Large-scale voluntary transfer – Legitimate expectation – Defendant local authority transferring housing stock – Consultation indicating use of capital receipt from transfer for housing needs – Defendants applying only part of capital receipt for housing – Claimant tenant applying for judicial review – Whether claimant having legitimate expectation that entire net capital receipt to be used for housing – Application dismissed
In November 2003, the defendant local authority was considering a large-scale voluntary transfer (LSVT) of its housing stock to a registered social landlord (NSH). The intention was to secure the necessary refurbishment and maintenance for those properties that the defendants could not afford to carry out.
In November 2004, the defendants issued a consultation document, in which they stated that the moneys received from the transfer would be used to address the housing needs in their area by being spent on capital projects as part of their affordable housing strategy.
Following a tenant ballot in February 2006, the defendants effected the transfer to NSH and reaffirmed their intention to use the net capital receipt from the transaction for housing purposes. They subsequently allocated £8m of the proceeds to housing projects, with the balance being used in other areas of responsibility.
The claimant was one of the tenants affected by the transfer. She applied for judicial review of that decision, contending that, by failing to allocate the total capital receipt to housing needs, the defendants had breached a legitimate expectation, arising out of the consultation, upon which she had relied when voting in favour of the transfer.
The court was asked to decide, inter alia, whether the defendants had given a clear and unqualified commitment to the affected tenants upon which the claimant was entitled to found a legitimate expectation that the whole of the net capital receipt would be applied to housing.
Held: The application was dismissed.
The law normally required a legitimate expectation to be founded on a clear and unqualified representation to the claimant and/or those persons for whom he or she might be speaking, departure from which would be so unfair as to amount to an abuse of power: R v Inland Revenue Commissioners, ex parte MFK Underwriting Ltd [1990] 1 WLR 1545 and Begum (Sultana) v Returning Officer of Tower Hamlets London Borough Council [2006] EWCA Civ 733 referred to.
In the present case, the consultation document did not contain any such clear and unqualified commitment to the affected tenants generally upon which the claimant rested her case or otherwise. Neither the decision to embark on the transfer nor the consultation amounted to a clear or firm representation that the anticipated net capital receipt would be used for housing. No specific amount had been estimated or contemplated as being likely to become available. The proposal in the consultation paper had been part of a wider, general project for the transfer of housing stock, subject to the completion of a number of stages and contingencies under the statutory process.
In addition, it was the defendants’ responsibility to plan and budget so as to enable them to respond appropriately, in varying priorities, as and when they arose over the entire range of their responsibilities. It was inherent in the nature of the proposal that its detailed implementation might be subject to change, as proved to be the case.
In any event, even if there had been a departure from a legitimate expectation, it would not have been an abuse of power or otherwise unfair either to the claimant or the tenants generally. Changes of circumstance entitled the defendants to conclude that it was in the public interest to limit the sum allocated for housing.
David Watkinson (instructed by South West Law, of Bristol) appeared for the claimant; Christopher Baker (instructed by the legal department of North Somerset Council) appeared for the defendants.
Eileen O’Grady, barrister