High Court considers whether housing association is public body

Last year an Office for National Statistics review concluded that English housing associations should be regarded as public bodies and in September 2016 the ONS ruled that housing associations in Northern Ireland, Scotland and Wales should be similarly reclassified.  Housing associations are concerned about this change as it may restrict their access to private funding. But, classifying a housing association as a public body will also mean that these organisations become subject to certain human rights legislation and will mean decisions made by these bodies can be subject to judicial review.

Below, Housing Rights solicitor, Carmel Ferguson, discusses a recent case which considered whether or not a decision made by a housing association could be challenged by way of judicial review.

Can this decision not to grant permission for exchange be judicially reviewed?

In R (on the application of Macleod) v The Governors of the Peabody Trust [2016] EWHC 737 (Admin), the tenant Mr M applied for a judicial review to challenge Peabody Trust’s decision not to allow him to exchange his tenancy.  Mr M's flat was one of a number transferred from the Crown Estate Commissioners (CEC) to the defendant housing association, the Peabody Trust. Mr M's tenancy agreement included a non-assignment clause. Mr M argued that Peabody had a public law discretion to allow the exchange to proceed. Peabody argued that its decision to decline to approve the exchange was a matter of contract and a private law obligation and hence that it was not exercising a public function. The High Court in London had to consider whether this decision was amendable to judicial review.

When will a housing association be regarded as a public body?

The leading case on whether or not Housing Associations are public bodies is London and Quadrant Trust v Weaver [2009] EWCA Civ 587. In the leading judgment, Lord Justice Elias set out some factors which should be taken in to account including ”the extent to which in carrying out the relevant function the body is publicly funded, or is exercising statutory powers, or is taking the place of central government or local authorities, or is providing a public service”.

In deciding whether a particular act or omission by a housing association is subject to possible judicial review, the court will also consider whether it is a “private act” under Section 6(5) of the Human Rights Act 1998.  

Section 6 of the Human Rights Act 1998 holds that “It is unlawful for a public authority to act in a way which is incompatible with a Convention right”. Section 6 (3) (b) goes on to further define a public authority) as including “…any person certain of whose functions are functions of a public nature”. Section 6 (5) limits the duty, noting that “a person is not a public authority by virtue only of subsection (3)(b) if the nature of the act is private.”

Was the Peabody Trust acting in a public capacity?

In the Peabody case, the Court held that the general principles enunciated by Lord Justice Elias in Weaver have to be applied to the particular facts of each particular case. Weaver did not decide that all registered housing associations are public bodies and, on the particular facts of this case, the court held that the Trust was not exercising a public function in relation to this tenancy.

The court took a number of factors into consideration, including:

• Peabody purchased the properties from CEC using funds raised on the open market, not via any public subsidy or grant.
• Although the properties were not let at a full market rent, it is not clear that they were pure social housing. The key workers, for whom these properties were reserved, included those with a family income of up to £60,000 per annum. The commercial housing market in London adequately serves the needs of those workers. Very many workers in occupations not covered by the nomination agreement relating to the CEC properties are served by the open market. The provision of below market rent properties for such workers does not fall within the definition of social housing in the Housing and Regeneration Act 2008
• Unlike the social landlord in Weaver, Peabody had no allocation relationship with any local authority. It was not acting in close harmony with a local authority to assist the local authority to fulfil its statutory duty.
• Rents for the properties transferred from CEC are not subject to the same level of statutory regulation as social housing in general

The court accepted that there was some public function in the provision of homes for key workers but that “the cumulative effect of the various factors in the circumstances of this case does not have the sufficiency of public favour which Lord Justice Elias found in Weaver”

Relevance to Northern Ireland

As this is a decision of a UK High Court, it is not binding on Northern Ireland courts. In the absence of any contrary decision from a Northern Ireland court, it is “persuasive” and will be taken in to account by a court considering the issues raised. UK housing legislation generally does not apply in Northern Ireland which has its own, broadly similar housing legislation. The Equality Act 2010 which is referred to in the case does not apply to Northern Ireland.

Learning points for advisers

The case of Weaver did not decide that all housing associations are public bodies, but rather that they are generally hybrid authorities which exercise a mixture of public and private functions. In deciding whether a particular act is a public or private act, a number of factors must be considered, including

• whether the housing association is publicly funded,
• whether the housing association is exercising statutory powers,
• whether the association is taking the place of central government or local authorities,
• whether the association is providing a public service”.

Allocating and managing housing stock is generally taken to be a function of a public body and a housing association providing these services will typically be regarded as a public body and, therefore, amendable to judicial review.  However, even where the association is regarded as a public body individual acts carried out by the association may be considered “private acts” and, therefore, not subject to challenge by judicial review.  In deciding whether a particular housing provider is a public body, the cumulative effect must be considered.