Patel v London Borough of Hackney

Factual and Procedural Background

The Appellant was granted a tenancy in October 2008 for privately owned accommodation in The City. He resided there with his family until June 2018, when he was evicted under a possession order due to rent arrears that had increased from 7,920 to 11,400 by eviction. Prior to eviction, the Appellant applied for homelessness assistance from the local Council and was placed in interim accommodation pending a statutory determination under section 184 of the Housing Act 1996 ("HA 1996").

The Appellant submitted a Homelessness Affordability and Accommodation Suitability Questionnaire and an expenditure form, detailing his income from welfare benefits and self-employment, alongside estimated monthly and weekly expenses including rent, insurance, and household costs.

The Council issued a decision under section 184 HA 1996, determining that although the Appellant was eligible for assistance, homeless, and in priority need, he had become homeless intentionally due to failure to pay rent. Consequently, the Council limited its housing duty as prescribed by sections 190 and 193 HA 1996.

The Appellant requested a review of this decision under section 202 HA 1996, submitting revised income and expenditure figures. The review officer upheld the original decision, concluding the accommodation was affordable with careful budgeting.

The Appellant appealed the review decision, challenging the assessment of affordability and the exclusion of certain expenses, particularly an allowance for replacement of white goods.

Legal Issues Presented

1. Whether the Appellant became homeless intentionally under section 191 HA 1996 by failing to pay rent, resulting in eviction.
2. How to properly assess affordability of accommodation under Article 2 of the Homelessness (Suitability of Accommodation) Order 1996, including the consideration of "reasonable living expenses".
3. The extent to which guidance in the 2018 Homelessness Code of Guidance for Local Authorities should influence the interpretation of statutory provisions regarding affordability and intentional homelessness.
4. Whether the Council's exclusion of certain expenditure items, such as an allowance for replacement white goods, was lawful and reasonable in the affordability assessment.

Arguments of the Parties

Appellant's Arguments

• The Appellant contended that the Council's exclusion of a weekly allowance for replacement of white goods was incorrect, emphasizing that second-hand appliances had been purchased due to financial constraints and that some allowance should be made.
• He challenged the calculation of rent arrears and the reasons attributed to the build-up of arrears.
• The Appellant argued that his financial circumstances, including income and expenditure, were not properly accounted for, particularly regarding essential expenses.

Council's Arguments

• The Council maintained that the accommodation was affordable based on a recalculation of income and expenditure, which included adjustments to income figures and certain expenses.
• The Council excluded the allowance for replacement white goods on the basis that it was not an essential expense, but acknowledged there was sufficient flexibility in the Appellant’s budget to cover such occasional costs.
• The Council relied on statutory guidance and case law to justify its assessment that the Appellant’s failure to pay rent was deliberate and that his homelessness was intentional.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by outlining the statutory framework under HA 1996, particularly sections 184, 190, 191, and 193, which govern homelessness applications and duties owed by local authorities. It emphasized that intentional homelessness arises when a person deliberately fails to take reasonable steps to retain accommodation that it would have been reasonable to continue to occupy.

The court examined the statutory and regulatory provisions, including Article 2 of the Homelessness (Suitability of Accommodation) Order 1996, which requires consideration of affordability by comparing accommodation costs against net income and reasonable living expenses.

The 2018 Homelessness Code of Guidance was considered, especially paragraphs 9.18 and 17.46, which clarify that accommodation is not affordable if paying rent would deprive the applicant of basic essentials, and that living expenses should be assessed in light of the applicant's particular needs and household circumstances.

The court acknowledged that the guidance is not statutory but must be taken into account by local authorities under section 182 HA 1996.

Addressing the dispute over the allowance for replacement white goods, the court found that the review officer’s exclusion of the weekly 32 allowance was not a denial of the expense's reasonableness but a recognition that such costs are occasional and can be managed within the overall budget flexibility. The court referenced external guidance suggesting a lower weekly allowance for such items and noted that other expenditure categories had been increased in the officer’s calculations.

The court emphasized that recalculations of income and expenditure are routine and must be evidence-based. It held that the review officer’s assessment was open on the material before him and that there was no error of law in the decision.

Finally, the court underscored the principle that judicial review of such decisions is limited to errors of law, and that the local authority’s discretion and fact-finding must be respected unless shown to be perverse or legally flawed.

Holding and Implications

The court DISMISSED THE APPEAL, affirming the Council’s decision that the Appellant had become homeless intentionally and that the accommodation was affordable based on a reasonable assessment of income and expenditure.

The direct effect is that the limited housing duty prescribed by section 190(2) HA 1996 applies, and the Appellant is not entitled to the full housing duty under section 193 HA 1996. The decision does not establish new precedent but reaffirms existing principles on affordability and intentional homelessness, emphasizing the discretion afforded to local authorities in these assessments.