justice Centre
1 Bridge Street West
B e f o r e :
THE QUEEN (on the application of PEAT and Ors)
|- and –
|HYNDBURN BOROUGH COUNCIL
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Ms Stockley (instructed by Hyndburn Borough Council) appeared on behalf of the Defendant.
Crown Copyright ©
Mr Justice McCombe:
The statutory background
"Before making a designation the local housing authority must—
(a) take reasonable steps to consult persons who are likely to be affected by the designation; and
(b) consider any representations made in accordance with the consultation and not withdrawn."
"LHAs [that is local housing authorities] will be required to conduct a full consultation. This should include consultation of local residents, including tenants, landlords and where appropriate their managing agents and other members of the community who live or operate or provide services within the proposed designation. It should also include local residents and those who operate businesses or provide services in the surrounding area outside of the proposed designation who will be affected. LHAs should ensure that the consultation is widely publicised using various channels of communication.
During consultation, LHAs must give a detailed explanation of the proposed designation, explaining the reasons for the designation, how it will tackle specific problems, the potential benefits etc. For example, in the case of selective licensing, LHAs must be able to demonstrate what the local factors are that mean an area is suffering from low demand and/or anti-social behaviour, how those factors are currently being tackled and how the selective licensing designation will improve matters. Affected persons should be given adequate time to give their views and these should all be considered and responded to.
Once the consultation has been completed the results should then be published and made available to the local community."
"...the first phase of work to introduce selective licensing of private landlords and which made recommendations as to which areas of the borough should be subject to a further detailed study, ultimately forming the basis of a designation request to Government."
"The designation report will include a section on stakeholder consultation. The guidance for selective licensing requires us to inform local residents; landlords, letting agents and other businesses about the proposed designation, giving the reasons for proposing it, why alternative remedies are insufficient, demonstrating how it will tackle specific problems and describing the potential benefits."
In short, failure to include such matters in the consultation lies at the heart of the present claim.
"The Council is considering introducing a requirement that anyone who wishes to rent out residential property, in certain parts of Accrington and Church will need to have a licence. Whilst the area or areas to be designated have yet to be finally decided, as you are a landlord with properties in the Borough I want to give you the opportunity to comment on the proposal.
'With this letter is a consultation form and explanatory leaflet which our consultants, Accent Group, have prepared and posted to you.
I would ask that you read the explanatory leaflet and then complete the consultation form and return it in the post-paid envelope. I am unable to provide you with information as to what fee will be charged at this moment, but I will contact you again when a fee structure has been drafted and give you the opportunity to comment further."
"Hyndburn Borough Council have recently commissioned Accent Regeneration Ltd to undertake a study to explore the concept of selective licensing, and have identified West Accrington, Church, Peel and Barnfield, as the areas from within the borough that will benefit from licensing. From this a final submission may be made to the Department for Communities and Local Government."
"The Council is considering designating one or two areas of the borough under Part 3 of the Housing Act 2004. The areas under consideration cover about 7,000 properties, of which I estimate 1,500 to be PRS stock with perhaps 300 different landlords.
The Council wishes to engage widely with stakeholders and is currently nearing the end of an exercise in which residents and businesses in the area being considered for designation, have been written to and asked for comments. At the same time, we have written to all landlords in the borough (not just those who we think own property in the potential licensing zone), however, I also wish to inform those landlords associations who may have members in the area, or who may wish to comment on the proposal. Hopefully this will increase the chances of reaching any landlords we have not been able to identify.
I also intend to set up a meeting open to landlords once we have established a fee structure, to allow discussion on the whole topic. Obviously you will be invited to send a representative..."
"7.2 As part of the designation report, an extensive consultation exercise was carried out by post with 10,000 households within the proposed designation area and all known active landlords across the Borough, approximately 1,000. Both surveys achieved an 11% response rate with the following findings:-
(i) 67.6% of households were in favour of licensing 8.8 per cent were against;
(ii) 30.6% of landlords were in favour of the introduction of licensing; 38.5% were against with the remainder (31%) having no preference;
(iii) 78.1% of landlords did support the idea that the Council should intervene in areas of low demand housing or anti-social behaviour;
7.3 In addition information has been shared at landlord forum meetings and with East Lancashire Landlords Association."
"Guidance suggests that consultation should include details of the proposed designation, this is however merely guidance and is not a statutory requirement. The Council concedes that their consultation was more on the general principles of selective licensing however it satisfied the legal requirements..."
Thus it appears the decision not to follow the Secretary of State's guidance was both conscious and deliberate.
"(ii) Consultation was carried out via:
( Presentations at Neighbourhood Committee meetings
( The establishment and frequent meetings of a local stakeholder group
( Area-wide questionnaires to residents...
( Borough-wide questionnaires to landlords...
( Landlord's forum meetings;
( Information to [certain representative associations]"
"Stakeholder consultation: a copy of the consultation document, a summary of the responses received (ie those within the proposed area and also those in the area surrounding proposed designation), and demonstrate how these have either been acted on or not, giving reasons. The consultation should inform local residents, landlords, letting agents and other businesses about the proposed designation, giving the reasons for proposing it, why alternative remedies are insufficient, demonstrating how it will tackle specific problems, and describing the potential benefits."
It is submitted by the claimants that, in that context, the term "stakeholder" is well understood and would have been understood by the Secretary of State to include the bodies identified in that section.
"9. ...The underlying principles are not in dispute. They were identified by Mr Stephen Sedley QC in argument in R v Brent LBC ex p Gunning (1985) 84 LGR 168 and were adopted by Hodgson J in his judgment in that case at p 189. They are:
'First, that the consultation must be at a time when proposals are still at a formative stage. Second, that the proposer must give sufficient reasons for any proposal to permit of intelligent consideration and response. Third, that adequate time must be given for consideration and response, and finally, fourth that the product of consultation must be conscientiously taken into account in finalising any statutory proposals.'
10. Those principles were elaborated in this way by McCullough J in ex p Cran at p 38 as follows:
'What kind and amount of consultation is required in a particular case must depend on the circumstances. A few general principles can however, be stated.
The process of consultation must be effective; looked at as a whole, it must be fair. This requires that: consultation must take place while the proposals are still at a formative stage; those consulted must be provided with information which is accurate and sufficient to enable them to make a meaningful response; they must be given adequate time in which to do so; there must be adequate time for their responses to be considered; the consulting party must consider responses with a receptive mind and a conscientious manner when reaching its decision.'
So far as they go, those passages in my judgment correctly state the relevant principles.
11. They do not, however, provide a complete answer to the question which arises for decision in this case. Thus, they do not address the question what is the necessary extent of the notification or consultation required in order to discharge the duty. As McCullough J pointed out, all will depend upon the circumstances. For example, a national project with wide implications for society as a whole will require far more extensive consultation than the installation of a pedestrian and cycle crossing [which was the issue in that case] Provided that the notification and consultation satisfy the principles set out above, it appears to me that council must have a comparatively wide discretion as to how the process is carried out. The council cannot be in breach of duty unless the extent of the consultation process was such as to be outside the ordinary ambit of its discretion. In short, in order to be unlawful the nature and extent of the process must be so narrow that no reasonable council, complying with the principles set out above, would have adopted it."
Similar formulations are to be found in other statutory contexts in decisions such as R v SSSS ex p. Association of Metropolitan Authorities  1 WLR 1 at page 4 before letters F and H by Webster J and in R (Breckland DC) v Boundary Committee  LGR 589 by Sir Anthony May P, at paragraphs 43 to 46.
"62...A consultation exercise which is flawed in one, or even in a number of respects, is not necessarily so procedurally unfair as to be unlawful. With the benefit of hindsight it will almost invariably be possible to suggest ways in which a consultation exercise might have been improved upon. That is most emphatically not the test. It must also be recognised that a decision-maker will usually have a broad discretion as to how a consultation exercise should be carried out. This applies with particular force to a consultation with the whole of the adult population of the United Kingdom. The defendant had a very broad discretion as to how best to carry out such a far-reaching consultation exercise.
63. In reality, a conclusion that a consultation exercise was unlawful on the ground of unfairness will be based upon a finding by the court, not merely that something went wrong, but that something went 'clearly and radically' wrong.
"116. ... The purpose of the 2006 Consultation Document as part of the process of 'the fullest public consultation' was unclear. It gave every appearance of being an issues paper, which was to be followed by a consultation paper containing proposals on which the public would be able to make informed comment. As an issues paper it was perfectly adequate. As the consultation paper on an issue of such importance and complexity it was manifestly inadequate. It contained no proposals as such, and even if it had, the information given to consultees was wholly insufficient to enable them to make "an intelligent response". The 2006 Consultation Document contained no information of any substance on the two issues which had been identified in the 2003 White Paper as being of critical importance: the economics of new nuclear build and the disposal of nuclear waste. When dealing with the issue of waste, the information given in the 2006 Consultation Document was not merely wholly inadequate, it was also seriously misleading as to CoRWM's position on new nuclear waste.
117. On both the economics and the waste issues all, or virtually all, the information of any substance (the cost-benefit analysis and supporting reports, and CoRWM's draft and then final recommendations) emerged only after the consultation period had concluded. Elementary fairness required that consultees, who had been given so little information hitherto, should be given a proper opportunity to respond to the substantial amount of new material before any 'in principle' decision as to the role of new nuclear build was taken. There could be no proper consultation, let alone 'the fullest public consultation' as promised in the 2003 White Paper, if the substance of these two issues was not consulted upon before a decision was made. There was therefore procedural unfairness, and a breach of the claimant's legitimate expectation that there would be 'the fullest public consultation' before a decision was taken to support new nuclear build."
"The Court of Appeal said in para 76 of its judgment that the Code is something that those to whom it is addressed are expected to follow unless they have good reason for not doing so: see R v Islington London Borough Council, ex p Rixon (1996) 1 CCLR 119, per Sedley J at p 123. Like my noble and learned friend Lord Bingham of Cornhill I would go further. They must give cogent reasons if in any respect they decide not to follow it. These reasons must be spelled out clearly, logically and convincingly. I would emphatically reject any suggestion that they have a discretion to depart from the Code as they see fit. Parliament by enacting section 118(1) has made it clear that it expects that the persons to whom the Code is addressed will follow it, unless they can demonstrate that they have a cogent reasons for not doing so. This expectation extends to the Code as a whole, from its statement of the guiding principles to all the detail that it gives with regard to admission and to treatment and care in hospital, except for those parts of it which specify forms of medical treatment requiring consent falling within section 118(2)...
70. If good reasons are required for departing from the system that the Code sets out for the monitoring and review of the use of seclusion, there are ample grounds for thinking that they have been well demonstrated..."
"...the respondent should be permitted to recanvass, by way of undue delay, an issue of promptness which has been decided at the leave stage in the applicant's favour only (i) if the judge hearing the initial application has expressly so indicated, (ii) if new and relevant material is introduced on the substantive hearing, (iii) if, exceptionally, the issues as they have developed at the full hearing put a different aspect on the question of promptness, or (iv) if the first judge has plainly overlooked some relevant matter or otherwise reached a decision per incuriam."
"Secondly, I am satisfied that no real prejudice will be caused to the defendant by permitting the application to proceed. The only argument advanced on behalf of the defendant by Mr Halliwell was that it would be administratively inconvenient, an assertion to which he was unable to attach any substance when pressed. If it should transpire that there was any substance to the argument, that is a matter that could be considered when considering the appropriate remedy should the claimant's [claim] succeed."
"Such delay has caused the defendant considerable prejudice as set out in Helen Graham's Statement of 16 May 2011 at paragraphs 29 to 31. The designation came into force on 1 October 2010. Some landlords have accordingly applied and paid for the cost of the requisite licence and incurred costs in ensuring that properties will meet the necessary standards and in obtaining the necessary certification. Many other landlords have made applications for licences which are not yet complete, but nonetheless have incurred costs of ensuring their properties meet the requisite standards and in obtaining the necessary certification. As the designation is in force, landlords who have not obtained a licence are not able to evict tenants on the basis of 2 months notice. Currently, both landlords and tenants are in a state of confusion as to whether or not that will be enforced by the Courts (in proceedings to which the Defendant would not be a Party) if a landlord seeks to evict a tenant on that ground. That confusion exists in relation to all the other consequences of an area being designated."
MR JUSTICE McCOMBE: Any consequentials?
MR MANNING: My Lord, I do have an application for costs.
MR JUSTICE McCOMBE: Yes.
MR MANNING: I would respectively submit that this application has succeeded and that the normal consequence of that must follow.
MR JUSTICE McCOMBE: Ms Stockley, do you have anything to say?
MS STOCKLEY: My Lord, in the circumstances, I accept that costs should follow the event in this case. I do not feel I can resist the principle. If the order is to be made for reasonable costs to be paid, subject to detailed assessment if not agreed, I would propose such an order.
MR JUSTICE McCOMBE: All right. Well, I will make that order. The defendant is to pay the claimants' costs to be assessed on a detailed basis, and I need to say no more. Are there any other points?
MR MANNING: My Lord, no. I am very grateful to my Lord and I will liaise with my learned friend to ensure that the matters relating to the order of Mr Justice Owen are rectified.
MR JUSTICE McCOMBE: Could you do this: could you also between you settle a form of order for my decision of today.
MR MANNING: I will do.
MS STOCKLEY: Certainly, my Lord.
MR JUSTICE McCOMBE: And I thank you both, again, for really excellent arguments, and when you go back to chambers, you can both without undue modesty tell them your judge thought you both did the case very well.
MR MANNING: Thank you, my Lord.
MS STOCKLEY: Thank you, my Lord.