Neutral Citation Number: [2007] EWHC 771 (Admin)
Case No: CO/1337/2007
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 04/04/2007

Before :

THE HONOURABLE MR JUSTICE FORBES
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Between :

	Carole Swords	Claimant	
	
- and -		
	
The Secretary of State for Communities and Local Government
-and-
(1) London Borough of Tower Hamlets
(2) Old Ford Housing Association	

Defendant

Interested Parties	
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(Transcript of the Handed Down Judgment of
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David Wolfe (instructed by Leigh Day & Co) for the Claimant
Jonathan Swift and Deok Joo Rhee (instructed by the Treasury Solicitor) for the Defendant
Kelvin Rutledge and Sian Davies (instructed by Isabella Freeman for the Assistant Chief Executive, Legal Services) for the First Interested Party
Jane Oldham (instructed by Prince Evans) for the Second Interested Party. 

Hearing dates: 22nd and 23rd March 2007
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Judgment
Mr Justice Forbes : 
1.	Introduction and factual background.	This is an application for permission “rolled up” with the substantive hearing (if permission is granted) in proceedings brought by the Claimant, Ms. Carole Swords (“Ms Swords”), whereby she seeks appropriate relief by way of judicial review of the decision of the Defendant (“the Secretary of State”), dated 9th February 2007, to grant consent to the voluntary transfer by the First Interested Party (“Tower Hamlets”) to the Second Interested Party (“Old Ford”) of the social housing estates collectively known as “Parkside” (“the Parkside Estate”).
2.	It is important to note that this case is not concerned with any challenge to Tower Hamlets’ decision to proceed with the transfer in question, subject to the Secretary of State’s consent.  Nor is it an inquiry into the intrinsic merits of the proposed transfer or of stock transfer policy generally.  On behalf of the Claimant, Mr Wolfe made it clear that the various complaints, upon which this challenge is mounted (as to which, see below), were confined to the manner in which the Secretary of State has exercised her discretion under sections 34 and 43 of the Housing Act 1985 (“the 1985 Act”: as to which, see below): see paragraph 1 of Mr Wolfe’s written Notes in Reply.  Accordingly, as Mr Rutledge observed on behalf of Tower Hamlets, this Court’s function is therefore confined to its supervisory role of ensuring that the Secretary of State has exercised that discretion lawfully.
3.	The background to this case is that, in 2000, the Government published its Housing Green Paper entitled “Quality and Choice: a decent home for all” in which it set out the commitment that all social housing must meet specified standards of decency by 2010.  A “decent home” is one which satisfies the following four criteria: (i) it meets the current statutory minimum standard for housing (i.e. the fitness standard), (ii) it is in a reasonable state of repair, (iii)  it has reasonably modern facilities and services and (iv) it provides a reasonable degree of thermal comfort.
4.	Local housing authorities, like Tower Hamlets, must therefore find the means by which their properties can be brought up to the “decent homes standard” by the target date.  As Munby J. observed in R (Albert Beale & Lesley Carty) ~v~ Camden LBC (2004) EWHC 6 (Admin) (“Beale”), at paragraph 7:
“[Meeting Central government policy by 2010] … will obviously cost a lot of money … There are various methods by which local authorities can in principle comply with central government’s objectives and raise the necessary money.  One is by means of a Large Scale Voluntary Transfer (“LSVT”).  Another is by means of a Private Finance Initiative (“PFI”).  Another … is by means of an entity called an Arms Length Management Organisation (“ALMO”), which involves the transfer to the ALMO of the management, but not the ownership, of the local authority’s council houses.”  
5.	Following an options appraisal, Tower Hamlets introduced its “Housing Choice” policy as the means by which it was most likely to achieve the Government’s target.  In relation to the Parkside Estate it concluded that a Large Scale Voluntary Transfer (“LVST”) was the only viable option.  It was considered that the proposed transfer would facilitate the delivery of a £42.8 million regeneration programme across the Parkside Estate, a target Tower Hamlets could not otherwise expect to meet.  The proposed transfer was to be carried out pursuant to Tower Hamlets’ powers to dispose of its housing land under section 32 of the 1985 Act, for which purpose the consent of the Secretary of State was required under section 32(2).  In addition, the consent of the Secretary of State was also required under section 43 of the 1985 Act insofar as the proposed transfer involved the disposal of houses belonging to Tower Hamlets that had been let on secure tenancies or introductory tenancies or on leases granted pursuant to the exercise of the right to buy.  It is to be noted that, although it was common ground that the consent of the Secretary of State to the proposed transfer to Old Ford was required under both sections 32 and 43 of the 1985 Act, the matters to which the Secretary of State may have regard in deciding whether to give consent are, in all material respects, the same under both sections (see below).
6.	In the summer of 2002 a referendum of all Tower Hamlets’ secure and introductory tenants was conducted on the issue of Housing Choice.  It resulted in a vote in favour of Tower Hamlets’ initiative.  Consequently, various Estate Residents’ Steering Groups were set up and, in the case of the Parkside Estate (in common with the other estates within Tower Hamlets), the steering group consisted of volunteer tenants and leaseholders from those estates.  The Parkside Estate steering group (“PESG”) itself selected Old Ford as a proposed partner landlord.  Old Ford is a charity registered with the Charity Commission and is a housing association registered with the Housing Corporation.
7.	On 5th May 2004, the proposed transfer was awarded a place on the Secretary of State’s Disposal Programme 2004.
8.	On the 31st May 2005 the Stage 1 Offer documentation and notice was issued (the first stage in the formal consultation exercise: as to which, see below).  The documentation allowed 28 days for any representations to be made to Tower Hamlets concerning the proposed transfer.  The Stage 2 notice (see below) was also issued, allowing 28 days for representations to be sent to the Secretary of State.  In the event, the Secretary of State received no such representations. 
9.	Following completion of the formal consultation exercise, in July 2005 ballots of tenants and leaseholders took place in accordance with the statutory scheme under the 1985 Act (as to which, see below).  The ballots in question were conducted, overseen and reported upon by Electoral Reform Services (“ERS”), a highly respected body that is independent of central and local government (and independent of Housing Associations).   On 26th July 2005, ERS confirmed the results of the ballots, as follows:
(1)	820 tenants voted (45.7% of those eligible), of whom 413 voted “Yes”  (50.4% of the valid vote) and 406 voted “NO” (49.6% of the valid vote) – a majority of 7 in favour of the proposed transfer;
(2)	206 leaseholders voted (23.2% of those eligible), of whom 40 voted “Yes” (19.4% of the valid vote) and 166 voted “No” (80.6% of the valid vote) – a majority of 126 against the proposed transfer.
10.	On 11th January 2006, Tower Hamlets’ Cabinet approved the proposed disposal to Old Ford, subject to obtaining the Secretary of State’s required consent under sections 34 and 43 of the 1985 Act.  On 16th January 2006, Tower Hamlets applied to the Secretary of State for the necessary consent.  On 31st March 2006, the transfer was placed on the Disposal Programme for 2005.  In due course, the Secretary of State decided to give her consent to the disposal in question and did so by letter dated 9th February 2007 (“the decision letter”).  It is that decision that is the subject of challenge in these proceedings.
11.	The Claimant, Ms Swords, is the secure tenant of Flat 6, Grenville House, 39 Arbery Road, London, E3, a property that is owned by Tower Hamlets and included in the proposed transfer to Old Ford.  In the period between the ballots and the giving of consent, protracted correspondence passed between Tower Hamlets and Leigh Day & Co, solicitors acting on behalf of Ms Swords.  This included several pre-action protocol letters and responses.  Leigh Day & Co also submitted a number of petitions and template letters which purported to show majority opposition to the proposed transfer (as to these, see paragraph 13 below).
12.	In the course of this correspondence, Leigh Day & Co requested that Tower Hamlets give an undertaking that, in the event that the Secretary of State gave consent to the transfer, Tower Hamlets would provide at least 7 days’ notice before any transfer to Old Ford took place.  The reason for this was that the 1985 Act contains certain provisions for the protection of the transferee such that a transfer, once effected, cannot easily be undone.  Tower Hamlets gave the undertaking sought without conceding that there was any merit in Ms Swords’ complaints.
13.	A summary of the various categories of evidence or information that were received by the Secretary of State together with and subsequent to the receipt of Tower Hamlets’ application for consent is to be found in paragraphs 56 to 59 of the first witness statement of Ms Anne Kirkham, filed on behalf of the Secretary of State.  This documentation comprises the following.
(1)	A petition from residents on the Parkside Estate which was sent to Tower Hamlets on 10th January 2006 (“the Original Petition”).  Tower Hamlets volunteered to undertake an analysis of the petition against their records.  Tower Hamlets’ analysis was then sent to the Claimant’s solicitors, indicating that the original petition did not show that the majority of tenants opposed the transfer.  In response, the Claimant sought to obtain more signatures and, in the course of the following months, she submitted (via her solicitors) three further versions of the petition, on each occasion seeking to add new signatures to the list.  Details of the careful analysis of this and other information that was undertaken by Tower Hamlets (working closely with the Secretary of State’s officials) are set out in paragraphs 72 to 100 of Ms Kirkham’s first witness statement.  In short, Tower Hamlets’ overall analysis of the information in question showed (on the most generous interpretation) that 43.12% of eligible tenants (i.e. significantly less than a majority) were opposed to the proposed transfer.
(2)	A total of 962 template letters of complaint which were sent to the Deputy Prime Minister between August and November 2005, copies of which were sent to Tower Hamlets on 11th January 2006.  Tower Hamlets also undertook an analysis of these template letters in conjunction with the analysis of the petition, in order to ensure that there was no element of double counting and to ensure that both sets of documentation were taken into account in order to create as accurate a picture as possible of the level and nature of the opposition to the proposed transfer.
(3)	A total of 266 template letters of objection were received by Tower Hamlets, following advertisement of the plans to dispose of the housing amenity land as part of the proposed transfer of the Parkside Estate (“the Open Space letters”).  For the avoidance of doubt, Tower Hamlets also took these letters into account as part of its overall analysis and reviewed them against the previous representations already received.  Tower Hamlets found that 25 of the letters had come from tenant addresses from which no other representations had been received.  After validating a total of 18, Tower Hamlets went on to conclude that, if these letters were taken into account with all other representations, 43.95% of tenants eligible to vote were opposed to the proposed transfer (i.e. still significantly short of a majority).
(4)	A single document containing 60 “statements” from tenants, which was sent to Tower Hamlets by the Claimant’s solicitors under cover of a letter dated 31st January 2006.  Tower Hamlets did consider this document but appear to have attached little weight to it because, as it correctly pointed out in its letter to the Secretary of State dated 21st February 2006, the “statements appear to be all or mostly in one person’s handwriting with no separate verification or corroboration such as individual signatures.”
(5)	Finally, in a letter to the Claimant’s solicitors dated 11th July 2006, George Galloway MP stated that he had received around 900 letters of complaint from tenants concerning the fairness of the ballot.  However, Tower Hamlets felt unable to incorporate this information into the careful analysis that it was carrying out, because Mr Galloway was not prepared to disclose the letters for reasons of confidentiality. 
14.	On the day it received the Secretary of State’s decision letter, Tower Hamlets wrote to Leigh Day & Co, enclosing a copy and notifying them, in accordance with its earlier undertaking, that it proposed to proceed with the transfer on Monday 19th February 2007.  On the evening of 16th February 2007, Grigson J. granted Ms Swords an ex parte injunction to restrain the transfer from going ahead.  On 23rd February 2007, Black J. ordered that the matter be expedited and gave appropriate directions for the hearing.  Pending the resolution of these proceedings, it is said that Old Ford will incur additional costs of approximately £127,000 for every week that the transfer is delayed: see paragraphs 4 and 5 of Madeleine Forster’s witness statement dated 20th February 2007.
15.	The Legal Framework.	I turn first to the relevant provisions of the 1985 Act:
(i)  Part II of the Act is entitled “Provision of Housing Accommodation”.  So far as material, section 32 provides as follows:
	“Disposal of land held for housing purposes
	32 Power to dispose of land held for purposes of this Part
	(1)  Without prejudice to the provisions of Part V (the right to buy), a local authority have power by this section, and not otherwise, to dispose of land held by them for the purposes of this Part.
	(2)  A disposal under this section may be effected in any manner but, subject to subsection (3), shall not be made without the consent of the Secretary of State.
	(3)  No consent is required for the letting of land under a secure tenancy or an introductory tenancy ….”
(ii) 	Section 34(4A) provides that the matters to which the Secretary of State may have regard in determining whether to give consent under section 32 include:
	“(a)	the extent (if any) to which the person to whom the proposed disposal is to be made (in this subsection referred to as “the intending purchaser”) is, or is likely to be, dependent upon, controlled by or subject to influence from the local authority making the disposal or any members or officers of that authority; 
	(b)	the extent (if any) to which the proposed disposal would result in the intending purchaser becoming the predominant or a substantial owner in any area of housing accommodation let on tenancies or subject to licences;
	(c)	the terms of the proposed disposal; and
	 (d)	any other matters whatsoever he considers relevant.” (My emphasis) 
(iii)	So far as material, Section 43 is in the following terms:
	“43  Consent required for certain disposals not within s 32
	(1)	The consent of the Secretary of State is required for the disposal by a local authority, otherwise than in pursuance of Part V (the right to buy), of a house belonging to the authority –
		(a)	 which is let on a secure tenancy or an introductory tenancy, or
		(b) of which a lease has been granted in pursuance of Part V,
	but which has not been acquired or appropriated by the authority for the purposes of this Part.
…
	(4A) The matters to which the Secretary of State may have regard in determining whether to give consent and, if so, to what conditions consent should be subject shall include –
	…
(d) any other matters whatsoever which he considers relevant.” (My emphasis)
(iv)	In the case of proposed disposals to private sector landlords of “dwellings which are subject to secure tenancies or introductory tenancies”, both the local authority and the Secretary of State are required to “have regard to” the views of tenants liable to cease to be secure tenants or introductory tenants as a result of the disposal: see Section 106A which, so far as relevant, provides as follows:
	“106A  Consultation before disposal to private sector landlord
	(1)	The provisions of Schedule 3A have effect with respect to the duties of –
		(a) a local authority proposing to dispose of dwelling-houses subject to secure tenancies or introductory tenancies, and
		(b) the Secretary of State in considering whether to give his consent to such a disposal,
	to have regard to the views of tenants liable as a result of the disposal to cease to be secure tenants or introductory tenants.” 
(v)	The provisions of Schedule 3A are expressed as applying to disposals by a local authority of an interest in land as a result of which a secure tenant or an introductory tenant of the authority will become the tenant of a private sector landlord (see paragraph 1 of the Schedule).  So far as material, paragraphs 2 to 6 of Schedule 3A provide:
	“Application for Secretary of State’s consent
	2.	(1) The Secretary of State shall not entertain an application for his consent to a disposal to which this Schedule applies unless the authority certify either – 
 		(a) that the requirements of paragraph 3 as to consultation have been complied with, or
		(b) …
  and the certificate shall be accompanied by a copy of the notices given by the authority in accordance with that paragraph.
(2) …
(3) References in this Schedule to the Secretary of State’s consent to a disposal are to the consent required by section 32 or 43 (general requirement of consent for disposal of houses or land held for housing purposes).
Requirements as to consultation
3.	(1) The requirements as to consultation referred to above are as follows.
(2) The authority shall serve notice in writing informing him of –
		(a) such details of their proposal as the authority consider appropriate, but including the identity of the person to whom the disposal is to be made,
	(b) the likely consequences of the disposal for the tenant, and
	(c) the effect of the provisions of this Schedule and in the case of a secure tenant, of sections 171A to 171H (preservation of right to buy on disposal to private sector landlord),
	and informing him that he may, within such reasonable period as may be prescribed in the notice, make representations to the authority.
(3) The authority shall consider any representations made to them within that period and shall serve a further written notice on the tenant informing him – 
		(a) of any significant changes in their proposal, and
	(b)  that he may within such period as is specified (which must be at least 28 days after the service of the notice) communicate to the Secretary of State his objection to the proposal,
		and informing him  of the effect of paragraph 5 (consent to be 	withheld if majority of tenants are opposed).
		Power to require further consultation
	4.	The Secretary of State may require the authority to carry out such further consultation with their tenants, and to give him such information as to the results of that consultation, as he may direct.
	Consent to be withheld if majority of tenants are opposed
	5.	(1) The Secretary of State shall not give his consent if it appears to him that a majority of the tenants of the dwelling-houses to which the application relates do not wish the disposal to proceed; but this does not affect his general discretion to refuse consent on grounds relating to whether a disposal has the support of the tenants or on any other ground.
	(2) In making his decision, the Secretary of State may have regard to any information available to him; and the local authority shall give him such information as to the representations made to them by tenants and others, and other relevant matters, as he may require.
	Protection of purchasers
	6.	The Secretary of State’s consent to a disposal is not invalidated by a failure on his part or that of the local authority to comply with the requirements of this Schedule.”
16.	On behalf of the Secretary of State, Mr Swift made it clear that it was accepted that (i) the transfer in question came within the terms of both section 32 and section 43 of the 1985 Act, (ii) the Claimant is a secure tenant of a dwelling that is subject to the transfer and (iii) Old Ford is a private sector landlord.
17.	The Policy Framework.	The Secretary of State’s policies in relation to a local authority’s transfer of its housing stock are fully set out in Ms Kirkham’s first witness statement.  In summary:
(1)	transfer of housing stock such as that proposed in the present case, is one of the means by which local authorities are able to meet the Government’s targets for making all council housing decent by 2010;
(2)	the first such housing transfer took place in 1988 and since then the Secretary of State has consented to 241 large scale voluntary transfers;
(3)	in the case of the transfer with which this case is concerned, Old Ford intends to spend over £37 million on Parkside estates within 5 years of transfer; the repairs and improvements programme will bring homes up to modern standards; Old Ford will provide a programme of maintenance that will ensure that the properties remain in their improved condition for 30 years; the repairs programme will bring all homes up to the Decent Homes standard; if the transfer does not go ahead the Parkside Estate will remain with Tower Hamlets and Tower Hamlets does not have the resources to undertake the improvement and redevelopment programme proposed by Old Ford – Tower Hamlets will only be able to address urgent Health and Safety repairs from its limited budget and continue day to day arrangements for repairs.
18.	The Housing Transfer Manual.		The “Housing Transfer Manual 2005 Programme” (“the Manual”) is Departmental guidance that was issued by the Secretary of State’s predecessor (the Office of the Deputy Prime Minister: “ODPM”) to local authorities and sets out the processes by which transfers of housing stock are to be carried out.  Unless it is necessary to distinguish between the Secretary of State and her predecessor, I will continue to use the term “Secretary of State” to cover both.  It is common ground that the Manual was the departmental guidance that is applicable in this case.  However, the Manual was not issued under any express duty or power to do so, nor is there any statutory requirement that local authorities should have regard to the guidance that it contains.  
19.	Paragraph 1.1 of the Manual states that it “can be considered the definitive guidance to authorities considering the completion of a housing transfer in 2005”.  Paragraph 1.1 goes on to state that the Manual “will also be of interest to tenants of authorities considering transfer and to prospective recipient landlords”.  Paragraph 1.2  states that:
“This manual provides guidance on housing transfer, i.e. the transfer of ownership and management of all or part of a local authority’s housing stock to a Registered Social Landlord (RSL).  It also sets out the current Government policy in respect of housing transfer in general.”
20.	The key provisions of the Manual relating to the transfer process, including provisions relating to tenant participation are summarised in Ms Kirkham’s first witness statement.  It is clear from these provisions that tenants are to be involved from the earliest stages (i.e. from before the authority’s application for a place on the Secretary of State’s Disposals Programme) and that they will have had opportunities to influence the proposals as they were being developed.
21.	Section 10 of the Manual deals with the formal consultation exercise that is required by section 106 and Schedule 3A of the 1985 Act.  The Manual describes the procedures prescribed in paragraphs 3(2) and 3(3) of Schedule 3A respectively as Stages 1 and 2 of the formal consultation requirements.
22.	In relation to the Stage 1 procedure (see paragraph 3(2) of Schedule 3A) the Manual states that:
(a) the Stage 1 Notice should, inter alia, explain the effect of the provisions of Schedule 3A of the Act (paragraph 10.19); and
(b) the formal consultation or offer document issued thereunder should invite representations within a reasonable period (considered to be at least 28 days) and that the authority is required to consider any representations made within that period and may wish to revise its proposals accordingly (paragraph 10.20).
23.	 In relation to the Stage 2 procedure (paragraph 3(3) of Schedule 3A), the Manual states:
(a) the Stage 2 Notice should (i) describe any significant changes in the proposal, (ii) state that objections may be made to the Secretary of State within 28 days or a specified longer period and (iii) draw attention to the fact that the Secretary of State will not give her consent if it appears to her that the majority of tenants are opposed to the transfer (paragraph 10.21); and 
(b) the ballot should normally commence immediately after the issue of the Stage 2 Notice and the 28 days (or other specified period), in which objections may be made to the Secretary of State, to run concurrently with the ballot.
24.	Paragraph 10.23 of the Manual deals with the structure and content of the formal consultation document, as follows:
“An authority should draw up its formal consultation document in accordance with the good practice guidance at Annex N.  The document should set out clearly the terms of the proposed transfer including tenants’ rights under the assured tenancy regime; it should compare those rights to the rights of secure tenants.  The document should explain that, although transferring tenants will have broadly similar rights, some rights will be lost while others will be provided by contract rather than by statute.  Any promises made at the informal consultation stage should be incorporated into the formal consultation material.”
25.	The Manual also states that the Stage 1 and Stage 2 Notices should give an indication of the likely timing of the ballot and explain the mandate required by the authority to proceed with its proposals which should bind the authority’s future action (paragraph 10.26).
26.	The significance of the ballot and its bearing on the Secretary of State’s power to grant consent is dealt with in paragraphs 10.24 to 10.29 of the Manual, as follows (so far as material):
“Establishing tenants views
10.24	The Secretary of State cannot grant consent to the transfer if it appears to him that the majority of the tenants are opposed to it.  Whilst not a legal requirement, we consider that a properly conducted formal ballot, carried out under the auspices of an independent body, is an effective way in which an authority can demonstrate satisfactorily that a majority of tenants are not opposed to the transfer.
10.25	Where an authority wishes to use an alternative method of establishing tenants’ views, it will be required to make a case to ODPM in advance of any action, demonstrating why a ballot would not meet its needs.
10.26	We consider that a simple majority of those voting being in favour [will] be sufficient to indicate tenant support for the transfer.  …
10.27	The ballot paper should be delivered to each tenant under separate cover from any consultation material. …
10.28	…
10.29	…  If the majority is in favour, and the authority decides to proceed with the transfer, formal notification of the ballot will be required in support of the consent application.” 
27.	The Manual deals with those who should be consulted in the following terms:
“Who should be consulted?
Tenants
10.30	The statutory consultation procedures are concerned solely with secure tenants or those with an introductory tenancy. …
Leaseholders
10.31	There are no statutory requirements for consulting long leaseholders (i.e. people who have exercised their Right to Buy (RTB) on a long leasehold basis or have bought from those who have exercised their RTB) as the terms of their lease would not change if the freehold transferred to an RSL.  However, an authority should have engaged leaseholders in the development of the transfer proposal as they are important local stakeholders.  …
…
10.36	Leaseholders should be kept informed of progress on the transfer proposal and told that they may make any objections to the transfer to the Secretary of State, who will take them into account when making his decision on the consent application. …
10.37	Although an authority may, in order to ascertain their views, ballot leaseholders about a transfer proposal, it is not obliged to do so and it should conduct such a ballot as a separate exercise to ensure that tenants’ views can be clearly demonstrated.”
28.	As to the timing of the formal consultation and the ballot, the Manual gives the following guidance:
“Timing of formal consultation and ballot
10.38	The aim of the formal consultation exercise is to seek tenants’ views on the terms of the proposed transfer.  It is important that the information given to tenants and promises made regarding future policies on rent and repairs and levels of service are well founded.  Formal consultation should not start, therefore, until the authority is sure that its proposal accords with the policy set out in this guidance.  We consider that securing a place on the LSVT programme, or ODPM agreement to develop a proposed SSVT further, is the best way of confirming this to be the case.
10.39	An authority deciding to hold a ballot prior to this does so at its own risk and should note that a vote in favour will not guarantee a place on the LSVT Programme …  In any event, the authority should not start consideration until it has valued the property and has a clear understanding of the nature of the repair and improvement package and the service that would be provided by the prospective new landlord.  Should consideration of the details of a transfer proposal reveal aspects that do not comply with he policy, further consultation may well be required before the transfer may proceed.
10.40	In order to ensure that it reflects the views of tenants’ resident at the time of transfer, an authority should seek to minimise the time between the ballot and the transfer.  Ideally it should be around 6 months. …”
29.	At paragraph 16.2 the Manual sets out the criteria that the Secretary of State will apply when considering an application for consent to the transfer, as follows:
“Criteria for consent
16.2	In considering an application for consent to the transfer under sections 32-34 and/or 43 of the Housing Act 1985, the Secretary of State will apply the following criteria:
•	that the authority’s consultation exercise has been adequate;
•	that the majority of secure tenants affected by the proposed transfer are not opposed to it;
•	that the acquiring landlord is registered with the Housing Corporation;
•	that the acquiring landlord is independent of the council;
•	that all houses transferred would meet the decent homes target by 31 December 2010;
•	that there is a long term demand for the properties to be transferred;
•	that the estimated Exchequer and public expenditure costs represent value for money;
•	that the terms of the transfer are acceptable (i.e. that the sale would be at tenanted market value and wholly privately financed);
•	that the authority will be able to fulfil its statutory obligations under the Housing Act 1996 as amended …
		16.3	In addition the Secretary of State may consider any other matters 		which seem relevant.”
30.	When dealing with the submission of an application and supporting documentation, the Manual states (inter alia):
“16.5	In addition to a letter formally applying for consent … various items of supporting information are required, as follows:
a.	formal certification that consultation has been carried out in accordance with Schedule 3A to the Housing Act 1985;
b.	written confirmation of the ballot result;
…
e.	details of any representations made by other parties who have an interest in the transfer, for example long leaseholders; …
31.	Guidance as to good practice with regard to the consultation material is given in Annex N to the Manual, which contains the following paragraphs (inter alia):
“1.	The main purpose of this Annex is to help authorities proposing transfer to prepare a Stage 1 notice, more commonly known as the formal consultation, or offer document.  It is aimed at improving the content and presentation of consultation documents so that they are accessible to tenants.  They must also meet the statutory requirement for tenant consultation and this guidance sets out how this may be achieved.
…
9.	Material produced by the authority should explain clearly the options that are available to address the housing investment and management needs.  It should state both the possible benefits and disadvantages of the options as determined by the investment appraisal.  Whilst the authority may well have resolved to pursue transfer, it should ensure material on other options, such as Arms Length Management Organisations and the Private Finance Initiative, remains accessible to tenants.
10.	The informal material should never be written in such a way that tenants feel the authority is actively promoting a yes vote by presenting only the pro-transfer arguments.  Neither should it include logos or chartermarks which claim that the information presented is any one of the following: honest/truthful/legal/fair/ approved by ODPM. …
…
37.	Tenants need to understand why the council is proposing to transfer their housing, but should not feel that the main purpose of the consultation document is to sell the transfer; rather, it should give neutral information.  A balanced and informative approach is needed, which provides brief information on all the options that have been considered.”  
32.	The Grounds of Challenge.	Mr Wolfe made it clear that the Claimant pursues only the following grounds of challenge to the decision in question (see paragraph 18 of his written skeleton argument):
(1)	The Secretary of State unlawfully failed to take into account the views of leaseholders despite (among other things) the Manual saying that she would do so (“the Leaseholders Issue”);
(2)	The Secretary of State unlawfully failed to consider whether the materials circulated by Tower Hamlets and Old Ford prior to the ballot complied with the requirements of the Manual (despite the fact that she needed to determine whether they complied) (“the Pre-Ballot Documentation Issue”);
(3)	The Secretary of State unlawfully failed to consider whether the overall consultation and ballot process had been fairly and properly conducted (despite the fact that she had needed to decide whether they had been properly conducted) (“the Consultation and Ballot Process Issue”);
(4)	In deciding on the weight to give to the petitions and letters which opposed the transfer and sought an independent inquiry into the conduct of the consultation process, the Secretary of State proceeded without evidence and on the basis of an “opinion” on which (in breach of basic principles of procedural fairness) she failed to give residents an opportunity to comment (“the Petitions and Letters of Opposition Issue”); and
(5)	The Secretary of State unlawfully relied upon key misunderstandings of fact (as to the nature and role of the Estates Steering Group, i.e. PESG) and failed to take into account the criticisms that Group had made in coming to her decision (“the Estates Steering Group Issue”).
33.	Before turning to consider the parties’ submissions and my conclusions in relation to each of the grounds identified in the preceding paragraph, it is necessary to refer first to a number of points of general application to the grounds of challenge.
34.	Mr Wolfe referred to and relied upon the judgment of Munby J in Beale at paragraphs 20 to 21, where he said this:
“20.	I have already set out the key provisions in the ODPM Guidelines that Ms Markus relies upon.  I do not see how they help her in mounting a challenge to the legality of what Camden has done.  The ODPM Guidelines are not legal principles or statements of law; they are merely statements of the factors that the SoS will take into account in deciding whether or not to give his approval under s.27 of the 1985 Act and of the prerequisites that have to be met if he is to be persuaded to give his approval.  Failure to comply with the ODPM Guidelines may imperil or even fatally prejudice a local authority’s application for s.27 approval.  I fail to see, however, how such a failure – even if established – can, of itself, invalidate the consultation process as a matter of law or make it, as the claimants assert, unlawful.
21.	There is another reason why I cannot agree with the use Ms Markus seeks to make of the ODPM Guidelines.  Parliament, as I have said, has chosen to confer the relevant power of approval under s.27 of the 1985 Act on the SoS, not on the court.  It is for the SoS, at least in the first instance, to decide whether or not Camden has complied with the ODPM Guidelines [my emphasis].  Were I at this stage of the process to be drawn into deciding whether or not Camden has done so, I would, as it seems to me, be usurping a power which Parliament has chosen to confer on the SoS – who might find himself, were we to differ, in the dilemma of not knowing whether to follow his views or mine as to the meaning of the ODPM Guidelines – but also of the judge who would have to determine any challenge that might thereafter be made to the SoS’s decision.
35.	Mr Wolfe drew attention to and placed heavy reliance upon the sentence that I have italicised in paragraph 21 of the judgment in Beale.  Applying that statement of principle to the circumstances of this case, Mr Wolfe submitted that it followed that the Secretary of State was required to consider whether Tower Hamlets’ application complied with the guidance provided in the Manual.
36.	Mr Wolfe submitted further that the Manual contains statements of policy and/or promises on the part of the Secretary of State as to what she expects of applications and as to how she will evaluate, consider and deal with applications for transfer (including the exercise of her discretions in relation thereto).  Mr Wolfe therefore submitted that the Secretary of State must consider applications for transfer in the manner promised, unless for good reason she departs from it in the particular case.  In support of that submission, Mr Wolfe referred to and relied upon the judgment of Woolf J. (as he then was) in Gransden & Co. Ltd ~v~ Secretary of State for the Environment (1985) 54 P. &C.R. 86 (“Gransden”), where he said this, at pages 93/94:
“What then is the significance of the inspector having failed to follow the policy?  Does that mean that this court has to quash his decision?  The situation, as I see it, is as follows: first, section 29 lays down what matters are to be regarded as material, and the policy cannot make a matter which is otherwise a material consideration an irrelevant consideration.  Secondly, if the policy is a lawful policy, that is to say, if it is not a policy which is defective because it goes beyond the proper role of a policy by seeking to do more than indicate the weight which should be given to relevant considerations, then the body determining an application must have regard to the policy.  Thirdly, the fact that body has to have regard to the policy does not mean that it needs necessarily to follow the policy, it must give clear reasons for not doing so in order that the recipient of its decision will know why the decision is being made as an exception to the policy and the grounds upon which the decision is taken.”
37.	For his part, Mr Swift submitted that the Manual cannot be said to supplement the relevant statutory provisions.  I agree.  Mr Swift stressed that the express purpose of the Manual is to provide departmental guidance to local authorities, it was not issued under any statutory duty or power and there is no statutory requirement that local authorities should have regard to it.  Again, I agree.  Mr Swift submitted that the short point is that the Manual is no more and no less than guidance – it is not a set of rules.  As such, it was Mr Swift’s submission that, whilst the statutory framework must as a matter of law govern the exercise of the Secretary of State’s powers, the Manual is simply material that the Secretary of State is entitled to and will, in the ordinary course of events, take into account when deciding whether to grant consent.  Mr Swift submitted (correctly, in my view) that the Secretary of State is not required to follow the guidance contained in the Manual rigidly and that any departure from it can only be impugned on traditional grounds of review or on the basis of any legitimate expectation to which it may have given rise.
38.	In this latter respect, Mr Swift submitted (correctly, in my view) that the court should be slow to recognise any legitimate expectation where the effect of so doing would be to elevate non-statutory guidance into a statutory requirement in circumstances where Parliament has clearly omitted certain requirements from the statutory framework – such as: (i) a requirement that the Secretary of State have regard to the views of leaseholders (c.f. section 106A of the Act: see Ground 1) and (ii) a requirement that the Secretary of State independently assess the adequacy of  the local authority’s consultation exercise (c.f. paragraphs 2 and 3 of Schedule 3A to the Act: see Grounds 2 and 3). 
39.	Mr Wolfe also submitted that it was not permissible for the Secretary of State to rely on material that seeks to supplement the reasoning of her decision letter, particularly in a case such as this where the decision letter has been carefully drafted following a long period of deliberation by the Secretary of State: see the judgment of Elias J. in Hereford Waste Watchers Ltd ~v~ Hereford Council (2005) EWHC 191 (Admin) at paragraphs 47/48, where he said this:
“47.	… It will be rare indeed for an inconsistent explanation, given in the course of the judicial review proceedings, to be accepted as the true reason for the decision.
48.	This is in accordance with the basic principles of fairness.  Plainly the courts must be alive to ensure that there is no rewriting of history, even subconsciously.  Self deception runs deep in the human psyche; the truth can become refracted, even in the case of honest witnesses, through the prism of self justification.  There will be a particular reluctance to permit a defendant to rely on subsequent reasons where they appear to cut against the grain of the original reasons.”
40.	However, as Mr Swift pointed out, it is a well-established principle of law that a decision maker is not required to set out every single detail of his reasoning process.  It will be sufficient for the decision-maker to set out the major chain of his reasoning which has led to the overall decision and it will not be necessary for him to deal with every argument presented to him: see MJT Securities Ltd. ~v~ Secretary of State (1997) PLR 43 at 51G to 52A and Eagil Trust Co Ltd ~v~ Pigott-Brown (1985) 3 All ER 119 at 122d.  Furthermore, although it should be very cautious about doing so, the court can and, in appropriate cases should admit evidence to elucidate or exceptionally, correct or add to the reasons of the decision-maker.  The function of such evidence should generally be elucidation not fundamental alteration – confirmation not contradiction: see the judgment of Hutchison LJ in R ~v~ Westminster City Council, ex parte Ermakov (1996) 2 All ER 302 (“Ermakov”) at 315h-j.
41.	I now turn to consider the individual grounds of challenge in these proceedings.
42.	Ground 1: the Leaseholders Issue.	Mr Wolfe submitted that, as well as being prevented from giving her consent if she considered that a majority of tenants were opposed to the transfer (see section 106A(1) and paragraph 5(1) of Schedule 3A of the 1985 Act), the Secretary of State also had a general discretion to refuse consent after taking into account (inter alia) such matters as she considered to be relevant (see sections 34(4A) and 43(4A) of the Act).
43.	Mr Wolfe referred to the guidance provided in the Manual and, in particular, to paragraphs 16.5(e), 10.31 and 10.36.  He submitted that, in effect, the Secretary of State had made a clear statement of policy and/or promise in those paragraphs that the views of leaseholders would be considered to be relevant to her decision-making in relation to the application for consent and that they would be taken into account for that purpose.  
44.	Mr Wolfe pointed out that the need for the Secretary of State to take into account the leaseholders’ clearly expressed opposition to the proposed transfer, as evidenced by the result of the leaseholders’ ballot, had been specifically drawn to the Secretary of State’s attention in, for example, a letter that was attached to the Claimant’s first pre-action (and pre-decision) letter dated 21st November 2005, as follows:
“There is an additional point about the ballot of the leaseholders.  What was the purpose of balloting the leaseholders to ascertain their views if they were not going to be taken into account?  Taken together, it is clear that the majority of the residents do not want to leave the council.”
45.	Mr Wolfe emphasised that the Secretary of State made no mention of the leaseholders’ ballot in her decision letter and that, in paragraph 6.6(8) of the her Grounds of Resistance, the Secretary of State has confirmed that she had regarded the leaseholders’ ballot to be irrelevant, as follows:
“(8)	the result(s) of the leaseholders’ ballot was not relevant either to the Defendant’s assessment under the first limb of paragraph 5(1) of Schedule 3A or to the exercise of her discretion under the second limb thereof, as Schedule 3A only applies in respect of secure and introductory tenants.”
46.	 It was Mr Wolfe’s submission that the Secretary of State has thus unlawfully failed to have regard to the views of the leaseholders (in particular their opposition to the proposed transfer) in the exercise of her general discretion when deciding whether to consent to the transfer.
47.	Mr Swift, supported by Mr Rutledge and Mrs Oldham (on behalf of Old Ford), submitted that the Secretary of State is under no statutory duty to have regard to the views of the leaseholders or otherwise to take them into account.  Mr Swift is plainly correct in that submission.  The policy rationale for this difference between leaseholders and secure/introductory tenants is that transfers of housing stock do not generally impact on leaseholders in the same way as they do on tenants: see paragraph 6 of Ms Kirkham’s 2nd witness statement.  This is also reflected in the terms of Section 10 of the Manual, in that the formal consultation requirements clearly only relate to tenants: see paragraphs 10.24 to 10.31 of the Manual (see above).
48.	I also agree with Mr Swift’s further submission that the Manual does not make any representation or promise that the Secretary of State’s consent will be dependent upon the support of the leaseholders.  The criteria for the grant of consent are listed in paragraph 16.2 of the Manual and do not include any reference to the views of the leaseholders.  Paragraph 16.3 simply adds that the Secretary of State may consider any other matters that seem to her to be relevant.
49.	Mr Swift accepted that, under the statutory framework, the Secretary of State does have a general or residual discretion to have regard to any other matter that she considers relevant for the purposes of determining whether to give consent under sections 32 and 43 of the Act: see sections 34(4A)(d) and 43(4A)(d) quoted above.  Mr Swift submitted that it is in this context that the indication at paragraph 10.36 of the Manual (that the views of the leaseholders would be taken into account) and the statement at paragraph 16.5e (that information relating to representations made by other parties, such as leaseholders, is required) should be read.  I agree with that submission. 
50.	Mr Swift also submitted that the Secretary of State’s general discretion to refuse consent to which reference is made in paragraph 5(1) of Schedule 3A of the Act clearly refers back to the Secretary of State’s general discretion in sections 34(4A) and 43(4A).  He therefore submitted that the Secretary of State’s reasons (as expressed in her decision letter) clearly applied to a process of decision-making that included the exercise of her general discretion under sections 34(4A) and 43(4A) and that the suggestion that the Secretary of State has only concerned herself with matters under Schedule 3A and thus failed to consider the exercise of her general discretion to refuse consent was wrong.  I agree with that submission.  In my view, on a fair reading of her decision letter, the Secretary of State’s reasons for her decision to consent to the proposed transfer embrace every relevant aspect of the necessary decision-making process, including the exercise of her general discretion under those two subsections to refuse such consent.  I reject Mr Wolfe’s submissions to the contrary effect.
51.	Mr Swift also referred to and relied upon the evidence contained in Ms Kirkham’s witness statements.  Despite Mr Wolfe’s submissions to the contrary, I am satisfied that Ms Kirkham’s evidence relating to the Secretary of State’s reasons for her decision is admissible.  To the extent that Ms Kirkham deals with aspects of the Secretary of State’s reasons that are not expressly stated in the decision letter, I am satisfied that she manifestly does so by way of elucidation.  In my view, Ms Kirkham’s evidence is not inconsistent with the decision letter, nor does it seek to rewrite or alter the Secretary of State’s reasons.  To adopt the words of Hutchison LJ in Ermakov, Ms Kirkham’s evidence is “elucidation not fundamental alteration – confirmation not contradiction” and I reject Mr Wolfe’s submissions to the contrary effect.
52.	Having referred to Ms Kirkham’s evidence, Mr Swift made the following points with regard to the Secretary of State’s exercise of her residual discretion:
(1)	The Secretary of State’s consent to the proposed transfer, in circumstances where (inter alia) 80.6% of the 23.3% of leaseholders eligible to vote had voted in opposition to the proposed transfer, does not, ipso facto, constitute a breach of either the statutory provisions or of the Manual.
(2)	The Secretary of State was aware of and did take note of the result of the leaseholders’ ballot and the fact that leaseholders were among those who had signed the petition and letters of complaint.  The Secretary of State therefore did take the leaseholders’ views into account: see paragraph 10.36 of the Manual.  However, in the circumstances, no weight was attached to these “objections” (thus leading to and/or supporting the conclusion that the leaseholders’ views were irrelevant). 
53.	Mr Swift therefore submitted that the Secretary of State had taken the views of leaseholders (including the ballot result) into account, when exercising her residual discretion in determining whether to give consent to the proposed transfer, and had come to the conclusion that little weight should be attached to those views so that they were, in effect, irrelevant.  Mr Swift submitted that this was a conclusion that the Secretary of State was entitled to reach in all the circumstances of the case and that it was one that cannot be stigmatised as perverse or irrational.  I agree with those submissions and I reject Mr Wolfe’s submissions to the contrary effect.
54.	Mr Swift maintained further that, in any event, any failure to take into account the views of leaseholders would not have breached any legitimate expectation on the part of the Claimant.  He submitted that the representation in paragraph 10.36 of the Manual (that representations made by leaseholders would be taken into account) was clearly directed to leaseholders and not to secure tenants such as the Claimant.  I also agree with that submission.
55.	I am satisfied that the first ground of challenge was arguable and is one for which permission should be granted.  However, for the reasons already given, the first ground of challenge fails in the event.
56.	Ground 2: the Pre-Ballot Documentation Issue.		Mr Wolfe referred to paragraphs 9, 10 and 37 of Annex N to the Manual and submitted that the materials circulated to residents by Tower Hamlets clearly sought to promote or “sell” the proposed transfer and, contrary to the guidance contained in Annex N, did not provide the balanced and informative approach that was required.
57.	Mr Wolfe pointed out that the Claimant and others had complained about what was said to be the one-sided nature of the official consultation material: see, for example, the copy letter attached to the Claimant’s pre-action letter dated 21st November 2005, which states:
“Although called “Housing Choice”, the process neither presents a real choice to tenants nor full information about the consequences for tenants of leaving the council.”
58.	Mr Wolfe also referred to paragraphs 2 to 6 of the Claimant’s further witness statement and to other documents, including a letter from the local Member of Parliament, George Galloway MP, to Tower Hamlets dated 18th August 2005 (forwarded to the Secretary of State on 21st February 2006), which states:
“Serious allegations have been raised about the conduct of this ballot, including a one-sided campaign with vast amounts of money spent on an entirely pro-transfer message, council letters warning of “no improvements” if tenants rejected transfer ... ”
59.	It was Mr Wolfe’s submission that this issue (i.e. the allegedly biased or one-sided nature of the official consultation documentation) was squarely before the Secretary of State.  Mr Wolfe contended that the decision letter makes no mention of the matter and that it contains no evaluation or determination of the question whether the consultation material complied with the guidance.  He therefore submitted that the Secretary of State has unlawfully failed to consider (as she needed to) whether the consultation materials complied with the requirements of the Manual.
60.	For his part, Mr Swift first put forward a submission of general application to grounds 2 to 5 inclusive of the Claimant’s challenge and it is convenient to deal with that, before moving on to his specific submissions.  Mr Swift submitted that grounds 2 to 5 were all bound to fail in any event, having regard to the terms of paragraph 6 of Schedule 3A of the Act which provides that the “Secretary of State’s consent to a disposal is not invalidated by a failure on (her) part or that of the local authority to comply with the requirements of this Schedule.”  
61.	Mr Swift submitted that, in effect, grounds 2 to 5 were all concerned with various alleged failures or shortcomings in the consultation process or on the part of Tower Hamlets in carrying out the consultation process required by paragraph 3 of Schedule 3A.  In such circumstances, he argued, the terms of paragraph 6 ensured that the Secretary of State’s consent was not invalidated.
62.	In support of this submission Mr Swift referred to the judgment of Schiemann J. (as he then was) in R ~v~ Secretary of State for the Environment, ex parte Walters (1997) 30 HLR 328 at page 342, where he said this:
“Mr Howell firstly relied on what he submits is a distinction between the statutory requirement in section 106A to have regard to the views of the tenants and the requirements of the Schedule.  I reject this submission.  The section itself imposes no duty to have regard to the views of the tenants.  One must look at the schedule to discover any duty.  It seems to me clear that paragraph 6 of the schedule provides that the consent is not invalidated by a failure on the part of the Secretary of State to comply with, inter alia, the requirement in paragraph 5 that he should not give consent if it appears to him that the majority of the tenants do not wish the disposal to proceed.
Mr Howell then submitted that no reasonable Secretary of State would consider giving his consent to a disposal without having regard to the views of the secure tenants.  I am not persuaded that one can impose a common law duty to consult alongside the statutory duty.  Even if there were such a duty, it seems to me that Parliament has in effect enacted that a consent is not to be invalidated by a failure by the Council or the Secretary of State to have regard to the views of tenants.”
63.	Stated briefly, it was therefore Mr Swift’s submission that the effect of paragraph 6 of the schedule is to “rule out” grounds 2 to 5 inclusive.
64.	In response to this particular submission, Mr Wolfe contended that paragraph 6 of the schedule is not in play here at all, because grounds 2 to 5 do not allege any failure on the part of the Secretary of State or Tower Hamlets to comply with the requirements of the schedule.  He stressed that the complaint made in each of grounds 2 to 5 is in relation to the manner in which the Secretary of State has exercised her discretion under sections 34(4A) and 43(4A).  In short, grounds 2 to 5 consist of four separate allegations of the unlawful exercise of that discretion and, thus, neither comes within the terms of paragraph 6 of the schedule. 
65.	I agree with Mr Wolfe’s submissions on this aspect of the matter.  A statutory provision such as paragraph 6 of the schedule should be strictly construed and not interpreted in such a way as to go beyond the clearly expressed intention of Parliament.  In my view, Mr Swift’s attempt to extend the beneficent effect of paragraph 6, so as to preserve the validity of the Secretary of State’s consent in circumstances where (for the sake of argument) the exercise of discretion under sections 34(4A) and 43(4A) has been unlawful, seeks to do just that.  Put simply, the unlawful exercise of Secretary of State’s general discretion under sections 34(4A) and 43(4A) does not equate to a failure on her part to comply with the requirements of Schedule 3A.  Accordingly, I am satisfied that none of grounds 2 to 5 should be dismissed on the basis of Mr Swift’s paragraph 6 submission.
66.	Next, Mr Swift made the uncontroversial point that the relevant statutory framework makes it clear that the Secretary of State is not under any statutory duty to carry out an independent assessment of the adequacy of the consultation exercise.  Rather, the statutory scheme imposes a duty on the local authority to certify that the required consultation exercise has been duly carried out: see paragraphs 2 and 3 of Schedule 3A.  Mr Swift went on to submit (correctly, in my view) that the fact that the Manual indicates that one of the criteria for consent will be the adequacy of the consultation exercise does not equate to a statutory duty on the part of the Secretary of State to carry out an independent assessment of the consultation carried out by the local authority.
67.	It was Mr Swift’s submission that the Manual clearly signals to the local authority the importance of the consultation exercise and serves to enhance (so far as concerns secure and introductory tenants) the requirements of Schedule 3A.  Mr Swift also rightly accepted that, to the extent that the Secretary of State’s assessment with regard to the absence of majority opposition on the part of tenants is based on the results of the consultation exercise, the adequacy of that consultation would be a relevant factor in deciding whether to grant consent.
68.	Mr Swift referred to paragraphs 61 to 66 of Ms Kirkham’s first witness statement and submitted that the adequacy of Tower Hamlets’ consultation exercise was a factor that the Secretary of State considered as part of the decision-making process.  He suggested that this was clearly evidenced by, in particular, the fact that quite apart from the formal consultation material that had already been submitted to her by Tower Hamlets together with its application for consent, the Secretary of State subsequently asked for, and was provided with, additional consultation material that had been provided to the tenants both by Tower Hamlets and Old Ford.
69.	Mr Swift submitted that the fact that the Secretary of State did not include in her decision letter any analysis of the consultation material that she had been sent does not mean that she was not alive to and did not consider this aspect of the matter.  I entirely agree with that submission.  For example, at paragraph 9 of her decision letter, the Secretary of State makes reference to the fact that one of the relevant findings of the MRUK pre-ballot survey was that there was “a high level of understanding of the proposals, indicating an effective campaign of consultation on the Estate about the proposed transfer.”
70.	Mr Swift also submitted that, in any event, other than to make generalised assertions that the consultation material was “one-sided” and “pro-transfer”, the Claimant has not sought to identify any particular aspects of the material in question that are said to be inaccurate, misleading or otherwise unbalanced.  I agree with that submission and I also agree with the following points made by Mr Swift.
(1)	The fact that the benefits of the transfer are clearly explained in the consultation material does not, ipso facto, render the material unbalanced or unfair;
(2)	The Offer Documentation (i.e. the Stage 1 documentation) does, in particular, set out clearly what would happen to tenants’ rents and charges (see section 4) and what their rights would be after transfer (see section 7); and
(3)	No useful purpose would be served by the inclusion in any of the consultation material of any comparison between and/or analysis of the respective advantages and disadvantages of the chosen option (i.e. the proposed LSVT) and an entirely hypothetical (i.e. as yet unavailable) “fourth” option, namely direct investment in Council housing.  
71.	I am satisfied that this is a ground that was arguable and, thus, one for which permission should be granted.  However, for the reasons already given, I am satisfied that there is, in the event, no substance in the suggestion that the Secretary of State unlawfully failed to consider whether the consultation material circulated by Tower Hamlets and Old Ford complied with the Manual.  The second ground of challenge therefore also fails.
72.	Ground 3: the Consultation and Ballot Issue.	Mr Wolfe submitted that, given that the ballot process was central to the overall statutory decision, the Secretary of State was required to consider and evaluate its efficacy: see paragraph 16.2 of the Manual, where the adequacy of the consultation exercise (including the ballot) is expressly identified as one of the criteria that will be applied by the Secretary of State in considering an application for her consent to a transfer.  It was therefore Mr Wolfe’s submission that the Secretary of State clearly needed to be satisfied that the ballot process had been properly and fairly conducted.  This included matters such as the distribution of ballot papers, the conduct of Tower Hamlets and Old Ford staff during the process and the operation of the actual balloting process itself, including the proper operation of the ballot boxes.
73.	 Mr Wolfe referred to the large number of residents who had signed a standard form letter calling for an independent inquiry into the overall ballot process and, for example, complaining that:
•	“Lakeside polling station was not held due to 7 July bombings – an alternative day was promised, but never happened
•	Many tenants did not receive ballot papers
•	There were no instructions for non-English and non-Sylheti speakers; you had to follow instructions in English before being able to vote on the phone
•	The council refused to let independent observers witness the votes being counted 
•	Old Ford Housing Association visited and tried to pressurise tenants during the balloting period after the consultation period had ended
•	At least one polling station was packed with Old Ford Housing and Council representatives pressurising people to vote for the transfer
•	The Law Centre questioned the Council’s advice on how our legal rights are affected.  Official leaflets were inaccurate and unfair.”
74.	 Mr Wolfe also referred to Mr Galloway’s witness statement and to a number of his letters, as well as from residents and from the Claimant and her solicitors, complaining about the ballot, challenging its fairness and calling for an independent inquiry into the way in which it had been conducted.
75.	Mr Wolfe submitted that, despite being aware of all these complaints, the Secretary of State has only considered the ballot in a single paragraph of her decision letter, in which she stated as follows:
“32.	The conduct of the ballot.  The ballot was overseen by the ERS which raised no concerns regarding the ballot.  It is difficult in these circumstances to give more than a little weight to isolated and anecdotal evidence of the difficulties encountered by individual tenants on the day of the ballot as compared with the endorsement of the ERS which supervised the ballot process throughout.”
76.	  Mr Wolfe suggested that it was clear from the terms of her decision letter that, in effect, so far as concerns the complaints about the ballot process, the Secretary of State has relied entirely upon the part played by ERS in that process.  However, it was Mr Wolfe’s submission that ERS had played only a limited part in the overall process, being essentially concerned with the distribution and counting of ballot papers.  Mr Wolfe contended that, in reality, ERS had not been given any wider role of overseeing the process and, thus, was not in a position to deal with or comment upon any of the wider matters about which complaint had been made.  In support of his submission, Mr Wolfe stressed that the only official correspondence from ERS was its letter to Tower Hamlets dated 26th July 2005.  Mr Wolfe contended that, consistent with its very limited role in the ballot process, ERS’ letter was concerned only with the details of the turnout and the result of the ballots.  Mr Wolfe also suggested that, although ERS was later asked about the complaint that many tenants had not received their ballot papers, its email response had been brief and inconclusive.
77.	Mr Wolfe therefore submitted that, by relying exclusively upon ERS’ report about the ballot, the Secretary of State has unlawfully failed to consider whether the ballot process was properly conducted as required by the Manual and/or in any event.  Mr Wolfe went on to comment that the Secretary of State’s failure to consider this aspect of the matter properly when exercising her general discretion, despite the many complaints and expressions of concern that had been raised, was entirely consistent with the approach adopted by her predecessor (the OPDM) when writing to the local MP on 8th December 2005, as follows:
“The ballot was run on behalf of the London Borough of Tower Hamlets by the ERS.  If you believe there was unfairness or malpractice in the process you need to raise this with both the authority and ERS.  It is for them to investigate your concerns not OPDM and satisfy themselves that the ballot process was fair.”
78.	For his part, Mr Swift submitted that the adequacy of the ballot process was a factor which the Secretary of State did consider and take into account.  Mr Swift pointed out that, in this respect, the Secretary of State also sought information from Tower Hamlets with regard to: (i) any complaints and representations that had been made by tenants, (ii) the ballot verification process and (iii) the way in which Tower Hamlets had responded to specific allegations of irregularities.  As a result, the Secretary of State was provided with details of complaints and Tower Hamlets’ response to them, as well as with details of ERS’ assistance with regard to some of those complaints.  The information provided by Tower Hamlets included such matters as the distribution of ballot papers, the conduct of Tower Hamlets and Old Ford staff during the ballot process and the operation of the actual balloting process itself: see paragraphs 69 to 71 of Ms Kirkham’s first witness statement.
79.	Mr Swift submitted that the fact that the Secretary of State did not set out in detail the nature of the individual allegations and her conclusions in relation to each of them but, instead, stated her conclusions on this aspect of the matter in the general terms of paragraph 32 of the decision letter was, in all the circumstances, sufficient.  I agree with that submission and reject Mr Wolfe’s submissions to the contrary effect.
80.	I also agree with Mr Swift’s submission that the fact that the ODPM had indicated in its letter of 8th December 2005 that it would not then investigate allegations of ballot irregularities is not a proper evidential basis upon which to assert that the Secretary of State did not take those allegations into account and give them appropriate consideration after Tower Hamlets submitted its application for consent.  I agree with the suggestion that, at the stage the letter of 8th December was written (i.e. before Tower Hamlets had submitted its application for consent), it was entirely appropriate for the ODPM to indicate that the correct course would be to take up such matters with Tower Hamlets and/or ERS.  
81.	Furthermore, as Mr Swift pointed out (see paragraph 2.5(3) of his written supplemental skeleton argument), the very fact that, soon after having received Tower Hamlets’ application for consent, the Secretary of State sought information from Tower Hamlets concerning these allegations clearly contradicts the suggestion that she did not take into account and consider them.  I also agree that, as such, there has been no “impermissible after-the-event reasoning” upon which the Secretary of State relies.  I accept Mr Swift’s submission that, in this respect, the Secretary of State did not simply rely on the conclusions of Tower Hamlets, but was able to reach a considered view on the underlying documents provided by Tower Hamlets.
82.	In those circumstances, I agree that, on analysis, this particular ground amounts to no more than an irrationality challenge.  I accept Mr Swift’s submission that, in this respect, there is no proper basis upon which the Secretary of State’s conclusion that the ballot process was not flawed can be said to be irrational or perverse having regard to the totality of the evidence that was before her.
83.	Again, I am satisfied that this ground was arguable.  However, for the reasons already given, this ground of challenge also fails in the event.
84.	Ground 4: the Petitions and Letters of Opposition Issue.  Having made the point that the Secretary of State did not seek any information from the Claimant or other residents as to the circumstances in which the various signatories had come to sign the petitions and the template (standard form) letters of complaint, Mr Wolfe referred to paragraph 33 of the decision letter, in which the Secretary of State said this about the material in question:
“33.	Opposition to the transfer.  The Secretary of State has considered the representations of those tenants who state expressly that they oppose the transfer.  The Secretary of State’s opinion is that evidence collected through campaign petitions and standard form letters is inherently less reliable than the views of the tenants as expressed in an independently conducted and scrutinised democratic ballot.  In these circumstances, she considers that it is reasonable to rely on the view of the majority of tenants, as expressed in the ballot, in accordance with the terms of the Department’s Transfer Manual.”
85.	Mr Wolfe submitted that the Secretary of State’s approach to this aspect of the matter was flawed because it was, in effect, based on her misunderstanding, confusion and incorrect assumptions with regard to the petitions and template letters, as follows:
(1)	The Secretary of State misunderstood or confused the campaign petitions (which opposed the transfer) and the standard form (template) letters (in which complaint was made about the conduct of the ballot, not with the transfer).
(2)	There was no basis for saying that petitions and letters were “inherently less reliable”, particularly (i) against a background of widespread complaints about the ballot process and (ii) when the Secretary of State did not actually know the circumstances in which the material in question had been obtained and produced and had taken no steps to find out.
(3)	Basic principles of procedural fairness required that, before proceeding (without notice) on the basis of her “opinion”, which itself depended on matters about which she was ignorant, the Secretary of State needed to give the Claimant and others an opportunity to comment and explain the matters in question. 
86.	Mr Wolfe therefore submitted that the Secretary of State had unlawfully come to her conclusion with regard to the weight to be attached to the petitions and standard form (template) letters on the basis of a misunderstanding of the materials, without being aware of (or taking steps to investigate) or allowing residents to comment on her assumptions in relation to the process by which the petitions were collected and the standard form letters were sent. 
87.	For his part, Mr Swift submitted that this ground was wholly without merit.  Mr Swift rightly rejected the suggestion that the Secretary of State had misunderstood or was confused about the nature and/or contents of the petitions and the standard form (template) letters.  As Mr Swift pointed out, it is clear that, for the purposes of her assessment under the first part of paragraph 5(1) of Schedule 3A, the Secretary of State had simply treated both sets of representations as constituting opposition to the proposed transfer.  There was no confusion or misunderstanding.  In my view, the Secretary of State was right to approach the material in question in the way that she did and her approach clearly operated to the Claimant’s advantage.  There is therefore no substance in this particular point.
88.	I also agree with Mr Swift’s submission that there is no proper basis upon which the Secretary of State’s view, that evidence submitted in the form of petitions and/or template letters of complaint is inherently less reliable than a “properly conducted and scrutinised democratic ballot”, can be impugned as irrational or perverse.  In my view, the Secretary of State was bound to attach considerable weight to the fact that the ballot was conducted and scrutinised by a highly respectable independent body such as ERS, who subsequently expressed no concern about the reliability and probity of the ballot process.  In such circumstances, the Secretary of State was fully entitled to take the view that she did, namely that the evidence of the ballot was inherently more reliable than that of the petitions and template letters.
89.	I also agree with Mr Swift that there is no proper basis upon which a procedural requirement of the type argued for by Mr Wolfe in his third point (see paragraph 85 above) can be read into the consent procedure.  As Mr Swift observed, paragraph 5(1) of Schedule 3A does not require the Secretary of State to make any determination as to whether there is majority opposition to the proposed transfer.  Rather, it is only if it “appears” to the Secretary of State that the majority of tenants oppose the transfer that the first part of paragraph 5(1) precludes the grant of consent.  I therefore accept Mr Swift’s submission that, given the statutory context and scheme and the nature of the material in question, the Secretary of State cannot be said to have erred in failing to seek the further information identified.  There can be even less basis for importing such a requirement into the exercise of the Secretary of State’s discretion under the second part of paragraph 5.1 (and, thus, under sections 34(4A) and 43(4A)).
90.	In my judgment, there is insufficient substance in ground 4 to justify the grant of permission which is, accordingly, refused.  In any event, having considered the arguments in full, for the reasons already given I am satisfied that this ground is bound to fail.
91.	Ground 5: the Estates Steering Group Issue.		Mr Wolfe referred to paragraph 11 of the decision letter, in which the Secretary of State stated:
“11.	The consultation process was overseen by the Estates Steering Group which was comprised solely of residents of the Parkside Estates.”
92.	Mr Wolfe submitted that, to the extent that the Secretary of State appears to have placed reliance upon her understanding of the role and operation of PESG, she did so on the basis of key misunderstandings of fact (such as the membership and role of PESG) and, Mr Wolfe suggested, in the erroneous understanding that the members of PESG were content with what was going on.
93.	Mr Wolfe made the following points in support of this ground of challenge:
(1)	Mr Wolfe suggested that, contrary to the Secretary of State’s understanding, PESG was not “comprised solely of residents of the Parkside Estates” and that this was demonstrated by the minutes of PESG meetings, which show that the meetings were regularly attended by representatives of Tower Hamlets and Old Ford.
(2)	Contrary to what the Secretary of State thought, PESG did not “oversee” the “consultation” process.  Mr Wolfe submitted that the evidence shows that PESG’s role was limited to the selection of a particular Registered Social Landlord (i.e. Old Ford) and the development of consultation proposals.
(3)	In any event, PESG had expressed anxiety about the consultation documentation.  On 27th September 2004, the Vice-Chair of PESG resigned, stating that she “no longer actively supported the process” and that “there still appears to be no real choice for people to make” and complaining that PESG had become more focused on Old Ford’s policies than it had on its role as the residents’ group.
(4)	Mr Wolfe also suggested that the evidence of proceedings at some of the meetings held by PESG during 2004 (in particular) showed that PESG was not entirely independent of Tower Hamlets and Old Ford, nor did it “oversee the consultation process” in the neutral manner suggested by the Secretary of State’s decision letter.
94.	Mr Wolfe therefore submitted that, in coming to her decision to grant consent, the Secretary of State unlawfully relied upon erroneous factual material in relation to PESG and failed to take into account the concerns that had actually been expressed by PESG.
95.	Mr Swift submitted that this ground was also wholly without merit.  In support of that submission (with which I find myself entirely in agreement), Mr Swift made the following points:
(1)	As far as the Secretary of State was aware, PESG was made up of tenants and leaseholders.  The Secretary of State was not aware whether Tower Hamlets and/or Old Ford representatives attended PESG meetings because the Secretary of State was not sent any of the minutes of the meetings.  Their attendance at the meetings did not mean, ipso facto, that the Tower Hamlets and Old Ford representatives were members of PESG. In any event, there appears to be no suggestion that these representatives were able to vote on any of the issues discussed at the meetings and it was the understanding of the Secretary of State that they were not entitled to do so.  The Secretary of State therefore neither misunderstood nor misdirected herself with regard to the facts relating to PESG. 
(2)	The Secretary of State understands that PPCR Associates (an independent tenant adviser) were present at PESG meetings to provide independent support: see paragraph 38 of Ms Kirkham’s first witness statement.
(3)	Whilst the Secretary of State accepts that PESG did not “monitor” (and in this sense, did not “oversee”) the consultation process, PESG was responsible for developing the consultation proposals and therefore had a key involvement in setting the structure of the consultation exercise.  The Secretary of State therefore did not effectively mislead herself or exaggerate the significance of PESG’s role in paragraph 11 of the decision letter.
96.	In my view, Mr Swift’s points are well made and clearly demonstrate that there is no substance in this particular ground.  In my judgment, therefore, permission should not be granted.  In any event, having considered the arguments in full, I am also satisfied that this ground is bound to fail for the reasons already given.
97.	Conclusion.  For all the foregoing reasons, I have come to the firm conclusion that this application must be and is hereby dismissed.