Allocation, Allocation, Allocation (Part 2)

In this post Alice Richardson considers the second of two recent challenges to allocation schemes: R (YA) v Hammersmith and Fulham LBC [2016] EWHC 1850 (Admin). Part 1 looked at R (Woolfe) v Islington LBC [2016] EWHC 1907 (Admin) and is available here.

 

In R (YA) v Hammersmith and Fulham LBC the Defendant’s allocation scheme provided that persons who had been guilty of unacceptable behaviour which made them unsuitable to be tenants were, save for in exceptional circumstances, disqualified from the housing register. The Claimant challenged the Defendant’s refusal to enter him onto their housing register due to his serious, but now spent, criminal record.

 

Housing Act 1996

The allocation of housing by local housing authorities is governed by Pt.6, Housing Act 1996. A local housing authority must have an allocation scheme for determining priority and must allocate housing accommodation in accordance with that scheme: s.166A(1). Each scheme must be framed so as to secure that persons falling within the categories in s.166A(3) are given a reasonable preference. Subject to s.166A(3) an authority may determine which classes of persons qualify for assistance under its scheme: s.160ZA(6)-(8).

 

Rehabilitation of Offenders Act 1974

Generally, by s.1 Rehabilitation of Offenders Act 1974, unless the sentence imposed in relation to a conviction is an excluded one, a conviction becomes “spent” and the convicted person becomes a “rehabilitated person” after the end of the applicable rehabilitation period set out in s.5 of the Act.

 

By s.4(1) of the Act, subject to certain exceptions, a person who has become a rehabilitated person shall be treated for all purposes in law as a person who has not committed, been charged with, prosecuted for, convicted of or sentenced for the offence or offences which were the subject of that conviction. Generally, no evidence shall be admissible in any proceedings before a judicial authority exercising its jurisdiction or functions to prove that any such person has committed, been charged, prosecuted for, convicted of or sentenced for any offence which was the subject of a spent conviction.

 

By s.4(2), subject to certain provisions, where a question seeking information with respect to a person’s previous convictions, offences, conduct or circumstances is put to him or to any other person otherwise than in proceedings before a judicial authority the question shall be treated as not relating to spent convictions or to any circumstances ancillary to spent convictions.

By s.4(5)(b) for the purposes of s.4 and s.7 of the Act the conduct constituting the offence is defined as “ancillary to a conviction”.

 

s.7 sets out certain limitations on “rehabilitation” under the Act. By s.7(3):

“If at any stage in any proceedings before a judicial authority… the authority is satisfied… that justice cannot be done in the case except by admitting or requiring evidence relating to a person’s spent convictions or to circumstances ancillary thereto, that authority may admit … the evidence in question …”

 

Article 14 ECHR

Article 14 provides that:

“The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status.”

 

Differential treatment is discriminatory if it has no objective and reasonable justification or is disproportionate: Stec v United Kingdom (2006) 43 E.H.R.R. 47.

 

R (YA) v Hammersmith and Fulham LBC [2016] EWHC 1850 (Admin)

Hammersmith and Fulham’s allocation scheme disqualified certain classes of applicant from the register even though they fell within a reasonable preference category including, inter alia, “applicants who have been guilty of unacceptable behaviour which makes them unsuitable to be a tenant”.

 

Hammersmith and Fulham also operated a ‘Care Leavers’ Quota’ which applied to ‘looked after’ children who leaving local authority care. Each financial year, a quota of social housing units was allocated for Care Leavers by Housing Options within its Housing Allocation Scheme. The Care Leaver had to meet the qualification criteria for social housing as set out in the Allocation Scheme. In exceptional circumstances the Director of Housing Options, Skills and Economic Development had the discretion to override the qualification criteria.

 

The Claimant was a Somali national who came to the UK as a refugee in around 2002. He was taken into care by the Defendant’s social services team at the age of 11 after suffering a serious assault. Between the ages of 12 and 15 he had committed a number of criminal offences for which he was convicted. The offences included theft, assaulting a police officer, assault occasioning actual bodily harm, criminal damage, robbery, receiving stolen goods, possession of class A drugs, burglary and fraud offences.

 

After January 2012 the Claimant had not committed any offences and the evidence suggested that he had “turned his lifestyle around” over the next few years. He went to college and had long term plans to attend university. He had moved into semi-independent living aged 16 and was described by a social worker as an “ideal candidate for social housing”.

 

By a review decision dated 29th October 2015 Hammersmith & Fulham confirmed that the Claimant’s application to join the housing register had been rejected. Due to his significant offending history he had been ‘guilty’ of unacceptable behaviour and therefore considered unsuitable to be a tenant. It had been noted that he had not been found guilty of any offences since 2012 and it was accepted that the convictions had all become “spent” but nevertheless no discretion was awarded.

 

The Claimant was given permission for judicial review on following grounds:

  1. The decision amounted to a breach of s.4(1) of the Rehabilitation of Offenders Act 1974.
  2. The decision was irrational.

 

A renewed permission application was also made in respect of a further ground:

  1. The decision was in breach of Article 14 of the European Convention on Human Rights on the basis that it gives rise to indirect discrimination against the Claimant as a “Care Leaver”.

 

The Claimant argued that the wording of section 4(1) was plain and that he must be ‘treated for all purposes in law as a person who has not committed… the offence’. The Defendant argued that it was entitled to take into account the behaviour of the Claimant that led to the convictions.

 

Mr. Peter Marquand, sitting as a Deputy Judge of the High Court, held firstly that what the Defendant had taken account of was a list of convictions which clearly fell within s.4(1). Inferences as to behavior had been made from those convictions and so the Judge then went on to consider whether s.4(1) includes the circumstances ancillary to a conviction, in particular ‘the conduct constituting that offence or those offences’. He held that looking at s.4 as a whole and considering the purpose behind it was the circumstances ancillary to a conviction did fall within s.4(1) and therefore details of the Defendant’s conduct and behavior which formed the basis for the convictions fell within the prohibition.

 

The Defendant argued that it was able to rely on the limitation in s.7(3) but the Judge agreed with the Claimant that consideration of a housing application does not amount to ‘proceedings before a judicial authority’.

 

Due to his decision on the first ground the Judge did not think it necessary or proportionate to go on to consider the irrationality ground given that the scheme itself was not being challenged. However the Claimant did challenge the policy as a whole under his third ground; breach of Art.14.

 

The Judge held that the process did fall within the ambit of Art.8 and therefore Art.14 applied, being a care leaver was an “other status” and there is a potential for indirect discrimination. However, the discrimination was justified. The Defendant’s evidence was that provision had been taken to prevent people with histories of anti-social behaviour being allocated very scarce social housing resources partly due to fairness but also due to community safety and well-being and a prudent use of limited public resources. Anti-social behaviour is a long-standing and difficult problem is to deal with which sometimes involves very serious and adverse consequences for other tenants, residents or staff.

 

Comment

The decision on Art.14 is not entirely surprising. Firstly, the Judge acknowledged that whilst there is no absolute right to accommodation this did not prevent the allocation scheme from coming within the scope of Art.8. and the evidence demonstrated the link between the process, private life and the need for settled accommodation for vulnerable individuals.

 

As to the question of ‘other status’ the Judge, following, R (RJM) v the Secretary of State for Work and Pensions [2008] UKHL 63, held that the Care Leavers have had something ‘done to them’ in that they have been looked after by a local authority under a statutory regime and as a result of that they will have personal characteristics given their experiences of being in care. This may be of some wider significance given that there doesn’t seem to be any previous authority on the status of care leavers.

 

Considering the potential for discrimination the Judge followed Burnip v Birmingham CC [2013] PTSR 117 and held that there is no need for statistical evidence or for a comparator to establish discrimination under Article 14. In any event the evidence indicated that care leavers are likely to have a higher level of criminal convictions and behaviours and would therefore be disproportionately affected by the exclusion from the housing register.

 

Lastly, there was a wide margin of appreciation for any justification. The Defendant had to consider the rights and interests of the whole of its community and the exclusion form the register of those “who have been guilty of unacceptable behaviour which makes them unsuitable to be a tenant” was a proportionate measure striking a fair balance between the rights of the individual and that of the community.

 

The decision on the first ground may be of interest to other authorities who operate a similar scheme and to those who represent applicants falling within them (though they may be relatively few in number). Whilst the decision may seem fair for the Claimant in this case it does lead to the odd situation, as pointed out by Counsel for the Defendant, whereby anti-social behaviour that was less serious and did not result in a criminal conviction could be taken into account but behaviour that was more serious and resulted in a criminal conviction (which then became spent) could not.

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Allocation, Allocation, Allocation (Part 1)

In this post Alice Richardson considers the first of two recent challenges to allocation schemes: R (Woolfe) v Islington LBC [2016] EWHC 1907 (Admin), Part 2 will consider R (YA) v Hammersmith and Fulham LBC [2016] EWHC 1850 (Admin).

 

In R (Woolfe) v Islington LBC the claimant challenged the points “threshold” set by Islington for bidding, argued that the threshold was a breach of s.11 Children Act 2004 and contended that she should have been awarded additional points under the authority’s “New Generation” scheme.

 

Mr Justice Holman opened his judgment with the observation that:

 

“the schemes of local housing authorities for allocating their scarce social housing stock seem to be fertile ground for litigation”

 

Indeed this blog addressed the High Court’s “re-found lack of deference to authorities’ allocation schemes” in a blog post in April of this year.

 

Part 6, Housing Act 1996

The allocation of housing by local housing authorities in England is governed by Pt.6, Housing Act 1996. A local housing authority must have an allocation scheme for determining priority and must allocate housing accommodation in accordance with that scheme: s.166A(1). Generally, an authority may determine which classes of persons qualify for assistance under its scheme: s.160ZA(6)-(8).

 

That discretion is, however, subject to the “reasonable preference” categories in s.166A(3).

Each scheme must be framed so as to secure that persons falling within these categories are given a reasonable preference. These categories include, inter alia, homeless persons to whom the “full” housing duty is owed under s.193(2), Housing Act 1996: s.166A(3)(a).

 

Therefore the discretion under s.160ZA cannot be used to exclude a person who is entitled to a reasonable preference under s.166A(3): R. (Jakimaviciute) v Hammersmith and Fulham LBC [2014] EWCA Civ 1438; [2015] H.L.R. 5. See also R. (Alemi) v Westminster CC [2015] EWHC 1765 (Admin) in which it was held that a policy which prevented a person owed the duty under s.193(2) from bidding for social housing for 12 months was unlawful as incompatible with s.166A(3) and R (HA) v Ealing LBC [2015] EWHC 2375 (Admin) in which it was held that a requirement that an applicant must have been resident in the borough for five years was also unlawful insofar as it excluded persons who were entitled to a reasonable preference.

 

R (Woolfe) v Islington LBC [2016] EWHC 1907 (Admin)

The claimant was a pregnant single woman who was owed the full housing duty under s.193(2). Islington arranged temporary accommodation for her and she was registered the housing register.

 

Islington operate a points-based allocation scheme under which the claimant was awarded 110 points (100 for being homeless and 10 for local residence). However, the allocation scheme included provision to set a points “threshold” for bidding on the choice-based lettings system. The threshold had been set at 120 points and therefore although the claimant was on the housing register she wasn’t actually able to bid for properties.

 

The claimant issued judicial review proceedings alleging, firstly, that the application of a points threshold was unlawful insofar as it applied to persons entitled to a reasonable preference.

 

Islington’s evidence was that the threshold assisted in managing the bidding process by limiting the volume of applicants who are bidding and confining this group to those who have a realistic chance of actually being re-housed under the scheme. There is an acute shortage of available accommodation relative to the very large number of applicants. In 2014-15 no applicant had been successful with fewer than 129 points for any type of property.

 

Mr Justice Holman held that the points threshold did not offend s.166A(3). In doing so he distinguished Jakimaviciute, Alemi and HA. In Jakimaviciute and HA the claimants had been excluded from registering altogether. In Alemi there was an absolute bar against bidding for 12 months, whereas in the present case only those who were not eligible for 120 or more points were unable to bid.

 

The Judge held that it was entirely lawful for Islington to operate a threshold and that the level at which they set their threshold is a matter for their judgment, not that of the court.

 

The claimant’s second ground was that the threshold was a breach of s.11(2) Children Act 2004 which required Islington to make arrangements to ensure that they have regard to the need to safeguard and promote the welfare of children when discharging any functions. For similar reasons the judge found that there had been no breach. Islington’s scheme allowed for additional points to be awarded for welfare and the evidence showed that that there was a joint working protocol between the housing and social services departments so that when considering whether to award welfare points housing would contact social services and that they did so in the present case.

 

Islington’s allocation scheme also included provision for a “New Generation scheme” under which additional points were awarded to certain applicants who lived with their parents. One of the criterion for the scheme was that “applicants must be living continuously as an agreed member of the household of an Islington resident for at least three out of the last five years”.

 

When the claimant first applied to Islington in June 2015 she did fall within the New Generation scheme, entitling her to an additional 90 points. However, she was then temporarily rehoused by Islington and on their interpretation, the moment the claimant moved into that temporary rehousing she lost her entitlement to 90 points under the New Generation scheme.

 

The Claimant’s third ground was that she was entitled to points under the New Generation scheme because she had been living with her mother in Islington’s district continuously for at least three out of the last five years.

 

The claim was allowed on the third ground. It was arguable that Islington has misinterpreted the policy. If the block of three years has to be continuing at the moment of decision, then the criterion would simply say “for at least the last three years” or some such words. The issue was remitted for reconsideration.

 

Comment

Both parties sought, and were declined, permission to appeal from Mr Justice Holman who nevertheless extended time for renewed applications to the Court of Appeal. It seems likely that one, if not both, will chose to do so.

 

The decision on the first and second grounds may demonstrate that despite recent successful challenges the Court is still mindful of the decision in R (Ahmad) v Newham London BC [2009] UKHL 14 in which, Baroness Hale of Richmond said at paragraph 12:

 

“… no one suggests that [the claimant] has a right to a house. At most, he has a right to have his application for a house properly considered in accordance with a lawful allocation policy. Part VI of the 1996 Act gives no one a right to a house. This is not surprising as local housing authorities have no general duty to provide housing accommodation.”

 

At paragraph 46, Lord Neuberger of Abbotsbury said:

 

“… it is undesirable for the courts to get involved in questions of how priorities are accorded in housing allocation policies … it seems unlikely that the legislature can have intended that judges should embark on the exercise of telling authorities how to decide on priorities as between applicants in need of rehousing, save in relatively rare and extreme circumstances…”

 

The decision on the third ground is problematic for Islington, who may have a number of applicants affected, but it seems unlikely to be of wider importance. Nevertheless, along with the cases mentioned above, it does demonstrate that notwithstanding the decision in Ahmad the Courts are willing to intervene where it is felt necessary.

 

 

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Anti-Social Behaviour & Sentencing for Contempt: A Recap

Following the recent Court of Appeal decision in Gill v Birmingham City Council [2016] EWCA Civ 608, Alice Richardson reviews the authorities on sentencing in contempt proceedings for breach of injunctions granted to social landlords to prevent anti-social behaviour.

 

Committal for contempt of court

Breach of an injunction is a contempt of court and punishable with an unlimited fine or imprisonment for a period of up to two years: s.14, Contempt of Court Act 1981.

 

Pursuant to s.258 of the Criminal Justice Act 2003, a defendant will be released from custody upon serving half of any period of imprisonment imposed in committal cases. In addition, where a contemnor is committed to prison, the court has power to order his discharge prior to completion of sentence where the contemnor purges his contempt (CPR r.81.31).

 

By CPR 81.29(1) the court making the committal order may also order that its execution will be suspended for such period or on such terms or conditions as it may specify.

 

There are three main objectives in sentencing the defendant, Solihull v Willoughby [2013] EWCA CIV 699, [2013] HLR 36 at [20]:

  1. punishment for breach of the court order;
  2. securing future compliance with it; and;
  • rehabilitation of the defendant.

 

However, there is no tariff for “sentences” for contempt of court. It is entirely a matter for the Judge and every case must inevitably depend upon its own facts: Longhurst Homes Ltd v Killen [2008] EWCA Civ 402 per Hughes LJ, at [14].

 

Suspending a sentence

In Hale v Tanner, Practice Note [2000] 1 W.L.R. 2377, CA Hale LJ acknowledged, at 2380/D, the “dearth of guidance on sentencing for contempt of court” and set out various factors which require particular consideration when deciding whether to suspend any sentence:

 

  1. Suspension is possible in a much wider range of circumstances than it is in criminal cases. It does not have to be the exceptional case. Indeed, it is usually the first way of attempting to secure compliance with the court’s order [2381/C].

 

  1. If imprisonment is appropriate, the length of the committal should be decided without reference to whether or not it is to be suspended. A longer period of committal is not justified because its sting is removed by virtue of its suspension [2381/B].

 

  • The length of the suspension requires separate consideration, although it is often appropriate for it to be linked to continued compliance with the order underlying the committal [2381/D].

 

In Re W(B)(An Infant) [1969] 2 Ch 50 Lord Denning held, at 56/F, that, where a further breach is alleged a Judge hearing an application to activate a suspended committal order has a discretion whether or not to do so and may substitute some alternative penalty instead.

 

Even though it may not be best practice to suspend a committal order indefinitely, it is not unlawful to do so: see Griffin v Griffin [2000] 2 FLR 44, CA at [27].

 

Guidance in ASB cases

There have been a number of decisions of the Court of Appeal which concerned injunctions granted to prevent anti-social behavior (under the old provisions of the Housing Act 1996, or the so-called gang-injunctions granted under the Policing and Crime Act 2009; as yet, none seem to have arisen in the context of the “new” provisions of the Anti-Social Behaviour, Crime and Policing Act 2014). The following authorities in particular provide useful guidance.

 

In Leicester CC v Lewis [2001] 33 H.L.R. 37 (CA), at [19], in the context of the committal for breach of an ASBI, Clark LJ, held that, inter alia, it was important to have the following particular considerations in mind:

(1) Who was intended to be protected and against what?

(2) How strong was the evidence against the appellant in the original injunction proceedings?

(3) Was the breach of a carefully drafted term or a more general prohibition?

(4) Was the breach deliberate?

(5) How serious was the conduct?

(6) Was the defendant of good character?

 

In Amicus Horizon v Thorley [2012] EWCA Civ 817; [2012] H.L.R. 43 it was held, at [5], [9], that in sentencing a defendant for breach of the terms of an anti-social behaviour injunction made under the Housing Act 1996, the court should consider the guidance issued by the Sentencing Guidelines Council in relation to breaches of anti-social behaviour orders made under the Crime and Disorder Act 1998.

 

The committal order should reflect the aggravating and mitigating features of the breaches. Aggravating features will include deliberate flouting of the court’s order on repeated occasions and breach of a suspended order for imprisonment. Mitigating features may comprise personal inadequacy, admissions of breach, a low level of anti-social behaviour and efforts to reform: Solihull v Willoughby [2013] EWCA Civ 699, [2013] H.L.R 36 at [20]. The decision in Amicus Horizon v Thorley does not, however, apply to repeat offenders [23].

 

Although it is not mandatory to deduct any time spent on remand from a sentence passed on committal it is open to the judge to reflect the period on remand in the total period of imprisonment when passing sentence: R (James) v Governor of Birmingham Prison and others [2015] EWCA Civ 58; [2015] 1 W.L.R. 4210.

 

The conduct complained of in contempt proceedings may well also constitute a criminal offence. In that case, if there is more than one set of proceedings the first court to sentence must not allow for, or anticipate, a likely further sentence. It is for the second court to reflect the prior sentence to ensure that the defendant is not punished twice for the same act: Lomas v Parle [2003] EWCA Civ 1804; [2004] 1 W.L.R. 1642 at [48] (see also Slade v Slade [2009] EWCA Civ 748; [2010] 1 W.L.R. 1262).

 

Gill v Birmingham City Council

In Gill the appellant appealed against a committal order sentencing him to 14 months and 23 days’ imprisonment for breach of an anti-social behaviour injunction (“ASBI”).

 

In June 2012 the respondent had obtained an ASBI as a result of an alleged seven-year history of domestic violence against the appellant’s ex-partner, with whom he had a child. The appellant repeatedly breached the ASBI and, prior to the proceedings out of which this appeal arose, there were three previous committal orders made in the County Court for which Mr Gill served custodial sentences.

 

The new proceedings concerned seven alleged breaches, some of which were committed whilst the appellant was on bail. Prior to the proceedings in the County Court the appellant pleaded guilty to criminal charges in relation to some of the incidents in the Magistrate’s Court. At the date of the County Court proceedings he was still awaiting sentencing from the Magistrates.

 

In the County Court Her Honour Judge Wall found all of the breaches proved and sentenced the appellant to a total of 14 months and 23 days’ imprisonment. The appellant was subsequently sentenced in the Magistrates Court to a six sentence to run concurrently with the sentence ordered by HHJ Wall.

 

On appeal to the Court of Appeal the appellant contended that:

(1) the judge was wrong to make findings of fact against him on the basis of the evidence of his ex-partner.

(2) she was wrong to sentence him for the breaches which he had pleaded guilty to in the Magistrates’ Court.

(3) the sentence was manifestly excessive.

 

The Court of Appeal held that:

(1) the judge had been entitled to reach the conclusions she had done.

 

(2) where there were parallel criminal and civil proceedings regarding the same incidents, the first court should not anticipate or allow for a likely future sentence (Lomas v Parle and Slade v Slade). It was for the second court, which should be fully informed, to sentence in the light of the first so as to ensure that there was no double punishment for the same act.

 

(3) It was not clear whether, in the later sentencing the magistrates’ court had taken into account the sentence already imposed by the county court in respect of the same offence. There seemed no basis for any sentence relating to those criminal offences where the county court had already punished the breaches. While that could be an argument on appeal against the magistrates’ court order, it did not affect the validity of the sentence for breaches of the injunction.

 

However, the sentence of 14 months and 23 days was manifestly excessive. The judge had failed to consider that, inter alia, the appellant had pleaded guilty in the magistrates’ court to the two most serious offences. He should have had more credit for those pleas. The Court of Appeal held that the correct sentence was one of 12 months and the appeal was allowed to that extent.

 

Conclusion

Sentencing in contempt cases remains a difficult task for County Court judges. As in many other appeals of this nature the decision in Gill v Birmingham is predominantly fact-specific. However, it does confirm the position in relation to parallel criminal proceedings and may well assist judges who find themselves in a similar position.

 

One practical difficulty arising from the fact that those bringing contempt proceedings are not parties involved in the criminal proceedings is that it is often difficult to establish on what basis the Magistrates Court have reached their decision on sentencing. For that reason, it is preferable that the contempt proceedings are dealt with first in order to minimise the potential for defendants being punished twice for the same act.

 

 

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The Right to Rent and The Immigration Act 2016

In this post Alice Richardson considers the Immigration Act 2016 as it relates to possession proceedings and eviction.

 

How did we get here?

The Immigration Act 2014 sought to prevent landlords and letting agents from renting residential property to people who are unlawfully present in the United Kingdom. It did so by prohibiting letting of residential property to those people who did not have a “right to rent” (s.21) (in general terms, those people not lawfully present); enforcement was by way of civil penalties on landlords and agents (ss.23, 25).

The provisions of the 2014 Act were, and are, controversial. Landlords are not border officials, immigration specialists or experts in identifying valid identity documents. In  Ryanair Ltd v. Secretary of State for Home Department [2016] EWFC B5 the judge held, albeit in a different statutory context, that airline staff cannot be expected to have the same level of knowledge as the UK Border Agency and could not be expected to spot certain forged documents. There are also practical issues with retaining personal data which arise under the Data Protection Act 1998.

Conducting the necessary checks to protect a landlord or agent from falling foul of the Act is potentially time-consuming and costly. Most troubling therefore is the potential for discrimination. In a study carried out by the Joint Council for the Welfare of Immigrants 27% of landlords said that they would be less likely to rent to someone with a “foreign-sounding name or accent”. The research also found that 42% of landlords were less likely to consider someone who does not have a British passport as a result of the Right to Rent requirements. All landlords must be aware that any such discrimination would, of course, be in breach of the provisions of the Equality Act 2010 (s.33, s.13 & s.19 EA 2010).

The 2016 Act

The Immigration Act 2016 received Royal Assent on 12th May 2016. Sections 39-42 concern residential tenancies and will come into force in England on a date to be appointed. The issues with the 2014 Act identified above apply equally, if not even more so, to the new provisions given their punitive effect.

 

s.39 of the 2016 Act amends the Immigration Act 2014 by inserting new ss.33A-C. These provisions introduce the criminal offence of “leasing premises” to someone who does not have a “right to rent”. A landlord, or agent, who is guilty of the offence is liable on conviction, on indictment, to imprisonment for a term of up to five years.  This aspect of the new Act is particularly controversial and has probably received the most press coverage.

However, this post is concerned primarily with the new methods for gaining possession introduced by the 2016 Act.

The “Notice Only” Ground

s.40 of the 2016 Act inserts ss.33D-E into the 2014 Act and s.33D introduces a new “notice only” ground for possession.

By s.33D a landlord may terminate a residential tenancy agreement where he or she has been notified by the Secretary of State that the occupier(s) of the premises is disqualified from renting the premises because of their immigration status. The landlord simply has to give notice in writing, in the prescribed form specifying the date on which the agreement will come to an end (s.33D(3)). That date must not be earlier than the period of 28 days beginning the date the notice is served (s.33D(4)). This method will only apply where all occupiers are disqualified.

Crucially the notice will be enforceable as if it were an order of the High Court (s.33D(7)) and therefore a landlord would, presumably, be able to instruct a High Court Enforcement Officer (“HCEO”) to enforce the notice.

However it is not even necessary for a landlord to instruct an HCEO/bailiff to carry out an eviction where s.33D(2) is met as s.3A Protection From Eviction Act 1977 is amended by s.33E(5) so as to exclude such a tenancy from protection.

This new method of obtaining possession is potentially extremely problematic and will no-doubt face legal challenged once implemented.  The first question is, how would one challenge the Secretary of State’s notice? There is no internal review or appeals process so the only potential way must be by Judicial Review. The next question is who brings the Judicial Review? It is unlikely that the landlord would have inclination or interest in doing so in which case it must be the tenant.

The difficulty then is that the tenant has only 28 days from the date the notice is served before she is evicted and may well be a very vulnerable individual. It seems that the tenant would have to issue a claim for Judicial Review, before the 28 days expire, naming the landlord as an interested party and seeking an injunction against the landlord to prevent him executing the eviction pending the outcome of the Judicial Review claim.

Legal aid should, in theory, be available for such a claim subject to the usual means-testing and merits criteria and the rules on payment in Judicial Review cases contained in the Civil Legal Aid (Remuneration) (Amendment) Regulations 2015. But given the well-known backlog in processing legal aid claims (and the #CCMSfail), there must be real concerns that people will not get funding in time to secure proper representation.

 

The Mandatory Ground

By ss.33E(1) it is an implied term of a residential tenancy agreement to which the subsection applies that the landlord may terminate the tenancy if the premises to which it relates are occupied by an adult who does not have the “right to rent”.

 

By s.33E(2) subsection (1) applies to any tenancy (or sub-tenancy) which is not a protected or statutory tenancy within the meaning of the Rent Act 1977 or an assured tenancy within the meaning of the Housing Act 1988.

S.33E(3) deals with Rent Act tenants (see Case 10A in Part 1 of Schedule 15 to the Rent Act 1977) and s.33E(4) refers to the new mandatory Ground 7B which is inserted into Part 1, Schedule 2 to the Housing Act 1988 by s.41 of the 2016 Act.

Ground 7B applies where an occupier is disqualified; unlike the “notice only” ground it is not necessary for all occupiers to be disqualified. The ground is satisfied where the Secretary of State has given notice in writing to the landlord which identifies that the tenant (or one or more of the joint tenants) or another adult who is occupying the dwelling-house is disqualified as a result of their immigration status from occupying the dwelling-house under the tenancy.

Ground 7B is a mandatory ground and therefore the Court will have no discretion to consider reasonableness.

 

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Stepchildren and succession after divorce

Stepchildren and succession after divorce

 

Annette Cafferkey and Alice Richardson ask whether the Housing Act 1985 (as it read pre-Localism Act 2011), permit a stepchild succeed to a secure tenancy on the divorce of his natural parent from his step-parent?

 

Succession to a secure tenancy

Under s.87 Housing Act 1985, pre-April 2012 Localism Act amendments,

“a person is qualified to succeed to a secure periodic tenancy if he occupied the dwelling house as his only or principal home at the time of the tenant’s death and either:

  1. i) He is the tenant’s spouse or civil partner or
  2. ii) He is another member of the tenant’s family and has resided with the tenant throughout the period of 12 months ending with the tenant’s death.

unless, in either case, the tenant was himself a successor, as defined in section 88”

By s.113(1)(b) of the Act, a person is a “member of the family” if he is, inter alia, that person’s parent, grandparent, child, grandchild, brother, sister, uncle, aunt, nephew or niece. By s.113(2)(c), the stepchild of a person is to be treated as his child.

A stepchild clearly therefore falls within the definition of “member of the family” and could succeed a tenancy from his step-parent.

 

“Former” stepchild

The question that arises is whether the child ceases to be a stepchild when his natural parent and step-parent divorce? Or, even if that were the case, could someone who was a stepchild succeed to the tenancy despite the divorce?

 

The definition of “family member” in s.113 of the 1985 Act is an exhaustive one: Michalak v Wandsworth LBC [2002] EWCA Civ 271; [2002] H.L.R. 39. In Sheffield City Council v Wall [2010] EWCA Civ 922; [2010] H.L.R. 47 the Court of Appeal held that a foster child does not fall within the definition, and any discrimination under Art.14 and Art.8 was justified as a deliberate policy choice made by Parliament as part of the balance involved in the allocation of social housing.

 

Given that the definition of family member under s.113 is exhaustive, the only way that a former stepchild could fall within the Act would be if, in law, he retained that status after his parent has divorced his step-parent.

 

Under some statutory schemes, provision is made for children if they have been treated as a “child of the family”:

 

  1. Under the Matrimonial Causes Act 1973 a step-parent may be required to provide financial provision for a child where the child has been treated as a “child of the family”, even if they have divorced the child’s parent. In determining whether such an order should be made, the court must take into account various factors including whether the step-parent has assumed any responsibility for the child’s maintenance: Snow v Snow [1972] Fam. 74; [1971] 3 W.L.R. 951.

 

  1. Under s.1(1)(d) Inheritance (Provision for Family and Dependants) Act 1975 any person (not being a child of the deceased) who in relation to any marriage or civil partnership to which the deceased was at any time a party, or otherwise in relation to any family in which the deceased at any time stood in the role of a parent, was treated by the deceased as a child of the family may apply to the court for an order under s.2 of that Act.

 

  • Under the Fatal Accidents Act 1976 s.3(f) any person (not being a child of the deceased) who, in the case of any marriage to which the deceased was at any time a party, was treated by the deceased as a child of the family in relation to that marriage is classed as a “dependent” for the purposes of a claim for damages.

 

  1. Under s.1(2) and Part 2 of Schedule 1 of the Marriage Act 1949 a marriage between a person and a child of their former spouse/ the former spouse of a parent is void if the younger party was at any time before attaining the age of 18 a child of the family.

These various provisions, of course, do not answer question of whether the status of stepchild is retained following the divorce of his parent.

 

The case-law

There is scant authority in England and Wales that deals with the status of stepchildren or former stepchildren.

 

In Mander v O’Toole [1948] NZLR 909 the New Zealand Supreme Court held that the term “stepson”, in s.2 of the Deaths by Accident Compensation Act 1908, extended only to children who possessed that character by virtue of a marriage subsisting when the cause of action sought to be enforced under the statute arose. The court held at [912] that any suggestion that the step-parent/child relationship was retained after divorce;

“… implies that the consequential and sub-ordinate relationships remain unbroken whilst the link by which they were created is complete severed… if Mr West’s contention is correct, the stepson of the man to whom his mother is currently married might also be the stepson to any number of other men whom his mother may, during the life of the son, have married and divorced”.

 

That position is established in the US: Brotherhood of Locomotive Firemen and Enginemen v. Hogan (1934) 5 Fed. Supp. 598 (at 604) where the court held that:

“The wife in this case was the cause of the affinity which existed between Kennedy and her children. When the cause ceases, it should logically follow that the result ceases. No sound reason for any other view occurs to the Court.”

 

The same interpretation is taken in Australia. In Re Burt [1988] 1 Qd R 23 the Supreme Court of Queensland relied on Mander v O’Toole and Hogan and held at [32] that:

“The status of stepchild, as ordinarily understood, does not apply to a case in which the natural parent has been divorced from the step-parent, and probably does not survive the death of the natural parent”.

 

Conclusion

The defining feature of a step-parent/child relationship is that the step-parent is married to the natural parent. The status of stepchild does not endure when that marriage ends: it is not the equivalent to adoption. The reasoning in Mander and Hogan must surely be correct.

 

This could result in some seemingly harsh decisions where a step-child, despite the divorce, continues to consider his former step-parent to be his parent, perhaps having been brought up by him/her, the divorce only occurring when the child is an adult.

 

Whether the status is severed by the death of the natural parent, as suggested in Re Burt, appears to be more doubtful, where the marriage has endured “til death [they] did part”.

 

The statutory schemes outlined above make provision for these circumstance. But the Housing Act 1985, which, notably, was enacted after each of those schemes, makes no such provision.

 

It seems likely that a former stepchild could be a “status” for the purposes of Art.14. However, any challenge on the basis of discrimination under Art.14 and Art.8 may be difficult, below the Supreme Court in any event, unless Sheffield City Council v Wall could be distinguished.

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Allocation schemes and unlawful discrimination

Sam Madge-Wyld looks at challenges to housing allocation schemes.

In Ahmad v Newham LBC [2009] UKHL 14; [2009] HLR 31, Lady Hale said of challenges to allocation schemes:

“[22]… Castigating a scheme as irrational is of little help to anyone unless a rational alternative can be suggested. Sometimes it may be possible to do this. But where the question is one of overall policy, as opposed to individual entitlement, it is very unlikely that judges will have the tools available to make the choices which Parliament has required a housing authority to make.”

That was because,

“[15]… The trouble is that any judicial decision, based as it is bound to be on the facts of the particular case, that greater weight should be given to one factor, or to a particular accumulation of factors, means that lesser weight will have to be given to other factors. The court is in no position to rewrite the whole policy and to weigh the claims of the multitude who are not before the court against the claims of the few who are.”

The previous coalition Government’s localism agenda also adopted a similar “hands off” approach in England. While every scheme would still have to give a reasonable preference to certain classes of people (e.g. the homeless and those in overcrowded accommodation), individual authorities could determine the priority each group were to be given within the scheme and could even exclude certain classes of people from the scheme: s.160ZA and s.166A, Housing Act 1996 (as inserted by Localism Act 2011). The new statutory guidance, issued in 2012 to accompany the changes made by the Localism Act 2011, also encouraged authorities to use this flexibility to support working households with a low income: Allocation of accommodation: guidance for local housing authorities in England, para.4.27.

One would have thought that the combination of Ahmad, the Localism Act 2011 amendment and the statutory guidance ought to have shut the door on the majority of successful challenges to authority’s allocation schemes. This was, by and large, the case for the first five years after Ahmad. For example, in R (Hillsden) v Epping Forest DC [2015] EWHC 98 (Admin), a scheme which prevented an applicant who had not been resident in the authority’s district for more than three years from ever joining the waiting list, whatever the circumstances, was lawful.

A “hands off” approach is not the same, however, as giving authorities carte blanche to frame schemes in any way they see fit. The 2012 Guidance reminded authorities that

“[3.20]… In framing their qualification criteria, authorities will need to have regard to their duties under the equalities legislation, as well as the requirement in s.166A(3) to give overall priority for an allocation to people in the reasonable preference categories.”

Two cases concerning Ealing’s scheme have illustrated the court’s increasing willingness to hold aspects of schemes as being unlawful which, on their face, appear to be following the statutory guidance.

R (H & others) v Ealing LBC [2016] EWHC 841 (Admin)

In R (H & others) v Ealing LBC, Ealing’s scheme was challenged for a second time (see below for the first challenge). Ealing’s scheme provided that 20% of allocations would be made to people who did not necessarily have a reasonable preference but who were either working at least 24 hours a week or who were an existing secure tenant who had complied with their terms of tenancy. This was therefore precisely the sort of scheme that the Government had encouraged authorities to adopt in its statutory guidance.   

H argued, however, that the scheme put women, the disabled and the elderly at a disadvantage because they were much less likely to be able to satisfy the qualifying criterion of working 24 hours per week. Accordingly, the scheme indirectly discriminated – under s.19, Equality Act 2010 and Art.14, ECHR – against such people and was discrimination which could not be justified. Ealing contended that the fact that those persons were still entitled to apply for the remaining 80% of council properties meant that the scheme as a whole did not discriminate against women, the disabled or the elderly or, if it did, it could be justified.

The High Court held, however, that the evidence showed that since the scheme had been amended the number of allocations made to disabled persons had fallen by 3%; in the absence of an explanation for this fall it followed that there was prima facie evidence of disadvantage to disabled persons. Nor could the discrimination be justified. Other authorities, who had adopted similar schemes, had adopted a “safety valve” which meant that people who could not work because of their age, disability or responsibility for caring for a disabled child were still eligible to bid for the same properties as those who had worked 24 hours a week. It followed that this less intrusive measure could have been adopted. The court found that the result was the same under both the Equality Act and the ECHR as the test for justification under the ECHR for policy made by local authorities was not whether the policy was “manifestly without reasonable foundation”.

In any event, Ealing had also breached s.149, Equality Act 2010, i.e. the failure to have due regard to the public sector equality duty, because it had not made any real enquiry into the potential discriminatory effects of the part of the scheme that excluded people who were not working 24 hours a week or more. Ealing had not been entitled to consider the scheme as a whole when considering the impact the change would have. Likewise, Ealing had failed to have regard to the need to safeguard and promote the welfare of children under s.11, Children Act 2004. No consideration had been given to how children would be affected.

While it would be surprising if this was not appealed (the finding that an authority is unable to justify discrimination that arises under a local lettings policy by reference to the rest of the scheme is a particularly surprising development which appears to cut across the whole localism agenda), it does evidence the courts’ new willingness to interfere in questions of allocations policy that, post Ahmad, it had generally ceased to.

R (HA) v Ealing LBC [2015] EWHC 2375 (Admin)

The statutory guidance (referred to above) also envisaged that authorities had the power to exclude certain classes of people from an authority’s scheme who had a reasonable preference and explained that this might apply to persons who are guilty of anti-social behaviour and who did not have a local connection to the authority’s area: 2012 Guidance, paras 3.21-3.22. This power to adopt a residency requirement was emphasised in further guidance published in 2013 (Providing Social Housing for Local People).  In the 2013 Guidance the Secretary of State said that he believed “that including a residency requirement is appropriate and strongly encourages all housing authorities to adopt such an approach”: para.13.

Moreover, in R. (Jakimaviciute) v Hammersmith and Fulham LBC [2014] EWCA Civ 1438; [2015] HLR 5, the Court of Appeal held that such a requirement was lawful: authorities could exclude people with a reasonable preference from applying for accommodation provided that the reason for the exclusion was because of something that was unrelated to the circumstances that gave rise to their reasonable preference. Authorities could not, however, exclude people, as a class, from applying under the scheme by reference to their reasonable preference. One of the lawful examples given by the Court of Appeal was, however, where a scheme had a residency requirement.

Surprisingly, in R (HA) v Ealing LBC, the High Court held that a scheme that excluded people, other than in exceptional circumstances, from applying for accommodation who had not been resident in the borough for more than five years was unlawful because it excluded people with a reasonable preference. That, however, belies a total misunderstanding of the decision in Jakimaviciute and is in direct contradiction of the statutory guidance and Hillsden.

More interesting was the argument concerning discrimination. Ealing had, perhaps unwisely, not given effect to the statutory guidance which had suggested that:

 “[3.22] … [W]hen framing residency criteria, authorities may wish to consider the position of people who are moving into the district to take up work or to escape violence, or homeless applicants or children in care who are placed out of borough.”

HA had suffered domestic violence at an address in Hounslow. As a result, she had left this address and applied to Ealing for assistance under Part 7, Housing Act 1996. Ealing decided that it owed her the full duty under s.193(2). She subsequently applied to join Ealing’s housing register. Her application was, however, rejected because Ealing’s allocation scheme provided that, absent exceptional circumstances, applicants who had not lived in Ealing for the last five years could not apply for accommodation under Part 6. As in the latter case of H, HA argued that the scheme breached the Equality Act 2010, ECHR and s.11, Children Act 2004 on the basis that women are more likely to be victims of domestic violence than men and so are significantly less likely to be able to establish sufficient residency criteria to meet the blanket qualifying criteria.

The High Court agreed. The scheme had discriminated against women and the discrimination could not be justified. What was interesting was the court’s dismissal of the argument that the “exceptional circumstances” provision in the scheme prevented any discriminatory conduct, holding that “the residual discretion permitted by the policy does not save it if there is no justification for the difference”, at [30].

As there was no justification for the difference in treatment the scheme was held to be unlawful.

Presumably, this means that an authority will have to identify all the potential ways in which the scheme may unlawfully discriminate against persons and prevent it accordingly unless it can be justified. While this may be possible in obvious cases of discrimination – and indeed ought to have obviously included those moving to escape domestic violence – it is impossible to identify every case of discrimination before it arises. Moreover, discrimination cannot be justified unless it is foreseen first or there is a residual discretion that can ameliorate its effect as and when it arises.

Therefore a scheme that contains has an exceptional circumstances provision ought to justify any discrimination provided the authority can show that it is exercised to prevent discrimination. In the bedroom tax cases (see The ever confusing tale of the bedroom tax), the Court of Appeal has held that a discriminatory scheme can be justified by the exercise of a residual discretion (in that case the provision of discretionary housing payments). After all, a scheme is only discriminatory (be it under Art.18, TFEU, Art.14, ECHR, or s.19, Equality Act 2010) if its effect is to actually disadvantage people of a certain class in comparison to those of another class. A scheme which permits officers to depart from the local residence provision is not discriminatory if in practice officers do so to prevent unlawful discrimination from occurring. This also accords with the needs of any scheme to be flexible enough to prevent injustice from occurring. This though appears to have been a point that was not considered in HA.

That is not to say that the result in HA was necessarily wrong. The failure to apply the exceptional circumstances provision to HA was both discriminatory and plainly irrational. However, that ought to have been the basis for the decision not that the scheme itself was unlawful.

Conclusion

Both cases, in addition to Jakimaviciute, illustrate the court’s re-found lack of deference to authorities’ allocation schemes. Although the arguments are dressed in new clothing they are not at all dissimilar to the arguments that preceded Ahmad, i.e. the court should intervene where an allocation scheme is not providing sufficient priority to the more vulnerable groups in society. It is certainly questionable, however, whether that is an approach that a court is equipped to take. Lady Hale certainly didn’t think so in Ahmad.

This should, however, be an encouraging development for advisers of applicants wishing to challenge schemes as almost every scheme will, by its nature, be discriminatory as it gives priority to some groups over others. Whether it accords with the underlying reasoning in Ahmad or was the intention of the Localism Act 2011 is another matter entirely.

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Water, water everywhere …

Sam Madge-Wyld considers the practice of local authorities charging tenants for water as part of the rent.

In 1989, the water industry was privatised. In London, the responsibility for providing, and charging for, the supply of water and wastewater services was transferred to Thames Water. Since 1989 many housing associations and local authorities, including the London Borough of Southwark, have entered into agreements with Thames Water – and other similar companies throughout the country – to collect the charges for water and wastewater services from many of their tenants (usually from tenants living in flats or in other unmetered properties). Authorities and associations do this by making it a condition of the tenancy agreement that the tenant pay, in addition to rent, water charges. This is a very common arrangement: Southwark alone has 37,000 tenants who live in properties that are not fitted with a water meter.

According to Thames Water, “the purpose of these arrangements is to enable [it] to collect charges from tenants in a more efficient way”, as the local authority assumes the risk for the non-payment of such charges and bad debts. As a result, Thames Water agrees to pay the authorities and associations that collect such charges for it a commission for doing so.

This method of collecting water charges has proved unpopular with some tenants on the ground that they believe they are required to pay more for the water they are supplied than those people whose charges are collected by Thames Water. This is especially true for those who pay regularly. Ms Jones – in Jones v Southwark LBC [2016] EWHC 457 (Ch) – is the latest tenant to challenge the legality of this arrangement. Happily for her, she is also the first so far to have been successful.

Previous challenges

Before considering the Jones case, it is first necessary to consider two earlier unsuccessful challenges. In Lambeth LBC v Thomas (1997) 30 HLR 89, Lambeth had entered into a similar agreement with Thames Water to collect the charges for the supply of water and wastewater services from its tenants. Twice a year Lambeth paid Thames Water the total water charges for all of the relevant properties. This sum was, however, discounted to take into account unoccupied properties and its cost of collection. This discount was retained by Lambeth and ensured that each year it obtained a surplus, which it used to off-set other costs in its housing revenue account. The Court of Appeal held that this arrangement was lawful and Ms Thomas was legally obliged, under the terms of her tenancy, to pay Lambeth the water charges. Moreover, if she failed to do she was at risk of being evicted.

More recently, in Rochdale BC v Dixon [2011] EWCA Civ 1173; [2012] HLR 6, Rochdale had entered into an agreement with United Utilities for Rochdale to recover on behalf of United Utilities the water charges, already fixed by United Utilities, from its tenants. In 2005, Rochdale amended the terms of all of the tenancy agreements with its secure tenants so as to enable it to do so. Rochdale, in consideration for collecting the charges, were paid a commission, i.e. a fixed charge of £28 per property and a variable charge of 8 per cent of the water charges. The fixed charge was intended both to cover Rochdale’s costs of collection and to provide a profit. The variable charge of 8% was intended to allow for vacant properties and bad debt. On four dates in each financial year, the authority paid one quarter of the total water charges for the year and the company paid one quarter of the Commission.

Mr Dixon contended that Rochdale’s power to enter into an agreement with United Utilities was governed by s.1, Local Authorities (Goods and Services) Act 1970. Section 1, as amended by the Water Consolidation (Consequential Provisions) Act 1991, provided that while an authority could enter into an agreement with a water undertaker, it only had the power to enter into an agreement “for the collection and recovery by the authority, on behalf of any water undertaker or sewerage undertaker, of any charges fixed by the undertaker”. Mr Dixon argued that Rochdale had in effect purchased the supply of water and sewage services from United Utilities and was re-selling it to its tenants at a profit; it was not therefore collecting water charges on behalf of United Utilities. The Court of Appeal, however, disagreed and held that United Utilities remained the water undertaker, i.e. it still supplied the water to Rochdale’s tenants, and that Rochdale was simply its agent. The charges had been fixed by United Utilities and it was simply that the mechanism for the collection and recovery of those liabilities had been undertaken by Rochdale for United Utilities. It was irrelevant that Rochdale paid United Utilities in bulk or that it charged an additional sum for collecting the charges.

Jones v Southwark

Southwark had a similar arrangement with Thames Water, which had been entered into in 2000 (albeit had been subsequently amended in 2013 after another case was settled; the court did not consider the meaning of the latest agreement as Thames Water needed to be joined to the proceedings). Under the 2000 agreement, Thames Water determined the water and sewerage service charge for each “unmeasured property” that it was agreed Southwark would collect the charges from. Thames Water then billed Southwark the total sum of all such charges less two sums: for void allowances (5%) and a collection commission (18%). Southwark accepted in evidence that this was an important source of funding for it and that the void allowance did not always correspond to the actual number of voids, for example in one year the number of voids was around 1% but the void allowance assumed 5%.

The agreement described Thames Water as the provider and Southwark as the customer. It further provided that Southwark would pay for Thames Water to provide water and sewerage services to some of its premises.

Ms Jones argued, like Mr Dixon, that the 2000 Agreement involved Thames Water supplying Southwark with water and sewerage services and Southwark’s tenants in turn buying such services from Southwark. Ms Jones further argued, unlike Mr Dixon, that Southwark was a re-seller of water and sewerage services within the meaning of the Water Resale Order 2006. The 2006 Order defined a Re-seller as being any person, other than a relevant undertaker – i.e. a supplier of water and sewerage services under the Water Industry Act 1991 such as Thames Water – who provides to a Purchaser, i.e. a person who occupies any dwelling and who buys from a Re-seller any water or sewerage services, a supply of piped water or sewerage service which a Water Undertaker has supplied, directly or indirectly, to the Re-seller.

Ms Jones also argued that under Thames Water’s charging scheme that had persisted until 2010, she was not in any event liable to pay Thames Water for water or sewerage services as Thames Water’s charging scheme had provided that where the relevant premises to which the supply is made is let on a tenancy of less than twelve months or licence, the owner of the premises shall be regarded as the occupier and be liable for charges except where some other person has paid the charges or is liable by agreement with Thames Water. As Ms Jones was a weekly periodic tenant Southwark had been liable to pay Thames Water for the supply of water and sewerage services and had, in turn, passed the cost onto her.

Whether Southwark was a re-seller of water within the meaning of the 2006 Order was important because the 2006 Order imposed a maximum charge for water and sewerage services that could be levied by the re-seller. It did not allow a re-seller to recover a commission for collecting unpaid charges or to make a profit on the voids allowance. Ms Jones argued that she, and all of Southwark’s other tenants who paid Southwark for water and sewerage services, had therefore been overcharged.

Southwark argued that, as in Thomas and Dixon, the 2000 agreement provided for it to collect the water charges on Thames Water’s behalf and that it was merely Thames Water’s agent. Newey J, however, disagreed.  The 2000 agreement was different to the one between Rochdale and United Utilities: it contained no reference to tenants being liable to pay water or sewerage charges to Thames Water, to Thames Water authorising Southwark to collect such charges on its behalf, to Southwark owing any duty of skill and care or to Southwark having any obligation to invoice tenants or in respect of complaints from them. Moreover, the commission paid to Southwark was nothing of the sort; it simply reduced what Southwark had to pay Thames Water and was not conditional on a service being performed.

Perhaps most importantly, however, until 2010 it was Southwark who had been liable to pay Thames Water for water charges; it could not therefore have been Thames Water’s agent during that time as its tenants were not liable to pay Thames Water.

That final point seems the most important as it is hard to see any real distinction between the arrangement in Rochdale, Lambeth and Southwark. They all proceeded on the same model of agreement.

The impact of this decision

Obviously for Southwark this decision has very wide-ranging implications. Some 37,000 of its tenants appear to have been over-charged for water and sewerage services over a period of 10 years. Although the decision does not quantify the amount at stake, one bill from 2005 put the discount (i.e. the commission and void allowance) at £126,000. It is not just Southwark, however, who this may affect. Thames Water gave evidence that it had “commercial agency arrangements” in place with 69 local authorities and housing associations that covered 375,000 properties.

It is important to note at this stage two points: this decision will almost certainly be appealed and seeing as contrary decisions were reached in Thomas and Dixon the prospects are not fanciful. Secondly, the decision only concerned whether Southwark had been entitled to levy the charges that it did. The decision did not decide whether or how much Southwark had to reimburse tenants who had been overcharged. Ordinarily, where money has been paid to another in circumstances where it was not due such money can be recovered by a restitutionary claim. Such a claim can, however, be defended on the basis that the authority has, in good faith, paid the money to a third party and, but for the payment by the tenant, would not have paid the third party. Any surplus, one assumes, has been credited to the housing revenue account and used to pay third parties, e.g. contractors.

However, this defence is unlikely to apply to Southwark, because s.150(5), Water Industry Act 1991 gives Ms Jones, and other tenants in her position, an express statutory right to recover from Southwark any overpayment she has made. It does not appear therefore that she will need to rely on the law of restitution to recover the sums paid. Presumably, however, as s.9, Limitation Act 1980 will apply, any sum that can be recovered will be limited to six years from the date that her claim was issued.

In the meantime, tenants with arrears who are being brought to court by Southwark in possession proceedings, or indeed any other association or authority with a similar agreement with Thames Water, would be wise to dispute the level of the arrears in respect of any water charges and to put Southwark to proof. Presumably, any such defence would also include a counterclaim. It is going to very difficult for Southwark, for the time being at least, to be able to prove what water rates were payable before 2013. This is likely to cause Southwark some difficulty in litigating possession claims unless it agrees to waive the water charge.

Finally, if Southwark has been using this revenue to off-set the housing revenue account, it will have to find other ways of doing so. Historically, the easiest and most obvious way of doing so would have been to increase the rents of its secure tenants. However, this will soon no longer be an option, as the Welfare Reform and Work Bill, once passed, will require it to cut rents by 1% per year for four years.

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