Babakandi v Westminster City Council

Mr Babakandi, the Claimant in these proceedings, rents a studio flat from the Defendant, Westminster City Council. Apart from the kitchen and bathroom it has just one living room and is small even by London standards. He lives there with his wife and his two daughters, one of whom is aged 8 and the other three. One daughter sleeps on a bed. All the other occupants of the flat sleep on the living room floor. The Defendant accepts that the flat is severely overcrowded. In addition, Mr Babakandi has a number of health problems and there is medical evidence that the overcrowded nature of his accommodation is likely to exacerbate these. In May 2009 he applied to the Defendant for a transfer. In July 2009, the Defendant registered him for transfer to a 2 bedroom flat under its choice based lettings scheme. Nearly three years later he has yet to be offered alternative accommodation.

As it is required to do by s.167 of the Housing Act 1996, the Defendant has adopted an Allocation Scheme. In these proceedings for judicial review the Claimant alleges firstly that the Defendant’s Scheme is unlawful or that the Defendant’s system as it has operated in practice does not accord with its adopted Scheme. Secondly, the Claimant argues that the Scheme is legally flawed because it automatically debars tenants with rent arrears from bidding for properties. Thirdly, he submits that as a result of a letter written to him on 13^th January 2010, he had a legitimate expectation that he would be able to bid for properties despite his continuing rent arrears. Permission to argue these grounds was granted by Mrs Justice Nicola Davies on 11^th January 2011.

So far as is material, section 167 of the Housing Act 1996 provides:

“(1)

Every local housing authority shall have a scheme (their ‘allocation scheme’) for determining priorities, and as to the procedure to be followed, in allocating housing accommodation. For this purpose ‘procedure’ includes all aspects of the allocation process, including the persons or descriptions of persons by whom decisions are to be taken.

…

(2)

As regards priorities, the scheme shall … be framed so as to secure that reasonable preference is given to –

(a)

people who are homeless (within the meaning of Part 7);

(b)

people who are owed a duty by any local housing authority under s.190(2), 193(2) or 195(2) …

(c)

people occupying insanitary or overcrowded housing or otherwise living in unsatisfactory housing conditions;

(d)

people who need to move on medical or welfare grounds; and

(e)

people who need to move to a particular locality in the district of the authority, where failure to meet that need would cause hardship (to themselves or to others).

The scheme may also be framed so as to give additional preference to particular descriptions of people within this subsection (being descriptions of people with urgent housing needs).

…

(2A) The scheme may contain provision for determining priorities in allocating housing accommodation to people within subsection (2); and the factors which the scheme may allow to be taken into account include –

…

(b)

any behaviour of a person (or of a member of his household) which affects his suitability to be a tenant;

….

(4A) The scheme shall be framed so as to secure that an applicant for an allocation of housing accommodation –

(a)

has the right to request such general information as will enable him to assess -

(i)

how his application is likely to be treated under the scheme (including in particular whether he is likely to be regarded as a member of a group of people who are to be given preference by virtue of subsection (2)); and

(ii)

whether housing accommodation appropriate to his needs is likely to be made available to him and, if so, how long it is likely to be before such accommodation becomes available for allocation to him;

….

(c)

has the right to request the authority to inform him of any decision about the facts of his case which is likely to be, or has been, taken into account in considering whether to allocate housing accommodation to him; and

(d)

has the right to request a review of a decision mentioned in paragraph …(c) … and to be informed of the decision on the review and the grounds for it.

….

(6)

Subject to the above provisions, and to any regulations made under them, the authority may decide on what principles the scheme is to be framed.

…

(8)

A local housing authority shall not allocate housing accommodation except in accordance with their allocation scheme.”

Local authorities are obliged to have regard to guidance issued by the Secretary of State (see 1996 Act s. 169). The Secretary of State has issued guidance under this provision in 2008 and again in 2009. The 2008 Guidance was called “Allocation of Accommodation: Choice Based Lettings: Code of Guidance for Local Housing Authorities”. At paragraph 4.72, this said,

“Where accommodation is allocated by means of a choice based lettings scheme, housing authorities may wish to attach criteria (known as ‘advertising criteria’ or ‘restrictive labelling’) to particular accommodation which is advertised specifying, for example, that:

-

only people of a particular description may apply for that particular accommodation or

-

people of a particular description will be given preference for that particular accommodation.”

The following paragraph of the guidance cautions that, where an authority uses restrictive labelling, it should monitor its impact to ensure that it continues to comply with its duty to give reasonable preference to applicants in the reasonable preference groups.

The 2009 Guidance was entitled “Fair and Flexible: Statutory Guidance on Social Housing Allocations for Local Authorities in England”. It was, in part, a response to the decision of the House of Lords in R (Ahmad) v London Borough of Newham [2009] UKHL 14, [2009] HLR 31. The Guidance noted that the House of Lords had found that

“ - there is no requirement for local authorities to frame their allocation scheme to provide for cumulative preference i.e. affording greater priority to applicants who fall into more than one reasonable preference category.

-

an allocation scheme which allows for priority to be determined between applicants in the reasonable preference categories on the basis of waiting time (alone) is not unlawful or irrational.

…

-

where a local authority’s allocation scheme complies with the requirements of section 167 and any other statutory requirements, the courts should be very slow to interfere on the ground that it is irrational.”

The guidance went on to note (at paragraph 62) that removing the requirement to provide for cumulative preference gave scope for local authorities to develop simpler, more transparent systems of applicant prioritisation which would be easier for applicants to understand and for housing staff to operate.

The desirability of having a scheme which was transparent is repeated throughout the 2009 Guidance. Thus, for instance, banding schemes had the advantage of being more transparent while points based systems could be more complex and lack transparency. Paragraphs 81-83 of the 2009 Guidance specifically contemplated the use of quotas and targets and lettings plans. They said,

“81.

An authority may want to set targets for the proportion of properties which it expects to allocate to the various groups within the allocation scheme as part of an annual lettings plan. So, for example, this might set a target for a proportion of large family-sized accommodation to be allocated to overcrowded households, or for a proportion of lettings to be given to transferring tenants.

82.

Authorities should avoid setting rigid quotas which cannot be amended in the light of changing circumstances. However, they may wish to set broad targets which should be published alongside the authority’s allocation scheme. Targets should be published as part of an annual lettings plan and monitored, and lettings outcomes against the targets should be published. Published targets, together with information about lettings outcomes, help make the allocation process more transparent.

83.

In setting targets, authorities should take into account;

- the size and composition of the waiting list.

- the profile of their stock and the vacancies which are likely to become available.”

Westminster published its Choice Based Lettings Housing Allocation Scheme in May 2009. It is not necessary to explain all its details. It is sufficient to sketch its application so far as it impacted on the Claimant. Applicants were placed in one of four bands – A,B, C or S. The latter was for sheltered and supported accommodation and was not relevant to the Claimant’s case. Within bands there were different groups. In addition, points were awarded for membership of particular groups. When the Claimant was told in July 2009 that he had been registered for a transfer to a 2 bedroom flat, he was also told that he had been placed in Band B (which included existing tenants of Westminster occupying insanitary or overcrowded housing or otherwise living in unsatisfactory housing conditions) and that, in accordance with the Scheme, he had been awarded 560 points.

Paragraph 2.3.3 of the Defendant’s Scheme explained,

“The council allocates available properties among Bands/Priority Groups in accordance with the projections contained in the annual report (subject to review) and subject to the size of the accommodation required. The council will monitor the outcome of all lettings during the year. If some Bands/Priority Groups are not getting the expected proportion of properties, the council will seek to address any imbalance by, for example, advertising certain properties exclusively to certain Priority Groups.”

Bids could only be made for a property size for which the bidder had been registered. If a property was confined to certain bands or groups, only people within those categories could bid. Otherwise, the council would draw up a shortlist of the three highest banded/pointed bidders to view each property. If competing bidders in the same band and equal in points, preference would be given to the bidder who had been registered for longest. The Scheme reserved a general discretion to the Director of Housing to give such additional preference as he considered appropriate to any applicant who, in his opinion, had urgent housing needs.

The Introduction to the May 2009 Scheme said,

“Housing policy, including the allocation and assessment policies in this document, is made and amended by the Cabinet Member for Housing. …Before making … major policy changes, the council will comply with section 167(7) of the [1996] Act, which enables Registered Social Landlords (RSLs) to have a reasonable opportunity to comment on proposals.

The Housing Overview and Scrutiny Panel considers policy development proposals twice yearly prior to a final annual report and mid-year report with recommendations being submitted to the Cabinet Member for Housing. Therefore, for the most up to date position on policy this allocation scheme should be read in conjunction with the mid-year and annual Supply and Allocation Reports.”

The Social Housing Supply and Allocation Report 2009/10 dated 23^rd March 2009 made recommendations which included the following,

“That a target be set that in 2009/10 each of the 44 severely overcrowded households identified on 5^th January be made an offer of suitable accommodation and that 80% of these families are rehoused. To facilitate this, these households are moved to Band A under choice based lettings.”

The same report projected that 44 units would be allocated for this purpose. A further 84 units were also projected for (amongst other people) those suffering from overcrowding. These recommendations were adopted by the Council.

The 44 households who were moved to Band A were those who had been registered for a transfer on grounds of severe overcrowding in January 2009. The Claimant did not make his application until May 2009. He was not therefore, one of those advantaged by the promotion to Band A in 2009. Putting it another way, when, as happened in the course of 2009 properties were made available exclusively for those in Band A, he was disadvantaged because he remained in Band B and was not eligible to bid for such properties.

The Claimant’s first ground of challenge which I mentioned in paragraph 2 centres on two features of the way Westminster’s Scheme operated in practice: the allocation of properties to particular groups or bands, rather than to the entirety of the waiting list; and the specific promotion of the 44 households who were in severe overcrowding in January 2009 into Band A. Ms Osler, on the Claimant’s behalf, argues that these were contrary to the published scheme and so were contrary to s.167(8) of the 1996 Act. Furthermore, the Scheme as a whole lacked the transparency which had to be a characteristic of a proper scheme.

Section 10 of the Scheme provided that applicants with rent arrears above specified levels would be suspended from the Choice Based Lettings Scheme. Westminster tenants with rent arrears would not be eligible to bid for properties. In practice rent arrears of up to one week’s rent would not usually be taken into account. Ineligible applicants would be suspended until the week after the arrears were reduced below that amount. For applicants in receipt of Housing Benefit, the amount taken into account would be the net weekly rent i.e. the amount payable weekly by the tenant. Paragraph 10.1.3 provides that, “The Director of Housing may exercise discretion in exceptional circumstances to allow applicants with rent … arrears to bid or to receive offers.”

The Claimant in this case was suspended from bidding under the Choice Based Lettings Scheme in August 2009 because he had by then accumulated rent arrears of £222.32. On 23^rd October 2009 he was told by a council official about the importance of clearing his rent arrears. On 14^th December 2009 he was again told that he would need to clear his rent arrears in order to be in with a chance of successfully bidding for alternative accommodation.

The Claimant submits that the automatic disqualification from bidding because of rent arrears was unlawful. This is the second ground of challenge that I referred to above. When these proceedings began, the Claimant’s ability to bid for properties was still suspended. However, subsequently, the Director of Housing decided that the Claimant had kept to an agreement to begin paying off his arrears and they had been reduced to a level that was sufficiently low that his suspension could be lifted. Consequently, this ground of challenge relates only to the period (August 2009 – April 2011) when the suspension was in operation.

In January 2010, Westminster expanded the category of severely overcrowded who would be promoted to Band A. A further 60 households were favoured in this way. They included the Claimant. He was informed of this decision in a letter dated 11^th January 2010 which said,

“You are currently registered on the waiting list as a severely overcrowded households with 500 points or more, but are restricted from bidding for most properties. This is because the quota for overcrowded rehousings is currently limited to 44 specific households who had the necessary priority at the beginning of the year [inferentially 2009].

However from 13^th January 2010 we propose to remove your restriction and allow you to bid for the properties remaining in the quota.

We will do this by placing you in Band A of the choice based lettings system which will give you priority, subject to your precise points level, for any suitable property that comes up (apart from the occasional one allocated on medical and mobility criteria).

You will, of course, be in competition with other households in a similar position and, as a guide only, we expect there to be two 2 bedroom …opportunities available. The numbers of potential bidders are 14…These numbers can be amended nearer the time.

The opportunity will be open until 31 March or until the quota is filled, whichever is the sooner…”

The Claimant alleges that, because this letter made no mention of his suspension from bidding due to his rent arrears, he had a legitimate expectation that he would be able to bid notwithstanding those rent arrears. This is the third ground of challenge which I mentioned in paragraph 2.

This ground of challenge is sub-divided as follows:

In my judgment there a number of reasons why these attacks do not succeed.

First, the statute requires a Housing Authority to publish its scheme for allocating accommodation. It does not follow from this that an applicant is entitled to be able to predict when and if he will actually be accorded accommodation. There are many uncertainties, thus, for instance, the Authority cannot know for certain which of its properties will become vacant or what size they will be. Some people who were on the list may leave the area or, for other reasons, no longer be eligible to bid. Other people may move into the area or join one of the categories to whom reasonable preference must be given. The two Codes of Guidance specifically contemplate that an Authority may use quotas and confine bidding for specific properties to particular groups on its list. I recognise, as did Mr Peacock on behalf of the Defendant, that this will mean that the operation of the Scheme is not as transparent as it might otherwise be, but the Authority was entitled to decide that this disadvantage was outweighed by the advantage of a more equitable distribution of its scarce accommodation.

Second, the Scheme has to be considered as a whole. As I have shown, the Introduction to the Scheme said that it had to be read in conjunction with the Annual and Mid-year reports to the Council from the Member with responsibility for housing. It is not disputed that these reports were available on the Authority’s website. The March 2009 Annual Report made clear that each of the 44 households who had been identified as being in severely overcrowded accommodation in January 2009 were to be promoted to Band A. It may be cumbersome to have to look at two (and possibly more) documents, but it is not unlawful. The Claimant, like others whose overcrowding was only identified or acknowledged by the Defendant after January 2009, would know that they were not part of the promoted group. I am not clear how widely the information was disseminated that a second cohort of households in overcrowded conditions was to be promoted. However, since the Claimant was a member of that group and since his promotion was (or could have been but for his rent arrears) to his advantage, it is difficult to see how he is in a position to complain.

The adoption of quota or restricted labelling systems necessarily has the consequence that people on the list who are not eligible to bid for a particular property or quota of properties are disadvantaged. This is a good reason why, as the Codes of Guidance recommend, the operation of such systems needs to be closely monitored, but if this is done, it does not necessarily mean that there has been an infringement of the statutory requirement to give “reasonable preference” to the groups specified in s.167(2). I do not interpret this obligation as meaning that such preference must be given at all times and in relation to all properties. It is sufficient if such preference is given over the course of a reasonable period. There is no evidence that the group of which the Claimant was part was not given such a reasonable preference. The two promotions of households in severely overcrowded conditions to Band A illustrate the contrary. The Claimant has been shut out from bidding for the greater part of the time that he has been on the transfer list but for the most part that is because of his rent arrears. He makes separate challenges to that aspect of the Defendant’s decision-making under grounds 2 and 3 and I shall turn to consider these. However, in my judgment his first ground of challenge does not succeed.

The Claimant accepts that in principle rent arrears can be taken into account. That is plainly correct. Section 167(2A)(b) allows a housing authority’s scheme to take account of any behaviour of a person which affects his suitability to be a tenant. Reliability in paying rent clearly affects a person’s suitability to be a tenant.

Ms Osler submits, however, that an Authority could only properly take arrears into account after it had considered the particular applicant’s circumstances. The blanket or automatic exclusion is objectionable. She gives the example of applicants in receipt of housing benefit. Since this is commonly paid in arrears, such tenants would be automatically suspended from bidding for a great deal of the time. Ms Osler recognised that the Defendant’s scheme permitted the Director of Housing to allow applicants with rent arrears to bid “in exceptional circumstances”, but, she said, there was no guidance as to what would be “exceptional circumstances.” There was lack of certainty elsewhere in the policy as well. Thus, rent arrears of up to one week’s rent will not “usually” be taken into account, and homeless applicants with arrears below their threshold (of £1,000) may nonetheless be suspended if they have a record of persistent non-payment.

Mr Peacock argued that automatic suspension had practical advantages. It took effect swiftly and effectively and at a time when the arrears were likely to be at a relatively modest level so that there was a better chance of them being paid off. The applicant whose bid was not accepted because of rent arrears would be told that this was the reason if he or she asked. The Claimant’s argument concerning Housing Benefit was misconceived. As paragraph 10.1.8 made clear, what was taken into account was the amount which was payable by the tenant after allowing for the Housing Benefit. The Director did have a discretion to allow someone with rent arrears to bid and that power had relatively recently been exercised in the Claimant’s favour. The scheme was not unlawful because it did not set criteria for what were “exceptional circumstances”. The other examples which the Claimant gave of alleged imprecision had no relevance to the facts of his case and Ms Osler accepted that the Claimant could only mount challenges to the aspects of the policy which impacted adversely on the Claimant.

I agree with Mr Peacock’s submissions. For the reasons he gives the Claimant’s second ground of challenge is unsuccessful.

I have quoted above the letter which was written to the Claimant by the Defendant on 11^th January 2010. Ms Osler submits that this told the Claimant that he would be allowed to bid for the properties remaining in the quota. It made no mention of his suspension for rent arrears. It was not right to expect the Claimant to go back to previous communications from the Defendant in order to understand that he was still precluded from bidding. In any event, it was irrational for the Defendant both to promote the Claimant so as to enhance his chance of bidding successfully and, at the same time, to suspend his opportunity to bid at all.

Mr Peacock argued that the letter was addressed to the Claimant as a member of a group – those in severely overcrowded housing who had not benefited from the earlier promotion and who, for that reason, had been restricted from bidding for most properties. The letter was clearly aimed at removing that restriction. It was not concerned with the individual circumstances of members within that group and did not deal with issues such as suspension for rent arrears. There was nothing irrational about that. If an addressee of the letter did have rent arrears and so was temporarily suspended from bidding, they would still benefit if the arrears were paid off or the suspension was otherwise lifted before the end of the financial year and before the quota was exhausted. In any case, the Court would only prevent an authority from frustrating a legitimate expectation if this would be so unfair that it would amount to an abuse of power – see R v North and East Devon Health Authority [2001] QB 213 at [57]. In the present case, although Ms Olser said in her oral submissions that the Claimant was bidding throughout this period, there was no evidence to that effect. If he had not bid he had not acted in reliance on the letter of 11^th January 2010. If the Claimant had tried to bid and found that he had been blocked he could have contacted the Defendant who would have reminded him of his suspension on account of his rent arrears. There was nothing unfair in this. In any case, the Claimant sought only a declaration in relation to this ground of challenge and it was difficult to see what purpose that would serve.

Here, too, I accept Mr Peacock’s submissions. It was clear from the first paragraph of the letter that it was addressing just one of the obstacles that faced the Claimant in bidding for properties, namely that he was not one of the 44 specific households who had the necessary priority at the beginning of the year. He had been reminded in October and again in December 2009 that he was also suspended from bidding because of the rent arrears. The letter of January 2010 was simply silent as to that second matter. This was, I assume, a standard letter which was sent to all of the 60 newly promoted households. It is not surprising that it did not deal with the individual circumstances of each of the addressees. With hindsight, as Mr Peacock accepted, it would have been preferable for the letter to include some general caution or reminder as to the impact of rent arrears, but even without that, I do not consider that the letter constituted the clear and unambiguous representation that is necessary for the principle of legitimate expectation to operate. In any case, for the other reasons which Mr Peacock gave, that principle would not avail the Claimant.

When Mrs Justice Nicola Davies granted permission to apply for judicial review, she specifically preserved the Defendant’s opportunity to argue at the substantive hearing that the Claimant’s delay meant no relief should be granted. Mr Peacock did argue this. However, I have found that the Claimant’s grounds of challenge fail in substance. In those circumstances, it is not necessary for me to consider issues of delay.

For all of these reasons, this claim for judicial review is dismissed.

In his submissions, Mr Peacock observed that, during the course of the year, 20 two bedroom properties were likely to become available for allocation to tenants in overcrowded accommodation. The Claimant was placed 7^th in that group. Even though his claim has failed, it therefore looked as though the Claimant’s long wait for proper housing was coming to an end.