England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
CIVIL DIVISION
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(ADMINISTRATIVE COURT LIST)

		The Royal Courts of Justice The Strand London Monday 8 October 2001

Monday 8 October 2001

1. LORD JUSTICE LATHAM: Between 20 July 1992 and 2 April 1995, the appellant received £6,600.10 by way of Housing Benefit and other associated benefits to which he was not entitled from the Cambridge City Council. The respondent has determined in two separate decisions, the first on 5 November 1997 and the second on 10 December 1999, that the appellant should repay this sum. Both decisions became the subject of judicial review applications which were dismissed by Richards J on 28 February 2001. The appellant now appeals to this court.
2. The appellant does not dispute that he has been paid money to which he was not entitled. During the relevant period he was receiving Housing Benefit, Community Charge Benefit, and Council Tax Benefit in respect of a property in Cambridge and a property in London in the City of Westminster. He was entitled to benefit only in relation to the property in London.
3. Housing Benefit was payable under the Social Security Contributions and Benefits Act 1992 and its predecessor. Section 130 of the 1992 Act provides:

"(1) A person is entitled to housing benefit if -

(a) he is liable to make payments in respect of a dwelling in Great Britain which he occupies as his home;

(b) there is an appropriate maximum housing benefit in his case; and

(c) either:

(i) he has no income or his income does not exceed the applicable amount...."

4. The relevant statutory provision dealing with overpayment of Housing Benefit is section 75 of the Social Security Administration Act 1992. This provides:

"(1) Except where regulations otherwise provide, any amount of housing benefit ... paid in excess of entitlement may be recovered either by the Secretary of State or by the authority which paid the benefit."

5. The relevant regulation is Regulation 99 of the Housing Benefit (General) Regulations 1987 which provides:

"(1) Any overpayment, except one to which paragraph (2) applies, shall be recoverable.

(2) ... this paragraph applies to an overpayment caused by an official error where the claimant or a person acting on his behalf or any other person to whom the payment is made could not, at the time of receipt of the payment .... reasonably have been expected to realise that it was an overpayment.

(3) In paragraph (2), 'overpayment caused by official error' means an overpayment caused by a mistake whether in the form of an act or omission by the appropriate authority or by an officer or person acting for that authority or by an officer of the Department of Social Security or the Department of Employment acting as such where the claimant, a person acting on his behalf or any other person to whom the payment is made did not cause or materially contribute to that mistake, act or omission...~"

6. There are like provisions in relation to the recovery of overpayments of Community Charge Benefit and Council Tax Benefit.
7. The decisions of both Review Boards were to the effect that paragraph (2) of the Regulation did not apply to the payments made to the appellant, so that the overpayments were recoverable.
8. The facts were that the appellant, then a merchant banker, suffered from a brain tumour in 1983 and become unemployed. From then onwards, he relied on Social Security Benefits, in particular income support. At the relevant time, therefore, he was a person who was entitled to Housing Benefit for his home, and Community Charge Benefit and Council Tax Benefit. When he become unemployed, he was living in rented accommodation in Cambridge, at 26 Malcolm Place.
9. To claim Housing Benefit he would from time to time complete an application form setting out details of the relevant accommodation. It included the following statement:

"I understand that it is my responsibility to tell the Benefits Service Office IMMEDIATELY of ANY change in my circumstances."

10. This declaration reflects the obligation contained in regulation 75 of the 1987 Regulations to the following effect:

"(1) ... if at any time between the making of a claim and its determination, or during the benefit period, there is a change of circumstances which the claimant, or any person by whom or on whose behalf sums payable by way of housing benefit are receivable, might reasonably be expected to know might affect the claimant's right to, the amount of or the receipt of housing benefit, that person shall be under a duty to notify that change of circumstances by giving notice in writing to the designated office."

11. In 1992 the appellant, according to his evidence, considered that it would help him to find employment if he was resident in London. Again according to him, having found possible accommodation at 26C Lupus Street, London SW1, he made enquiries of the Westminster Housing Department as to whether he could obtain Housing Benefit from them. He asserts that he was told that there was no bar to his obtaining Housing Benefit for two residences. He confirmed this, he says, by telephoning Kensington and Chelsea Housing Benefit Department, who gave the same answer. He therefore took a tenancy of the Lupus Street address and on 15 July 1992 made a claim for Housing Benefit in respect of that address. From then until 2 April 1995 he continued to receive Housing Benefit in relation to both addresses. It appeared that he would then spend the week in London and the weekends at Cambridge. At no time did he make any enquiry of the Cambridge City Council as to his entitlement to continue to receive Housing and other benefits, nor did he inform the Council of his change in circumstances. When he moved to London, he terminated his claim for income support from the Cambridge office of the Department of Employment and claimed Income Support from the local office in London.
12. In April 1995, the appellant exercised his right to buy the Cambridge property with the assistance of monies provided by a third party. This, not surprisingly, triggered enquiries from the Cambridge City Council which decided, among other things, to reclaim Housing and other Benefit which had been overpaid. He requested a review and ultimately this was heard by the Review Board which gave its decision in October 1997. In addition to his own evidence in support of his claim for a review, the appellant submitted among other documents a statement from a Mr Renbury who stated that he had telephoned Kensington and Chelsea Housing Benefits Department and been told that, as a matter of principle, a person already in receipt of Housing Benefit in one place was not debarred from a claim for Housing Benefit in another; that taking a flat in London to facilitate a hunt for a new job was the type of case in which two claims for Housing Benefit would be applicable; and that there was no overriding requirement for residence during at least four days each week for the purpose of a claim for Housing Benefit.
13. The basis of the appellant's claim for review was that the absence of any express requirement in the Cambridge City Council's application form for Housing Benefit to disclose where his home was, or whether he was applying for or in receipt of Housing Benefit elsewhere, represented a failure by the Council to ensure that the form requested all relevant information which amounted to an "official error" for the purposes of Regulation 99(2) of the 1987 Regulations. He further argued that he had disclosed his change in circumstances by attaching to his applications for Housing Benefit after July 1992 the Giro Payment Slip for benefit, which stated his address as 26 Lupus Street, London. The fact that this had not been noted by the Benefits Officer at Cambridge was also said to amount to an official error. The Review Board concluded there had been no "official error" within the meaning of regulation 99(2) in either respect, and that the cause of overpayment was the appellant's failure to notify Cambridge City Council of his change in circumstances.
14. As I have already said, this decision was the subject of an application for Judicial Review, which was refused on paper. At the oral hearing on 7 September 1998 the application was stayed on the basis that the appellant had then appreciated that for a period in July 1992, after he had moved into 26 Lupus Street, London, he was no longer in receipt of Income Support whilst his application to the appropriate Benefits Office in Westminster was being considered. By section 127 of the Social Security Administration Act 1992 and Regulation 2 of the Housing Benefit (Supply of Information) Regulations 1988, there is a power in the Department of Social Security to provide information of that nature to a local authority. The normal, but not invariable, practice of the Department would have to been to notify the Cambridge City Council of the cessation of Income Support on a form known as NHB8. For some reason that form was not completed in the appellant's case, or alternatively was not sent to the Cambridge City Council. This was said to provide an opportunity to the appellant to seek a further review of the decision to reclaim the overpayments. Counsel for the appellant indicated to the judge that a request for such a review would be made, and it was on it that basis that the application was then stayed.
15. Cambridge City Council was prepared to provide a further review, which resulted in the 1999 decision. In that decision, the Review Board concluded as follows:

"5.1 The Housing Benefit (Supply of Information) Regulations 1988 provide that the Secretary of State may supply a local authority with details of a claimant's entitlement to Income Support where this may affect the claimant's entitlement to Housing Benefit although there is no statutory duty to do so. Failure on the part of the DSS/Benefits Agency to do this was not an official error. The overpayment is therefore a recoverable payment.

5.2. Notwithstanding para 5.1, the Review Board consider that you caused and materially contributed to any error which may have occurred. Under Regulation 75, you are required to notify the Benefits Service of any changes in your circumstances which may affect your housing benefit claim. You did not inform the Benefits Service of your move to London in July 1992 or of the fact that you were claiming housing benefit from Westminster City Council.

5.2 (sic) It is considered that you were aware that the change in your circumstances might affect your right to receive housing benefit. You struck the Review Board as an intelligent man, you were previously a merchant banker, and you were concerned enough to telephone other local authorities to enquire as to whether you would be able to claim housing benefit for two properties. It was noted that you did not contact the Cambridge City Council Benefits Service, the authority from which you were claiming housing benefit throughout this period. Benefit Officers at Cambridge would have been familiar with your circumstances and would have been more likely to advise accurately rather than simply replying to hypothetical situations put to them by you, as officers of other authorities had to do.

5.3 You relied upon the statements of Jonathan Renbury and Stephen Pinfold as evidence of the type of advice given by local authorities when certain questions were put them about claiming housing benefit for two properties. The Review Board took note of the responses but were of the view that the questions did not make sufficiently clear that you would continue to rent and claim benefit for the property in Cambridge. It is reasonable to interpret the questions as signifying an intention on your part to move to London from Cambridge but that for a short period of time you will be paying rent for two properties as you terminate the tenancy on one property and commence occupation of another property, in which circumstances benefit is payable.

5.4 You took positive steps to ask other authorities for advice regarding benefit matters but you did not contact Cambridge. You did not notify Cambridge Benefit Service of your change in circumstances when you did move to 26 Lupus Street, London in July 1992.

5.5 You did not notify Cambridge Benefits Service of your circumstances in any subsequent forms that you completed and submitted. It is accepted that the Cambridge form does not ask a specific question 'Do you have two homes?' or 'Are you claiming housing benefit from any other authority?' However, the Review Board consider that it would be reasonable for you to have ascertained, from the nature of the questions asked on the application form, the type of information you should provide. It may be that you attached a copy of your girocheque to one of the renewal forms but the purpose of this is to show that you are in receipt of Income Support, it is not the means of informing the Benefits Section of your change in circumstances.

5.6 It is considered for the reasons in paragraph 5.5 that you continued to contribute to any error made leading to the overpayment of benefit.

5.7 The Review Board have taken into account that you have been ill in the past but are of the view that the overpayment should be recovered from you. The Review Board are of the view that your dealings in this matter have been disingenuous. You had concerns as to whether you could claim benefit for two properties, but you sought advice from other authorities rather than the authority from which you were claiming benefit; you were concerned enough to telephone various authorities for this advice and yet you were not concerned enough to notify Cambridge Benefits Service of your change in circumstance. You have stated that you were unfamiliar with the benefits system but you are able to distinguish what 'income' needs to be declared on the application. (Your comments that you have come to be very familiar with the system during the conduct of your case in the High Court does not explain why you did not disclose the details of your Westminster home and benefit claim to the Benefits Service in 1992 to 1994."

16. Richards J considered the challenge to the 1999 decision first. He concluded that the failure of the DSS to send form NHB8 to the Cambridge City Council did constitute an 'official error' for the purposes of Regulation 99(2) but that it was not the cause of the overpayment within the meaning of that paragraph. In relation to the 1997 decision, he rejected the argument that there was any flaw in the application form which could amount to an 'official error' or that there was any other matter which could amount to an 'official error'.
17. In this court Mr Stagg, on behalf of the appellant, does not seek in any way to challenge the decision of the judge in relation to the 1997 decision. His submission concentrates on the conclusion of the judge in relation to the 1999 decision that the overpayment was not caused by official error. It is sufficient, in his submission, if there is an official error which is a cause of the overpayment. It does not have to be the only or the overriding cause. The legislation focuses upon the actions of the public authorities and requires an answer as to whether or not the public authorities have acted or failed to act in a way which is a cause of the overpayment.
18. It follows that the issue of causation is clearly central to this case. Both Mr Stagg and Mr Findlay, on behalf of the respondents, have relied upon passages in the speech of Lord Hoffman in Environmental Agency v Empress Car Co Ltd [1999] 2 AC 22 at page 29. Lord Hoffman there said:

"The courts have repeatedly said that the notion of 'causing' is one of common sense. So in Alphacell Ltd v Woodward [1972] AC 824, 847 Lord Salmon said:

'what or who has caused a certain event to occur is essentially a practical question of fact which can best be answered by ordinary common sense rather than by abstract metaphysical theory.'

I doubt whether the use of abstract metaphysical theory has ever had much serious support and I certainly agree that the notion of causation should not be overcomplicated. Neither, however, should it be oversimplified. In the Alphacell case, at page 834, Lord Wilberforce said in similar vein:

'In my opinion, "causing" here must be given a common sense meaning and I deprecate the introduction of refinements, such as causa causans, effective cause or novus actus. There may be difficulties where acts of third persons or natural forces are concerned... '

... ... ...

The first point to emphasise is that common sense answers to questions of causation will differ according to the purpose for which the question is asked. Questions of causation often arise for the purpose of attributing responsibility to someone, for example, so as to blame him for something which has happened or to make him guilty of an offence or liable in damages. In such cases, the answer will depend upon the rule by which responsibility is being attributed. Take, for example, the case of the man who forgets to take the radio out of his car and during the night someone breaks the quarter-light, enters the car and steals it. What caused the damage? If the thief is on trial, so that the question is whether he is criminally responsible, then obviously the answer is that he caused the damage. It is no answer for him to say that it was caused by the owner carelessly leaving the radio inside. On the other hand, the owner's wife, irritated at the third such occurrence in a year, might well say that it was his fault. In the context of an inquiry into the owner's blameworthiness under a non-legal, common sense duty to take reasonable care of one's possessions, one would say that his carelessness caused the loss of the radio.

Not only may there be different answers to questions about causation when attributing responsibility to different people under different rules (in the above example, criminal responsibility of the thief, common sense responsibility of the owner) but there may be different answers when attributing responsibility to different people under the same rule."

19. After giving other examples of where the fact that another party or event could be said to have caused the consequence in question, without relieving another of responsibility under the rule in question, he said at page 31E:

"These examples show that one cannot give a common sense answer to a question of causation for the purpose of attributing responsibility under some rule without knowing the purpose and scope of the rule."

20. Lord Hoffman was there considering the question of causation in a different context, clearly, from the one with which we are concerned today. But it seems to me to be helpful to be reminded that the legislative purpose is likely to be of critical significance in determining how the court should approach the elastic concept of causation in any situation.
21. There is no case to which counsel have been able to point us which deals with the proper approach to the question of causation in the context of the regulations which we have to consider today. The nearest, it is submitted on behalf of Mr Stagg, is the case of Duggan v Chief Adjudication Officer (1998) appendix to R(SB) 13/89, a decision of the Court of Appeal in relation to the provisions as to the recovery of overpayments in the Supplementary Benefits Act 1976. The facts in that case were that the applicant for benefit had not disclosed to the adjudication officer that his wife, who had been in receipt of maternity benefit, was at the end of her period of maternity benefit intending to seek work and, in the event of failing to obtain work, to seek and obtain unemployment benefit. The adjudication officer made the erroneous assumption that, because she had been in receipt of maternity allowance, she was not intending to work thereafter. He accordingly awarded benefit to the applicant on the wrong premise that the wife would not be in receipt of any sums by way of either income or benefit.
22. It was submitted in that case that the payments which were accordingly overpaid were recoverable under section 20 of the 1976 Act, which provides as follows:

"(1) If, whether fraudulently or otherwise, any person misrepresents, or fails to disclose, any material fact and in consequence of the misrepresentation or failure -

(a) the Secretary of State incurs any expense under this Act; or

(b) any sum recoverable under this Act by or on behalf of the Secretary of State is not recovered;

the Secretary of State shall be entitled to recover the amount thereof from that person."

23. The argument on behalf of the claimant was that the payments had been made not as result of any failure on his part but were made by reason of the failures of the adjudication officer to make the appropriate enquiries.
24. The Court of Appeal dealt with that argument shortly in the judgment of May LJ, in a passage in which he made it clear that the question was not one which could be answered simply by saying that a mistake had been made by the adjudication officer. That was a cause. The section required those administering the scheme to determine whether or not, whatever other cause there may have been, the claimant had acted as described in section 20(1). He undoubtedly had in the case in question and accordingly he was caught by the provisions of that section and was liable to make repayment of the overpayments.
25. It seems to me that that is a good example of the Court carrying out the exercise which Lord Hoffman indicates as the appropriate exercise in determining the approach to causation in any given case. In the present case, one has to have regard to the general legislative purpose, which seems to me to be clear. Parliament has laid down in the Regulations that a person is to be relieved of the obligation to repay an overpayment when that has been occasioned by an administrative mistake and not by any fault on the part of the recipient. That seems to me to be the basic thrust of the Regulation and one should approach the meaning of the word "cause" and its application to the facts on that basis.
26. Bearing that in mind, I consider that Richards J was correct in concluding that the failure to send form NHB8 to Cambridge City Council had not "caused" the overpayment even if that failure did amount to an official error. The overpayment occurred because the appellant continued to claim Housing Benefit for the Cambridge property and failed, in breach of his duty under Regulation 75 of the 1987 Regulations, to notify the Cambridge City Council of what in my judgment was clearly a relevant change in his circumstances and one which he would have appreciated. The administrative failure, if that is the appropriate way of describing it, to send form NHB8 of the Cambridge City Council did not cause any payments to be made. The most that could be said is that as a result of that failure Cambridge City Council was not alerted to the fact that the appellant was no longer entitled to the relevant payments. But it seems to me that the answer to the question posed by the Regulation is clear: this was not an overpayment caused by official error and accordingly the Regulations do not relieve the appellant of the obligation to repay the overpayment, which is the primary rule in such circumstances.
27. Accordingly, I would dismiss this appeal.
28. LORD JUSTICE MANTELL: So would I.
29. LORD JUSTICE SIMON BROWN: On Mr Stagg's submission, in a case like the present, the fact that the primary cause of the relevant overpayment was the appellant's own failure, in breach of his statutory duty, to disclose the important change in his circumstances, rather than the breakdown of the department's non-statutory back-up system, is a complete irrelevance; unless perhaps it were to bear on the residual question arising under regulation 99(2) as to whether the claimant could reasonably have been expected to realise that it was an overpayment. The strength of that submission depends upon treating the question whether the appellant caused, or materially contributed to, the department's mistake as a wholly discrete one. On that approach, of course, the appellant was not responsible for the failure of the department's back-up system.
30. Such a result, however, seems to me so entirely surprising and unsatisfactory that it requires one to approach regulation 99(3) rather differently. In my judgment a single composite question falls to be asked under regulation 99(3). One must ask: "was the overpayment the result of a wholly uninduced official error, or was it rather the result of the claimant's own failings, here his failure in breach of duty to report a change of circumstance?" The answer to that question on the facts of this case is, of course, self-evident.
31. That approach, to my mind, underlies and informs what Hale J (as she then was) said in the observation to which our attention was drawn in Warwick DC v Freeman 27 HLR 616 at 621. More importantly, however, it accords with Lord Hoffman's speech in Environment Agency v Empress Car Co Ltd [1999] 2 AC 22 at 29, in the passage already cited by Lord Justice Latham. If one asks the purpose for which the question arises under regulation 99(3) as to whether the overpayment was caused by an uninduced official error, the common-sense answer is so as to distinguish that sort of case from a case where the claimant himself is substantially responsible for the overpayment. It would be remarkable indeed if the claimant was liable to make repayment in a case where he merely contributed to what might be a fundamental error on the part of the department, and yet wholly escapes such liability even when himself primarily responsible for the overpayment.
32. In my judgment that is not the law. I too would dismiss this appeal.
ORDER: Appeal dismissed with costs. The full costs of this appeal which have been incurred by the respondent are to be determined by a costs judge and the appellant, who is in receipt of services funded by the Legal Services Commission shall pay to the respondent an amount to be determined by that judge. The appellant's costs to be subject to detailed assessment. (Order not part of approved judgment)