McIntyre & Anor, R (on the application of) v Gentoo Group Ltd

A registered social landlord’s decision about consent to a mutual exchange of social housing is amenable to judicial review where it is taken in managing and allocating social housing. Public law may apply even though the decision also concerns contractual rights. The landlord must nevertheless act within the contractual and statutory framework governing consent to assignment. A condition requiring payment of a debt arising under a different tenancy is unrelated to the landlord-and-tenant relationship concerning the tenancy to be assigned and is not a lawful condition where consent cannot reasonably be withheld. Judicial review remains discretionary. Where an ordinary claim under the Landlord and Tenant Act 1988 provides a suitable and more effective remedy, relief may be refused.

The claimants were assured tenants of a dwelling owned within the Gentoo group. They sought consent to exchange their tenancy with another assured tenant. Consent was made conditional on Mr McIntyre paying rent arrears and a county court judgment debt arising from an earlier tenancy of a different property.

The claimants argued that the decision was irrational, unlawfully applied a blanket policy, and imposed a condition unrelated to the tenancy being assigned. The defendant disputed amenability to judicial review and relied on alternative remedies. The central issues were whether the decision was subject to public law, whether the condition was lawful and reasonable under private law, and whether relief should be granted.

1. The decision was amenable to judicial review. Following the majority reasoning in R (Weaver) v London & Quadrant Housing Trust [2009] EWCA Civ 587, decisions concerning mutual exchange form part of a registered social landlord’s public function of managing and allocating social housing. There is no additional requirement that the particular decision possess a separate public law element.

2. Public and private law may impose different requirements when a public body exercises a contractual right. Differences may concern relevant considerations, the perspective from which reasonableness is assessed, the burden and standard of proof, and who may challenge the decision. A public authority must consider whether it has a contractual right to act as it proposes; acting on a mistaken legal assumption may amount to public law error.

3. The claimants’ right to exchange involved assignment and was subject to section 1 of the Landlord and Tenant Act 1988. Under that provision the landlord had to consent unless it was reasonable not to do so, and any condition imposed had to be reasonable. The landlord bore the burden of showing reasonableness.

4. The principles stated in Ashworth Frazer Ltd v Gloucester City Council [2001] UKHL 59 applied. A landlord may not refuse consent or impose a condition unrelated to the landlord-and-tenant relationship concerning the subject matter of the lease. Reasonableness is generally a question of fact, and the landlord must show that its conduct was reasonable, not necessarily that it was right or justifiable.

5. The condition requiring payment of arrears and a judgment debt relating to 78 Rockingham Road was not connected with the tenancy which the claimants sought to assign. It was a lever to recover a separate debt, rather than a means of protecting the landlord against an undesirable assignee or securing performance of the tenancy being assigned. The condition therefore infringed the first Ashworth Frazer principle.

6. The condition was not made lawful by the tenancy agreement, the Tenants’ Handbook or section 92(5) of the Housing Act 1985. The landlord proceeded on the mistaken assumption that it could impose the condition and took an irrelevant consideration into account. The decision was consequently unlawful in public law.

7. The remaining grounds failed. Considering the position overall, requiring payment of a debt to which the landlord was entitled was not, apart from the separate-tenancy issue, a decision no reasonable social landlord could have made. There was no sufficient evidence of disproportionate impact, inability to pay, or a blanket policy applied without considering the claimants’ circumstances.

8. Relief was refused. An ordinary claim under the Landlord and Tenant Act 1988 was a suitable alternative remedy, and quashing the historic decision could not restore the proposed exchange because the property had subsequently been let to another person. The claim for judicial review was dismissed.

Not stated in the judgment. The claim was decided at first instance in the Administrative Court.