COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE SOCIAL SECURITY COMMISSIONER
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE JACOB
SIR WILLIAM ALDOUS
| Campbell & Ors
|- and -
|South Northamptonshire District Council
Secretary of State for the Department for Work and Pensions
Northampton) for the Appellants
Mr James Findlay (instructed by Kevin Lane, Head of Corporate
Services, South Northamptonshire District Council) for the First Respondent
Mr Philip Sales and Miss Marie-Eleni Demetriou (instructed by the Solicitor for
the Department for Work and Pensions) for the Second Respondent
Hearing date : 26 February 2004
Crown Copyright ©
Jacob LJ :
"(1) A person who is liable to make payments in respect of a dwelling shall be treated as if he were not so liable where
(a) the tenancy or other agreement pursuant to which he occupies the dwelling is not on a commercial basis .
(1A) in determining whether a tenancy or other agreement pursuant to which a person occupies a dwelling is not on a commercial basis regard shall be had inter alia to whether the terms upon which the person occupies the dwelling include terms which are not enforceable in law.
The ECHR Point
"Factors which tend to suggest the agreements are commercial
75. The factors which tend to suggest that the agreements are commercial are as follows:
(a) The Trust is non-charitable. The Trustees are under legal obligations to protect Trust property, to ensure that it is only used for proper purposes and to secure a proper return on Trust assets. Its finances are properly managed by Mr Farrant and are subject to detailed and rigorous financial controls.
(b) Those Conditions of Residence which deal with the Board and Lodging charge create a genuine and legally enforceable liability on the part of Community Members to make payments in respect of the occupation of Community Houses.
(c) The Trust takes reasonable measures to enforce payment of arrears of the Board and Lodging charge by former residents of Community Houses who have left.
(d) The Trust takes reasonable measures short of eviction against Community Members who are in arrears of the Board and Lodging charge but are otherwise in good standing with the Church and who wish to remain as Community Members.
Factors which tend to suggest the agreements are not commercial
76. The factors which tend to suggest that the agreements are not commercial are as follows:
(a) The Lifestyle Conditions which (inter alia) require Members to pool their income in a Common Purse, actively to pursue a particular religious lifestyle, submit to the authority of the Elders, bring up their children in a specified way and participate wholeheartedly in the activities of the Church and the communal life of the Community Houses.
(b) In the case of the Elders' Conditions of Residence, the requirements to be responsible for oversight of the religious life of the Community House, including matters of religious discipline.
(c) Full Style 3 Members are required to donate all their belongings to the Trust.
(d) The Board and Lodging charge is not set so as to maximise the Trustees' return on their investments but so as to cover costs and provide a reasonable return on capital. It is also relevant that:
i. The Board and Lodging charge is not based on the current values of the Trust's property portfolio but on its historic cost;
ii. The Board and Lodging charge is not based on the actual value of the property occupied by the payor but on figures calculated on the value of the Trust's property portfolio as a whole;
iii. The Board and Lodging charge is not related to the size of the accommodation occupied by the payor and his or her family;
iv. As the Board and Lodging charge is based on bed-spaces, the return which the Trust receives from the Elders (who are, in effect, the Head Licensees) varies according to the number of occupiers.
(e) The Board and Lodging charge can be increased by the Trustees, on occasion with retrospective effect, without consulting or securing the prior agreement of the payor.
(f) The Elders may unilaterally change the sleeping arrangements of Community Members.
(g) The Elders' conditions of residence may be unilaterally changed by the Trustees.
(h) The procedure of merging a Common Purse which is in financial trouble with one which is not. The possibility that one group of sub-licensees of a Landlord should intervene to assist the Landlord by assuming the financial responsibilities of another group of the Landlord's sub-licensees is without any parallel in the commercial letting market.
(i) Community Members in good standing are permitted to run up arrears of Board and Lodging charge indefinitely without being evicted as long as the failure to pay the charge results from factors outside that Member's control, such as non-payment of housing benefit. Mr Farrant said in evidence that, in the long run, the Trustees stood a better chance of recovering their money by keeping the person with arrears as a Style 3 member and that since a continuing Style 3 member would already be paying all of his or her income into the Common Purse there would be no assets against which any legal judgment could be enforced. That may be so in the short or even the medium term but ultimately there would come a point when a commercial landlord would cut his or her losses and seek to replace a tenant who could not pay the ongoing charge with one who could, even at the risk of making it more difficult to recover any arrears. A commercial landlord would not have permitted the Elders of to accumulate arrears in excess of £84,000 without taking steps to terminate their licenses no matter what the reasons for the arrears may have been.
(j) When pursuing arrears, even through the courts, the Trust or the Elders do not normally make a claim for interest."
"Article 8 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 and crime, for the protection of health or morals, or for the protection of the rights and freedom of others.
Article 9 Freedom of thought, conscience and religion
1. Everyone has the right to freedom of thought, conscience and religion; this right includes freedom to change his religion or belief and freedom, either alone or in community with others and in public or private, to manifest his religion or belief, in worship, teaching, practice and observance.
2. Freedom to manifest one's religion or beliefs shall be subject only to such limitations as are prescribed by law and are necessary in a democratic society in the interests of public safety, for the protection of public order, health or morals, or for the protection of the rights and freedom of others."
"Article 14 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."
Protocol 1 Article 1 Protection of property
Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties."
(1) Was the Tribunal obliged to consider the appellants' Convention rights in drawing the inference about commerciality?
(2) Are the appellants being discriminated against?
(3) Was Art. 14 engaged?
(4) Was the discriminatory treatment imposed in furtherance of a legitimate aim?
(5) Was the discrimination proportionate to the aim?
(3) No because there is no violation of any substantive Article;
(4) There is a legitimate aim and no discriminatory treatment, and
(5) In any event if there is discrimination it is proportionate in furtherance of a legitimate aim.
Commerciality and the Convention
"44. The Court has so far considered that the right under Article 14 not to be discriminated against in the enjoyment of the rights guaranteed under the Convention is violated when States treat differently persons in analogous situations without providing an objective and reasonable justification. However, the Court considers that this is not the only facet of the prohibition of discrimination in Article 14. The right not to be discriminated against in the enjoyment of the rights guaranteed under the Convention is also violated when States without an objective and reasonable justification fail to treat differently persons whose situations are significantly different."
"47. The Court considers that, as a matter of principle, States have a legitimate interest to exclude some offenders from the profession of chartered accountant. However, the Court also considers that, unlike other convictions for serious criminal offences, a conviction for refusing on religious or philosophical grounds to wear the military uniform cannot imply any dishonesty or moral turpitude likely to undermine the offender's ability to exercise this profession. Excluding the applicant on the ground that he was an unfit person was not, therefore, justified. The Court takes note of the Government's argument that persons who refuse to serve their country must be appropriately punished. However, it also notes that the applicant did serve a prison sentence for his refusal to wear the military uniform. In these circumstances, the Court considers that imposing a further sanction on the applicant was disproportionate. It follows that the applicant's exclusion from the profession of chartered accountants did not pursue a legitimate aim. As a result, the Court finds that there existed no objective and reasonable justification for not treating the applicant differently from other persons convicted of a felony.
48. It is true that the authorities had no option under the law but to refuse to appoint the applicant a chartered accountant. However, contrary to what the Government's representative appeared to argue at the hearing, this cannot absolve the respondent State from responsibility under the Convention. The Court has never excluded that legislation may be found to be in direct breach of the Convention. In the present case the Court considers that it was the State having enacted the relevant legislation which violated the applicant's right not to be discriminated against in the enjoyment of his right under Article 9. That State did so by failing to introduce appropriate exceptions to the rule barring persons convicted of a felony from the profession of chartered accountants."
(a) the absence of a material interference with the appellants' religious practice;
(b) the proportionality of the grounds for refusal of HB;
(c) the lack of a sufficient nexus (close link) between the alleged discrimination and the refusal of HB.
No material interference
"Further, the type of communal living desired by the appellants is not incompatible with the receipt of housing benefit. In order to receive housing benefit, it is not necessarily that, as between themselves, they should abandon any of their religious beliefs, practices or discipline, or the pooling of their income and capital, or the donation of surplus income to the Church. All that is required is that they should have a normal commercial relationship with those who let or licence them to occupy their homes. Given my conclusions on the commerciality issue, this will require that the terms on which they occupy those homes should not impose those religious practices and discipline as a condition of occupation and that the properties occupied should not be let or licensed by the Church, the Trust or, possibly, the Housing Association. (In this, the position of the appellants is analogous to that of the claimant in the Tucker case who is free to rent accommodation from any landlord in the country who is willing to let it except from the father of her child). It is no part of the Statement of Faith and Practice that the communal living which is considered desirable should necessarily take place in property owned by the Church or persons and organisations connected with it."
Proportionality and insufficient nexus
"The Commission is not persuaded that visits to the priories can be considered an indispensable element of the applicant's religious worship."
"In the instant case the applicant complained in substance not of action but of a lack of action by the State. While the essential object of Article 8 is to protect the individual against arbitrary interference by the public authorities, it does not merely compel the State to abstain from such interference: in addition to this negative undertaking, there may be positive obligations inherent in effective respect for private or family life. These obligations may involve the adoption of measures designed to secure respect for private life even in the sphere of the relations of individuals between themselves (see, inter alia, X and Y v The Netherlands, cited above, § 23), Stubbings and Others v the United Kingdom, judgment of 22 October 1996, Reports 1996-IV, p. 1505, §.
The Court has held that Article 8 may impose such positive obligations on a State where there is a direct and immediate link between the measures sought by an applicant and the latter's private life (see Botta v Italy, cited above, § 34). However, Article 8 does not apply to situations concerning interpersonal relations of such broad and indeterminate scope that there can be no conceivable link between the measures the State is urged to take and an individual's private life each time an individual's everyday life is disrupted, but only in the exceptional cases where the State's failure to adopt measures interferes with that individual's right to personal development and his or her right to establish and maintain relations with other human beings and the outside world. It is incumbent on the individual concerned to demonstrate the existence of a special link between the situation complained of and the particular needs of his or her private life (see Zehnalovΰ and Zehnal v the Czech Republic (dec. no. 38621/97, ECHR 2002-V).
Even assuming that in the present case such a special link indeed exists as was accepted by the Central Appeals Tribunal -, regard must be had to the fair balance that has to be struck between the competing interests of the individual and of the community as a whole and to the wide margin of appreciation enjoyed by States in this respect in determining the steps to be taken to ensure compliance with the Convention (see Zehnalovΰ and Zehnal, cited above).
The margin of appreciation is even wider when, as in the present case, the issues involve an assessment of the priorities in the context of the allocation of limited State resources .
In view of their familiarity with the demands made on the health care system as well as with the funds available to meet those demands, the national authorities are in a better position to carry out this assessment than an international court .
In the present case the Court notes that the applicant has access to the standard of health care offered to all persons insured under the Health Insurance Act and the Exceptional Medical Expenses Act (see Nitecki v Poland (dec. no. 65653/01, 21 March 2002, unreported). It thus appears that he has been provided with an electric wheelchair with an adapted joystick. The Court by no means wishes to underestimate the difficulties encountered by the applicant and appreciates the very real improvement which a robotic arm would entail for his personal autonomy and his ability to establish and develop relationships with other human beings of his choice. Nevertheless the Court is of the opinion that in the circumstances of the present case it cannot be said that the respondent State exceeded the margin of appreciation afforded to it."
The Art 1 of Protocol 1 ("1P1") Point
"47. It seems to me, then, that the law of the Convention is settled on this point as to the scope of "possessions" for the purpose of Article 1P. The policy of the cases is, I think, that while States are in general free to grant, amend or discontinue social security benefits and to change the conditions for entitlement to them as they please without any ECHR constraint, yet where contributions are exacted as a price of entitlement the contributor should be afforded a measure of protection: it has, so to speak, cost him something to acquire the benefit."
"37. The Court also points out that it has already held that the right to emergency assistance in so far as provided for in the applicable legislation is a pecuniary right for the purposes of Article 1 of Protocol No 1. That provision is therefore applicable without it being necessary to rely solely on the link between entitlement to emergency assistance and the obligation to pay "taxes or other contributions" (see Gaygusuz, cited above, § 41). In that connection the Court considers that the fact that, in that case, the applicant had paid contributions and was thus entitled to emergency assistance (ibid., § 39) does not mean, by converse implication, that a non-contributory social benefit such as the AAH does not also give rise to a pecuniary right for the purposes of Article 1 of Protocol No 1.
38. In the instant case it was not disputed that the applicant had been registered as 80% disabled and issued with an invalidity card. His claim for an allowance for disabled adults was refused solely on the grounds that he was neither a French national nor a national of a country that had signed a reciprocity agreement in respect of the AAH.
Accordingly, the Court notes that the allowance could be awarded both to French nationals and to nationals of a country that had signed a reciprocity agreement with France to that end.
39. In the Court's view, the fact that the applicant's country of origin had not signed such an agreement, whereas the applicant had been issued with an invalidity card, resided in France, was the adopted son of a French citizen residing and working in France and, lastly, had previously been receiving the minimum welfare benefit, did not in itself justify refusing him the allowance in question. As the allowance is moreover intended for persons with a disability, the Court also refers to the recommendation of the Committee of Ministers no. R (92) 6, adopted on 9 April 1992 (see paragraph 27 above), which is aimed at the adoption of a policy and measures adapted to the needs of the persons with disabilities, and to the conclusions of the European Committee of Social Rights (see paragraph 29 above).
40. Furthermore, the Court notes that the nationality condition for the award of the allowance was abolished by the Act of 11 May 1998. The AAH has therefore been awarded without any distinction on grounds of nationality since that Act was enacted. The applicant has indeed received it since June 1998, that is immediately after the Act was passed.
41. The Court considers finally that the refusal to award the allowance to the applicant prior to June 1998 was based on criteria possession of French nationality or the nationality of a country having signed a reciprocity agreement with France in respect of the AAH which amount to a distinction for the purposes of Article 14 of the Convention.
42. Having regard to all the foregoing considerations, the Court holds that the applicant had a pecuniary right for the purposes of Article 1 of Protocol No. 1 and that Article 14 of the Convention is also applicable in the instant case."
The Ultra Vires Point
"(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
(ii) the tenancy or other agreement between them is other than on a commercial basis "
(i) A note (I think prepared by the Secretary to the Committee);
(ii) The draft amending Regulation;
(iii) A letter from the Department of 2nd September 1998 to the Secretary of the Committee;
(iv) A Departmental Note on comments received from the Local Authority Associations;
(v) Some comments made by the Local Authority Associations.
It was not given (as probably would be better practice) the unamended regulation.
"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 has 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 regulation. 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-dependents (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.
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."
"Attached at Annex A is a letter from the Department seeking the Committee's approval to make the above regulations which would simplify and clarify the Housing Benefit provisions against abuse. This would be done by providing a test to allow local authorities to decide whether a rent liability had been constructed to bring the tenant within Housing Benefit and by making such determinations easier for all involved to understand. The proposals would not alter existing policy on non-liability for rent."
"(1) A person who is liable to make payments in respect of a dwelling shall be treated as if he were not so liable where the appropriate authority is satisfied that the substance of the liability amounts to an abuse of the housing benefit scheme established under Part VII of the Social Security Contributions and Benefits Act 1992.
(1A) Without prejudice to the generality of paragraph (1), persons falling within that paragraph include any person:
(a) whose tenancy or other agreement pursuant to which he occupies the dwelling is not on a commercial basis."
"The added list is essential to avoid confusion and make the regulation "tighter" in certain cases."
"7(1B)(a) (referred to as 1A(j)) is not intended to tackle religious groups who live communally. Insofar as they seek to abuse the HB scheme by the terms of their residence, we would expect them to be caught by 1A(a) ie non-commercial arrangements."
"The new draft regulation is a clarification, not a change of direction."
Sir William Aldous:
Peter Gibson LJ: