Secretary of State for the Environment, Transport and the Regions and Another, Ex parte Spath Holme Limited, R v.

The House considered the scope of the reserve order‑making power in section 31 of the Landlord and Tenant Act 1985 (consolidating section 11 of the Housing Rents and Subsidies Act 1975) and whether that power was limited to counter‑inflationary purposes. The court held that section 31 conferred a broad but not unlimited reserve power to restrict or prevent increases of rent for dwellings and to make incidental amendments to other rent‑related provisions, and that Parliament had not confined the power solely to combating general inflation.

The House applied ordinary principles of statutory construction, considered the position of a consolidation Act and its predecessors, and reaffirmed the strict tests for resort to Hansard under Pepper v Hart. It rejected arguments that the Order was ultra vires on grounds including misapplication of the definition of "dwelling", unlawful modification of the Rent Act 1977 procedure, procedural incompatibility with section 74, and breach of Convention rights. The ministers' Rent Acts (Maximum Fair Rent) Order 1999 was within the section 31 power and the appeal was allowed.

This was an appeal by the Secretaries of State against a Court of Appeal decision quashing The Rent Acts (Maximum Fair Rent) Order 1999. Spath Holme Limited, a landlord, had sought judicial review and contended that section 31 of the Landlord and Tenant Act 1985 did not empower ministers to make the Order.

• Nature of the application: an application for judicial review by a landlord seeking to quash the 1999 Order which limited permitted increases in registered fair rents; the Order was made under section 31 of the 1985 Act.
• Principal issues before the House: (i) the proper construction and scope of section 31 (the reserve power to limit rents); (ii) whether, as a consolidation provision, section 31 should be read down to the narrower counter‑inflation purpose of its predecessors (section 11 of the 1975 Act and earlier counter‑inflation Acts); (iii) whether resort to Hansard and the legislative history was permissible and, if so, what it showed; and (iv) subsidiary challenges including alleged procedural and ECHR breaches and Wednesbury/unreasonableness grounds.

The House analysed the statutory text, context in the 1985 consolidation Act, and the antecedent statutory history. It rejected the submission that section 31 was confined to counter‑inflationary uses, noting (inter alia) that the 1975 Act was not solely counter‑inflationary in its purpose, contained no sunset, and enacted broad housing‑policy provisions. The court reiterated that consolidation Acts should not be read by reference to predecessors unless ambiguity or other recognised grounds make that necessary, and that Pepper v Hart permits use of Hansard only where the statutory language is ambiguous or obscure and ministerial statements are clear and unequivocal. On the facts the House concluded that section 31 was wide enough to authorise the 1999 Order, that ministers had not acted irrationally or unlawfully in making it, and that the Convention arguments did not show illegality. The Court of Appeal was therefore wrong to quash the Order and the appeal was allowed.

The House noted and applied established administrative law principles (including Padfield and Wednesbury review), confirmed the strict conditions for resort to parliamentary materials, and dismissed the subsidiary grounds raised by the landlord.

Appeal allowed. The House held that section 31 of the Landlord and Tenant Act 1985 is a broad reserve power to restrict or prevent increases of rent for dwellings and to make incidental or modifying provisions; it is not confined solely to counter‑inflationary purposes. The Rent Acts (Maximum Fair Rent) Order 1999 fell within that power and the Court of Appeal was wrong to quash it. The strict Pepper v Hart conditions for using Hansard should be applied; in this case the statutory language and context were decisive and the ministers' exercise of the power was not unreasonable or in breach of Convention rights.

Single judge refused permission for judicial review; the Court of Appeal granted permission and, at a further hearing, accepted Spath Holme's contention and quashed The Rent Acts (Maximum Fair Rent) Order 1999 (see Court of Appeal judgment reported at [2000] 3 WLR 141). The House of Lords allowed the appeal ([2000] UKHL 61).