Regas, R (On the Application Of) v London Borough of Enfield [2014] EWHC 4173 (Admin)

[2014] EWHC 4173 (Admin)Case No CO/3170/2014IN THE HIGH COURT OF JUSTICEQUEEN S BENCH DIVISIONADMINISTRATIVE COURTVenue Royal Courts of Justice, Strand, London, WC2A 2LLDate 11/12/2014
Before
HIS HONOUR JUDGE McKENNA(Sitting As A High Court Judge)
Between
THE QUEEN (on the application of CONSTANTINOS REGAS)ClaimantLONDON BOROUGH OF ENFIELDDefendant
Jonathan Manning and Justin Bates (instructed on a public access basis) for ClaimantKelvin Rutledge QC and Sian Davies (instructed by Legal Services, London Borough ofEnfield) for DefendantHearing Hearing date: 26 November 2014
JudgmentHis Honour Judge McKenna:Introduction
[1]This is a Judicial Review Claim in respect of the decisions of the defendant local authority (“Enfield”) taken on the 9 April 2014 pursuant to its statutory powers under the Housing Act 2004 (“2004 Act”) to designate their entire borough for both additional licensing of houses in multiple occupation (HMOs) and selective licensing of private rented sector (“PRS”) properties for a five year period coming into force on the 1 April 2015 (page T25).[2]It is fair to say that the claim has had something of a tortuous history to which I must refer by way of background since issues of delay and the appropriateness of relief are raised.[3]Following a call-in, the 9 April 2014 decision was considered and affirmed by Enfield’s Overview and Scrutiny Committee on 30 April 2014 (page T65 at page T72).[4]On the 24 June 2014 the claimant, who had attended meetings to express his opposition to the scheme, sent a letter before claim (page T433) to which Enfield responded on 7 July 2014 within the time specified for response (page T445).[5]The claimant issued his claim on 9 July 2014, one day outside the three months outer limit under CPR 54.5(l)(b)(page T78). He was then acting in person. In his witness statement dated 29 September 2014 (page T388) the claimant contended that he would have issued the claim within time but for bad advice he received from staff in the administrative court office. Nothing turns on this point.[6]The claim, as issued, included four grounds one of which (then designated ground 3) sought to impugn Enfield’s consultation process leading up to its Cabinet’s decision on the basis, among other things, that there was a failure to consult potentially interested parties outside the borough such as landlords and neighbouring local authorities (“the first consultation ground”).[7]On the 4 August 2014 Cranston J refused permission on the papers (page T144).[8]The claimant then instructed Irwin Mitchell LLP who in turn instructed Leading Counsel who settled grounds for oral renewal (page T135). That document invited the court to grant permission on grounds 1, 3 and 4 of the claim form.[9]By letter dated 12 August 2014 (page T454) Irwin Mitchell LLP notified Enfield that the claimant intended to rely on a new ground under the Directive on services in the Internal Market (2006/123/EC) (“European Services Directive”) and suggested that the details of the ground and indeed any other grounds would be communicated to Enfield, at the latest, by 22 August 2014.[10]On 3 October 2014 Ouseley J heard the oral permission application. At that time he had before him an issued application notice dated 30 September 2014 for permission to “add additional grounds of challenge” together with the draft ground settled by Leading Counsel relying on the European Services Directive (page T142). In his skeleton argument for that hearing leading counsel for the claimant sought to rely on two grounds namely irrationality and the proposed new European Services Directive ground with no reliance being placed either in his skeleton argument or in oral argument on the first consultation ground. Not surprisingly therefore Ouseley J did not deal with that first consultation ground in his judgment. He refused the claimant permission to proceed in relation to the decision of 9 April 2014 in so far as it related to selective licensing but granted permission to challenge the decision in so far as it related to additional licensing limited to the “irrationality/vires” grounds on the basis that the statutory preconditions for the availability of the power to introduce a licensing scheme had not been fulfilled and the decision to designate the scheme was irrational. He directed the claimant to file and serve composite grounds but refused permission to amend his grounds to rely on the European Services Directive challenge. Shortly after that hearing Irwin Mitchell LLP ceased to represent the claimant.[11]Notwithstanding Ouseley J’s granting of the limited permission to which I have referred the claimant no longer pursues that ground because on 12 November 2014 Enfield’s cabinet took a fresh decision (page T77) to introduce an additional licensing scheme. It did so on the basis of additional evidence in the light of which the claimant has concluded that the ground of challenge is no longer available to him.[12]With the assistance of fresh lawyers, the claimant on 10 October 2014 lodged an appeal against Ouseley J’s decision and by an order dated 14 November 2014, Lewison LJ granted permission for an additional ground of challenge relating to the consultation exercise (ground 4 in the statement of composite grounds) namely that the consultation process conducted pursuant to section 56(3) (additional licensing) and section 80(9) (selective licensing) 2004 Act was inadequate and unlawful in that certain people likely to be affected by the schemes were not consulted as required by statute. In particular it is said that no attempt was made to consult those people living, working or otherwise affected in neighbouring boroughs who were likely to be affected, that is to say the first consultation ground. Lewison LJ however refused permission to appeal against Ouseley J’s decision not to allow the claimant to rely on the European Services Directive challenge. That challenge on the ground of delay, although he considered the point arguable is no longer pursued.[13]In addition to, as it were, resurrecting the first consultation ground the claimant now also seeks permission to proceed on an additional argument (ground 6 of the statement of composite grounds) namely that Enfield failed to consult for the period of time required by the Secretary of State in his General Approval 2010 as a condition of his approval for the additional and selective licensing schemes with the result, it is said, that neither scheme has the approval of the Secretary of State as required by the 2004 Act (“the second consultation ground”) and permission is sought to amend his Grounds to challenge Enfield’s decision dated 12 November 2014 to raise composite grounds 4 and 6 in respect of that decision in addition to the original decision of 9 April 2014 contending among other things that the amendments would cause no prejudice to Enfield and that if permission were refused to challenge the ratification decision on both grounds the claimant could simply reissue proceedings in relation to that decision.[14]The issues before this court as identified by Enfield therefore are as follows: -(1) Was the decision of Cabinet dated 9 April 2014 vitiated on the first consultation ground and, if so, what relief if any should the court grant to the claimant?(2) Should the claimant have permission to amend his claim to rely on the first consultation ground in respect of the 12 November 2014 decision and to rely on the second consultation ground in respect of both decisions?(3) If so, were either or both decisions by Enfield vitiated, and if so, what relief if any should the court grant to the claimant?[15]In summary Enfield’s position on these issues is that, on the merits, both consultation grounds fail. So far as the first consultation ground is concerned it was entirely reasonable for Enfield to proceed on the basis that those most likely to be affected were those within the borough and in any event and, as a matter of fact, the consultation extended beyond those living and working in the borough. So far as the second consultation ground is concerned, the court must look at the substance and not the form, and looked at through that prism, the consultation process began with a listening and engagement phase and went on to a second phase and, taken as a whole, both phases consisted of in excess of ten weeks so as to comply with the requirement in the General Approval. Furthermore permission to amend should in any event be refused on the basis of delay in the sense of a lack of promptness, a point relevant to all grounds other than that for which permission was granted by Lewison LJ.[16]Finally, should the claimant make out a case on either or both of the consultation grounds, as a matter of discretion, relief should be refused, both because of delay under section 31(6) of the Senior Courts Act 1981 and because any benefit to the claimant would be outweighed by disbenefit to others relying on R v LB Brent ex.p.Walters (1998) 30 HLR 328, CA.

Legal Framework

[17]In general terms the owner of a HMO in England which comprises three or more residential storeys and which contains five or more persons who form two or more households is required by statute to obtain a licence from the local housing authority (2004 Act Part 2 and the Licensing of Houses in Multiple Occupation (Prescribed Descriptions) (England) Order 2006, SI 2006/371.) This is known as mandatory licensing.[18]The 2004 Act also permits a local housing authority to designate part or indeed the whole of their local government area as an area subject to additional and or selective licensing. In general terms, additional licensing applies to HMOs which are not subject to mandatory licensing (section 56) whereas selective licensing applies to privately rented houses which are not HMOs (those which are let as separate, or single dwellings) (sections 79 and 99). If an authority does make a designation, the effect is to require landlords of properties specified in the designation, and within the area to which it applies, to apply for and obtain a licence, failure to do which is a criminal offence. Licences will incorporate licence conditions relating to the management of the property, failure to comply with which is also a criminal offence.[19]By section 56(3) (additional licensing) and section 80(9) (selective licensing) consultation with specified groups must be undertaken by the local authority before any designation may be made. Section 56(3) provides: - “(3) Before making a designation the authority must- a) take reasonable steps to consult persons who are likely to be affected by the designation; and b) consider any representations made in accordance with the consultation and not withdrawn” a) take reasonable steps to consult persons who are likely to be affected by the designation; and b) consider any representations made in accordance with the consultation and not withdrawn” So far as its material, section 80(9) is in identical terms.[20]In either case, the designation will not be effective unless it is either confirmed by the Secretary of State or it falls within the description of designations in relation to which there is a general approval from the Secretary of State (sections 58 and 82).[21]On 1 April 2010, the Secretary of State issued a general approval (the “General Approval”) to all local housing authorities in England which includes at paragraph 4 the following: “Condition to be satisfied 4. The general approval described in paragraphs 2 and 3 is not given in relation to a designation in respect of which the local housing authority has not consulted persons who are likely to be affected by it under section 56(3) or section 80(9) (a) of the Act for not less than ten weeks”.[22]The Secretary of State has also issued, in February 2010, Guidance on the steps to be taken by authorities prior to making designations. In Approval steps for additional and selective licensing designation in England (DCLG, February 2010) the Secretary of State made clear that consultation should “...also include local residents and those who operate businesses or provide services in the surrounding area outside of the proposed designation who will be affected”.[23]The status of this Guidance is unclear. It is said to be a draft but in any event it does not purport to be statutory guidance.[24]In R (Peat) v Hyndburn BC [2011] EWHC 1739 (Admin) a case where it has to be said the extent of the consultation undertaken by the local authority was on any view woefully inadequate and by no means on a par with that undertaken by Enfield, McCombe J (as he then was) first summarised the grounds of challenge to a selective licensing scheme in this way:
“31. First, it was submitted that the consultation did not accord with the terms prescribed in s.80(9). The submission was divided into three sub-points. Firstly, s.80(9), it is argued, requires consultation on a specific proposal and not just a general principle. Secondly, it is a detailed proposal that the guidance indicates should be submitted for consultation. If the guidance is to be departed from, reasons should be given. Thirdly, it is clear from the council's own documents that it apparently intended to comply with the guidance and no change in that intention can be detected from later official documents prior to the designation being made. It is not clear that the decision makers were informed, however, that the Secretary of State's guidance had not been followed in the consultation process.”
[25]His conclusions in respect of those submissions are as follows:- “49. In my judgment, while the three sub-points of Mr Manning's first submission could be addressed individually, in the context of this case the question that arises is whether the consultation as a whole met the statutory requirements in s.80(9) of the Act. To this, in my judgment, all three points are cumulatively relevant. In the end, I reach the conclusion that the defendant council did not take reasonable steps to consult with the persons likely to be affected by the designation. I take this view for the following reasons.50. First, I accept Mr Manning's submission that the statute requires consultation with those likely to be affected by the designation. I think this does require some precision in the identification of what is to be designated and its consequences, so that the extent of the effect on those persons can be appreciated. In addition, it is hard to see how adequate steps can be taken to consult with persons affected unless one knows the likely licence conditions that will be imposed.51. Consultations as to general principles were, in my judgment, insufficient. The concession made by Ms Graham, in paragraph 16 of her witness statement dated 16 May, to my mind indicates that the consultation could not be said to be correctly directed to those likely to be affected by the opposed designation, as opposed to the general principles of selective licensing as a whole. That is what she concedes and in my judgment, that is, in effect, a concession as to the inadequacy of the consultation.52. Secondly, in order to comply with the requirements of valid consultation envisaged in the Gunning case and later authorities, the consultees must be given sufficient information to enable them to reach an informed decision upon that on which they are being consulted. Without some fleshing out of the reasons for the proposals, the nature of the proposals as regards the licence conditions and as to a fee structure, it seems to me that an informed response was really impossible. It is significant that, after the designation in the course of the present proceedings, the parties have indeed debated and to some degree reached compromises about licence conditions. It would have been more fruitful if that debate had occurred during the consultation process.53. Thirdly, while I agree with Ms Stockley that the guidance issued in the present case has a lesser status than that in issue in the Munjaz case, it does provide a helpful, objective yardstick as to the steps that might well be considered reasonable in the consultation process and the absence of which might well be considered to demonstrate a failure to take reasonable steps. Measured against this yardstick, it is not necessary to determine whether the guidelines are such in nature that authorities canonly decline to follow them for good reasons which they then explain. It suffices to say that, measured by this guidance, the consultation in the present case was merely perfunctory in the extreme and could not conceivably put the consultees in the position of being able to give an informed response to that which was really being proposed by the council.”[26]In R (Moseley) v Haringey London Borough Council [2014] UKSC 56, the Supreme Court considered the requirements for lawful consultation in advance of a decision as to the provision of council tax support. The overriding consideration, irrespective of the source of the obligation to consult, was held to be fairness. As Lord Wilson JSC put it: “The Law24. A public authority's duty to consult those interested before taking a decision can arise in a variety of ways. Most commonly, as here, the duty is generated by statute. Not infrequently, however, it is generated by the duty cast by the common law upon a public authority to act fairly. The search for the demands of fairness in this context is often illumined by the doctrine of legitimate expectation; such was the source, for example, of its duty to consult the residents of a care home for the elderly before deciding whether to close it in R v Devon County Council, ex parte Baker [1995] 1 All ER 73.But irrespective of how the duty to consult has been generated, that same common law duty of procedural fairness will inform the manner in which the consultation should be conducted.25. In R v Brent London Borough Council, ex p Gunning, (1985) 84 LGR 168 Hodgson J quashed Brent's decision to close two schools on the ground that the manner of its prior consultation, particularly with the parents, had been unlawful. He said at p 189: "Mr Sedley submits that these basic requirements are essential if the consultation process is to have a sensible content. First, that consultation must be at a time when proposals are still at a formative stage. Second, that the proposer must give sufficient reasons for any proposal to permit of intelligent consideration and response. Third,... that adequate time must be given for consideration and response and, finally, fourth, that the product of consultation must be conscientiously taken into account in finalising any statutory proposals." Clearly Hodgson J accepted Mr Sedley's submission. It is hard to see how any of his four suggested requirements could be rejected or indeed improved. The Court of Appeal expressly endorsed them, first in the Baker case, cited above (see pp 91 and 87), and then in R v North and East Devon Health Authority, ex parte Coughlan [2001] QB 213at para 108. In the Coughlan case, which concerned the closure of a home for the disabled, the Court of Appeal, in a judgment delivered by Lord Woolf MR, elaborated at para 112: "It has to be remembered that consultation is not litigation: the consulting authority is not required to publicise every submission it receives or (absent some statutory obligation) to disclose all its advice. Its obligation is to let those who have a potential interest in the subject matter know in clear terms what the proposal is and exactly why it is under positive consideration, telling them enough (which may be a good deal) to enable them to make an intelligent response. The obligation, although it may be quite onerous, goes no further than this." The time has come for this court also to endorse the Sedley criteria. They are, as the Court of Appeal said in R (Royal Brompton and Harefield NHS Foundation Trust) v Joint Committee of Primary Care Trusts [2012] EWCA Civ 472. 126 BMLR 134, at para 9, "a prescription for fairness".” "Mr Sedley submits that these basic requirements are essential if the consultation process is to have a sensible content. First, that consultation must be at a time when proposals are still at a formative stage. Second, that the proposer must give sufficient reasons for any proposal to permit of intelligent consideration and response. Third,... that adequate time must be given for consideration and response and, finally, fourth, that the product of consultation must be conscientiously taken into account in finalising any statutory proposals." "It has to be remembered that consultation is not litigation: the consulting authority is not required to publicise every submission it receives or (absent some statutory obligation) to disclose all its advice. Its obligation is to let those who have a potential interest in the subject matter know in clear terms what the proposal is and exactly why it is under positive consideration, telling them enough (which may be a good deal) to enable them to make an intelligent response. The obligation, although it may be quite onerous, goes no further than this." 27. Factual background[27]The claimant is a private landlord with an interest in one property located in Enfield’s area namely a long lease of a property in Southgate, London which he rents out as a low-rise HMO.[28]Between 15 November and 16 December 2013, a “listening and engagement” exercise was undertaken on Enfield’s behalf by a market research company, Opinion Research Services (“ORS”) during which meetings were held with local residents, landlords and agents to consider whether there was evidence of antisocial behaviour among private sector tenants and whether the introduction of licensing would in principle, be beneficial in resolving such issues.[29]A document entitled “Report of a Listening and Engagement Exercise” dated December 2013 was produced and extracts were referred to by both parties. It includes the following under the heading “Introduction” “1.3 Before formulating specific proposals or making any decisions, the Council has undertaken a Listening and Engagement exercise, running from 15 November to 16 December 2013 to engage with affected stake holders and understand their views. The Listening and Engagement process included a range of activities including: Two forums with landlords and letting agents A forum with representatives from tenants and residents associations, and other interested stakeholders Depth telephone interviews with selected stake holders Engagement questionnaire” It then went on to summarise the results of the exercise following which Enfield formulated proposals for borough-wide additional and selective licensing schemes. Two forums with landlords and letting agents A forum with representatives from tenants and residents associations, and other interested stakeholders Depth telephone interviews with selected stake holders Engagement questionnaire”

Depth telephone interviews with selected stake holders

[30]Between 2 January and 28 February 2014 ORS and Enfield conducted a formal consultation process on these proposals by way of a range of methods including an online questionnaire, a paper questionnaire, a telephone survey and public meetings across the borough resulting in 2,258 responses (page T180 and following).[31]The consultation identified the proposal in these terms at paragraph 3.1.1: “The Council is proposing the designation of Additional and Selective Licensing schemes across the Borough as a whole as the Council believes that this will have the level of impact required to deal with the antisocial behavioural problems that exist in the Borough, and will prevent problem tenants and landlords from merely moving to another area within the Borough”.[32]Following the consultation a Report to Cabinet was prepared a copy of which is a page T236 and following which includes the following material passages:- 1.5 “Independently led consultation with local residents, landlords, tenants and other stakeholders was undertaken between November 2013 and February 2014. The executive summary of this consultation can be found in appendix 5. This shows that although there is no consensus between the stakeholder groups consulted, there is strong support for the proposal to implement licensing with:• 84% of individuals who live in Enfield strongly or tend to agree with the proposal, alongside a majority of Enfield businesses (62%) and local organisations (89%)• 16% of letting or managing agents, and 18% of private landlords supported the general proposals. 1.6 The rationale behind implementing additional and selective licensing across the whole borough of Enfield, will achieve wide reaching benefits. 1.8 The Council does not envisage that the licensing proposal will have a negative impact on good quality providers of accommodation working in Enfield. Other authorities who have already introduced licensing schemes have indicated that licensing has helped to identify rogue landlords who impact negatively on the reputation of private landlords, thus improving the rental market by raising standards of both tenancy and property management. 3.10 A period of open engagement and discussion with tenants, landlords and stakeholders took place in late 2013, where the issues were discussed and the views of these key stakeholders were considered. 3.11 A formal consultation period specifically on additional and selective licensing began on 2 January 2014, concluding on 28 February 2014. The consultation mechanisms included: Table 1 Method No of Events Participants Online questionnaire available on the council’s website 1,528 responses Invited & deliberative events with landlords and letting agents Three events - geographically spread and undertaken a different times of the day to promote fair access 168 participants Invited & deliberative events with tenants & stakeholders Three events - geographically spread and undertaken a different times of the day to promote fair access 60 participants Weighted household telephone survey 502 participants 3.12 In addition, written submissions from interested parties were also received and considered. The findings from this consultation are set out below (paragraphs 4.13) and the executive summary of the report from the consultation exercise is attached at appendix 5, with the Council responses at appendix 6. Paragraph 4.24 below highlights the important changes made to the scheme by the Council as a result of the consultation exercise.”[33]The scope of the consultation in terms of those consulted and the responses is identified in paragraphs 4.13 to 4.26. The graphics at paragraph 4.14 show, it is said, that, aside from representative organisations, only people who lived, worked or owned business (including as landlords and letting agents) in Enfield were consulted.[34]The consultation process led to certain amendments to the proposals so that for example the licensing cost was reduced to £500 for a five year period but the core features remained. The possibility of introducing licensing only in certain areas of the borough was specifically rejected because of, among other things, the risk of “displacement of poor behaviour to other (i.e. non-licensed) areas” (see paragraph 5.5).[35]Ms McTernan, the assistant director of community housing services at Enfield, in her third witness statement sworn on 21 November 2014 commented on the consultation undertaking by Enfield which she described as follows under the heading “consultation” “5. The consultation process which predated the decision of 9 April 2014 is set out in the Report to Cabinet exhibited to my first witness statement in these proceedings. Both phases 1 and 2 of the consultation were publicised by a number of means including on Enfield’s website. Screen shots of the relevant pages are at pages 17-21 of SM1. I confirm that the website publicity inviting representations were available for the public view from 15 November 2013 until mid March 2014. In addition, Enfield Council carried out a market and communications campaign that included:• The distribution of a borough wide leaflet to 140,000 residents and businesses in Enfield from 13 January 2014 until the end of the consultation• Posters were displayed in Council buildings, libraries and GP surgeries in the borough from 20 January 2014.• Adverts were placed in the Enfield Independent, the Londra Gazete and Parikiaki newspaper, the latter two which are widely circulated in London.• Distribution of 3,000 leaflets to landlords from 27 January 2014.• Large street posters board by JCDecaux were used throughout the borough from 28 January to 10 February 2014.• Emails and letters were sent to landlords and agents some of which were operating businesses outside the borough from 1 February 2014.• Between 20 January and 3 February 2014 various messages were publicised to Enfield Council staff using internal channels of communication.• A Press release was circulated to recipients listed on pages 22-26 of SM1 on 31 December 2013.• Some online news websites such as “this is Local London” “Landlord Today” ran features about the consultation on their websites. Screen shots of those are at pages 27-28 of SM1.• The consultation invited representations from anyone interested in the proposal, and was not limited to residents of Enfield. A number of letting agents conducting business in areas other than Enfield were invited to take part in the consultation process in addition to other organisations whose clientele extend beyond Enfield’s borders. I exhibit at pages 20.9-22.1 of SM1 a list of all the organisations invited to the consultation forums and the mode of invitation, sign-in sheets from the public meetings showing attendance by representatives of organisations such as the Citizen’s Advice Bureau and a list of those who confirmed attendance at the public forums held on 11 and 12 February 2014. 7 Representations were received from two national organisations representing landlords.(a) (The National Landlords Association) (“NLA”) claims on its website to represent 1.4 million landlords across the UK and claimed in its deposition to Enfield’s Cabinet meeting on 9 April 2014 to have 23,000 individual landlord members in the United Kingdom and over 1,000 members in North London, just over 300 of whom are in Enfield. The NLA was involved in both phases of the consultation process. During the first phase, referred to in the Opinion Research Services report as the “Listening and Engagement” phase of the consultation, the NLA was invited to attend and participate in an exploratory meeting to hear the views of and express the landlords and other stakeholders. This invitation was emailed on 20 November 2013 and the meeting on 9 December 2013 was attended by a NLA representative, Mr Philip McGriskin. Furthermore, Opinion Research Services subsequently contacted Mr McGriskin and carried out a telephone interview with him on 11 December 2013.(b) The Residential Landlords Association (which on its website states that it represents landlords across England and Wales) also made written representations.”.• The distribution of a borough wide leaflet to 140,000 residents and businesses in Enfield from 13 January 2014 until the end of the consultation• Posters were displayed in Council buildings, libraries and GP surgeries in the borough from 20 January 2014.• Adverts were placed in the Enfield Independent, the Londra Gazete and Parikiaki newspaper, the latter two which are widely circulated in London.• Distribution of 3,000 leaflets to landlords from 27 January 2014.• Large street posters board by JCDecaux were used throughout the borough from 28 January to 10 February 2014.• Emails and letters were sent to landlords and agents some of which were operating businesses outside the borough from 1 February 2014.• Between 20 January and 3 February 2014 various messages were publicised to Enfield Council staff using internal channels of communication.• A Press release was circulated to recipients listed on pages 22-26 of SM1 on 31 December 2013.• Some online news websites such as “this is Local London” “Landlord Today” ran features about the consultation on their websites. Screen shots of those are at pages 27-28 of SM1.• The consultation invited representations from anyone interested in the proposal, and was not limited to residents of Enfield. A number of letting agents conducting business in areas other than Enfield were invited to take part in the consultation process in addition to other organisations whose clientele extend beyond Enfield’s borders. I exhibit at pages 20.9-22.1 of SM1 a list of all the organisations invited to the consultation forums and the mode of invitation, sign-in sheets from the public meetings showing attendance by representatives of organisations such as the Citizen’s Advice Bureau and a list of those who confirmed attendance at the public forums held on 11 and 12 February 2014. 7 Representations were received from two national organisations representing landlords. (a) (The National Landlords Association) (“NLA”) claims on its website to represent 1.4 million landlords across the UK and claimed in its deposition to Enfield’s Cabinet meeting on 9 April 2014 to have 23,000 individual landlord members in the United Kingdom and over 1,000 members in North London, just over 300 of whom are in Enfield. The NLA was involved in both phases of the consultation process. During the first phase, referred to in the Opinion Research Services report as the “Listening and Engagement” phase of the consultation, the NLA was invited to attend and participate in an exploratory meeting to hear the views of and express the landlords and other stakeholders. This invitation was emailed on 20 November 2013 and the meeting on 9 December 2013 was attended by a NLA representative, Mr Philip McGriskin. Furthermore, Opinion Research Services subsequently contacted Mr McGriskin and carried out a telephone interview with him on 11 December 2013. (b) The Residential Landlords Association (which on its website states that it represents landlords across England and Wales) also made written representations.”.[36]On 12 November 2014 Enfield’s Cabinet met and made a further decision to implement a borough-wide additional licensing scheme for private sector landlords (page T77D), a decision which it plainly took following the decision of Ouseley J to grant permission, limited to the vires/irrationality grounds. The Report to the November committee is at page T396 and following and includes the following:- 3.14 A claim for judicial review was issued against the Council by Mr Regas, an Enfield landlord, challenging its decision to implement both additional and selective licensing schemes. Permission to apply for judicial review was refused on the papers but was renewed at an oral hearing on 2 October 2014. On 3 October 2014 Mr Justice Ouseley granted permission to apply for judicial review in relation to the decision to implement additional licensing only. That claim was considered “arguable” by the Judge. Amended grounds of challenge have been filed in advance of a hearing in November 2014. Permission to challenge the decision to implement selective licensing was refused. Mr Regas is seeking to renew the application for permission in relation to selective licensing to the Court of Appeal, which has yet to decide whether he should have permission to bring his further challenge. 4.11 Consideration has been given to whether further consultation is required. A further consultation exercise is not considered to be reasonable or proportionate. There was an extensive consultation exercise which ended on 28.2.2014 which was overwhelmingly in favour of licensing across the privately rented sector and which specifically asked respondents about their views on additional licensing. In the Public and Stakeholder Consultation there was, in the first forum, more support for additional than for selective licensing and in the second, there was clear support for additional licensing for smaller HMO’s as a means of reducing ASB/neighbour nuisance. The surveys showed 85% of residents and 88% of organisations in favour of additional licensing, with telephone interviews indicating 76% support for HMO’s to be licensed. As there was such clear support as recently as the beginning of 2014, the delay and expense of further consultation would be proportionate only if circumstances indicated that there might be a different response to the proposal now. 4.12 There has been no information gathered by Council staff to indicate a significant change in public opinion since the original consultation (Appendix 3). In the circumstances, taking into account the delay which would be caused by further consultation, it is not considered reasonable or necessary to undertake a further consultation exercise.”[37]The 2004 Act imposes an obligation to take reasonable steps to consult people who are likely to be affected by the designation. The breadth of the specified group will depend on the nature and extent of the proposed designation in any given case.[38]What is said on behalf of Enfield, relying on paragraph 4.4 of the Report to Committee on 9 April 2014 (T242), is that its consideration necessarily focussed on residents, tenants landlords and other stakeholders within the borough because that was the very area within which it was considering introducing the designation. It was entitled to consider that those most likely to be affected were within the borough. This was because it was said the risk was one of switching from one type of property to another within the borough. Moreover, and as a matter of fact, in the light of the evidence of Ms McTernan as I have recorded, the process included media not limited to Enfield and for example representations were received from two national landlord’s associations and there were meetings with other neighbouring boroughs.[39]As to the latter point, whilst it may be true, up to a point, as it seems to me Enfield plainly targeted those who lived, worked or owned businesses in Enfield, and by contrast anyone outside the borough who might have had their attention drawn to the proposals had that attention drawn entirely by chance if they happened to have seen a reference to the proposals in media circulating outside the borough (with the possible exception of the national landlord’s association) or happened to drive through the borough and saw one of the posters or the like. As counsel for the claimant characterised it, there was no strategy for the consultation of anyone outside the borough and it was a matter of pure happenstance if they became aware of the proposals.[40]As to the former, I have reached the conclusion in the present case that the class of persons likely to be affected by the designation plainly included those residents, businesses, landlords and agents who live or operate in immediately adjoining parts of other local authority areas. To my mind it is plain that these groups were likely to be affected and should have been consulted and no thought was given, as it should have been, to the likely impact on those outside the borough who would be affected but were not protected by the proposals. After all, as is plain from Enfield’s own documentation to which I have referred, the rationale for deciding to impose both additional and selective licensing schemes across the whole of Enfield was at least in part to prevent bad landlords and indeed tenants simply moving to an unlicensed area within Enfield. That concern applies with equal force to the adjoining parts of the neighbouring boroughs. There is no justification as it seems to me for Enfield to treat people in the immediate vicinity but who happen to be located outside the borough differently from those within the borough yet they have not been consulted in any meaningful way and accordingly I conclude that the statutory precondition contained in section 56(3) 2004 Act has not been met.[41]This conclusion, as it seems to me, is in accordance with the Secretary of State’s own Guidance, to which I have referred, which makes specific reference to the need for consultation to extend to local residents and those who operate businesses or provide services in the surrounding area outside the proposed designation but who will be affected by the designation.[42]On the first issue therefore I conclude that the 9 April 2014 decision was indeed vitiated on the first consultation ground (i.e. ground 4 of the composite grounds).

The Second Consultation Ground (ground 6 of the composite grounds)

[43]This ground raises a short point of law. What is said on behalf of the claimant is that the General Approval does not apply to either of the designations purportedly made by Enfield because for it to apply the consultation required by section 56 (3) and section 80 (9) must have been undertaken for not less than ten weeks and at best Enfield only consulted from 2 January 2014 to 28 February 2014, the period referred to by Enfield as the formal consultation. Moreover as is clear from the statement of Ms McTernan, not all of those who should have been consulted were consulted for the whole of the period of the formal consultation. Enfield cannot, it is said, aggregate the period of the formal consultation with the earlier period of general listening and engagement to obtain evidence of anti-social behaviour or housing management and to discuss the general principles and benefits of licensing since that is not the kind of consultation required by the statute.[44]In support of these submissions counsel for the claimant relies on Enfield’s own documentation including the response to the letter before claim and its designation of 2 January to 28 February 2014 as the formal consultation as well as the decision of McCombe J, as he then was, in Peat, to which I have already referred.[45]Enfield, by contrast, asserts that the 9 April 2014 decision followed a two-part consultation exercise. Although phase one was described as a “Listening and Engagement” exercise and not as part of the “formal consultation” it is the substance of the exercise which is relevant to whether Enfield complied with its obligations to consult fairly. The substance of the first phase of the consultation is described in the executive summary of the report on the exercise produced by ORS in December 2013 at paragraphs 2.2-2.4 (internal page 6) and respondents to that phase were specifically asked about licensing and alternatives as appears from paragraph 2.20-2.25 inclusive (internal page 8).[46]In all the circumstances, argues Enfield, its consultation, taken as a whole, was faithful to the principles set out in Moseley. Thus it is said phase one made clear that the proposals were at a formative stage and made it plain that licensing was being considered and it was not necessary at that early stage to identify the detail of the scheme or the conditions which would attach to the licence.[47]Superficially attractive though Enfield’s argument is, in my judgment it is flawed. As McCombe J, as he then was, put it in Peat at paragraph 50 the statutory consultation requirement cannot be satisfied by a general engagement and listening exercise but requires a draft proposal which would require some precision in the identification of what is to be designated and its consequences so that the extent of the effect on the people can be appreciated. In addition, it is hard to see how adequate steps could be taken to consult with the persons affected unless they knew the likely licence conditions that would be imposed. That level of detail was conspicuously lacking in the first phase undertaken by Enfield and, in the circumstances, Enfield’s argument cannot prevail, falling foul as it does, of the second of the Sedley principles.[48]In my judgment the period of consultation, properly so called, began on 2 January 2014 and ended on 28 February 2014 and lasted much less than the ten week period required to satisfy the conditions set out in the General Approval. Moreover it is plain from Ms McTernan’s witness statement that not all those who should have been consulted within the borough, never mind outside the borough, were consulted for the whole of that period. On the second consultation issue therefore I conclude that, subject to the issue of permission to amend, the 12 November 2014 decision is also vitiated on the second consultation ground. Permission to Amend[49]I turn now to consider whether permission should be given to amend to rely on composite ground 6 both in respect of the 9 April and 12 November 2014 decisions and to rely on composite ground 4 in respect of the 12 November 2014 decision.[50]Perhaps not surprisingly, Leading Counsel for Enfield urged me to refuse permission to amend, citing a lack of promptness on the basis that both the first and second consultation grounds were, assuming merit, available to the claimant from 30 April 2014 at the latest when the Cabinet decision was affirmed, and pointed out that the claimant had first raised, but then apparently abandoned, the first consultation ground in his Detailed Grounds (ground 3 page T98,) it not having been referred to at the oral permission hearing before Ouseley J. He had also failed to raise the second consultation ground either in his detailed grounds or in the draft amendment to the claimant’s ‘statement of facts and grounds’ and the Claimant’s Application Notice dated 30 September 2014 (pages T139 and following) which only referred to the European Services Directive challenge or following the Irwin Mitchell LLP letter of 12 August 2014 (page T454) which had intimated that any additional grounds would be notified by 22 August 2014, nor was it raised before Ouseley J.[51]Moreover, Ouseley J in refusing permission to rely on the European Services Directive challenge cited delay as a factor in his decision (see paragraphs 58, 59, 61 and 62 at pages T161-162.) Thus argued Enfield there has been delay on the part of the claimant at every stage of the case which it is said is fatal to the application to amend.[52]So far as reliance on ground 6 in respect of the 9 April 2014 decision is concerned what is said on behalf of the claimant is that it is plainly arguable and Enfield had been on notice of the point since 24 October 2014 when it was included in the composite grounds; Enfield had dealt with the argument in its detailed grounds of opposition and at the substantive hearing before me.[53]As to delay, the claimant submits that arguments based on delay lose their force in the particular circumstances of this case where on the 12 November 2014 Enfield took a fresh decision in reliance on the same consultation process since, if the court were to refuse permission on the grounds of delay, the claimant would be entitled simply to seek permission to challenge the 12 November 2014 decision and the delay aspects would fall away at least in relation to additional licensing.[54]It was also submitted that delay was not the only factor in Ouseley J’s refusal of permission in respect of the European Service Directive challenge. Rather there were a combination of factors which led to that decision including lack of merit and, of course, Lewison LJ in granting permission on composite ground 4 plainly took the view that that challenge should proceed to a substantive hearing notwithstanding delay.[55]For my part I see the cumulative force of the claimant’s submissions on these issues. Moreover and given that, on the merits, I have concluded that Enfield had no power to introduce the designations because it had neither consulted for the required period specified in the General Approval nor sought the Secretary of State’s specific confirmation, the balance of the argument in my judgment plainly favours the granting of permission to amend to rely on composite ground 6 both in respect of the 9 April 2014 and the 12 November 2014 decisions and to rely on composite ground 4 in respect of the 12 November 2014 decision. In my judgment, therefore, issue two identified by Enfield’s counsel, is therefore resolved in the claimant’s favour. Relief[56]It was argued on behalf of Enfield that even if the claimant could, as I have found, make good a case on either or both of the consultation grounds the court should nevertheless refuse him relief in its discretion for two principal reasons, namely delay and because any benefit to the claimant of the relief would be outweighed by the disbenefit caused to others.[57]As to delay it is said that this has caused substantial prejudice to Enfield since the decision has been acted upon in that, prior to the issue of the claim, dedicated IT systems have been set up and integrated into the current system for licence applications and payment processes; the website has been modified; a project manager has been appointed with effect from 1 July 2014 and recruitment of permanent staffing resources has commenced with significant progress having been made towards the licensing scheme being made available for what has been termed “earlybird” registration from 15 December 2014 (see Ms McTernan’s witness statement 21 November 2014)[58]As to the second point reliance is placed on the conclusions of Judge LJ (as he then was) in R v LB Brent ex p Walters (1998) 30 HLR 328 CA at 381. It is said that although the claimant had an interest in the additional licensing scheme he had no such interest in the selective licensing scheme. He was consulted and spoke about the proposal before Cabinet. Moreover as a resident of Enfield, the claimant would derive benefit from the licensing scheme as would his tenants and a very high proportion of residents supported a borough-wide licensing scheme according to the ORS report and there was no evidence of any benefit to anyone else if the scheme were to be quashed and this could be contrasted with a considerable disbenefit to Enfield and indeed those residents who supported the borough wide licensing scheme.[59]Whilst I have some sympathy with the thrust of Enfield’s submissions on this point in the end I have come to the conclusion that the claimant should be entitled to the relief sought. I do so for a number of reasons. Whilst I accept that Enfield has undertaken preparatory work for the scheme, it is plain from the decision of Cabinet that it is intended that the scheme will not come into force until 1 April 2015 (page T25.) The inconvenience therefore is very likely to be less that would otherwise be the case.[60]The facts of the Walters case are very different to the facts of the instant case. In that case there was no issue as to whether or not the correct person had been consulted. By comparison on my conclusion, Enfield have failed to consult a class of people who should have been consulted.[61]This is not a straightforward, conventional consultation-based procedural fairness challenge since, on my findings, Enfield’s jurisdiction to implement the scheme is brought into question. In those circumstances, as it seems to me, it is no answer for Enfield to plead either delay or to say that it has started to implement the scheme so that there would be disruption if relief were granted. The implementation and operation of an unlawful designation is a continuing unlawful act which could be challenged by an affected landlord or indeed any other claimant with the necessary standing. Alternatively any landlord could simply refuse at any time in the future to apply for a licence and rely on the ultra vires nature of the designation as a defence if prosecuted and as it seems to me therefore the administrative inconvenience with that course of action would be far greater. Taking into account all relevant matters, therefore, I conclude that this Court should, indeed, exercise its discretion in favour of granting relief to the claimant. Conclusion[62]For all the above reasons I conclude that the additional and selective licensing schemes were not lawfully designated, nor can they lawfully be implemented unless and until Enfield(a) conduct a lawful consultation as required by ss.56 and 80; and,(b) having done so, obtains approval for a lawfully designated scheme (whether specific confirmation from the Secretary of State or under the General Approval).[63]I trust that the parties will be able to agree the form of an order which reflects the substance of this judgment.[64]Finally I would like to take this opportunity to express my gratitude to the Counsel in the case for all the assistance they have given to the court in this matter.

Cited in 3 later judgments