England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		13 August 2015

Sir Stephen Silber :

Introduction

1. Parliament has given powers to local authorities to deal with anti-social behaviour and criminal activities in their areas. One such power is the designation of an area as a selective licensing scheme under the provisions of the Housing Act 2004 ("the 2004 Act")^[1].
2. Such a scheme may be controversial as it identifies the area so designated as an area which has problems of anti-social behaviour and criminal activities. In addition, some local landlords believe such designation will reduce the value of their properties in the area concerned as first, it stigmatises the area designated and second, it will lead to higher costs in the form of licensing fees, which are required under the scheme and increased borrowing costs.
3. Before making a designation, the Council had to comply with the consultation requirements of s.80(9) of the Act which provides that:

"(9) 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(b) consider any representations made in accordance with the consultation and not withdrawn."

4. On 16^th March 2015, the London Borough of Croydon ("the Council") designated the entire Borough of Croydon for a selective licensing scheme under the provisions of the 2004 Act. After this designation occurred, the Claimant was formed on 29^th May 2015 and its object includes carrying out "…any lawful activity to promote or safeguard the interests of private rented sector landlords operating within [Croydon]". Its members consist of a consortium who wish to challenge the validity of the scheme on the grounds that local developers and local landlords were not adequately consulted.
5. The Claimant now seeks in these proceedings to quash the decision of the Council to designate the entire Borough of Croydon for a selective licensing scheme under the provisions of the 2004 Act. Ouseley J ordered an expedited rolled-up hearing, which is the subject of this judgment.
6. The Claimant contends that the Council was under a statutory duty set out in s.80 (9) of the Act "to take reasonable steps to consult" developers and landlords before making the designation as they were likely to be adversely affected by the designation. It is said by Mr. Jonathan Manning, counsel for the Claimant, that no reasonable steps were taken, because "the developers, as a class" and the landlords were not consulted with the consequence that the designation should be quashed.
7. Mr. Clive Sheldon QC, counsel for the Council, contends that it complied with this statutory obligation "to consult persons who are likely to be affected by the designation" as the steps taken by the Council to consult with such persons were extensive and, on any view, plainly "reasonable". In other words, the Council disputed the contentions that it did not take reasonable steps to consult with "developers" and the landlords, who were thereby "excluded" from the consultation process.
8. As a further answer to the claim, the Council contends that the challenge was not brought promptly and that permission should also be refused on that ground bearing in mind the substantial prejudice caused to the Council as result of the delay in commencing these proceedings.
9. There are a number of matters which are not in issue on this application. Indeed, no complaint has been made by the claimant first, that insufficient information was provided to enable meaningful consideration by those who were consulted, or second, that the consultees did not have adequate time to respond, or third, that the Council did not conscientiously consider the representations that were made. The sole issue on this application relates to whether the developers and landlords had been properly consulted as to whether there should be a selective licensing scheme in the entire Borough of Croydon.

The Chronology

10. The background to the decision of the Council to consult on whether to introduce the selective licensing scheme was that the Council was concerned first, that there had been a significant and persistent problem with Crime and Anti-Social Behaviour in the Borough, and second, that this was linked to the management of private rented housing as some, or all, private landlords were failing to take appropriate actions to help combat the problem. The Claimant does not contend that this was not a rational view for the Council to hold.
11. The decisions of the Council in relation to the selective licensing scheme were made against the background that there was a great need for more housing in Croydon and the Council estimated that an additional 27,000 homes, including those available for private letting were needed by 2031. Private sector developers were intended to be an important partner in the process.
12. On 30th June 2014, the Council's Cabinet agreed that a proposal to introduce a selective licensing scheme for private landlords in the Borough should be consulted upon, and so it authorised its officers to commence consultation. The effect of this scheme would be that private landlords of properties, other than Houses in Multiple Occupation ("HMO properties")^[2], which would be those let as separate or single dwellings in the area would be required to obtain a licence. If a licence was not obtained, the local authority could take enforcement action, including commencing prosecutions leading to fines originally capped at £20,000 but now unlimited. As part of the licensing process, the local authority had to be satisfied that the landlord was a "fit and proper person" before granting a licence for which a fee would be chargeable, and conditions could be imposed on the grant of a licence, relating to the management of the property.

The Consultation

13. Before making a decision as to whether to introduce a licensing scheme, the Council carried out a lengthy consultation exercise, which lasted from 1^st September 2014 until 2^nd March 2015. The consultation involved three stages.

Stage 1

14. The Council quite properly does not contend that this stage of the consultation complied with its statutory obligations, but its case is that what was done at this stage is of relevance in relation to what occurred in the later stages of the consultation process in determining if the Council had complied with its s.80 (9) duty as Stage1 explained that there would be a subsequent consultation. This first stage was a general and non statutory consultation exercise, which was conducted from 1^st September 2014 to 31^st October 2014. The Council engaged with private sector landlords, managing agents and associations that supported private landlords or had an interest in private landlord affairs, to determine the level of support for the Council's proposals. The Council considered that it was good practice to obtain the views of these stakeholders initially and to use that information to shape the options put forward in the public consultation.
15. Background information about selective licensing, indicative licence costs and the Council's proposal, was made available on the Council's website, as well as on the website of M.E.L. Research, which was a consultancy that had been engaged to assist the Council with the consultation process. A postal survey was sent to 9,032 landlords and agents with properties in the borough. The survey was accompanied by a leaflet – "A Better Place to Rent – A Guide to Selective Landlord Licensing". It was general in nature and it did not specifically deal with planning criteria or practices. The leaflet explained that the consultation was being run in two parts with the first part taking place from 15^th September 2014 to 17^th October 2014 with the engagement with landlords, private tenants and associations. A qualitative workshop with landlords and agents to gather further feedback on the proposed scheme was held on 16^th October 2014. The leaflet indicated that a formal consultation would take place from 17^th November 2014 with all interested parties and that it would finish on 8^th December 2014. So it is said that Stage 1 meant those notified under it- including the 9,032 landlords and agents with properties in the borough - were aware that there would be a further consultation on whether there should be a selective licensing scheme in Croydon. 709 Responses were received from landlords and 45 from agents.

Stage 2

16. Following feedback from Stage 1, the Council consulted again, identifying four options and explaining that a borough-wide selective licensing scheme was its preferred option. The proposed fee for the requisite licence was £750 per property, while at Stage 1, it had been proposed that the fee would be £1,000 per property.
17. Stage 2 ran from 17^th November 2014 to 12^th December 2014 during which period the Council publicised the consultation in a variety of ways, including:

i) On its website, including using a web banner on the homepage;

ii) Through posters and flyers in libraries, leisure centres, community centres throughout the Borough and in Access Croydon, which was a space open to the public at Bernard Weatherill House, Croydon;

iii) by sending emails to children's centres, residents' groups and residents' associations;

iv) by inserting items in the October/November 2014 edition of the Your Croydon monthly e-magazine which is available on the Council's website;

v) having it listed every week during the duration of the consultation in the weekly ebulletin (which contains a link to Your Croydon) sent by e-mail (between mid-November 2014 to early December 2014 and then again from the end of December 2014 to the end of February 2015) to the more than 38,000 subscribers. In fact there were 38,930 subscribers beginning November 2014; 38,882 beginning December 2014;and 38,841 beginning January 2015;

vi) by inserting posts on the Council's 'I love Croydon' Facebook page;

vii) by the use of regular tweets from the 'Your Croydon' Twitter account - @yourcroydon;

viii) by placing advertisements in local newspapers;

ix) by issuing a press release which was picked up by a number of local newspapers;

x) by placing information on the plasma display screens in Bernard Weatherill House, including in the Corporate Reception and Access Croydon; as well as

xi) by providing information on the consultation in a standard footer, along with a link to the consultation page, on all emails sent out by the Council. This stated that:

"Croydon is asking for people's views on introducing a landlord licensing scheme in Croydon. You have until 12 December 2014 to get involved."

18. The case for Croydon is that any person with any material interest in what was going on in Croydon and who was unaware of the regime from the Stage 1 process would have learnt of the consultation process from one or other of these sources in Stage 2. The sources used key social media channels, traditional media, as well as posters in public spaces throughout Croydon.
19. In addition, a public meeting was held to discuss the proposals and to express views on 27^th November 2014. It was attended by 42 people, including landlords, agents and a representative from the National Landlords Association. One of the Claimant's supporters, Alison Crane of Klassic Property, which owns 16 properties in Croydon, states that she was invited to the workshop and that 'We think we were invited because we had previously replied to the Landlords' survey on the Croydon Council website'.
20. A face-to-face survey using a random sample of 1,071 households across the Borough, representative by ward area, was conducted by M.E.L in which 23 landlords/agents took part.

Stage 3

21. On 11^th December 2014, the High Court gave judgment in a case in which there was a challenge to London Borough of Enfield's decision to introduce a borough-wide selective licensing scheme: R (Regas) v. London Borough of Enfield [2014] EWHC 4173 (Admin); [2015] H.L.R.14. In that case, it was decided that Enfield's consultation was flawed because residents, businesses, landlords and agents who lived or who operated in immediately adjoining parts of that borough had not been consulted. Furthermore, the consultation had not been conducted for a period of 10 weeks as referred to in the General Approval.
22. As a result of this judgment, the Council decided to extend its consultation exercise on the four proposed options by a further 10 week period to allow those with connections to the Borough more time to provide feedback, and to give people in neighbouring boroughs a more targeted opportunity to express their views. The Council acknowledged that if its preferred option was to go ahead and that if a borough-wide scheme was introduced, this might cause problems to the neighbouring boroughs. No criticism is made of this decision of the Council.
23. The Council updated its consultation website to indicate the extended consultation period, and it also provided a separate online survey for those in neighbouring boroughs. A separate feedback form for people who had already completed the original survey was provided for anyone who wished to provide additional comments.
24. The Stage 3 Consultation was publicised:

i) by making updates to the council webpage and banner on home screen;

ii) by placing posters and flyers in libraries, leisure centres, community centres throughout the Borough and in Access Croydon, the Council's customer contact centre located in Bernard Weatherill House;

iii) by posting material on the Council's 'I love Croydon' Facebook page;

iv) by sending regular tweets from the 'Your Croydon' Twitter account - @yourcroydon;

v) by placing advertisements in the London daily newspaper the Metro, published on the 23^rd December 2014, 5^th January and 6^th January 2015;

vi) by inserting items in the Your Croydon e-magazine on 21^st December 2015, 9^th January 2015, 16^th January 2015, 23^rd January 2015, 30^th January 2015, 6^th February 2015, 16^th February 2015, 20^th February 2015 and 27^th February 2015;

vii) by placing an advertisement in the Croydon Guardian on 31^st December 2014;

viii) by including information on the consultation in a standard footer, along with a link to the consultation page, on all emails sent out by the Council; and

ix) by a press release, dated 23rd December 2014.

25. In addition, various means were used to bring the Stage 3 Consultation to the attention of persons outside the Borough, including by placing advertisements in the 15^th January editions of the following newspapers – the Sutton, Merton & Wandsworth Guardians; Lewisham & Bromley News Shoppers; Southwark News; County Border News and Surrey Mirror.
26. So it is said by the Council that anybody with any material interest in what was going on in Croydon would have been aware of the consultation from one or other of these sources, which included key social media channels, traditional media (including several advertisements) in the London Metro, as well as posters in public spaces throughout Croydon.
27. Stage 3 ran from 23^rd December 2014 to 2^nd March 2015. More than 250 landlords took part in stages 2 and 3 of the consultation exercise. There were respectively 470 and 1071 responses to first the Stage 2 and 3 online survey and second the Stage 2 doorstep survey. The complaint is made that the developers in the Borough were not specifically targeted and further efforts should have been made to specifically consult the landlords in the Borough.

The Decision of the Cabinet

28. On 16^th March 2015, the Council's Cabinet decided to designate the entire borough as subject to selective licensing with effect from 1^st October 2015. In making that decision, the Cabinet considered the results of the consultation process, as well as an equalities analysis. There had been overall support for the scheme among private rented tenants (70%) and among other Croydon residents (73%). Support was low among landlords and managing agents at 18%.
29. The Cabinet's decision was 'called in', and it was considered by the Council's Overview and Scrutiny Committee on 26^th March 2015. The Committee resolved that no further action was necessary and that the decision should proceed to implementation. The designation was subsequently published by the Council in Steps to implement the Decision and in a number of newspapers circulating in Croydon and the surrounding area.

Steps taken to implement the Decision

30. Following the Council's decision to designate the borough as subject to selective licensing, it has taken a number of steps to implement that decision and to prepare for the introduction of selective licensing on 1^st October 2015 and they were:

i) Publicised the scheme at a cost to date of £26,134.85;

ii) developed a bespoke ICT application form and case management system at a cost of £10,447.06 to date, plus approximately £7,000 for the IT project manager and assistant;

iii) recruited a Business Support Team Leader at SCP Grade 9 with an annual salary of £31,986;

iv) recruited five Business Support Officers at SCP Grade 5 with combined annual salaries of £113,295; and

v) Recruited a Senior Business Support Officer at SCP Grade 6 with an annual salary of £24,744.

31. As part of the proposal that had been put out for consultation, the Council stated that it would offer landlords the opportunity to obtain an 'early bird discount' on the licence fee if they applied for the licence before the commencement date. Publicity about this offer was made on 25^th June 2015, with landlords being informed that if they were to apply between 1^st July 2015 and 30^th September 2015 they could be eligible for the discount. Enabling landlords to sign up to the licensing scheme in the period leading up to 1^st October 2015 would make the operation of the scheme from the commencement date much smoother. From 1^st October 2015, landlords would technically be in breach of the scheme if they were not licensed.

Preliminary Issue: Delay

32. As I have explained, Mr Sheldon contends that this claim cannot be pursued on account of the fact it was not brought promptly. CPR 54.2 (1) provides in respect of a judicial review claim that:

"The claim form must be filed (a) promptly; and (b) in any event not later than 3 months after the grounds for making the application first arose."

33. The critical dates are that on 16^th March 2015, the Council's Cabinet decided to designate the entire borough as subject to selective licensing with effect from 1^st October 2015 and the Scrutiny Committee approved the Cabinet' decision on 26^th March 2015. The Claimant's letter before action was sent on 29^th May 2015 and the present judicial review proceedings were commenced on 12^th June 2015, which was still within the prescribed three-month period starting with the date of the decision.
34. The Claimant did not start proceedings earlier, because steps were being taken to raise the funds needed for a claimant to bring the present judicial review challenge. Those steps started when Ms Mandy Thompson set up the Campaign Facebook page on 23^rd March 2015. By mid April 2015, about £10,000 had been raised from about 15 people. Later Dr. Ansari joined the campaign and, as I have explained, on 29^th May 2015, the Claimant was incorporated and the letter before action was sent.
35. I have no doubt that the delay in starting proceedings was caused by the need to raise funds and the time it took to achieve this and to incorporate the Claimant. The Courts have been reluctant to hold that a claim has not been brought promptly when, as in the present case, the claimant has acted expeditiously when seeking to raise funds and there is no real prejudice to the opposing party especially where the case is nevertheless brought within the prescribed three-month period. Baroness Hale explained in A v Essex County Council [2011] AC 280 at [115] that, "Difficulties with funding are often regarded as a good reason to extend time unless there is real prejudice to the other side". There is no real prejudice to the Council caused by the delay as its case is not that if the judicial review application had been brought earlier, it would not have incurred the expense which it did because the Council has continued incurring expenses even after the present judicial review claim was brought. I assume that it would have acted in the same way if the judicial review claim had been bought more promptly. So I would not refuse permission on the grounds of delay.

The Submissions

36. Mr. Manning submits that the Council failed to comply with its duty under s.80 (9) of the Act, which I have set out in paragraph 2 above to "take reasonable steps to consult persons who are likely to be affected by the designation" by failing to consult property developers and landlords properly. He makes this submission against the background that the Council estimates that Croydon needs an additional 27,000 homes, including those available for private letting by 2031 and that private developers are expected and intended to be important partners in the process.
37. The case for the Claimant is that property developers have a special interest in the selective licensing scheme for at least three reasons. First, it is said that the statutory basis for the designation and justification for introducing the scheme was that in the opinion of the Council, the entire Borough suffered from anti-social behaviour and that a selective licensing regime was needed to address this problem. Second, it is contended that this stigmatisation of the Borough and its residents would cause developers to reconsider investing in the area in order to prevent their developments being stigmatised. Third, it is said that that developers would be deterred from proceeding with developments in Croydon because of the additional costs and inconvenience caused by the designation, such as by the need to obtain licences, the obligation to pay the licensing fees and the increased borrowing costs.
38. The next step in Mr. Manning's submission is that there was no consideration of the need to consult property developers or to bring the consultation exercise to their attention. This meant, he said, that if any property developer became aware of the consultation that would be purely by happenstance. Indeed, he points out that some of the developers who have given witness statements on behalf of the Claimant were included within the mailing list for the Stage 1 consultation process because they also happened, as landlords, to have received housing benefits at some time from the Council.
39. Mr. Manning relies on evidence that some developers with different sized portfolios had no idea that a designation was being considered. He gives the examples first, of Alphachem Ltd which had £2,500,000 of property investments in Croydon, second, of Mr Job who had six properties and third, of Dr. Ansari, who was a prominent member of the community and a member of Develop Croydon.
40. A recurring theme of Mr. Manning's able submissions was that the Council could and should have consulted specifically those involved in the "Develop Croydon" forum, but that it did not do so. This is an established forum for allowing developers and landlord to have discussions with the Council. It has been described as a not-for-profit community interest company, which brings together relevant partners, including major developers, financiers, construction firms, landlords and a representative of the Council, who was the Lead Officer for the selective licensing scheme.
41. Mr. Manning says that if the developers and some landlords had been consulted, they would have raised many important objections to the proposal with a view to persuading the Council not to pursue the scheme. If properly targeted, the developers and landlords would have submitted first, that there would be a reluctance to invest in Croydon, given the financial and administrative costs involved with a licensing scheme of this nature; second, that it would be unfair that developers cannot take advantage of any "early bird" discount for properties which are already being developed; third, that developers would sell properties to avoid the stigma of being associated with an area which the Council brands as suffering from anti-social behaviour; fourth, that developers would reduce the number of new development projects in Croydon; and, finally developers would be concerned that the costs of licensing would have to be passed on to tenants in increased rents, but that, for many tenants (e.g. those in receipt of housing benefit), this would have made their rents unaffordable.
42. Mr. Sheldon says that these points had been made by other consultees, but I accept that the more people who make these points, the more persuasive they would have become. He also says that the Stage 1 consultation was publicised to a substantial number of landlords and agents on the Council's database and it drew attention to the fact that in and after November 2014, there would be a further and more formal consultation on the issue as to whether the Council should adopt the selective licensing scheme. I agree with Mr. Sheldon that the Council could properly assume that any of those people notified at Stage 1 of the consultation process - if hostile to the proposed scheme - would have been have been on the look-out for publicity concerning further stages of the consultation, and that they would in any event have had their attention drawn to it by the publicity given to the Stages 2 and 3 of the consultation process as a result of the publicity which I have described.
43. Mr. Manning also contends that there is a class of landlords who were not properly consulted. He points out that at Stage 1, the Council sent out a questionnaire and a leaflet to over 9000 landlords and agents, but that they did not repeat the exercise at either Stage 2 or at Stage 3 as it relied on general advertising to achieve that aim. The case for the Claimant is that the Council acted irrationally in adopting this restrictive approach at Stages 2 and 3 and in not going back to canvass those landlords and other identified at Stage 1 when the work of identifying landlords had been undertaken at Stage 1 especially as it was only at Stages 2 and 3 when the specific schemes were being consulted on together with the proposed licence conditions and fees. So Mr. Manning contends that the Council had failed to take "reasonable steps to consult people who are likely to be affected by the designation".
44. Mr. Sheldon submits that the Council complied with its statutory obligation as it took "reasonable steps to consult people who are likely to be affected by the designation". He stresses the large amount of publicity that was given to the consultation exercise at Stages 2 and 3 after the advance publicity in Stage 1. Mr. Sheldon then submits that the claims of the developers and the landlords fail to take account of these vital matters which provide an answer to the Claimant's case.

Discussion

45. The first issue to be considered is the nature and the extent of the obligation imposed on the Council in s. 80(9) of the Act. It is noteworthy that it was only to take "reasonable steps", and significantly the obligation on the Council did not extend to taking either "all steps" or "every step" or even "all reasonable steps".
46. What constitutes "reasonable steps" has not been explained in any further detail in the Act, but in the Guidance issued by the Department for Communities and Local Government and entitled 'Approval steps for additional and selective licensing designation in England' (" the Guidance") it is stated in its section on consultation at page 13 that:

"LHAs 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 businesses 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."

47. As specified in the Guidance, the Council did use "various channels of communication" at all stages of the consultation process as I have explained in paragraphs 14 to 17, 19, 20 and 23 to 25 above. These "channels of communication" included using the Council's own website, distributing flyers and posters in libraries, leisure centres and community centres, emailing children's groups, residents' groups and residents' associations, listing every week on a email bulletin to over 38,000 subscribers, posting details on the Council's Facebook page, sending regular tweets, placing advertisements in local papers, issuing a press release which was picked up by local newspapers, placing information on the plasma display screens in various places and having it as a standard footer on all emails sent out by the Council.
48. I accept that those likely to be affected by the designation would include many groups and that they would include landlords in Croydon and developers especially those who intended to let the properties actually developed or properties to be developed. Developers who intended to sell the developed properties would not be affected by the designation, except insofar as the value of the properties might well be adversely affected by the designation and I will assume that this is the case.
49. Pulling all the threads together, I am quite satisfied that the Council complied with its duty to take "reasonable steps to consult people who are likely to be affected by the designation" and this included developers and landlords. There are six factors which individually and cumulatively lead me to that conclusion and which I will not set out in any particular order of importance.
50. First, although Stage 1 was not part of the consultation process, it was of great relevance to the performance of the Council's s.80 (9) duty as the attention of many members of the private landlord community would then have been drawn to the proposal to designate the borough or part of it as a selective licensing scheme. The reason for that was that at that stage the Council was then engaging with private sector landlords, managing agents, and associations that support private landlords some of whom might also have been developers. A postal survey was sent by post, inter alia, to 9,032 landlords and agents with properties in the Borough. Significantly it was accompanied by a leaflet entitled "A Better Place to Rent- A Guide to Selective Landlord Licensing", which explained that the consultation would be conducted in two parts. So Stage 1 would have been a trailer for the full consultation process, and it would have forewarned the readers that it would take place from 17^th November 2014. As I have explained, there were 768 responses from landlords and agents in Croydon.
51. Mr. Manning complains that the material was not specifically addressed to developers nor did it ask any question relating to development criteria. Nevertheless, the leaflet drew attention to the nature of the scheme and it informed readers when they would be consulted in the future. It formed an important function as it was intended to put, and indeed must have put, the very many recipients of the leaflet and other Stage 1 information on notice of what was in issue and the times when they would be formally consulted. I agree with Mr. Sheldon that the Council could reasonably assume that after having received this material, those landlords would then be on the look out for publicity about the further stages of consultation and so they would not close their eyes to the very many channels of communication used by the Council to publicise Stage 2 of the consultation.
52. Second, the comprehensive publicity which was given in Stage 2 and in Stage 3 to the consultation process meant that any person interested in the letting of property was highly likely to have become aware, if not previously aware, of the consultation exercise from the steps taken by the Council at Stages 2 and 3. As I have explained, the Council used an impressive variety of different means of communications to alert all different groups in Croydon of its planned intention to use the selective licensing scheme. These means included the Council's own publications, advertisements in local newspapers, posters and flyers, information as a standard footer to all the Council's emails, information on plasma display schemes. In consequence, the consultation is highly likely to have been drawn to the attention of any person with an interest in what was going on in Croydon, such as landlords, agents and businesses with an interest in developing properties. The information supplied by the Claimant shows not surprisingly that many "developers" were existing landlords. The Council received 1071 responses to the Stage 2 doorstep survey.
53. Third, it would be reasonable to assume that any person or any entity which was investing or which was preparing to invest substantial sums in property in Croydon would regularly review the local media to ensure that they were fully aware of all matters relevant to their investment as part of what Mr. Sheldon describes as "due diligence" on their part. The mere fact that a small number of developers contend that they were not aware of the consultation exercise does not mean that the Council had not taken "reasonable steps to consult persons who are likely to be affected by the designation", but it shows that for some reason first, that those developers had not carried out "due diligence", second, that they had failed to see all the material flagging up the future consultation exercise at Stage 1 and third, that they had failed to see all the publicity given to the consultation exercise at Stages 2 and 3.
54. Fourthly, this consultation exercise started on 15^th September 2014 and finished on 2^nd March 2015 with much differing publicity being given for much of this period. The fact that this consultation exercise with the accompanying publicity went on for so long must have increased the chance of people (including developers and private landlords) seeing it and this factor would be supportive of the contention that the Council had complied with its s. 80(9) duty.
55. Fifthly, a critical factor is that it would not be "pure happenstance" if developers became aware of the consultation as was the position in the case of people who lived outside the Borough in the case: R (on the application of Regas) v London Borough of Enfield [2014] EWHC 4173 (Admin); [2015] H.L.R.
56. I believe that it could reasonably be expected that anyone with a connection to or interest in Croydon would have had the Council's proposals drawn to their attention. Indeed, to have had no awareness would have meant first, that the people concerned did not look at the Council's website; second, that they did not receive an email from the Council; third, that they did not look at any of the Council's social media outlets; fourth, that they did not read the Council's regular newsletter (subscribed to by more than 38,000 persons); fifth, that they did not read the local newspaper; sixth, that they did not read the Metro newspaper (3.2 million readers every day); and seventh, that they did not attend the Council's offices or any of the public places in which posters were placed over a period of months. If they had done any of these things, they would have learned about the consultation. That would not be "pure happenstance". Indeed, I have explained that Mr. Manning complains that Alphachem Ltd, Mr. Job and Dr. Ansari were developers who were unaware of the consultation process, but I do not understand how that occurred bearing in mind the extensive publicity which the Council organised and how they failed to appreciate it.
57. Sixthly, as I have explained, the Council complied with what was stated in the Guidance in that it did "ensure that the consultation is widely publicised using various channels of communication". That is precisely what the Council did. It is noteworthy that the Guidance did not state expressly or impliedly that a Council should target any particular group or groups and this omission supports the Council's case that it had complied with its s.80(9) duty.
58. Finally, there are, as I have explained, very few instances of developers and landlords who the Claimant says should have been consulted but who were not consulted. This small number is indicative that the Council had in the words of s.80(9) "take(n) reasonable steps to consult people who are likely to be affected by the designation". So I conclude that the Council complied with its statutory duty to "take reasonable steps to consult persons who are likely to be affected by the designation".

The Correct Approach of a Court to this Judicial Review application

59. Until now, I have been looking at this obligation as a matter of strict construction of s.80(9) of the Act, but I believe that such an approach is not appropriate on a judicial review application and is too favourable to the Claimant. That is because, as I will explain in the next two paragraphs, there is clear authority that the Council must have a comparatively wide discretion as to how the consultation process is carried out and the process will not be considered unlawful unless something went clearly and radically wrong. So there is a high threshold for the Claimant to reach to obtain relief.
60. Indeed in the case of R(Peat and others) v Hyndburn Borough Council [2011] EWHC 1739 (Admin), McCombe J (as he then was) was dealing with a challenge to the consultation process in relation to a selective licensing scheme and he cited with apparent approval the approach in R(Wainwright) v Richmond upon Thames London Borough Council [2001] EWCA Civ 2062, of Clarke LJ (as he then was) and with which Henry LJ and Wall J(as he then was) agreed. He explained (with emphasis added) that:

"11…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"

61. McCombe J in Peat also cited with apparent approval the statement of Sullivan J (as he then was) who explained (with emphasis added) in R(Greenpeace Ltd ) v SSTI [2007] Env 623 that:

"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."

62. Mr. Manning could not put forward any good reason why the approach advocated in those two cases could not, and should not, apply to the approach I should adopt to the consultation process in the present case. Applying those principles to the present case, the Council had "a comparatively wide discretion" as to how the consultation process was conducted. I am quite satisfied that nothing went "clearly and radically" wrong in the consultation exercise bearing in mind that it is almost invariably possible to suggest ways in which this or indeed any consultation exercise might be improved.

Conclusion

63. Hopefully it will be some consolation to the Claimant to know that everything that could be put forward on its part has been stated with commendable skill by its counsel, but that notwithstanding Mr. Manning's able submissions, the Claimant is not entitled to any other relief.
64. I therefore order that:

i) Permission is granted in respect of the contention that the Council failed to comply with its statutory duty under s.80(9) of the Act to "take reasonable steps to consult persons who are likely to be affected by the designation", but the application for judicial review is refused; and

ii) All other claims for permission^[3] are refused.

APPENDIX

Housing Act 2004

80Designation of selective licensing area

(1)A local housing authority may designate either—

(a)the area of their district, or

(b)an area in their district,

as subject to selective licensing, if the requirements of subsections (2) and (9) are met.

(2)The authority must consider that—

(a)the first or second set of general conditions mentioned in subsection (3) or (6), or

(b)any conditions specified in an order under subsection (7) as an additional set of conditions,

are satisfied in relation to the area.

(3)The first set of general conditions are—

(a)that the area is, or is likely to become, an area of low housing demand; and

(b)that making a designation will, when combined with other measures taken in the area by the local housing authority, or by other persons together with the local housing authority, contribute to the improvement of the social or economic conditions in the area.

(4)In deciding whether an area is, or is likely to become, an area of low housing demand a local housing authority must take into account (among other matters)—

(a)the value of residential premises in the area, in comparison to the value of similar premises in other areas which the authority consider to be comparable (whether in terms of types of housing, local amenities, availability of transport or otherwise);

(b)the turnover of occupiers of residential premises;

(c)the number of residential premises which are available to buy or rent and the length of time for which they remain unoccupied.

(5)The appropriate national authority may by order amend subsection (4) by adding new matters to those for the time being mentioned in that subsection.

(6)The second set of general conditions are—

(a)that the area is experiencing a significant and persistent problem caused by anti-social behaviour;

(b)that some or all of the private sector landlords who have let premises in the area (whether under leases or licences) are failing to take action to combat the problem that it would be appropriate for them to take; and

(c)that making a designation will, when combined with other measures taken in the area by the local housing authority, or by other persons together with the local housing authority, lead to a reduction in, or the elimination of, the problem.

"Private sector landlord" does not include a registered social landlord within the meaning of Part 1 of the Housing Act 1996 (c. 52).

(7)The appropriate national authority may by order provide for any conditions specified in the order to apply as an additional set of conditions for the purposes of subsection (2).

(8)The conditions that may be specified include, in particular, conditions intended to permit a local housing authority to make a designation for the purpose of dealing with one or more specified problems affecting persons occupying Part 3 houses in the area.

"Specified" means specified in an order under subsection (7).

(9)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.

(10)Section 81 applies for the purposes of this section.

Note 1    The relevant section of the Act is set out in the Appendix to this judgment.    [Back]

Note 2   HMOs were subject to a separate regime with which this application is not concerned.    [Back]

Note 3    There was another claim set out in the Grounds of Claim which was that there was no requisite approval from the Secretary of State. This was not pursued orally or in writing at the hearing and so permission must be refused for it.    [Back]