She began legal action against the friend and reduced the arrears from almost £2000 to £83 but the association still repossessed the property.
The council decided that Mr and Mrs O'Connor had become intentionally homeless for not preserving their home.
The Court of Appeal allowed their appeal. It decided that the council had not properly considered if that failure was "deliberate" or whether the couple had, in good faith, been ignorant of the relevant facts.
Their action in 2002 showed what they would have done had they known. The council had to consider if their ignorance of the true situation had been in good faith.
If it had been, they were not intentionally homeless.
Source
Housing Today
Reference
As the most up-to-date review of the law on intentional homelessness by an appeal court, this is mandatory reading for homelessness review officers.