East Midlands Property Owners Ltd, R (on the application of) v Nottingham City Council

Judicial review of an additional HMO licensing designation requires a claimant to show sufficient interest, but not necessarily a direct personal interest. A claim must be issued promptly; compliance with the three-month limit does not necessarily satisfy that requirement. For the purposes of Housing Act 2004, section 56(2), a local authority may rationally use a defined area, a minimum number of non-mandatory HMOs, complaint data over a sufficiently long period, and a threshold representing a significant proportion. Complaints about management, housing conditions, noise, refuse and amenity may constitute rational evidence of ineffective management and actual or likely problems. A consultation is lawful where the methodology and evidence are sufficiently explained to permit informed responses. The court may refuse permission where the claim was not prompt and the grounds are unarguable.

The claimant, a landlords’ association, challenged the defendant council’s decision to designate areas of Nottingham for additional licensing of specified HMOs under Part 2 of the Housing Act 2004. The challenge concerned standing, promptness, the council’s compliance with sections 56 and 57, the evidence and methodology used to identify qualifying areas, the consultation, and the legality of the licensing fee. The hearing was a rolled-up permission hearing. The central questions were whether the claimant had sufficient interest, whether time should be extended, and whether any ground was arguable.

1. Standing. The claimant had sufficient interest. A judicial review claimant need not demonstrate a direct interest. The claimant was not a busybody or extraneous party: it had been consulted and had made a substantial contribution. One of its witnesses was directly affected.
2. Promptness. The claim, issued four days before the expiry of three months, had not been brought promptly. Promptness concerns the passage of time rather than the claimant’s state of knowledge. It is informed by the need for persons affected by public decisions to proceed on the basis that those decisions are valid and reliable. The delay was unexplained and had prevented effective consideration of interim relief before the licensing scheme commenced.
3. Section 56(2). The statutory inquiry required the council to identify an area containing non-mandatory HMOs, determine whether some were managed sufficiently ineffectively to cause or be likely to cause particular problems, and determine whether they represented a significant proportion. It was rational to use ONS output areas adapted to natural or physical boundaries, require at least 10 non-mandatory HMOs, and use a 20 per cent complaint threshold over four years and nine months.
4. The council was entitled to treat complaints to environmental health, and in limited cases the police, concerning noise, disrepair, overcrowding, refuse and amenity as evidence of ineffective management and actual or likely problems. The methodology avoided a misleading short-term snapshot. The possibility that a small area might qualify on a small number of complaints did not make the approach irrational.
5. Consultation and other grounds. The consultation explained the formula and data sufficiently to enable informed criticism, and the objections were faithfully reported and rationally answered. The reports also showed due regard to Housing Act 2004, section 57(4). The fee ground became unarguable once the council’s evidence established that impermissible expenditure identified in R (on the application of Hemming and others) v Westminster City Council [2013] EWCA Civ 591 was not included.
6. Time was not extended. Permission to seek judicial review was refused.