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Withdrawal of repairs grant on owner failing to pay share held ultra vires

17 November 2017

A council which withdrew an award of repairs grant to the owner of a flat who failed to pay his share of the cost of work to the ternement acted beyond its powers, the Inner House of the Court of Session has ruled.

Lords Brodie, Malcolm and Glennie allowed a reclaiming motion by Masroor Hussain against a decision by Lord Mulholland, who refused a petition for judicial review which sought a ruling that Glasgow City Council had acted beyond its powers under part 2 of the Housing (Scotland) Act 2006 in imposing a requirement of payment of the owner's share in full by a certain date as a condition of grant assistance. (Click here for report.)

The petitioner and his wife owned a flat in Langside Road, Govanhill. The council had served a notice that it considered the tenement to be substandard and listing necessary repair work. It did not accept a proposed voluntary scheme by the owners and instructed repairs through a statutory contract, advising that grant assistance would be available. The petitioner qualified for the means tested 75% grant, which was approved in November 2012 subject to the condition challenged. His contribution was assessed at £15,884.89. By the time of the final account in May 2015 the petitioner's contribution was £21,360.89. The council refused a request for time to pay and imposed a deadline, breach of which would require the petitioner to pay the full £84,923.56 as his share of the overall works.

The council based its case on s 71(4) of the Act, which provides that "Assistance may be provided on such terms as the authority thinks fit", subject to a proviso. Lord Glennie, delivering the opinion of the court, said the court had not found the answer to what terms might permissibly be imposed by analysing s 71 in relation to other provisions of the Act, but by considering "whether, looking at the Act as a whole and the purposes for which the grant is given, the condition attached to the grant was for a purpose connected with the grant rather than for some ulterior purpose or, to put it another way, whether the condition fairly and reasonably relates to the grant".

For the council it was submitted that the condition satisfied that test because it was an essential aspect of the provision of financial assistance for housing purposes that owners should be encouraged to play their part and take a financial stake in the repair and renovation works to their properties – even if it could be viewed as "a stick with which to force the home owner to comply with his obligations".

Lord Glennie, however, said in the court's opinion the condition did not meet the test. "The grant, if made, is made for housing purposes. In a case such as the present it is made because owners of buildings, or of flats within buildings, do not have the means to carry out and pay for the repair and renovation works which the council, on the basis of its own expert advice, considers necessary.

"We could understand conditions being imposed which sought to regulate the quality of the works to be undertaken, or required certification by the council before grant monies were released, or something of that sort. There might be any number of detailed conditions relating to the availability or application of the moneys advanced by way of grant. But the condition here relates to payment by the petitioner of his own money, not grant money. It relates to payment by the petitioner to the council of sums spent by the council on the repairs, sums which are not and have never been covered by the grant. It is seeking to use the promise of a grant, and the threat of its withdrawal, as a stick with which to force the petitioner into compliance with his obligations as regards the expenditure not covered by the grant. In our opinion this goes well beyond what is legitimate."

If the policy was to ensure that owners made a contribution to the cost, that was achieved, if at all, by making them liable for part of the cost. But the council's condition went much further. "It may be intended as a kind of sword of Damocles, hanging over the owner of the property to encourage him to pay the sum due from him for his share of the cost of the repairs. But, if activated, the effect goes much wider than enforcing payment of the sums already due; it takes away the whole of his grant... This is not a condition which is attached to the grant for the purposes of the grant – to make sure that it is properly applied, that the work is carried out satisfactorily, or whatever. It is attached to the grant for the purpose of ensuring payment of other sums which are and have always been the responsibility of the owner of the property.

"In those circumstances we consider that the pre-condition goes much further than is justified in terms of the Act. It is ultra vires the council."

The court proposed to grant a declarator that the condition was ultra vires and that the council was not entitled on that account to withdraw its offer of grant.

Click here to view the opinion of the court.


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