R (Swords) v Secretary of State for Communities and Local Government and Others
| Jurisdiction | England & Wales |
| Judge | Lord Justice Wilson,Lord Justice Lloyd,Lady Justice Smith |
| Judgment Date | 27 July 2007 |
| Neutral Citation | [2007] EWCA Civ 795 |
| Docket Number | Case No: C1/2007/0777 |
| Court | Court of Appeal (Civil Division) |
| Date | 27 July 2007 |
[2007] EWCA Civ 795
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE,
QUEENS BENCH DIVISION, ADMINISTRATIVE COURT
THE HONOURABLE MR JUSTICE FORBES
LOWER COURT NUMBER: CO/1337/2007.
Lady Justice Smith
Lord Justice Lloyd and
Lord Justice Wilson
Case No: C1/2007/0777
David Wolfe (instructed by Leigh Day & Co) for the Appellant
Jonathan Swift and Deok Joo Rhee (instructed by The Treasury Solicitor) for the Respondent.
Kelvin Rutledge and Siân Davies (instructed by Tower Hamlets Legal Services) for the First Interested Party
Jane Oldham (instructed by Prince Evans) for the Second Interested Party.
Hearing dates: 21 and 22 May 2007
Judgement
SECTION A: INTRODUCTION
With leave granted by Toulson LJ on paper, Ms Swords, the Appellant, appeals against a decision of Forbes J sitting in the Queen's Bench Division, Administrative Court, on 4 April 2007 to refuse to quash a decision by the Secretary of State for Communities and Local Government (“the Secretary of State”), the Respondent, dated 9 February 2007, whereby consent was given to a proposed transfer by the London Borough of Tower Hamlets (“Tower Hamlets”), the First Interested Party, to Old Ford Housing Association (“Old Ford”), the Second Interested Party, of freehold title to housing estates in Tower Hamlets known collectively as “the Parkside estate” (“the estate”). In principle the Secretary of State's consent enables Tower Hamlets to effect the transfer; but the transfer has been stayed pending determination of this appeal. Of the dwellings on the estate, about 1285 are occupied by tenants, of whom the Appellant is one, and about 1000 are owned by leaseholders.
In 2000 the government published a Housing Green Paper entitled “Quality and Choice; a decent home for all”, by which it explained that all social housing should by 2010 be brought up to specified standards of decency. Since then local housing authorities have had to address the means by which their properties can by 2010 be brought up to the standards there set. Local authorities who lack substantial funds of their own with which to meet the “decent homes” standard have been told by central government to consider three options: first, a Voluntary Transfer, Large Scale or Small Scale, to a Registered Social Landlord, such as a Housing Association, which could, with borrowings or otherwise, fund the requisite improvements; or, second, a Private Finance Initiative contract; or, third, transfer to an Arms Length Management Organisation of the management, but not the ownership, of their housing stock. Critics have strongly urged that there should be a so-called “Fourth Option”, namely central government subsidy of local authorities otherwise unable to fund the requisite improvements but, to date, there is no sign that central government is prepared to retreat from its refusal to provide such subsidy.
In about 2002 Tower Hamlets decided that, in respect of a number of their estates, including the estate, the only viable option for meeting the “decent homes” standard was by way of Large Scale Voluntary Transfers; and a referendum of all secure and introductory tenants on all such estates resulted in a vote in favour of such transfers. Thereupon various steering groups, comprising tenants and leaseholders, were set up in respect of each estate; and one of the group's functions was to identify the preferred transferee. The steering group referable to the estate selected Old Ford as its preferred transferee. Old Ford is a Housing Association registered with the Housing Corporation and thus subject to its control.
From about 2003 to date, the proposal that the estate should be transferred by Tower Hamlets to Old Ford has been extremely controversial. The appellant is one of a number of tenants who, along with a number of leaseholders, have been articulating the strongest opposition to it in a well-organised way which can properly be described as a campaign. When, during the oral argument, we sought to collect from Mr Wolfe, who represents the appellant, the grounds of her objection to the transfer, he evinced reluctance to be drawn into the detail. He submitted that the judge had been right not to address the merits and demerits of the transfer and that we would be straying from the supervisory jurisdiction in play in these proceedings were we to press him in that regard. Mr Rutledge, on the other hand, submitted on behalf of Tower Hamlets that, if Mr Wolfe was to persuade us that the Secretary of State's decision had been unlawful, it would be relevant to the exercise of the resultant discretion as to the grant of any remedy for the court to consider the nature of the appellant's objections as well as, by contrast, the alleged strength of feeling on the part of other tenants and leaseholders, including those in the steering group now known as the “Residents' Group”, that the transfer should take place and should indeed have taken place long ago, as well as features such as the effect of further delay. To the extent that it is possible on the evidence to discern its nature, the appellant's objection to the transfer relates, so Mr Wolfe broadly indicated, not just to narrow points of difference about the status of a secure tenant of a local authority under the Housing Act 1985 (“the Act”), on the one hand, and of an assured tenant of a Housing Association under the Housing Act 1988, on the other, but also to more general, indeed – so he said –“ethereal”, considerations. For his part, Mr Rutledge submitted that Mr Wolfe had declined to pick up the gauntlet which he, Mr Rutledge, had thrown down in stating that the legal distinctions between the two sorts of tenancy were barely discernible. After making his brief reference to “ethereal” considerations, Mr Wolfe mentioned democratically elected landlords and privatisation; and he spoke darkly of 'the devil you know'. What, however, shines through the evidence is a real sense of grievance on the part of the appellant, and probably of many others on the estate, about the way in which Tower Hamlets purported to discharge their duties to the residents in connection with the proposed transfer and in which the Secretary of State purported to exercise her discretion to grant consent to it.
The hearing before the judge was a composite hearing of the appellant's application for permission to apply for judicial review and, in the event that such was granted, of the substantive application. To the judge, she put forward five grounds of challenge to the decision. In respect of the first three grounds, the judge granted permission but refused the substantive application. In respect of the last two grounds, he refused permission. The appeal relates only to the first three grounds, which have in effect become the grounds of appeal. The first is that, in granting her consent, the Secretary of State unlawfully failed to take into account the views of the leaseholders on the estate as opposed to the tenants such as the appellant herself. The second is that the Secretary of State unlawfully failed to consider whether the documentation provided to the tenants prior to a ballot conducted by Tower Hamlets referable to the proposed transfer in July 2005 complied with the provisions of a manual published by the Office of the Deputy Prime Minister, he having been responsible up to 4 May 2006 for the discharge of the functions under the Act of 1985 which since then have been vested in the Secretary of State. The third is that the Secretary of State unlawfully both failed to consider whether the pre-ballot consultation with tenants and leaseholders and the actual balloting process referable to them in July 2005 were adequately conducted by Tower Hamlets and, in particular, failed to evaluate numerous complaints which had been brought to her attention in that overall regard.
SECTION B: THE STATUTORY FRAMEWORK
It is agreed that the consent of the Secretary of State to the proposed disposal by Tower Hamlets of the estate to Old Ford is required by each of two sections of the Act, namely sections 32 and 43.
Section 32 provides:
“(1) Without prejudice to the provisions of Part V (the right to buy) …, a local authority shall have power by this section, and not otherwise, to dispose of land held by them for the purposes of this Part.
(2) A disposal under this section may be effected in any manner but … shall not be made without the consent of the Secretary of State.”
Section 43 provides:
“(1) The consent of the Secretary of State is required for the disposal by a local authority, otherwise than in pursuance of to Part V (the right to buy) …, of a house belonging to the authority –
(a) which is let on a secured tenancy [or an introductory tenancy], or
(b) of which a lease has been granted in pursuance of Part V,
but which has not been acquired or appropriated by the authority for the purposes of this Part.”
The exercise of the discretion granted to the Secretary of State in determining whether to give consent to a disposal pursuant to sections 32 and 43 is subject to elaboration set out in sections 34(4A) and 43(4A) respectively. The wording of both subsections is identical and runs as follows:
“The matters to which the Secretary of State may have regard in determining whether to give consent and, if so, to what conditions consent should be subject...
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