Leeves v. Chief Adjudication Officer  UKSSCSC CIS_12263_1996 (06 November 1998)
(Leeves v. Chief Adjudication Officer)
CA (Roch, Ward and Potter LJJ) CIS/12263/1996
Income - student grant repayable after abandonment of course – whether still to be taken into account as "income"
The claimant was a student in receipt of income support. He abandoned his course of studies on 27 April 1995 and was told that he would have to repay part of his student grant. He sought a review of his award of income support on the ground that he was no longer a student but the adjudication officer decided that he should continue to take the student grant into account. On 24 May 1995, the claimant's local education authority requested the repayment of the portion of his grant paid in respect of the period after the date of abandonment. On 25 September 1995, a social security appeal tribunal dismissed the claimant's appeal against the adjudication officer's decision. On a further appeal, the Commissioner reversed the tribunal's decision and held that the proportion of the grant attributable to the remainder of the term after the date of abandonment was held under a constructive trust impressed with the obligation to repay the local education authority and accordingly should not have been taken into account when assessing his income support entitlement after the date of abandonment. The Chief Adjudication Officer appealed to the Court of Appeal.
Held, allowing the appeal, that:
- the remainder of the grant payment was not impressed with a constructive trust as the local education authority did not retain a proprietary right in the monies and no fiduciary obligation had been created and, further, by the time of the abandonment of the claimant's course he had already spent the entire grant so that there was nothing remaining upon which any kind of resulting trust could operate;
- but, distinguishing R. v. Bolton Supplementary Benefits Appeal Tribunal Ex p. Fordham  1 All ER 50, monies that a claimant was under an immediate obligation to repay did not amount to "income" for the purposes of either the Social Security Contributions and Benefits Act 1992 or the Income Support (General) Regulations 1987;
- there was no immediate liability to repay a precise sum on the date the course was abandoned, but after the local education authority invoiced the claimant on 24 May 1995 there was an undisputed and immediate obligation to pay and, accordingly, the portion of the grant which related to the period from 24 May 1995 lost the character of income from that date.
The Court of Appeal remitted the case to the tribunal with a direction to consider the claimant's income support claim as at 24 May 1995.
DECISION OF THE COURT OF APPEAL
Mr. J. R. McManus (instructed by Mr. Morgan, Solicitor to the Department of Social Security, London, WC2A 2LS) appeared on behalf of the Appellant
Mr. D. Forsdick (instructed by The Child Poverty Action Group, London, EC1V 9PY) appeared on behalf of the Respondent
LORD JUSTICE POTTER:
This is an appeal by the Chief Adjudication Officer and the Secretary of State for Social Security (joined as an appellant by leave of the court) against a decision of the Social Security Commissioner dated 4 September 1997 whereby he held that, in ascertaining the entitlement to income support of the respondent (whom hereafter I shall call "the claimant"), a former student who had recently abandoned his course of study in mid-term, there should be excluded from the calculation of his current income the amount of his student grant awarded to him for the whole of that term, the claimant having received and spent the grant prior to the date on which he had abandoned his course.
That decision was reached on the basis that the regulations then applicable to the claim were the Income Support (General) Regulations 1987 ("the 1987 Regulations"). As the Commissioner pointed out in his decision, so far as any claim made after 7 April 1997 is concerned, the answer would be bound to be different by reason of an amending regulation (SI 1997 No. 65 ) operative from that date, which by Regulation 5 adds a new Paragraph (2B) to Regulation 29 of the 1987 Regulations in the following terms:
"(2B) Where grant income as defined in Chapter VIII of this part has been paid to a person who ceases to be a student before the end of the period in respect of which that income is payable and, as a consequence, the whole or part of that income falls to be repaid by that person, that income shall be taken into account over the period beginning on the date on which that income is treated as paid under Regulation 31 and ending -
(a) on the date on which repayment is made in full; or
(b) on the last date of the academic term or vacation during which that person ceased to be a student,
whichever shall first occur."
The question on this appeal is whether the effect specifically provided for under sub-paragraph (b) of that amending regulation was in any event implicit in the 1987 Regulations prior to such amendment.
At the time when his claim fell to be considered, the claimant was thirty-three years old and living in mortgaged, owner-occupied, accommodation with his two dependent children. He had worked for British Telecom until 12 August 1994 when he was made redundant. He first made a claim for income support on 18 August 1994 at a time when he did not qualify, as his capital was in excess of £8,000.
On 7 September 1994 he commenced a two year HND Computing Course at a College of Technology. He made a second, unsuccessful claim for income support on 30 September 1994. However, on 17 January 1995, having become eligible for support in relation to 100% of the interest on his mortgage, he was awarded income support at a weekly rate of £10.98.
On 24 April 1995, the first day of the summer term at his college, the claimant received from Hampshire County Council a cheque for £2011.82 as his student grant to cover the period of the summer term. As he was in financial difficulties at the time, he immediately spent the money to pay off mortgage arrears upon his home and other debts. On 27 April, he abandoned his college course for financial reasons. He asked the Benefit Agency to review his award of income support from 27 April 1995 on the grounds that he was no longer a student.
We have been told (though it does not appear from the papers) that, upon being told that the claimant had given up his course, the Hampshire County Council informed him that he would have to repay the apportioned balance of the grant. He informed the Benefit Agency in turn that he proposed to pay it back. He pursued his claim for income support, contending that, because of that liability, the grant should not be taken into account in assessing his claim for income support. On 9 May 1994 the Adjudication Officer reviewed the award. He decided:
"Mr. Leeves is no longer a student, however his income from the Local Education Department still falls to be taken into account ..."
On 11 May, the claimant appealed. His income support was suspended pending appeal.
On 24 May 1995 Hampshire County Council wrote formally terminating the claimant's student grant with effect from 27 April 1995 and stating:
"A re-assessment of your award has been made to calculate the amount due to you for the time you have attended college. This shows you have been overpaid by £1698.85 ... Please arrange for repayment to be made as soon as possible. "
An invoice for immediate payment was enclosed.
On 31 May 1995, the claimant forwarded copies of the letter and invoice to the Benefits Agency and asked that the original decision to treat the grant as income over the period post-abandonment be reviewed.
It is not clear whether any such review took place. It seems that the matter proceeded simply as an appeal from the Adjudication Officer's decision of 9 May.
On 21 October 1995 the Social Security Appeal Tribunal decided that, although the claimant was no longer a student and, although liable to repay his award, his income from the grant which he had received had to be taken into account on a proportionate basis at a weekly rate of £187.77. Accordingly he was not entitled to income support from 27 April when he abandoned his course, till 7 July 1995 when term ended, because this sum exceeded his applicable amount.
On 17 January 1996 Hampshire County Council obtained a default judgment against the claimant for £1698.85 plus costs. On 19 February 1996 he was granted leave to appeal to the Social Security Commissioners. On 19 November 1996 the hearing before a Commissioner was adjourned because of an application for leave to appeal made in a parallel case relating to the income support treatment of a grant paid to a student who had abandoned his course (CIS/5185/1995 Grundy), in which the opposite conclusion had been reached. However, that case did not proceed to a hearing and, on 4 September 1994, the Commissioner allowed the appeal of the claimant.
The Commissioner's Decision
The grounds of the Commissioner's decision were that, given the terms of the claimant's original undertaking to the Hampshire County Council as education authority, upon the abandonment of his course, the proportion of the grant attributable to the period remaining of the term for which it had been awarded was held under a constructive trust impressed with an obligation of repayment to the County Council and accordingly should not be taken into account as income when assessing the claimant's entitlement to income support after the date of abandonment. In this respect the Commissioner differed from the conclusion of another Commissioner in Grundy who had rejected a similar argument on the grounds that, following payment of the grant by the education authority, it retained no proprietary interest in the grant, so that any right to repayment from the claimant was no more than a right in personam against the recipient for repayment of a debt.
The Commissioner rejected the further argument of the Adjudication Officer that the reasoning of this court in R -v- Bolton Supplementary Appeals Tribunal ex parte Fordham  1 All ER 50 ("Bolton"), a case concerning entitlement to supplementary benefits, was conclusive against the claimant. In that case, in relation to the treatment of wages paid in advance to firemen who had come out on strike, the court held that although the wages were repayable at some unspecified future date they were nonetheless to be treated as an income resource in the hands of the claimant. The Commissioner distinguished that case upon the facts.
The Statutory Framework (As At 9 May 1995)
By s. 124(1) of the Social Security Contributions and Benefits Act 1992 ("the SSCBA") a person in Great Britain is entitled to income support if
"(b) He has no income or his income does not exceed the applicable amount."
S. 124 (4) provides that, where a person is entitled to income support,
If he has no income, the amount shall be the applicable amount
If he has income, the amount shall be the difference between his income and the applicable amount."
By s. 135(1) of the SSCBA the "applicable amount" is such amount as is prescribed. Prescribed means specified in or determined by regulations (see s. 137).
The 1987 Regulations contain the detailed provisions for the "calculation of income". The term "income" is nowhere defined in the SSCBA or the "1987 Regulations". There are general provisions contained in Chapters II to VI (Regulations 28-60) and some special rules relating to students in Chapter VIII.
Regulation 26 provides that:
"the provisions of Chapters II to VI of this Part (Income and Capital) shall have effect in relation to students and their partners subject to the modifications set out in Chapter VIII thereof (Students)."
By Regulation 28:
" ... the income of a claimant shall be calculated on a weekly basis -
(a) by determining in accordance with this Part, other than Chapter VI the weekly amount of his income .."
By Regulation 29:
"(1) Earnings derived from employment as an employed earner and income which does not consist of earnings shall be taken into account over a period determined in accordance with the following paragraphs and at a weekly amount determined in accordance with Regulation 32 (Calculation of Weekly Amount of Income).
(2) ... the period over which a payment is to be taken into account shall be-
(a) in a case where it is payable in respect of a period, a period equal to the length of that period
and that period shall begin on the date on which the payment is treated as paid under Regulation 31 (date on which income is treated as paid)."
By Regulation 31:
"1. ... a payment of income to which Regulation 29 (Calculation of Earnings Derived from Employed Earners Employment and Income other than Earnings) applies shall be treated as paid -
(a) in the case of payment which is due to be paid before the first benefit week pursuant to the claim, on the date on which it is due to be paid:
(b) in any other case, on the first day of the benefit week in which it is due to be paid or the first succeeding benefit week in which it is practicable to take it into account."
By Regulation 40:
"(1) For the purposes of Regulation 29 (Calculation of income other than earnings) the income of a claimant which does not consist of earnings to be taken into account shall .... be his gross income"
It is not necessary to quote further from Regulations 28 to 32 which deal in detail with matters of calculation and apportionment. Where a lump sum which requires to be taken into account as income is paid in respect of a period, it is apportioned over that period to determine the weekly amount of that income. There is no issue relevant to this appeal as to the arithmetical correctness of the calculation of the claimant's entitlement on the assumption that his grant fell to be taken into account.
Turning to the special provisions in relation to students contained in Chapter VIII, by Regulation 61, a "student" is defined as:
"a person aged 19 or over but under pensionable age who is attending a full time course of study at an educational establishment: and for the purposes of this definition
(a) a person who has started on such a course shall be treated as attending it throughout any period of time or vacation within it, until the last day of the course or such earlier date as he abandons it ..." (emphasis added)
and "grant income" means:
"any income by way of grant .... ."
By Regulation 62 the amount of a student's grant income to be taken into account is the whole of his grant income subject to various "disregards" set out in 62(2). These include tuition fees, travel and book expenses and like matters, none of which requires further reference for the purposes of this appeal.
The Education (Mandatory Awards) (No. 2) Regulations 1993 ("the 1993 Regulations") were applicable to the award made by Hampshire County Council to the claimant in this case. Regulation 11 provides that:
".. the duty of an authority to bestow an award shall be subject to the conditions that -
(b) the applicant gives the authority a written undertaking that, where any provisional or other payments made in pursuance of the award in respect of a year exceed (for whatever reason) the grant payable in respect of that year, he will, if called upon to do so, repay the excess amount." (emphasis added)
By Regulation 15:
" (1) An award shall terminate on the expiry of the period ordinarily required for the completion of the course ...
(2) The authority may, after consultation with the academic authority, terminate the award if they are satisfied that the student has either -
(a) abandoned the course in respect of which it is held .."
In applying for his student grant to the Hampshire County Council, the claimant was required to sign a document headed "Declaration by the Student" which stated, inter alia:
"If, for any reason whatsoever, I cease to attend my chosen course before the normal date of the termination of the award, I undertake to repay such sum as may be determined by the County Treasurer to have been paid in respect of a period after my last attendance."
The Contentions Of The Parties
Mr. Forsdick for the claimant early indicated in the course of the appeal, that he would not seek to support the Commissioner's decision in so far as it depended upon the finding that the balance of the grant payable in respect of the period following abandonment of the claimant's course was subject to a constructive trust in the hands of the claimant and for that reason could not be regarded as part of his income for the purposes of the 1987 Regulations. He correctly made that concession. At the time of the payment of the grant it was paid in anticipation that the course would be completed. Although the approach of the regulations is that a lump sum payment by way of income falls to be apportioned over the period in respect of which it is payable for the purpose of calculating the claimant's entitlement to income support, there is no obligation upon a claimant to spend the money, once paid, other than as and when he pleases. No proprietary right is retained by the education authority, nor any fiduciary obligation created, in respect of those monies so as to give rise to a constructive trust. Further, by the time of the abandonment of the claimant's course, no monies remained in his hands upon which any kind of resulting trust could operate.
For the appellant, Mr. McManus accepted that the claim the subject of the Commissioner's decision fell to be dealt with on the basis that the claimant was no longer a student to whom Chapter VIII (and in particular Regulations 61 and 62) applied because, under Regulation 61, he had ceased to be a student at the date he abandoned his course i.e. 27 April 1995. Thus Regulations 61 and 62 were not apt to apply the definition of "grant income" directly to his case and in order to decide whether or not the claimant was to be treated as in receipt of "income" for the purposes of his entitlement, one must look to the provisions of Chapters II - VI. Mr. McManus also accepted that, because the claimant had received and spent his grant before the week for which he claimed, it could not be regarded (i.e. taken into account) as income received or available in the week of his claim unless the provisions of Chapters II to VI so provided. However, Mr. McManus submitted that those provisions do so provide.
He pointed out that neither Regulation 29 ("income which does not consist of earnings shall be taken into account") nor Regulation 40 ("the income which does not consist of earnings to be taken into account shall be ..[the client's] .. gross income") impose any limitation on the concept of "income" or "gross income", which (he submits) therefore applies to any income by way of grant; and that Regulations 29 and 31 make clear that, when any lump sum (such as a grant) is paid in respect of a period, that sum falls to be apportioned on a weekly basis over the period for which it is paid. Accordingly, come what may, the grant in this case fell to be treated (on an apportioned basis) as the claimant's weekly income for the period till the end of the term for which it was paid. So far as any obligation to repay the grant is concerned, Mr. McManus submits it is to be disregarded, relying in that respect on the Bolton case (supra).
Mr. Forsdick's argument in reply relied upon two propositions.
First, he submitted that "income", not being defined in the Regulations, should be given its natural and ordinary meaning and that, in the ordinary way, money accruing in respect of which there was an obligation of immediate and equivalent repayment should not be regarded as income. Thus, he submitted, where, at the date of a claim for income support, there is a certain and immediate or, as he put it, a "crystallised" liability to repay money actually or notionally paid to the claimant, that money should not be regarded as income for the purposes of the Regulations. In that respect, he sought to distinguish the Bolton case upon its facts and, in particular, the uncertainty of the striking employees' ultimate liability.
Second, he relied upon the requirement of Regulation 29(2) that the period over which a (lump sum) payment is to be taken into account shall be the period in respect of which it is "payable". Mr. Forsdick submitted that, since the grant was only payable to the claimant as a student and since, as from the date of abandonment of his course he had no entitlement to it and was under an immediate obligation of repayment, the amount of the grant should not thereafter be regarded as "payable" in respect of the period post-abandonment.
So far as the definition of "income" is concerned, I prefer the submissions of Mr. Forsdick to those of Mr. McManus. It seems clear to me that one must look at matters as at the date of the Adjudication Officer's decision. At that date the claimant had (since abandonment of his course on 27 April) ceased to be subject to the provisions of Chapter VIII and the question of whether or not he was in receipt of income during the week of his claim and subsequently was a matter to be determined under Chapters II to VI which provide no definition of that term.
It is plain that, at the time of the adjudication in this case, the claimant was not in receipt of income in any ordinary sense, having already received and spent the amount of his grant before the week(s) in respect of which he claimed and thus the only basis upon which such sum could be taken into account and treated as paid in the weeks to which his claim related was under the combined provisions of Regulations 29 and 31.
However, those Regulations, while providing for the taking into account and calculation of the payments referred to, do nothing to illuminate the question of whether or not the particular sum or sums required to be treated as paid are in the nature of "income" for the purposes of the Regulations. Thus, the question of whether, as at the date of their notional payment, the weekly sums are income in the hands of the claimant, falls to be decided on the basis of ordinary notions as to the nature of income.
In that respect I consider that, in the absence of statutory definition to the contrary, or some compelling contrary indication arising from the scheme of the Act, (a) monies received by way of grant towards maintenance which are not repayable are plainly in the nature of income (other than earnings) whereas (b) monies accruing, or required to be treated as received or accruing, under a certain obligation of immediate repayment (i.e. an equivalent debt) do not amount to income. (I shall refer further below to the decision in the Bolton case.) Thus, the question to be determined is whether, at the time of the original adjudication, the claimant was under a certain and immediate liability to repay in respect of the notional weekly payments to be taken into account.
I have no doubt, that when, following the adjudication, the claimant received a letter and invoice of 24 May from the Hampshire County Council he was plainly in that position. It told him his grant had been terminated and it called for immediate payment of a certain sum. However, his position was not certain prior to receipt of that letter. Prior to that letter, the matter rested upon the terms of the undertaking which the claimant had given to Hampshire County Council at the time of receipt of his grant and the oral information which we have been told he received from the council that he would be required to repay the balance of his grant. Mr. McManus has submitted that, upon that basis, there was no certain and immediate liability to pay any sum, because the claimant's obligation was "to repay such sum as may be determined by the County Treasurer to have been paid in respect of" the post-abandonment period. Mr. McManus submitted that, since such sum had not yet been determined no liability had yet crystallised. Further, it was not clear that the authority had terminated the award under Regulation 15 of the 1993 Regulations. In any event, he relied on the decision in the Bolton case as decisive in his favour.
In that case, a fireman went on strike having just been paid 4 weeks' wages, two weeks of which were paid in advance and were thus paid in respect of the period when he was on strike. He was subsequently informed by the local authority that he would have to repay that part of the payment at some time in the future. When he later applied for supplementary benefit it was held that the two weeks' advance payment had to be taken into account as part of his resources over the strike period, even though it was repayable at some future date. It was held by this court that, under the Supplementary Benefits Act 1976, Schedule 1, Part III, the resources of an applicant for supplementary benefit had to be assessed on a weekly basis by taking into account the applicant's weekly earning for the period in question, and the fact that, at some indeterminate future date, he would have to repay part of the payment did not prevent that payment constituting part of his resources for the period in question.
Lord Denning MR, having referred to the fact that the applicant's position (as in this case) had to be assessed on a weekly basis, said:
"When the weekly requirements and resources were being assessed in November 1977, no one knew what was going to happen in the future. No one knew how long the strike would last; whether Mr. Fordham would remain in the employment of the council or not; or on what date or to what extent the refund would be made. It was so uncertain that no one could properly take that into account in considering what the weekly resources and requirements were ...
So it seems to me that the payment to Mr. Fordham on 15 November 1977 of £261 was a payment which was to last him for the next four weeks. It could be calculated in his resources for the next four weeks until 15 December. Those being his resources, they covered his requirements. Therefore he was not entitled to supplementary benefit for his wife and children during that time ....
I take .. [my] .. view because of the indefinite, uncertain and almost unforeseeable obligation to refund the money. It was so far ahead that it could not affect the immediate resources available to Mr. Fordham."
Waller LJ stated that he agreed. He also stated:
"The factual position, as I see it, was that, when a month's wages were paid on 15 November they related to the period of two weeks which had already elapsed and were a payment covering the two weeks immediately following 15 November. In the ordinary way, when the employee continues to work there would be no obligation for repayment because the work would be done .. but the argument is, that because the strike started on that very day, the 14, thereafter the second half of the payment had to be repaid and therefore was no longer to be regarded as a resource ..
In my view, it can properly be said that, when the payment was made on 15 November, it was a resource for each of the next four weeks, that is until the next payment is made on 15 December. It remained income, albeit that there was an obligation to repay at some future date when the strike was over. It remained as a resource for each of the next four weeks. It started as a resource for each of those four weeks, and the fact of a strike with a consequential obligation to repay at some future date did not alter the fact that it was a resource for each of the four weeks."
Dunn LJ also agreed. He stated:
"The fact that at some indeterminate future date those wages were to be repaid does not prevent them constituting resources available to Mr. Fordham to meet his requirements during the relevant supplementary benefits period."
The first point to be made about the Bolton case is that it was not concerned with any argument addressed to the 1987 regulations or their effect. The problem before the court in Bolton was whether or not the wages paid and in hand in respect of the weeks concerned were part of the "resources" of the applicant in relation to his requirements over the same period. The court was not concerned with the proper meaning of the word "income", nor was it concerned with a notional payment of income attributed on a weekly basis under a statutory formula.
Thus, there seems to me no ground for regarding the Bolton case as decisive of the question before this court. Nonetheless, both cases concern legislation for the relief of claimants who are currently without any or adequate income and the relevance of an obligation to repay in the future sums available or payable to the claimant during the period in respect of which relief is sought. Thus the approach of the court in Bolton may render some assistance.
I consider that, on the position as it stood prior to 24 May, the adjudication officer was correct in deciding that the grant fell to be treated as income of the claimant. Such potential obligation to repay as existed following abandonment did not give rise to an immediate liability. The power of the Hampshire County Council under regulation 15 of the 1993 regulations could not be exercised before consultation with the educational authority and, in any event was framed in discretionary terms. While in this case there was no substantial reason to doubt that the discretion to call for repayment would be exercised, it was not clear how long it would be before the claimant was called on to repay, nor was it certain precisely what sum or over what period he would be required to pay. The wording of the undertaking appears to have been framed to reflect that position ("such sum as may be determined by the County Treasurer to have been paid") and did not in my view itself create a certain and immediate (i.e. crystallised) obligation of payment of the kind which Mr. Forsdick concedes he must demonstrate.
On the other hand, it seems plain to me that, following demand made by the Hampshire County Council in its letter of 24 May, at which point the claimant became under an obligation of immediate repayment in respect of his grant, that part of the claimant's grant required to be taken into account over the weeks which followed under regulation 29 thereby lost its character of "income" on any ordinary understanding of the word.
Contrary to the submission of Mr. McManus, I do not consider that the decision in Bolton governs this case as from 24 May. That decision was expressly based on the uncertainty of the claimant's position as to repayment, namely whether and when the claimant would have to repay the wages previously received in respect of the period of benefit. In this case, as from 24 May, the claimant was under an undisputed and immediate obligation to repay which was soon enforced by action in the County Court. In Bolton, there was also no doubt that the wages received were and remained part off the claimant's "resources" over the weeks in respect of which the wages were paid; and that was the question before the court for decision under the relevant regulations. In this case, the problem relates to the word "income" in respect of a sum received and spent prior to the period concerned. The case of Bolton is therefore not of direct assistance and I decline to apply its reasoning in this case.
The result is that, whilst the decision of the Adjudication Officer was correct at the time when he made it, by the time the matter was before the Social Security Appeal Tribunal, that tribunal should have held that as from 24 May 1995 the grant monies apportioned and taken into account under Regulations 28 and 29 were not "income" and that the claimant was entitled to income support as from that date. The tribunal should then either have determined the amount of the income support payable or remitted the matter to the Adjudication Officer with an order that he reconsider the amount of income support entitlement on the basis that the grant monies were not income from 24 May 1995. Equally, in the context of an appeal hearing from the tribunal, the Commissioner could have given effect to the change of circumstances brought about by the letter of 24 May 1995. He could either have exercised his powers under s.23(7) to set aside the tribunal decision and give the decision which it should have given, or he could have referred the case back to the tribunal with directions for determination.
In the circumstances it seems to me that, subject to any further submissions from counsel, the appropriate solution is to allow the appeal to the extent indicated and remit the case to the Social Security Appeals Tribunal with a direction to consider the claimant's claim for income support as at 24 May, 1995 on the basis that, as at that date, there was a crystallised obligation to repay £1698.85 to Hampshire County Council, which sum was not to be taken into account as the claimant's income as from that date.
LORD JUSTICE WARD: I agree.
LORD JUSTICE ROCH: I also agree.
Order: Appeal allowed. Case to be remitted to Social Security Appeals Tribunal. No order as to costs. Legal Aid taxation of Respondent's costs.