R v Secretary of State for the Environment, ex parte Walters

Council planning to dispose of freehold of housing estate as part of redevelopment scheme – Secretary of State for the Environment consenting to scheme – Tenants applying for judicial review – Whether Secretary of State had adequately consulted tenants – Whether council’s decisions had been illegally made – Applications dismissed Brent London Borough Council decided to implement a scheme for the redevelopment of the Chalkhill Estate, comprising the Bison and Scientist Estates. Under the scheme the Bison Estate was to be demolished and reconstructed, and the Scientist Estate was to be refurbished. The scheme was set out in a framework agreement made between the council and New Horizons (Brent) Ltd, which was owned by the Metropolitan Housing Trust Ltd (‘MHT’), and Wimpey Construction (UK) Ltd. Under the scheme the council were to transfer their freehold interest in the estate to New Horizons for nominal monetary consideration. Part of the estate was to be disposed of for the development of a retail supermarket, another part was to be redeveloped by Wimpey for private owner occupation, and the remainder was to be developed to provide social housing. The Scientist Estate was to be transferred to New Horizons, which was to transfer it to MHT for £2m and a subsequent payment. MHT was then to lease back to the council those dwellings on the Scientist Estate whose tenants had not indicated that they wished to become tenants of MHT, and the council was to pay £2.5m for those leases. The Secretary of State gave his consent to the proposals. A number of tenants applied for judicial review. The applicant in the first case asked the court to quash the consent of the Secretary of State to the proposals on the basis that the secure tenants of the Scientist Estate had not been adequately consulted in respect of the transfer of the freehold to New Horizons and MHT, as required by section 106A of the Housing Act 1985. The applicants in the second case asked the court to quash the council’s decisions which allowed the proposals to proceed on the basis that they had been in breach of statutory provisions. Held The applications were dismissed. 1. The court was entitled to quash the Secretary of State’s consent on the basis that he had proceeded under the misunderstanding of law that the freeholds of the committed council tenants’ flats were not being transferred. However, in the circmustances, subject to receiving an undertaking to ensure that the applicant’s right to purchase was not affected, it was not appropriate for the court to exercise its discretion. 2. It had not been demonstrated that the council had acted illegally. The council had been entitled to conclude that there would be no need to set aside capital assets under Part IV of the Local Government and Housing Act 1989. The Public Works Contracts Regulations 1991 did not apply because the building of the social housing was not work done for the authority, and therefore the scheme was not a public works contract. Accordingly, the applications for judicial review were dismissed. John Howell QC and Nigel Giffin (instructed by Brent Community Law Centre) appeared for the applicant; Jeremy Sullivan QC and Ian Burnett (instructed by the Treasury Solicitor) appeared for the Secretary of State for the Environment; Presiley Baxendale QC, Michael Fordham and Andrew Hunter (instructed by the solicitor to Brent London Borough Council) appeared for the council.