QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
| THE QUEEN
ON THE APPLICATION OF SARA HILLSDEN
|- and -
|EPPING FOREST DISTRICT COUNCIL
Mr Stephen Knafler QC (instructed by Corporate Support Services, Epping Forest District Council) for the Defendant
Hearing dates: 25 & 30 September 2014
Crown Copyright ©
The Hon. Mr Justice McCloskey :
"Decision not to consider whether or not the Claimant's circumstances were exceptional and that she should be treated as eligible for an allocation despite her not fulfilling the Defendant's residency criteria in its allocations scheme."
Within these words one finds two of the key ingredients in the matrix of these proceedings, each uncontroversial: the Claimant did not fulfil the Council's residency criteria and her quest to secure an allocation of housing from the Council was refused in consequence. Permission was granted following an oral renewal hearing. It was not submitted on behalf of the Council that the proceedings have been rendered academic by either the Claimant's subsequent altered housing circumstances or the imminent advent of a new scheme.
[II] FACTUAL FRAMEWORK
[III] THE IMPUGNED DECISION
"Under the new Scheme, which comes into force on 01 September 2013, in order to be a qualifying person to join the list you must have three years continuous residency. If you are already on this list you must have 2 ½ years continuous residency. According to our records, you have not been resident in our District for sufficient time. As a result, I am afraid I have no alternative but to agree with the decision that you are not a qualifying person to remain on our register from 01 September 2013."
With the assistance of the Citizens Advice Bureau, the Claimant appealed against this decision. This generated a further letter from the Council, dated 05 December 2013, stating, inter alia,
"On 01 September 2013, the Council's revised Housing Allocations Scheme came into force. Under the Local Eligibility Criteria any applicant who was on this list at the time the new scheme came into force must have 2 ½ years residency to remain on the list. Unfortunately, your client does not meet this aspect of the Criteria ….
If any person does not meet with the Residency Criteria, then their circumstances are not taken into account as there is no exception to this nor any other aspect of the Local Eligibility Criteria. ….
In her letter, [XY] refers to paragraph 3.25 of the 'Allocation of Accommodation Guidance for Local Authorities in England' which states that there may be exceptional circumstances where it is necessary to disapply these criteria in the case of individual applicants. The Council's Cabinet decided that there should be no exceptions to the Residency Rules. I am therefore not authorised to take any other circumstances into account."
In the pre-proceedings correspondence which followed, the Claimant's solicitors drew attention particularly to paragraph 7.2 of the impugned Scheme (infra). The Council did not respond directly to this.
"Under the new Scheme, which came into force on 01 September 2013, in order to be a qualifying person to join the list an applicant would need to have three years continuous residency. However, as the Claimant was already on the Register under the old rules, she would have needed to have 2 ½ years continuous residency. According to our records, the Claimant had not been resident in our District for sufficient time. As a result ……. she was not a qualifying person to remain on our Register from 01 September 2013."
The Assistant Director further explains that in devising the impugned Scheme, one of the aims was to formulate clear qualifying criteria, in the interests of clarity and expedition. A further aim was to formulate clearly defined exceptions. The practical implications of the new Scheme were considered:
"…. It was believed at least 3,000 home seekers would no longer qualify …..
Like many others, [the Claimant] previously qualified and was now excluded and, like many others, had pressing reasons for wanting to reside in the Council's area."
On 15 April 2013, the Council resolved that the new "local eligibility criteria" should be threefold. First, all new applicants for inclusion in the Housing Register must have lived within the Council's District for at least the three immediately preceding years. Second, they must have a demonstrated housing need, in accordance with the relevant assessment mechanism. Third, they had to satisfy a lack of resources requirement. All existing applicants who had resided within the Council's district for less than 2 ½ years were to be withdrawn from the Register.
"housing authorities may only allocate accommodation to people who are defined as 'qualifying persons' (section 160ZA(6)(a)). Subject to the requirement not to allocate to persons from abroad who are ineligible and the exception for members of the Armed and Reserve Forces in paragraph 3.27 below, a Housing Authority may decide the classes of people who are, or are not, qualifying persons."
Paragraph 3.25 provides:
"Whatever general criteria Housing Authorities use to define the classes of persons who do not qualify for social housing, there may be exceptional circumstances where it is necessary to disapply these criteria in the case of individual applicants. An example might be an intimidated witness who needs to move quickly to another local authority district. Authorities are encouraged to make explicit provision for dealing with exceptional cases within their qualification rules."
This is followed by paragraph 3.26:
"As with eligibility, Authorities are advised to consider whether an applicant qualifies for an allocation at the time of the initial application and when considering making an allocation, particularly where a long time has elapsed since the original application."
This is the Ministerial Guidance which applied at the time when the impugned Scheme was adopted by the Council.
"I took note of what the Guidance said about making provision for discretion to be exercised in individual cases, inter alia at paragraph 3.25. I knew, however, that it was Council policy that whilst the Council wanted to provide for discretion to be exercised in limited circumstances, in the case of qualifying individuals, it wanted clear rules that left no room for doubt about whether an individual qualified in the first place."
Thus, it is averred, what the Guidance said about discretion in individual cases was considered, but duly rejected, by the Assistant Director in devising the impugned Scheme. The Council policy, to which the Assistant Director sought to give effect in formulating the Scheme, was that there should be no discretion in the matter of qualifying in the sense explained in  above. Thereafter, post-qualification, the intention was to make provision for the exercise of discretion in specified limited circumstances viz-a-iz qualifying persons only.
[IV] THE IMPUGNED SCHEME
"This Housing Allocations Scheme has been formulated in accordance with the provisions of the Housing Acts 1996, as amended by the Homelessness Act 2002, the Localism Act 2001, the Allocation of Accommodation Guidance for Local Housing Authorities in England (DCLG June 2012) and other relevant legislation."
The practical operation of the Scheme is explained in paragraph 4.1:
"The Council operates a Choice Based Lettings Scheme where all vacant properties are advertised to applicants on the Council's Housing Register on a website and a two weekly Property List giving details of location, type, rent, service charge and landlord of the available accommodation. Applicants can apply for a property by 'expressing an interest' (or) 'bidding' either on the website, by post, telephone or text ….
[4.2] Applicants are restricted to 'bidding' for properties for which their household has an assessed need. At the end of the two weekly 'bidding' cycle, the Council analyses the 'bids' received and the Allocations Team within the Housing Options Section allocates each property following a prioritisation and selection process in accordance with this Allocations Scheme. In general terms, the property is offered to the applicant in the highest band, who has been registered on the Housing Register the longest, who had 'bid' for the specific vacancy."
"This Housing Allocations Scheme is framed so as to secure that the categories of applicants set out in section 166(A) of the Housing Act 1996 are given reasonable preference."
In paragraph 7.3, it is explained that the Scheme embraces vacancies in the Council's own housing stock and those in accommodation in the Council's District belonging to other Registered Providers (housing associations). Per paragraph 7.4, the Scheme applies to all home seekers on the Council's Housing Register on the effective date (01 September 2013) and those who apply subsequently. Paragraph 7.5 contains a series of exclusions from the Scheme, such as where the death of a tenant gives rise to a tenancy succession, none of which is germane in the present context. The provisions of the impugned Scheme of most significance in the present context are the following. First, in paragraph 7.2 it is stated:
"The Council recognises that there may be some exceptional circumstances not covered by the Scheme. In such instances, the Director of Housing will have delegated authority to make decisions, as he considers appropriate."
Then in paragraph 14.1, under the banner "Local Eligibility Criteria", it is provided:
"The Council has a Local Eligibility Criteria which is in place to prevent applicants joining the Housing Register who have no realistic prospects of being housed, in order to remove any expectations. Within this Housing Allocations Scheme, those who do not meet the criteria are classed as persons not qualifying." [My emphasis.]
This is followed by:
"14.2 The following classes of persons will not qualify for inclusion on the Council's Housing Register ….
14.3 Any applicant/s who has lived in the Epping Forest District for less than three continuous years immediately prior to their date of registration, with the exception of the following ….."
There follows a table of six categories which include, for example, serving and former members of the Armed Forces. Finally, per paragraph 27.1, the Scheme is to be reviewed after twelve months of operation.
[V] STATUTORY FRAMEWORK
"Social housing is of enormous importance ………… the way it is allocated is key to creating communities where people choose to live and are able to prosper. Under the previous Government housing waiting lists almost doubled …………..
Through the Localism Act 2011 we have introduced the most radical reform to social housing for a generation. The new freedoms in the Localism Act which allow Councils to better manage their waiting lists and promote mobility for existing social tenants came into force on 18 June 2012. This guidance will assist Councils to make full use of these new freedoms – and the existing flexibilities within the allocation legislation – to encourage work and mobility and to tailor their allocation priorities to meet local needs and local circumstances."
The relevant amended provisions of the 1996 Act came into operation on 18 June 2012. They are contained in Part 6, the subject matter whereof is "Allocation of Housing Accommodation". Section 159 provides, in material part:
"(1) A local housing authority shall comply with the provisions of this Part in allocating housing accommodation ………….
(7) Subject to the provisions of this Part, a local housing authority may allocate housing accommodation in such manner as they consider appropriate."
This is followed by section 160 which prescribes a series of cases which are excluded from the allocation provisions of Part 6. Section 160ZA, which was inserted by the 2011 Act, provides, under the title "Allocation Only to Eligible and Qualifying Persons: England", provides, where material:
"(6) Except as provided by subsection (1), a person may be allocated housing accommodation by a local housing authority in England (whether on his application or otherwise) if that person –
(a) is a qualifying person within the meaning of subsection (7), or
(b) is 1 of 2 or more persons who apply for accommodation jointly and 1 or more of the other persons is a qualifying person within the meaning of subsection (7).
(7) Subject to subsections (2) and (4) and any regulations under subsection (8), a local housing authority may decide what classes of persons are, or are not, qualifying persons.
(8) The Secretary of State may by regulations –
(a) prescribe classes of persons who are, or are not, to be treated as qualifying persons by local housing authorities in England, and
(b) prescribe criteria that may not be used by local housing authorities in England in deciding what classes of persons are not qualifying persons."
Specific provision is then made for the procedure to be followed where an authority decides that an applicant for housing accommodation is not a "qualifying person".
"(1) Every local housing authority in England must have a scheme (there 'allocation scheme') for determining priorities, and as to the procedure to be followed, in allocating housing accommodation."
In the immediately ensuing provisions, the obligatory contents of every allocation scheme are prescribed. Thus, in summary, every allocation scheme must include a statement of the authority's policy concerning choice of housing accommodation and the expression of preference by applicants and the scheme must secure that reasonable preference is given to specified classes of persons, such as the homeless. The remainder of section 166A specifies various provisions which every scheme either (i) must or (ii) may contain. This is followed by section 166A(11):
"Subject to the above provisions, and to any regulations made under them, the authority may decide on what principles the scheme is to be framed."
Section 166A(12) prescribes certain matters to which the authority must have regard in devising or modifying its allocation scheme. By section 166A(13), there is a specified form of obligatory consultation. The final provision of section 166A is the following:
"(14) A local housing authority in England shall not allocate housing accommodation except in accordance with their allocation scheme."
The final material provision of the 1996 Act, as amended, is section 169:
"(1) In the exercise of their functions under this Part, local housing authorities shall have regard to such guidance as may from time to time be given by the Secretary of State."
The Ministerial Guidance noted in  above was made in the exercise of this power.
[VI] THE CLAIMANT'S CHALLENGE
The First Issue
"Whatever general criteria housing authorities use to define the classes of persons who do not qualify for social housing, there may be exceptional circumstances where it is necessary to disapply these criteria in the case of individual applicants ….
Authorities are encouraged to make explicit provision for dealing with exceptional cases within their qualification rules."
These provisions, Mr Luba submitted, contemplate both explicit exceptions to the general eligibility, or qualifying, rules and a residual discretion to consider whether there are special circumstances warranting a deviation therefrom in any particular case. It was submitted that this residual, or overarching, discretion is precisely what paragraph 7.2 confers.
"Within this Housing Allocations Scheme, those who do not meet the criteria are classed as persons not qualifying."
This is followed by:
"14.2 The following classes of persons will not qualify for inclusion on the Council's Housing Register."
These provisions are framed in uncompromising and unambiguous terms. They disclose no intention to reserve to the Council any power, or discretion, of relaxation or dispensation. Their language confounds the contention that they are to be read as if followed by words such as "subject to the exceptional circumstances dispensation contained in paragraph 7.2 above". Had it been intended to include a dispensation of this kind, in the matter of qualifying to be admitted to the Housing Register, one would have expected the inclusion of language of this type or some other clear reference to paragraph 7.2 or the inclusion in paragraph 14 of the substance of paragraph 7.2. None of these relatively unsophisticated mechanisms has been adopted. All of these considerations militate against the construction advocated on behalf of the Claimant. I further consider that if the intention underlying paragraph 7.2 had been to empower the Director of Housing to make "decisions" about exceptional admission to the Housing Register, this would have been clearly stated and would also have found some expression in paragraph 14.1. Finally, I concur with Mr Knafler that the various components of section 14 have the clear flavour, thrust and texture of hard edged rules.
The Second Issue
a) In allocating housing accommodation, every local housing authority ("LHA") must comply with the provisions of Part 6: per section 159(1).
b) Every LHA is empowered to allocate housing accommodation in such a manner as it considers appropriate – however, this is "subject to" the provisions of Part 6: per section 159(7).
c) A LHA shall not allocate housing accommodation to certain classes of persons, who are decreed ineligible: per section 160ZA(1).
d) While the determination of what classes of persons constitute "qualifying persons" is a matter for each LHA, this is subject to four limitations – the last mentioned exception viz section 160ZA(1), section 160ZA(2), section 160ZA(4) and, finally, any regulations made by the Secretary of State under section 160ZA(8): all of these restrictions are enshrined in section 160ZA.
e) It is obligatory for every LHA to have a HAS. Fundamentally, every such scheme is designed to determine priorities in the allocation of accommodation and the procedure to be followed in accommodation allocation decisions: per section 166A(1).
f) It is obligatory for every such scheme to contain certain provisions: per section 166A(2), (3), (9) and (10).
g) Certain other types of provision within the schemes are optional, to be included or, as the case may be, excluded in the LHA's discretion: see section 166A(3)(i) – (iv), section 166A(5) and section 166A(6).
h) Where the Secretary of State has, by regulations, prescribed the principles to be observed in the procedure to be followed, every LHA's scheme must be framed in terms compatible therewith: per section 166A(10).
i) The formulation of the principles on which the scheme is to be framed is a matter for the LHA, subject to the foregoing provisions of section 166A and any regulations made thereunder: per section 166A(11).
j) It is obligatory for every LHA, in devising or modifying a housing allocation scheme, to have regard to the matters specified in section 166A(12).
k) Procedurally, it is obligatory for every LHA to consult in accordance with section 166A(13) before adopting or significantly changing its housing allocation scheme.
l) A LHA shall not allocate housing accommodation exception in accordance with its HAS: per section 166A(14).
m) In devising its HAS, every LHA must have regard to the Ministerial Guidance: per section 169(1).
"But the circumstances in which discretions are exercised vary enormously …..
The general rule is that anyone who has to exercise a statutory discretion must not 'shut his ears to an application' …..
I do not think there is any great difference between a policy and a rule. There may be cases where an officer or authority ought to listen to a substantial argument reasonably presented urging a change of policy. What the authority must not do is to refuse to listen at all."
Within this passage are the fons et origo of the celebrated "British Oxygen" principle.
"The underlying rationale of the principle against fettering discretion is to ensure that two perfectly legitimate values of public law, those of legal certainty and consistency (qualities at the heart of the principle of the rule of law), may be balanced by another equally legitimate public law value, namely that of responsiveness."
While this analysis does not mirror precisely that which I have formulated above, it nonetheless illustrates the elasticity of general principles of public law.
"The unfortunate fact of the matter is that where a council is faced, as this appellant council is faced, with a demand for council housing that greatly exceeds the available housing stock, there is no allocation system that can be devised to avoid hard cases ….."
Two basic touchstones for measuring the legality of such a scheme are also encapsulated in the same passage:
"The section 167(1) scheme devised by the Appellant council complies with the statutory requirements of the 1996 Act, as amended, and, insofar as its provisions for the allocation of housing to those in the section 167(2) priority band are concerned, cannot ………. be described as irrational or unlawful."
The degree of latitude available to housing authorities in devising their allocation schemes also features in the other opinions of the House: see, for example, per Baroness Hale at  and, in trenchant language, Lord Neuberger at :
"The allocation of social housing is a difficult and potentially controversial matter, which gives rise to very hard choices, at all levels of decision making, whether strategic, policy or specific. Social housing is an increasingly scarce (and correspondingly valuable) resource, for which demand considerably outstrips supply, in some areas (such as Newham) by an enormous margin, even if one restricts one's assessment of demand to those whose claims would be characterised by most people as very pressing."
In the next passage, Lord Neuberger speaks of the "considerable discretion" accorded to LHAs in the formulation of their allocation policies, subject of course to the statutory constraints which have been devised from time to time.
"I am clear that it would be unlawful for the Defendants to apply their new policy in such a way as to preclude their acceptance of an application which fell foul of it but of which the circumstances were exceptional."
This statement is to be understood within the context which I have sketched above. I am satisfied that it does not provide authority for the proposition that a HAS made under the current incarnation of Part 6 of the 1996 Act must, in its provisions for qualification for admission to the housing register, contain an overriding, or residual, discretionary dispensation. Its ratio decidendi cannot be applied to the matrix of the present challenge. Stated succinctly, this decision is not an authorative guide to the correct construction of the current legislation.
"Under the Barras principle, where an Act uses a form of words with a previous legal history, this may be relevant in interpretation. The question is always whether or not Parliament intended to use the term in the sense given by this earlier history."
Mr Luba's submission was that in enacting the amended version of Part 6 of the 1996 Act in June 2012, Parliament must be presumed to have been aware of the decision in Conway and, armed with such knowledge, has essentially repeated the former statutory wording. The essence of Mr Knafler's argument, which I prefer, was that this principle has no application since the decision in Conway does not provide a clear and authorative interpretation of the earlier corresponding statutory provisions. He referred the Court to the decision of the House of Lords in Galloway – v – Galloway  AC 299, in particular the speeches of Lord Oaksey and Lord Radcliffe, at pages 317 and 320 respectively. I consider that this submission prevails.
"Subject to subsections (2) and (4) and any regulations made under subsection (8), a local housing authority may decide what classes of persons are, or are not, qualifying persons."
It was submitted that the earlier corresponding statutory provisions relating to qualifying persons had been interpreted in the previous version of the statutory code of guidance. If one pauses at this juncture, the immensity of the obstacles confronting this argument quickly becomes apparent. The version provided to the Court is in a loose-leaf format with the earliest pages stamped "Revised 20 December 1996" and with replacement pages stamped with later dates. This, it was submitted, formed part of the pre-enacting history of which Parliament must presumptively have been cognisant. It is important to identify clearly the origins, nature, purpose and limitations of this code. First, it was made under sections 169 and 182 of the 1996 Act. Second, its author is a Government Minister. Third, it is an instrument of guidance. Fourth, it does not bind local housing authorities: rather, their obligation is to have regard to it. The legal character of the instrument emerges emphatically in the opening paragraph:
"The Code is not, however, a substitute for the legislation: it gives guidance on how local authorities should discharge their functions and apply the various statutory criteria in practice."
In this passage the Code has, commendably, avoided the temptations of self-aggrandisement. I consider this succinct statement to be an accurate exposition of the Code's legal status.
" However, in this instance Parliament has deliberately, by section 7, conferred a rule making power on the authority. It is for the authority to draw up what it believes are the appropriate criteria for the grant of licences ………….
 …. The statutory context must be examined with great care. In this case …. the statutory context empowers the authority to make the commission of certain serious criminal offences an absolute bar to obtaining a licence to work as a door supervisor. The rule is intra vires and rational. Not to have such a rule in respect of offences of such great gravity would tend to undermine a fundamental aim of the 2001 Act and such a failure would be truly vulnerable to challenge on grounds both of ultra vires and Wednesbury irrationality."
I concur with the learned deputy Judge's formulation of principle and, in particular, the pre-eminence given to the governing statutory regime.
The Final Issue
(a) In devising the impugned scheme, the Council failed to have regard to the Ministerial Guidance.
(b) The impugned scheme is not compatible with the Ministerial Guidance.
(c) It is incumbent on the Council to justify this incompatibility and it has failed to do so.
I shall consider each element in turn.
"It is for an applicant for leave to show in some fashion that the deciding body did not have regard to such changes in material considerations before issuing its decision. It cannot be said that the burden is imposed on the decider of proving that he did do so. There must be some evidence or a sufficient inference that he failed to do so before a case has been made out for leave to apply for judicial review." [Emphasis added.]
While permission to apply for judicial review has, of course, been granted in the present case, I consider that this principle applies with full force at this, the substantive, stage. In cases where an issue of this kind arises, I consider that the decision of the Court of Appeal in Balog – v – Birmingham City Council  HLR 14 may be viewed as an illustration of the Court's resistance to microscopic and forensic analyses of the decisions of public authorities, particularly in certain contexts: see .
"Despite the opportunity to submit further evidence, the Defendant has been unable to demonstrate that the relevant passage [paragraph 3.25] was brought to the attention of the Cabinet Lead for Housing, the Scrutiny Committee which formulated the Scheme or the Cabinet which adopted it ……
In the absence of any evidence that the relevant passage in the Guidance was expressly considered – and the total absence of any evidence of any explanation as to why it was departed from – [the Court should infer that] ……. the Scheme was adopted in ignorance of, or in disregard of, the relevant guidance."
I consider that this passage betrays the misconception which is highlighted in the SOS decision. It is not for the Council to demonstrate that the Ministerial Guidance was taken into account in devising and adopting the impugned Scheme. Rather, the onus rests on the Claimant to establish the converse. This is a matter of evidence and proof. The Claimant invokes no evidence in support of her assertion and I am satisfied that the failure which she advances cannot properly be inferred from the evidence available. Accordingly, this aspect of the Claimant's challenge fails at the first hurdle. Whichever evidential approach is adopted, I consider that the Claimant's case cannot prevail. In the alternative, I accept Mr Knafler's submission that the evidence supports the conclusion that the Councillors had regard to the Ministerial Guidance in substance.