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 — Claim dismissed
The claimant was a non-profit-making housing co-operative and a registered social landlord (RSL) under the Housing Act 1996. RSLs were regulated by the defendant, which had the power to conduct an inquiry into the management of an RSL and, subject to the consent of the Secretary of State, direct it to transfer its property to another RSL. An inquiry into the claimant’s affairs found that it was being mismanaged to such an extent that its assets and the welfare of its tenants would be at risk unless urgent action was taken to address its failings and to bring good order to such fundamental tasks as collecting rent and controlling expenditure. The defendant accepted the findings of the inquiry and proposed to direct the transfer of the claimant’s housing stock.
The claimant 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.
Held: The claim was dismissed.
Article 1 of the First Protocol required a fair balance to be struck between the general interest of the community and the protection of the individual’s fundamental rights. If a compulsory purchase order was to withstand a challenge, it had to be demonstrated that the Secretary of State had rational grounds to conclude that a substantial public interest existed and that it outweighed the landowner’s rights: Chesterfield Properties plc v Secretary of State for the Environment Transport and the Regions (1998) 76 P&CR 117 considered.
National authorities had a wide margin of appreciation in determining whether a measure was in the public interest, and it was not appropriate to apply a test of strict necessity. The defendant had to determine whether a compelling case in the public interest had been established for the transfer of the claimant’s housing stock to another RSL. It had to balance the comparative benefits of a compulsory transfer and a voluntary transfer to a different RSL and the claimant’s wish for the latter to enable its members to continue to enjoy the benefits of a co-operative. If a comparison of the benefits and disadvantages of the two alternative options compellingly showed that the option resulting in the deprivation of property was to be preferred, a compelling case for adopting that option in the public interest would have been established: James v United Kingdom A/98 (1986) 8 EHRR 123 considered.
It could not be said that the defendant had made the wrong judgment as to where the fair balance lay, nor that there were no rational grounds for concluding that the public interest in favour of a transfer was such that it outweighed the claimant’s right to dispose of its housing stock as it wished.
David Wolfe (instructed by Bindmans) appeared for the claimant; Paul Stanley (instructed by Trowers & Hamlins) appeared for the defendant.
Eileen O’Grady, barrister
