R (Clays Lane Housing Cooperative) v The Housing Corporation

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLORD JUSTICE AULD,LORD JUSTICE JACOB,Lord Justice Maurice Kay,Lord Justice Waller,Lord Justice Brooke
Judgment Date08 December 2004
Neutral Citation[2004] EWCA Civ 1183,[2004] EWCA Civ 1658
Docket NumberC1/04/1161,Case No: C1/2004/1161
Date08 December 2004

[2004] EWCA Civ 1183






Royal Courts of Justice

Strand London, WC2


Lord Justice Auld

Lord Justice Jacob


Clays Lane Housing Co-Operative Limited
The Housing Corporation

MR D WOLFE (instructed by Bindman & Partners) appeared on behalf of the Applicant.

MR P STANLEY (instructed by Trowers & Hamlins, London, EC3) appeared on behalf of the Respondents.


This is a renewed application by the Clays Lane Housing Co-operative Limited, after refusal by Buxton LJ of its application for permission to appeal an order of Keith J on 14th May 2004 refusing judicial review of a decision of The Housing Corporation under the Housing Act 1996 to direct, with the consent of the Secretary of State, a transfer of its housing stock to the Peabody Trust which, unlike the applicant, is not a co-operative. The applicant accepts that there should be a direction for the transfer of its housing stock but contends that it should be to a body like itself, a housing co-operative, in particular, the Tenants First Housing Co-operative, a large social landlord resident in Scotland. The applicant maintains that The Housing Corporation applied the wrong test or tests in directing the transfer to the Peabody Trust, particularly in its purported justification of the interference with the applicant's property rights and rights of its members to associate, and that it made other errors.


In all, the applicant proposes seven grounds of appeal, the bases for which Mr David Wolfe has set out in two closely argued skeleton arguments, the second in part a condensation of the first and in part a response to Buxton LJ's equally closely reasoned refusal of permission. I do not intend to rehearse the arguments to and fro or attempt any close reasoning of my own, but express my indebtedness to Mr Wolfe today and also to Mr Stanley, who appears on behalf of The Housing Corporation, who drew together the essential issues with great skill.


The first three proposed grounds all, as Mr Stanley acknowledged, turn on the test imposed by article 1 of the First Protocol to the European Convention of Human Rights for the deprivation of a person's property. In particular, there is an issue between the parties on which the judge found against the applicant as to whether the requirement is any more than one of "a compelling case in the public interest" or whether, as so far unsuccessfully maintained by the applicant, it also requires the interference to be necessary and the minimum in the circumstances.


The case law, both in Strasbourg and in this country, has been on the move for some years as to the test or tests to be applied on such issues and as to the degree of intrusiveness that the court should exercise when examining them by way of judicial review. In my view, it would be in the public interest that the court should, in this field and on these issues as well as others, attempt some up to date guidance on the authorities as they stand now, in particular, the approach to the Strasbourg authority of James and the extent to which it has been affected by subsequent binding House of Lords authorities in this country. The James case was concerned with a legislative scheme, not an individual transaction. I believe that there is force in Mr Wolfe's submission that it leaves open as to what is meant by proportionality, certainly when the court is considering the validity of a particular transaction. There is equal force in his contention that the comparatively recent authorities of Daly v Secretary of State for the Home Department [2001] 2 WLR 1622, and R v Shayler [2002] 2 WLR 754, have a general application beyond their article 8 context, and in particular should be considered in relation to the issue arising here in relation to article 1 of the First Protocol.


It would arguably follow from that—ground 2- that the judge did not undertake a sufficiently rigorous or intrusive review as required by those authorities, and—ground 3—whether he correctly, on the facts of the case, was entitled to conclude that the Housing Corporation had even properly applied the compelling test case. I would grant permission on those first three grounds.


As to the fourth, the Corporation's concerns about regulatory issues, I am uneasy: first, on the issue of procedural fairness in the Housing Corporation's refusal to meet the applicant's representatives to discuss such concerns, and, second, as to the judge's finding that the Corporation had not taken account of them when clearly it had. If such considerations were material and of significance, it seems to me arguable that the applicant should have had more opportunity than it had to meet the concerns which were exercising the Corporation. If authority were needed for that, it is to be found in the case of Jokela v Finland [2003] 37 ECRR 36, a decision of the European Court of Human Rights, in particular paragraph 45 of the judgment. I would therefore grant permission on that ground also.


As to the fifth ground, challenging the judge's ruling that article 11 of the European Convention of Human Rights guaranteeing the right to association is not engaged, there is, on the one hand, Mr Wolfe's contention that the article guarantees rights or is meant to guarantee rights in a practical and effective way, and that to deprive the applicant of its assets, as would be the effect of the Housing Corporation's decision in its transfer to the Peabody Trust, could be said effectively to bring the association to an end.


On the other hand, as Mr Stanley has urged that the argument under article 11 has no real life of its own. This is essentially an issue about deprivation of property and such an argument would run, whether one is concerned with an association or an individual or something in between. Mr Wolfe's suggestion that there are residual aspects of the association, which are or may be affected by the decision, does not seem to me to be sufficiently central to the point that he is seeking to achieve which is covered, if he is successful on appeal, by his arguments on ground 1 to 3. I would therefore refuse permission on the fifth ground.


Finally, there are grounds 6 and 7, going to material relating to Peabody's financial strength relative to that of Tenants First. This is material which was apparently available to the Housing Corporation's officers at the time but not to the members of its board or to the Secretary of State or to the applicants, so as to enable either the board or the Secretary of State to have an informed view of this issue, if it was important, or to allow the applicant to make representations on it. In short, the complaint is one of ignorance on the part of all those three players in this story of material facts. Because of the sparseness of the information available as to the centrality of this material to the decision, I would have hesitated before granting permission if these two grounds stood on their own. But it seems to me, in the light of the decision that I would make on the other grounds, that they too should be available for consideration by the court. Accordingly I would grant permission to appeal on all seven grounds, save No.5 relating to article 11.


I agree. Permission to appeal will only be given where the court considers that the appeal would have a real prospect of success or there is another compelling reason why the appeal should be heard. As to grounds 1 to 3, I agree on the basis of the second alternative. The argument advanced on those grounds by Mr Wolfe is worthy of consideration by the Court of Appeal, although, speaking for myself, I think that the consideration by Buxton LJ of those points is entirely compelling.


As regards the remainder of the grounds, I consider that they pass the real prospect of success test but only just.

ORDER: Permission to appeal granted save in relation to ground 5; expedition ordered; to be heard in the last two weeks of September if possible; if not as soon as possible in the Michaelmas term; costs to be costs in the appeal.

[2004] EWCA Civ 1658





Royal Courts of Justice

Strand, London, WC2A 2LL


Lord Justice Brooke

Vice-President of the Court of Appeal

(Civil Division)

Lord Justice Waller and

Lord Justice Maurice Kay

Case No: C1/2004/1161

The Queen on the Application of Clays Lane Housing Co-Operative Limited
The Housing Corporation

David Wolfe (instructed by Bindman & Partners) for the Appellant

Paul Stanley (instructed by Trowers & Hamlins) for the Respondent

Lord Justice Maurice Kay

Clays Lane Housing Co-operative (CLHC) is a housing cooperative whose members are the residents of premises in Clays Lane, Stratford, East London. The premises are held by CLHC on long leases from the London Borough of Newham. They comprise 50 self contained flats and 400 rooms in 57 houses. They are let to members of CLHC. CLHC is run by a management committee which is largely elected from its membership. It is a non-profit making body and as such is registered and incorporated under the Industrial and Provident Societies Act...

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