R on the Application of XC v LB Southwark [2017] EWHC 736 (Admin)
The London Borough of Southwark’s housing allocations scheme provides that people who work or who volunteer in the local community are awarded a reasonable preference for an allocation of social housing (by virtue of being awarded something called a “priority star”).
The claimant, XC, had a physical disability which made it more difficult for her to work or to undertake voluntary work. She claimed to have a mental health problem which also impeded her ability to work or volunteer although this was not accepted by LB Southwark. She was also carer to her adult son who had Asperger Syndrome, which again made it more difficult for her to work or volunteer. She therefore argued that Southwark’s scheme discriminated against disabled people who could not work or volunteer and that it discriminated against women because women were more likely than men to be carers and therefore were more likely to have difficulty working or volunteering.
As a result of being unable to work or volunteer, XC was unable to qualify for a reasonable preference in LB of Southwark’s housing allocations scheme and therefore her prospects of being made an allocation of housing were slim. She therefore argued that LB of Southwark’s allocations scheme was unlawful under the Equality Act 2010.
The judicial review claim
Whether the scheme was discriminatory
LB of Southwark argued that the housing allocations scheme did not indirectly discriminate against disabled people because when the scheme was construed as a whole, it contained numerous provisions which in fact treated disabled people favourably. LB Southwark also emphasised that there was no intention to discriminate against women or disabled people.
The Administrative Court rejected these arguments, holding that whether or not there had been any intention to discriminate, what mattered was whether in fact the scheme discriminated. Furthermore, the Court held that if an individual provision of a housing allocations scheme were discriminatory, that discrimination was not remedied by the fact that the scheme when construed as a whole did not appear to be discriminatory.
The Court therefore held that the scheme was indirectly discriminatory towards disabled people and women.
Whether the discrimination could be justified
The parties differed as to the correct legal test to be applied by the Court when it was deciding whether it could interfere with LB Southwark’s housing allocations scheme.
LB of Southwark argued that the details of a local authority’s housing allocations scheme are a policy decision for that local authority and that accordingly the Court could only intervene if the scheme was “manifestly without reasonable foundation”.
On the other hand, the claimant, XC, argued that the test for the Court to apply was whether the discriminatory effect of the housing allocations scheme could be justified by LB of Southwark as being a proportionate means of achieving a legitimate aim (per the Supreme Court’s decision in
Aster Communities v Akerman-Livingstone [2015] AC 1399). The Claimant argued that LB Southwark had to satisfy a four-stage test in order to show that the discrimination was indeed a proportionate means of achieving a legitimate aim. That four-stage test was set out in
Bank Mellat v HM Treasury (No. 2) [2014] AC 700:
- Is there a sufficiently important objective of the discrimination (i.e. a legitimate aim)?
- Is the discriminatory measure rationally connected to the objective?
- Is the measure the least intrusive measure which could be used without unacceptably compromising the objective? And
- Has the public body struck a fair balance between the importance of securing the objective and its effects on the particular claimant’s rights?
The Administrative Court agreed with the claimant that the correct legal test was that LB of Southwark had to show, by means of the four-stage test, that the discriminatory scheme was a proportionate means of achieving a legitimate aim. The Court held that individual housing decisions made by local authorities are not matters of high policy and therefore LB of Southwark’s argument (that the Court could only interfere if the discriminatory measure were manifestly without reasonable foundation) had to be rejected.
Whether the discriminatory aspects of the scheme were a proportionate means of achieving a legitimate aim
The claimant, XC, did not dispute that the first two stages of the four-stage test in
Bank Mellat v HM Treasury (No. 2) were met i.e. the discrimination had a legitimate aim and was rationally connected to that aim.
The Court held that the discrimination was the least intrusive measure which could be used. The Court was influenced by the fact that statutory guidance to local authorities endorsed the idea of giving priority for housing to those in work or who volunteer. Furthermore, a housing allocations scheme by its very nature involves prioritising some to the detriment of others.
The Court cited a statement from the House of Lords in
R (Ahmad) v Newham LBC [2009] UKHL 14 to the effect that the courts should be slow to interfere with decisions about how local authorities choose to accord priorities in their housing allocations schemes since such decisions are better taken by the local authorities who are more aware of local needs and sensitivities. Although
Ahmad pre-dated the Equality Act 2010, the Court held that it applies equally post-Equality Act 2010.
Finally, the Court noted that the scheme included a discretion for any provision (including the ones under challenge) to be waived in exceptional circumstances. This provided a “safety valve” in the scheme which meant that it did strike a fair balance between the objective of the discrimination and the claimant’s rights.
Ultimately, therefore the Court held that whilst the scheme did indirectly discriminate against women and the disabled, such discrimination was justified and therefore lawful. The claim was therefore dismissed.
Summary by
Alexander Campbell, barrister,
Arden Chambers. For the full text of the judgment
click here.
Sheffield City Council v Oliver [2017] EWCA Civ 225
The landlord appealed against a decision that the cost of works had not been “incurred” when quantifying service charges payable by a leaseholder and that it had to give credit for third-party contributions received towards the cost of works to avoid double recovery.
Hazel Oliver (‘the Tenant’) was a long leaseholder (having exercised her right to buy in 1989) of a maisonette in a tower block on an estate. The local authority (‘the Council’) was the landlord. The estate consists of around 1,000 flats and maisonettes contained in forty separate blocks. Most of the units are let as social rented housing.
The Council embarked upon a large-scale refurbishment (both repairs and improvement) of the estate in June 2011. The works were completed in August 2013 at a total cost of £11,438,802. The major elements of the works included re-cladding, new central heating, new hot water boilers and new thermostatically controlled radiator valves.
The Council received substantial funding (‘CESP funding’) from the Community Energy Savings Programme pursuant to an agreement with NPower made in May 2012. However, as some of the works undertaken at the estate fell outside the strict criteria of the programme (geographical area and prescribed timeframe) it didn’t all qualify for CESP funding.
The Council received a total of £2.913 million pursuant to the NPower agreement. It received £2,210 for work done to the Tenant’s property together with a further “whole house bonus” (for aggregated works) for £2,210.
The Council decided not to deduct the amounts received under the NPower agreement in respect of units held by long leaseholders. This was a “political decision” due to some units being ineligible for CESP funding. This resulted in the Council charging the Tenant in full for the cladding works despite receiving a contribution towards it from NPower. The Council didn’t seek to recover the cost of replacing the boilers or the radiator vales or any proportion of its professional fees incurred with the refurbishment of the estate from its long lessees (who numbered just under 80). Pursuant to the service charge provision in the leases, the Council sought to recover £615,324 from its long leaseholders. The charge presented to the Tenant was for £9,378.72.
In 2011, both the Tenant and the Council applied to the Leasehold Valuation Tribunal for a prospective determination as to the reasonableness of the (then) proposed refurbishment scheme. The Tenant was largely unsuccessful at the LVT and appealed to the Upper Tribunal.
In 2015, the Upper Tribunal (Martin Rodger QC, Deputy President of the Lands Chamber and Mr PD McCrea FRICS) found that the Council should have deducted its CESP receipts to the extent attributable to the cladding work on the Tenant’s maisonette (amounting to £1,885). It concluded that part of the cost had not been incurred by the Council within the meaning provided for in the lease and needed to be deducted from the service charge.
As for the whole house bonus, the Upper Tribunal noted that this had been earned in part by the cladding works (which had been charged to the Tenant) and in part by the boiler and radiator valve replacements (which hadn’t). Since it was difficult to decide whether the whole house bonus represented a further deduction from the cost which the Council has incurred, the Upper Tribunal concluded that the fairest way to deal with it was to allow for a 50% deduction of that bonus.
With the permission of the Deputy President, the Council appealed to the Court of Appeal.
Law
The regulatory scheme in relation to the recovery of service charges by landlords for residential property let to tenants is contained in Sections 18 onwards of the Landlord and Tenant Act 1985. There’s an overriding requirement that costs may be taken into account in determining the amount of the service charge only to the extent that they’re reasonably incurred (section 19).
In
Windermere Marina Village Limited v Wild [2014] UKUT 0163(LC) and
Gater v Wellington Real Estate Limited [2014] UKUT 0561(LC) the Deputy President held that the apportionment of service charges can be a complex matter and that there may be more than one fair or reasonable method which may be adopted. Section 27A requires the court or tribunal to determine the fair proportion for itself.
Decision
Briggs LJ [at 42] held that the parties to the lease couldn’t sensibly be thought to have made provision for the levying of a service charge which permitted any double recovery by the Council in relation to the cost of carrying out relevant works.
At [43] the Court held:
“The prospect of double recovery (if service proportions are determined without giving
credit for third party funding) is by no means limited to payments under the CESP
Scheme…
[44] The Council might receive payment against the carrying out of works falling
within its repairing covenant from an original builder of the Block under a guarantee,
from the employers or insurers of the driver of a heavy goods vehicle which crashed
into it, or by way of damages from someone committing malicious damage. All those
sources would be third party contributions to the cost of carrying out the requisite
works, and double recovery would occur if the Council did not have to give credit for
the receipt of them when determining the service charge liabilities of the long lessees
within the Block.”
Consequently, the service charge provisions in the lease had to be interpreted to achieve the objective of preventing double recovery. From three potential options identified to achieve this, preference (per Briggs and Longmore LJJ) was given to determining a “fair proportion” of the Council’s incurred costs, expenses and outgoings to be paid by the lessee.
The Court held that whilst the UT was right to treat the avoidance of double recovery as a necessary objective in seeking to construe the lease, it was wrong to invoke a special rather than natural meaning of the word “incurred”. It should, instead, have carried out its own assessment of whether the Council’s apportionment was fair as per
Windermere Village Marina and
Gater which were correctly decided.
At [56] Briggs LJ stated:
“In my judgment the determination of a fair proportion does require the Council to give
credit for the relevant parts of CESP funding received in relation to, and only by reason
of, the works which it carried out in respect of the Property. Fairness in this context is
to be achieved by the avoidance of double recovery, as the Upper Tribunal concluded.”
The Court confirmed the Upper Tribunal’s base figures for deductions from the service charge and didn’t depart from the 50% apportionment of the whole house bonus, as this was within the range of fair outcomes available to the decision maker.
The appeal was dismissed.
Summary by
Naveen Agnihotri, barrister,
Arden Chambers. For the full text of the judgment
click here.
Lillian Darby (Administratrix of the estate of Lee Mark Rabbetts (deceased) v Richmond On Thames LBC [2017] EWCA Civ 252
Lee Mark Rabbetts suffered from leukaemia. In April 2010, after undergoing treatment including a bone marrow transplant and chemotherapy, he went to live with his mother in the home which she rented from Richmond on Thames LBC (‘the Council’). Mr Rabbetts’ sister and her baby also lived at the property.
Due to his ill health, Mr Rabbetts was at high risk of contracting infections. When he applied to the Council for housing, several medical staff, including his GP and a hospital consultant, wrote to the Council to stress the danger of infection posed to him of living with a baby.
Under the Council’s housing allocations scheme, 0 to 50 points could be awarded where a person had a medical need for housing, however 200 points could be awarded where a life threatening condition was seriously affected by the applicant’s housing. Mr Rabbetts was awarded 50 points.
In January 2011, some four months after making a housing application, Mr Rabbetts died from an infection acquired from his sister’s baby.
The legal proceedings
Mr Rabbetts’ mother brought proceedings against the Council, asserting that the Council had owed a common law duty of care to Mr Rabbetts. She argued that the duty had been to take reasonable care to evaluate Mr Rabbetts’ housing application so as to avoid causing him injury, which they had breached by failing to award him 200 points on medical grounds.
The County Court struck out the claim on the basis that it disclosed no reasonable grounds for being brought and the Court granted summary judgment for the Council. Mr Rabbetts’ mother appealed the striking out and summary judgment to the Court of Appeal.
The Court of Appeal
The Court of Appeal rejected the argument that a local authority allocating housing under Part VI of the Housing Act 1996 has a duty of care to apply its housing allocations policy so as to avoid causing injury.
The Court of Appeal recited House of Lords authority (
O’Rourke v Camden LBC [1998] AC 188) to the effect that where a statute creates a duty which can be enforced by judicial review, it will only also give rise to an action in damages if there was a legislative intention to create such an action. The House of Lords had held that where welfare legislation provides protection for those people affected by it, it is not to be construed as having been passed for the benefit of those individuals only, but rather for the benefit of society in general, hence no duty of care automatically arises.
The Court of Appeal reiterated reasoning from a previous decision that the carrying out of statutory functions under Part VI of the Housing Act 1996 was not sufficient to create a duty of care (
X v Hounslow LBC [2009] EWCA Civ 286).
The Court of Appeal held that the Council could not be subject to a common law duty of care on any of the traditional grounds on which a common law duty of care can be said to arise. In particular:
- The purported duty of care could not satisfy the long-established test for a duty of care to arise from the case of Caparo Industries Plc v Dickman [1990] 2 AC 605 because it would not be fair, reasonable and just to impose liability and because it is arguable that the relationship between Mr Rabbetts and the Council was not one of sufficient proximity.
- The Council could not be said to have voluntarily assumed a duty of care because the Council was obliged to fulfil its duties under the Housing Act 1996 and therefore had not assumed any obligation on any voluntary basis.
The Court of Appeal held that the law in this area has been settled by the Supreme Court in
Michael v Chief Constable of South Wales [2015] UKSC AC 1732 and that, pursuant to that judgment, there are only very limited circumstances in which a public authority acting under statute will be held to owe a common law duty of care, none of which were applicable to Mr Rabbetts’ case.
In any event, the Court of Appeal stressed that a common law duty of care could not exist because Mr Rabbetts had had available to him alternative remedies under the Housing Act 1996 including the option of bringing judicial review proceedings.
In all the circumstances, the Court of Appeal refused permission to appeal.
Summary by
Alexander Campbell, barrister,
Arden Chambers. For the full text of the judgment
click here.
Tahira Chatokai v Salford City Council [2017] Manchester Civil Justice Centre (11 April 2017, HHJ Main QC)
A social tenant applied by way of judicial review to quash the local authority’s decision that he was seeking to unreasonably give up his accommodation and was not homeless.
Background
Mr Chatokai (‘the Appellant’) is 43 years old and has been a tenant of Salix Homes in Salford since August 2008. He occupies a one-bedroom flat on the 14th floor of a tower block. In May 2016, he presented as ‘homeless’ to Salford City Council (‘the Respondent). He asked to be re-housed on the basis that the allocated accommodation was wholly unsuitable and it was unreasonable to expect him to occupy it.
In August 2016, the Respondent provided notification (under s.148 of the Housing Act 1996) that he wasn’t going to be treated as homeless (as defined by s.175(3) of the 1996 Act) and that it was reasonable for him to continue to occupy the property. The Appellant sought a review (pursuant to s.202(f) of the 1996 Act) of that determination based on there being an inadequate inquiry as to his current medical condition and that he was ‘at risk’ at the property.
In the hope that the Respondent would reverse its decision, further evidence of the Appellant’s significant intellectual dysfunction, disability and vulnerability was provided. This included the fact that he suffers from epilepsy, depression and PTSD. He has Asperger’s Syndrome and ADHD. He experiences chronic back pain due to a degenerative condition as well as chronic bilateral hip and knee pain requiring him to use a walking stick (for limited independent mobility). Further, outside of his property the Appellant uses a motorised scooter (he’s wheelchair bound). The mobility difficulties have led to numerous falls both inside the Appellant’s flat and on the staircases; he can’t manage a single flight of stairs.
In previous possession proceedings brought by the landlord, the court had noted in an order that the property was “
not suitable for the Defendant’s occupation”.
The Appellant is homosexual and open about this. He experienced threats from the local community when he’d arrived in the Salford area due to rumours spreading that he was a paedophile. He was assaulted because of this in 2007 and the police felt that such an offence could be repeated at any time due to his perceived reputation.
In October 2016, the Respondent sent a “minded to” letter to the Appellant intimating an intention to uphold the determination. Despite the Appellant solicitors’ efforts to persuade the Respondent to change its preliminary view, in November 2016 the Respondent confirmed the correctness of the earlier determination. That decision was challenged by the Appellant by way of judicial review (under s.204(1)(a) of the 1996 Act) on a point of law.
Law
The Respondent was obliged to assess whether the Appellant was homeless in accordance with its obligations under the 1996 Act (as amended by the Homelessness Act 2002). This includes reference to the homelessness Code of Practice 2006 and the Homelessness Guide for Local Authorities.
The Appellant’s significant medical, physical and psychological ailments meant that he engaged the protection of the Equality Act 2010. Due to his protected characteristics (under section 6 of the 2010 Act) the Appellant could avail himself of the provisions of the public sector ‘equality duty’ under s.149 of the 2010 Act.
Decision
HHJ Main QC placed reliance upon the judgments (majority opinion) of the Justices of the Supreme Court in
Hotak v Southwark LBC et al [2015] UKSC 30. On the issue of ‘vulnerability’, the most relevant factor was the personal circumstances of the applicant – seen against an ordinary person, if made homeless.
The judge found that the Appellant’s disabilities:
“…had the effect of impacting on his appreciation of his
own vulnerability and as to
his responses to that – such that he felt trapped and very isolated in his flat on the 14th
floor, which interfered with his ability to feel safe in the property.”
Consequently, in order to satisfy the requisite legal test in applying the ‘equality duty’, the Respondent had to assess the reasonableness of the Appellant’s actions “
through the prism of his subjectively experienced dysfunction”. This would show a greater awareness as to the effects of the disability on the Appellant and his experience of the same. The Respondent’s determination failed to do this was and was inadequate.
HHJ Main QC cited the compounding effects of the Appellant’s disabilities along with:
“…his worries about racist or homophobic taunts from his neighbours – it is entirely
easy to understand why he would harbour real anxiety and fear in occupying such
accommodation and feel very reluctant to leave it.”
The judge held that given the Appellant’s deteriorating physical function and the nature of the ‘equality duty’ it was certainly reasonable (viewed objectively) that his current accommodation was “
entirely” unsuitable. The Respondent should have specifically considered:
“…from the Appellant’s perspective, as an Asberger’s sufferer, how
he was able to
cope with the level of his adversity, given all his difficulties on the facts presented.”
The Respondent had erred, it’s “
final review was seriously flawed” and was quashed.
Subsequently, the Appellant invited the judge to exercise his discretion and substitute it with his own decision (under CPR Part 54.19(2)). However, the matter was remitted back to the Respondent (to revisit the assessment) and to consider the issues that had been raised.
Summary by
Naveen Agnihotri, barrister,
Arden Chambers.
The publishers thank Chetna Parmar of Cobden House Chambers and Amy Tagoe of Stephensons Solicitors, who acted for the appellant for bringing this judgment to our attention.
