Green & Anorv London Borough of Croydon

This is an appeal from a decision of Mr Recorder Spon-Smith given on 13^th March 2007 on an appeal from a review of a homelessness matter carried out by the London Borough of Croydon (“Croydon”) in relation to the appellants. The question which arises on this appeal is whether it can be said that Croydon erred in law in failing to make all the necessary inquiries when carrying out that review. After hearing argument, this court gave its decision in the appeal, which was that the appeal should be dismissed, with reasons to be given later. These judgments contain those reasons.

Until its determination by a possession order made on 4^th January 2006, the appellants were the tenants of property known as 4 Newlands Road, Norbury, London SW16. They held pursuant to a tenancy agreement dated 2^nd January 2001 which created an assured shorthold tenancy agreement. The rent provided in the tenancy agreement was £650 per month. After about a year, the landlord indicated that the rent was going to be increased to £700 per month. From January 2002 the appellants paid that increased sum as their rent, though from time to time there were arrears. It is plain on the facts that that was the rate that, in terms of payments made, the appellants treated as being due. The landlord did not serve any formal notice of increase. The appellants say that they registered a query when the landlord’s agents said that the rent was going up, and the agents said they would get the matter sorted out but the appellants never received a new tenancy agreement.

By October 2005 the amount of the arrears that had built up, and the pattern of arrears (calculating the rent as £700 per month) was such that the landlord served a notice seeking possession. He did so on grounds 8, 10 and 11 of the Housing Act 1996 – all rent arrears related grounds. The “current rent” in that document was stated as being £650 per calendar month. On 27^th October 2005 the landlord issued possession proceedings. In the particulars of claim, which are in the prescribed form, the current rent was again described as being £650 and the daily rate was said to be calculable at £21.36 per day – a figure which again reflects a rent of £650. However, details of the rent arrears were shown on an attached rent statement. That statement was a multi-column document, and three of the columns were the amount demanded from time to time, the credits received from time to time since January 2004, and the balance. The monthly amount demanded is indicated as being £700, and many credits of £700 appear. There is no credit for £650 until 3^rd October 2005, when a single one appears. There are some odd amounts shown to have been received which are obviously either part payments or payments on account of the arrears. The arrears shown as at date of the statement (5^th November 2005) were £1,730.

The possession proceedings were due for hearing on 4^th January 2006. Between service of the proceedings in about October and the hearing date, Mr Green had several interviews with Croydon Housing Department. The hearing took place on 4^th January 2006. Mr Green said that he was surprised that the council did not send a representative to assist because he was expecting that they would, and at the hearing he became tongue tied and as a result did not take a point about the quantum of the rent being £650 and not £700. It seems to be common ground that if the rent was indeed at the lower amount, then there would have been no arrears, or no significant arrears. There is little direct evidence of what happened at the hearing, but it is likely to have been a short one. The matter was heard by District Judge Freeborough. He made a possession order on ground 8, ordered a money judgment in the sum of £2,830 and made a further order that the appellants pay the landlord £23.01 per day for use and occupation from 1^st February 2006 until possession be given. That figure of £23.01 reflects a passing rent of £700 per month when annualised.

The possession order having been made, the appellants applied to Croydon for housing. A number of meetings took place and they provided information to the council. It seems the possession order was executed on 6^th March 2006, and on the same day they were informed that the council had determined that they were intentionally homeless because they had not paid rent. The effect of such a determination is that the council owes a different, and lower, set of duties to the appellants than would be owed if they had been found to be unintentionally homeless. The appellants sought a review of that decision pursuant to s.202 of the Housing Act 1996, which they were entitled to do. The review confirmed the decision. The appellants then appealed to the county court from that review under s.204 of the 1996 Act. That appeal came before Mr Recorder Spon-Smith and on 13^th March 2007 he dismissed it. The ground of appeal before him, as it was before us, was that Croydon had failed to investigate properly assertions made by the appellants that their rent was only £650 and not £700, on which basis there would have been no arrears. They said that on that footing a possession order should not have been made, and they were therefore not intentionally homeless. He recorded his decision on that point in paragraph 8 of his judgment:

That is the decision appealed from. Permission to appeal was given by Sir Henry Brooke on 21^st June 2007.

The point taken on this appeal is the same as that run in the county court, namely that the local authority did not make proper inquiries. Mr David Carter, who appeared for the appellants, said that the reviews officer, a Miss Duncan, was put on notice of the disputed arrears and should have made further inquiries to establish whether or not the district judge’s decision that the appellants had fallen into arrears was correct. Inquiries should have been made of the landlord in order to find out the position and consideration should have been given as to why there were inconsistencies in the particulars of claim (between the stated passing rent and the passing rent shown in the arrears statement). There should have been an investigation as to whether the appellants continued to pay under protest, or whether in fact there was an agreement to pay at the new rent. This would have involved, amongst other things, an investigation as to whether the discrepancies in the particulars of claim were drawn to the attention of the district judge, and Mr Carter went so far as to say inquiries should have been made of the district judge himself. These were all, said Mr Carter, inquiries which it was necessary for the reviews officer to make, and she made none of them.

The duty of a local authority considering applications from those who claim to be homeless is set out in s.184 of the 1996 Act:

That concept was elaborated by Neill LJ in R v Royal Borough of Kensington ex p Bayani (1990) 22 HLR 406 at 409:

A challenge to the decision of a reviewing officer presents a high hurdle, as Mr Carter accepted. This is made clear by what Brooke LJ said in Cramp v Hastings BC [2005] 4 All ER 1014. Having drawn attention to the fact that since Bayani a review stage in the local authority had been introduced and challenges to that review went to the county court rather than the high court on a judicial review application, he then made observations about the approach to a challenge to the reviewing officer’s decision. He went on to say:

It is therefore necessary to consider the facts of this case against that background. The central question is whether or not the reviews officer was entitled to assume the correctness of, or to rely on the judgment of the county court on whether there were or were not rent arrears in this case, or whether she was obliged to make her own inquiries as to what the rent was despite the order made by the county court and the findings implicit in that order?

The findings of the reviews officer appear in a letter that she wrote to Messrs Flack & Co, the appellants’ solicitors, on 8^th May 2006. The following material points emerge from that letter:

It is a long and ostensibly very thorough document, running to some seven pages.

It sets out the sort of material relied on in assessing the position of the appellants, which is said to include information from the council’s housing benefit records, information concerning the county court action and a rent account statement. It is also claimed that there was a consideration of the fruits of various meetings between the council’s housing officers and the appellants.

The correct statutory background is referred to.

So far as the payment of rent is concerned, it says this on page 2:

It refers to the “notice seeking possession” and identifies the discrepancy in rent amounts appearing in the claim form:

It deals with a suggestion made by Messrs Flack & Co, who were solicitors for the appellants by that time, that the council was at fault in not making sure that the appellants received legal advice much earlier than they in fact did, and in particular before the possession order was made. This is not a point which arises on this appeal.

It states that inquiries made of Miss Jones about the meeting immediately before the possession hearing revealed that Miss Jones said that the appellants had already partially completed a form of defence and she advised them to include their concerns about the accuracy of the arrears statement in their defence at court, and Mr Green told her he had already done so. I deal below with the contents of the defence. At this point I would observe that that information from Miss Jones does not appear in an attendance note that she took at the meeting.

It rejects, as an issue in the review, whether the outcome of the possession proceedings would have been different had the appellants been legally represented. It states that this is no more than speculation.

It rejects a number of other allegations about failures to make inquiries. It makes the point that the appellants were aware of their obligation (in general terms) to pay rent for premises which they occupy. It refers more than once to the claiming of housing benefit, and in particular says this:

Having considered a large number of matters put to them by Messrs Flack & Co, the letter concludes that there was a persistent failure to pay rent, and taking all of the matters into consideration, the reviews officer came to the conclusion that the failure to pay rent was a deliberate act and that the appellants were intentionally homeless.

It is said that that letter reveals that the reviews officer did not conduct an investigation into whether or not the rent was £700 or £650. That is true, to an extent. However, it is plain from the letter, and from the material available to the reviews officer, that some material other than the decision of the county court was available to and considered by her. That material was as follows:

The housing benefit records.

A long letter from Messrs Flack & Co drawing various matters, including the alleged unreliability of rent arrear figures, to the attention of the reviews officer.

A rent schedule showing £700 per month to have been demanded and paid on a large number of occasions.

A large number of receipts for rent, provided by Mr Green, which again show £700 to have been frequently paid.

It is said that the form of defence was available to the reviews officer, and I am prepared to assume that it was. That document contained two elements which are said to be inconsistent with each other and which should have put the reviews officer on inquiry as to the true rental position. On the first page, under a tick box indicating that the appellants did not agree with what was said about the premises and the tenancy agreement in the particulars of claim, the following reason was given:

An interview note taken by Miss Jones on 3^rd January 2005 contains the following words: “Cust [i.e. customer] claim form filled in and I have advised him to speak to me tomorrow to let me know the outcome”. That is probably a reference to the defence form being filled in at that time. The evidence is equivocal as to when and by whom the defence form was filled in. However, nothing in this note or in any other note records an agreement by Mr Green that the increased rental was agreed. To that extent there is no support for the statement to that effect in the reviews officer’s decision letter.

On 6^th February 2006 a standard form inquiry was made of the landlord. In answer to the question “How much was the weekly/monthly rent?” the landlord’s agents have answered (by marking the amount in the appropriate place on a copy of the letter) “£700”. That letter seems to have been followed up by an oral inquiry on 6^th March 2006 in which the agents are reported as having complained about “constant arrears” and bounced cheques. The note of Miss Yamin who apparently took the telephone call records “As can see on rent statement printout rent was never paid up to date, very erratic payment”. The agents were thereby reinforcing the landlord’s case that £700 per month was due.

The possession order showed a daily rate figure which, as pointed out above, is consistent only with £700 per month being paid as rent. It also showed that counsel had attended the hearing for the claimant.

That, then, was what the reviews officer did and the basis on which she did it. Was it necessary for her to do more, and embark on an active consideration of what the rent was? On the one hand she was faced with a decision of a court of competent jurisdiction which was consistent only with a finding that the monthly rent was £700. That was supported by evidence that the tenants had been paying rent at that rate, without a continued protest, for some 3 years, and it is probable that that was the basis on which they had been claiming housing benefit. On the other side of the coin she had some equivocal documents from the landlord, and an indication that the tenants had raised some point about the rent when it was increased, but not subsequently. I am afraid that I find it impossible to say, in those circumstances, that any reasonable reviews officer would have carried out an investigation into the subject in the light of the court’s decision. Apart from the fact that the evidence supported the inferences to be drawn from the court’s decision, it seems to me to require an impracticable degree of inquiry in the circumstances. A further inquiry would require the officer to conduct the sort of investigation that a county court would carry out when faced with such a question, but without the advantages that the court would have (including, probably, having the full participation of the landlord). The county court had apparently declined to do that - had the district judge thought that there was an arguable defence (or something that needed investigation) he would have been required to have adjourned the case for that purpose. He did not do so. Of course, if the court decision had not been there, then further inquiries might have been necessary (I do not consider it necessary to consider whether that was in fact the case), but on the facts of this case she had the court’s decision and was entitled to assume that the court would do what was (in these circumstances) the court’s job. In those circumstances she was entitled to rely on the court’s decision and not embark on inquiries designed to go behind it. It was not necessary to embark on them, and it cannot be said that any reasonable officer would have formed the view that it was. Such inquiries would go well beyond the test set out by Brooke LJ in Cramp. I therefore agree with the recorder; he was right to dismiss the appeal from the review.

This second appeal has reached this court because Sir Henry Brooke considered that it raised an important point of practice, which might almost be considered a point of principle. In giving his reasons for giving permission to appeal he said:

It follows that this appeal should be dismissed with costs.

I agree.

I also agree.