Case Nos: CO/3011/2000 and
Neutral Citation Number:  EWHC Admin 308
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Friday 4th May 2001
THE HONOURABLE MR JUSTICE LIGHTMAN
THE QUEEN on the application of
- and -
THE CARMARTHENSHIRE COUNTY COUNCIL HOUSING BENEFIT REVIEW BOARD
THE QUEEN on the application of
(1) WESTMINSTER CITY COUNCIL
(2) WESTMINSTER CITY COUNCIL HOUSING BENEFIT REVIEW BOARD
(3) THE SECRETARY OF STATE FOR SOCIAL SECURITY
(Transcript of the Handed Down Judgment of
Smith Bernal Reporting Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
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Mr Paul Stagg (instructed by Smith Llewellyn Partnership, 18 Princess Way, Swansea, SA1 3LW for Mr Painter and by Moss Beachley Mullem & Coleman, 37 Crawford Street, London W1H 1HA for Mr Murphy)
Mr Clive Lewis (instructed by Solicitors' Department, Carmarthenshire County Council, County Hall, Carmarthen SA31 1JP for Carmarthenshire County Council)
Ms Nathalie Lieven (instructed by Office of the Solicitor, Department of Social Security, New Court, Carey Street, London WC2A 2LS for the Secretary of State)
Westminster City Council and Westminster City Council Housing Benefit Review Board did not attend and were not represented
As Approved by the Court
Crown Copyright ©
1. I have before me two applications for judicial review one by a Mr Painter against the Carmarthenshire County Borough Council and the other by a Mr Murphy against the Westminster City Council and the Westminster City Council Housing Benefit Review Board. Both applications raise issues as to the interpretation of regulation 7(1)(c)(i) of the Housing Benefit (General) Regulations 1987 ("the Regulations"). The application by Mr Murphy also raises an issue as to the validity of that regulation. This regulation bars from entitlement to housing benefit ("HB") a tenant or licensee whose liability to make a payment in respect of a dwelling is owed to his former partner and is in respect of a dwelling which he and his former partner occupied before they ceased to be partners. The question of construction is whether the bar operates where the tenant or licensee, having shared as partner the bedroom of his landlady, on cesser of the partnership moves into a separate bedroom in the same property. If the answer to the question of construction is in the affirmative, the question of validity arises, namely whether the bar in such circumstances constitutes a violation of the right of the tenant or licensee under Article 8 ("Article 8") of the European Convention on Human Rights ("the Convention") to respect for his home and private and family life. In view of the challenge to the validity of the regulation, the Secretary of State was joined as a party to the application made by Mr Murphy. Westminster City Council and Westminster City Council Housing Benefit Review Board are not represented but their position was fully covered in the submissions made to me.
2. The two applications have a similar factual background. The claimants, Mr Painter and Mr Murphy, moved as lodgers into residential accommodation (in the case of Mr Painter a two bedroomed house and in the case of Mr Murphy a three bedroomed flat) renting a bedroom and obtaining the right to use (in common with the landlady) the common parts. Both claimants formed relationships with their respective landladies. Mr Painter married Ms Rogers and Mr Murphy cohabited with Ms Sandford. In each case during the period of cohabitation they moved into their landladies' bedrooms and jointly occupied the respective house and flat with their landladies. Mr Murphy had two children with Ms Sandford, one of whom (his daughter Erin) still lives with her mother in the flat in which Mr Murphy lives. Both relationships ended, and the claimants reverted to their former status as lodgers renting the same bedroom as they had previously occupied as lodgers. Mr Painter and Ms Rogers entered into a deed of separation formalising their relationship in respect of the flat: Mr Murphy did not do so. Both claimants have lived in the flats as lodgers for a substantial period of time. They have been dependent on HB to meet their liabilities to their landladies for rent. But on their first claim after January 1999, both were refused HB on the ground that pursuant to regulation 7(1)(c)(i) of the Regulations they were deemed not to have a liability for rent. In the case of Mr Painter all the HB claimed accrued due prior to the 2nd October 2000 when the Human Rights Act 1998 ("the HRA") came into force; in the case of Mr Murphy part accrued before and part accrued after that date. It is common ground that the provisions of the HRA accordingly only apply in respect of the HB claimed by Mr Murphy after that date.
3. The HB scheme is part of the income related benefits scheme which provides a safety net for those with no or little income. Section 130(1)(a) of the Social Security Contributions and Benefits Act 1992 ("the 1992 Act") provides that as one of the conditions of entitlement to HB the claimant "is liable to make payments in respect of a dwelling in Great Britain which he occupies as his home". Section 137 of the 1992 Act provides, so far as is material, that:
"dwelling means any residential accommodation, whether or not consisting in whole or part of any building and whether or not comprising separate or self-contained premises."
Section 137(2)(i) of the 1992 Act provides that regulations may provide for the circumstances in which a person is or is not to be treated as occupying a dwelling.
4. Prior to the amendment made in 1998 regulation 7 of the Regulations read as follows:
"Circumstances in which a person is to be treated as not liable to make payments in respect of a dwelling
7. 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 a 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 of rent in respect of the same dwelling;
(c) a person who is 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;
(e) a person, except one to whom paragraph (2) applies, who is in residential accommodation."
5. Regulation 7(1)(c)(i) was introduced into regulation 7 by the Housing Benefit (General) Amendment Regulations (No 2) Regulations 1998, and amends regulation 7 so as to read as follows:
"(a) the tenancy or other agreement pursuant to which he occupies the dwelling is not on a commercial basis;
(b) his liability under the agreement is to a person who also resides in the dwelling and who is a close relative of his or of his partner;
(c) his liability under the agreement is--
(i) to his former partner and is in respect of a dwelling which he and his former partner occupied before they ceased to be partners, or
(ii) to his partner's former partner and is in respect of a dwelling which his partner and his partner's former partner occupied before they ceased to be partners;
(d) he is responsible, or his partner is responsible, for a child of the person to whom he is liable under the agreement;
(e) 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;
(f) his liability under the agreement is to a trustee of a trust of which his or his partner's child is a beneficiary;
(g) subject to paragraph (1B), before the liability was created, he was a non-dependant of someone who resided, and continues to reside, in the dwelling;
(h) he previously owned, or his partner previously owned, the dwelling in respect of which the liability arises except where he satisfies the appropriate authority that he or his partner could not have continued to occupy that dwelling without relinquishing ownership;
(i) his occupation, or his partner's occupation, of the dwelling is a condition of his or his partner's employment by the landlord;
(j) he is a member of, and is wholly maintained (disregarding any liability he may have to make payments in respect of the dwelling he occupies as his home) by, a religious order;
(k) except where paragraph (2) applies, he is in residential accommodation;
(l) in a case to which the preceding sub-paragraphs do not apply, the appropriate authority is satisfied that the liability was created to take advantage of the housing benefit scheme established under part VII of the Contributions and Benefits Act.
(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 at law.
(1B) Sub-paragraphs (e) and (g) of paragraph (1) shall not apply in a case where the person satisfied the appropriate authority that the liability was not intended to be a means of taking advantage of the housing benefit scheme."
6. The reason for this amendment has been explored in these proceedings. On the 2nd September 1998 the Secretary of State for Social Security submitted a set of the draft amending regulations to the Social Security Advisory Committee for their consideration. In the accompanying letter ("the Letter") he explained his reasons for wishing to make the amendments as follows:
"... 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 government 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 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-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 means 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 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."
7. In January 1999 the Department of Social Security issued the Housing Benefit and Council Tax Benefit Circular A1/99 ("the Circular") explaining the amendment which (inter alia) states:
"1. There are some claimants who, although liable to make payments in respect of their dwelling, are to be treated as not liable, and this basic principle is reflected in regulation 7(1). In general, this is because the arrangement under which the liability arises amounts in some way to an abuse of the HB scheme. This arises where the liability either creates or increases the claimant's entitlement to HB, when he would have been adequately accommodated without any liability. Regulation 7(1) also excludes people who are maintained by a religious order and most people in residential accommodation, although these are not instances of abuse of the HB scheme.
2. Regulation 7(1) has come under repeated scrutiny by the Courts, particularly in determining its intended effect. This regulation has now been re-drafted to make that intention clearer. It does this by extending the list of cases which clearly fall within the remit of the basic principle of the regulation, as well as stating that principle, which is that HB should not be payable where the liability has been created to take advantage of the scheme. This extended list not only identifies cases where the claimant should be treated as not liable, but also indicates the kind of case which should be considered under the basic principle.
3. Regulation 7(1) lists a number of situations where HB should be refused. Any claimants in these categories are to be treated as not liable for their housing costs. The LA is not required to show that the liability has been created to take advantage of the HB scheme in these cases.
6. Although the regulation contains a list of people to be treated as not liable, that does not mean that someone who is not in one of the specific groups should automatically be treated as liable. There will still be cases which take advantage of the HB scheme which are not specifically mentioned in the list. Such cases should be excluded under the provisions of regulation 7(1)(l) (see paragraphs 27 to 30 below).
Landlord is the tenant's ex-partner
14. Where a couple, whether married or unmarried, separate and the one remaining in the joint home (or his partner if he has one) is charged `rent' by the one who has left, then he is to be treated as not liable for housing costs. This provision equalises the treatment for married and unmarried couples. Where the couple are married, the remaining partner is not under an obligation to make payments in order to live in the home. Note that the landlord can be the ex-partner of the claimant or of his partner.
Example: Mr Brown and Miss White live together (as man and wife) at 3 Bloom Terrace, which Mr Brown owns. They fall out and agree to separate, and Mr Brown leaves the property and rents a flat. Mr Green, Miss White's new boyfriend, joins her at 3 Bloom Terrace, and Mr Brown agrees to let him the property at a rent of £80 per week. Mr Green claims HB. Mr Green is to be treated as not liable for his housing costs under regulation 7(1)(c), because his landlord is his partner's ex-partner."
8. The reasons are further elaborated in the witness statement of Mr Andrew Carter, the responsible deputy section head of the department of Social Security:
"Regulation 7 of the Housing Benefit (General) Regulations 1987 was put in place to stop housing benefit being paid where no legal liability existed to pay rent. Such arrangements are know[n] as contrived tenancies. It is an anti-abuse measure. It sought to cover the situation where the landlord would be unlikely to bring the tenancy to an end if the rent was not paid. In other words neither the tenant nor the landlord had any intentions of enforcing the terms of the tenancy.
5. This provision was considered in R v Stratford on Avon HBRB ex p White (1998) 31 HLR 126. The judgements in this and similar cases (eg R v Sheffield HBRB ex parte Smith (1994) 93 LGR 139 and Solihull MBC v Simpson (1994) 27 HLR 41) caused considerable difficulties for the practical application of regulation 7(1) by local authorities. This was because it did not provide a clear workable test which could have been adopted by local authorities to ascertain whether the arrangement in question was contrived. It only established that there had to be the notion of abuse of the housing benefit arrangement. Neither Judge came to any conclusion as to how the notion of abuse is to be ascertained or measured in the light of the overall intention and purpose of the housing benefit scheme.
6. As a result of these problems the Secretary of State decided to introduce amendments to regulation 7(1). The purpose behind these amendments was:
-- to give local authorities a clearer test as to circumstances or relationships where rent liability will not be covered by housing benefit;
-- to remove the requirement in the particular circumstances listed for local authorities to form a judgment as to whether in general terms the arrangement was contrived: in the specified circumstances it is no longer necessary for the local authority to show that the arrangement was contrived or any aspect of the intention of the parties;
-- to make it easier for claimants to understand what test is being applies and, if they fail the test for entitlement why they failed: this will be self evident if they fall within any of the categories set out in the regulation.
7. The regulation was a response to the extreme difficulties local authorities had in obtaining evidence to determine whether arrangements had been contrived to take advantage of the housing benefit scheme. In the situations listed in regulation 7(1) the nature of the relationship between the parties can facilitate the contriving of documents and other evidence to indicate a bona fide tenancy. It is extremely difficult for the local authorities to rebut such evidence. An authority can have little or no evidence to weigh against that put forward by the Claimant and his/her landlord and yet there may be strong doubts as to the credibility and integrity of the evidence indicating entitlement. In such situations refusals to award housing benefit are vulnerable to review. The new regulation gave local authorities a firm basis on which to decline to award housing benefit in circumstances where the risk of abuse is very considerable.
15. It is my belief that regulation 7(1)(c)(i) was intended to catch those in the Claimant's position. As I have said above the regulation is an anti-abuse provision. In particular, it is intended to prevent abuse of the system where a couple have separated and one former partner charges rent to the other former partner for living in the former home. This is an inappropriate use for Housing Benefit. Even if there are two dwellings at the Claimant's address, his dwelling is part of the dwelling that was formerly shared. The guidance given in paragraph 14 of Circular HB/CTB A1/99 illustrates the typical type of case likely to be covered by the regulation - i.e. where one former partner leave the home. It does not rule out other types of case such as the one here, where both former partners continue to reside at the same address."
9. Regulation 7(1)(c)(i) focuses on the agreement between the claimant to HB and his landlord and the property for the occupation or use of which the liability to pay is incurred.
10. The first issue raised is whether Mr Painter and Mr Murphy fall within regulation 7(1)(c)(i). Mr Painter and Mr Murphy contend that the regulation only applies if the dwelling in respect of which the liability is incurred is the same as the dwelling occupied during the period of his partnership with his landlady and that the dwellings changed when the partnerships ended with the vacation of the landladies' bedrooms, for thereafter the landladies' bedrooms ceased to be part of their dwellings. The question of mixed fact and law raised is whether Mr Painter's and Mr Murphy's dwellings were the same before and after the partnerships with their landladies ended. If the answer is in the affirmative, it is common ground that the regulation bites. If however after the partnership ended they agreed to occupy different dwellings, namely only part of the dwellings previously occupied, the question of law arises whether as a matter of construction the regulation applies in that situation. For the purpose of the exercise the statutory definition of "dwelling" in section 137 of the 1992 Act provides that it means any residential occupation whether or not comprising separate or self-contained premises.
11. I turn first to the case of Mr Painter. By a Deed dated the 17th August 1993 ("the 1993 Deed") and made between (1) Ms Rogers and (2) Mr Painter, after reciting that they were married on the 4th October 1989 and their agreement to live in separate households from each other and that they were presently resident at a house purchased in the name of Ms Rogers ("the Rogers House"), the parties mutually covenanted that they each should live separately notwithstanding that they would live together under the same roof; that Ms Rogers was sole beneficial owner of the Rogers House; and that Mr Painter would pay to Ms Rogers £60 per week in advance in relation to his occupation of the Rogers House. It is clear that during the period that Ms Rogers and Mr Painter were partners, the Rogers House was the dwelling of both of them. The legal position created by the 1993 Deed upon their ceasing to be partners continued to be the same in this regard, for it is clearly stated that both of them will live separate lives under the same roof and that Mr Painter will pay £60 a week in consideration of the right to continue to occupy the Rogers House. Under the 1993 Deed his liability to his partner is specifically stated to be in respect of the same dwelling namely the Rogers House. The position on the ground (so far as this is relevant) is entirely consistent with this state of affairs. It is true that informal arrangements have been made between Ms Rogers and Mr Painter providing that each of them shall occupy separate bedrooms and that so long as this arrangement remains in force each shall respect the right of the other to the privacy of the other's bedroom. But such an arrangement cannot in my view affect the factual or legal position that each of them is occupying the Rogers House as their residential accommodation. Such an arrangement may be made in the case where partners live together (as opposed to separately) for all other purposes. Such an arrangement may be made between e.g. parents and children: in each case there is (at any rate in any ordinary case) a single shared residential accommodation. This, as it seems to me, accords with the approach adopted in Neal v. Del Soto  KB 144 where the Court of Appeal held that a letting of two of a number of rooms in a property together with joint use with the landlord of the kitchen, bathroom, lavatory and conservatory was not a letting of the two rooms as a separate dwelling, but a sharing of the property; and the decision of the House of Lords in AG Securities v. Vaughan  1 AC 417 that four separate agreements independent of each other granting to each of four occupants the exclusive right to use a four bedroom flat in common with others granted the like right conferred upon each occupant a licence to share the flat. The fact that a set or rooms in which a tenant does not sleep may not be a dwelling (see Wimbush v. Libulia  2 KB 564 at 569) does not mean that a tenant's dwelling is confined to the room in a set of rooms which he does sleep and does not extend to other rooms in which others sleep.
12. I turn to the position of Mr Murphy. In his case there is no such deed or other written agreement between Mr Murphy and his landlady. But in my judgment an agreement to like effect is to be inferred from the facts stated, and accordingly under his implied agreement with his landlady he is also liable to pay in respect of the same dwelling which he and his former partner occupied before they ceased to be partners.
13. If I am wrong in either case and the area of the dwelling is smaller after the cesser of the relationship on the basis that there is excluded their landlady's bedroom, the legal position is unchanged and the regulation continues to bite. For upon its true construction (as was submitted by Ms Lieven, counsel for the Secretary of State) it is sufficient that the dwelling occupied by the claimant after the relationship ended formed part of or was subsumed within the space of the dwelling occupied whilst the relationship lasted. For the regulation only requires that the liability is in respect of a dwelling which he and his former partner previously occupied: the dwelling does not have to be the same: it is only necessary that it was in fact occupied by the claimant and his former partner during the period of their relationship. Indeed this must be the paradigm situation at which the regulation was directed.
14. The language of the regulation is clear and unambiguous. I do not think that for the purpose of construction any reference is appropriate to the Letter or Circular. Nor can I see any scope for adopting any alternative construction displacing the bar on entitlement to HB by reference to the common law principles of construction applicable to secure conformity to the Convention. Because for reasons I set out later this construction involves no lack of conformity to the Convention, the principles of construction set out in section 3 of the HRA are likewise inapplicable.
15. Mr Murphy contends that, if upon its true construction the regulation excludes him from entitlement to HB, it is ultra vires and void as from the 2nd October 2000 as incompatible with Article 14 taken together with Article 8 of the Convention. Articles 8 and 14 read as follows:
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.
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."
16. It is conceded that the refusal of HB cannot of itself constitute a breach of Article 8. That concession is rightly made because Article 8 imposes no positive obligation to provide financial assistance for the provision of housing or the protection of family life: see Petrovic v. Austria  4 BHRC 232 at p.237 (para 26). But nonetheless the same authority holds (in paragraph 27-9) that Article 14 can come into play whenever "the subject matter of the disadvantage ... constitutes one of the modalities of the exercise of a right guaranteed ... or the measures complained of are linked to the exercise of a right guaranteed". Mr Murphy submits that by the grant of HB the United Kingdom has demonstrated respect for the protection of the home and family life and that therefore it follows that Article 14 taken together with Article 8 are applicable. Like Kay J in on the application of Tucker v. Secretary of State for Social Security  EWHC Admin 260 who had to consider a like submission in respect of the provisions of regulation 7(1)(d), I am minded to accept that these Articles are engaged.
17. Mr Murphy goes on to say that the discrimination complained of is in respect of entitlement to HB and that it is against him as a tenant who has had a relationship with his landlady, the comparators being tenants who have had no such relationship and who are not barred from entitlement. The general rule is that the discrimination to fall within Article 14 has to be on the basis of status or personality. It is perhaps not immediately apparent that the existence of such a relationship is sufficient for this purpose, but no doubt the categories of prohibited grounds for discrimination are not closed. Rather than focus on the engagement of the Articles or the comparative discrimination alleged on their own, I prefer to view them together with and measured against the justification relied on. A difference in treatment will be held to be discriminatory if it has no objective and reasonable justification, and to prove such justification the Secretary of State must show that the difference in treatment pursues a legitimate aim and that there is a reasonable relationship of proportionality between the means employed and the aim sought to be realised. The aim in this case pursued by the regulation is the avoidance of the HB scheme. Mr Murphy accepts that this is a legitimate aim, but he challenges that the regulation is a proportionate response.
18. There is some confusion as to the object and effect of the regulation in the Letter. For it contains the statement that the regulation should have no effect on genuine HB claimants. That is not correct. What the regulation does is preclude abuse of the system by excluding from entitlement to HB a tenant who is in a situation or relationship where experience has proved there is the potential for abuse. The question whether there is a genuine arrangement with the landladies or any contrivance or abuse in the present case has not been investigated and does not need to be decided because it is no longer relevant. The past relationship between the applicants and their landladies disqualifies the applicants from a claim to HB in respect of payments made to their landladies for their current dwellings. There is no personal bar on Mr Murphy claiming HB if he moves elsewhere. He however complains that he should not be required to move, most particularly since such a move will disturb his existing access to and sharing a dwelling with his daughter, and his move will have to be to single bedroom accommodation where his daughter cannot stay, since his HB will be limited to the rental value of single bedroom accommodation.
19. The approach to be adopted on this application is authoritatively stated by the Court of Appeal in R v. Secretary of State for the Home Department Ex parte Isiko:
"In our judgment the position is as follows
1. Where the Court reviews a decision which is required to comply with the Convention by the Human Rights Act 1998, it does not substitute its own decision for that of the executive. It reviews the decision of the executive to see if it was permitted by law - in this instance the Human Rights Act. In performing this exercise the Court has to bear in mind that, just as individual States enjoy a margin of appreciation which permits them to respond within the law in a manner which is not uniform, so there will often be an area of discretion permitted to the executive of a country which needs to be exceeded before an action must be categorised as unlawful. In this area difficult choices may have to be made by the executive or the legislature between the rights of the individual and the needs of society. In cases involving immigration policies and the rights to family life, it will be appropriate for the courts to recognise that there is an area of judgment within which the judiciary will defer, on democratic grounds, to the considered opinion of the elected body or person whose decision is said to be incompatible- see Mahmood para 38.
2. Where, as here, a fundamental right is engaged the court will, applying the law as it was established prior to the coming into force of the Human Rights Act 1998, insist that this fact be respected by the decision maker, who is required to demonstrate either that his proposed action does not in truth interfere with the right, or if it does, that there exist considerations which may reasonably be accepted as amounting to a substantial objective justification for the interference. The graver the impact of the decision in question upon the individuals affected by it, the more substantial the justification that will be required. - Mahmood para 30.
3. This more intrusive mode of supervision will in broad terms and in most instances suffice as the beginning of a proper touchstone for review when the Convention is in play - Mahmood para 30.
4. Within the framework of the approach outlined above the court can give the due deference to the primary decision maker which Mr MacDonald accepts that it should give...."
20. Mr Murphy first argues that there is no abuse of the HB scheme or contrivance in this case: the position is exactly the same as it was before his relationship with his landlady: and accordingly it is irrational for the regulation to bar entitlement in his case. The answer is simply that the regulation adopted as the means of curbing abuse takes the form of a rule precluding claims by Mr Murphy so long as he remains a lodger in his current dwelling. His second argument is that the regulation should have been drafted to catch those who abused the system, and not those innocent of abuse such as himself. The answer is that the Secretary of State based on experience concluded that this was not practicable and indeed that was the reasoning behind adopting the regulation. Thirdly Mr Murphy argues that there was no serious difficulty under the law as it existed under the earlier regulation in interpreting the regulation or in requiring the local authority to gather evidence as to the motivation of landlord and tenant and decide whether there was an abuse. This argument is unmaintainable for a series of reasons. The authorities and literature on the subject reveal the horrendous nature of the difficulties. Indeed the supplement to the 11th edition of CPAG's Housing Benefit and Council Tax Benefit Legislation (edited by Mr Stagg) states:
"Apart from the old rent restriction rules, the `contrived tenancy' rule under regulation 7(1)(b) [as it stood prior to the amendment] has probably given rise to more judicial review litigation than any other part of the scheme."
I (like I am sure many other judges of this court) recall many occasions of those difficulties figuring in judicial review proceedings. Crucially the Secretary of State was amply aware of the difficulties and the need for remedial action. Fourthly he argues that it would have been sufficient for the remedial action to take the form of a provision reversing the burden of proof of abuse and placing on the claimant the burden of proving that there was no abuse. But this would not have solved the problems of construction and of requiring the local authority and court to delve into the question in each case whether there was an abuse. Fifthly he argued it was disproportionate to require tenants who have had an affair with their landlady, as a condition of obtaining HB, to change landlords, most particularly in a case such as the present where the tenant is merely resuming his previous role of lodger. But again the risk of abuse springs from the relationship of landlord and tenant between two persons who were previously partners. Sixthly he argued that the bar is most particularly objectionable in a case such as the present when the refusal of HB means that Mr Murphy must move away, not merely from his present home, but from the home of his daughter who is living with her mother. This again is merely a consequence of the need to prevent the occasion arising of abuse. It is open to Mr Murphy to move anywhere else and from there maintain his relationship with his daughter.
21. In short, applying the test laid down in Isiko, I must recognise the need of the Secretary of State to make a difficult choice on a pressing social problem between allowing a scheme to continue which was the occasion for abuse and occasioned the most serious practical difficulties for local authorities and the courts and tribunals or adopt a new scheme which should effectively preclude many (if not all) of the occasions for abuse at the cost of requiring claimants on occasion, as a condition of entitlement, to change their landlords or avoid particular landlords. The choice made by the Secretary of State was one which he was clearly entitled to adopt, most particularly in the absence of availability of any equally effective alternative measure to curb abuse. After anxious scrutiny I have concluded that I should defer to this decision. I find that there is no breach of Articles 8 and 14. I am confirmed in reaching this conclusion by the fact that Kay J in Tucker reached a conclusion to like effect in respect of regulation 1(d), which was introduced at the same time as the regulation now under consideration.
MR JUSTICE LIGHTMAN: For the reasons set out in the judgment which I have handed down, I dismiss both these applications.
MR MEREDITH PICKFORD: My Lord, Carmarthenshire County Council asks for an order for costs against the claimant, determination to be postponed until such time as the court thinks fit.
MR JUSTICE LIGHTMAN: So you are asking for costs, but subject to the normal legal aid limitation? There can be no complaint about that, can there?
MISS MORTIMER: My Lord, no.
MR JUSTICE LIGHTMAN: With costs, subject to legal aid limitation on recovery. I do not remember what the exact formula is.
MISS OLLEY: The Secretary of State makes no application for costs.
MR JUSTICE LIGHTMAN: You are making an application for costs?
MISS OLLEY: None, my Lord.
MR JUSTICE LIGHTMAN: You are not or you are?
MISS OLLEY: The Secretary of State is not.
MR JUSTICE LIGHTMAN: No. So I will say costs, the usual form, and I will say no order as to the Secretary of State's costs. Thank you very much.
MISS MORTIMER: My Lord, I am asking for permission to appeal this morning. I believe you have the draft grounds for appeal in the bundle in front of you. I am unable to elaborate on those, as you will appreciate.
MR JUSTICE LIGHTMAN: What is the position of the defendants on the application for leave to appeal?
MR MEREDITH PICKFORD: In so far as Carmarthenshire is concerned, the only point which arose in that case was the point of construction of the Regulations and your Lordship has determined in relation to those Regulations that the language is clear and unambiguous. We say, therefore, it is not an appropriate case in which to grant leave to appeal.
MISS OLLEY: My Lord, as far as the Secretary of State is concerned, with regard to permission to appeal on the domestic law points, clearly we resist that application. As regards the Convention point, my Lord, the Secretary of State does not resist leave, it is left in the hands of the court. However, if your Lordship is minded to grant permission then I would like to make further submissions.
MR JUSTICE LIGHTMAN: Just help me, the only matter that concerns me on the Convention point is that, as I understand it, in the other action permission to appeal on validity was given was it, or not?
MISS OLLEY: Is your Lordship referring to the case of Tucker?
MR JUSTICE LIGHTMAN: Yes, on the validity point?
MISS OLLEY: Yes, my Lord.
MR JUSTICE LIGHTMAN: Because I have been told that leave to appeal has been given, but I know nothing about it.
MISS OLLEY: My Lord, that case is proceeding, as we heard, in the Court of Appeal, and the Secretary of State's position is that the points will be dealt with in that case. Certainly, if your Lordship is minded to grant permission, the Secretary of State's position is that these cases should not be heard together. That is the point I would make in relation to that.
MR JUSTICE LIGHTMAN: Why should they not be heard together?
MISS OLLEY: Because, my Lord, Tucker will deal with all the points. It is being dealt with by leading counsel on both sides, one of whom is Richard Drabble QC. There is no reason why this case should not simply be stayed until the outcome of Tucker.
MR JUSTICE LIGHTMAN: Can I stand over the question of permission to appeal, to await the outcome in Tucker? Or do I have to make my decision now?
MISS OLLEY: My Lord, if you were to make the decision now that would not prevent the case from being stayed until the outcome of Tucker. It may be convenient for your Lordship to determine----
MR JUSTICE LIGHTMAN: Tucker is the validity of a different regulation though, a different provision?
MISS OLLEY: May I just take instructions?
MR JUSTICE LIGHTMAN: It is 1(d), I think.
MISS OLLEY: Yes, my Lord, I am instructed that it does cover regulation 7(1)(d), a different subparagraph, but the Secretary of State feels that the matter will still be dealt with adequately in the case in the Court of Appeal and there is no reason for this case to be heard together with Tucker and Tucker will clarify the position.
MR JUSTICE LIGHTMAN: Do we know when Tucker is being heard?
MISS OLLEY: My Lord, permission has been given but an appellant's notice has not been received and the Secretary of State is not aware of when the hearing will take place.
MR JUSTICE LIGHTMAN: Yes, I think the line I shall take is that I shall not give permission to appeal and I leave it to the applicant, Mr Murphy in particular. I make it quite clear, I certainly on no basis would consider giving permission to appeal on the question of the construction. On the question of validity the only reason I have any anxiety is that permission to appeal seems to have been given in the matter of Tucker, but I think the right course is for me to refuse permission to appeal and then the Court of Appeal can make up its own mind whether to give permission and, if so, whether this matter on the question of validity should be heard at the same time as Tucker. Thank you very much for your help. So I will put down permission to appeal refused.
MISS MORTIMER: My Lord, may I just clarify one point? Mr Stagg sent in draft orders, can I just clarify that those orders are going to be put into effect as they are.
MR JUSTICE LIGHTMAN: The draft orders are agreed, are they?
MISS OLLEY: They are, my Lord.
MR MEREDITH PICKFORD: Yes.
MR JUSTICE LIGHTMAN: Yes. The order in terms of the minute of order, with the addition of this permission to appeal point, and I cannot remember whether it includes the provision as to costs.
MISS MORTIMER: Yes, it does.
MR JUSTICE LIGHTMAN: So it will be order in terms of minute of order. Thank you all for your help.