Adding a Local Authority as a party to costs.

I'm sure many CLS advisers here have trouble with Local Authorities who totally ignore the Code of Guidance and the Housing Act 1996 in advising clients that they must remain in their accommodation till evicted even when issued with section 21 notices to which there is no defence and having been told that the landlord will be taking possession. In such cases the Local Authority won't even consider whether or not it is reasonable for the tenant to continue to occupy the property.

This sort of practice is damaging for so many reasons. To name a few it causes landlords who might otherwise rent to people on Housing benefit (as often it is those on HB that have had to approach the LA having not been able to find alternative privately rented accommodation) to decide they don't want to in the future as understandably they don't want to go through lengthy possession proceedings. In the last month or two I've had 4 or 5 landlords tell me that because of such advice they won't be renting to tenants on Housing benefit again.

Such advice also causes a great deal of stress and uncertainty to both landlord and tenant. It also adds extra burden to already overstretched Courts and clients often then have to be assisted by at yet more public money by people like me.

Whilst the threat of Judicial Review and Judicial review can be very useful there may be another tool that can be used to get the Local Authority to do what the law requires.

With the kind permission of its author Mr Tony Ross at 1 Pump Court Chambers, London EC4Y 7AB 02078427070 I have copied in some advice I received regarding having a Local Authority joined as a party to an order for the costs of the possession proceedings. This is pretty uncharted territory but Pump Court have had success in obtaining such orders but have stated they don't receive many instructions regarding such action (perhaps because it's something new to consider). I ended up not pursuing the action as the client was assisted before it became necessary.

I'm not a solicitor and this is something I would refer out but I think it would be a handy action that could possibly go hand in hand with JR where appropriate.

I look forward to any comments on what uses people think this might or might not have.

I have of course edited the advice where appropriate in order to keep the LA and my client anonymous.

The Facts

Bobtown Council, the local housing authority, apparently have a practice of refusing to accept homelessness applications from Assured Shorthold Tenants until at or very close to the date of eviction, on the basis that the applicants are not homeless. The effect of this "gate keeping" is that the cost of providing s.188 interim accommodation is avoided.

A further consequence, however, is that the tenant has to wait for the landlord to obtain a possession order before he is re-housed. This will usually result in the landlord obtaining a costs order against his tenant.

Those instructing me seek advice on what can be done to prevent the housing authority continuing to act in a manner which is contrary to the policy and express terms of the Housing Act 1996, and the Code of Guidance. It is suggested that a costs order could be obtained in the possession proceedings against the housing authority.

Legal Background:

Homelessness applications and the Housing Act 1996 ("HA")

Whenever a person approaches a local housing authority for accommodation or assistance in obtaining accommodation, and the local housing authority has reason to believe that he may be homeless or threatened with homelessness, then he has made a homelessness application: s.183 HA. Applications for assistance under Part 7 HA 1996 do not need to be in any particular form, nor do they need to be explicitly expressed to be seeking assistance under Part 7: see Paragraph 6.6 of the Code of Guidance.

9. Where a housing authority has reason to believe that an applicant may be homeless or threatened with homelessness, they shall make such inquiries as are necessary to satisfy themselves whether he is eligible for assistance, and if so, whether any duty, and if so what duty, is owed to him: s.184(1).

10. An early assessment will be vital to determine whether the housing authority has an immediate duty to secure accommodation under s.188. Housing authorities are obliged to begin inquiries as soon as they have reason to believe that an applicant may be homeless or threatened with homelessness and should aim to carry out an initial interview and preliminary assessment on the day the application is received: Para 6.16 Code.

11. On completing their inquiries the authority must notify the applicant of their decision and, so far as any issue is decided against his interests, inform him of the reasons for their decision: s.184(3) HA.

12. The threshold for the duty of councils to act is a low one since it arises if they have reason to believe the applicant may be homeless or threatened with homelessness: R (Aweys and others) v. Birmingham City Council [2007] EWHC 50, [2007] HLR 27, at para 8.

Reasonable to Continue to Occupy

13. The relevant parts of the Code of Guidance are:

"Tenant given notice 8.14. With certain exceptions, a person who has been occupying accommodation as a tenant and who has received a valid notice to quit, or notice that the landlord requires possession of the accommodation, would have the right to remain in occupation until a warrant for possession was executed (following the granting of an order for possession by the court). The exceptions are tenants with resident landlords and certain other tenants who do not benefit from the Protection from Eviction Act 1977. However, authorities should note that the fact that a tenant has a right to remain in occupation does not necessarily mean that he or she is not homeless. In assessing whether an applicant is homeless in cases where he or she is a tenant who has a right to remain in occupation pending execution of a warrant for possession, the housing authority will also need to consider whether it would be reasonable for him or her to continue to occupy the accommodation in the circumstances (see paragraphs 8.30-8.32 below).

8.15. Some tenants may face having to leave their accommodation because their landlord has defaulted on the mortgage of the property they rent. Where a mortgage lender starts possession proceedings, the lender is obliged to give written notice of the proceedings to the occupiers of the property before an order for possession is granted. The notice must be given after issue of the possession summons and at least 14 days before the court hearing. As for tenants given notice that the landlord requires possession of the accommodation (see paragraph 8.14 above), authorities will need to consider whether it would be reasonable for a tenant to continue to occupy the accommodation after receiving notice of possession proceedings from the lender.

8.30. In cases where the applicant has been occupying accommodation as a tenant and has received a valid notice to quit, or a notice that the landlord intends to recover possession, housing authorities should consider the scope for preventing homelessness through consulting the landlord at an early stage to explore the possibility of the tenancy being allowed to continue or the tenant being allowed to remain for a reasonable period to provide an opportunity for alternative accommodation to be found. If the landlord is not persuaded to agree, the authority will need to consider whether it would be reasonable for the applicant to continue to occupy the accommodation once the valid notice has expired.

8.31. In determining whether it would be reasonable for an applicant to continue to occupy accommodation, the housing authority will need to consider all the factors relevant to the case and decide the weight that individual factors should attract. As well as the factors set out elsewhere in this chapter, other factors which may be relevant include the general cost to the housing authority, the position of the tenant, the position of the landlord, the likelihood that the landlord will actually proceed with possession proceedings, and the burden on the courts of unnecessary proceedings where there is no defence to a possession claim (see paragraphs 8.14 and 8.15 above for guidance on the right to occupy where notice of possession proceedings has been given).


8.32. Each case must be decided on its facts, so housing authorities should not adopt a general policy of accepting – or refusing to accept – applicants as homeless or threatened with homelessness when they are threatened with eviction but a court has not yet made an order for possession or issued a warrant of execution. In any case where a housing authority decides that it would be reasonable for an applicant to continue to occupy their accommodation after a valid notice has expired – and therefore decides that he or she is not yet homeless or threatened with homelessness – that decision will need to be based on sound reasons which should be made clear to the applicant in writing (see Chapter 6 for guidance on housing authorities’ duties to inform applicants of their decisions). The Secretary of State considers that where a person applies for accommodation or assistance in obtaining accommodation, and: (a) the person is an assured shorthold tenant who has received proper notice in accordance with s.21 of the Housing Act 1988; (b) the housing authority is satisfied that the landlord intends to seek possession; and (c) there would be no defence to an application for a possession order; then it is unlikely to be reasonable for the applicant to continue to occupy the accommodation beyond the date given in the s.21 notice, unless the housing authority is taking steps to persuade the landlord to withdraw the notice or allow the tenant to continue to occupy the accommodation for a reasonable period to provide an opportunity for alternative accommodation to be found."


Costs: CPR 48.2 Costs Orders in favour of or against non-parties
14. CPR 48.2 provides:
Costs orders in favour of or against non-parties:
(1) Where the court is considering whether to exercise its power under section 51 of the Supreme Court Act 1981 (costs are in the discretion of the court) to make a costs order in favour of or against a person who is not a party to proceedings—
(a) that person must be added as a party to the proceedings for the purposes of costs only; and
(b) he must be given a reasonable opportunity to attend a hearing at which the court will consider the matter further.
(2) This rule does not apply—
(a) where the court is considering whether to—
(i) make an order against the Legal Services Commission;
(ii) make a wasted costs order (as defined in 48.7); and
(b) in proceedings to which 48.1 applies (pre-commencement disclosure and orders for disclosure against a person who is not a party).

15. Section 51 of the Supreme Court Act 1981 gives the court full power to determine by whom and to what extent costs are to be paid. The Court of Appeal has laid down guidelines for the exercise of this power:

(1) An order for the payment of costs by a non-party would always be exceptional. The judge should treat any application for such an order with considerable caution.

(2) It would be even more exceptional for an order for the payment of costs to be made against a non-party where the applicant had a cause of action against the non-party, and could have joined him as a party to the original proceedings.

(3) Even if the applicant could provide a good reason for not joining the non-party against whom he had a valid cause of action, he should warn the non-party at the earliest opportunity of the possibility that he might seek to apply for costs against him.

(4) An application for payment of costs by a non-party should normally be determined by the trial judge (see Bahai v Rashidian [1985] 1 W.L.R. 1337).

(5) The fact that the trial judge in the course of his judgment had expressed views on the conduct of the non-party, neither constituted bias nor the appearance of bias.

(6) The procedure for the determination of costs is a summary procedure, not necessarily subject to all the rules that would apply in an action. Thus, subject to any relevant statutory exceptions, judicial findings are inadmissible as evidence of the facts upon which they were based in proceedings between one of the parties to the original proceedings and a stranger. Yet in the summary procedure for the determination of the liability of a solicitor to pay the costs of an action to which he was not a party, the judge's findings of fact may be admissible. This departure from basic principles can only be justified if the connection of the non-party with the original proceedings was so close that he will not suffer any injustice by allowing this exception to the general rule.

Per Balcombe L.J. Symphony Group Plc v Hodgson [1993] 4 All E.R. 143, CA

15. It is relevant to the court's exercise of discretion, whether to make an order against a non party, for it to consider whether the non party has received notice before or during the litigation that he may be made subject to an order for costs.

16. The discretion to award costs against non parties may be exercised in a variety of circumstances, such as whether the third party is considered to be the real party interested in the outcome of the litigation; or, where the third party has been responsible for bringing the proceedings and they have been brought in bad faith or for an ulterior purpose, or there is some other conduct that makes it just and reasonable to make an order (see Millett LJ in Metalloy Supplies Ltd (In Liquidation) v MA (UK) Ltd [1997] 1 W.L.R. 1613 at 1619): Barndeal Ltd v Richmond upon Thames LBC (Costs) [2005] EWHC 1377 (QB), [2006] 1 Costs L.R. 47, Newman J.

17. Where a non party is shown to have intervened in litigation so as to take control of the prosecution or defence of a claim, substantially for his own purposes or benefit and the claim or defence fails, there is no requirement that a court, making a non party cost order against a director, should find that the director was guilty of some impropriety in the prosecution by the company of the claim: BE Studios Ltd v Smith and Williamson Ltd [2005] EWHC 2730 (Ch), Evans Lombe J.

Merits & Procedure
18. In my view, there are two possible approaches that might be taken - the first by X with the assistance of those instructing me; the second by those instructing me over a period of time.
(1) Application for a Costs Order under CPR 48.2
19. This application is relatively simple and summary.
20. The keys points to be followed for this to application to work appear to be:

Notice should be provided to the Authority that an application will be made to join the Authority under CPR 48.2 immediately after the hearing of the possession claim in order to seek a costs order from them. The date of the possession hearing should be provided if known.

The grounds for the application should be explained to the District Judge in the County Court, even though they may appear obvious to a housing adviser. The most relevant points appear to be:

The Authority have made the proceedings necessary, by their failure to accept an application and provide interim accommodation.

The circumstances are exceptional, because the Authority have acted unlawfully – and in a high handed and arbitrary manner, by deliberately ignoring the Code of Guidance. This is easily demonstrated by reference to the Code of Guidance, Para 3.32. It will be even easier to demonstrate if they have refused to accommodate in the face of the letter providing them with notice.

The Authority have adopted an unlawful policy or practice, in that they routinely behave in this way.

The motivation for this unlawful behaviour is saving costs. As a result, the Authority should not be permitted to profit from unlawful conduct, but should be required to pay the Defendant’s costs.

The aim of the Authority should be Homelessness Prevention – that is carrying out inquiries at an early stage to ensure that there is little or no time spent in B & B. The policy of the Act considers a more seamless move from one accommodation to another.

21. Anecdotally, this or similar arguments have succeeded when recommended by colleagues in Chambers. In my view, it is unlikely to lead to criticism of X even if it fails.

22. My note of caution would be that the Court must have before them evidence of what steps X took to obtain accommodation ie. when he applied as homeless, with what result, what was said to him, by whom etc. This should be designed to prevent the Authority arguing that "on the facts of this case, costs should not be awarded against them eg. because he did not consult them until proceedings were issue.


So there we are. The second of course of action is not relevant to this post as it relates to an Aweys style challenge.