Case No: CO/12184/2010
Neutral Citation Number: [2011] EWHC 1739 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN’S BENCH DIVISION 
ADMINISTRATIVE COURT

Sitting at:
Manchester Civil Justice Centre
1 Bridge Street West
Manchester
M60 9DJ

Date: Wednesday, 25th May 2011

Before:

THE HONOURABLE MR JUSTICE McCOMBE
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Between:
	
The Queen (on the application of PEAT and Ors)

Claimants	
	- and –
		
	Hyndburn Borough Council
	
Defendant
	
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(DAR Transcript of 
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Mr Manning and Mr Justin Bates (instructed by JGT Solicitors) appeared on behalf of the Claimants.

Ms Stockley (instructed by Hyndburn Borough Council) appeared on behalf of the Defendant.

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Judgment

Mr Justice McCombe:

1.	This is an application for judicial review of a decision of Hyndburn Borough Council to designate areas within its district as subject to selective licensing under Part 3 of the Housing Act 2004.
2.	The claim is brought by six claimants who are landlords of property in the borough, who say they represent also 341 other landlords operating, in all, some 1,326 properties in the borough.  
3.	The relevant decision was taken on 3 March 2010 and the designation was confirmed by the Secretary of State on 31 March of that year, coming into operation on 10 October last.  The present proceedings were begun on 23 November 2010.  The application for review is brought with permission granted by Owen J on 14 April.  
4.	After a hearing on 8 April, the learned judge delivered a full judgment in which he decided that the substantive points raised in the claim were properly arguable and dealt with what he called the council’s principal ground for resisting the grant of permission, namely delay on the claimants’ part in bringing the claim.  Owen J rejected that argument.  One point of delay raised on the pleadings remains, to which I will return later in this judgment.  The substantive argument application has now been argued before me.  
5.	The claim is based upon the principal ground that the consultation conducted by the council prior to the designation of the area concerned was inadequate and failed to comply with the statutory obligations to consultation under s.80(9) of the 2004 Act.
6.	The claimants also submit that, in its application to the Secretary of State for confirmation of the designation pursuant to s.82 of the same Act, the council made material misrepresentations to the Secretary of State as to the nature of the consultation conducted.  It is also argued that, whatever the merits or otherwise of the consultation carried out in 2008, the results were stale by the time the designation decision came to be made and confirmed in March 2010.  
The statutory background
7.	Part 3 of the 2004 Act makes provision for the introduction by local authorities of selective licensing of rented residential property in the private sector.  This is achieved by a local authority designating either the whole of its district or an area within its district as subject to such licensing, if the requirements of s.80(2) and (3) of the Act are made out.  These requirements, for the purposes of the present case, can be summarised in that the relevant area is thought to be likely to become an area of low housing demand or that the area is experiencing significant and persistent problems caused by anti-social behaviour; that some or all of the private sector landlords operating in the area are failing to take appropriate action to combat the problem; and that, in either case, a designation with other measures will lead to a reduction of the problems identified.
8.	I was told it was the low housing demand criterion which was particularly material in the present case, although the explanatory leaflet sent out to the consultees in August 2008 referred to both of the statutory criteria.
9.	One of the features of a licensing scheme, if introduced, is that the local authority before issuing a licence must be satisfied that the landlord is a “fit and proper person” and the authority can impose conditions upon the grant of a licence, for example, relating to facilities and equipment to be made available in rented properties -- see s.90 of the Act.  Control or management of unlicensed property or failure to comply with licence conditions can be a criminal offence subject to a defence of “reasonable excuse” for any relevant failure -- see s.95 of the Act.
10.	Importantly for present purposes, s.80(9) of the 2004 Act provides as follows:
“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.”

11.	For the purpose of the Secretary of State’s role in approving any designation made by a local authority, there exists a document published by the Department of Communities and Local Government, called “Approval steps for additional and selective licensing designation in England”.  The relevant edition of that paper is of February 2010.  This contains the following passage, particularly material to the present case in the following terms:
“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.”
12.	At a meeting of the council’s cabinet, consideration was given to a report from local authority officers as to:
“...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.”
13.	The officers’ report identified in some detail the areas of the borough considered to be priority areas for a licensing scheme.  Those areas were called “Central” (in effect Accrington), Church, Peel and Barnfield. The report referred to the guidance issued by the Department of Communities and Local Government, of which I have quoted an extract a little earlier, and said this in paragraph 9.2:

“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.
14.	In August 2008, the authority conducted an exercise which it contends amounted, however, to compliance with s.80(9).  Letters sent to landlords, which the authority had identified from housing benefit records, council tax records; voluntary housing accreditation procedures and what was called “officer knowledge” were in the following terms:
“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.”
15.	The letter did not say anything about the specific areas that had been identified in the officers’ report in March of that year, although the accompanying explanatory leaflet did say this:
“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.”
16.	There followed a questionnaire asking a number of questions as to the problems touched upon by the Act which might be affected by a licensing scheme.  I will just give one or two examples.  The questionnaire had a series of 13 features numbered in it and it asked the respondents to say whether a feature was “a big problem”, “a fairly big problem”, “not a very big problem”, “not a problem at all”, “no opinion”.  The features identified were low demand for housing, high turnover, noisy tenants or loud parties, teenagers hanging around the streets and so forth.  It also asked the person consulted in which areas of Hyndburne he or she had properties, identifying West Accrington and Church, Peel and Barnfield and other areas which the person responding could tick and it also contained a small section at the end inviting any other comments about the licensing proposals.  I think that is sufficient to give a gist of what the questionnaire covered.  Consultees were given some seven days to respond.
17.	The consultation documents gave no details of the boundaries of the scheme areas, the considerations that had gone into the council’s view that the area or areas were ones of low housing demand or otherwise why areas had been chosen.  No details of proposed licensing conditions or fees were given.  There was no further contact, as promised by the letter, when a fee structure was ultimately drafted.
18.	On 4 September 2008, the council sent a letter to a number of national or regional representative landlords’ bodies, which was in the following terms:
“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...” 
19.	The individual landlords that were consulted in August were not provided with a copy of the actual proposal that was ultimately submitted to the Secretary of State.  That would clearly have been an unrealistic exercise, given the size of the final document, but nonetheless no further details of the designation to be made were either circulated, published or made publicly available before submission to the Secretary of State.
20.	A copy of the report that was sent to the Secretary of State was, however, emailed to the representative organisations on 25 November 2008.  At a meeting on 27 November of that year, the council’s cabinet considered the officers’ proposals for seeking confirmation of the designation. The report to the cabinet contained the following passage:
“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.”
21.	It is not stated in the report, as the claimants point out, however, that the Secretary of State’s guidance, referred to at the March meeting, had not been followed.  It is accepted now on the council’s behalf that the guidance was indeed not followed.  Local residents and business owners outside the proposed designated area were not consulted.  There was no detailed explanation about the proposed designation explaining its benefits, how it would tackle the perceived problems and so forth.  While the consultation was exiguous in the extreme and therefore little time would have been required to respond, only seven days were in fact given for any response that a respondent wished to give.
22.	The deponent on the council’s behalf says in a recent witness statement:

“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. 
23.	The first application for confirmation of the designation was made on 1 April 2009.  At no time prior to this was the specific proposal for which confirmation was being sought made available to the consultees of the previous August.  None of the matters that the Secretary of State’s guidance suggested were desirable as elements of the consultation were communicated to the landlord body.
24.	Correspondence between the council and the Secretary of State followed.  The Secretary of State raised concerns about the consultation that had taken place and details of publication of the results.  He or she was told that consultation had been conducted between mid-July and September 2008, and the results were published on the council website.  The council acknowledges that there had in fact been no publication on the Web at any stage.
25.	Concerns were raised by the Secretary of State about the size of the designation area and the council’s resources to meet the same.  As a result, modifications were made.  No further consultation took place.  However on 24 March 2010, the council applied for confirmation that modified designation, asserting that the requisite information included the following passage:
“(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]”
26.	It is now conceded that the landlord’s forum, which did in fact exist, was not involved in the consultation at all and that the stakeholder group did not exist formally, as it is put, but was more accurately described as a series of meetings with police, neighbourhood management providers, the fire service and housing associations represented locally.  The deponent for the council says that landlords were not included because the consultation with them that had been conducted over the seven day period in August 2008 had done the trick.  In contrast, the Secretary of State’s guidance says the following about stakeholder consultation:

“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.
27.	On 31 March 2010 however, the Secretary of State confirmed the designation, which was then due to come into force on 1 October 2010.  The designated areas identified in the document submitted to the Minister were Alleytroyds, Barnfield, Burnley Road, Church Kirk, Dill Hall, West Accrington, Waterloo, East Accrington and Woodnook.  It is not entirely clear how this area related to the areas identified in the explanatory consultation leaflet of August 2008 as being West Accrington, Church, Peel and Barnfield.
28.	The claimants submit that the consultation failed in many respects to consult on the proposal at all, in that it can be seen that a significant number of the features of consultation recommended in the Secretary of State’s guidance document were not followed.  These are particularly identified in Mr Manning’s helpful skeleton argument as being as follows.  The authority did not consult residents or businesses in areas surrounding the proposed designation and thus did not consult all those likely to be affected.  The documents did not contain any detailed explanation of the proposed designation; did not explain the reasons for designation; did not explain how the licensing would tackle specific problems; and did not contain details of any fee structure.
29.	I turn now therefore to the substance of the claimants’ submissions and the defendant’s responses.  I would record here my gratitude to counsel for the clear and succinct arguments that they presented to me yesterday.
30.	The claimants’ submissions were three-fold, and it is helpful to deal with them in the order presented and the order responded to in the course of argument yesterday.
31.	First, it was submitted that the consultation did not accord with the terms prescribed in s.80(9).  The submission was divided into three sub-points.  Firstly, s.80(9), it is argued, requires consultation on a specific proposal and not just a general principle.  Secondly, it is a detailed proposal that the guidance indicates should be submitted for consultation.  If the guidance is to be departed from, reasons should be given.  Thirdly, it is clear from the council’s own documents that it apparently intended to comply with the guidance and no change in that intention can be detected from later official documents prior to the designation being made.  It is not clear that the decision makers were informed, however, that the Secretary of State’s guidance had not been followed in the consultation process.
32.	The second principal submission was this.  It was argued that the consultation was stale by the time of the designation decision, and thirdly, it is submitted that the council misrepresented the nature of the consultation to the Secretary of State.
33.	Taking to the first point, I have already quoted that s.80(9), which is a statutory precondition of the designation of any scheme.  It provides that the local authority must take reasonable steps to consult persons who are likely to be affected by the designation.  Mr Manning emphasises the definite article in the subsection – “affected by the designation”.  The relevant persons, he submits, are those likely to be affected by the designation.  People are not affected, he argues, by a formal consultation on general principles rather than on a specific proposal.
34.	He submits that the affect of a designation is draconian in its impact on a landlord’s business and in setting conditions for the designation, such as low demand and anti-social behaviour.  Consultation must surely be expected to address the type of information identified in the Secretary of State’s guidelines.  For example, he submits, questions of low demand and anti-social behaviour are likely to be controversial and consultees might be expected to have some information as to how the authority might reach proper conclusions on the subject so that statutory conditions are either met or not met in any individual case.
35.	As to this point, Ms Stockley for the defendant, says that the scheme did comply with s.80(9).  She submits that the section clearly imports an element of discretion for the authority provided objectively reasonable steps are taken.  She points out that the consultation was delivered to 11,000 addresses and to representative associations, including known active landlords throughout the borough.  As the area had only been broadly identified, it could not be said with precision where residents and businesses outside the designated zone might be.  The council did consult the landlords, as I say, on a borough-wide basis.  
36.	Ms Stockley submits that consultation on general principles was sufficient, and that the broad ambit of the proposed designation was identified in the explanatory leaflet sent out in August 2008.  This was all consistent, she submits, with the legal obligation to consult while proposals are at a formative stage, and in accordance with the principles first enunciated in the case of R v Brent London Borough Council ex parte Gunning [1985] 84 LGR 168, and developed in later cases.  The principles have developed and are expressed in certain different statutory contexts in the following cases to which I was referred:
37.	In the judgment of Clarke LJ in R(Wainwright) v Richmond upon Thames London Borough Council [2001] EWCA Civ 2062, (as he then was) there is the following passage which provides a helpful summary of where the law has reached at this stage:

“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 [1986] 1 WLR 1 at page 4 before letters F and H by Webster J and in R (Breckland DC) v Boundary Committee [2009] LGR 589 by Sir Anthony May P, at paragraphs 43 to 46.
38.	On the present subject, perhaps the most graphic warning against over-enthusiastic judicial intervention in the consultation process conducted by a public authority is to be found in the judgment of Sullivan J (as he then was) in the case of R (Greenpeace Ltd) v SSTI [2007] Env. LR at page 623 at paragraphs 62 to 63, where Sullivan J said this:
“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. 
39.	Ms Stockley submits that, while one can identify with hindsight in this case things that might have been done, the consultation did not, as she says, go “clearly and radically wrong” in this sense.  
40.	It is perhaps useful, as a control on that passage from the judgment of Sullivan J, to recall what he actually decided in that case.  It was a case concerning the nuclear policy for the United Kingdom in which the government had promised “the fullest public consultation”.  It was not in fact a consultation conducted pursuant to a statutory obligation to consult.  Nonetheless, the conclusions of Sullivan J, which can be taken at paragraphs 116 and 117 of his judgment, were these:
“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.” 

41.	But in the context of this case, it is interesting to note the contrast between consultation on issues, rather than consultations on conclusions, and compare it with the consultation on general principles and upon the designation scheme in some detail, as the rival contentions in this case urge.  
42.	Before drawing a conclusion on this first sub-point of Mr Manning’s submissions, I think it is convenient to outline the remaining two sub-submissions and the responses to them: that is the failure to follow the guidelines and the council’s failure to carry out its apparent intention of actually following those guidelines.  
43.	On the second sub-point, Mr Manning submits that the case falls within the well-known principle that statutory guidance should be followed by public authorities in the exercise of their functions unless good reason exists for the departure from them and reasons are explained.  He referred to the decision of the House of Lords in R (Munjaz) v Mersey Care National Health Service Trust [2006] 2 AC 148 and the passages and speeches of Lord Bingham of Cornhill at paragraphs 18 to 21 and Lord Hope of Craighead at paragraphs 68 to 69.
44.	The case concerned the application by the defendant health authority of a statutory code issued under s.118 of the Mental Health Act 1983.  The principles can perhaps be shortly taken from the speech of Lord Hope in the Munjaz case to the following effect at paragraphs 68 and 69:
“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...”

45.	Mr Manning submits that, while the Code is not a statutory code in the sense of having been promulgated pursuant to a statutory obligation to do so, it is guidance issued by the Secretary of State as to how he or she expects to be informed by the applicant local housing authorities when invited to perform the statutory function of confirming a designation under s.82 of the 2004 Act.  In such circumstances, he submits, the guidance should be followed and, if departed from, the reasons for departure must be identified.  Further, he says, in this case the minimal extent to which the guidance had been followed would have been far from clear to the Secretary of State.
46.	Ms Stockley, in contrast, says this is not a statutory code and so the same principles do not apply.  There was therefore no obligation slavishly to follow the guidance.  She accepts, however, that compliance with the guidance may show that consultation steps were reasonable in any particular case, whereas non-compliance does not demonstrate that in any particular case the steps actually taken were unreasonable.
47.	Further, she submits that the Secretary of State could see for herself whether or not the guidelines had been followed and could choose whether or not to make the confirmation sought.  It is of materiality, she submits, that the Secretary of State did make the confirmation.
48.	Finally, there is the point in the final sub-submission in that the council seems to have proposed to follow the guidelines but then failed to do so. Ms Stockley submits that that fact does not undermine a consultation process that was in fact compliant with the Act, even if the guidelines were not followed to the letter.
49.	In my judgment, while the three sub-points of Mr Manning’s first submission could be addressed individually, in the context of this case the question that arises is whether the consultation as a whole met the statutory requirements in s.80(9) of the Act.  To this, in my judgment, all three points are cumulatively relevant.  In the end, I reach the conclusion that the defendant council did not take reasonable steps to consult with the persons likely to be affected by the designation.  I take this view for the following reasons.
50.	First, I accept Mr Manning’s submission that the statute requires consultation with those likely to be affected by the designation.  I think this does require some precision in the identification of what is to be designated and its consequences, so that the extent of the effect on those persons can be appreciated.  In addition, it is hard to see how adequate steps can be taken to consult with persons affected unless one knows the likely licence conditions that will be imposed.
51.	Consultations as to general principles were, in my judgment, insufficient.  The concession made by Ms Graham, in paragraph 16 of her witness statement dated 16 May, to my mind indicates that the consultation could not be said to be correctly directed to those likely to be affected by the opposed designation, as opposed to the general principles of selective licensing as a whole.  That is what she concedes and in my judgment, that is, in effect, a concession as to the inadequacy of the consultation.
52.	Secondly, in order to comply with the requirements of valid consultation envisaged in the Gunning case and later authorities, the consultees must be given sufficient information to enable them to reach an informed decision upon that on which they are being consulted.  Without some fleshing out of the reasons for the proposals, the nature of the proposals as regards the licence conditions and as to a fee structure, it seems to me that an informed response was really impossible.  It is significant that, after the designation in the course of the present proceedings, the parties have indeed debated and to some degree reached compromises about licence conditions.  It would have been more fruitful if that debate had occurred during the consultation process.
53.	Thirdly, while I agree with Ms Stockley that the guidance issued in the present case has a lesser status than that in issue in the Munjaz case, it does provide a helpful, objective yardstick as to the steps that might well be considered reasonable in the consultation process and the absence of which might well be considered to demonstrate a failure to take reasonable steps.  Measured against this yardstick, it is not necessary to determine whether the guidelines are such in nature that authorities can only decline to follow them for good reasons which they then explain.  It suffices to say that, measured by this guidance, the consultation in the present case was merely perfunctory in the extreme and could not conceivably put the consultees in the position of being able to give an informed response to that which was really being proposed by the council.
54.	Fourthly, anticipating the later submission that the true nature of the consultation was misrepresented to the Secretary of State, it seems to me to undermine the confidence that one might have in the reasonableness of the steps taken that the council itself could not explain accurately or fairly to the Secretary of State the elements of the consultation that it had undertaken.  In particular, I would refer to the apparent belief of the officers responsible for seeking the Secretary of State’s confirmation for designation that the landlords’ forum had been informed in the consultation, when it had not.  This undermines the council’s protest that the necessary reasonable steps had been taken.  It seems to have been itself unaware of what consultation steps had and had not been taken.  I do not consider that the lack of clarity as to whether the council intended to apply the guidelines derived from the officers’ report of March 2008 takes the matter much further.  Taken as a whole, I am satisfied that the council have failed to comply with s.80(9) of the Act.
55.	Turning to submission 2, the alleged staleness of the consultation process by March 2010, I do not need to add a great deal.  If the consultation had otherwise been adequate, I would have been inclined to hold that the period between consultation and designation was not so long as to vitiate the exercise.  The reasons advanced by Ms Stockley indicate that some delay, possibly of this length, might well have been necessary to deal with enquiries from the Minister, submissions from consultees and other steps necessary to put forward a formal designation proposal to the Secretary of State.  I do not think that the brisk turnover of tenants of rented property pointed out by Mr Manning invalidates that view.
56.	However, if the council’s consultation is a shallow one, as in my view this one was, its usefulness is likely to have a much shorter sell-by date.  In my judgment, the fact that so long had passed and so much had evolved in the formulation of the scheme between the perfunctory consultation and the designation should have raised in the authority’s mind a serious question whether by March 2010 they had taken the reasonably necessary steps to consult, so as to inform it adequately of the views of those affected in order to decide rationally whether the designation decision should be taken or not.
57.	I have already dealt with Submission 3 in the context of assessing the reasonableness of the consultation steps taken.  I do not think more needs to be added.  However it is regrettable that the council was so economical in the accuracy of its reports to the Secretary of State.  As already mentioned, it undermines the confidence one can have as to the reasonableness of the steps taken by the council in the consultation process.
58.	The final point taken by the council is delay between the designation decision and the bringing of the present proceedings.  The substance of this ground of opposition was considered and determined by Owen J on considering the permission application.  Ms Stockley recognises that the decision in R v Lichfield District Council ex parte Lichfield Security Ltd [2001] 3 LGLR 637 stands in her way of re-arguing matters previously decided by Owen J, except within the limited parameters explained in that case.
59.	The relevant principles are to be found in the judgment in the Lichfield case in the judgment of Sedley LJ at page 652.  He gave the judgment on behalf of himself and Potter LJ, as he then was, and Jonathan Parker LJ.  The principles are these:

“...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.”
60.	Ms Stockley, in a characteristically realistic submission, submitted that only the first of those criteria are met here, namely the judge’s express reservation of a question that might arise at the substantive hearing.  The relevant passage appears at paragraph 14 of Owen J’s decision, where the judge said this:

“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.”
61.	Clearly the window left open by the learned judge was as to remedy only, rather than the substance of the underlying claim.  Ms Stockley argues, however, that there would be prejudice to good administration if relief were granted at this late stage.  The features of the prejudice envisaged she summarises in paragraph 6.5 of her helpful skeleton argument in the following terms:
“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.”
62.	She submits that those features have implications for good administration within the meaning of s.31 (6) of the Senior Courts Act.  Mr Manning submits that there is no proper evidence of the prejudice said to have been caused by the grant of relief.  The council gives no indication of the numbers affected by the facts identified.  Further, many of the matters pointed out are not features of administration but of inconvenience to landlords.  Fees can be remitted, and insofar as the scheme is quashed, then any disadvantages a landlord may have suffered in the county courts would go.
63.	In my judgment, the prejudice contended for by the council has not been adequately established by proper evidence as opposed to speculation.  Embarrassment for the defendant is not the same as prejudice to good administration.  The features identified, slender as they are, do not militate against the natural consequences of the absence of a consultation properly compliant with the requirements of the Act.  Those consequences are that the application must succeed and, as it seems to me, the designation must be quashed.

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.

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