Housing co-operative — Registered social landlord — Peaceful enjoyment of possessions — Housing Corporation proposing compulsory transfer of housing stock from registered social landlord — Whether compulsory transfer amounting to interference with property rights — Appeal dismissed
The appellant was a non-profit-making housing co-operative and a registered social landlord (RSL) under the Housing Act 1996. RSLs were regulated by the respondent, which had the power to conduct an inquiry into their management and, subject to the consent of the secretary of state, direct them to transfer the property of one RSL to another. An inquiry found that the appellant was being mismanaged to such an extent that its assets and the welfare of its tenants would be at risk unless urgent action were taken to bring good order to such fundamental tasks as the collecting of rent and the controlling of expenditure. The respondent accepted the findings of the inquiry and proposed to direct the transfer of the appellant’s housing stock.
The appellant sought judicial review of that proposal. It argued, inter alia, that the compulsory transfer of its housing stock amounted to an interference with its property rights and its rights of association under Article 1 of the First Protocol to the European Convention on Human Rights. It contended that such interference could be justified only if the transfer of the housing stock was strictly necessary, or if there was a compelling case in the public interest for such a transfer, but this was not the case in this instance.
The High Court dismissed the claim ([2004] PLSCS 126) but the appellant appealed to the Court of Appeal.
Held: The appeal was dismissed.
There was no merit in the appellant’s appeal. It was common ground that the second sentence of Article 1 of the First Protocol was engaged in the present case, which was a case concerning “deprivation” rather than “peaceful enjoyment” or “use”. The primary issue between the parties related to the test to be applied when considering the justification for a deprivation. Having lawfully decided that there would have to be a transfer of housing stock, the respondent’s decision was between two alternatives, namely a compulsory or a voluntary transfer. The decision approximated to a situation where the essential conflict was between two or more groups of private interests.
The appropriate test of proportionality required both a balancing exercise and a decision that could be justified as being reasonably necessary and in the public interest, but not obligatorily the least intrusive of Convention rights. That accorded with authority and was consistent with sensible and practical decision making in the public interest in this context. If “strict necessity” were to compel the “least intrusive” alternative, decisions that were distinctly second best or worse when tested against the performance of a regulator’s statutory functions would become mandatory. A decision that was fraught with adverse consequences would prevail because it would be the least intrusive. Although appropriate in some Convention contexts, this would result in poor administration in the context of cases such as the present: James v United Kingdom A/98 (1986) 8 EHRR 123 and Lough v First Secretary of State [2004] EWCA Civ 905; [2004] 31 EGCS 92 considered.
David Wolfe (instructed by Bindman & Partners) appeared for the appellant; Paul Stanley (instructed by Trowers & Hamlins) appeared for the respondent.
Eileen O’Grady, barrister
