B2/2000/2797
Neutral Citation Number: [2000] EWCA Civ 399
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM MIDDLESBOROUGH COUNTY COURT
(His Honour Judge Bowers)
							Royal Courts of Justice
							Strand
							London WC2

							Tuesday, 12th December 2000
B e f o r e:

LADY JUSTICE ARDEN

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RIGHTGROVE LTD

Applicants

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SEDGEFIELD BOROUGH COUNCIL

Respondents
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(Computer Aided Transcript of the Palantype Notes of
Smith Bernal Reporting Limited, 190 Fleet Street,
London EC4A 2AG
Tel: 0171 421 4040
Official Shorthand Writers to the Court)
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MR M DRAY (Instructed by Hadaway & Hadaway, Midland Chambers, 58 Howard Street, North Shields, Tyne & Wear, NE30 1AL) appeared on behalf of the Appellant.

The Respondents did not appear and were not represented.

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J U D G M E N T
Tuesday, 12th December 2000 
1.	LADY JUSTICE ARDEN: On 8th September 1989 Sedgefield Borough Council made demolition orders in respect of numbers 22 and 87 Kirkstone Place, Newton Aycliffe, County Durham. The applicant owns both properties. It appealed to the County Court pursuant to section 269 of the Housing Act 1985 for an order that the demolition orders be set aside. The applicant admits that the properties are not fit for human habitation. However, the applicant has spent some £10,000 on the original purchase of the properties and some £50,000 on repairing them. They have now been vandalised more than once. Its appeal to the County Court was unsuccessful. The applicant now seeks leave to appeal to this court; and to obtain that permission it must show there is a real prospect of success on appeal. 
2.	In the original argument lodged with the court it was submitted that the demolition order was not the most satisfactory course of action in respect of the premises. The applicant submitted that the Borough Council had used excessive estimates for the repairs in making its decision to serve the orders and had proceeded on the basis that the cost of improvements would exceed the cost of demolition, whereas the figures of the applicant were the other way round. Secondly, the skeleton argument pointed out that the applicant would be liable for the cost of demolition in accordance with section 272(1) of the Housing Act 1985, though a credit is given for the cost of any materials that can be resold. Indeed, the applicant would still have the value of the site if that was of any significant amount.
3.	The applicant also submitted that circular 17/1996 required the Borough Council to have regard to the socio-environmental impact of demolition, that number 22 was part of a terrace and that the local housing authority proposed demolition of the whole terrace, which would leave a vacant space. Number 87, on the other hand, is a gable property, and it would be necessary to erect a new gable end costing some £20,703, including the cost of demolition. The applicant also pointed out that the Borough Council had rejected, on its submission wrongly, a proposal to swap number 87 for numbers 21 and 23, which it was happy to improve to the Borough Council's specification. 
4.	The matter came before His Honour Judge Bowers on 23rd June 2000. He set out the history. He referred to correspondence between the applicant and the Borough Council from as early as 1992 in which correspondence the Borough Council had regularly asked the company for its plans to improve the properties. It was only on the day of the hearing, said the judge, that the applicant produced its costing for repairs.
5.	The Borough Council's figures for repairs were based on an approximation in respect of other properties generally. They were therefore not specific to these properties. The judge accepted that the Borough Council's prices were likely to be higher than those that a private individual would pay; but then again he considered that the applicant's costs were likely to be based on prices that were as cheap as they could get them. The judge thought that some of the applicant's estimates were on the low side. The applicant's figures depended on quick sale and would be subject to deduction of costs on sale. The houses, however, might not sell quickly and might be damaged by vandalism in the mean time. It was not easy to sell or rent houses in the particular area because there were already surplus properties on the market. 
6.	The judge held that effectively the applicant would be unable to get a new grant because, among other things, grants were means tested. He found that the costs of repairs were more likely to be £20,000 than £14,000 in respect of each property. He held the sale of the properties was precarious, and that there was a real risk of vandalism. He also found that the applicant had not availed itself of opportunities to repair the properties over several years. These properties have been boarded up since the early 1990s. The Borough Council has received numerous complaints in respect of them.
7.	The original submission of the applicant in support of its application for permission to appeal was that the decision of His Honour Judge Bowers was not supported by the evidence. That matter has not been pursued before me on this application in open court, and it would, in my judgment, not afford a reasonable prospect of success. This court would not go over all the facts again. Its review would be limited to seeing whether the finding which the judge made were against the weight of the evidence which the judge heard.
8.	Counsel, Mr Dray, has today focused on two points: first, an argument on the true construction of section 265 of the Housing Act 1985; and, secondly, an argument based on the Human Rights Act 1988. His argument on the basis of section 265 is as follows. Section 265(1) provides: 
“Where the local housing authority are satisfied that- (a)a dwelling-house which is not a flat, or 
(b)a house in multiple occupation which is not a flat in multiple occupation,
is unfit for human habitation and that, in accordance with section 604A, taking action under this subsection is the most satisfactory course of action, they shall make a demolition order with respect to the dwelling-house or house concerned.” 
9.	Mr Dray's argument focuses on the words “the most satisfactory course of action”, and his argument is limited to number 22. It is thus that in selecting the most satisfactory course of action the housing authority could look only at the subject property. 
10.	The implications on the facts of that argument are that the local housing authority would have to have regard to the cost of demolishing number 22 alone, not number 22 taken with numbers 21 and 23. On the evidence, the demolition of costs of number 22 alone was some £27,500 odd, whereas the costs of demolishing numbers 22 taken with numbers 21 and 23 was only £17,000; and it was on the basis of the lower demolition figure that the local housing authority was able to conclude that the most satisfactory course of action was indeed demolition rather than repair. I bear in mind that the consequence of this decision is indeed a significant one for the owner because, as I have pointed out, the Act provides that the costs of demolition can be recovered from the owner less the costs of any building materials that can be resold.
11.	Counsel's argument is, as I say, based on section 265(1). It is really an argument which is simply taken on the wording of the section. Mr Dray has not taken me to any other wording or propounded any other argument which would support this construction. 
12.	For my own part, I do not think that there is a real prospect of success on this argument. The wording of the section is perfectly general and the effect of Mr Dray's construction is that the exercise which the local housing authority must perform is a totally artificial one. For instance, on the particular facts of this case, they must assume that number 22 is demolished on its own, rather than, as they propose, with numbers 21 and 23. On the particular facts, that works against the owner. But, of course, there could be examples when proceedings, as Mr Dray suggests, could work to the advantage of the owner. Let us suppose that we have, as here, three houses and the question is: what is the cost of repairing them to put them to a condition where they cease to be unfit for human habitation? Let us suppose that the owner of numbers 21 and 23 are different from the owners of number 22 and that the local housing authority is considering the position in relation to number 22, as here, the middle property. Let us suppose that the other owner is willing to combine with the owner of 22 and that the evidence shows that in those circumstances the costs of repairs would be significantly less. If Mr Dray's argument is correct, then the local housing authority must proceed on the basis that the cost of repair is the higher cost of repairing number 22 alone, rather than looking at the situation in which those costs would be lower because the other two owners are prepared to co‑operate; and it is reasonable to suppose that all three owners could satisfactorily work together and repair the three properties. That would work against the owner. 
13.	Mr Dray's argument, as he accepted, involved ignoring that situation, although he did accept that if the reality was that the owners were all prepared to co‑operate, then the local housing authority could take into account the other costs of repairing numbers 22, 21 and 23. In that eventuality, of course, the council is not doing that which on his submission it is obliged to do under the section, namely focus exclusively on the subject property.
14.	I then move to the argument propounded under the Human Rights Act 1998, which is as follows. The applicant has a Convention right under Article 1 of the First Protocol, that is that it should not be deprived of its possessions. Article 1 of the First Protocol is set out in Schedule 1 to the Human Rights Act 1998, and in the material part provides: 
“No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.”
15.	Article 1 also provides that the foregoing provision: 
“...shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”
16.	Mr Dray was constrained to accept that section 22(4) would prevent the applicant from relying on this Convention right pursuant to section 7(1)(b) -- that is in proceedings -- but he nonetheless submits that the court would be bound to take account of his argument under Article 1 of the First Protocol under section 6. I will go back to section 22(4). It provides that: 
“Paragraph (b) of subsection (1) of section 7 applies to proceedings brought by or at the instigation of a public authority whenever the act in question took place; but otherwise that subsection does not apply to an act taking place before the coming into force of that section.” 
17.	These proceedings were commenced by the applicant. Mr Dray is constrained to accept that “proceedings” there means the proceedings commenced by the summons issued by the applicant. Accordingly, under section 22(4), the Act does not apply to the demolition orders which were made in September 1999. Therefore he cannot rely on section 7. He refers me instead to section 6: 
“It is unlawful for a public authority to act in a way which is incompatible with a Convention right.”
18.	He is there referring to the fact that this court is a public authority. 
19.	As I see it, the court considering whether to grant permission to appeal and then hearing the appeal itself is concerned with a review of the order made by His Honour Judge Bowers. It is not acting in a way which brings into question section 6 of the Act. If that were so in this case, section 6 would effectively undermine section 22(4). In my judgment, that is not the correct construction. 
20.	Accordingly, I dismiss the application.
Order: Application dismissed.