First Real Estates (UK) Ltd v Birmingham City Council [2009] EWHC 817 (Admin)

[2009] EWHC 817 (Admin)Case No CO/6424/2008
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 01/05/2009
Before
THE HONOURABLE MR JUSTICE PLENDER
Between
FIRST REAL ESTATES (UK) LIMITEDClaimantBIRMINGHAM CITY COUNCILDefendant
(Transcript of the Handed Down Judgment ofWordWave International LimitedA Merrill Communications Company165 Fleet Street, London EC4A 2DYTel No: 020 7404 1400, Fax No: 020 7404 1424Official Shorthand Writers to the Court)
Mr Anthony Allston (instructed by The Birmingham Legal Partnership) for ClaimantMr Jon Holbrook (instructed by Legal Services Department) for DefendantHearing Hearing dates: 3 April, 2009
Judgment
[1]CPR 54.1(2) defines a “claim for judicial review” as a claim to review the lawfulness of an enactment or of “a decision, action or failure to act in relation to the exercise of a public function”. However, as Lord Wilberforce pointed out in Davy v Spelthorne Borough Council, [1984] AC 262 at 276, the expressions “public law” and “private law” are recent immigrants. One of the issues presented by the present case is that of determining whether Birmingham City Council, “the Council”, was exercising a public function when deciding to terminate what it described as its arrangements with First Real Estates (UK) Limited, “FRE”, for the provision of temporary accommodation for those whom the Council was obliged to house in accordance with Part VII of the Housing Act 1996. The Facts[2]FRE was formed on 6June 2005 with the object of supplying to the Council property to be used as accommodation for homeless people. The managing director of FRE is Mr Iftikhar Hussain. He had previously worked for Dadyal Property Link, a company which made arrangements through landlords for the supply of properties to the Council. After setting up FRE Mr Hussain reached an agreement with Dadyal Property Link pursuant to which it would refer to FRE all properties on its portfolio which would then be offered by FRE to the Council. In due course, FRE became the biggest supplier of temporary accommodation to the Council.[3]In his witness statement in these proceedings, Mr Hussain makes the point that FRE was able to meet the Council’s needs for housing at short notice. Requests for properties to be made available after 5 PM on any working day were met and on one occasion occupants were even housed at 9.30 PM. It is to be inferred from Mr Hussein’s account that the Council frequently had need of premises for prompt occupation and appreciated the ability of FRE to supply that need. Conversely the Council commonly had cause to terminate at short notice its requirement for such premises. That is not surprising. An individual may be eligible to he supplied with accommodation under the Housing Act on one day but not on the next. An individual supplied with such accommodation might in due course find preferable accommodation on his own. The agreements concluded between the Council and FRE characteristically provided (as in a specimen letter dated 31 March 2008):
“The licence is terminable by either party on receipt of written notice at any time”
. The licence agreements also provided for payment of licence fees four weekly in arrears and pro rata. This meant that where a weekly licence fee was computed from a Sunday to a Sunday, and the licence was terminated on the first Wednesday, FRE would be entitled to be paid four sevenths of one week’s licence fee. The Council did in fact make use of its facility to terminate licence agreements with FRE without notice. For instance, by letter dated 21 September 2007 a member of the Council’s staff wrote to FRE a letter ending:
“Our tenant… has now vacated the property on 14 September 2007 and we hereby terminate the licence agreement with immediate effect.”
[4]The licences characteristically supplied to the Council by FRE contained a warranty, on behalf of FRE, expressed as follows:
“we warrant for our part that the Housing Unit complies with all current legislation and is fully licensed as required to be used as residential property.”
The Council did not inspect each of the properties made available to it for use by homeless people but relied on the providers of the property to do so. Providers of accommodation, including FRE, were required to complete “Property Self Certification” forms, certifying that the provider had examined the property and found it satisfactory in thirteen itemised respects. They were also required to complete self-certification forms in respect of the safety of the gas supply and appliances.[5]In the course of 2007 the Council initiated a process designed to replace its existing arrangements for the supply of accommodation for homeless persons with system of public tenders for public procurement. FRE responded to the pre-qualification invitation and received a letter dated 11September 2007 inviting it to submit a tender, which it did. In due course FRE received confirmation that it had met the applicable Environmental Sustainability and Racial Equality standards. In a note handed to the Claimants on 16June 2008, however, the Council stated inter alia that “The (Council) (Acting Strategic Director) determined not to proceed further with contract (CPOC/0293) in respect of which you have submitted a tender”.[6]In the absence of a tendering arrangement providing the supplier of accommodation with a secure market, the Council was unable to assure FRE of the use that it might make of FRE’s properties. On 15 May 2008 Mr Saran Sankhagiri on behalf of the Council responded to an e-mail from Ms Severa of FRE by letter headed “Vacant Properties”. The letter stated:
“We are aware of the properties that are provided by your company, however, as previously advised, we are unable to confirm if we are able to use the properties due to the nature of the accommodation service provision … “For this reasons [sic] we are unable to advice you [sic] at any point that we are able to use your properties.”
[7]At about the same time the Council made to FRE a series of complaints about the quality of the accommodation that it was supplying. The Council had received from solicitors known as CLP a communication threatening to take judicial review proceedings about accommodation at Flat 1, 732 Stratford Road on the ground that it was “not suitable to discharge the local authority’s duties under Part VII of the Housing Act 1996”. The same solicitors wrote another letter complaining about the “appalling condition” of premises supplied to one Mr Nurhussein and family. The solicitors wrote:
“The Agent who showed Mr Nurhussein around the property gave the impression that he was from the local authority. He advised Mr Nurhussein that if he failed to sign for the accommodation, then he would be on the streets”
. It appears from a handwritten note on the file that Mr Nurhussein and family were moved to bed and breakfast accommodation on the day the letter arrived. Another licensee stated that she was given temporary accommodation at 126 Bordesley Green East and only stayed for one night because “it was dirty, infested with insects in the kitchen and broken windows. My mother also witnessed seeing mice in the kitchen”. A Council buildings inspector, after visiting on 2 May 2008 a different property supplied by FRE, listed a series of defects and concluded “In my opinion this property is unsuitable for temporary accommodation use. Do not re-use”.[8]The quality of accommodation was not the only subject of the complaints made about FRE. By letter dated 30 May 2008 one Maxine Goggins of Weir Housing Ltd wrote to the Council a letter stating that she had received a call from someone who identified herself as Nicky from FRE “in a very aggressive manner and a male voice could be heard in the background to prompt the caller”. Ms Goggins stated “When I tried to defend myself I was continually spoken over and told it was now a police matter”. Ms Goggins understood that the call was prompted by FRE’s discovery of a Weir Housing Ltd business card in the possession of an occupant of one of FRE’s properties.[9]A Council officer, Gurdish Kaur Sandhu has made a statement in these proceedings reading in part as follows:
“I also became aware of the problem with the rent claimed by the Claimant for the property at 1126 Bordesley Green … when it was unoccupied … Statements of account for March and April 2008 are exhibited at GKS8. These statements suggest to me that the Claimant was charging the Council for properties that were not occupied.”
[10]Another Council officer, Gary Nicholls, reported that he had received an e-mail from a British Gas contract manager alleging that one of his engineers was offered extra work by Mr Hussain in exchange for omitting various findings from his report. The e-mail caused the Council particular concern.[11]The Council also became concerned about the safety of gas appliances and gas supplied in properties supplied by FRE. By a letter dated 21 May 2008 Lisa Barker, the Council’s interim head of housing, referred to “discrepancies” in the gas safety certificates supplied by FRE in respect of fifteen properties. The letter stated that the Council’s private sector housing services team would undertake inspections of all the properties managed by FRE, following which FRE would be advised, in writing, of the inspection carried out, the contraventions (if any) and the necessary remedial works to ensure that the properties comply with the Council’s enforcement standards. The Council received no response to that letter.[12]On 2 June 2008 Lisa Barker wrote a further letter, this time to Mr Zulfiquar Hussain of FRE stating that until the Council had completed its inspections of the properties managed by FRE “the Council will not be making any further placements of homeless persons in any of [FRE’s] properties”. On 10 June Lisa Barker sent a letter to Mr Iftikhar Hussain stating that she wished to arrange a meeting to discuss a number of issues including those relating to the standard of property. She proposed a meeting on 16 June at the Council’s premises. The complaints made by FRE in these proceedings focus upon that meeting and particularly on the procedure adopted at it.[13]Mr Iftikhar Hussain attended that meeting along with his solicitor (Ms Virk), Mr Naeem and Councillor Tariq Ayoub Khan. Mr Khan is deputy leader of the Liberal Democratic Party in Birmingham. He had known Mr Iftikhar Hussain for over twelve years and spoke well of him. He had in the past made representations to the Council on behalf of FRE, particularly about a delay in making payments. He attended the meeting on 16 June because he understood “the aim of the meeting was to resolve issues and the way forward for both parties was to work together … At the commencement of the meeting I spoke and told everyone that I was hoping a constructive way forward would be worked on to avoid a potentially embarrassing situation.”[14]Eight representatives of the Council were present including Lisa Barker and Martin Brooks, the Council’s environmental housing officer. At the outset of the meeting Lisa Barker distributed a letter dated 16June 2008 setting out the Council’s concerns, which centred on the quality of the accommodation supplied by FRE and the gas certificates. The Council stated that it had received, and would send to FRE’s solicitors, a copy of the letter from CLP about Flat 1, 732 Stratford Road. The Council stated that it had received complaints about other service providers but was not able to supply FRE with details. Following a break in the proceedings the Council’s representatives returned and FRE’s representatives were told (in the words of the Council’s minutes) “that FRE’s services were being ended on 7 days’ notice” and “The occupants of FRE’s premises would be re-housed from 24 June 2008.” That decision was confirmed by letter from the Council dated 18 June 2008 which read in part “The Department [scilicet the Council’s Housing Department] gives you 7 days’ notice to terminate the arrangements between Birmingham City Council and First Real Estates (UK) Ltd for the provision of temporary accommodation”.[15]In fact the decision was not as precipitate as a casual reading of those minutes and that letter might imply. It will be recalled that by its letter of 2 June 2008 the Council had already advised FRE that it would not be making any further placements of homeless persons in any of FRE’s properties pending the outcome of its enquiries. In stating that occupants of FRE’s premises would be re-housed from 24 June 2008, the Council set a date for the commencement of a process of re-housing that would inevitably take some time. Indeed I was informed at the hearing on 3 April 2009 that the process of re-housing FRE’s occupants was still not entirely complete. The reference to “7 days’ notice” appears to denote the period after which the Council would begin to re-house FRE’s occupants; and consequently the period after which FRE could expect a diminution of its income from the Council.[16]Even so, it is contended on behalf of FRE that the decision of 16 June 2008 was unfair and unreasonable since(i) The Council did not notify FRE in advance of the particular issues and properties to be discussed at the meeting that day.(ii) At the commencement of the meeting Mr Iftikhar Hussain was presented with a letter setting out various allegations of regulatory defects but was not given time to investigate these and to respond as he would wish.(iii) The allegations as to non-compliance with the Gas Safety Installation and Use) Regulations related to more than 150 certificates so that it would take considerable time to check them but Mr Hussain was not allowed the time to do so.(iv) The allegations as to non-compliance with the Health and Safety Rating System introduced under Part I of the Housing Act related to 23 properties so that it would take considerable time to check them but Mr Hussain was not allowed the time to do so.(v) No period of time was offered to FRE at the meeting on 16 June to remedy the various defects in the properties of which complaint was made.(vi) The Claimant had not been forewarned of “the vital fact” that the meeting was to be followed by a discussion as to whether the Council would continue to use FRE’s services. Among the evidence adduced in these proceedings by FRE is a series of letters from occupants of properties supplied by FRE, who declare themselves satisfied with the property supplied. In one case the occupant’s letter complains of being told, apparently by a Council officer, that he had to move from his property within two hours.[17]In order to determine whether the procedure followed by the Council at the meeting on 16 June infringed a rule of law available to FRE, it is first necessary to define the relevant legal relationship between the parties. The Overarching Agreement[18]It is contended on behalf of FRE that there was in force between it and the Council an “over-arching agreement” pursuant to which “The Claimant has a legitimate and reasonable expectation that the arrangements between it and the [Council][ would not be abrogated in a summary and arbitrary fashion and with no adequate notice”. The evidence of Mr Iftikhar Hussain is that there was in force between FRE and the Council an “over-arching agreement” whereby FRE would supply properties to the Council. This was an agreement that could not be terminated without adequate notice. Mr Iftikhar Hussain states as follows:
“Mrs Barker states, at paragraph 4 of her statement, that “There has never been an over-arching formal agreement with the Claimant [FRE] governing the arrangement. I agree that there has never been a formal agreement, but this is as a direct result of the Defendant [Council] failing to complete the tender process which commenced in 2007, at a cost I understand of £100,000.00. Having said this an established arrangement was undoubtedly in place whereby reliance was placed on the Claimant [FRE] by the Defendant [Council] to provide services to house the homeless on a temporary basis to discharge their responsibilities and the Claimant placed reliance on the Defendant to use its service and to discharge its invoices as they fell due.”
[19]Mr Hussein might have considered that he had an “arrangement” with the Council, pursuant to which it owed him various duties. Lisa Barker states that in its contract with Dadyal Property Link FRE described itself as “registered agents for Birmingham City Council”. If she is right, FRE’s management may have thought that it enjoyed a privileged position of some kind with the Council. But Miss Barker explains that: “The Claimant [FRE] was never a registered agent because no register exists. The Claimant was one of a number of suppliers of temporary accommodation”.[20]The lack of substance in any “over-arching agreement” is demonstrated in the letter from Mr Saran Sankhagiri to Ms Severa dated 15 May 2008, stating that the Council was unable to advise FRE “at any point” that it could use FRE’s properties. At the oral hearing on 3 April 2008 I asked counsel for FRE, Mr Allston, whether FRE accepted an obligation under the “over-arching agreement” to supply accommodation if asked by the Council to do so. He did not accept that FRE had any such obligation.[21]Mr Allston did, however, contend with some force that the Council had itself referred to the “arrangements” or the “agreement” in force between itself and FRE and that this is itself powerful evidence in favour of the existence of such an agreement. There is no doubt that solicitors for the Council did use the words on which Mr Allston relies; and they did so repeatedly. In determining what significance is to be attached to the solicitors’ letters, I think it right to read them in their context. The relevant correspondence begins with a letter from solicitors for FRE dated 19 June 2008 which states that the effect of the meeting on 16 June 2008 was “to terminate the agreement on 7 days’ notice between your Authority and our client”. The same letter states “Our client acted as your agent and service provider” and it refers to “the astonishing fact that the agreement between your Authority and our client was never formalised in writing, despite the fact that the arrangements related to important and large-scale statutory duties cast upon your Authority”. According to the letter “The approach adopted by your Authority to our client in abrogating the arrangements existing between the parties can only be described as being an unlawful and abusive exercise of public powers”. The same solicitors’ letter claims that at the meeting of 16 June “the whole impression given was that your Authority had already decided to terminate the arrangements”. Solicitors declared their intention of instituting proceedings in the absence of a satisfactory response by 4 PM on the day following the letter.[22]By its response on the following day the Council stated that there are two prime documents on which the agreement between the Council and FRE is based. There were the self-certification form (by which the service provider certified to the Council that the property to be occupied was satisfactory in specified respects) and the standard offer letter (by which a service provider such as FRE offered property to the Council by way of licence).[23]Although in this exchange of letters both parties speak of “the agreement” and “the arrangements”, they use that expression in different senses. Solicitors for FRE asserted the existence of an “over-arching agreement” or arrangement relating to important and large-scale statutory duties cast upon the Council, in accordance with which FRE is said to have acted as the Council’s agent and service provider. As solicitors for FRE acknowledge, it would be an “astonishing fact” if such an over-arching agreement were never committed to writing. The Council maintained that there was no over-arching agreement: merely a series of individual agreements, each relating to a specific property, although following a common form. The Council referred to the arrangements pursuant to which FRE would make individual properties available for occupation by those whom the Council had a duty to house. It is in this sense that I understand a passage in the Council’s acknowledgment of service reading as follows:
“The arrangements between a housing authority and provider of accommodation is [sic] not underpinned by a specific enactment. It is alleged that the Respondent has terminated the contract between the parties for supply of housing (“the Contract”) without adequate reason. Such a commercial dispute is not amenable to judicial review.”
As I read it the Council’s reference to “the contract between the parties for supply of housing” is a reference to a contract for the supply of particular housing, based (as the Council states later in the same document) on the self-certification form and the licence agreement (both of which relate to particular properties). It is not an agreement relating to important and large-scale statutory duties cast upon the Council, in accordance with which FRE will act as the Council’s agent and service provider.[24]I conclude that there never was an “over-arching agreement” between FRE and the Council of the kind alleged in the letter from FRE’s solicitors.[25]Rather in the period from 2005 to 2008 FRE was successful in procuring from the Council its agreement to license a series of properties. Its success appears to have been due to its ability to supply accommodation at short notice, even outside normal office hours. This led the Council’s Temporary Accommodation Team to make more use of FRE’s services than it would otherwise have done. The confidence that Mr Iftikhar Hussain may have placed in his imagined position as the Council’s agent and service provider was misplaced, as was any perception that he may have had that he was the Council’s registered agent. Equally misplaced was any belief that he may have entertained that the Council had committed itself by a policy decision to refrain from terminating, other than in accordance with a certain procedure, any licence of property made available to it by FRE or from ceasing to enter into further license agreements with FRE in the future. Judicial Review of a Network of Contractual Decisions[26]To conclude that the legal relationship between FRE and the Council was characterised by a series of licence agreements rather than a single “over-arching arrangement” is not enough to warrant the conclusion that judicial review is unavailable. In R v Westminster City Council and London Electricity Board ex parte Leicester Square Street Association Limited, (1989) P & C.R. 53, it was held that judicial review was available to determine whether a local authority had statutory power to dispose of land subject to a non-binding covenant; and in R v Southern Water Authority ex parte Water Companies Association, The Times December 30, 1988, judicial review was available (before privatisation of water utilities) to determine whether water authorities were entitled to buy shares in other water companies. In those cases, however, the determining feature was the function of public (statutory) law in defining the contested power. In the present case, the power authorising the Council to enter into individual licence agreements with FRE was to be found in private law. It was a contractual power. In principle it cannot be right to permit a claimant suing a public body for breach of contract to invoke public law, for as Neuberger LJ (as he then was) stated in Supportways v Hampshire CC, [2006] LGR 837 at 848 para 42:
“If he could do so, it would place a party who contracts with a public body in an unjustifiably more privileged position than a party who contracts with anyone else, and a public body in an unjustifiably less favourable position than any other contracting party”
[27]In the present proceedings counsel for FRE placed reliance on sections 17 and 19 of the Local Government Act 1988. Section 17 (1) states that it is the duty of every public authority to exercise “any function regulated by this section without reference to matters which are non-commercial”. Section 19(7) provides that the duty imposed by section 17(1) does not create a criminal offence but “in proceedings for judicial review … the persons who have a sufficient interest in the matter shall include any potential contractor”. Section 19(9) provides that nothing in section 17 or in subsection 19(1) implies that the exercise of any function regulated by that action may not be impugned by judicial review. It is clear from this wording alone that section 19(9) does not create a right to proceed by way of judicial review when this would not otherwise be the case. What section 19(9) does is to make it clear that judicial review is not precluded by the wording of sections 17 or 19(1) of the 1988 Act.[28]This conclusion (which is to my mind sufficiently clear on the face of the statute itself) is confirmed by the judgments in R v London Borough council of Enfield ex parte T.F. Unwin (Roydon) Ltd, 46 BLR (1989) 5, “Unwin” and R v Bristol City Council ex parte D.L. Barrett & Sons, “Barrett”, CO/4181/1999.[29]In Unwin the applicant had been on two of the Council’s lists of approved contractors: one for minor building works and one for decorating. Following receipt by the Council of allegations against the applicant, the Council wrote to state that “your company has not been placed on the selected list of contractors pending the outcome of enquiries”. On an application for judicial review, Glidewell LJ, with whom Pill LJ agreed, concluded that on the facts of the case Unwin had a legitimate expectation of fair treatment and stated that Unwin must be reinstated on the list of approved contractors. Barrett was another case in which a contractor, removed from lists maintained by a public authority, applied for judicial review of the decision to remove it. Jackson J concluded that the Council had no justification for striking the applicants off the list of approved tenderers and that the applicants’ name must be restored.[30]What these two cases show is that a decision to remove a contractor from an approved list is capable of being challenged by judicial review. The reason for this is that a public authority’s power to maintain a list of approved contractors is derived from public law. But FRE never was such an agent and the contested decision was not one that had the effect of removing from FRE a public status that it previously enjoyed. Moreover the maintenance of the list is a matter in which the public has an interest. It was in this sense that Lloyd Jones J read those two cases in A v B [2007] LGR813 at 814. Holding that a decision to strike firms off an approved list of contractors was amenable to judicial review, he reasoned that the Council, when taking such a decision, “was taking a policy decision in pursuit of its public duties as an education authority as to the suitability of the claimant to act on behalf of the authority in the discharge of those particular functions.” Although FRE claimed that the Council, in the present case, was taking a policy decision in pursuit of its public duties, I have found that in point of fact it was not doing so. The present case is to be distinguished from those in which a decision was taken to remove a name from a list of approved contractors. In the present case we may, perhaps, infer that judicial review might well have been an appropriate remedy to quash any decision to terminate FRE’s status as the Council’s agent and service provider, had there been any such decision. But in the present case, there was no list of approved agents and service providers. Legitimate Expectation[31]I must ask, nevertheless, whether the Council by its conduct created a legitimate expectation that the Council would continue to take licences of premises offered to it by FRE; and acted inconsistently with that conduct in taking the contested decision.[32]In R v Newham Borough Council ex parte Bibi, [2002] 1 WLR 237 the Borough council appealed against a judgment of Turner J rendered on applications for judicial review made on behalf of two families found to be unintentionally homeless and in priority need. The families had been provided with accommodation for ten years but had never been granted security of tenure. The Borough council, in the early 1990s, had promised to the applicants and to others in a legally similar situation that it would supply them with secure accommodation within eighteen months. Schiemann LJ, giving the judgment of the Court, held that the Borough council was under a duty to consider the applicants’ applications for suitable housing on the basis that they have a legitimate expectation that they will be provided with a secure tenancy.[33]The difference between ex parte Bibi and the present case is that in the former the Borough council accepted that it had made a promise and the Court of Appeal had to decide whether it should be held to it. In the present case the Council denies that it made any promise on which FRE was entitled to rely. With one exception, I have been referred to no statement made by the Council which is capable of giving rise to an expectation, legitimate or otherwise, that the Council will continue to use the facilities offered by FRE. Subject to the same exception, I can find no basis for reliance on the principle of legitimate expectation to defeat the decision made by the Council on 16 June 2008.[34]The exception that I have in mind is located at the end of the Council’s letter to FRE dated 21 May 2008 in which the Council stated that it would inspect the properties managed by FRE in the next 4-5 weeks and “following the inspection your company will be advised, in writing, of the inspection carried out, the contraventions (if any) and the necessary remedial works to ensure that the property complies with the Council’s adopted enforcement standards for all private sector housing”. It is fairly to be inferred into that letter that if FRE were to conduct any of the remedial works identified as necessary in the course of such inspections, so as to bring the relevant property up to the Council’s enforcement standards for public housing, the Council would consider such property as suitable for its use in providing public housing. But the decision of 16 June 2008 intervened before the inspections were completed. It would be unfair, and contrary to the expectation legitimately created for the Council to encourage FRE to incur expenditure in bringing property up to the Council’s standard without permitting FRE to recoup that cost by licensing it to the Council or (if this cannot be done) by defraying the cost actually incurred by FRE in reliance upon the Council’s letter.[35]However FRE does not rely upon the expectation created by the letter of 21 May 2008. Nor does it identify any costs actually incurred in reliance upon it, I therefore consider that the appropriate order to be made on the application for judicial review is an order refusing the relief sought. The Claim in Contract[36]A further issue remains for determination. By Order dated 12 March 2009 Irwin J ordered FRE to serve on the Council a draft pleading appropriate to a claim for damages for breach of contract for use in the event that the Court at trial should rule that FRE is not entitled to relief by way of judicial review. Since I have decided that FRE is not entitled to that relief, I now consider the draft pleading.[37]By draft Particulars of Claim helpfully supplied at the hearing Counsel for FRE pleads in part:
“Notwithstanding the lack of formal agreement between the Claimant and the defendant, the Claimant asserts that by virtue of the consistent course of dealings between them and not least the scale and value of the accommodation services supplied by the Claimant, a contract may be implied, and has thus arisen between the parties”
[38]This pleading is not far removed from the submission, summarised in paragraph 18 above, that there is to be inferred from the course of dealings between the parties an over-arching agreement regulating the supply of services to the Council by FRE. The terms of the contract for which FRE pleads in the alternative are similar to the terms of the over-arching agreement on which it bases its primary case. The main terms of the contract for which FRE contends are that FRE would supply to the Council residential properties for its use and that in consideration the Council would pay for use of the properties at rates to be agreed. Part of my difficulty in accepting this submission is that the conduct on the basis of which a contract is said to be inferred constitutes the “main terms” of the contract so inferred.[39]It is of course well known that a contract can be accepted by conduct; but as the editors of Chitty on Contracts observe (29th ed., 2006, para 2-028) “conduct will only amount to acceptance if it is clear that the offeree did the act with the intention (ascertained in accordance with the objective principle) of accepting the offer. Here, the act of the putative offeree, on which the FRE relies, is the act of accepting FRE’s offer of accommodation on terms set out in writing which stated expressly that “The licence is terminable by either party on receipt of written notice at any time”. This is not readily to be reconciled with the Claimant’s plea for an implied term pursuant to which the termination of “the contract” will be subject to reasonable notice, meaning notice of at least 3 months.[40]I do not accept that there is to be inferred into the parties’ conduct a contract of the kind for which the Claimant contends. Specifically I do not accept that there is to be inferred into such a contract a term precluding termination other than by notice of at least 3 months.[41]Dealing with the terms of the licences the Claimant pleads in the draft Particulars of Claim:
“The period of notice to be given is not specified in the licence, but the Claimant says that it is to be implied that the period of notice would be reasonable, depending in each case on the circumstances in which notice was given”
. To my mind, a licence agreement excludes any period of notice when stating that “The licence is terminable by either party on receipt of written notice at any time”. In cases such as the present one, the exclusion of a period of notice is not only comprehensible; it is essential. FRE and the Council must have known that occupants of the accommodation supplied to the Council by FRE were liable to require it, and to depart from it, with little or no notice. For this reason FRE raised no objection when the Council wrote to it stating that it was terminating a licence agreement with immediate effect. I am certain that the Council would never have entered into an agreement with FRE (or anyone else) to take a licence of accommodation subject to an implied term that the licence should be terminable upon a variable period of notice.[42]In any event I am not satisfied that in reaching the decision of 16June 2008 the Council acted unreasonably. I accept that the Council gave only short notice of its decision to begin the process of re-housing the occupants of FRE’s properties; but it took that decision at the end of a substantial history of complaints made to the Council about the properties and conduct of FRE. By its communications, including the letters of 21 May 2008 and 2 June 2008, the Council had made FRE aware of its growing concern for the welfare of homeless people placed in FRE’s premises (although it does not appear to have told FRE of its particular concern that a fatality might be caused by an explosion of a gas appliance in one of the premises supplied by FRE).[43]If I had considered that the present claim might have succeeded if presented on the basis of contract rather than judicial review, I would have granted permission for the case to continue as though pleaded in contract. But as I do not consider that this claim could succeed on a contractual basis, I do not grant that permission. My conclusion is that the claim must be dismissed in its entirety. It is therefore ordered that the claim shall be dismissed. It is declared that the Defendant’s decision of 16 June, 2008 to terminate its arrangements with the claimant was not unlawful and that no claim for damages in private law arising from this decision can succeed. The Claimant shall pay the Defendant’s costs which are to be subject to a detailed assessment if not agreed.