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Chief Adjudication Officer v. Bate [1996] UKSSCSC CIS_787_1991 (16 May 1996)

R(IS) 12/96

(Chief Adjudication Officer and Anor. v. Bate)

Mr. R. A. Sanders CIS/787/1991

HL (Lord Goff, Lord Jauncey, Lord Browne-Wilkinson,

Lord Slynn and Lord Hoffman)

Anti-test case rule - whether the only decisions whose reversal brings the rule into operation are those made consistently with a binding authority - whether the rule has effect on subsequent decisions of Commissioners or the courts

Severe disability premium - meaning of the term "resides with" in the definition of "non dependant" - meaning of the term "jointly occupies" in the exception from the definition

Miss Bate was a single woman with learning difficulties who lived with her parents in a house owned by them. She was in receipt of supplementary benefit until 1988 when this was converted to income support. In calculating her entitlement the adjudication officer decided that she did not satisfy the qualifying conditions for severe disability premium set out in paragraph 13(2)(a)(ii) of the Income Support (General) Regulations 1987 because her parents were non-dependants who resided with her.

In May 1990 a Commissioner made decisions in two cases (Trotman/Crompton) involving claimants who lived with their parents without being joint owners with them. He held that the parents were persons who jointly occupied the claimant's dwelling and so fell within the exception from the definition of non-dependant in regulation 3(2)(c) of the Income Support (General) Regulations 1987. The term "jointly occupies" merely meant that the occupiers enjoyed equality of access and use of the premises.

Miss Bate considered that this rule applied to her case and so in August 1990 applied for a review of her entitlement. The adjudication officer refused to review on the grounds that the "anti-test case rule" set out in sections 104(7) and (8) of the Social Security Act 1975 applied. The Trotman/Crompton decision was a "relevant determination" and so Miss Bate's entitlement for any period prior to May 1990 had to be determined as if the Commissioner had found the decision of the adjudicating authority under appeal in Trotman/Crompton not to be erroneous in law. Miss Bate appealed to a social security appeal tribunal who in November 1990 allowed her appeal.

The adjudication officer appealed to a Commissioner. The arguments before the Commissioner were concerned solely with the interpretation of the anti-test case rule. The claimant contended that the only decisions of an adjudicating authority whose reversal would bring the rule into operation were those made consistently with a binding authority. In a decision of 13 January 1993, Mr. Commissioner Sanders rejected this interpretation and allowed the appeal, substituting his own decision that Miss Bate was not entitled to the severe disability premium.

Miss Bate appealed to the Court of Appeal. In argument before the Court, both parties advanced fresh contentions regarding both the effect of the anti-test case rule and the qualifying conditions for severe disability premium. In its decision of 30 November 1994, the Court (Glidewell, Mann and Millett LJJ) held that: (1) the anti-test case rule had no effect on subsequent decisions made by Commissioners or the Courts because the rule only covered how "a question arising on the review" should be dealt with. In a case such as the present a Commissioner or the Court was not conducting a review but rather dealing with an appeal from a refusal to review; (2) the phrase "jointly occupies" in regulation 3(2)(c) of the General Regulations connoted that the occupation of the premises by each of the persons concerned was based on the same legal right; (3) Miss Bate's parents were not her non-dependants as defined in regulation 3(1) of the General Regulations because they did not reside with her. A person who was not a householder could be said to reside with the householder but the reverse was not the case. The Court therefore allowed the appealed. The adjudication officer appealed to the House of Lords.

Held, allowing the appeal, that:

the "anti-test case rule", set out in sections 104(7) and (8) of the Social Security Act 1975, had effect on subsequent determinations made by Commissioners or the Courts. The contrary was not implied by the use of the term "question arising on the review" in section 104(8). If the adjudication process is commenced by an application for review, the subsequent stages of reconsideration at each level are part of the same process and this remains one of review, irrespective of whether the application for review is accepted or rejected (page 8);

there was nothing in the wording of the legislation to limit the application of the anti test case rule to cases where the decision of the adjudicating authority referred to in section 104(7) of the Social Security Act 1975 was one made consistently with a binding authority (page 8);

the term "resides with" in regulation 3(1) of the Income Support (General) Regulations 1987 meant no more than that the claimant and the other person live in the same residence or dwelling. The phrase applied both where the household is that of the claimant and where it is that of the other person. Who has the ownership or tenancy of the property was irrelevant for the purpose of deciding whether a person resides with the claimant (page 11);

the term "jointly occupies" in regulation 3(2)(c) of the Income Support (General) Regulations 1987 did not apply where there was merely co-residence of the claimant and the other person. It is a technical expression which connotes that the persons concerned have a common legal relationship either with a third party or an item of property. The decision of the Court of Appeal to the same effect in Fulwood v. Chesterfield BC [1993] 92 LGR 160, interpreting a similarly worded provision in the housing benefit regulations, approved (page 12).

The decision of the Court of Appeal was set aside and the decision of the Commissioner that Miss Bate was not entitled to severe disability premium was restored.

DECISION OF THE SOCIAL SECURITY COMMISSIONER

My decision is that the decision of the social security appeal tribunal dated 20 November 1990 is erroneous in law and I set it aside. As it is appropriate for me to do so I give, subject to paragraph 10 below, the decision the tribunal should have given which is that the decision awarding income support to the claimant as at 11 April 1988 does not fall to be revised on a review under section 104(lA) of the Social Security Act 1975 so as to entitle her to a severe disability premium under regulation 17(1)(d) and paragraph 13 of Schedule 2 to the Income Support (General) Regulations 1987 ("the General Regulations").

The claimant is a single woman now in her late twenties who lives with her parents. She is mentally handicapped and her mother acts for her in relation to social security matters. Income related benefit and attendance allowance have been in payment for many years. When income support replaced supplementary benefit on 11 April 1988 an award of income support was made, as at that date, on the basis that the claimant was entitled to the personal allowance for a person aged under 25 and to a disability premium under paragraph 12 of Schedule 2 to which persons in receipt of attendance allowance are entitled. On 14 August 1990 a written request was made on behalf of the claimant that the decision awarding income support to her should be reviewed and revised on the ground that it was erroneous in law; the contention was to the effect that on a proper construction of the relevant provisions she should have been awarded the higher severe disability premium to which she now made claim as from the date of the original award. An adjudication officer refused to carry out a review because, he said, of the effect of subsections (7) and (8) of section 104 of the 1975 Act which had been introduced into that Act by amendment as from 13 July 1990. The claimant appealed against that decision. The tribunal who considered various points of construction of the provisions in question then produced a decision which satisfied neither the claimant nor the adjudication officer. Contrary to what their reasons as recorded suggested, they said that the claimant was not entitled to a severe disability premium prior to 9 October 1989 but was entitled thereafter notwithstanding that the condition of entitlement had, by amendment of a crucial definition in the General Regulations (which came into force on that date), become more difficult to satisfy. The adjudication officer now appeals against the tribunal's decision. I held an oral hearing of the appeal. The adjudication officer was first represented by Mr. N. Butt of the Solicitor's Office, Departments of Health and Social Security and then, following an adjournment, by Mr. R. McManus of Counsel. The claimant was first represented by Mr. K. Farrow of Warrington Community Law Centre and then by Mr. M. Rowland of Counsel.

Before turning to what became the crucial issue in this appeal I must refer to sub-paragraphs 13(1) and (2) of Schedule 2 to the General Regulations which (as in force at 11 April 1988) provide, so far as relevant to the issues in this case, that:

"13.- (1) The condition is that the claimant is a severely disabled person.

(2) For the purposes of sub-paragraph (1), a claimant shall be treated as being a severely disabled person if, and only if-

(a) in the case of a single claimant or a lone parent-

(i) he is in receipt of attendance allowance, and

(ii) subject to sub-paragraph (3), he has no non-dependants aged 18 or over residing with him, and

(iii) an invalid care allowance under section 37 of the Social Security Act is not in payment to anyone in respect of caring for him;"

The claimant has all along satisfied paragraph 13(2)(a)(i) and (iii) but, at least when the award of income support was made, was thought not to satisfy paragraph 13(2) (a)(ii). Now the key to that provision is to be found in regulation 3 of the General Regulations which defines "non-dependant". It is enough I think for present purposes if I reproduce only paragraphs (1) and (2)(c) of this lengthy and difficult provision which, as in force at 11 April 1988, provided as follows:

"(3) - (1) In these Regulations, "non-dependant" means any person except someone to whom paragraph (2) applies, who normally resides with a claimant.

(2) This paragraph applies to-

....

(c) a person who jointly occupies the claimant's dwelling;"

Now, as I have said, the claimant has all along lived with her parents in their home, but the view was taken and not challenged that because of the effect of regulation 3(2)(c) she was not to be treated as a severely disabled person having regard to the restriction imposed by paragraph 13(2)(a)(ii) of Schedule 2. In CIS/180/1989 (which has, in fact wrongly, become known as "the Crompton case") a meaning was given to the words "jointly occupies the claimant's dwelling" in regulation 3(2)(c) which allowed the claimant in that case, contrary to what had previously been accepted to be the case, to satisfy the condition imposed by paragraph 13(2)(a)(ii) of the schedule. The decision in the Crompton case was given on 17 May 1990 and it was no doubt the knowledge of that decision which prompted the claimant, or at any rate her advisors, to ask for a review as she did on 14 August 1990, on the basis of the Crompton case the claimant, as everyone accepts, would satisfy the condition of being a severely disabled person as imposed by paragraph 13(1) of the schedule. The request for the review no doubt had regard to section 104(lA) of the Social Security Act 1975 (inserted by para. 3 of Schedule 8 to the Health and Social Services and Social Security Adjudications Act 1983 with effect from 23 April 1984) and which provided that:

"(lA) Any decision of an adjudication officer may ... be reviewed, upon the ground that it was erroneous in point of law, by an adjudication officer or, on a reference from an adjudication officer, by a social security appeal tribunal."

And, after Crompton, subsections 104(7) and (8) had been inserted (by para. 7 of Schedule 6 to the Social Security Act 1990 with effect from 13 July 1990); these subsections provided that:

"(7) Subsection (8) below applies in any case where-

(a) on the determination, whenever made, of a Commissioner or the court (the "relevant determination"), a decision made by an adjudicating authority is or was found to have been erroneous in point of law, and

(b) in consequence of that determination, any other decision-

(i) which was made before the date of that determination, and

(ii) which is referable to a claim made or treated as made by any person for any benefit,

falls (or would, apart from subsection (8) below, fall) to be revised on a review carried out under subsection (lA) above after the coming into force of this subsection.

(8) Where this subsection applies, any question arising on the review referred to in subsection (7)(b) above, or on any subsequent review of a decision which is referable to the same claim, as to any person's entitlement to, or right to payment of, any benefit-

(a) in respect of any period before the date of the relevant determination, or

(b) in the case of widow's payment, in respect of a death occurring before that date,

shall be determined as if the decision referred to in subsection (7)(a) above had been found by the Commissioner or court in question not to have been erroneous in point of law."

I should add that subsections 104 (7) and (8) are now to be found in section 69 of the Social Security Administration Act 1992. The adjudication officer's decision in this case was issued on 31 August 1990 and, as I have said, relied on section 104(7) and (8) as defeating what would otherwise have been the claimant's entitlement to have her benefit position reviewed and revised as from 11 April 1988. It is the meaning and effect of those provisions which have to be determined in this appeal. But before coming to that I must mention the case of Foster awaiting judgment in the House of Lords. The issue in that case is whether paragraph 13(2)(a)(ii) of the General Regulations is ultra vires. Judgment as I say is awaited but because the outcome may affect the entitlement of this claimant and indeed many thousands of others to a severe disability premium I am giving this decision, which relates only to the effect of section 104(7) and (8) of the 1975 Act, by way of interim decision; I will give my final decision on entitlement after the outcome of Foster in the House of Lords is known. I should say that Mr. Rowland accepts that unless the claimant in this case is assisted by whatever is decided on vires in Foster she cannot succeed in relation to the period commencing 9 October 1989. Furthermore as the Crompton case concerns only the construction of the statutory provisions relating to the period up to 8 October 1989, the section 104(7) and (8) point can be relevant in this case only to that first period. With that background I turn to subsections (7) and (8) which of course, whatever their effect, have application in relation to reviews of all decisions concerning benefit entitlement.

I have set out subsections (7) and (8) of section 104 above. It is also necessary to refer to subsection (10) and in particular to the definition of "adjudicating authority" and "the court" in subsection (10)(a) which, for the purpose of the provisions in question, is given the same meaning as in section 165D (which contains provisions similar to those in subsections (7) and (8) but in relation to claims rather than reviews, and which also came into operation on 13 July 1990). Subsection (10) provides that:

"(10) For the purposes of subsections (7) to (9) above-

(a) "adjudicating authority" and "the court" have the same meaning as they have in section 165D below;

(b) any reference to-

(i) a person's entitlement to benefit, or

(ii) a decision which is referable to a claim,

shall be construed in accordance with subsection (5) of that section; and

(c) the date of the relevant determination shall, in prescribed cases, be determined in accordance with any regulations made under subsection (6) of that section."

In section 165D(4) the relevant definitions are as follows:

"(4) In this section-

"adjudicating authority" means-

(a) an adjudication officer, the Attendance Allowance Board, a social security appeal tribunal or a medical appeal tribunal;

(b) any of the following former bodies or officers, that is to say, the National Assistance Board, the Supplementary Benefits Commission, a benefit officer, an insurance officer or a supplement officer; or

(c) any of the officers who, or tribunals or other bodies which, in Northern Ireland correspond to those mentioned in paragraph (a) or (b) above;

"the court" means the High Court, the Court of Appeal, the Court of Session the High Court or Court of Appeal in Northern Ireland, the House of Lords or the Court of Justice of the European Community;"

With all those provisions in mind I turn to the submissions. Mr. McManus contends that section 104(8) prevents a reviewing body from giving retrospective effect to a decision of the Commissioner or the Court when that decision has reinterpreted the law. Accordingly, in the present case, the claimant's request for a review, in relation to the period before the Crompton case (which of course dealt only with the meaning of the statutory provisions as in force from 11 April 1988 to 8 October 1989) must be determined in effect on the pretence that in Crompton the Commissioner had decided that "jointly occupies" in regulation 3(2)(c) of the General Regulations meant what "the adjudicating authority" previously thought those words meant. Now Mr. Rowland does not, as I understand it, challenge that, on a literal construction of subsection (8), Mr. McManus' submission is correct but, he says, that that construction would or could lead to such absurd results that the literal meaning of the words could not have been intended and should not have effect. He therefore, and adopting the language employed in Statutory Interpretation by Francis Bennion (2 ed., pgs. 333 to 338), submits that the words in question must be given a "strained construction" so as to avoid at least some of the absurdities or impracticalities which flow from the literal construction. On the literal construction the adjudication officer conducting a review must apply the error made by the adjudicating authority whose decision was found to be erroneous in law in the relevant determination. But, asks Mr. Rowland, if for example there were a number of Commissioners' decisions which were all consistent with each other but which had all held tribunals to have erred in different respects, which error is to be applied? Again, on the literal construction, adjudication officers have deliberately to misapply the law because a tribunal in another case fell into error. And one then asks whether section 104(8) applies at all where for example a tribunal applies a view of the law which, on appeal by the adjudication officer, is confirmed by the Commissioner. It was after all mere chance that Crompton was decided on a claimant's appeal there were a number of tribunals who, before Crompton, had taken the same view of the law as the Commissioner eventually did in Crompton. Those cases came before the Commissioner by way of appeals by the adjudication officer and the appeals did not succeed. These are the sorts of problems which led Mr. Rowland to his strained construction which, he says, requires that the words in subsection (8) "shall be determined as if the decision referred to in subsection (7) above had been found by the Commissioner or court in question not to have been erroneous in point of law" should be read as "shall be determined as if the decision referred to in subsection (7) (a) above had not been found by the Commissioner or court in question to have been erroneous in point of law". With that transposition of the word "not" Mr. Rowland submitted that section 104(8) has effect only where a decision on a claim has been made consistently with binding authority, for example of a Commissioner, which has subsequently been overruled. So, in the present case, there having been no binding authority as to the meaning of "jointly occupies" prior to the decision in Crompton that decision does not, so to speak, activate subsection (8). Now Mr. Rowland readily conceded that even if his strained construction was to be preferred and if, which Mr. McManus challenged, it produced the result which was claimed for it, there were still difficulties as to how the provision would operate in various circumstances. For my part I am puzzled as to what would happen on the so-called strained construction where one Commissioner differs from another. If in Crompton a Commissioner had taken a different view from that of a Commissioner in an earlier decision, which is the "binding" authority so far as an adjudication officer is concerned when he is dealing with a request for a review? And in any event why in principle should the outcome in any particular case be made to depend on the chance of there having been previous binding authority? And, furthermore, on that basis, an adjudication officer would still be in the position, in relation to a request for review made after the "re-interpretation", of having to misapply the law.

I now turn to a point which so far I have refrained from emphasising. Subsection (8) uses the words "... as if the decision referred to in subsection (7)(a) above had been found by the Commissioner or court in question not to have been erroneous in point of law". The "decision" referred to is of course that of the "adjudicating authority" which, as I have said, is defined in section 165D(4)(a) as meaning "an adjudication officer, the Attendance Allowance Board, a social security appeal tribunal or a medical appeal tribunal". So where "the relevant determination" is that of the Commissioner one might naturally suppose, by reference to that definition, that "had been found by the Commissioner ..." refers to the decision of the social security appeal tribunal; strictly speaking that would appear to be the only decision of an adjudicating authority that a Commissioner finds to be erroneous in law. But where for example "the relevant determination" is that of the court it is more difficult to see how the definition of adjudicating authority operates. The court does not, one might have thought, find the decision of any of the adjudicating authorities named in the definition to be erroneous in law. Now if "the decision ... found ..." in the case of an appeal to the Commissioner is taken to be the tribunal's decision, it would appear to follow that the provision operates only in relation to a Commissioner's decision on a claimant's appeal; if an adjudication officer unsuccessfully appeals against a tribunal's decision in favour of a claimant then the Commissioner has not found the tribunal's decision to be erroneous in law. That would seem to be an unacceptably haphazard outcome. One wonders then whether "found" is used in a much broader sense i.e. in the sense that, at least indirectly, when a Commissioner makes a decision which, in the result, is to the contrary of the original adjudication officer's decision in the case then the Commissioner has "found" that adjudication officer's decision to be erroneous in law. It is interesting to note that in the Social Security Administration Act 1992, which is the consolidation of the procedural and administrative content of the earlier social security legislation including the 1975 Act. The relevant part of the definition of "adjudicating authority", in sections 68(4) and 69 has subtly changed. That definition of "adjudicating authority", in section 68(4), is:

"(a) an adjudication officer or, where the original decision was given on a reference under section 21(2) or 25(1) above, a social security appeal tribunal, a disability appeal tribunal or a medical appeal tribunal;"

Under section 21(2) an adjudication officer may, instead of deciding a claim or question himself, refer it to a tribunal for their decision and, under section 25(1), the same applies in the case of a review. It would therefore appear quite plainly to be the case, under the 1992 Act that the words "... a decision made by an adjudicating authority is or was found to have been erroneous in point of law" must be taken in the very broad sense that a Commissioner or court indirectly finds an adjudication officer's decision to be erroneous in law. If the words are not to be read in that way the substantive provision in the 1992 Act would never have any application. I will return to this point shortly.

As I have said, Mr. Rowland contended that a literal interpretation of section 104(8) led to absurd results and therefore that such an interpretation could not be sustained. Mr. McManus responded that if there was any question that the words should be given some exceptional meaning then, as an aid to construction, by virtue of the recent judgment in the House of Lords in Pepper (Her Majesty's Inspector of Taxes) v. Hart (judgment: 26 November 1992) one was permitted to look at Hansard or at least at the statements of Ministers so as ascertain what the legislation was intended to achieve. Having done so both Mr. McManus and Mr. Rowland contended that their construction was reinforced. I think they also both agreed that the Ministerial statements, so far as they related to the point now in issue, were not always easy to follow; that was particularly the case where the statements were made in reply to questions as the replies did not always appear to be directed to the same point as the question. What is however apparent is that, one way or another, the purpose was to provide a common starting date for reviewing entitlement of other claimants in the light of what was referred to as a "reinterpretation" of the law in a particular case.

Whichever view is taken of the effect of section 104(8) one seems to be left with what might be thought to be anomalies and difficulties, some of which I have referred to. There are others. If the Commissioner's decision is appealed by the Chief Adjudication Officer to the Court of Appeal and the appeal is dismissed which is the relevant determination? And which is the relevant determination where the Court of Appeal allows the appeal against the Commissioner's decision but the House of Lords in effect restores that decision? Then it is said that it is difficult if not impossible to apply section 104(8) where the Commissioner finds the tribunal's decision to be erroneous in law and the adjudication officer and the tribunal and the Commissioner all have different reasons for their decision, or the Commissioner finds the tribunal's decision to be erroneous in law in more than one respect; in such cases what law is to be applied when it is pretended that the Commissioner decided that the tribunal's decision was not erroneous in law?

I have come to the conclusion that some of these difficulties are real and some are not. It seems to me, leaving aside the difficulties, that the words in question are directed at producing the outcome that claimants in other cases are not to benefit retrospectively from a decision of a Commissioner or Court which overturns the view of the law taken by the adjudicating authority in the particular case; although other claimants will have the future benefit of the authoritative decision there is a common starting date for arrears in all cases namely the date of the relevant determination. And I think it must be that "found" is used in a very broad sense so that what is found by the Commissioner or Court to be erroneous in law is, indirectly, the original adjudication officer's decision. Otherwise, as I have said, the provision and particularly the consolidated provisions would have no application or such a haphazard application as to make no sense at all. One might have been tempted to conclude that with all the difficulties the provision simply has no effective meaning but I do not think that such a conclusion is justified. If "found" is treated in that broad non-technical sense some of the difficulties disappear. Other claimants are dealt with, in relation to arrears, as if what the adjudication officer decided in the case in question, no matter what the reasons were and no matter what reasons the tribunal or the Commissioner gave, was correct. So that the request for a review in the present case has to be dealt with as if the adjudication officer in the Crompton case had rightly decided that Mr. Crompton was not entitled to a severe disability premium and on the basis that the adjudication officer's decision on that point was not erroneous in law. I reach that conclusion without regard to the amended definition of "adjudicating authority" in the 1992 Act. But if that were to be taken into account (and on the basis that one is entitled at least to start from the premise that, being a consolidation, the 1992 Act could not materially change the law), the amended provision is in its effect consistent with the provision which it consolidated. Read in the way I suggest the application of section 104(8) will not vary, as it otherwise would, depending on whether the authoritative decision was given on a claimant's or adjudication officer's appeal. And again, if section 104(8) has the meaning and effect that I have attributed to it inconsistent decisions of Commissioners will not present a problem; the position will be that claimants will not retrospectively have the benefit of a favourable Commissioner's decision in another case. What of the Commissioner's decision that is overturned by the Court of Appeal and in effect reinstated by the House of Lords? In such a case what is the common starting date for arrears? That of course does not arise in this case and I have no need now to deal with that problem.

It follows from what I have said that I reject Mr. Rowland's "strained" interpretation of the provisions in question and see no justification for transposing the word "not" in the way he suggests; furthermore I am far from sure that even if that were justified the effect would be as he has contended.

The outcome with regard to the application of section 104(8) in this case is that the claimant is not entitled to a severe disability premium for the period 11 April 1988 to 8 October 1989. Nor, for the other reasons to which I have referred, would she be entitled after that last date unless she is assisted by Foster. I will therefore defer my decision in relation to this second period until after the outcome in Foster is known and, as appropriate, the parties have had the opportunity of making further submissions as to its effect.

Date: 13 January 1993 (signed) Mr. R. A. Sanders

Commissioner

The claimant appealed to the Court of Appeal and subsequently to the House of Lords. The decision of the House of Lords follows.

DECISION OF THE HOUSE OF LORDS

Mr. S. Richards and Mr. J. R. McManus (instructed by the Solicitor to the Department of Social Security, New Court, London WC2) appeared on behalf of the Appellants.

Mr. D. Pannick QC and Miss B. Harris (instructed by Miss P. Wood, Child Poverty Action Group, London EC1) appeared on behalf of the Respondent.

LORD GOFF OF CHIEVELEY

My Lords

I have had the advantage of reading in draft the speech of my noble and learned friend Lord Slynn of Hadley and for the reasons he gives I too would allow the appeal.

LORD JAUNCEY OF TULLICHETTLE

My Lords

I have had the advantage of reading in draft the speech of my noble and learned friend Lord Slynn of Hadley and for the reasons he gives I too would allow the appeal.

LORD BROWNE-WILKINSON

My Lords

I have had the advantage of reading in draft the speech of my noble and learned friend Lord Slynn of Hadley and for the reasons he gives I too would allow the appeal.

LORD SLYNN OF HADLEY

My Lords

This case concerns the entitlement of Miss Bate, the respondent to this appeal, to an allowance as a severely disabled person which it is common ground that she is.

The appeal raises two distinct issues, one as to the interpretation of section 104 of the Social Security Act 1975 as amended in 1983, 1986 and 1990 (now sections 25(2) and 69(1) and (2) of the Social Security Administration Act 1992); the other as to the meaning of regulation 3 of the Income Support (General) Regulations 1987, SI 1987 No. 1967 which were made pursuant to the Social Security Act 1986.

As a somewhat discouraging introduction to the case, it is to be recalled that Glidewell LJ in the Court of Appeal said:

"Even for this legislation, they [subsections (7) and (8) of the Act of 1975] are particularly obscure in their meaning. It is no wonder in my view that an experienced appeal tribunal has formed a different view of the proper meaning of these provisions from that formed by the Commissioner. I comment, not merely in relation to these provisions, but to the regulations which we have to consider in relation to the second issue, that it is deplorable that legislation which affects some of the most disadvantaged people in society should be couched in language which is so difficult for even a lawyer trained and practising in this field to understand."

Whether in the event your Lordships agree wholly with that view it is underlined in the Court of Appeal by the fact that Millett LJ (with whom in the result, Glidewell and Mann LJJ agreed) found that the construction of the statute adopted by the Commissioner "is not only unwarranted by the wording of [subsection (8)], but is unacceptable in its effect and capricious in its application."

The Social Security Act 1986 provided for the payment of "income support" in place of "supplementary benefit" and section 22(3) (now section 135(5) of the Social Security Contributions and Benefits Act of 1992) provided that:

"in relation to income support and housing benefit the applicable amount for a severely disabled person shall include an amount in respect of his being a severely disabled person."

The "applicable amount" for the purpose of calculating the benefit was to be prescribed by regulations. Income support and the severe disability premium ("the premium") became payable with effect from 11 April 1988. Miss Bate received income support from that date but initially was not paid the premium which she had claimed.

According to the agreed statement of facts "At all material times she lived with her parents in a house owned by them (i.e. the parents)." Following a Commissioner's decision on 17 May 1990 that two other claimants in a similar position to Miss Bate (Miss Trotman and Miss Crompton who also lived with their parents without being joint owners of the property with their parents) were entitled to the allowance, Miss Bate applied for a review of the award of income support without the premium. The adjudication officer decided that the earlier decision should not be reviewed; a social security tribunal on 20 November 1990 reviewed the initial decision and awarded the premium from 9 October 1989; on 13 January 1993 the Commissioner allowed the adjudication officer's appeal against the decision of the tribunal and held that Miss Bate was not entitled to the premium. The Court of Appeal allowed Miss Bate's appeal.

Whether there was and is jurisdiction to review the initial decision to award Miss Bate income support without the premium in the light of the decision in Trotman and Crompton is the first issue in this appeal and depends on the correct interpretation of section 104 of the Act of 1975 as amended in particular by paragraph 7(1) of Schedule 6 to the Social Security Act 1990. By section 104(1) of the Act of 1975:

"Any decision under this Act of an adjudication officer, a social security appeal tribunal or a Commissioner may be reviewed at any time by an adjudication officer or, on a reference by an adjudication officer, by a social security appeal tribunal."

Such a review may take place where the decision was given in ignorance of, or was based on a mistake as to, some material fact or where there has been a relevant change of circumstances: by subsection (1A):

"Any decision of an adjudication officer may be reviewed, upon the ground that it was erroneous in point of law, by an adjudication officer or, on a reference from an adjudication officer, by a social security appeal tribunal."

Subsection (1) is not relied on here but it is said that on the basis of the decision in Trotman and Crompton the adjudication officer's initial decision in 1988 in Miss Bate's case was erroneous in law. Accordingly if subsection (1A) had stood alone Miss Bate was entitled to have that initial decision in her case reviewed.

Subsections 104(7) and (8) as introduced by the Act of 1990, however, provided:

"(7) Subsection (8) below applies in any case where-

(a) on the determination, whenever made, of a Commissioner or the Court (the 'relevant determination'), a decision made by an adjudicating authority is or was found to have been erroneous in point of law, and

(b) in consequence of that determination, any other decision-

(i) which was made before the date of that determination, and

(ii) which is referable to a claim made or treated as made by any person for any benefit, falls (or would, apart from subsection (8) below, fall) to be revised on a review carried out under subsection (1A) above after the coming into force of this subsection.

(8) Where this subsection applies, any question arising on the review referred to in subsection (7)(b) above, or on any subsequent review of a decision which is referable to the same claim, as to any person's entitlement to, or right to payment of, any benefit-

(a) in respect of any period before the date of the relevant determination, or

(b) in the case of widow's payment, in respect of a death occurring before that date,

shall be determined as if the decision referred to in subsection (7)(a) above had been found by the Commissioner or Court in question not to have been erroneous in point of law".

By subsection (10) "adjudicating authority" and "the court" have the same meaning as in section 165D of the Act of 1975. Subsection (4) of the latter section provides that "adjudicating authority" means "(a) an adjudication officer, the Attendance Allowance Board, a social security appeal tribunal or a medical appeal tribunal." "The Court" means so far as England and Wales are concerned the High Court, the Court of Appeal, the House of Lords or the Court of Justice of the European Community.

The social security Commissioner appointed pursuant to section 97 of the Act of 1975 is not in either category though an appeal to him is provided by section 101 of the Act of 1975.

The respondent accepts that where a decision is taken by a Commissioner or by a Court that the decision of the adjudicating authority is wrong in law, the assumption is to be made in other cases (contrary to the fact) that the adjudicating authority's decision was correct in law. It follows that, so far as the first two levels in the hierarchy are concerned, decisions cannot be re-opened because of a subsequent decision that they were wrong, because by statute they are to be taken as being right. It is said, however, that this does not affect the power of the Commissioner or of a court to set aside earlier decisions when they have been shown to be wrong. Such a result is said to flow from the language of the section and from the fact that the appellate bodies, the Commissioner and the courts, are not part of the review process; it is also said to be inherent in the power of the higher court to make sure that the law is observed. If there is ambiguity in the language it is said that section 104(7) and (8) should be given the narrowest construction so as to ensure that claimants can have the social security benefit to which they are on a proper construction of the legislation entitled. Alternatively it is said by the respondent that the use of the words "found to have been erroneous in point of law" make it clear that the provisions of section 104(7) and (8) are only to apply where a Commissioner or a Court has reversed a previous decision which was binding on the adjudicating authority. Until such a decision was taken the adjudicating authority could not have known that its decision was erroneous in point of law or dealt with such an error since he was bound by higher authority. It is only when the adjudicating authority has followed previous wrong but binding decisions that public funds should be protected from claims being re-opened. Here Trotman and Crompton did not overrule any previously binding authority so that section 104(7) and (8) do not apply.

The Court of Appeal accepted that section 104(7) and (8) had no application to the decision of the court or the Commissioner on the issues of law arising out of the review sought by Miss Bate. The principal judgement on this pan of the case was given by Millett LJ, the other members of the court expressing agreement. It was held that section 104(7) only applies to a "question arising on the review." That is limited to review by the adjudicating officer and the social security appeal tribunal in Miss Bate's case. The Commissioner and the Court are not conducting a review in the case like the present they are dealing with matters "on an appeal from a refusal to entertain a review." Moreover the Court of Appeal held that the effect of the statutory assumption was no more than that the decisions of the adjudication officers in the earlier cases were to be treated as having been correctly determined in law and not that, by statute, the adjudicators' decisions were correct in law so that they would be binding on other Commissioners and the Court. Millett LJ said:

"In my judgment the effect of subsection (8) is that the adjudication officer in the present case was bound by the decision which he was required to assume the Commissioner had made in the earlier cases to reject the claimant's application for a review; but that even if the subsection was directed to him the Commissioner was not bound to do so. Moreover, there is nothing in the subsection to preclude this Court from reaching its own conclusion on the meaning of paragraph 3(2)(c) of the regulations, whatever the Commissioner in the earlier cases may have or must be assumed to have decided; or from deciding that, even if the tribunals below were bound to reject the claimant's application for a review, their decisions were wrong in law."

He went on:

"On this construction, the subsection can be given a limited and rational application. It requires an application for review under section 104(1A) to begin, in effect, at an appellate level for which leave is required, thus preventing frivolous or repeated applications."

As I see it section 104(7) applies where:

(1) in case B the Commissioner or the Court determines that an adjudicating authority has made a decision in that case which was erroneous in law

(2) in case A, decided earlier than case B, a decision has been based on the same error of law so that but for subsection (8) the earlier decision would fall to be revised on a review for error of law under subsection (lA) of section 104.

The effect of subsection (8) is that if a question arises on the review of case A as to a person's entitlement to benefit the determination of the Commissioner or the Court is taken as being that the decision was not erroneous in point of law in respect of any period before the date of the determination.

The result is that the claimant in case A cannot take advantage of the determination in case B retrospectively.

These provisions introduced a substantial change in the law. Prior to that time there had been a limit on the period in respect of which claimants could claim if they succeeded on a review of a previous decision. Thus by the Supplementary Benefits (General) Regulations 1977 a Commissioner was given by regulation 9 power to review a determination made by a Commissioner or by an appeal tribunal on the right to or the amount of pension or allowance in respect of any period on the grounds stated. Where the review arose from a mistake as to a material fact or a relevant change of circumstances of which a claimant was aware but of which he had failed to notify the Secretary of State then:

"if that review would result in an increase in the amount of pension or allowance payable, that increase should not be payable from a date earlier than 52 weeks before the week in which the claim had first furnished that information" (para. (2) of regulation 9)

By paragraph (5) of regulation 9:

"Any determination made by the Commission on a matter specified in the preceding paragraphs of this regulation may be reviewed by them if they are satisfied that it was based on a mistake as to the law but any such review shall not be made in respect of a period of more than 52 weeks before the date on which a claimant requested or the date on which the Commission made the review, whichever is the earlier."

By regulation 69 of the Social Security (Adjudication) Regulations 1986, SI 1986 No. 2218, it was provided that:

"(1) Subject to Regulation 72, a determination on a claim or question relating to income support shall not be revised on review under section 104 of the 1975 Act so as to make income support payable or to increase the amount of income support payable in respect of-

(a) any period which falls more than 12 months before the date on which the review was requested or, where no request is made, the date of review;"

The provisions allowing for decisions to be re-opened on review (which go back in one form or another to the Supplementary Benefit (General) Regulations 1966, SI 1966 No. 1065) are in a sense a concession since, contrary to the practice in the courts, they allow cases closed by, for example, the decision of an adjudication officer to be re-opened before an adjudication officer or, on a reference by him, by a social security appeal tribunal. It is, therefore, perhaps not surprising that some limit was introduced in the regulations to the retrospective effect of subsequent decisions on the law.

Subsections (7) and (8) of section 104 are on any view more radical, however tortuous the method adopted to make the change. The question, however, is whether Parliament intended to limit the effect of the subsequent determination to decisions on review, on the ground of error of law, by the adjudication officer and the social security appeal tribunal or whether this provision was intended to apply across the board.

For my part I am not persuaded by the argument that "review" is different from "appeal," the former being carried out by the adjudication officer and the tribunal, the latter by the Commissioner and the Court. It seems to me that the various stages of reconsideration at each level, including the Court, are part of one process, to see whether in the adjudication officer's decision there was an error of law. The process is still one of review whether the body further up in the hierarchy accepts or rejects the application for a review. The reference in subsection (8) to "any subsequent review of a decision which is referable to the same claim" is wide enough to include decisions by a higher jurisdiction and is not limited to a second bite at the cherry on different grounds before the same jurisdiction.

I do not accept that the object of the legislation was simply to allow review to begin at the appellate level, for which leave was required, and thereby to prevent frivolous or repeated applications, as the Court of Appeal thought. On the face of it this amendment was intended to exclude claims based on a change in the law following a subsequent decision by the statutory authorities or by the courts. Nor do I think that it is right to say, if a Commissioner decides that there has been an error of law in the case before him, that its effect on the earlier case is simply that there has been a deemed decision that the adjudication officer was right in law which can be appealed to a Court. The intention, in my view, was that that deemed decision in the earlier case is to be treated as correct at all stages of the process and that claims for benefit arising prior to the subsequent determination should be excluded. If that means adopting in case A a fiction that the decision in case B was to the opposite effect, then that on the wording of the statute must be accepted. I am satisfied that this was what was intended; if such a result is "unacceptable in its effect" it is for Parliament to change it.

I accept the submission of Mr. Richards that there is no warrant for limiting the effect of the subsection to cases where a previous decision binding on the adjudication officer has been reversed. Mr. Pannick's argument based on the word "found" I would reject, forcefully and skilfully though he argued it. "Found" is used in the general sense of declared and I decline to draw a legalistic distinction between "found" for facts and "held" for law in this particular subsection.

I do not see that this is any way interfering with the proper functioning of the judicial hierarchy, nor as preventing the proper interpretation of the law. The decision in case A above was wrong; for the future the law as declared in case B must apply; entitlement to benefit in respect of the past, however, has been excluded by Parliament.

Accordingly on this point I consider that the Commissioner was right and that the Court of Appeal were in error. I am not persuaded by Mr. Pannick that this result is incompatible with European Community Law.

Two other issues have been raised as to the respondent's entitlement to the allowance under the regulations. By paragraph 13(2) of Schedule 2 to the Income Support (General) Regulations 1987, SI 1987 No. 1967, a person is to be treated as being a severely disabled person if and only if:

"(a) in the case of a single claimant ...

(i) he is in receipt of attendance allowance, and

(ii) subject to sub-paragraph (3), he has no non-dependants aged 18 or over residing with him, and

(iii) no-one is in receipt of an invalid care allowance under section 37 of the Social Security Act in respect of caring for him; ...

(3) For the purposes of sub-paragraph (2)(a)(ii) ... no account shall be taken of-

(a) a person receiving attendance allowance; or

(b) a person to whom Regulation 3(3) (non-dependants) applies; or

(c) subject to sub-paragraph (4), a person who joins the claimant's household for the first time in order to care for the claimant or his partner and immediately before so joining the claimant or his partner was treated as a severely disabled person.

(4) Sub-paragraph (3)(c) shall apply only for the first 12 weeks following the date on which the person to whom that provision applies first joins the claimant's household."

A challenge to the vires of paragraph 13(2)(a)(ii) and (iii) was rejected by your Lordships' House in Chief Adjudication Officer v. Foster [1993] AC 754 [now also reported as R(IS) 22/93].

"Non dependant" is defined in regulation 3 of the same regulations:

"3(1) In these Regulations, 'non-dependant' means any person, except someone to whom paragraph (2) applies, who normally resides with a claimant.

(2) This paragraph applies to-

...

(c) a person who jointly occupies the claimant's dwelling

...

(4) For the purposes of this regulation a person resides with another only if they share any accommodation except a bathroom, a lavatory or a communal area.

(5) In this regulation 'communal area' means any area (other than rooms) of common access (including halls and passage ways) ...."

The effect of this is that a claimant cannot be treated as a severely disabled person if someone other than one of the persons specified in regulation 3(2) is "residing with him" since for the purposes of regulation 13(2)(a)(ii) that person is a non-dependant, the assumption apparently being that such a person is likely to assist the claimant to cope with his severe disability so that the premium to provide assistance is not required. But a person is not to be treated as a non-dependant if he "jointly occupies the claimant's dwelling."

The Court of Appeal in the present case followed an earlier decision of that Court in Fulwood v. Chesterfield BC [92] LGR 160. There it was held that in sub-paragraph 2(d) of regulation 3 of the Housing Benefit (General) Regulations 1987, SI 1987 No. 1971, the words "a person who jointly occupies the claimant's dwelling" connoted a legal relationship between joint occupiers who occupy premises by virtue of the same legal right. Accordingly the Court concluded that on the facts of the present case Miss Bate's parents were not persons who jointly occupied her dwelling for the purposes of the Income Support (General) Regulations 1987. They were, therefore, not excluded from the definition of "non-dependants" by virtue of sub-paragraph 2(c) of regulation 3. The Court of Appeal, however, concluded, on a point apparently raised for the first time by the court, that the ordinary meaning of "resides with a claimant" connoted someone who resided with a householder and was not apt to cover the situation of a householder having someone else to live in his house. Millett LJ said, at p. 88:

"In the case of severe disability premium likewise one begins with the claimant and asks whether he has anyone residing with him, i.e. sharing his accommodation with his consent. If so, he will normally be deprived of severe disability premium because if he has allowed someone to reside with him it is reasonable to expect him to have made arrangements for that person to help look after him in return for accommodation. The exceptions are all cases where that expectation would not be justified."

They did not reside with her because "both as a matter of ordinary language and in the context of the 1987 Regulations, a householder does not reside with the persons with whom he shares his accommodation; they reside with him" (p. 90). Accordingly the Court of Appeal held that Miss Bate had no non-dependants residing with her and she was entitled to the premium.

The scheme of the legislation as I see it is that if a claimant has to make arrangements to enable him to deal with his disability (not just to be housed) then the premium is payable, but that if someone is living with him and able to look after him (or who may be assumed to be likely to look after him) then the premium is not payable.

I do not see any indication in the regulation that "resides with" is to be given any meaning other than its ordinary meaning. It seems to me to mean no more than that the claimant and the other person live in the same residence or dwelling. There is no need to read into the phrase "resides with a claimant" the qualification that the household has to be that of the claimant or that the dwelling must be one in which the claimant has the legal interest and that the other person is there in a subordinate position (it is not his household) or without any legal interest before that person can reside with the claimant. Glidewell J suggested that for a husband and wife the normal phrase would be that they "live together"; that is no doubt right but the act of living together means that he lives (or resides) with her and she lives (resides) with him.

The phrase "resides with a claimant" thus includes the situation where the household in a broad sense is that of the claimant (as contemplated in para. 13(3)(c) and (4) of Schedule 2 to the regulations) and also where it is that of the other person. Who has the ownership or the tenancy, for the purpose of deciding whether a person resides with a claimant, is irrelevant. Paragraph 3(4) of the regulations gives some indication of the nature of "residing with"; it imposes the qualification that a person resides with another only if they share "any" accommodation except e.g. a bathroom. It does not limit it to the situation where the other person shares "the claimant's" sitting room.

Accordingly Miss Bate cannot show that she has no non-dependants residing with her unless her parents are persons who "jointly occupy the claimant's dwelling".

In the Trotman and Crompton cases (CIS/180/1989), the Commissioner Mr. R. A. Sanders ruled that "jointly occupies" did not have a technical meaning. On the basis that there was nothing in severe disability premium to suggest "that a claimant ought to get the premium if she and her mother jointly own the property but not if they jointly occupy their home as owner and licensee," he concluded that "the provision applies if in fact the persons in question who normally reside together jointly occupy the premises in the sense of equality of access and use as distinct from a situation where restrictions are imposed in relation to those matters."

His view was rejected by the Court of Appeal in Fulwood v. Chesterfleld BC (supra) where Hoffmann LJ, with whom the other members of the court agreed, said that "jointly occupied" did not have any "ordinary and generally understood meaning" but was "a technical expression, which connotes a legal relationship, either between two or more people and a third party, or between two or more people and an item of property."

That case concerned the Housing Benefit (General) Regulations 1987 and it is clear that different considerations may apply, since the purpose of housing benefit is to assist people who cannot afford to house themselves and who need help related to their income, whereas severe disability premium is to help with the extra cost likely to be incurred by reason of the disability.

Mr. Pannick submits that the Court of Appeal were wrong to follow Fulwood in the present case and that "a person 'jointly occupies' a dwelling with another if they live there together on terms of equal sharing, whether or not their joint occupation has specific legal characteristics." Whilst accepting that Fulwood was correct in relation to housing benefit he contends that "In the context of severe disability premium, however, it is impossible to understand why there should be a link between the legal status of the co-resident and the entitlement of the severely disabled person to extra money for living expenses."

Though like Glidewell LJ, I have sympathy with the submission it is not one which I can accept. It does not follow, I accept, that a phrase used in the Housing Benefit Regulations necessarily has the same meaning as in regulations dealing with severe disability premium. But it is not possible to ignore that these regulations were made at the same time pursuant to the same statute. What is perhaps more important is that in regulation 3 a distinction is drawn between "resides with" and "jointly occupies the claimant's dwelling" which does not apply in the Housing Benefit Regulations. I do not think it is possible to construe "jointly occupies" as meaning merely "resides in" or the same words would have been used. They were not used because the result would not have made sense since a person would have been a non-dependant for the purposes of regulation 3(1) but for exactly the same reason and solely on the same basis would have been exempted by regulation 3(2). Nor is it possible to accept that there is a distinction solely in that "jointly occupies" is intended to cover residence where there is equal access or use. If that had been intended it would have been expressed in relation to residence; again it was not done because the result would have been bizarre, if a person having precisely equal access was not a non-dependant whereas someone who had less or more than equal access was a non-dependant. I conclude therefore, as Hoffmann LJ said in Fulwood, that "jointly occupies" involves a legal relationship; it does not involve merely factual co-residence.

With effect from 2 December 1994 by virtue of the Income-related Benefits Schemes (Miscellaneous Amendments) (No. 6) Regulations 1994, SI 1994 No. 3061, following the Court of Appeal's judgment in the present case on 30 November 1994, regulation 3(1) of the 1987 Regulations was amended by adding after the words "who normally resides with a claimant" the words "or with whom a claimant normally resides" and paragraph 13(2)(a)(ii) of schedule 2 to the 1987 Regulations was consequentially amended by substituting for "residing with him" the words "normally residing with him or with whom he is normally residing". The present question was thus answered for the future but in my opinion the provision always had that meaning.

With effect from 9 October 1989, regulation 3(2)(c) of the 1987 regulations was amended by adding after the words "person who jointly occupies the claimant's dwelling" the words:

"and either is a co-owner of that dwelling with the claimant or his partner (whether or not there are other co-owners) or is liable with the claimant or his partner to make payments in respect of his occupation of the dwelling."

So once again from that date the requirement of a legal relationship between the claimant and the other person is specified.

Miss Bate's case has however to be determined as of 11 April 1988 and your Lordships have been told that a significant number of cases will turn on the interpretation of the legislation regardless of these amendments.

In my opinion the appeal should be allowed but on the terms agreed that the appellants will pay the respondent's costs of this appeal and not seek to disturb the order for costs in the Court of Appeal.

LORD HOFFMANN

My Lords

I have had the advantage of reading in draft the speech of my noble and learned friend Lord Slynn of Hadley and for the reasons he gives I too would allow the appeal.