England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE CCRTF 98/0198/2

(HIS HONOUR JUDGE COWELL )

Royal Courts of Justice

Strand

London WC2

Wednesday, 26 May 1999

B e f o r e:

LORD JUSTICE ROCH

LORD JUSTICE OTTON

LORD JUSTICE PILL

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LONDON BOROUGH OF HARINGEY

Claimant/Appellant

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MRS A AWARITEFE

Defendant/Respondent

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(Handed Down Transcript of

Smith Bernal Reporting Limited, 180 Fleet Street,

London EC4A 2HD

Tel: 0171 421 4040

Official Shorthand Writers to the Court)

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MR ALAN MACLEAN (Instructed by Harvey Chappell, Borough Solicitor, London Borough of Haringey, London, N22 4TR) appeared on behalf of the Appellant

MISS NATHALIE LIEVEN (Instructed by the Secretary of State for Social Security, London, WC2)

MR DAVID DALY (Instructed by The Bar Pro Bono Unit) appeared on behalf of the Respondent

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J U D G M E N T

(As approved by the Court )

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©Crown Copyright

LORD JUSTICE ROCH:

This is an appeal by the London Borough of Haringey, to whom I shall refer as the appellants, from the order of HHJ Cowell made on the 29th January last year setting aside the order of District Judge Allen made on the 8th October 1997 that the respondent should pay the appellant £1,015.66 together with costs assessed at £126.

When the appeal was before this court in November last year this court presided over by the Master of the Rolls, directed that the Secretary of State for Social Security should be given the opportunity to intervene in the appeal and to make submissions. The Secretary of State has availed himself of that direction and we have had the advantage of hearing submissions by counsel on behalf of the Minister.

The respondent is the owner of 65, Belmont Avenue, N15. The respondent acquired that property on the 16th October 1991. Previously the house was owned by Euro-Afro-Consumers Ltd who sold it to the respondent. The property is divided for multiple occupation, namely a number of bed-sitting rooms with shared kitchen, bathroom and lavatory facilities.

On the 15th August 1990 Angela Narwanga Nsubuga, to whom I shall refer as the claimant, became a tenant of the company. The claimant claimed from the appellants Housing Benefit. The appellants decided that the claimant was entitled to Housing Benefit, assessed the weekly sum and paid it directly to the landlord company at the claimant’s request under Regulation 94 of the Housing Benefit (General) Regulations, 1987. By the autumn of 1991 the weekly housing benefit to which the claimant was entitled was £59.34. When the respondent became the owner of 65, Belmont Avenue the appellants paid the housing benefit directly to her. Those payments continued until the 7th June 1992. The claimant applied for housing benefit in respect of her tenancy of another property 159, Haringey Road on the 23rd January 1992 claiming to have been in occupation of accommodation at 159, Haringey Road from 17th November 1991. It would seem that the appellants did not immediately appreciate that the applicant on that occasion was the same person in respect of whom Housing Benefit was being paid to the respondent. The claimant wrote to the appellants on the 3rd April 1992 pointing out that she had left 65, Belmont Avenue. In that letter the claimant stated that she had left No 65 on the 15th October 1991. Despite the date in that letter, the appellants have accepted that the claimant left 65, Belmont Avenue on the 17th November 1991, as the district judge and the judge were to find.

The appellants decided that the payments to the respondent between the 18th November 1991 and the 7th June 1992 were overpayments and that the appellants should take steps to recover those overpayments from the respondent. Accordingly on the 4th February 1993 the appellants demanded repayment of £1,720.86 from the respondent. That letter was sent from the Housing Benefits Department of the Appellant Authority. It was headed “Overpayment of Housing Benefit”. It began with reference to the name of the claimant and the address of the property and then stated:

"Because your tenant moved out of the above address on the 17th November 1991 their housing benefit should have ended on the 18th November 1991. This means that we have paid you £1,720.86 too much towards your tenant’s rent and you owe us this money. Haringey Council has decided that this is a recoverable payment."

The letter also contained this:

"If you think our decision is wrong, you can appeal against it. Ask us for the leaflet - Problems with Your Housing Benefit or Poll Tax - which explains how you can appeal. If you want to appeal, you must write to the address below within the next six weeks."

The reverse side of the letter gave the addresses of Advice Bureaux or Law Centres where the respondent could obtain advice and also set out the details of the overpayment, namely that there were 29 weeks between 18th November 1991 and 7th June 1992 when housing benefit was overpaid. We have seen the leaflet referred to in that letter. It tells the reader that if they think there is something wrong with the authority’s decision the reader should write to the housing benefit office within six weeks of the date on the letter to tell them what is wrong, why the reader thinks it to be wrong; send proof if it is available and ask the housing benefit office to review the case. The leaflet goes on to say that the office will look at the matter again and send a review letter saying if the office has changed its decision or thinks that it should stay the same and the reasons for reviewing the matter in that way. That letter should reach the reader within two weeks of the reader’s request for a review.

The leaflet continues that if the reader still thinks something is wrong, he or she can appeal to a board made up of local councillors, who are neutral and do not take sides. The board will listen to the reader’s case and to the council’s case before deciding the matter. The leaflet then sets out what the reader has to do to obtain a hearing by a review board. Mr Daly told us that his instructions were that at no time did the respondent see this leaflet.

Eight days later the appellants sent an account of the Housing Benefit overpayment to the respondent. On the 26th of that month the respondent wrote to the appellants’ Housing Department further to the respondent’s meeting with a member of the appellants’ Housing Benefit Office on the same date stating that the respondent had not known that the claimant had left 65, Belmont Avenue until April of 1992 and indeed that the respondent’s knowledge of the claimant’s position as tenant of one of the rooms at 65, Belmont Avenue was equivocal until on the 11th May of that year, the respondent having left a note for the claimant that she remove her belongings by that date, saw that the claimant’s belongings had been removed from the room that the claimant had been renting from the respondent. The respondent claimed that on the 14th May she had left the United Kingdom but before doing so she had phoned the Housing Benefit Officer to confirm that the claimant had moved from 65, Belmont Avenue.

The appellants replied to that letter on the 14th April 1993, regretting that the respondent had seemed to have had difficulty with the claimant as a tenant but stating that the length of the tenancy agreement does not necessarily coincide with the period of Housing Benefit entitlement. Entitlement to Housing Benefit ends on the day that the tenant moves from the property. The letter went on:

"I trust this answers you query, but if you still don’t agree you still have the right to appeal against our decision. To do this, you have to write to us again within six weeks of the date of this letter giving your reasons for appeal. I enclose a leaflet, which explains the appeals procedure."

This is the leaflet referred to in the letter of the 4th February 1993 which the respondent has instructed Mr Daly that she did not see.

The next step taken by the respondent of which this court has documentary evidence is that on the 24th March 1994 when the respondent paid the appellants the sum of £705.25 in part discharge of the overpayment demand. There was a suggestion during Mr Daly’s submissions that the respondent may not have received the letter of the 14th April 1993. That possibility is to be discounted for two reasons, in my judgment, first paragraph 15 of Mr Daly’s skeleton argument states that the respondent “does not receive a reply from the Council until 14th April 1993 .....”. Second, the terms of Regulation 78(2) when read with section 7 of the Interpretation Act, 1978 have the effect that that letter is deemed to have arrived at the respondent’s address in the ordinary course of the post following the 14th April 1993. There is no evidence to displace that presumption, even were it to be a rebuttable presumption.

On the 21st March 1996 the appellants commenced proceedings in the Edmonton County Court to recover the outstanding balance of the overpayment. The respondent entered a defence stating that there had been no overpayment because the appellants had paid her for the exact period in which the claimant had lived at 65, Belmont Avenue. The matter came before the District Judge on the 8th October 1997 who found for the appellants and ordered that the outstanding balance be paid with costs assessed at £126. The respondent gave notice of appeal against the District Judge’s order on the 29th October 1997 on the grounds that:

1. The District Judge erred in that the defendant could not have known that the claimant was no longer entitled to housing benefits, and

2. The council refused to review the case before taking it to court.

It is to be noticed that in this appeal, as in her written representations of the 26th February 1992 the respondent was not saying that the claimant had not ceased to occupy her room at 65, Belmont Avenue on the 17th November 1991, but that the respondent had not known and had had no means of knowing that the claimant had done so.

That appeal came before HHJ Cowell on the 29th January 1998.

Housing benefit is governed by the Housing Benefit (General) Regulations 1987. The judge considered the applicable regulations in that statutory instrument and decided that the payments were overpayments within the meaning of Regulation 98; that any overpayment was recoverable under Regulation 99(1) unless it fell within the exception in Regulation 99(2). The judge reminded himself of the wording of Regulation 99(2) and decided that it did not apply to the facts of the case before him and that the appellant’s claim was “a perfectly good one. It is plain therefore that Regulation 99(1) applies and that the overpayment is recoverable.” The judge expanded on the reasons for that conclusion pointing out that under the regulations it was not necessary for the person from whom recovery of overpayment was sought to be guilty of any misrepresentation or failure to disclose a material fact. If the claimant was not entitled to the payments, then the Housing Authority was able to recover the overpayment from the person to whom the payment had been made, unless the overpayment was due to an error on the part of the Housing Benefit Authority and the claimant and the lessor did not know and could not have been expected to know of that error.

In so far as the District Judge and the judge dealt with the substantive issues, they had no jurisdiction to do so, because a local authority’s determination in respect of a housing benefit matter does not give rise to private law rights and duties. Issues of substance relating to such determinations are to be resolved by the procedures laid down by the regulations Haringey LBC -v- Cotter [1996] 29 HLR 682 and Plymouth City Council -v- Gigg [1997] 30 HLR 284 CA. Warwick District Council -v- Freeman [1994] 27 HLR 616 is authority that it is open to a person affected by a determination of a local authority with regard to housing benefit to challenge the validity of the determination, or perhaps more precisely the validity of the notification of the determination on the ground of procedural irregularity, as a defence to an action by the local authority in the county court to recover the sum which the local authority has determined is a recoverable overpayment. It remains to be decided whether in such proceedings the person from whom recovery of overpayment is sought could defend the action by alleging that the local authority’s determination or, if the matter has gone before the review board, the review board’s decision was Wednesbury unreasonable. That point does not arise for decision in this appeal.

The judge went on to consider the procedural aspect of the case. The judge directed himself that Schedule 6 of the Regulations laid down a procedure which had to be followed by a council when it sought to recover an overpayment. The judge found that there were breaches of paragraphs 2, 3 and 5 of Schedule 6. The judge found that the breach of paragraph 3 of Schedule 6 was of no consequence but that the breaches of paragraphs 2 and 5 of the Schedule were fatal to the appellants’ claim to recover the overpayment. The judge applied the decision of this court consisting of Kennedy LJ and Hale J in Warwick District Council -v- Freeman [1994] 27 HLR 616, which the judge read as deciding that if the procedures set out in Schedule 6 have not been followed then the local authority’s claim to recover an overpayment “does not get off the ground”. The judge went on to observe that he found that conclusion disturbing because the respondent was relying upon a technicality. The judge gave the appellants leave to appeal because “If I am wrong I would be pleased to know .....”

The respondent has been represented in this appeal by Mr Daly of counsel, instructed by the Bar’s Pro Bono Unit on the 22nd April this year and we are indebted both to that unit and to Mr Daly for the assistance we have received from the submissions he has made on the respondent’s behalf.

The determination of questions under the Regulations is dealt with in Part XI of the Regulations. Regulation 76(1) provides that any matter which the regulations require to be determined shall be determined in the first instance by the appropriate authority. Regulation 77(1) provides:

"An authority shall notify in writing any person affected by a determination made by it under these regulations

a. In the case of determination on a claim forthwith or as soon as reasonably practicable thereafter;

b. In any other case within 14 days of that determination or as soon as reasonably practicable thereafter, and every notification shall include a statement as to the matters set out in Schedule 6."

Regulation 77(4) entitles a person to whom an authority sends a notification of determination to request in writing the authority to provide a written statement setting out its reasons for its determination. Regulation 78 deals with the time and manner of making notifications, requests or representations. Regulation 79 covers review of determinations by the appropriate authority either of its own determination or a decision of a Review Board. Regulation 81 provides for a further review of determinations by a review board appointed by the appropriate authority. Schedule 7 covers the appointment and constitution of review boards, and is designed to ensure their independence of the authority appointing them. Regulation 82 lays down the procedure to be followed by a review board on a further review which includes the examination and cross-examination of witnesses. Regulation 83 governs the powers of a review board upon a further review.

This appeal is concerned with the questions, first, whether the two notifications given by the appellants to the respondent in February and April 1993 included the matters set out in Schedule 6 to the regulations and, if they did not (as the judge found), the consequences of such omissions. Paragraph 14 of Schedule 6 sets out the matters which have to be included in the notice of determination that there is a recoverable overpayment within the meaning of regulation 99. Those matters relevant to this case were five in number:

a. The fact that there was a recoverable overpayment;

b. The reason why there was a recoverable overpayment;

c. The amount of the recoverable overpayment;

d. How the amount of the recoverable overpayment was calculated; and

e. The benefit weeks to which the recoverable overpayment related.

It is common ground that those five matters appeared in the notice given by the appellants of their determination that there was a recoverable overpayment dated the 4th February 1993.

In addition to those five matters there were other matters to be included in the notices of determination, namely those set out in paragraphs 2, 3, 4 and 5 of Schedule 6. It is appropriate to set out those paragraphs in full, together with the first paragraph of the Schedule.

"1. The statement of matters to be included in any notice of determination issued by an appropriate authority to a person, and referred to in regulation 77 (notification of determinations) and 79 (review of determinations) are those matters set out in the following provisions of this Schedule.

2. Every notice of determination shall include a statement as to the right of any person affected by that determination to request a written statement under regulation 77(4) (request for statements of reasons) and the manner and time in which to do so.

3. Every notice of determination shall include a statement as to the right of any person affected by that determination to make written representations in accordance with regulation 79(2) and the manner and time in which to do so.

4. Every notice of determination following written representations in accordance with regulation 79(2) (review of determinations) shall include a statement as to whether the original determination in respect of which the person made his representations has been confirmed or revised and where the appropriate authority has not revised the determination the reasons why not.

5. Every notice of determination following written representations in accordance with regulation 79(2)(review of determinations) shall include a statement as to the right of any person affected by that determination to request a further review in accordance with regulation 81 (further review of determinations) and of the manner and time in which to do so."

The notice of determination given on the 4th February 1993 did not, as paragraph 2 of Schedule 6 required include a statement as to the right of a person affected by that determination to request a written statement under regulation 77(4) or the manner or time in which to do so. However such a request would be a request for a statement of reasons. The reasons for the appellants’ determination were already contained in the notification of the determination, namely the paragraph which read:

"Because your tenant moved out of the above address on the 17th November 1991 their housing benefit should have ended on the 18th November 1991. This means that we have paid you £1,720.86 too much towards your tenant’s rent and you owe us this money. Haringey Council has decided that this is a recoverable payment."

That notice of determination did not include a statement as to the right of any person affected by that determination to make written representations in accordance with regulation 79(2) and the manner and time in which to do so as required by paragraph 3 of Schedule 6. Instead the notice of determination informed the respondent of her right to appeal against it, gave her the name of the leaflet which would be relevant and added “If you want to appeal you must write to the address below within the next six weeks.” In the event the respondent met a member of the appellant’s housing benefit overpayment team on the 26th February 1993, and following that meeting wrote a letter on the same date making written representations to the appellants. Those written representations were taken into account and lead to the further determination by the appellants referred to in their letter of the 14th April 1993. The judge found that “the failure to comply with paragraph 3 did not matter”.

In those circumstances, the appellants submit that there was no material breach of regulation 77 or of paragraphs 2 or 3 of the 6th Schedule.

Paragraphs 4 and 5 applied to the letter of the 14th April 1993 which was a notice of determination following written representations by the respondent in accordance with regulation 79(2). Although that letter did not in terms state that the original determination in respect of which the respondent had made her representations had been confirmed, it clearly implied that the determination had not been revised and gave the reasons why no revision had occurred, namely that housing benefit entitlement ends on the day that a tenant moves from the landlord’s property, which in the case of the claimant had been the 17th November 1991 because she had claimed housing benefit for her new address from the 18th November 1991. The notice of determination went on to inform the respondent that if she still did not agree with the appellants’ decision she had the right to appeal. It is correct that the letter did not inform the respondent that she could request a further review by a review board in accordance with regulation 81 and that it indicated that to appeal a letter would have to be written to the appellants by the respondent within six weeks of the 14th April 1993 giving reasons for the appeal, rather than the four weeks stated in regulation 81(1). However the letter purported to enclose a leaflet which explained the appeals procedure, and even on the assumption that the leaflet was not enclosed with the letter, it is clear that the respondent could have obtained a copy either by visiting or writing to or telephoning the Housing Benefit Office or by seeking advice at any of the advice centres whose addresses she had been given. Moreover it has never been suggested that had the respondent written to the appellants seeking to appeal, or seeking a second review by a review board in the six weeks following the letter of the 14th April 1993, the appellants would not have allowed the appeal or further review to go forward.

Again it is the submission of the appellants that they complied with paragraph 4 of Schedule 6 and in substance complied with paragraph 5 of that schedule. It is the contention of both the local authority and of the Secretary of State that the use of the word “appeal” rather than “review” is to use a word which is more readily understood and covers more accurately the nature of the process before a review board.

In fact the respondent did not seek an appeal or further review. The next step taken by the respondent was that in March 1994 she paid £705.25 off the sum claimed as overpayments by the appellants.

Counsel for the Local Authority and Counsel for the Secretary of State accept that before the local authority can bring proceedings in the County Court to recover an overpayment, there must have been a valid notification of the local authority’s decision to recover the overpayment sent to the person from whom the overpayment is to be recovered i.e. the defendant in the County Court proceedings.

The question that arises in this appeal is whether the failure to comply exactly with the requirements of Part 1 of Schedule 6 of the regulations means that as the appellants did not go through the proper process they were not entitled in this case to take action in the County Court, and consequently their appeal should fail, following the reasoning of this court in Warwick District Council -v- Freeman [above].

Whereas I would not seek to cast doubt on the correctness of the decision of this court in that case, my view is that the facts of that case were materially different from the facts in the present case. In Warwick District Council -v- Freeman , it was accepted that the local authority had not followed the procedures contained in the regulations. Consequently it was not merely a matter of failing to include in the notices of determination those matters in Schedule 6. The local authority declined to review their decision at the request of the landlord, maintaining that the landlord was not “a person affected by the determination” within the meaning of regulation 77. This court decided, and I respectfully agree, that a person from whom an overpayment is to be recovered is a person affected by the determination. In this case there has never been any attempt by the appellants to deprive the respondent of her right to a review of their decision or, after written representations, of a second review of their decision. The Court in Warwick District Council -v- Freeman was not referred to cases where courts have had to consider whether irregularities in procedural steps which statutory regulations require local authorities to take result in the decisions of local authorities being unenforceable. The leading case is London and Clydesdale Estates Ltd -v- Aberdeen District Council and Anr [1980] 1 WLR 182 a decision of the House of Lords in a Scottish case. In his speech at page 201 H Lord Keith said:

"The word “shall” used in article 3(3) is normally to be interpreted as connoting a mandatory provision meaning that what is thereby enjoined is not merely desired to be done but must be done. In many instances failure to obtemper a mandatory provision has the consequence that the proceedings with which the failure is connected are rendered invalid. But that is not necessarily so. As is shown by the case of Brayhead (Ascot) Ltd -v- Berkshire County Council [1964] 2 QB 303 something may turn on the importance of the provision in relation to the statutory purpose which the provision is directed to achieving, and whether any opportunity exists of later putting right the failure."

As Mr Daly pointed out, Lord Keith went on to observe that where Parliament has required a local authority to inform a person affected by a local authority’s decision of a right to appeal that is a matter of great importance.

In his speech at page 193 G Lord Fraser said:

"I do not think that literal compliance with the provisions is mandatory: for example, if a statement of the rights of appeal had not been “included” in the certificate but had been sent with it in a separate sheet, that would in my opinion have been substantial compliance and would have been sufficient. But here there was no compliance at all with the provision."

In R -v- Stoke City Council ex parte Highgate Projects 26 HLR 551 at 564 Henry LJ said:

"In this as in all matters of judicial review, the remedy is discretionary. Against that background I do not find it useful to decide whether that regulation was mandatory or directory. I agree with Sedley J that it is more satisfactory to look at the problem in terms of the substantive harm done by the breach. Here the reason for the Board’s decision is clear from the evidence as to the debate that took place. It was a simple decision, properly set out in the decision letter. Here there was an undoubted breach of the regulations, but in my judgment that breach was venial, and there are no proper grounds for setting aside the Review Board’s decision because of it."

The fact that there have been breaches of the procedures laid down by the statutory instrument is not decisive of the question whether the determination made by the authority is valid or invalid, enforceable or unenforceable. As Sedley J put it pithily in R -v- Solihull Metropolitan Council, ex parte Simpson [unreported] it is necessary to assess “the substantive harm done by the breach”. There was no disagreement of any substance between counsel that this is the correct approach. The issues here were whether there were breaches of Part 1 of Schedule 6 and if so whether the respondent had suffered substantial harm as a result.

Mr Daly in his submissions on behalf of the respondent whilst not abandoning a case founded on breach of Regulation 2 of the 6th Schedule, focused his submissions on paragraph 5 of that Schedule. Mr Daly pointed to the letter of the 14th April 1993 referring to six weeks rather than the four weeks permitted under regulation 81. Mr Daly recognised that the local authority can by virtue of regulation 78(3) extend the time specified by regulation 79(2) and 81 for special reasons, and realistically accepted that a misstatement of the period of time available for seeking a further review would probably amount to a special reason for extending the time. Nevertheless Mr Daly made the point that the insertion in the letter of the wrong period was an indication of a slipshod approach on the part of the local authority. The essence of the complaint that Mr Daly made was that the manner of requesting a further review was not set out in the letter of the 14th April 1993, nor did that letter make it clear that the appeal or further review would be by a review board who were independent of the local authority. Those matters are contained in the leaflet, but Mr Daly urged us that we should not conclude that the leaflet had reached the respondent. Had the matter gone before the review board, the respondent might well have achieved a finding that the claimant had continued to occupy her room at 65, Belmont Avenue until the spring of 1992, thus reducing substantially the amount of the recoverable overpayment.

In the present case although it can be said that paragraphs 2 to 5 of Schedule 6 were not complied with literally or precisely, in my judgment the appellants are entitled to say that they achieved substantial compliance with those paragraphs and that the respondent had the opportunity of seeking a second review by a review board had she wished to do so, because she was told in the letter of the 14th April 1993 that she could appeal by writing to the appellants again within six weeks. There was no reason to suppose that had the respondent written saying that she wished to appeal within the six weeks or even later, that the appellants would not have allowed the respondent to go before a review board. The fact of the matter is that the respondent did not write to the appellants seeking “to appeal” and there is nothing in the material before us to indicate why she did not do so. The respondent had met with an officer from the appellants’ housing office and had written to the appellants’ housing office. In addition the respondent had the addresses of the centres where she could obtain free advice. The respondent, reading the letter of the 14th April 1993 could have been in no doubt that there was a further appeal which she could pursue, had she thought that she had a ground for appealing. At this point it is significant that both in her written representations and in her notice of appeal from the district judge the respondent was not alleging affirmatively that the claimant had remained in occupation of her room at 65, Belmont Avenue after the 17th November 1991; the respondent was saying that she had not had the means of knowing that the claimant had ceased to occupy her room prior to the 11th May 1992. Then there is the fact that the respondent in March 1994 did pay the sum of £705.20 which is almost 12 weeks' housing benefit. The payment of 12 weeks' housing benefit, housing benefit having ceased to be paid on the 7th June 1992, in effect was an admission that the claimant had remained at 65, Belmont Avenue until early March 1992.

If the respondent had, following receipt of the letter of the 14th April 1993 written to the appellants in the six weeks following the 14th April 1993 saying that she wished to appeal and the appellants had not appointed a review board and allowed the respondent to seek a second review of their determination, then the respondent would have had a complaint of substance similar of that of Mr Freeman in Warwick District Council -v- Freeman . But the reality is that although she was told that she could appeal the appellants' refusal to alter or amend their original determination, the respondent took no step to do so. This case is a very different case from that envisaged by Sedley J, as he then was, in the Solihull case in that in the present case the authority has throughout not only stated its decision but also given the reasons for its decision.

Mr Daly for the respondent argued that had the respondent sought a review by a review board of three councillors, there is no means of knowing what those councillors might have decided to do. I do not accept that that is the position. The payment of housing benefits involves the expenditure of public money which is in short supply. If there have been overpayments as defined by the regulations and there is a person who has received those overpayments and from whom they can be recovered, the decision of the review board should be to confirm the local authority’s decision to recover the overpayments. It is different where there is conflicting evidence as to the date on which the tenant ceased to occupy the landlord’s premises, as in this case. But this conflict was considered by the district judge and by the judge, both of whom concluded that the claimant had left 65, Belmont Avenue on the 17th November 1991. There is no ground for supposing that a review board would have reached a different conclusion on that matter.

In those circumstances I consider that the judge should have distinguished this case on its facts from the case of Warwick District Council -v- Freeman; he should have concluded that there had been substantial compliance with the procedural steps required by the regulations and there had been no possibility of any injustice having been suffered by the respondent. In those circumstances he should have upheld the order of District Judge Allen and awarded the appellants £1,015.66 and the costs of the hearing before the District Judge of £126.

LORD JUSTICE OTTON:

I agree that this appeal should be allowed and that the award of the District Judge should be restored. I have had the opportunity to study the judgments of Roch LJ and Pill LJ in draft and having regard to the fact that they arrive at the same conclusions but differ in some of their reasons, I record my own.

I agree with Pill LJ that this was less than satisfactory conduct on the part of the Council. They do not appear to have addressed the respondent’s case as to the precise date when the claimant left 65 Belmont Avenue. It seems that the Council did not contact either the respondent or the claimant to resolve this fundamental factual issue. The date determined the amount of the overpayment recoverable. However, the apparent error in administration is not determinative of this appeal.

By virtue of Regulations 98 and 99 the decision by the Local Authority as to whether or not there is an overpayment, the amount, and whether or not it is recoverable are a determination under Regulation 76 (1). The respondent undoubtedly had the right to a review of Haringey’s determination that there was a recoverable overpayment. The purpose of Schedule 6 is to provide information to the recipient of a determination so that the decision already made is intelligible to that person and to inform the landlady of her rights to seek reasons, or to challenge the determination either by requesting a review by officials (under Regulation 79) and thereafter by way of appeal to the independent tribunal (pursuant to Regulation 81). If the landlady is still unhappy she can challenge the tribunal’s decision by way of Judicial Review on the grounds of procedural irregularity, illegality, or irrationality. I leave open the question whether the authority has a discretion to recover the over payment in whole or in part as it plays no part in this appeal. The proceedings in the County Court are primarily a mechanism for recovery of the recoverable overpayment.

I agree that even if there were technical breaches of Schedule 6 (upon which I do not propose to comment) the Learned Judge was wrong to conclude that such breaches were fatal to the appellant’s claim. He should have held that the requirements in paragraphs 2 and 5 were not mandatory but directory, that none of the breaches had occasioned any significant prejudice to the respondent and that accordingly there had been “substantial compliance” with the Schedule (see London and Clydeside Estates v Aberdeen DC [1980] 1 WLR 182 and R v Tower Hamlets LBC ex-parte Tower Hamlets combined Trader’s Association [1994] COD 325).

I also agree with Roch LJ that Regulations 78 (1) and (2) when read in conjunction with Section 7 of the Interpretation Act 1978, provide proof of notice to the respondent. They have the effect that the letter of 14 April 1993 is deemed to have arrived at the respondent’s address in the ordinary course of the post following that day. Although the judge left the matter open there would have been no basis for the judge to proceed other than that she had received it.

It follows that I also agree that it is not necessary to decide this appeal by determining whether the County Court had jurisdiction to entertain arguments advanced by the respondent relating to issues of fact. I am aware of the inconsistency of authority in such cases as The Manchester Count Court v Citroen [1989] 1WLR 809 and Pawlowski (Collector of Taxes) v Donnington (The Times 13 May 1999) to which Pill LJ refers. I am inclined to the view that if an issue of fact has been determined under the Statutory Code it should not be reopened in the recovery proceedings in the County Court. That should be the sole province of the review by officials and the tribunal. If the landlord has been given the opportunity to challenge the initial determination that there is an overpayment, the amount, and that it is recoverable, by way of review by officials and thereafter by appeal to the tribunal, it would be inappropriate to raise the matters again in the County Court. It would also, in my view, be inappropriate to raise issues of illegality, or irrationality where Judicial Review is the proper recourse. Even so, it might still be open to the defendant to say that she had been the subject of a procedural irregularity, which would include a breach of the code and natural justice. Such cases would probably be rare, yet easy to determine, and if resolved in the defendant’s favour, would disentitle the Local Authority to recover and might in practice lead to an expeditious and fresh determination, review and appeal under the code.

On this analysis it would mean that neither the District Judge nor the County Court Judge should have undertaken the task of deciding as a fact the date when the claimant left 65 Belmont Avenue.

I would not go so far as to say that their decisions are in “substitution for” those of the Review Tribunal but I agree that it is safe to infer that as they both came to the same conclusion it is inherently unlikely that the tribunal would have come to a different conclusion. Accordingly I see no ground for setting aside the District Judge’s assessment of £1,015.66 and would restore the appellant’s entitlement to this recoverable overpayment.

LORD JUSTICE PILL:

This is an unfortunate piece of litigation. Mrs Awaritefe (“the respondent”) is the owner of premises at 65 Belmont Avenue, N15. When she acquired the property on 16 October 1991, Ms Angela Nalwanga Nsubuga (“the claimant”) was a sitting tenant. The housing benefit to which the claimant was entitled was then paid direct to the respondent, as the Regulations permit. Weekly payments continued until 7 June 1992 and the London Borough of Haringey (“the appellants”) have sought to recover from the respondent, as overpayments, the weekly sums paid from 18 November 1991 to 7 June 1992.

On 16 October 1991, the appellants received from the claimant a notice, on a Benefit Enquiry Form they had supplied to her, in which she stated that she was still at the same address (65 Belmont Avenue) but had a new landlady, identifying the respondent. The date of change was given as 16 October. In a letter received by the appellants on 3 April 1992, the claimant asserted that she had left 65 Belmont Avenue on 15 October 1991, that is the day before she claimed in the Form that she was still there and had a new landlady. On a Benefit Enquiry Form received by the appellants on 24 January 1992, the claimant asserted that she had moved from 65 Belmont Avenue to 159 Haringey Road. In that form, she said that she had applied for housing benefit for her new address, over two months ago. If that is correct, she applied to the appellants in November 1991. A handwritten note on the document indicates that the claimant was seen at the appellants’ reception room on 23 April 1992. In the letter received by the appellants on 3 April 1992, the claimant stated that “it has been brought to my attention my former landlady of 65 Belmont Avenue has been cashing cheques from the benefit office in my names ... I would kindly ask you to stop my benefit at 65 Belmont Avenue and process my benefits for 159 Haringey Road from the date mentioned above (15 October 1991) since I am unable to cater for the arrears.”

Notwithstanding the assertions of the claimant, the appellants continued to pay the housing benefit to the respondent for the period up to 7 June 1992. No enquiries appear to have been made of the respondent.

The position was curious not only in that the claimant asserted that she had left 65 Belmont Avenue on 15 October, that is before the date on which she had previously claimed to be living there with a new landlady, but the date on which, on a claim form, she said she had moved into 159 Haringey Road was, in a manner unexplained, changed from 15 October 1991 to another possible date, 17 November 1991.

It was not until February 1993 that the appellants reclaimed the sum of £1,720.86p from the respondent. The claim was based on the period from 18 November 1991 to 7 June 1992, 29 weeks at £59.34 a week. The respondent attended at the appellants’ offices to query the claim and on 26 February wrote a detailed letter stating that the claimant had agreed a six month lease from 16 October 1991. When the respondent attempted to renew that lease in April 1992, she could not contact the claimant, though the claimant’s goods were still at the premises. The goods were removed by 11 May 1992 and the respondent stated that she had notified the appellants that the claimant had moved and that payments of housing benefit to her, the respondent, should be stopped. That letter does not include any admission that the claimant had changed her residence before that date. On visiting the premises on 25 April, the respondent was told that she had just missed the claimant who had “gone out shopping with her boy friend”.

The appellants have not sought to challenge the good faith of the respondent and indeed have no reason to do so. The date on which they stopped paying benefit, 23 May 1992, is consistent with what the respondent says she told them.

Following her challenge, in her letter of 26 February, to the claim for repayment, the appellants confirmed their determination that the repayment was due. In a letter of 14 April 1993 they stated that the applicant “claimed housing benefit, at a new address, from 18.11.91. This meant that her entitlement to housing benefit on your property ended on 18.11.91, causing the above overpayment for the period 18.11.91 to 7.6.92”. They had continued to make payments to the respondent to cover that period notwithstanding the assertions the claimant was making. They neither contacted the respondent nor queried with the claimant the apparently contradictory claims mentioned above. There has been no explanation from them as to why they continued to pay.

The misfortune was compounded when, nine months after payments had stopped, they contacted the respondent. Having received a written explanation from her, they based their confirmation of the decision to claim repayment not on a specific finding that the claimant had left the premises on November 17 1991 but on the basis that she had claimed housing benefit at another address from 18 November 1991. The decision should have been based not on where the claimant, whose credibility was inevitably in question, then said she was living but where in fact she had been living. It is not a tenant’s claim for benefit at an alleged new address which determines the issue, as the appellants appear from their letter of 14 April to have thought, but where she was in fact living.

There is in my judgment no evidence that the appellants ever addressed themselves to that central factual question. All the housing benefit officer who subsequently made a statement, says, is that “by our reply dated 14 April 1993, we confirmed that the overpayment was correct”. The statement made no attempt to deal with the contradictions and anomalies which had arisen or the issue of fact which was present.

The narrative may be completed by stating that the respondent repaid in 1994 the sum of £705.20p, rightly acknowledging that there had been some overpayment. We were told by counsel that the payment was made in the course of negotiations between the parties with a view to settlement. Written statements that the claimant had in fact lived at 65 Belmont Avenue until May 1992 were made at a later stage.

For these reasons, I regard the administration in this instance by the appellants as unsatisfactory. Events up to and including the appellants’ letter of 14 April 1993 were likely to create in the respondent a legitimate sense of grievance. She was entitled to form the opinion that no sufficient consideration had been given to the question of fact as to when the claimant left 65 Belmont Avenue. Assuming the Court has jurisdiction to consider that potential grievance, however, the Court must remind itself that it is the judge not of standards of administration but of the law. It is to be expected, and indeed hoped, that there is very considerable coincidence between what is required of a local authority by way of good administration and what is required by law. There may however be cases where conduct which may be categorised as poor administration, or even maladministration, does not fall below the standard required by the law.

In this case, there is an elaborate statutory code dealing with housing benefit and the remedies available to those who claim it or have received it and resist a claim for repayment. In Haringey LBC v Cotter (1997) 29 HLR 682, Mummery LJ described it as “detailed, self-contained and exhaustive”. The relevant parts of the procedure have been set out by Roch LJ in his judgment.

Provision is made for review of determinations by the local authority and by a Review Board consisting of not less than three councillors and having broad powers. Under Regulation 82 the Review Board “shall hold an oral hearing to conduct a further review”. Any person affected has the right under Regulation 82(2)(c), to be heard, to be represented, to call persons to give evidence and to put questions to any person who gives evidence. Under Regulation 83(4) the Chairman of the Review Board shall:

“(a) record in writing all its decisions; and

(b) include in the record of every decision a statement of the reasons for such decisions and of its findings of questions of fact material thereto.”

Decisions of the Board may be quashed for inadequacy of reasons ( R v Housing Benefit Review Board ex parte Thomas (1993) 25 HLR 1).

In this case there were breaches by the appellants of the procedure in the Regulations but I am persuaded by Mr Maclean, counsel for the appellants, that no substantive harm was done by these breaches. For the reason I have given, I do not regard the appellants’ letter of 14 April 1993 as satisfactory but it did, in the manner indicated by Roch LJ, sufficiently alert the respondent to the availability of a further remedy if she disagreed with the determination, particulars of which had been given to her under paragraph 14 of Schedule 6. The nature of the further remedy available could have been better stated but it was sufficiently stated to prevent a person, who did not follow the matter up, from impugning the decision of the appellants on procedural grounds.

This Court, like the Court below, has been prepared to hear argument on all aspects of the dispute. It is, however, yet another situation in which the question arises as to whether a defendant is entitled to advance a public law defence in County Court proceedings. In this case the appellant, having failed to take the central issue of fact to a Review Board, took the same point before the District Judge by way of defence to the appellants’ claim for repayment.

The House of Lords decision in Wandsworth London Borough Council v Winder [1985] AC 461 has frequently been the subject of analysis in the courts. Two recent decisions of this Court illustrate the difficulties. In Manchester City Council v Citroen [1999] 1 WLR 809, the Court considered the effect of an alleged failure by a local authority properly to review, under section 129 of the Housing Act 1996, a decision to seek an order for possession of a dwelling house let under an introductory tenancy. It was held that it was not open to a defendant in County Court proceedings for possession to allege a failure by the housing authority to observe the rules of natural justice when conducting the review. In Pawlowski (Collector of Taxes) v Donnington (The Times May 13 1999), on the other hand, the Court held that while it would have been open to the taxpayer to challenge the validity of directions, by the Inland Revenue, under PAYE Regulations, in judicial review proceedings, that was not a bar to the taxpayer raising the same public law issues when defending County Court proceedings.

I agree that it is not appropriate to decide this appeal on jurisdictional grounds and what I now say is subject to that reservation. Had there been a finding by a Review Board on the central issue of fact in this case, it would be very undesirable if that issue could be re-litigated in a County Court action for repayment and I am very doubtful whether it could be. The quasi-judicial duties imposed on the Board in the Regulations, to which I have referred, are intended to make the Board the appropriate fact-finding tribunal. If my doubts are justified, I find it difficult to accept that a defendant, who has not availed himself of the right to a hearing before a Review Board, can nevertheless argue the same issue of fact, which could have been argued before the Review Board, in the County Court. On the other hand, it may be that a claim by a defendant that he has wrongfully been deprived of a hearing before a Review Board, that is a public law defence based on procedural impropriety, can subsequently be made in County Court proceedings for repayment. To hold otherwise would be to place an onus on a wronged defendant to initiate judicial review rather than await the claim against him.

Where I respectfully disagree with Roch LJ is in his finding that a procedural irregularity in failing to provide a hearing before a Review Board could be cured by the findings of fact in the County Court. If the appellant had been deprived of a hearing before a Review Board constituted by councillors, that defect would not in my judgment be cured by permitting the appellant to argue the same factual issue in the County Court. Where a statutory procedure provides for determination of issues of fact by a specific tribunal, a court hearing is not a sufficient substitute.

While it does not affect the outcome of this appeal, I add that I do not accept Mr Maclean’s first submission, subsequently I think modified, that Regulation 77(4) is ousted when a notice of determination is given by an authority upon an alleged overpayment. Roch LJ has set out the reference to it in Schedule 6, paragraph 2. It is not in my view excluded by paragraph 14 of the Schedule. Its relevance is that it empowers a person affected by a determination to request the authority to provide a written statement “setting out its reasons as to its determination of any matter.” That is a broad power and would clearly include a response to a request for the reasons for a finding that the tenant left the premises on a particular date.

I agree with Roch LJ on the effect of Regulation 78(2), subject to the need to establish that the notice was “posted”.

I agree that the appeal should be allowed.

Order: Appeal allowed with no order as to costs.