Council defeats High Court challenge to borough-wide selective licensing

A High Court judge has rejected a judicial review challenge to Croydon Council’s decision to introduce a selective licensing scheme for the whole borough.

The claimants in Croydon Property Forum Ltd, R (on the application of) v The London Borough of Croydon [2015] EWHC 2403 were private sector landlords operating in the area who sought to quash the council’s 16 March 2015 decision on designation under the Housing Act 2004.

According to the local authority, there are around 30,000 private rented properties in the area. Landlords renting out a property without a licence from October face fines of up to £20,000, while those breaking licence conditions face prosecution and fines of up to £5,000.

The claimants argued that Croydon was under a statutory duty set out in s.80 (9) of the Act "to take reasonable steps to consult" developers and landlords before making the designation as they were likely to be adversely affected by the designation.

Their legal team argued no reasonable steps were taken, because "the developers, as a class" and the landlords were not consulted.

Croydon argued that it had complied with the statutory obligation "to consult persons who are likely to be affected by the designation" as the steps taken by the council to consult with such persons were extensive and, on any view, plainly "reasonable".

The local authority also argued that the legal challenge had not been brought promptly and that permission should also be refused on that ground.

Sir Stephen Silber, sitting as a High Court judge, said he would not refuse permission on the grounds of delay, as the claimants had acted expeditiously to raise funds and there was no real prejudice to the council.

However, the judge said he was “quite satisfied” that the council had complied with its duty to take reasonable steps to consult people likely to be affected by the designation.

There were six factors that meant he reached this conclusion:

1. Although Stage 1 was not part of the consultation process, it was of great relevance to the performance of the council’s duty under s.80(9) of the Housing Act “as the attention of many members of the private landlord community would then have been drawn to the proposal to designate the borough or part of it as a selective licensing scheme”. A postal survey, accompanied by an explanatory leaflet, was sent to 9,032 landlords and acted as a trailer for the full consultation process. It received 768 responses from landlords and agents. The judge agreed with Croydon’s QC that having received this material, landlords would then be on the look out for publicity about further stages of the consultation.

2. The comprehensive publicity which was given in Stage 2 (a doorstep survey) and in Stage 3 to the consultation process meant that any person interested in the letting of property was highly likely to have become aware, if not previously aware, of the consultation exercise from the steps taken by the council at Stages 2 and 3. “The council used an impressive variety of different means of communications to alert all different groups in Croydon of its planned intention to use the selective licensing scheme.” In consequence the consultation was highly likely to have been drawn to the attention of any person with an interest in what was going on in Croydon.

3. It would be reasonable to assume that any person or any entity which was investing or which was preparing to invest substantial sums in property in Croydon would regularly review the local media to ensure that they were fully aware of all matters relevant to their investment as "due diligence" on their part. 

4. The consultation exercise started on 15 September 2014 and finished on 2 March 2015 with much differing publicity being given for much of this period. “The fact that this consultation exercise with the accompanying publicity went on for so long must have increased the chance of people (including developers and private landlords) seeing it and this factor would be supportive of the contention that the council had complied with its s. 80(9) duty.”

5. A critical factor was that it would not be "pure happenstance" if developers became aware of the consultation as was the position in the case of people who lived outside the Borough in the case: R (on the application of Regas) v London Borough of Enfield [2014] EWHC 4173 (Admin); [2015] H.L.R. “I believe that it could reasonably be expected that anyone with a connection to or interest in Croydon would have had the council's proposals drawn to their attention.”

6. The council complied with what was stated in government guidance in that it did "ensure that the consultation is widely publicised using various channels of communication". That was “precisely what the council did”. It is noteworthy that the guidance did not state expressly or impliedly that a council should target any particular group or groups and this omission supported the council's case that it had complied with its s.80(9) duty. There were very few instances of developers and landlords who the claimant said should have been consulted but who were not consulted. This small number was indicative that the council had taken “reasonable steps”.

Sir Stephen Silber went on to say that he had looked at the council’s obligation as a matter of strict construction of s.80(9) of the Act. However, he added that he believed that such an approach was not appropriate on a judicial review application and was too favourable to the claimant.

That was because, he said, there was clear authority – applying the principles in the case of R (Peat and others) v Hyndburn Borough Council [2011] EWHC 1739 (admin) and R (Greenpeace) v SSTI [2007] Env 623 – that the council must have a comparatively wide discretion as to how the consultation process was carried out and the process would not be considered unlawful unless something went “clearly and radically wrong”. There was therefore a high threshold for the claimant to reach to obtain relief.

“I am quite satisfied that nothing went ‘clearly and radically’ wrong in the consultation exercise bearing in mind that it is almost invariably possible to suggest ways in which this or indeed any consultation exercise might be improved,” Sir Stephen concluded.

Responding to the ruling, Cllr Alison Butler, deputy leader and cabinet member for homes, regeneration and planning at Croydon, said: “We always maintained that our landlord licensing scheme was robust and lawful, so we’re very pleased to hear the High Court has found in our favour.

“This scheme is important because raising housing standards and tackling antisocial behaviour is crucial to making Croydon a better place to live.

“We’ll continue to prepare for the licence’s launch on 1 October, and urge any landlords who haven’t yet taken advantage of our early bird discount fee to join the thousand who have.”