Court of Appeal's judgment in the case of James v Hertsmere Borough Council: What does it mean for jurisdiction of County Court?

Today the Court of Appeal handed down judgment in James v Hertsmere Borough Council [2020] EWCA Civ 489.  The judgment answered a question that has been troubling homelessness lawyers for several years now: does the County Court have jurisdiction, when hearing homelessness appeals, to consider challenges to councils’ ‘contracting-out’ processes?

The short answer is: yes it does.  But the case also raises some difficult questions about the exact nature of the homelessness appeals jurisdiction under section 204 of the Housing Act 1996

Background

The authorities have been in open conflict about this issue for some time.  In 2013, in a fist instance homelessness appeal that was transferred to the High Court (Tachie v Welwyn Hatfield BC [2015] PTSR 662), Jay J decided that the courts have jurisdiction under section 204 to hear ‘contracting-out’ challenges.

Four years later, in Panayiotou v Waltham Forest [2018] QB 1232 (more accurately in Smith v Haringey – the cases were heard together), Lewison LJ added a post-script to his judgment in which he expressed his doubt that Jay J was right.

Last year the Court of Appeal was asked to look at this point in Adesotu v Lewisham [2019] 1 WLR 5637, which concerned whether a homeless person could run a discrimination challenge in a section 204 appeal.  The Court of Appeal did not decide the issue, considering instead that “it should be resolved in a case where it really matters”.

James was such a case.

James v Herstmere

What happened in Mr James’s case was that the council had entered into a one-year contract with a private company called Residential Management Group (RMG), by which the company would carry out the council’s section 202 reviews of homelessness decisions.  During that one-year contract period Mr James requested a review of an adverse ‘priority need’ decision, but the review took some time to carry out and the decision was not reached until after the contract had expired.

At the time of Mr James’s review there were all sorts of problems at Hertsmere Council.  Two of the senior roles were vacant, which meant that (under the council’s constitution) responsibility for entering into a new contract travelled up the chain to the chief executive.  Regrettably, when the contract expired, a much more junior official (Mr Kargbo) reached an agreement with RMG – orally – to extend the contract to cover the period during which Mr James’ review decision was reached.  None of this was very well documented.

Mr James issued a County Court appeal against his homelessness review decision.  Two of his grounds challenged the decision itself, and one challenged the contracting-out process.

Both the chief executive and the leader of the council made witness statements during the appeal proceedings in the County Court, retrospectively ratifying (if the court considered it necessary) Mr Kargbo’s decision to extend the contract. 

Recorder Richard Methuen QC heard and dismissed the appeal.  Mr James applied for permission to appeal and Patten LJ – granting permission – noted that this case might be a good opportunity to resolve the Tachie / Panayiotou tension.

Hertsmere took the Court of Appeal up on that, and filed a respondent’s notice putting the jurisdiction point in issue.

The judgment

The recorder had been right to dismiss the appeal.  RMG had been entitled to carry out the review because it had been requested during the lifetime of the initial original one-year contract.  Even if that was wrong, it had been lawful for the leader of the council and/or the chief executive to ratify Mr Kargbo’s oral extension of the contract.  The Court of Appeal did not express a view on whether Mr Kargbo himself had validly extended the contract.

But the more interesting issue is jurisdiction.

Peter Jackson LJ reviewed the authorities.  He noted that there had been several attempts – in Tachie, Panayiotou/Smith and Adesotu – to establish the relative narrowness of the section 204 jurisdiction.  None of them had been wholly successful.

Instead, applying the binding authority of Runa Begum v Tower Hamlets [2003] 1 AC 430 and Nipa Begum v Tower Hamlets [2000] 1 WLR 306, and Baroness Hale’s obiter dicta in Nzolomeso v Westminster [2015] PTSR 549, the Court of Appeal held that section 204 does include jurisdiction to hear contacting-out challenges.

Where does this leave us on jurisdiction?

Since Adesotu it has become fashionable to try to strike out grounds of appeal by taking jurisdictional points.  Local authorities are increasingly running arguments based on the third and fourth limbs of Bean LJ’s decision in the Adesotu case by:

• Asserting that the ground of appeal does not ‘arise from the decision’ and
• Relying on the ‘respondent’s notice point’ in Adesotu (questioning whether the issue had been raised at any stage before the review decision).

Remembering what Lord Neuberger said in Holmes-Moorhouse – cautioning homeless people’s representatives against ‘over-technical’ and ‘nit-picking’ approaches – the shoe has, to a certain extent, been on the other foot recently.

What’s interesting about James is that the Court of Appeal seems to have taken a different approach to both of those Adesotu points.  And McCombe LJ was in in both cases (myself, and my colleague Riccardo Calzavara of Cornerstone Barristers, are therefore in very good company).

On the first Adesotu point (‘arising from the decision’), the Court of Appeal in James held that the test is whether the ground of appeal “concerns or relates to the lawfulness of the decision”.  Peter Jackson LJ rejected the council’s submission that appellants could only challenge “errors that are intrinsic to the making of the decision or to events during the period between the request for the review and the making of the review decision”.

Compare that to Adesotu, where Bean LJ applied an earlier test (set out in Abed v Westminster [2011] EWCA Civ 1406) of “a point of law said to be erroneous in the review decision” (emphasis added), and rejected Ms Adesotu’s submission that an appellant was entitled to challenge something that had taken place before the review process itself.

So, applying James an appellant could challenge something that took place before the review process, whereas applying Adesotu s/he could not; applying James an appellant could challenge something that merely ‘concerns or relates to’ the review decision, whereas applying Adesotu s/he could only challenge the lawfulness of something in the decision itself.

On the second Adesotu point (the ‘respondent’s notice point’ – whether an appellant may rely on something that had not been raised before the review decision) the contrast between the two cases is even stronger.

In Adesotu Bean LJ upheld HHJ Luba QC’s decision that there is no jurisdiction to consider a point that had not been raised before the review decision was made.  In James, on the other hand, Peter Jackson LJ reminded us of what Sedley LJ had said in Nipa Begum: “The jurisdiction of the county court is at least as wide as that of a court of judicial review” (affirmed in Runa Begum).

Judicial review, of course, does not always involve pre-decision representations, and a claimant in the Administrative Court is entitled to (attempt to) challenge any aspect of the decision that s/he considers to be unlawful.  Very often, some unlawful aspect of decision under challenge will be unknown to a judicial review claimant until after the decision has been reached, and in many cases the claimant may not even know about a decision or policy at all until s/he is affected by it.  That holds true in homelessness cases: people in Mr James’s position may not find out about contracting-out or other errors until after the review decision has been reached.

To give a practical example: suppose that an applicant finds out (during disclosure, perhaps) that the council had an unpublished temporary accommodation placements policy, which the reviewing officer had neither seen nor applied.  The approach adopted by HHJ Luba QC and Bean LJ in Adesotu would exclude that ground of challenge, whereas the court would have ample jurisdiction on Peter Jackson LJ’s analysis in James.

The battles over jurisdiction are sure to continue.