Three judges reversed a high court decision last October that the practice used by the council to allocate properties to homeless families was unfair and unlawful (see LGCnet). The council has also been awarded costs against the Legal Services Commission.
The appeal judges agreed that Newham obtains the necessary information about applicants - for example, family size, health issues, school and doctor information, risk of domestic violence etc - before it decides that a property is suitable. It also considers any new information given once an address is known.
The applicant also has a statutory right to request a review even after moving into the property if he or she then becomes aware of factors they think makes the property unsuitable.
The appeal court case arose from challenges brought by three homeless persons in bed-and-breakfast property.
They were each offered self-contained accommodation - flats or houses owned by private landlords - which the council considered suitable for the needs of them and their families, based on information obtained from the applicants.
The complainants however alleged the council had acted unfairly because they were required to accept the properties without viewing them, and that failure to do so would result in the cancellation of any temporary accommodation already provided by the council.
In answer to that the council pointed out that the scheme was fair and efficient, and was operated flexibly and humanely. Also, none of the complainants was evicted from bed-and-breakfast accommodation upon refusal of the offer of property.
One of the complainants also claimed the council's standard non-secure tenancy agreement contained unfair terms and was contrary to the Unfair Terms in Consumer Contracts Regulations 1999. The Office of Fair Trading - the government agency responsible for enforcing those regulations - intervened in that case as an interested party (see LGCnet).
In response to that claim, the council said the regulations did not apply to tenancies granted by local housing authorities under their homelessness duties.
They argued the government's view in 1994 was that the regulations did not apply to contracts for the transfer of an interest in land at all.
They also pointed out that in 1999 the government revised the regulations and in a Regulatory Impact Assessment, the ODPM made it plain that some uncertainty remained.
Mr Justice Newman ruled in the high court that Newham's practice was unlawful and also that in principle, the regulations did apply to contracts for the transfer of an interest in land, with councils considered suppliers and tenants deemed consumers.
The council was given permission to appeal the judgement on both issues 'for the sake of good order and to clarify the law'.
In relation to the applicability of the Unfair Terms in Consumer Contracts Regulations to contracts for the transfer of an interest in land, the court of appeal upheld the lower court's decision and decided the regulations do apply.
The court was not asked to consider the actual terms Newham uses and did not comment on the fairness of those terms.
A council spokesperson claimed: 'As the court of appeal said, the appeal was advanced for the sake of good order and to clarify the law. It was necessary because there had been confusion as to whether the regulations applied or not to tenancies entered into under Part VII of the Housing Act 1996. For example, the Law Commission believe they do not.
'Our case has never been that we wish to use unfair terms in our standard tenancy agreements. We do not think any of the terms we use are unfair. We would not negotiate with our tenants, or with those to whom we owe a housing duty, in anything other than good faith.
'We will co-operate fully with the OFT over the specific terms of our tenancy agreements and we await the outcome of these enquiries with confidence.'