Babakandi v Westminster City Council

A local housing authority may use quotas and restricted labelling within an allocation scheme, provided the scheme complies with the statutory reasonable-preference requirement. That requirement does not mean that preference must be given continuously or in relation to every property. It is sufficient that reasonable preference is provided over a reasonable period. An allocation scheme must be read as a whole, including incorporated annual or mid-year reports. Rent arrears may be taken into account as behaviour affecting an applicant’s suitability to be a tenant, and an automatic suspension from bidding is not unlawful merely because it does not require an individual assessment in every case. A legitimate expectation requires a clear and unambiguous representation; silence in a standard letter did not create such an expectation.

The claimant was a severely overcrowded Westminster tenant seeking a transfer to more suitable accommodation. The council’s allocation scheme placed applicants in bands and priority groups, used quotas and restricted bidding for some properties, and suspended applicants with rent arrears from bidding.

The claimant challenged the scheme and its operation under Housing Act 1996, alleging insufficient transparency, failure to give reasonable preference, unlawful automatic suspension because of rent arrears, and a legitimate expectation arising from a January 2010 letter that he could bid despite his arrears.

1. Allocation scheme and reasonable preference. The claim based on the quota system, restricted labelling and the promotion of selected severely overcrowded households failed. The statutory scheme had to be considered as a whole. The published scheme incorporated the annual and mid-year reports, which were available on the council’s website. Although quotas and restricted labelling reduced transparency and disadvantaged applicants unable to bid for particular properties, the guidance contemplated those mechanisms and the council was entitled to conclude that a more equitable distribution of scarce accommodation justified that disadvantage.
2. The duty under section 167(2) of the Housing Act 1996 did not require reasonable preference to be given at all times or for every property. It was sufficient that the relevant priority group received reasonable preference over a reasonable period. The evidence did not establish that the claimant’s group had been denied that preference.
3. Rent arrears. Section 167(2A)(b) permitted the council to take account of behaviour affecting an applicant’s suitability to be a tenant. Reliability in paying rent was capable of falling within that provision. The scheme’s automatic suspension of applicants with arrears was lawful. The discretion to permit bidding in exceptional circumstances did not require further criteria for the scheme to be valid on the facts of this challenge.
4. Legitimate expectation. The January 2010 letter addressed one restriction, namely the claimant’s exclusion from the earlier quota of promoted households. It did not address his separate suspension for rent arrears. Its silence, viewed against the earlier communications reminding him that arrears prevented bidding, was not a clear and unambiguous representation. Further, the principle would only prevent the authority from frustrating an expectation where doing so would be so unfair as to amount to an abuse of power, applying R v North and East Devon Health Authority [2001] QB 213 at [57].
5. The judicial review claim was dismissed. It was unnecessary to determine the separate issue of delay.