R v Secretary of State for the Environment, Transport and the Regions, Ex p Spath Holme Ltd (Spath Holme Ltd, Ex p)

A statutory discretion is never unfettered. Its lawful scope is determined from the language, context, policy and objects of the enabling Act. A reserve power to restrict residential rents may serve housing policy and protect tenants from hardship; it is not confined to counter-inflationary action merely because earlier legislation had that purpose.

Clear statutory authority to modify rent legislation permits consequential changes to rent-registration machinery. Presumptions favouring property rights and restrictive construction of delegated powers operate where genuine doubt exists, but cannot displace clear language. Parliamentary materials may be used only under the strictly controlled conditions governing recourse to Hansard.

The ministers made the Rent Acts (Maximum Fair Rent) Order 1999 under section 31 of the Landlord and Tenant Act 1985. The Order capped increases in previously registered fair rents by reference to inflation and a prescribed percentage. It also modified the registration machinery in Schedule 11 to the Rent Act 1977.

Spath Holme Ltd, a landlord, sought judicial review on the principal ground that section 31 authorised rent restrictions only for counter-inflationary purposes. A single judge refused permission, but the Court of Appeal granted permission, accepted the principal challenge and quashed the Order: [2000] 3 WLR 141.

The central issue was whether section 31 conferred power to restrict rents in order to protect tenants from hardship caused by sharp increases, notwithstanding that the measure was not directed at general inflation. Additional issues concerned modification of the 1977 Act, relevant considerations, rationality, proportionality and Convention rights.

1. Disposition. The House unanimously allowed the ministers’ appeal, quashed the Court of Appeal’s order and dismissed the application for judicial review. Lord Bingham of Cornhill delivered the leading speech. Lords Nicholls of Birkenhead, Cooke of Thorndon, Hope of Craighead and Hutton agreed that the Order was lawful.

2. Scope of the reserve power. Per Lord Bingham, a statutory discretion must promote the policy and objects of the enabling Act. Section 31 of the Landlord and Tenant Act 1985 was broad but not unlimited. Its purpose was not confined to countering inflation. It was a housing-policy power which could be exercised where the minister reasonably considered it necessary or desirable to protect tenants from hardship caused by increased or excessive rents. The legislative context did not justify treating the counter-inflationary purpose of earlier legislation as the only permissible purpose.

3. Consolidation and legislative history. Lord Bingham considered it legitimate, where the social and factual context of a consolidated provision could not otherwise be understood, to examine its statutory predecessor without assuming that the consolidation changed the law. Lord Cooke substantially agreed and regarded the wider purpose as confirmed by the history. Lords Hope and Hutton considered such recourse unnecessary or doubtful because the current provision was clear. On every approach, section 11 of the Housing Rents and Subsidies Act 1975 did not confine the power to counter-inflationary action.

4. Hansard. Lords Bingham, Hope and Hutton held that the strict threshold in Pepper v Hart [1993] AC 593 was not met: the statutory language was not ambiguous, obscure or absurd, and the ministerial statements were not clear and unequivocal. Lords Nicholls and Cooke considered the width or purpose of the power sufficiently uncertain to permit examination of Hansard, but agreed that the statements did not establish the restricted construction advanced by the landlord.

5. Additional challenges. Per Lord Bingham, section 31(2) expressly permitted supplementary or incidental provisions modifying any enactment relating to rent. The Order could therefore modify Schedule 11 to the Rent Act 1977 and cap the rent registered without revoking section 70. The power could distinguish dwellings by the legal characteristics of their tenancies. The ministers had considered landlords’ interests and were entitled to strike the policy balance between landlords and tenants. The Order was neither irrational, unfair nor disproportionate and did not breach the European Convention on Human Rights.

1. House of Lords: The ministers’ appeal was allowed unanimously. The Court of Appeal’s order was quashed and the application for judicial review was dismissed.
2. Court of Appeal: The court granted permission, held that section 31 of the Landlord and Tenant Act 1985 did not authorise the Order and quashed it: [2000] 3 WLR 141.
3. Single judge: Permission to apply for judicial review was refused.