This appeal concerns whether the Respondent Council acted in accordance with the law in concluding that it was satisfied that the Appellant had become homeless intentionally, for the purposes of Part 7 of the Housing Act 1996.

The Appellant is a woman of 24 years old who has two small children. It is agreed that she became homeless on 5 November 2007, that she was eligible for assistance and in priority need. The Council refused to provide more than temporary housing for her on the basis that the circumstances in which she had become homeless showed that, in the terms of the Act, she had become homeless intentionally. They maintained this position on appeal, and His Honour Judge Welchman, in a judgment delivered on 1 July 2008, held that they had not made any error of law in reaching this conclusion. With permission granted by Jacob LJ, she appeals to this court. Many other factors featured in the council’s original and review decisions, but this was the principal point on which the case was decided in the county court, and the sole point argued before us.

The circumstances are unusual. On 30 May 2006 the Appellant entered into a tenancy agreement with a private landlord, expressed to be for a year expiring on 27 May 2007. On 16 April 2007 the landlord wrote to her to say that he could not extend the tenancy and asking her to leave by 31 May 2007. On receiving this letter the Appellant went to a local advice centre run by the Council in Peckham, called a One-Stop Shop. According to her account, given in an interview at the stage of the review process, she was told to go to see the Homeless Persons Unit (HPU), and was also told that they would put her in temporary accommodation, and that if she had friends or relations who could provide space for her belongings, they could be left with them. She said she was shocked and did not want to be treated as homeless. She did not take the advice to visit the HPU. Instead, she placed her reliance on the process of bidding for more permanent Council accommodation, and on asking the landlord to allow her more time. He was willing to do so for the time being. However, in November he said he needed the property back, and asked her to leave. She had not made any progress with the Council’s bidding procedure in that time. So it was that, when the landlord came to ask her to leave on 5 November, she believed that she had to go, and she did so.

It is common ground that the landlord was not entitled to possession without a court order, so that she need not have left then. It is also accepted that, if she had followed the advice and gone to see the HPU, they would have told her this, and she would then have been aware that she could and should tell the landlord that she would not leave except if ordered to do so by the court. If, following court proceedings, she had been ordered to leave, then her giving up possession would not have been voluntary or intentional, and she would have had the benefit of the full duty under Part 7 of the Act. The question is whether it was intentional, given that she did not know that she did not need to leave on his demand.

The duties of local housing authorities as regards homeless persons are set out in Part 7 of the 1996 Act. The present issue turns on section 191, which is as follows:

Subsection (3) is not directly relevant, but is clearly aimed at one type of situation which would be an abuse of the legislation. Subsection (1) is, in itself, clear, simple and absolute. Apart from the fact that the act or omission must be deliberate, nothing in it allows the state of mind of the person in question to be considered as to, for example, whether the consequence of homelessness was foreseen. Subsection (2) qualifies it in one respect, by excluding an act or omission on the part of someone who was unaware of “a relevant fact”: the relevance must, presumably, be to the doing of the act or omission. However, this is subject to the safeguard that the act or omission must have been “in good faith”. The meaning of being “in good faith” in this context has been considered in a number of cases to which I will refer. The “good faith” applies to the act or omission, and must be in some way related to the statutory consequence, that is to say whether the person is or is not to be treated as intentionally homeless.

The Appellant ceased to occupy the accommodation the subject of the tenancy in consequence of agreeing to hand over the keys on the landlord’s demand. The accommodation was available for her occupation and it would have been reasonable for her to continue to occupy it. Her giving it up was a deliberate act. So section 191(1) applied to her, on its face. The question is whether the facts are taken out of the ambit of that subsection by subsection (2). Was she unaware of a relevant fact? If so, was her act done in good faith?

It is agreed that her ignorance of the fact that she had security of tenure, in the sense that she could not be required to leave without a court order, meant that she was unaware of a relevant fact, so that the condition for the possible application of the subsection is satisfied.

The issue is whether her act, namely the act referred to in subsection (1), of giving up her accommodation, was in good faith.

The courts have had to consider this provision, or its predecessor, in a number of different factual contexts.

In R v London Borough of Hammersmith and Fulham ex parte Lusi(1991) 23 HLR 260, Roch J had to consider the provision in relation to applicants who were Turkish, and had moved from England to Turkey in order to undertake a business activity there, but it had not proved successful and they then returned to England, and sought to be treated as homeless. The judge was prepared to accept that ignorance as to the availability of accommodation on their return was capable of being a relevant fact. (That question has been the subject of further judicial decisions since then.) As to good faith, the judge cited, first, Central Estates (Belgravia) Ltd v Woolgar [1972] QB 48 where Lord Denning MR referred to a claim being made in good faith when it was made honestly and with no ulterior motive. He also referred to Jones v Gordon(1877) 2 App Cas 616, about whether a holder of a bill of exchange was in good faith. He commented:

In R v London Borough of Tower Hamlets ex parte Rouf(1991) 23 HLR 460, in the Court of Appeal, the applicants had had accommodation in the borough, and had then moved to Bangladesh for some time, but had then come back, to find that their previous accommodation was no longer available. The consequent application to be treated as homeless, and to be accommodated accordingly, was rejected by the council on the basis that the applicant’s conduct was unreasonable. Dillon LJ said at 469:

The Court of Appeal had to consider these issues again in O’Connor v Royal Borough of Kensington and Chelsea[2004] EWCA Civ 394, [2004] HLR 37. In that case the applicants had a tenancy of accommodation in the borough from a housing trust. They went to Ireland and spent more time there than they had originally intended, having arranged for another person to stay in the flat and pay the rent. Unknown to them, he failed to pay the rent and the trust obtained a possession order. When the applicants sought to move back into the flat, they discovered this position, but were unable to obtain the discharge of the possession order. They therefore applied to the council to be treated as homeless, but this was rejected on the basis that they were intentionally homeless. Sedley LJ said at paragraph 24:

It was accepted that section 191(1) applied, so the question was whether the applicants were saved by subsection (2). As to this Sedley LJ said:

The review decision was held to have been wrong in law because it did not “consider whether the material omission had been made in good faith (not simply unreasonably) and in ignorance of any relevant fact (such as that Walton had stopped paying the rent, or that possession proceedings were on foot)”. Waller LJ and Carnwath LJ agreed with Sedley LJ in allowing the appeal on this basis, though with some differences on points not relevant for present purposes.

Mr Broatch for the Respondent Council submitted, fairly, that none of these observations on the content or meaning of “good faith” was or could be definitive, but that there was an indication of wilful ignorance, at least in the sense of the ignorance being culpable. He contended that it was not necessary or right to limit it to the equivalent of Admiral Nelson putting the telescope to his blind eye so that he should not see the signal which he knew he would otherwise have seen. It could properly cover a case in which, for no good reason, an applicant failed to follow up advice which, had it been followed, would have dispelled the relevant ignorance. In support of this he cited further cases, the first of them being F v Birmingham City Council[2006] EWCA Civ 1427, [2007] HLR 18. The facts of that case were rather clear, in that the applicant, who had enjoyed a local authority secure tenancy of a two bedroomed flat, gave it up in favour of a private tenancy of a three bedroom house, notwithstanding advice from her social worker that she risked being found intentionally homeless if she later became homeless. When that happened, because she could not pay the rent, the council were satisfied that she was intentionally homeless.

May LJ said this at paragraph 17, reviewing previous decisions:

In the following paragraph he identified the relevant fact of which, at highest, the applicant could have been said to be unaware as follows. “The highest it could reasonably be put is that she did not know whether housing benefit would cover the rent in full. Mr Cottle submits that this would be understandable in a young naïve woman in the appellant’s circumstances. I fear, however, that even this overstates the available case.” He continued:

In the light of the previous decisions which he had summarised in paragraph 17, in particular Aw-Aden v Birmingham City Council [2005] ECWA Civ 1834, the significance of the reference to proceeding “on a wing and a prayer” is that she was not unaware of a relevant fact. The Court of Appeal in that case approved a decision by Carnwath J in a previous case as follows:

If the ignorance of the true position as to available accommodation is not based on genuine investigation, then, as Maurice Kay LJ said in Aw-Aden, “section 191(2) is a non-starter”. The question of good faith does not arise. Thus, what May LJ said in paragraph 19 of F v Birmingham starting at the words “In my view” was not necessary for his decision and is obiter.

Mr Broatch also showed us some earlier cases, starting with R v Eastleigh Borough Council ex parte Beattie(1984) 17 HLR 168. There the applicants had bought a house with a mortgage from the council, but it was damaged by fire, they had to move out, and they were housed in temporary accommodation which they preferred. The council had repairs done to the house and the applicant had to move back into it. Hoping to be rehoused, they failed to pay the mortgage instalments, their solicitors having (they said) advised them that if they were required to give up possession of the house because of the arrears, the council would have to rehouse them. Webster J said that their ignorance of the fact that they would be treated as intentionally homeless, and therefore not rehoused, was of a matter of law, not of a fact. However he also said that even if that had not been fatal to the claim, he would probably have rejected the claim on the basis that the act or omission was not in good faith “because it was made, as appears from the terms of the solicitors’ letter … as a device the object of which was to put pressure on the respondent authority to allow the applicant to go back to the [alternative property] which was what they wanted to do”.

The other case relied on was R v London Borough of Wandsworth ex parte Onwudiwe(1993) 26 HLR 302. In that case, the applicant owned one house but mortgaged it to secure a loan in order to buy another property to be used for running a bed and breakfast business. Both properties were subject to substantial mortgages. He had carried out no research as to the market, and found that he was unable to attract any business. Consequently he got into arrears on both mortgages. When the relevant mortgagees had taken possession of both houses, he applied to be treated as homeless. This was rejected on the basis that he was intentionally homeless, he having obtained the loans “in the full knowledge of there being little prospect of you making the necessary repayments”, as the council put it. Farquharson LJ said at page 305:

The judge did not mention the then equivalent of section 191(2) in his judgment, nor did he address in terms either the question of ignorance of a relevant fact, or that of good faith. It seems to me that this case was concerned only with the first issue, whether the act was deliberate for the purposes of section 191(1). As such it does not assist in the present case.

Mr Broatch submitted that the scope of good faith was not limited to dishonesty, that it includes wilful ignorance, and manipulation (as in Beattie), and that it should also include ignorance in circumstances such as those of the Appellant. Wilful ignorance, he argued, is not limited to the Nelsonian example, where a person is treated as knowing that which he would be told if he had asked, but he did not ask in order not to be told that which he did not want to know. It should include a case where a person is given advice as to where to go to get assistance and advice, but this advice is not taken up, as a deliberate choice, and the person therefore remains in ignorance of that which she would have been told. That ignorance, he said, is culpable and wilful.

I cannot accept that the Appellant is to be categorised as not having acted in good faith on the basis of this argument. She was told by the staff at the One Stop Shop to go to the HPU for help and advice. She did not do so. If she had done so she would have been told that she did not have to leave, unless and until the landlord got a court order. That is exactly what she would have wanted to know. However, the staff had also told her that the HPU would see that she and her children had temporary accommodation, and that she might need to rely on friends or relatives to accommodate her belongings. That led her to suppose that the result of going to the HPU would be the opposite of what it actually would have been, and that she would be treated as homeless, which was the last thing she wanted. It was because she had been misled (no doubt inadvertently) into believing that if she went to the HPU the consequence would be that she was treated as homeless and put into temporary accommodation that she chose not to go. That is the very opposite of Nelsonian knowledge.

Her failure to go to the HPU for help could be said to have been foolish or imprudent. But neither of those would be sufficient to put her conduct into the category of not being in good faith, nor would it even if she were regarded as having been unreasonable.

The subsection provides relief against the otherwise potentially harsh consequences of subsection (1), as Sedley LJ said in O’Connor, for those who act in relevant ignorance, but subject to the safeguard of the requirement of good faith. It seems to me that the use of the phrase “good faith” carries a connotation of some kind of impropriety, or some element of misuse or abuse of the legislation. It is aimed at protecting local housing authorities from finding that they owe the full duty under Part 7 of the 1996 Act to a person who, despite some relevant ignorance, ought to be regarded as intentionally homeless. Its statutory purpose is analogous to that of subsection (3). Dishonesty is the most obvious kind of conduct which it would catch, and wilful blindness in the Nelsonian sense comes close to that. The conduct of Mr Beattie, which was considered by Webster J to amount to a device, is fairly seen as in the same category.

I cannot accept Mr Broatch’s submission that the Appellant’s conduct in not going to the HPU for advice is to be regarded as being in that category. She was not turning a blind eye to that which she knew she would be told, and did not want to know. On the contrary, she had been led to think that she would be treated as within the scope of the homeless duty, and wanted to avoid that if she possibly could. Foolish or not, her subjective motivation seems to me to be the opposite of bad faith. If the reference to good faith is intended to exclude from the protection of subsection (2) those who are in some way seeking to be brought within the scope of the main duty under this part of the Act, and who ought not to be so regarded because they are intentionally homeless, this Appellant was in the opposite category: she wanted if at all possible to avoid having to rely on the protection of this part of the Act.

I therefore accept Mr Hutchings’ submissions for the Appellant that the Council was wrong in law when it concluded in the review decision that she should be treated as intentionally homeless because she was not acting in good faith, having deliberately not taken the opportunity of going to the HPU for assistance, and that Judge Welchman ought to have allowed the appeal on that ground.

After the judge had dismissed the appeal, the Appellant obtained accommodation by way of a secure tenancy in the private sector. If that were to provide stable and settled accommodation, in which she can stay for some time, it may render the question whether she became intentionally homeless in November 2007 a point of only theoretical interest. Unfortunately, although the Appellant’s solicitors told the court of this development promptly, they did not give the same information to the Council, in breach of the elementary rule that a party must not write to the court without copying the letter to the other side. The solicitors have apologised, and the person who was responsible had left their employment some time ago. The facts only became known to the Council shortly before the hearing of the appeal. It then contended that the appeal was academic, and ought not to be pursued.

However, on enquiry, Mr Broatch told us that the Council was not, and could not be, in a position to ensure that, if the Appellant were to become homeless again, and were to apply to it or to any other relevant housing authority, the Council’s finding, in its original and review decisions, that it was satisfied that she had become intentionally homeless in November 2007 would not be taken into account. On the Appellant’s part, we were told that the accommodation cannot be relied on to be stable, and that there is a risk that she may again become homeless. In those circumstances it seems to me that the point is not necessarily academic, though it affects the order that the court should make on the appeal.

For the reasons already given, subject to any submissions from the parties, I would allow the appeal and quash the Council’s review decision dated 12 March 2008. It is not necessary to make any other order on the substantive issue.

I agree.

I also agree.