England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH DIVISION
(ADMINISTRATIVE COURT AND DIVISIONAL COURT)
Mr Justice Maurice Kay

		Royal Courts of Justice Strand, London, WC2A 2LL Thursday 8 November 2001

LORD JUSTICE WALLER:

Introduction

1. The appellant with her son occupied certain premises as a tenant of a landlord who was the father of her son. She received housing benefit for nine years which enabled her to pay rent to the landlord. By an amendment to the Housing Benefit (General) Regulations 1987 ("the Housing Benefit Regulations") which came in to force in 1999, a tenant such as the appellant who was responsible for a child of the landlord had to be treated as not liable to make payments in respect of the dwelling. Thus the appellant could no longer claim housing benefit. The appellant challenged the validity of that amendment. By a judgment dated 6 April 2001 Maurice Kay J rejected the challenge and this is an appeal from that judgment.

The relevant statutory provisions

2. By section 123(1) of the Social Security Contributions and Benefits Act 1992 one of the prescribed schemes for income-related benefits is "Housing Benefit". By section 130(1) it is provided that:

"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; or

(ii) his income exceeds the amount, but only by so much that there is an amount remaining if the deduction for which subsection 3(b) below provides is made."

3. By section 137(2) it is provided:

"Regulations may make provision for the purposes of this Part of this Act –

. . .

(i) for treating any person who is liable to make payments for a dwelling as if he were not liable."

4. Regulation7 of the Housing Benefit (General) Regulations 1987 was the regulation dealing with circumstances in which a person was to be treated as not liable to make payments in respect of a dwelling. This appeal is concerned with an amendment to that regulation but it is material to quote that regulation in its original form. Originally it provided by regulation 7(1):

"The following persons shall be treated as if they were not liable to make payments in respect of a dwelling –

(a) a person who resides with the person to whom he is liable to make payments in respect of the dwelling and either –

(i) that person is a close relative of his or his partner, or

(ii) the tenancy or other agreement between them is other than on a commercial basis;

(b) a person whose liability to make payments in respect of the dwelling appears to the appropriate authority to have been created to take advantage of the housing benefit scheme except someone who was, for any period within the eight weeks prior to the creation of the agreement giving rise to the liability to make such payments, otherwise liable to make payments of rent in respect of the same dwelling;

(c) a person who is a joint occupier of a dwelling and who was, at any time during the period of eight weeks prior to the creation of the joint tenancy or other agreement giving rise to the joint liability to make payments in respect of the dwelling, a non-dependent of one or more of the other joint occupiers of the dwelling, unless the appropriate authority is satisfied that the joint tenancy or other agreement was not created to take advantage of the housing benefit scheme;

(d) a person who is a member of, and is fully maintained by, a religious order. . . . "

5. By the Housing Benefit (General) Amendment (No 2) Regulations 1998 made on 22 December 1998 and coming into force on 25 January 1999, regulation 7 was put into an amended form. Paragraph 1 of regulation 7 was substituted by sub-paragraphs (1), (1A) and (1B). Sub-paragraph (1) identified with some precision the circumstances where a person liable to make payments should be treated as if they were not so liable and included the relevant subparagraph (so far as this appeal is concerned):

"(d) [where] he is responsible, or his partner is responsible, for a child of the person to whom he is liable under the agreement;"

6. That sub-paragraph was not subject to paragraph (1B) as were certain other sub-paragraphs i.e. (e) and (g). Sub-paragraph (e) provided:

"subject to paragraph (1B), his liability under the agreement is to a company or a trustee of a trust of which –

(i) he or his partner,

(ii) his or his partner's close relative who resides with him, or

(iii) his or his partner's former partner

is, in the case of a company, a director or an employee, or, in the case of a trust, a trustee or a beneficiary;

and sub-paragraph (g) provided:

subject to paragraph (1B), before the liability was created, he was a non-dependent of someone who resided, and continues to reside, in the dwelling;"

7. Sub-paragraph (1B) provided that the two above sub-paragraphs shall not apply "in a case where the person satisfies the appropriate authority that the liability was not intended to be a means of taking advantage of the housing benefit scheme." This was termed during argument as the reverse burden of proof provision.
8. The appellant in this case had been receiving housing benefit for many years under the old regulations. So far as transitional provisions were concerned the amending regulations simply provided by paragraph 1(3):

"Where a claimant is in receipt of an award of housing benefit on 25 January 1999, these regulations shall come into force in respect of that individual on the day after the last day of the benefit period in respect of which the award is made."

9. In the instant case, as will appear from the facts, the last day of the benefit period for this appellant under the previous regulations was 8 November 1999, or thereabouts, and thus it was only on that date that the amendment became applicable to her.

The Facts

10. There are two aspects of the facts that need addressing. First are the facts of the particular case with which this appeal is concerned. Second, having regard to the nature of the challenge to the amending regulations, are the facts lying behind the decision of the Secretary of State to bring in an amendment.

Particular facts

11. In 1986 the appellant began a relationship with Peter Noble who was at that time then living with his wife at 25 Colliers Way, Reading. It seems that Mrs Noble left the matrimonial home in 1986 and Mr Noble re-mortgaged the house in order to buy out his wife's share. The appellant did not live at 25 Colliers Way at this time.
12. In June 1988, a boy was born to the appellant, the son of Mr Noble. In 1989 the relationship between the appellant and Mr Noble ended and it seems that Mr Noble tried to sell 25 Colliers Way but was in some way prevented from so doing by solicitors acting for the appellant. In 1990 the appellant decided to move out of accommodation she was then residing in, and approached Reading Borough Council for accommodation. Only hostel accommodation could be offered. and at that stage, in April 1990, Mr Noble orally granted the appellant a tenancy of 25 Colliers Way at an agreed rent of £650 per month. The appellant then applied for housing benefit under the Housing Benefit Regulations. The appellant was awarded and paid housing benefit of £550 per month. It follows that under the then Housing Benefit Regulations, under regulation 7(1)(b) the appellant did not appear to the appropriate authorities to be "a person whose liability to make payments in respect of [25 Colliers Way] . . . . [had] been created to take advantage of the housing benefit scheme." Thus the appellant was not treated as if she were not liable to make the payments to Mr Noble. Following the award of housing benefit, Mr Noble accepted direct payments of £550 per month in housing benefit and agreed to waive the difference.
13. Thereafter on 16 March 1991 Reading County Court, by consent, ordered Mr Noble to pay £30 per week maintenance for his son; the court gave custody to the appellant with reasonable access to Mr Noble and adjourned the appellant's application for maintenance generally.
14. The appellant continued to receive housing benefit until the regulations were amended. Thus on each reappraisal at the end of each benefit period, the appropriate authority remained satisfied that the appellant's liability had not been created to take advantage of the Housing Benefit Scheme. The appellant gave birth to a daughter on 20 January 1995 of whom Mr Noble was not the father.
15. The amended regulations came into force on 25 January 1999 but, as previously indicated, it was only in November 1999, following the terms of the transitional provision, that Reading Borough Council notified the appellant that she was not entitled to housing benefit. The Council relied on sub-paragraph (1)(d) of the new regulation 7.
16. It is accepted that if sub-paragraph (1)(d) of regulation 7 of the Housing Benefit Regulations is valid, the appellant is not entitled to housing benefit for 25 Colliers Way.
17. The appellant attacks the amended regulation on grounds to which I will turn in detail, but which include that the Secretary of State's decision to amend the regulations into the form that he did was Wednesbury unreasonable and disproportionate. The attack is made at various levels, putting it broadly at the moment. Firstly, it is said that there is no basis for the presumption which underlay the amendment so far as sub-paragraph (1)(d) was concerned, that a partner should be responsible for providing accommodation for his child. Secondly, it is said that on any view, even with that presumption, there should have been a provision similar to (1B) under which the appellant could have established that the tenancy agreement was not in fact a sham. Thirdly, it is said that it was in any event unreasonable not to provide for different transitional provisions covering persons such as the appellant. The regulations should have recognised, so it is argued, that persons who had received housing benefit under the previous regulations would have ordered their lives by reference thereto and thus it should have been a term of the amendment that the amendments did not apply to such persons.

The facts relating to the Secretary of State's reasons

18. The nature of the attack makes it right to examine the facts relating to the reasons why the Secretary of State thought it right to make the amendments that were made in 1999, and, in particular, what lay behind sub-paragraph 1(d) and the absence of any "reverse burden of proof provision" relating thereto, and indeed the absence of any transitional provisions other than paragraph 1(3) which I have quoted.
19. The evidence relied on by the Secretary of State is that of Mr Singh. In essence his evidence came to this:

(1) Regulation 7 was an anti-abuse measure i.e. it sought to cover situations where the tenancy was contrived to take advantage of the Housing Benefit Scheme but where in reality the landlord and the tenant had no intention of enforcing any terms of any tenancy.

(2) Decisions of the court had not provided a workable test as to what constituted a contrived tenancy. That made it difficult for the appropriate authorities to take a view as to whether an arrangement was contrived. It was difficult in particular to rebut evidence put forward by a claimant and his/her landlord. That is relevant to the reverse burden aspect.

(3) The amendments were introduced thus to identify particular circumstances or relationships where housing benefit would not be allowed. That would remove the requirement to form a judgment in most cases and indeed make it easier for claimants to know the test being applied.

(4) Mr Singh's impression was that in (and this I infer from what he said) a substantial number of cases benefits were being allowed even though authorities had more than a suspicion that the tenancy was contrived.

(5) So far as regulation 7(1)(d) in particular was concerned it was, as with other sub-paragraphs, an anti-abuse provision and the underlying assumption was that a parent who owned a house would not normally charge the ex-partner for living in that house with their child, or would not normally create a relationship under which one would actually enforce any legal liability as against the other.

20. The amended regulations were sent to the Social Security Advisory Committee in draft under cover of a letter dated 2 September 1998 under which the Secretary of State for Social Security explained his reasons for wishing to make the amendments in the following terms:

"… These regulations aim to simplify and clarify long standing Housing Benefit provisions against abuse. Housing Benefit is generally available to people on low incomes who have a genuine rent liability. However, some people and some organisations occasionally set out to exploit the social security system, and construct rent liabilities whose primary purpose seems to be to bring tenants within Housing Benefit. Successive governments have sought to deny claimants access to Housing Benefit in these circumstances and the current regulation 7(1) excludes from benefit people whose liabilities have been 'created to take advantage of the Housing Benefit scheme'. However, local authorities have found these regulations increasingly difficult to apply and interpret.

In a recent Appeal Court hearing, involving a determination that the liability of an Elder of the Jesus Fellowship Church had been created to take advantage of the Housing Benefit scheme, the judgment left local authority Housing Benefit departments with no clear test to apply in such cases. The proposed amendment to regulation 7(1) seeks to provide such a test, and to make such determinations easier to understand for both LA housing benefit personnel and for claimants. We propose to make and lay the regulations as soon as is practicable with a commencement date agreed with the Local Authority associations.

This proposed amendment does not change the policy intention on who should be treated as not liable, but it does simplify interpretation of the regulations. It attempts to achieve this in two ways. Firstly, it states the basic principle involved in the regulation, which is that HB should not be payable where the substance of the liability amounts to an abuse of the Housing Benefit scheme.

Secondly, it provides a list of the situations in which such a liability can be said to have arisen. Some of these categories are already contained in regulation 7, ie those whose liability is to a close relative with whom they reside, and some joint tenants who were previously non-dependants (sub-paragraphs (b) and (g)). However, we have included additional categories to represent particular cases where a person has arranged his affairs in such a way as to be liable to make payments for his accommodation when he could have avoided such a situation and still been adequately accommodated. Such arrangements are those that were meant to be covered by the so-called 'contrived tenancy' provision in Regulation 7(1)(b), and they are the sorts of cases on which housing benefit departments seek guidance from DSS Headquarters on a daily basis.

A clear example is the case where an owner-occupier transfers his home to a Trust, of which he either is a Trustee or a beneficiary, and then rents it back from the Trust, with the house being the only property of the Trust. This is obviously set up to exploit the benefit system, since an owner occupier cannot receive Housing Benefit. In effect, HB is used to pay the full amount of his mortgage, where Jobseeker's allowance will only pay the interest. We have included an exemption for those people who can show that such an arrangement is not intended to exploit the Housing Benefit scheme. This exemption also applies, as now, to non-dependants who become joint tenants.

There should be no effect on genuine Housing Benefit claimants from this amendment. It is intended to be a simplification of the existing provision, that is clear to administrators and claimants alike. We would expect that any claimants affected by the amended provision would have been similarly affected by the current one. We hope, however, that the clearer wording and the explicit list will mean that not only will benefit be refused when people seek to exploit the benefit system, but that people who are not seeking to do so will receive their proper entitlement. To prevent LAs having to search for claims which may be affected, there is a saving provision for existing claimants which provides that the change does not become effective until the end of their current benefit period."

21. I should also refer to an internal memorandum from Mary Selby dated 4 September 1998 concerned with Housing Benefit Policy. (p. 134 of the bundle). It comments on a suggestion from a local authority that what became regulation 7(1)(d) should be added to the provisions to which the reverse burden of proof provision should apply. A local authority had suggested a rather rare example of where the regulation would disallow housing benefit in a genuine case. The answer was:

"The situation described as an example … seems to be a very rare event indeed. The purpose of this provision is to stop the abuse described in the last paragraph of this letter and applying the "escape route" of 1D to this provision would merely allow this abuse to continue."

22. That would seem to suggest that it was thought that there was considerable abuse taking place i.e. the understanding was that persons were successfully claiming housing benefit following contrived arrangements as between the parent of a child as tenant and the parent of that child as landlord.
23. Mr Drabble QC would counter the suggestion that the evidence established a considerable amount of abuse in this category firstly by reference to the paragraph in the letter of 2 September 1998 containing the sentence "we would expect that any claimants affected by the amended provision would have been similarly affected by the current one." Further, he would rely on a circular sent to Local Authorities in relation to the interpretation of the amended regulations. Paragraph 34 of that circular (see p.113) said:

"Generally speaking, anyone who would be affected by the new regulation would have been treated as not liable under the previous version, and so there should be few existing cases who are in receipt of HB. For any who are, the new regulation is effective from the day following the last day of their current benefit period."

24. These latter paragraphs, Mr Drabble suggests, would support the view that the Secretary of State did not think abuse was rife under the previous regulations otherwise he could not have said what he did. Thus, Mr Drabble submits, that a transitional provision which excluded persons who had been held entitled to benefit up until the date of the amendment, should have been one of the provisions of the amended regulations. That he suggests could have been so without serious consequences having regard to the views of the Secretary of State as to number of abusers and would in addition have covered persons such as the appellant who Mr Drabble submitted was not actually an abuser of the scheme.

The grounds of attack

Wednesbury irrationality

25. It is difficult to divide consideration of "irrationality" from considerations relating to "proportionality". Lord Slynn in Alconbury [2001] 2 WLR 1389 at 1406E –1407C said this:

"It has long been established that if the Secretary of State misinterprets the legislation under which he purports to act, or if he takes into account matters irrelevant to his decision or refuses or fails to take account of matters relevant to his decision, or reaches a perverse decision, the court may set his decision aside. Even if he fails to follow necessary procedural steps – failing to give notice of a hearing or to allow an opportunity for evidence to be called or cross-examined, or for representations to be made or to take any step which fairness and natural justice requires – the court may interfere. The legality of the decision and the procedural steps must be subject to sufficient judicial control. But none of the judgments before the European Court of Human Rights requires that the court should have "full jurisdiction" to review policy or the overall merits of a planning decision. This approach is reflected in the powers of the European Court of Justice to review executive acts under article 230 of the EC Treaty.

"It shall for this purpose have jurisdiction in action brought by a member state, the Council or the Commission on grounds of lack of competence, infringement of an essential procedural requirement, infringement of this Treaty or of any rule of law relating to its application, or misuse of powers."

The European Court of Justice does of course apply the principle of proportionality when examining such acts and national judges must apply the same principle when dealing with Community law issues. There is a difference between that principle and the approach of the English courts in Associated Provincial Picture Houses Ltd v Wednesbury Corpn [1948] 1 KB 223. But the difference in practice is not as great as is sometimes supposed. The cautious approach of the European Court of Justice in applying the principle is shown inter alia by the margin of appreciation it accords to the institutions of the Community in making economic assessments. I consider that even without reference to the Human Rights Act 1998 the time has come to recognise that this principle is part of English administrative law, not only when judges are dealing with Community acts but also when they are dealing with acts subject to domestic law. Trying to keep the Wednesbury principle and proportionality in separate compartments seems to me to be unnecessary and confusing. Reference to the Human Rights Act 1998 however makes it necessary that the court should ask whether what is done is compatible with Convention rights. That will often require that the question should be asked whether the principle of proportionality has been satisfied: see R v Secretary of State for the Home Department, Ex p Turgut [2001] 1 All ER 719; R (Mahmood) v Secretary of State for the Home Department [2001] 1 WLR 840."

26. Accordingly I intend to include consideration of proportionality under this head.
27. As already indicated the attack under this head is at three levels. First, Mr Drabble attacks the underlying assumption. Second, he attacks the fact that no reverse burden of proof provision was included, and third, he attacks the lack of proper transitional provisions which he says should have excluded the appellant.
28. Mr Drabble suggests that the assumptions which underlay regulation 7(1)(d) are irrational. He analyzes those assumptions at paragraph 24 of his skeleton. There is no issue in relation to assumptions (A) and (B) but assumptions (C) and (D) he puts in the following way:

"C. A landlord would not normally charge rent to a person with whom a minor child of the landlord lives.

D. Therefore, a case where a landlord does charge rent to such a person can properly be presumed to be one of abuse."

29. I am not sure that that fairly describes the assumptions that were being made. Mr Singh described the assumptions as it being normal for a person who owns the house not to charge the ex-partner for living in the house with their child and as it being normal not to create a relationship under which one parent would actually enforce a legal liability as against the other.
30. The judge said this about the assumption which lay behind regulation 7(1)(d):

"It rests on a rational belief that, in cases where the tenant is the parent and carer of the landlord's child, the landlord will generally not view the landlord/tenant relationship in the same commercial way that he otherwise would. Of course there will be cases (and I accept that this is one of them) where a genuine and commercial arrangement exists, notwithstanding the relationship between the parties. Moreover, as with any universal rule in this sphere, there are bound to be hard cases."

31. My only criticism of the above passage is the total acceptance that in the instant case it is clear that a "genuine and commercial arrangement exists ….". It is true that the authority in this case approved the arrangement but this case may (I stress that we simply do not know) exemplify the problem. Certain features strike one even at this stage. The father wanted to sell the house but was somehow prevented by those acting for the mother. The tenancy was oral and no formal document was produced. The agreement for rent originally was £650, but when housing benefit was granted for only £550 the balance of the rent was waived. By agreement the order for maintenance against the father was for only £30 per week but if the mother had needed accommodation and housing benefit had not been available the liability of the father might have been more. I emphasise that we simply do not know how genuine a commercial arrangement, as between the appellant and Mr Noble, this has been at any stage.
32. So far as the reverse burden of proof is concerned the above again demonstrates the difficulty. As Mr Singh has made clear, it is very difficult to refute the evidence of a tenancy put forward by a tenant/landlord. Furthermore, in cases such as the appellant, at least so far as the future is concerned, those parents will know the one landlord in relation to whom housing benefit would not be available. Of course that does not mean that any individual cannot obtain housing benefit because that person can move to other accommodation in which rent is paid under a commercial arrangement to someone other than the parent of the child.
33. So one can ask rhetorically what is unjust about the system under which a parent of a child appreciates that if they are to obtain housing benefit there is one person i.e. the other parent of the child who cannot be the landlord. Forgetting for the moment the separate argument available to this particular appellant that she has ordered her affairs on the basis of so renting and receiving housing benefit, once the regulations as amended came into force a person such as the appellant simply knew that if they needed housing benefit in order to pay the rent, then the tenancy had to be with someone other than the parent of the child, and that does not, as I would see it, impose serious hardship.
34. What then of the argument that there should have been a transitional provision excluding persons such as the appellant who had ordered their lives on the basis of renting from the other parent and receiving housing benefit. I can see there can be said to be some inconsistency between Mr Singh's view of likely numbers of those who were caught be the new regulations, but who were previously approved for housing benefit, and what was being said in the letter of 2 September 1998 and the circular referred to and quoted in paragraph 23 above. But, the position as I see it has to be accepted so far as the following points are concerned:

(1) On any view it was thought by the Secretary of State and those who advised him that some considerable body of persons were abusing the system and receiving housing benefit when really they should not have been.

(2) It was not easy, and still is not easy, to establish who those persons were and how many there were; that is the essence of the whole problem.

(3) It might be said to be unfair on future applicants for housing benefit to allow the parent of the child to continue renting from the other parent of the child and receive housing benefit simply because that has happened over a period of time up until now, when new applicants cannot. Particularly that may seem unfair if there is some suspicion that those who have received housing benefit up until now have been lucky, as it were, to "get away with it" under the old regulations.

35. I remind myself of the authorities to which we were referred and which are quoted in the judge's judgment. In O'Connor v Chief Adjudication Officer [1999] 1 FLR 1200 Auld LJ said at p. 1210:

"Irrationality is a separate ground for challenging subsidiary legislation, and is not characterised by or confined to a minister's deceit of Parliament or having otherwise acted in bad faith. That means irrationality in the Wednesbury sense. Counsel have referred to the difficult notion of 'extreme' irrationality sometimes suggested as necessary before a court can strike down subsidiary legislation subject to parliamentary scrutiny, citing …Nottinghamshire County Council v Secretary of State for the Environment [1986] AC 240, 247 [Lord Scarman] and Regina v Secretary of State for the Environment, ex parte Hammersmith and Fulham [1991] AC 521, 597 [Lord Bridge] …. It is wrong to deduce from those dicta a notion of 'extreme' irrationality. Good old Wednesbury irrationality is about as an extreme form of irrationality as there is."

36. Furthermore, as the judge correctly pointed out, it behoves this court to proceed with caution when considering "the rationality of a policy based on political, social and/or economic considerations outside its normal competence" (Auld LJ at p. 1211 citing Sir Thomas Bingham MR [1996] QB 517 at 556). Finally Auld LJ at pp. 1214-15 said:

"The fact that the general policy may produce hardship in individual cases does not make it or the subsidiary legislation implementing it irrational. More specifically, simply because there may be a powerful or sympathetic case for inclusion in the system of social security benefits for full-time students whose courses are interrupted for one reason or another short of illness, and for full inclusion in the case of illness, does not make it irrational to exclude them. See, for example R. v Social Fund Inspector, ex parte Healey (1991) 4 Admin LR 713 … Farquarson LJ, with whom Parker and Scott LJJ agreed, said, at 720 and 721:"

"As with any regulation or direction there will be cases … that are excluded from the help which as a matter of humanity they ought to have but I do not agree that the policy can be said to be irrational …

The argument is really reduced to saying that because one category of need is included there is no logical conclusion for excluding another … in my judgment this argument must fail …"

"As [Counsel] submitted, it was for the Secretary of State, under the scrutiny of Parliament, to decide who should qualify for income support and who should not. Simply because his policy may have operated harshly in individual circumstances did not make it irrational."

37. In my view the judge was right in concluding that the attack based on irrationality could not succeed.

Human rights Article 8 and Article 14

38. It is upon Articles8 and 14 of the ECHR that Mr Drabble bases the human rights challenge. In this court he accepted that Article 8 was not directly applicable but his argument was that the circumstances were within the scope of Article 8 and thus Article 14 was engaged when read together with Article 8.
39. Article 8 is in the following terms:

"Right to respect for private and family life

1. Everyone has the right to respect for his private and family life, his home and his correspondence.

2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others."

40. Article 14 is in the following terms:

"Prohibition of discrimination

The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property birth or other status."

41. Various issues arise as to whether the circumstances are within the scope of Article 8 and as to whether there is, or could be said to be, discrimination of any kind. But, this point can be dealt with shortly on the basis of an assumption that the facts do bring the matter within the scope of Article 8 and on the basis that Article 14 with Article 8 applies. That is the assumption that the judge ultimately made at paragraph 25 of his judgment.
42. I do not think it is possible to put the matter better than the judge then did at paragraph 29 of his judgment where he said:

"I have no doubt that it is appropriate to apply these principles in the present case and that, when that is done, it is abundantly clear that regulation 7(1)(d) is within the discretionary area of judgment on the part of the Secretary of State, subject to parliamentary scrutiny by the negative resolution procedure. I accept Miss Baxendale's submission that it is a legitimate and proportionate response to the matters set out in Mr Singh's witness statement to which I have referred earlier in this judgment. There is a need for an anti-abuse provision. In my judgment the fact that the provision does not embrace an exemption subject to a reverse burden of proof or a saving for existing arrangements by way of transitional provision (these being the two criticisms adumbrated by Mr Drabble) does not render the regulation in its present form disproportionate. Put another way, regulation 7(1)(d) pursues a legitimate aim and any differential treatment bears a reasonable relationship of proportionality to the aim sought to be achieved, viz the eradication of abuse. Moreover, any eviction of the claimant by Mr Noble would be, as Miss Baxendale submitted, a matter for him and not necessarily an inevitable consequence of regulation 7(1)(d). It is not without significance that, if the claimant is evicted, she would be eligible to apply for housing benefit in relation to another property with a different landlord. I am mindful of the claimant's evidence about the difficulties of finding alternative rented accommodation in Reading but I do not consider that they are such as to make an otherwise proportionate response a disproportionate one."

I too would hold that there was no validity in the attack made on the basis of the human rights points.

Principle of legality

43. The argument of Mr Drabble was that on this principle, even before the coming in to force of the Human Rights Act 1998 on 2 October 2000, Regulation 7(1)(d) was susceptible to challenge by reference to the principle of legality.
44. That principle was described by Lord Hoffman in Regina v Home Secretary ex parte Simms [2000] 2 AC 115 at 131 in the following terms:

"Parliamentary sovereignty means Parliament can, if it chooses, legislate contrary to fundamental principles of human rights. The Human Rights Act 1998 will not detract from this power. The constraints upon its exercise by Parliament are ultimately political, not legal. But the principle of legality means that Parliament must squarely confront what it is doing and accept the political cost. Fundamental rights cannot be overridden by general or ambiguous words. This is because there is too great a risk that the full implications of their unqualified meaning may have passed unnoticed in the democratic process. In the absence of express language or necessary implication to the contrary, the courts, therefore presume that even the most general words were intended to be subject to the basic rights of the individual. In this way the courts of the United Kingdom, though acknowledging the sovereignty, apply principles of constitutionality little different from those which exist in countries where the power of the legislature is expressly limited by a constitutional document."

45. Having held as I have that the attack on the basis of the human rights points was invalid, this principle would not in any event have been infringed prior to 2 October 2000. The argument of Mr Drabble was founded on the basis that there would have been a breach of the Convention and thus a breach of a fundamental right for the principle of legality to apply. I deal with this aspect simply because the judge, having correctly identified the principle of legality as a rule of construction, then went on to reason that the breadth of section 137 and Regulation 7 (1)(d) were such that as a matter of statutory construction even if there were a breach of a fundamental right the section empowered the Regulations.
46. Mr Pannick QC before us did not seek to support that approach. In my view it is not the correct approach. If there had been a breach of a fundamental right, then the general language of a section of an Act of Parliament is unlikely to empower the infringement by regulation of that fundamental right. There is however no need to go further into the matter having regard to the conclusion formed that in this instance there was no infringement of a fundamental right.

Regulation 7(1)(d) conflicts with the rights conferred by the Child Support Acts 1991 and 1995

47. The arguments in relation to this aspect were set out in the skeleton submissions of Mr Drabble and responded to in the skeleton submission of Mr Pannick. The judge deals with this aspect from paragraphs 5-9 of his judgment, and I agree with him. Putting the matter shortly, the principle on which Mr Drabble seeks to rely is exemplified by Ex parte Joint Council for the Welfare of Immigrants [1997] 1 WLR 275, is that subsidiary legislation must be drawn so as not to conflict with primary legislation. Regulation 7(1)(d) however does not defeat or affect rights conferred under the Child Support Acts 1991 and 1995. It does not force an ex-partner to maintain the "tenant". It simply provides that if a tenant is to obtain housing benefit, the landlord must be someone other than the parent of a child living with the parent/tenant, because the nature of their relationship is such that the Housing Benefit Scheme can otherwise be abused.

Conclusion

48. For the above reasons I would dismiss the appeal.

LORD JUSTICE MANTELL:

49. I agree.

LORD JUSTICE THORPE:

50. I agree that this appeal should be dismissed for the reasons given by my lord, Waller LJ. My conclusion is fortified by aspects of family law and practice that bear on this case.
51. The father's liability to maintain his son is probably not regulated by the Child Support Acts, a prior order by consent having been made: see section 4(10) of the Child Support Act 1991.
52. The consent order of 16 April 1991 was negotiated by solicitors after the creation of the tenancy, the award of housing benefit at the rate of £550 per month, and the father's acceptance of that monthly sum in lieu of the contractual rent of £650 per month. The continuation of these arrangements must have been one of the fundamental assumptions underlying the quantification of the father's weekly cash payment negotiated by solicitors and sanctioned by the court.
53. Many of Mr Drabble's submissions of prejudice or hardship to the mother following the withdrawal of housing benefit in November 1999 ignore her rights to apply for the variation of the 1991 consent order at any time. That right is vital to ensure that the recipient of child periodical payments is not prejudiced by inflationary factors, change of circumstance, or cost increases consequential upon child development. It is therefore highly unusual to see an order made for a two year old in 1991 continuing unvaried a decade later. It is no answer to say that the order remains constant because there has been no rent increase in the last decade. The contractual rent has been of little relevance once the real consideration for use and enjoyment became the amount of housing benefit awarded by the local authority. Of course it is possible that the mother suffered prejudice or hardship as a consequence of the withdrawal of housing benefit in November 1999. It is equally possible that the father has so suffered as a result of the loss of rental income. But we have a great dearth of relevant information to make such a judgment or draw such an inference. What are the respective financial circumstances of the mother and the father? What are the financial circumstances of the father of her second child and what contribution does he make (or should he be making) to the maintenance costs (including housing costs) of his daughter? Why has no application ever been made to vary the county court order? Is it perhaps because the provision of rent free accommodation after November 1999 plus £30 per week in cash is a fair assessment of the father's liability? Were there real hardship or prejudice to either parent arising out of the withdrawal of housing benefit I would have expected the mother to find another landlord or the father another tenant.