Court of Appeal remits possession case after housing association wins appeal despite breach of public sector equality duty

The Court of Appeal has allowed an appeal by a housing association in a case where it breached the public sector equality duty when seeking possession of a property.

The case has been remitted back to the judge, HHJ Bloom, who had dismissed Luton Community Housing’s (LCH’s) claim for possession of premises in Luton.

The claim had been sought in reliance on grounds 17 of Schedule 2 to the Housing Act 1988, which permits the Court to order possession where the landlord was induced to grant the tenancy by a false statement made knowingly or recklessly by the tenant or someone acting at the tenant's instigation.

The ground is discretionary so that, even if made out, the Court must then decide whether it is reasonable to make the order.

The respondent tenant and her husband are former employees of Luton Borough Council. They have two children, the youngest of whom (A) is three years old. She suffers from cerebral palsy. It was also common ground that the respondent suffers from PTSD as a result of the trauma associated with A's birth.

The respondent applied to the council for homelessness assistance in 2009. In March 2013 the council nominated her to LCH for an allocation of accommodation. However, in June 2013 she and her husband completed a housing register application form that contained false statements about where they lived, the number of banking accounts they had and the credit balance (said to be £1,000 at the time), and that she had been asked to leave by her parents due to overcrowding.

In fact at the time of the visit form and the application form they were living in another flat under an assured shorthold tenancy, having rented another property from 2001 to 2012. The husband also had another bank account into which he had been paying a second income. The combined annual income accounted to more than £70,000. The credit balance in an account of the tenant’s was more than £6,000.

In March 2017 the respondent accepted a caution in relation to three offences of dishonesty arising from the false information contained in the application forms. Her husband pleaded guilty at Luton Crown Court to the offence of providing false information in order to obtain housing. Both have been dismissed by the council.

LCH served a notice seeking possession and then commenced proceedings for possession relying on ground 17.

The respondent denied all but one of the false statements relied on but accepted that she had made a false statement about never having had any legal or financial interest in rented property. It was therefore common ground that ground 17 was made out.

The tenant contended that it was not reasonable for the Court to make an order for possession having regard to the effect which a possession order would have on both her and her daughter.

She also alleged that LCH had not performed its duties under s.149 of the Equality Act 2010 by properly considering in advance the impact on the respondent and A of seeking and obtaining possession of the premises.

At the trial HHJ Bloom found that the respondent had made false statements both as to her accommodation and as to her means and savings. She rejected the respondent's evidence that she had forgotten about the £6,000 held in one of her accounts. She also rejected the respondent's case that the council and LCH had not been induced by the false statements to grant the tenancy.

But the judge was satisfied that LCH was in breach of the PSED. For this reason the claim, she held, must be dismissed. In these circumstances, it was not strictly necessary to consider whether the claim should also fail because it was not reasonable to make the possession order. But the judge indicated that in her view the fact of the breach of the PSED did make it unreasonable to order possession because it was at least a possibility that on a proper consideration by the claimant of all relevant factors the possession proceedings might not have gone ahead. The judge did not, however, attempt to carry out that assessment herself.

LCH appealed against the judge's order on three grounds, all of which related to her dismissal of the possession claim for non-compliance with the PSED.

In Luton Community Housing Ltd v Durdana [2020] EWCA Civ 445 Lord Justice Patten noted how a customer relations manager with the housing association, Ms Wilson, had said in her witness statement that LCH had not been made aware of either the respondent’s or her daughter’s condition during the tenancy, but that, even in the light of those conditions, it was still considered proportionate and reasonable to seek a possession order. The false information had prevented a more needy and deserving applicant from being granted a tenancy, she said.

Ms Wilson had prepared a document called an “Equality Act Review”. She had consulted a solicitor beforehand about what she needed to look at. But she admitted to the judge that she had no previous experience of dealing with Equality Act assessments, did not know what s.149 of the Equality Act provided or what the PSED comprised of; and had not previously considered the PSED in relation to these proceedings.

The customer relations manager accepted in cross-examination that she did not know what the effect of A’s disability was on her day-to-day living or what impact their eviction would have on either A or her mother.

Lord Justice Patten said: “The judge was, I think, right to conclude that there had been a breach of the PSED in this case. Although it is theoretically possible for the duty to be complied with in ignorance of what it consists of, such cases are likely to be rare and this is not one of them.

“Ms Wilson, by her own admission, had not taken into account the likely effect of the disabilities of the respondent and A in relation to their proposed eviction from the Premises, although at the time when the decision was made LCH knew what the disabilities were; knew that they were being relied on as a defence to the proceedings; and had received copies of the medical reports I referred to earlier.”

The Court of Appeal judge said that although the reasonableness or proportionality of continuing to seek possession might be an appropriate way of characterising the ultimate decision to be made, he thought that [counsel to the respondent] was right to submit that the decision needed to be preceded by more than a proportionality assessment and that what Ms Wilson should have carried out was the open-minded conscientious enquiry referred to in the authorities.

In these circumstances, Lord Justice Patten said it was necessary to consider LCH’s alternative argument which was that even had Ms Wilson scrupulously carried out the enquiry, which she should have done, the ultimate decision was highly likely to have been the same.

Lord Justice Patten agreed that HHJ Bloom had misdirected herself on this point, and that it was therefore necessary for the Court of Appeal to decide whether, on the facts of the case, it was highly likely that a proper PSED assessment would have not led to a different decision.

The Court of Appeal judge noted that A had a serious disability. But she was still a very young child and the reports confirmed her general state of health to be good. It could not be said on the basis of that evidence that a move to other accommodation would impact on her disproportionately as a result of those disabilities. How severe the impact on the respondent would be was likely to depend on the circumstances. Lord Justice Patten proceeded on the basis that it would not be negligible but the evidence suggested it would not be irreversible.

“The question therefore is whether LCH, in paying due regard to this evidence and in considering whether it was still appropriate to seek possession, is highly likely to have made the same decision,” Lord Justice Patten said.

The Court of Appeal judge said that his own view was that it would. “Housing authorities operate under severe constraints in terms of available accommodation. There is no question that had the respondent and her husband provided honest answers to the questions in the application form they would not have been granted this tenancy. The Premises would have been allocated to other qualifying applicants of whom there were and are many. The respondent could have afforded to have rented accommodation in the private sector and should have done so.”

Lord Justice Patten said that in the face of a continuing shortage of public housing, LCH was justified in operating a policy of seeking to remove tenants who had obtained their accommodation by deception. The duties owed to other homeless applicants supported and justified that policy, he added.

He said: “The weight to be accorded to these policy considerations as opposed to the position of the respondent and her daughter as disabled persons is, of course, a matter for LCH as the decision-maker but it seems to me to be completely unrealistic to suggest that the balance of reasonableness would in this case have come down in favour of the respondent.

“This was not a case where the medical evidence suggested that the impact of eviction on the respondent and A as disabled persons would have been either acute or disproportionate. And nothing else could have acted as a sufficient counterbalance to the social objectives which underpinned the policies of LCH. Even after paying due regard to these disabilities LCH could lawfully have decided to continue with the claim for possession and are highly likely to have done so.”

Lord Justice Patten said, however, it would not be appropriate for the Court of Appeal to decide itself to make an order for possession.

He noted that HHJ Bloom had declined to carry out any appraisal of her own as to whether it would be reasonable to make the order. "The consideration of reasonableness which the Court is required to carry out under s.7(4) HA 1988 will undoubtedly bring into account many of the factors I have already referred to but it will be a consideration of matters as they stand now rather than in 2018 and the scope of the enquiry may be wider. In any event, it is not something which this Court is equipped to carry out on the material available for the purposes of this appeal."

The Court of Appeal therefore allowed the appeal and remitted the claim back to the judge to decide whether it was reasonable to make the order for possession.

Lord Justice Moylan and Lord Justice Newey agreed.