R (on the application of MACLEOD) v GOVERNORS OF THE PEABODY TRUST (2016)
Keywords: Public functions, Judicial Review, Human Rights Act, Definition of “Public Authority” for the purposes of s.6(3) Human Rights Act, Providers, s.73 Care Act
The case concerns Mr. Macleod, a tenant of The Peabody Trust (a Registered Social Landlord), living in a property intended for ‘key workers’ and provided on an intermediate rent (i.e. less than full market rent, but not as low as, nor set according to the same rules as, social housing rent). Mr. Macleod’s original tenancy agreement had been with the Crown Estate Commissioners (CEC) and had subsequently been one of a large block of ‘keyworker’ properties transferred to Peabody. Subsequently, Mr. Macleod wished to exchange his tenancy with a local authority social housing tenant in Edinburgh and applied to Peabody for approval to do so. Peabody declined to approve the exchange on the grounds that Mr. Macleod was not a social housing tenant and had no right to a mutual exchange. Mr. Macleod sought a judicial review of that decision, contending that Peabody was a public body in relation to the decision and thus amenable to judicial review.
In weighing this issue, Davis J turned to R (Weaver) v London and Quadrant Housing Trust  1 WLR 363 as the leading authority on the public authority status of social housing providers. He considered the factors set out in Weaver as relevant to whether a particular act undertaken by such a body should be considered a public function. These were:
- significant reliance on public finance enabling the body to achieve its objectives;
- whether the body was operating in close harmony with a local authority assisting the latter to meet its statutory duties and objectives;
- whether the body’s freedom to allocate properties was circumscribed by allocation agreements with the local authority and statutory co-operation duties;
- the provision of subsidised housing;
- the charitable objectives of the body.
In Weaver, none of these features in isolation had been considered sufficient to make the trust’s provision of housing a public function, however their cumulative effect had established “sufficient public flavour to bring the provision of social housing by this particular RSL (registered social landlord) within that concept”. Additionally, in Weaver, the act in question had been the termination of a tenancy, a decision so bound up with the provision of social housing that it was determined to be a public function amenable to judicial review.
In this case, however, many of these features were not present. Peabody had purchased the properties from CEC using funds raised from a bond issue rather than having recourse to any public funds (even though the bond over time was to be repaid from Peabody’s general funds which included some grants from public funds). Peabody had no allocation relationship with any local authority. Peabody were restricted in their freedom to allocate properties in the same category as Mr. Macleod’s, in that they were open only to keyworkers referred by approved employers. Although the properties were not let a full market rent, it was not clear that they were pure social housing. The provision of below market rent properties for keyworkers did not fall within the definition of social housing in s.69 Housing and Regeneration Act 2008 and rents for the properties transferred from CEC were not subject to the same level of statutory regulation as social housing in general. Whilst some public function was fulfilled by the provision of homes for key workers in London, the cumulative effect of the various factors in the circumstances of this case did not have the sufficiency of public flavour as in Weaver.
Peabody was a regulated private registered provider of social housing and had statutory powers over and above the powers available to private landlords in relation to its general housing stock, however the properties transferred from CEC fell into a different category and could be readily separated from those in its general stock.
The decision was not amenable to judicial review because Peabody was not a public body in relation to the properties transferred from CEC.
This case illustrates that the full range of public law principles (not fettering discretion, reasonableness (rationality), due process etc.) apply to decisions taken in carrying out a public function, not merely to traditional ‘public sector’ bodies. In Weaver, the housing trust, was carrying out a public function when it terminated a social housing tenancy. In this case the housing association was not carrying out a public function when it declined a mutual exchange because the tenancy involved was not ‘pure’ social housing – even though other properties it administered were ‘pure’ social housing.
This is potentially of interest to providers of regulated care. The provisions of s.73 Care Act specify that providers of regulated care are “exercising a function of a public nature in providing the care or support” where the client is publicly funded and explicitly bring them within the ambit of the Human Rights Act. However, providers of regulated care may also find themselves subject to the full scrutiny of public law in the sorts of circumstances where:
- they are receiving any degree of public funding for a client’s care
- they are performing functions of a “public nature”, perhaps particularly anything done on behalf of or in close co-operation with local authorities
The case also contains an interesting discussion about the relationship between private law contractual obligations and public law decisions. It was established in R (McIntyre) v Gentoo Group Limited  EWHC 5 (Admin) that a right exercised in accordance with contractual terms which conferred that right does not protect the decision to exercise that right from being subject to public law scrutiny if it would otherwise be amenable to judicial review. In this case, the decision under review was that of declining to take a step prohibited by a contract, rather than exercising a right under a contract. Peabody were successful in arguing that, even if their decision had been subject to public law scrutiny, they could not be compelled by public law to take a decision which was not open to them (because they were contractually prohibited from taking it).