UK Social Security and Child Support Commissioners' Decisions

UKSSCSC CH_1129_2004 (08 July 2004)

1. This appeal, brought with leave of the regional chairman, succeeds. The decision of the tribunal on 22 1 04 was erroneous in law and I set it aside. It did not decide the jobseekers allowance (JSA) ground on which the council's decision had been based, nor did it consider whether the claimant had wrongly failed to disclose either his leaving the property or his ceasing to be entitled to JSA, as required by regulation 101(1)(a) of the Housing Benefit (General) Regulations 1987. But this success is of no help to the claimant, as I consider it expedient to make certain further findings of fact and to give the appropriate decision based on them. This is that the claimant received £1746 overpaid housing benefit between 23 2 98 and 9 8 98, and this overpayment is recoverable from him.

Jurisdiction

2. I deal with this appeal alone because that is what commissioners do under s14 of the Social Security Act 1998. Only in cases of more general importance do we sit in greater numbers as a Tribunal. I had wondered whether I had jurisdiction to deal with it, despite the district chairman's ruling. If the decision appealed against was that of 15 8 98, then the appeal was "brought more than one year after the expiration of the last day for appealing" (one month after the date of notification) which is expressly forbidden by regulation 19(2) of the Housing Benefit and Council Tax Benefit (Decisions and Appeals) Regulations 2001. Under regulation 78(2) of the Housing Benefit (General) Regulations 1987, a decision is treated, when sent by post to a person's last known address, as notified on the day it was posted, not when it was received. This was confirmed by the Court of Appeal in Haringey LBC v Awaritefe (1999) 32 HLR (Housing Law Reports) 517. Any risk of postal delays, or documents not reaching the addressee because he has moved on without leaving a forwarding address, is allocated to the addressee. The original benefit termination and overpayment decision notices of 15 8 98 were sent to the claimant at his last known address. They were therefore properly served on him, even if he did not receive them, and the district chairman's original response of 6 12 02 would not have been wrong.
3. However, there are statutory requirements for such notices in Schedule 6 to the Housing Benefit Regulations which, if not complied with, may invalidate the notice: Warwick DC v Freeman (1994) 27 HLR 616. One of these requirements is that the recipient be given notice of his right to request a written statement setting out the council's reasons for its decision and how and when to apply for this (paragraph 2). But the notice of overpayment itself (page 152) provided reasons, including all the matters prescribed in relation to overpayments by paragraph 14 of Schedule 6: fact of overpayment, reason why it has occurred, its amount, how that amount was calculated, and the benefit weeks to which it related: Haringey at page 524.
4. However, another requirement is that the recipient be given notice of his right to make written representations against the decision and how and when to do so (paragraph 3). Now it may be that the back of the overpayment notice did contain such information; but the only indication of this in the papers is page 14, headed "Important Notes". This is tendered as part of "Cancellation and overpayment notification", tacked on following those two notifications, so that it is not clear to which of them it refers. And the directions it gives are also not clear. Claimants are told they have a right of appeal against "the way your claim has been worked out", but the present claimant had been given an overpayment, not a claim, decision. Only in the section addressed to landlords is mention made of how to disagree with the manner or repayment of overpayments. Although Haringey holds that such irregularities need not invalidate overpayment notifications where no substantial prejudice is caused to recipients, I am narrowly persuaded that in this case the irregularity did invalidate the notification. The irregularity may have been repeated when the council re-notified the claimant in August 2002, but in that instance it did not substantially prejudice him because he obtained leave to appeal out of time. I therefore have jurisdiction to deal substantively with the appeal, and must reject the council's detailed submissions to the contrary.

The history

5. The claimant, by an agreement from 25 8 97, took a six months tenancy of a flat at 5 Priory Court, Dover. He was at that time in receipt of jobseekers allowance (JSA), and on that basis he claimed and was awarded housing benefit of £72.75 a week, which was paid direct to the landlord. The council says that the period of the award was from 25 8 97 to 18 10 98, though the award notification letter that it has produced (page 10) said nothing about the period of the award. The tenancy agreement was accompanied by notices that the landlord was an owner and might recover possession on that basis, and that only the first six months tenancy was certain.
6. The claimant says that he fell out with his landlord, gave up the flat within a few days of the end of the six months' tenancy, and moved away to work elsewhere. He has variously said the landlord gave him notice that the tenancy would not be renewed, or that he told his landlord he was leaving, or that he left by mutual agreement. He did not tell the council. Nor did he tell the DSS (as it then was), he simply no longer turned up to sign on for JSA.
7. Four years later, by now living in Cumbria, the claimant received the invoice at page 15, asking for repayment of a £1746 housing benefit overpayment for the period from 23 2 98 to 9 8 98. It seems to be agreed that the reprinted invoice was sent out on 21 8 02. Apart from agreeing to repay benefit for the days from 15 2 98 when he moved out to 25 2 98 when his tenancy came to an end, the claimant contested the matter vigorously.
8. What had happened was that no-one had told the council that the claimant had moved out. There is no evidence on which the claimant could say, as he does at page 36, that the council "was well aware" that he had moved out. He says in asking for leave to appeal to me (page 122) that he had been in regular contact with the housing officer about his problems with the landlord and his intention not to extend the lease; but there is no reason to suppose the housing officer either did or should have informed the housing benefit department. Further, an insistence on having told the council contradicts the claimant's basic reason offered for not doing so – that he believed the benefit entitlement ceased with the tenancy. So far as the council was concerned, it had a housing benefit award not due to expire until October 1998, so it continued to pay housing benefit to the landlord until it was informed on 14 8 98 by the DSS (page 11) that the claimant had ceased to be entitled to JSA on 18 2 98 because he had ceased to attend for signing-on.
9. Once it received the DSS notification, the council proceeded promptly to cancel the award and to calculate and demand repayment of the consequent overpayment of £1746: pages 12 and 152. (Tiresomely, the papers before the tribunal contained at page 13 a council tax benefit overpayment notification, the correct one having been only recently supplied to me. We have heard nothing more about council tax.) These notices were sent, correctly addressed, to what was believed to be the claimant's address, 5 Priory Road. I see no reason to suppose they were not posted on or around their dates, nor to demand strict proof of posting. It is most unlikely this could be given other than by a statement of the normal practice, which would get us no farther. The claimant did not receive them, nor any reminders, because he had left no forwarding address. The council says that it eventually "traced" him. It does not say how it did this, nor why it could not have done so earlier. Once it did, it pursued him again.
10. After the second refusal to admit the late appeal, the council threatened legal proceedings, and the claimant under protest and without prejudice paid the £1746 which had been invoiced (pages 74-5). There has unfortunately been a good deal of bad feeling generated over the last 18 months. The claimant feels aggrieved that he has been pursued so long after the event and, as he sees it, with so little cause, the council is upset that the Appeals Service admitted the appeal. There have been delays. The claimant has complained to the Appeals Service, the council's customer services department, and the Local Government Ombudsman. I am not concerned with any of these matters, but only with the law.

The law

11. It is not in dispute that there was an overpayment, on either of the above grounds. The claimant's argument is that it should not be recovered from him. The legislative provisions set out below are those which were in force at the time of the events being considered. Regulation 99 of the Housing Benefit Regulations provides that any overpayment is to be recoverable, save

(2) ...an overpayment caused by an official error where the claimant or a person acting on his behalf or any other person to whom the payment is made, could not, at the time of receipt of the payment, or of any notice relating to that payment, reasonably have been expected to realise that it was an overpayment.

(3) In paragraph (2), "overpayment caused by official error" means an overpayment caused by a mistake made, whether in the form of an act or omission, by the [housing] authority or by an officer or person acting for that authority or by an officer of the DSS or the Department of Employment acting as such...where the claimant, a person acting on his behalf or any other person to whom the payment is made did not cause or materially contribute to that mistake, act or omission.

12. The tribunal held that the overpayment was not the result of an official error. It was right to do so. The council made no mistake other than one that was caused by the claimant's (or the landlord's) failure to notify it of his leaving the property, and the claimant's failure to notify it of his ceasing to be entitled to JSA. I did wonder about the DSS's delay in telling the council that JSA had been stopped back to 18 2 98: six months seemed to be rather a long time to wait in case someone came back to sign on. But again I conclude that the claimant's failure to notify the DSS that he was no longer going to be claiming at least materially contributed to the mistake, if there was one. So there was no "official error", and the overpayment was recoverable.
13. S75(3) of the Social Security Contributions and Benefits Act 1992 provides that a recoverable overpayment

is in all cases recoverable from the person to whom it was paid; but, in such circumstances as may be prescribed, it may also be recovered from such other person as may be prescribed.

Regulation 101(1)(a) exercises the "prescribing" (regulation-making) power:

Where the overpayment was in consequence of a misrepresentation or failure to disclose a material fact (in either case whether fraudulent or otherwise) by or on behalf of the claimant or any other person to whom a payment of housing benefit may be made, the person who misrepresented or failed to disclose that material fact.

14. Regulation 75(1) places on a claimant during a benefit period a duty to report a change of circumstances which he might reasonably be expected to know might affect his right to benefit. This includes ceasing to be entitled to JSA (regulation 75(2)(e)), as well as ceasing to occupy the property in respect of which benefit is awarded, both of which are "a material fact" within regulation 101(1)(a). The claimant knew both those facts but disclosed neither of them, and he accepts, by his offer to repay overpaid benefit for the 10 days at the end of the tenancy, that some part of what he believed to be the benefit period remained unexpired when he left.
15. To make out a case on failure to disclose, the council must show not only that the claimant knew the material facts and did not disclose them, but that disclosure was reasonably to be expected of him in all the circumstances. This is an objective test of whether a reasonable man would have considered either of the undisclosed facts to be material. If so, there was a duty to disclose: CF/026/90, concerning a nearly illiterate woman with family educational difficulties who was nonetheless held to have a duty to disclose.
16. The claimant contests recoverability on the ground of no longer occupying the property, arguing that (a) he did not know the length of the benefit award, so (b) he thought that benefit would terminate with the tenancy, and (c) he thought the landlord would pass on his notice to the council. I agree with him, on the evidence before me, about (a). I do not agree with him about (c): it is not safe to assume that someone else will discharge a responsibility which is the claimant's own, even though that other person may be under a separate duty to report. As for (b), the claimant left before the end of the tenancy. As to the rest of the benefit period, the claimant says he had no reason to assume other than that the award would terminate at the same time the tenancy terminated. The council argues that such shorthold tenancies are commonly extended without the need for a new agreement, and the award had been made for the maximum 60 weeks period. Certainly regulation 66(2) and (3) of the Housing Benefit Regulations provides a 60-week maximum, though it permits a council to fix a shorter period "having regard in particular to any relevant circumstances" which it "reasonably expects may affect entitlement in the future". But I have not been told of any such circumstances at the outset of the tenancy, though the claimant says his current local council would not consider it good practice to carry on paying benefit without checking whether the tenancy was in fact renewed.
17. The question is whether in these circumstances the claimant can successfully argue that a reasonable man would not objectively have been expected to report his leaving the property to the council. I have concluded that although there is some force in his contention about why he believed his award would cease, the claimant cannot rely on this. He in fact left ten days before the tenancy ended, when even on his own account he did not think the award had come to an end, without it occurring to him to tell the council. Reporting changes of circumstances did not come naturally to him, as can be seen with the JSA.
18. It follows that the tribunal's decision was correct in substance, even though it did not consider failure to disclose other than in concluding that the council's decision was not an official error.
19. The actual decision by the council was based on failure to disclose that the claimant's entitlement to JSA, on which he had been awarded housing benefit, had ceased. I cannot accept that it was reasonable for him not to have disclosed this. Further, if he had disclosed to the DSS that he was moving away and would no longer be claiming with them, it could immediately have told the council. The tribunal did not decide the appeal on the JSA ground, which may be why the regional chairman gave leave to appeal. It is not altogether surprising that it concentrated on the vacating of the property, since it was this which occupied the lengthy correspondence. But I do not consider it necessary to remit the appeal for a tribunal to consider the JSA ground, as I am in a position to decide this myself on the evidence before me.
20. As to whether the council should have chosen to recover the overpayment from the landlord rather than the claimant, it is clear that it has a discretion (choice) which to pursue and, as in CH/3880/02, it may if it wishes issue overpayment notices against both. It is also clear that whichever party is chosen may appeal against, among other things, that choice: Secretary of State v Chiltern DC and Warden Housing Association [2003] EWCA Civ 508. But it was held in CH/5216/01 (and the two other cases heard with it) that the grounds for such an appeal are narrow "public law" grounds such as a court exercising judicial review powers might invoke in deciding whether the council had used its discretion defectively or invalidly. Examples of such defective or invalid use would be bad faith, or perverseness or irrationality such that no council acting properly and reasonably could have reached such a result. It is only such impropriety or unlawfulness that can be challenged.
21. The claimant's original inquiry as to why he, rather than his landlord who actually received the benefit money, should have been chosen received the answer that the landlord could not reasonably be expected to know that the tenant had ceased to be entitled to JSA. This is attractive, but it is not a concern which councils always show to landlords. When I probed further, pointing out that the landlord, who lived locally, had continued to receive the benefit while knowing that the claimant had left, the council responded that it did not know how often the landlord, who owns much local property for which housing benefit is paid, checked his properties for continued occupancy, but it had no evidence to indicate that he had accepted housing benefit knowing the claimant had left. It added that since the claimant had not told it or the DSS that he was leaving, it was "questionable" whether he had told the landlord either.
22. We have many appeals from landlords raising just these points, and we customarily dismiss them. It behoves landlords who receive housing benefit to ensure that they do know what their tenants are doing by carrying out regular checks. And I at any rate have accepted the claimant's evidence that his landlord did know he was leaving and when.
23. So the council could have proceeded against the landlord. But it chose not to do so, and I see no reason to suppose that it did not consciously exercise the discretion it had. I understand the claimant's frustration; but the fact remains that his own omissions (and also the omission to leave a forwarding address or arrange for Post Office mail redirection) did cause the overpayment, whatever contribution the landlord made. There was nothing unlawful about the council's exercise of its discretion to choose. That the landlord might have been a more worthy target is not a reason for characterising the choice as irrational in the sense that no council acting properly and reasonably could have reached such a result. Nor am I persuaded that its discretion was exercised in bad faith. Consequently, I cannot allow the appeal on this ground either. The council's behaviour may strike me as unusual, but that is not what I am here to decide.
24. There can be no question of judicial review of my decision. Any appeal would lie to the Court of Appeal, but only with my leave, or that of the Court of Appeal if I refuse leave.
25. I am sorry to have had to write such a long decision, but it was necessary in order to deal properly with both parties' arguments. This being a matter of law, it had to be dealt with in legal language.

(signed on original) Christine Fellner

Commissioner

8 July 2004