England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE UPPER TRIBUNAL
ADMINISTRATIVE APPEALS CHAMBER
A LLOYD-DAVIES
CH/225/2011
CH/224/2011
CH/464/2011

		C3/2013/1291 C3/2013/0809 Royal Courts of Justice Strand, London, WC2A 2LL
		05/12/2013

Lord Justice Sullivan :

Introduction

1. In order to be entitled to housing benefit, a person must be liable to make payments in respect of a dwelling which he occupies as his home. There are other pre-conditions, but they are not relevant for present purposes: see section 130(1) of the Social Security Contributions and Benefits Act 1992.
2. Regulation 7 of the Housing Benefit Regulations 2006 ("the Regulations") defines the circumstances in which a person is or is not to be treated as occupying a dwelling as his home. Temporary absence for a period not exceeding 13 weeks is treated as occupation (subject to further conditions which are not relevant): see regulation 7(13).
3. For those persons falling within regulation 7(16) the 13 week period is extended by regulation 7(17) to a period of absence not exceeding 52 weeks. The list of persons to whom regulation 7(16) applies is lengthy: it includes, in addition to hospital patients, persons on training courses, students, remand prisoners etc.
4. Each of the Appellant's suffers from a serious mental illness and was detained in hospital under section 3 of the Mental Health Act 1983 for a period in excess of 52 weeks. The local authorities responsible for payment of their housing benefit decided that, after the expiration of the 52 week period, they were no longer eligible for housing benefit.
5. The Appellants' appealed to the First-tier Tribunal (Social Security and Child Support). They contended that the 52 weeks rule unlawfully discriminated against them as mental patients, and in particular as mental patients detained under section 3 of the 1983 Act, because detained mental patients are more likely than other hospital patients to be resident in hospital for more than 52 weeks. The First-tier Tribunal found that there was indirect discrimination; and further concluded that because the discrimination was "disproportionate and unjustified" it was in breach of the Appellants' rights under Article 14 of the European Convention on Human Rights ("ECHR").
6. The Secretary of State appealed to the Upper Tribunal (Administrative Appeals Chamber) against both limbs of the First-tier Tribunal's decision. In a decision dated 19^th December 2012 Upper Tribunal Judge Lloyd-Davies allowed the Secretary of State's appeal. He concluded that the First-tier Tribunal had not addressed the "manifestly without reasonable foundation" test when considering whether the discrimination was justified (paragraph 28). Having set aside the decisions of the First-tier Tribunal, he re-made the decisions. Judge Lloyd-Davies concluded that the 52 weeks rule did indirectly discriminate against the mentally ill (paragraph 24), but he concluded that the discrimination was justified because the 52 weeks rule was not manifestly without reasonable foundation (paragraphs 30 and 34).
7. In this appeal the Appellants challenge the Upper Tribunal's decision on justification. Having heard submissions on that issue from Ms. Markus on behalf of the Appellants and Ms. Mountfield QC on behalf of the Intervener, The Equality and Human Rights Commission, we indicated to the parties that we had not been persuaded that the judge had erred in law in his decision on justification. Ms. Demetriou QC then told us that she did not wish to pursue the Secretary of State's Cross-Appeal against the judge's decision that the 52 weeks rule indirectly discriminated against the mentally ill.

The Upper Tribunal's Decision

8. Having set out the relevant legislation, and in particular the list of persons falling within regulation 7(16) of the Regulations, in paragraph 2 of his decision, the judge set out the facts in each of the three cases in some detail; summarised the conclusions reached by the First-tier Tribunal; identified the further evidence which was given on behalf of the Appellants and the Respondent before the Upper Tribunal; set out the Secretary of State's grounds of appeal to the Upper Tribunal; and recorded a list of non-contentious matters. The Appellants do not criticise these parts of the Upper Tribunal's decision.
9. Against this background, the judge considered in paragraphs 18-25 of his decision whether the 52 weeks rule was indirectly discriminatory. Having concluded that there was indirect discrimination (which is no longer in issue, see paragraph 7 above), the judge turned to the question of justification. It is common ground that, having considered the relevant authorities – Burnip v Birmingham City Council [2013] PTSR 117 [2012] EWCA Civ 629, Humphreys v Revenue and Customs Commissioners [2012] 1WLR 1545, [2012] UKSC 18, R (RJM) v Secretary of State for Work and Pensions [2009] 1 AC 311, [2008] UKHL 63, and Stec v UK [2006] 43 EHRR 1017 – the judge correctly directed himself in paragraph 28 of the decision, as follows:

"…..the question I must ask in the present case under the authority of Humphreys is whether the failure to treat the mentally ill differently from the physically ill in relation to the 52 week absence rule was "manifestly without reasonable foundation."

10. In paragraphs 29 and 30 the judge said:

"29. The arguments before me primarily concentrated on whether, if regulation 7(17) when taken with regulation 7(16)(c)(ii) was indirectly discriminatory because it did not sufficiently address the different circumstances of mental health patients, those provisions taken in isolation could be justified. I return to this issue below

30. It seems to me, however, that there is a prior issue. It is to be noted that there was no submission before me that the 52 week period of absence permitted for the categories of persons listed in regulation 7(16) was itself in general unreasonable: indeed the EHRC accepted in a written submission that it had a legitimate aim. It is also to be noted that, unlike, for example, the single bedroom rule under consideration in Burnip, the 52 weeks rule is not a rule which excludes claimants from the outset from entitlement to benefit or enhanced benefit: rather it is a rule which provides an exception, beyond the normal 13 week absence rule, for the identified categories. In my judgment, in the case of a rule which includes those who would otherwise be excluded from benefit, the state is clearly entitled to introduce a "bright-line" test and that any discrimination that might occur after the expiry of an accepted generally reasonable 52 week period could not be found to be "manifestly unreasonable". (In the context of universal credit, the shortly to be introduced working-age means-tested benefit where a "housing costs element" is to be the substitute for housing benefit, I note that draft regulations recently laid before Parliament provide that a maximum of six months absence is to be permitted for all categories of claimant without exception, save for victims of domestic violence where the maximum period is extended to 12 months."

11. The judge said that in the event that this conclusion was wrong, he would consider the parties' arguments upon the basis that the focus for the purpose of justification had to be upon regulations 7(17) and 7(16)(c)(ii) alone. Ms. Markus accepted that paragraphs 32 and 33 of the decision accurately summarised the submissions made, respectively, by the Secretary of State and the Appellants. The Secretary of State's submissions included the following propositions:

"(b) The Housing Benefit Regulations did not in general require local authority decision makers to exercise discretion. Reliance was placed upon the witness statement of Susan Donald. The local authority information management systems were not equipped to handle confidential medical information and additional administrative costs would be incurred. The proposed exception would cause decision-makers to have to make a predictive judgment at or about the expiry of the 52 week period as to when any particular patient was likely to be discharged and whether it would be desirable for any particular claimant to return to his previous accommodation and if so at what stage of the discharge….

(d) The regulations in question did not result in claimants being left without accommodation or without suitable accommodation. The availability of housing benefit after discharge enabled them to secure suitable and appropriate accommodation of their choice. Further section 117 of the 1983 Act placed a duty on primary care trusts and local social services authorities, in conjunction with voluntary agencies, to provide aftercare for patients detained under the 1983 Act. Aftercare planning, which would be carried out before the date of patient's discharge, would certainly include the ensuring the availability of suitable accommodation – reference was made to Chapter 27 of the Mental Health Act 1983 Code of Practice, published in 2008…..

(f) The introduction of an exception for the mentally ill to the rule in regulation 7(17), when taken with regulation 7(16)(c)(ii), could well have the consequence that similar challenges would be made either by long-term hospital patients with physical heath problems, or by persons in the other categories listed in regulation 7(16)(c), for example those in residential accommodation or those receiving medically approved care or convalescence. It was pointed out that women, who were more likely than men to be the object of domestic violence, might mount a parallel challenge on the grounds of sex discrimination to regulation 7(16)(c)(x)."

The Appellants' and the Commission's response included the following submissions:

"(g) The housing benefit legislation contained numerous discretionary elements, which were identified.

(h) In the light of R (Mwanza) v LB Greenwich (2010) 13 CCLR 454 there was a real risk that the authorities mentioned in section 117 of the 1983 Act would not provide accommodation themselves to meet ordinary housing needs."

12. Having summarised the parties' submissions, the judge set out his conclusions in paragraph 34 of the decision:

"34. First, the absence of any prior justification for the provisions under consideration (which had their origins in the Housing Benefit Regulations 1987) does not preclude justification at a later stage. Justification has to be considered at the time that it is called into question. Secondly, and most importantly, the claimants have, in my judgment, concentrated too narrowly on the housing benefit rules. It is clear that the housing of the long-term mentally ill after discharge is a matter which involves the relevant primary care trust, the relevant local social services authority (which in most cases will not be the relevant housing benefit authority), voluntary agencies, as well as the relevant housing department and housing benefit authority. To say that the housing benefit rules must therefore be amended (even in the light of the claimants' evidence on comparative costs) is to focus on only one element of a complicated and overall structure and is to enter into the social and economic area, where it is the state which has to decide the disposition of resources and where the courts should be most reluctant to interfere. Thirdly, although administrative problems identified on behalf of the SSWP might be overcome and although local authorities do in the housing benefit context have to make discretionary decisions (for example in relation to discretionary housing payments), the discretion which is suggested should be introduced in the present case is of a different order. These are not cases which for the most part would be "easy to recognise… and unlikely to undergo change or need regular monitoring" (see Burnip at [64]). I recognise that regulation 7(16)(d) requires a housing benefit authority to exercise some predictive judgment: the introduction of the proposed discretion, however, would require housing benefit authorities periodically to monitor the situation of a mentally ill patient prior to the expiry of the 52 week period, periodically thereafter if he has not been discharged and if he had been discharged, but not to his own home (for example into supported accommodation), to continue such monitoring. The adverse exercise of the discretion could be the potential subject of an appeal or judicial review. I consider that the problems involved are a different order to those considered in Burnip. Fourthly, as was observed in paragraph [70] of AM (Somalia) this is not a case of planned or directed discrimination and the absence of targeting is an important factor when determining whether potential discrimination is justified. Fifthly, as was observed in that case at [68] and as set out in paragraph 32(1) above, there is a real, and not fanciful, risk that other challenges to the 52 week rule would be made by persons in other categories within regulation 7(16)(c). I conclude that the brightline rule is justified and is not manifestly unreasonable. (I recognise that, in Burnip, some of the observations in AM (Somalia) were considered to be of lesser weight in the context of social security: nonetheless the two factors mentioned above were not singled out)."

Appeals from the Upper Tribunal

13. We were concerned that the Appellants' Grounds of Appeal and Skeleton Argument appeared to proceed on the basis that we should, in effect, conduct a rehearing of the justification issue. There appeared to be no recognition of the fact that the right to appeal from the Upper Tribunal to the Court of Appeal is limited to an appeal "on any point of law" arising from the Upper Tribunal's decision: see section 13(1) of the Tribunals Courts and Enforcement Act 2007.
14. The dividing line between law and fact in the context of appeals from the Tribunal system established by the 2007 Act has recently been considered by the Supreme Court in R (Jones) v First-tier Tribunal [2013] 2 WLR 1012, [2013] UKSC 19. In paragraph 16 of his judgment Lord Hope said:

"A pragmatic approach should be taken to the dividing line between law and fact, so that the expertise of tribunals at the first-tier and that of the Upper Tribunal can be used to best effect. An appeal court should not venture too readily into this area by classifying issues as issues of law which are really best left for determination by specialist appellate tribunals." See also per Lord Carnwath at paragraphs 40-47.

15. The particular expertise of the Social Security Commissioners, (now part of the Administrative Appeals Chamber of the Upper Tribunal) in the highly specialised area of social security law has been recognised by this Court in a number of cases, including Cooke v Secretary of State for Social Security (2003) 3 A11 ER 279 at paragraphs 15-17; which was recently cited with approval by Baroness Hale in paragraph 49 of her judgment in R (Cart) v Upper Tribunal [2012] 1 AC 663, [2011] UKSC 28.
16. When we raised this issue with Ms. Markus during the course of her oral submissions, she referred us to the very detailed consideration of proportionality which had been undertaken by Henderson J, with whom Maurice Kay and Hooper LJJ agreed, in the case of Burnip. While I do not suggest that the eventual decision in Burnip was wrong, I do note that in the judgments in that case there was no express consideration of the respective roles of the Upper Tribunal and the Court of Appeal in appeals on points of law under section 13(1) of the 2007 Act. Indeed, Ms. Mountfield, who appeared for the Intervener in that case, confirmed that there had been no discussion of that issue in Burnip.
17. Because this matter had not been addressed in the parties' Skeleton Arguments we gave them permission to make further submissions in writing. In her further submissions on behalf of the Appellants, with which Ms. Mountfield on behalf of the Commission agreed, Ms. Markus contended that the Upper Tribunal's conclusion on justification did not fall within its specialist competence given the "constitutional significance" of the point, and submitted that the Court of Appeal "should consider the appeal in accordance with usual approach in CPR 52.11" Both Ms. Markus and Ms. Mountfield also submitted that the Upper Tribunal had erred in allowing the Secretary of State's appeals from the First-tier Tribunal without identifying any error of law by the First-tier Tribunal. I do not accept that submission. In paragraph 28 of his decision Judge Lloyd-Davies stated, correctly, that the First-tier Tribunal had not addressed the "manifestly without reasonable foundation" test when considering the issue of justification. There was no challenge to this aspect of the Upper Tribunal's decision in the very lengthy and detailed Grounds of Appeal, and no suggestion that the Upper Tribunal had not been entitled to re-make the decisions. The Appellants' challenge was not to the fact that the decisions had been re-made by the Upper Tribunal, but to the conclusions reached by the Upper Tribunal when re-making the decisions.
18. The submission that the Court should consider the appeal in accordance with the usual approach in CPR 52.11 ignores the limitation expressly imposed by section 13(1) of the 2007 Act. I do not accept the submission that the issue of justification raised in this appeal is an issue which was outwith the expertise of the Upper Tribunal, nor do I accept the submission that the issue before the Upper Tribunal was one of "constitutional significance." It is common ground that there was no direct or targeted discrimination in these three appeals. In my judgment, the question whether the indirectly discriminatory effect of a particular rule in the benefits system because it does not distinguish between mental patients and other patients in hospital is, or is not, "manifestly without reasonable foundation" is very far from being an issue of "constitutional significance". On the contrary, it is precisely the kind of issue that is best left for evaluation and judgment by a specialist appellate tribunal with a particular expertise in the field of social security law. If, as in the present case, the First-tier Tribunal has not applied the correct legal test when deciding the issue of justification, that specialist appellate tribunal is the Administrative Appeals Chamber of the Upper Tribunal. I will therefore consider whether the Appellants have demonstrated an error of law on the part of a tribunal which has a particular expertise in the benefits system.

The Grounds of Challenge

19. Although she accepted that the judge had posed the right question in paragraph 28 of the decision, Ms. Markus submitted that he "did not ask himself what that question meant in the circumstances of the particular case": a case where a "bright line" rule had been imposed which indirectly discriminated against mental patients, and especially those detained under section 3 of the 1983 Act. As I understood her oral submissions, they came perilously close to a submission that provision for an individualised assessment was always necessary, and that a "bright line" rule could rarely, if ever, be justified. She relied on the decision of the European Court of Human Rights in Kiyutin v Russia [2011] 53 EHRR 26 in which the Court said in paragraph 72 that a matter of further concern was "the blanket and indiscriminate nature of the impugned measure… [which had not] …. left any room for an individualised assessment based on the facts of a particular case." In a similar vein she referred to this Court's reliance in AM (Somalia) v Entry Clearance Officer [2009] EWCA Civ 634, at paragraph 71, on the Home Secretary's power to exercise discretion in favour of allowing entry in particularly compassionate cases as a factor which had helped to render paragraph 281(v) of the Immigration Rules proportionate.
20. While those observations were apposite on the facts of those two cases, it is not appropriate to treat them as propositions of general application which can simply be "read across" to the rule in issue in the present case. In Kiyutin the impugned measure – refusing residence permits to persons who were HIV – positive – was fairly described as having a "blanket and indiscriminate nature." In AM (Somalia) the Immigration Rule in question was, in effect, a blanket ban on settlement by the spouse of a sponsor who was already settled in the UK if the parties were not able to maintain themselves and their dependants adequately without recourse to public funds.
21. The particular nature of the discriminatory measure and the nature and extent of the discrimination, e.g. whether it potentially affects all persons with a disability as in the case of AM (Somalia), are plainly relevant when one comes to consider the issue of justification. The judge was therefore correct to have regard (in paragraph 30 of his decision) to the wider statutory context. Regulation 7 sets out in considerable detail the circumstances in which a person is, or is not, to be treated as occupying his home. By way of a general exception to the need for there to be actual occupation, a temporary absence from home for a period not exceeding 13 weeks is treated as occupation. Regulation 17(17) then creates an exception to the 13 week limit for the benefit of a carefully defined list of persons in regulation 7(16). In these respects, regulation 7 is the antithesis of a "blanket or indiscriminate" measure. Of course, the exceptions could have been more nuanced and could have distinguished between those hospital patients who are physically ill and those who are mentally ill, but the failure to make what would have been a further exception to an exception does not mean that a "bright line" exception which is in favour of all hospital patients can sensibly be described as a measure that is of a "blanket and indiscriminate nature."
22. Paragraph 30 of the Decision contains a number of propositions. The only proposition with which Ms. Markus took issue was the judge's statement that:

"…in the case of a rule which includes those who would otherwise be excluded from benefit, the state is clearly entitled to introduce a "bright line" test and that any discrimination that might occur after the expiry of an accepted generally reasonable 52 week period could not be found to be "manifestly unreasonable."

23. Decisions of the Upper Tribunal must be read as a whole and in a common-sense way. If that is done, it is clear that when using the words "could not be found to be manifestly unreasonable", the judge was not purporting to lay down some abstract principle of general application, he was merely saying that it was relevant to consider the role of the 52 weeks rule in the wider context of regulation 7 as a whole, and in that wider context having this "bright line" rule which defines those persons who are entitled to housing benefit, as an exception to the general rule which would otherwise have excluded them from housing benefit, was not "manifestly unreasonable." The question is not whether further refinement of this particular "bright line" rule to avoid indirect discrimination would be possible, it is whether the failure to further refine what is already a long and detailed list of the beneficiaries of an exception to a general exclusionary rule is manifestly unreasonable.
24. I am not persuaded that paragraph 30 does contain an error of law, but in any event the judge went on to consider all of the submissions made by the parties on the subject of justification, focussing on regulations 7(17) and 7(16)(c)(ii) alone. In paragraph 34 of the decision the judge set out his conclusions on five matters which led him to the overall conclusion that the bright line 52 weeks rule was justified and was not manifestly unreasonable (see paragraph 12 above). The Appellants did not challenge the first and the fourth of those conclusions.
25. Ms. Markus submitted that the judge's second conclusion was erroneous in law because he failed to subject the other forms of assistance available to the long-term mentally ill after discharge to sufficiently detailed scrutiny. She submitted that the correct approach would have been to "have a fuller understanding of the function, operation and interaction of the various …..benefits which were available to the claimants": see paragraph 24 of Burnip. I do not accept that submission. The judge was entitled to conclude that in concentrating on the impact of the 52 weeks rule in isolation the Appellants were focussing on only one element of what the judge rightly described as a complicated overall structure involving many agencies. There is no error in the judge's conclusions, both that the overall structure is relevant, and that to consider the operational effectiveness of that structure in detail would be to enter the social and economic area, where it is the state which has to decide the disposition of resources, and where the courts should be most reluctant to interfere. The judge was not required, as a matter of law, to enter into a detailed analysis of the effectiveness with which primary care trusts, local social services authorities, housing authorities and voluntary agencies discharge their various statutory functions in providing after-care for the long-term mentally ill when they leave hospital.
26. Ms. Markus submitted that the judge erred in his third conclusion, that the discretion which the Appellants suggested should be introduced into the regulations would be of a "different order" to other discretions conferred in the housing benefits context, and would give rise to problems of a different order to those considered in Burnip. Whether the proposed discretion would be of a different order to other discretions conferred in the housing benefits field; whether the cases which would benefit from the exercise of the suggested discretion would be "easy to recognise…. and unlikely to undergo change or need regular monitoring"; and whether the problems involved in the exercise of the suggested discretion would be of a different order to those considered in Burnip, are not questions of law. They are pre-eminently questions of evaluative judgment for the expert appellate tribunal, which was entitled to accept the Respondent's submissions (see paragraph 11 above) on this issue.
27. The same considerations apply to the Appellants' challenge to the judge's fifth conclusion. Whether there was a real rather than a fanciful risk that carving out a discretion for the benefit of mentally ill patients would lead to other challenges to the 52 weeks rule by persons in other categories in regulation 7(16)(c), as submitted by the Respondent to the Upper Tribunal, is not a question of law, it is another example of an issue on which the Upper Tribunal, which is familiar with the practical operation of the appellate system in this field, had to form its own view. The Upper Tribunal's acceptance of the Secretary of State's submissions on this issue (see paragraph 11 above) could not be said to be irrational.

Conclusion

28. The Appellants have not identified any error of law in the judge's decision. I would therefore dismiss this appeal.

Lady Justice Sharp

29. I agree.

Lord Justice Laws

30. I agree that this appeal should be dismissed for the reasons given by Sullivan LJ. I would with respect particularly wish to emphasise what my Lord has said concerning the specialist expertise of the Administrative Appeals Chamber of the Upper Tribunal at paragraphs 13 – 18 of his judgment.