Scottish Court of Session Decisions

Shepherd v. Dundee City Council & Ors [2002] ScotCS 290 (08 November 2002)

OUTER HOUSE, COURT OF SESSION
P982/02	OPINION OF LORD CARLOWAY in the petition of ROY SHEPHERD Petitioner; against (1) DUNDEE CITY COUNCIL; (2) DUNDEE CITY HOUSING BENEFIT REVIEW BOARD; and (3) THE RENT OFFICER, DUNDEE Respondents: for Judicial Review of decisions of the Respondents determining the level of the petitioner's Housing Benefit _______

 

 

Petitioner: Party

First and Second Respondents: L.C. Kennedy ; Haig-Scott & Co. WS

Third Respondent : Mure; R. Henderson (Solicitor to the Scottish Executive)

 

8 November 2002

1. The Legislative Background

1. Housing benefit is a means-tested system whereby rents due by certain persons are paid directly to their landlords by local authorities. The elaborate scheme governing the level of benefit is contained in The Housing Benefit (General) Regulations 1987 (SI 1987 No. 1971). Regulation 10 commences :

"(1) Subject to the following provisions of this regulation, the payments in

respect of which housing benefit is payable in the form of a rent rebate or allowance are the following periodical payments which a person is liable to make in respect of the dwelling which he occupies as his home -

(a) payments of, or by way of, rent;...."

This starting point, whereby the benefit is the equivalent of the rent paid, is rapidly overtaken by a series of modifications, qualifications and exceptions, which detract significantly from the initial simplicity. Adding to the problems of comprehension which might face an ordinary claimant in attempting to understand his entitlement by looking directly at the terms of the subordinate legislation, the applicable rules are often found in somewhat intricate amending regulations. Thus, regulation 10 (as amended) continues :

"(3) Subject to paragraph 6AA...and to paragraphs 6A .... and

regulation 11 (maximum rent)...the amount of a person's eligible rent shall be the aggregate of such payments specified in paragraph (1) as he is liable to pay less - ...

(b) where payments include service charges which are wholly or partly

ineligible, an amount in respect of the ineligible charges determined in accordance with Schedule 1 except in a case where an amount in respect of that ineligible charge has been deducted from a relevant rent as defined in regulation 11(13) and a maximum rent has been determined by reference to that relevant rent;...

(6A) In no case shall the amount of a person's eligible rent as determined in

accordance with the preceding paragraphs of this regulation exceed the amount of the maximum rent.

(6AA) ...in any case where a maximum rent has been determined there shall

be no reduction or further reduction, as the case may be, in eligible rent in accordance with paragraph (3)."

Moving ahead to see what are "ineligible charges", Schedule 1 Part I deals with service charges other than fuel by stating :

"1. The following service charges shall not be eligible to be met by

housing benefit-

(a) charges in respect of day-to-day living expenses including, in

particular, all provision of -

(i) subject to paragraph 1A meals...

(ii) laundry...

(iv) cleaning of rooms and windows..."

1A-(1) Where a charge for meals is ineligible to be met by housing

benefit under paragraph 1, the amount ineligible in respect of each week shall be the amount specified in the following provisions of this paragraph.

(2) Where the charge includes provision for at least three meals a day, the

amount shall be -

(a) for a single claimant £17.95..."

Part II deals in an equivalent way with fuel charges and provides, in the petitioner's case, for an fixed ineligible amount of £5.60 per week for heat and light.

2. In terms of regulation 12, the local authority must refer claims for housing benefit to rent officers for certain purposes. The rent officers' functions are set out in a separate set of rules appropriately named The Rent Officers (Housing Benefit Functions) (Scotland) Order 1997 (SI 1997 No, 1995 (S. 144)). Under Schedule 1 Part 1, the rent officer can determine under paragraph 1 whether a rent actually payable is "significantly higher" then that which might be expected and determine also what might be expected. He is obliged under paragraph 4 to make a determination of a "local rent" by an artificial formula whereby he divides by two the sum of the highest and lowest expected rent levels for an assured tenancy in the same locality, in a reasonable state of repair and of the same size as the actual tenancy having regard also to certain applicable criteria. One criterion is :

"4(2)(b) if the tenant does not have the use under the tenancy of the dwelling of more than one bedroom or room suitable for living in -

(ii) if the rent under the tenancy includes payments for board and

attendance and the rent officer considers that the amount fairly attributable to board and attendance is a substantial part of the rent, that a substantial part of the rent under the assured tenancy is fairly attributable to board and attendance."

Paragraph 4 goes on to provide that in ascertaining the highest and lowest rents, the rent officer excludes the amount of any rent fairly attributable to ineligible services, but this does not involve amounts for meals or fuel since these are fixed sums. The paragraph also explains that the phrase "bedroom or room suitable for living in" does not include any shared accommodation.

3. Returning to the determination of housing benefit, the still relatively straightforward formula of deducting fixed amounts for food and heat and light from the rent together with assessed figures for laundry and cleaning set out in regulation 10 and Schedule 1, is subject to additional provisions in regulation 11 of the 1987 Regulations. These set out in some detail a capping system of "maximum rent", introduced in this form in about 1996. This regulation provides :

"(1) Where an authority has applied to the rent officer for a

determination...and a rent officer has made a determination...the maximum rent shall be determined in accordance with paragraphs (2) to (12).

(4) ...where the rent officer has determined both a local reference rent and

a relevant rent, and

(a) the relevant rent is higher than the local reference rent, the maximum

rent shall be the local reference rent;...

(5) ...where the rent officer has determined a local reference rent of which he is required to notify the authority, but has not determined a relevant rent and the reckonable rent is more than the local reference rent, the maximum rent shall be the local reference rent.

(8A) ...in any case where, pursuant to regulation 10(3) (non-eligible payments), the amount of a person's otherwise eligible rent falls to be lessened by any -

(a) deduction for fuel;

(b) deduction for meals;...

the maximum rent shall be that determined in accordance with the foregoing provisions of this regulation, less the amount of any such deductions or charges..."

This regulation contains a number of categories of rent which the rent officer might have determined. These are variously defined in paragraph (13) as follows :

"'property-specific rent' means the rent determined by a rent officer under

paragraph 3(3) of Schedule 1 to the Rent Officers Order...;

'local reference rent' means the rent determined by a rent officer under

paragraph 1 of Schedule 1 to the Rent Officers Order;...

'reckonable rent' means those payments...which are eligible, or would, but for this regulation, be eligible for housing benefit plus the amount of any deduction for fuel, deduction for meals...;

'relevant rent' means

(a) in a case where the rent officer has determined both a property-

specific rent and a size related rent, whichever rent is the lower of the two, or

(b) in a case where the rent officer has determined only a property-

specific rent or a size related rent, as the case may be, that rent, less any amount of such rent which the rent officer has determined, pursuant to paragraph 6 of Schedule 1 to the Rent Officers Order, is attributed to the provision of services which are ineligible to be met by housing benefit..."

2. The Facts

4. In the years 1998-99, the petitioner was eligible for the maximum amount of housing benefit. On 1^st June 1998, he applied to the first respondents for that benefit in respect of his tenancy at 33 Albany Terrace, Dundee [Pro. 7/4]. His rent was £75 per week but this included elements for meals (full board), cleaning and laundry, and fuel (heating, hot water, lighting and cooking). A letter from his landlady, Mrs. Ladwiga Rudol, confirmed the position [Pro. 7/5]. The petitioner's tenancy involved the exclusive use of one bedroom, the remainder of the accommodation being shared. The claim was referred to the third respondent, who was the relevant rent officer, with a request that he provide figures for room only, bed and breakfast and full board [Pro. 7/7]. This request was made so that all similar applications relating to the same address might be dealt with on the same basis. The third respondent issued the following determination [Pro. 7/8]:

"Referred Rent £75.00 p. week

Rent Officer Decision

Significantly high rent determination £70.00 p. week

Value of services that Housing Benefit cannot

pay for but excluding fuel, meals and

water rates £ 4.00 p. week

Housing Benefit cannot be paid for the following services

Fuel for hot water Fuel for space/central heating

Fuel for cooking Fuel for lighting

Electric power

Meals : Full Board

Local Reference Rent

(excl. other ineligible services) £60.00

Remarks:

ABOVE VALUATION IS FOR FULL BOARD. IF PART BOARD £65.00 OR B&B £57.00 BOTH WITH A L.R.R. OF £60.00 LESS FUEL, BOARD AND £4.00 FOR INELIGIBLE SERVICES. ROOM RETENTION £35.00".

The room retention figure was said to relate to the situation where a person retained a room whilst on holiday or was otherwise unable to occupy it for a period. On 25^th June, following upon the third respondent's determination, which must have been intimated at an earlier date than that contained in the written decision, the first respondents notified the petitioner that the amount of his housing benefit would be £36.45 per week [Pro. 6/7, 7/6]. The method by which this figure was calculated was to take the £60.00 local reference rent, since it was lower than the actual rent, and then deduct the fixed £17.95 food and £5.60 fuel amounts [Pro. 6/8-9, 7/10].

5. The petitioner asked for a review of the first respondents' decision by letter

dated 2^nd July 1998 [Pro. 7/9], partly because, when he had previously lived at the same address some years earlier, he had received benefit of some £47 [Pro. 6/14] and he was surprised that the amount had decreased. Subsequent letters in July queried the various figures selected by the first and third respondents and requested a review by the second respondents [Pro. 7/11 and 13]. The first respondents replied to the petitioner's letters and attempted to explain their calculations but the case was not, at that time, referred to the second respondents in accordance with the petitioner's requests. Nothing seems to have happened for about a year and it was only in September 1999 that the first respondents did remit the claim to the second respondents [Pro. 7/22]. The second respondents met on 27^th October and 2^nd November 1999 and on or about 3^rd December 1999 confirmed the first respondents' decision [Pro. 6/1, 7/23]. The written reasons for the second respondents' view were stated as follows :

"The [petitioner] disputed only the [first respondents'] legal basis for their deduction of ineligible items from the local reference rent. The [petitioner] contended that the ineligible items should be deducted from the actual rent before regulation 11(4) was applied and maximum rent calculated accordingly.

The [first respondents] contended that regulation 12A required a rent officer determination and that as in terms of regulation 11(4) the maximum rent was the local reference rent (£60) as this was lower than the relevant rent (£66). In addition, as the material section of regulation 8A provides '(8A)...in any case where, pursuant to regulation 10(3) (non-eligible payments), the amount of a person's otherwise eligible rent falls to be lessened by any (a) deduction for fuel; (b) deduction for meals...The maximum rent shall be that determined in accordance with the foregoing provisions of the regulations, less the amount of any such deductions or charges...'

Given the terms of regulation 11(8A) read along with regulation 11(4) it appeared to the Board that the legal basis for the [first respondents'] determination, on the facts of this case, was sound. The claimant did not produce any relevant statutory authority for his contention. As the remaining figures were not contested the [second respondents] accordingly decided to confirm the [first respondents'] determination."

A letter from the petitioner dated 9^th January (presumably 2000 rather than the 1999 appearing) [Pro. 7/24], was taken as an application to the second respondents to set aside their decision. This resulted in a further decision from the second respondents dated 3^rd August 2000 refusing to set aside the earlier determination [Pro. 6/2, 7/26]. Since then, according to the petitioner, he has been attempting to persuade various solicitors to take his case forward and to obtain legal aid to do so, both without success. The lease had long since come to an end and the petitioner had only paid an extra £5-10 above the level of benefit determined. However, the petitioner carried out certain odd jobs for his landlady as compensation for this.

 

 

3. Submissions

6. The petitioner entered the dense labyrinth of the subordinate legislation and maintained that the calculation of the amount of his benefit had not been in accordance with the scheme contained in the Regulations. Basically, he said that regulation 11, and especially 11(8A), was not applicable to his case and that there should have been no deduction for meals or fuel from the local reference rent figure. This was at least partly based on the proposition that the third respondent had not determined a "relevant" rent but only a "reckonable" one. It was also based on the assertion that the local reference rent figure assessed by the third respondent did not include any element for food or fuel. On that basis, if the figures for fuel and fuel were deducted from the reckonable rent figure of £70 less the small ineligible amount of £4, this would leave a sum in respect of rent for the room only below the local reference rent figure. Therefore, it was contended, this sum ought to have been selected as the amount of eligible rent. Alternatively, the £60 local reference rent figure should have been used, without deductions, since if regulation 11 was applicable then it ought to have been 11(4) that applied. I record here also that, after the hearing, I received a letter from the petitioner dated 20^th October 2002. I considered its terms but, since ultimately they did not affect my decision in the case, I did not put the case out for any further procedure regarding the letter's content.
7. Counsel for the third respondent submitted that the third respondent had correctly followed the statutory scheme as set out in the 1997 Order, the claim having been referred to him in terms of regulation 12A of the 1987 Regulations. He had followed the terms of Schedule 1 Part I of the Order by determining that under paragraph 1 the £75 actually payable was a "significantly higher rent" and that the appropriate rent under that paragraph was £70. Under paragraph 4, he had determined the local reference rent at £60 inclusive of meals and fuel but exclusive of other ineligible services. Although the 1997 Order did not always use the same terminology as the 1987 Regulations, a "relevant" rent had determined since the third respondent had determined, in terms of paragraph 11(13) of the Regulations, a property specific rent (i.e. £70) and a figure for ineligible services (£4). The "relevant" rent was thus £66. But he had also determined the local reference rent at £60, inclusive of food and fuel, and therefore in terms of regulation 11(4) the maximum rent was £60. The history of and intention behind the capping provisions had been explored by Sedley J. in R (Saadat) v The Rent Service [2002] HLR 613 at 618-9. The petitioner had been surprised by the reduction in his benefit under the Regulations but this was the effect of the capping provisions.
8. The petitioner did not attack the third respondent's decisions of fact (see R v Sandwell Metropolitan Borough Council ex parte Wilkinson [1998] 31 HLR 22). The third respondent had done what he had been asked to do. He had heard nothing by way of criticism or complaint since then. Although it could not be said that the delay or degree of acquiescence was sufficient to bar the petitioner from taking the present proceedings, there had been an extremely long delay and if the Court were to determine that the issues required revisiting then that would be prejudicial to good administration since the decisions on local reference rent could not be made looking at matters now. Although the petition could be dismissed on that basis, counsel moved that it be dismissed against the third respondent primarily because the third respondent's decisions had not ultimately been attacked in argument.
9. Counsel for the first and second respondents maintained that, having obtained the figures from the third respondent, they had properly and accurately calculated the amount of the petitioner's benefit. The petitioner was paying £75 per week. If the prescribed sums for food and fuel were deducted then £51.45 would remain as the eligible rent under regulation 10(3). However, under regulation 10(6A) this total was reduced by the capping "maximum rent" provisions under regulation 11. The third respondent had determined a local reference rent and a relevant rent so, in this case, the lower figure of £60 would be the maximum under regulation 10(4). However, since this was also a case where there was a deduction under regulation 10(3) to reach the figure of £51.54, regulation 11(8A) applied to deduct the fixed fuel and meal sums from the £60, to leave the figure selected of £36.45. This was correct.
10. In addition, counsel maintained that there had been delay and acquiescence in bringing this petition sufficient to dismiss it on that ground. It was also said that it was inappropriate to find in the petitioner's favour because it seemed that the petitioner's landlady had not pursued him for the balance between his benefit and the rent payable (see the letter from the landlady dated 18^th October 2002, Pro. 7/27). She had only asked for an extra £5 per week or so during the currency of the lease and was content with that. The petitioner had therefore no longer any pecuniary interest in the issue, the tenancy having been relinquished some years ago.

4. Decision

(a) INTEREST, MORA, TACITURNITY AND ACQUIESCENCE

11. The petitioner's landlady appears to have decided not to take any formal proceedings against the petitioner in respect of the unpaid balance between the housing benefit, which she received from the first respondents, on the one hand and the rent due under the tenancy less the amount of any small payments or services contributed by the petitioner on the other. The fact that she has so decided does not deprive the petitioner of an interest to pursue the current petition. If his housing benefit has been wrongly determined then he has an interest to pursue that. If he succeeds then it may have to be recalculated and the landlady may benefit financially as a result, irrespective of her generosity to the petitioner. That generosity does not undermine the petitioner's interest in seeking to enforce his entitlement to benefits. He presents a real issue to the Court with potential practical consequences. In these circumstances, I would not have been inclined to dismiss the petition on the grounds presented by the first and second respondents to the effect that no live issue remained.
12. There seems to have been some delay in the first respondents referring the petitioner's claim to the second respondents and in the second respondents dealing with what they took to be an application to set aside their original decision. On the other hand, the date of the last decision under potential review here is over two years old. Although the petitioner explained that he has spent that time trying to obtain legal and financial assistance to pursue his claim, there is little to suggest that any of the respondents, especially the third respondent, were aware of this. However, the petitioner's challenge regarding the amount of his benefit is based largely on the proposition that it was miscalculated as a matter of law. Although, if successful, the petitioner's challenge would result in reduction of the decisions of the first and second respondent, there was little challenge to the third petitioner's assessments as distinct from the simple issue of whether he had, or had not, included elements for meals and fuel in calculating the local reference rent level. In these circumstances, any argument that a successful challenge by the petitioner would result in substantial prejudice to any of the respondents, especially the first and second respondents, is not a convincing one. Although the decisions might require to be revisited by the respondents, that would not involve any re-assessments of fact rendered difficult by the passage of time. Equally, although there has been a lapse of time since the last decision potentially under review, there have been no actings by the petitioner, positive or negative, which might have suggested that he had acquiesced in the decisions taken. In the absence of substantial prejudice or acts indicating acquiescence, I would not have been inclined to dismiss the petition, as I was invited to do by the first and second respondents, upon the basis of a plea of or akin to mora, taciturnity or acquiescence. Although, as all the respondents maintained, delay can be a factor in favour of refusing review, it is not one to which I would have given much weight in a case such as this where the petitioner has been trying, albeit ultimately without success, to obtain legal and financial assistance to mount the present challenge and where there would be little difficulty in re-appraising the claim in light of the Court's directions in law.

(b) SUBSTANTIVE MERITS

13. In terms of regulation 10(3), the starting point in the calculation of the petitioner's eligible rent for housing benefit purposes was the amount he was paying as rent. This was £75 per week. From that, in terms of paragraph (b) of Regulation 10(3), ineligible charges would normally fall to be deducted but that would not be the case here because these charges were already deducted under the maximum rent provisions. Furthermore, under regulation 10(6AA) the eligible rent calculated under regulation 10(3) would be subject to the cap provided by the "maximum rent" provisions if, as turned out to be the case here, that maximum rent was less than the figure calculated purely under 10(3).
14. Turning therefore to the maximum rent provisions, regulation 11(4) applies to the situation where the rent officer has determined both a relevant rent and a local reference rent. That is the position here. Although the third respondent did not use the words "relevant rent" in his written determination, the definition passages in regulation 11(13) make it clear that a relevant rent is, in the context applicable here, simply the rent actually determined by the rent officer for the property in question (the "property specific rent") less the ineligible service figure for non meals and fuel provision (1997 Order, paragraphs 6 referring back to 4(5)). The relevant rent here is then, once the significantly higher provisions are taken into account, £70 less £4, i.e. £66. These matters were all determined by the third respondent in his original decision dated 1^st July [Pro. 7/8]. In that decision he also determined a local reference rent of £60. That this figure includes an element for meals and fuel is clear from the decision letter. It says that the local reference rent is £60 per week, excluding the "other" ineligible services (i.e. the £4). It refers to the "above" valuation being for full board (i.e. the £75 and £70 sums) and that for that and any valuation involving lesser provision, such as part board or bed and breakfast, the local reference rent would be £60 per week "LESS FUEL, BOARD". I take that to mean that the £60 includes a full board and fuel element. The inclusion of the figures for full board and fuel is also what a rent officer is directed to do by paragraph 4(2)(b)(ii) of the 1997 Order. That paragraph applied to the petitioner's tenancy in that he had only one room exclusive to his use and the tenancy involved full board, payment for which must be taken as being a substantial part of the rent. In these circumstances, the relevant rent officer would be bound to assess the local reference rent on the basis that it included an element for board and relative attendance. That is what the third respondent did in this case in fixing the £60 sum. Having done so, since the relevant rent was higher than the local reference rent determined, the maximum rent became the lower £60 figure.
15. It is at this stage that regulation 11(8A) plays its part. It provides, in short, that where, as in the petitioner's case, a person's eligible rent under regulation 10(3) would fall to be reduced by the fixed meals and fuel charges, the maximum rent is to be determined under deduction of these charges. Therefore, the initial maximum of £60 is reduced by the £17.95 meals and £5.60 fuel figures, to leave a sum of only £36.45. This ultimate sum, which becomes the eligible rent for housing benefit purposes, is slightly less than half of the rent which the petitioner was obliged to pay and is less than the amount previously determined under the earlier form of the Regulations. In these circumstances, the petitioner may well have been surprised, and felt aggrieved, by the new determination. However, that determination appears to be the correct one in terms of the applicable regulations. In these circumstances, I find that the methodology and calculations of each of the respondents was correct.
16. The effect of this opinion is therefore that I will : sustain the first and second respondents' fifth and sixth pleas-in-law and the third respondent's fourth plea in law; repel the petitioner's first to sixth pleas-in-law, the first and second respondents' first to fourth pleas-in-law and the third respondents' first to third pleas-in-law; and refuse the prayer of the petition.