Judge quashes one of first selective licensing schemes over "perfunctory" consultation

A High Court judge has quashed one of the first selective licensing schemes put in place by a local authority after criticising the consultation undertaken as “perfunctory in the extreme”.

In Peat & Ors, R v Hyndburn Borough Council [2011] EWHC 1739, Hyndburn had sought to designate areas within its district as subject to selective licensing under Part 3 of the Housing Act 2004. This would have required all landlords to obtain a licence to let property.

Under the 2004 Act, an area can be designated for licensing if it is thought to be likely to become an area of low housing demand or that the area is experiencing significant and persistent problems caused by anti-social behaviour.

Other requirements are that some or all of the private sector landlords operating in the area are failing to take appropriate action to combat the problem, and that, in either case, a designation with other measures will lead to a reduction of the problems identified. The low housing demand criterion was particularly material in this case.

The application for judicial review was brought by six landlords, who claimed to also represent 341 other landlords owning 1,326 properties in the borough.

Their principal ground was that Hyndburn’s consultation prior to designation was inadequate and failed to comply with the statutory obligations set out under s. 80(9) of the 2004 Act. The Department for Communities and Local Government had issued guidance on consultations under the Act in 2006, which was revised in April 2010.

The landlords also argued that:

• in its application to the Secretary of State for confirmation of the designation, the council had made material misrepresentations as to the nature of the consultation carried out in 2008
• whatever the merits of the consultation carried out in 2008, the results were stale by the time the designation came to be made and confirmed in March 2010.

Mr Justice McCombe quashed the designation in a ruling last month, but the full judgment was only published this week.

Reviewing the process undertaken by Hyndburn, the judge concluded that Hyndburn did not take reasonable steps to consult with the persons likely to be affected by the designation.

The judge said the statute required some precision in the identification of what is to be designated and its consequences, so that the extent of the effect on those persons can be appreciated. “In addition, it is hard to see how adequate steps can be taken to consult with persons affected unless one knows the likely licence conditions that will be imposed,” he pointed out, adding that consultations as to general principles were insufficient.

Mr Justice McCombe said consultees must be given sufficient information to enable them to reach an informed decision upon that on which they are being consulted.

“Without some fleshing out of the reasons for the proposals, the nature of the proposals as regards the licence conditions and as to the fee structure, it seems to me that an informed response was really impossible,” he argued.

“It is significant that, after the designation in the course of the present proceedings, the parties have indeed debated and to some degree reached compromises about licence conditions. It would have been more fruitful if that debate had occurred during the consultation process.”

The judge criticised the consultation as “perfunctory in the extreme”. It could not conceivably put the consultees in the position of being able to given an informed response to that which was really being proposed by the council, he added.

Mr Justice McCombe also suggested that confidence in the process was undermined because the council itself could not explain accurately or fairly to the Secretary of State the elements of the consultation it had undertaken. “In particular, I would refer to the apparent belief of the officers responsible for seeking the Secretary of State’s confirmation for designation that the landlords’ forum had been informed in the consultation, when it had not,” he said.

“Taken as a whole, I am satisfied that the council have failed to comply with s.80(9) of the Act,” he concluded.

The judge added that had he come to the view that the consultation exercise was adequate, he would have been inclined to hold that the period between consultation and designation was not so long as to vitiate the exercise.

“However, if the council's consultation is a shallow one, as in my view this one was, its usefulness is likely to have a much shorter sell-by date,” he said. “In my judgment, the fact that so long had passed and so much had evolved in the formulation of the scheme between the perfunctory consultation and the designation should have raised in the authority's mind a serious question whether by March 2010 they had taken the reasonably necessary steps to consult, so as to inform it adequately of the views of those affected in order to decide rationally whether the designation decision should be taken or not.”

Mr Justice McCombe said it was “regrettable” that Hyndburn had been so economical in the accuracy of its reports to the Secretary of State, another factor that undermined confidence.

In May this year a landlords' association applied for judicial review against Thanet District Council over its bid to introduce selective licensing in its Cliftonville and Margate Central wards.

Philip Hoult