UK Social Security and Child Support Commissioners' Decisions

[2004] UKSSCSC CH_3616_2003 (12 January 2004)

 
DECISION OF THE SOCIAL SECURITY COMMISSIONER
1. My decision is that the decision of the King's Lynn appeal tribunal, held on 2 April 2003 under reference U/42/141/2003/00058, is not erroneous in point of law.

The appeal to the Commissioner

2. This is an appeal to a Commissioner against the decision of the appeal tribunal brought by a housing benefit claimant with the leave of Mr Commissioner Turnbull. The other party to the appeal is Breckland Council, the claimant's local authority.
3. The case concerns the interpretation and application of regulation 7(1)(h) of the Housing Benefit (General) Regulations 1987. The local authority has referred in its submissions to the Commissioner to regulation 7(1)(l). I can deal with that provision briefly. First, it is too late to raise that issue now. It should have been raised before the tribunal. The possibility of contrivance was referred to in some internal local authority documents that are in evidence. But it has never been relied on as the basis for refusing the claim for housing benefit. Second, the tribunal found that there had been no intention to take advantage of the housing benefit scheme and, for what it is worth, on the information in the papers I am of the same opinion.

The facts

4. The claimant owned premises that I will refer to as No 54. It comprised a shop and accommodation. For financial reasons, he wished to sell. The property was marketed for a price in excess of £53,000. Two sales fell through at the last minute. I do not need to consider why that was. However, in order to secure a sale the claimant sold the property to one of his sons for £26,000, which was the most that the son could raise for the purchase. By the time of this sale, the claimant and his wife were no longer living in the property. They had moved to live with another son.
5. Unfortunately, the other son became ill. So, the son who had bought No 54 decided to use it as a home for both the claimant and the claimant's other son. The property was extended and divided in No 54 and No 54A. The claimant lives in No 54A and the claim for housing benefit is in respect of that property. The local authority refused the claim and the appeal tribunal dismissed the claimant's appeal against that decision.

The legislation

6. The case turns on the proper interpretation of regulation 7(1)(h) of the Housing Benefit (General) Regulations 1987. As in force at the time relevant to this case, it reads:

'(1) A person who is liable to make payments in respect of a dwelling shall be treated as if he were not so liable where-

(h) he previously owned, or his partner previously owned, the dwelling in respect of which the liability arises and less than 5 years have elapsed since he or, as the case may be, his partner, ceased to own the property, save that this sub-paragraph shall not apply where he satisfies the appropriate authority that he or his partner could not have continued to occupy that dwelling without relinquishing ownership'.

7. 'Owner' is defined by regulation 2(1). It

'means-

(a) in relation to a dwelling in England and Wales, the person who, otherwise than as a mortgagee in possession, is for the time being entitled to dispose of the fee simple, whether or not with the consent of other joint owners'.

There is no provision that cognate terms must be interpreted according to this definition, but it is obviously sensible that they should. So, 'owned' in regulation 7(1)(h) must be interpreted in accordance with this definition.

The issues

8. This case raises two issues under regulation 7(1)(h). First, is it relevant that the claimant was not in occupation at the time of the sale to his son? Second, is it relevant that the property has now been extended and divided?

Continuity of occupation

CH/0716/2002

9. In CH/0716/2002, I had to interpret the earlier version of regulation 7(1)(h), which read:

'(1) A person who is liable to make payments in respect of a dwelling shall be treated as if he were not so liable where-

(h) he previously owned, or his partner previously owned, the dwelling in respect of which the liability arises except where he satisfies the appropriate authority that he or his partner could not have continued to occupy that dwelling without relinquishing ownership'.

10. I decided that that version of the provision did not apply unless the claimant had remained in continuous occupation. My reasoning was set out in these paragraphs:

'8. It is possible to read the provision in two ways.

'9. On the first reading, the provision falls into two parts, each of which is interpreted separately from the other. The first part – 'he previously owned, or his partner previously owned, the dwelling in respect of which the liability arises' - contains a general prohibition. The second part - 'except where he satisfies the appropriate authority that he or his partner could not have continued to occupy that dwelling without relinquishing ownership' – contains an exception. On this reading, the prohibition applies regardless of whether or not there has been continuity of residence. This is how the tribunal interpreted regulation 7(1)(h).

'10. On the second reading, the provision falls into the same two parts, but the second is relevant to the interpretation of the former. On this reading, the reference to continuity informs the interpretation of the scope of the general prohibition, limiting it to cases in which the claimant has remained in occupation of the dwelling despite the change of ownership.

'11. I prefer the second reading for these reasons. (a) It is more in keeping with principles of interpretation to read a provision as a whole. (b) It produces a more rational result. Why should someone in the claimant's position who has been out of occupation the dwelling for over a decade be deprived of housing benefit? (c) It is consistent with the obvious policy underlying regulation 7(1). It is clearly designed to identify cases in which there is a risk of abuse of the housing benefit scheme. The categories may be drawn in a way that can produces rough justice. No doubt, that was based on a policy decision to err on the side of protection for the scheme rather than fairness in an individual case. However, given that the categories can produce rough justice, it is appropriate to give them the narrowest interpretation that is consistent with the policy of protecting the scheme. (d) It takes account of the other categories of exclusion in regulation 7(1). My preferred reading, if taken in isolation, undoubtedly excludes from its scope cases in which there is an obvious risk of abuse. For example, a claimant may have been out of occupation for only a few days rather than for a few years. However, the other categories will be sufficient to exclude those cases where there is an abuse. In particular, the case is almost certain to fall under regulation 7(1)(l) as an attempt to take advantage of the housing benefit scheme. There may be exceptional circumstances in which a sudden change of circumstances allows the claimant to occupy the dwelling shortly after selling it. If there is a genuine reason that shows that advantage is not being taken of the scheme, there is no need for the claimant to be excluded from entitlement. So, the second reading of regulation 7(1)(h) produces an interpretation that takes account of the operation of the exclusions as a whole.'

Does that reasoning apply to the new version of the provision?

11. I had to, and did, take account of the nature of the provision as an anti-abuse measure. I also had to interpret it in the context of the other anti-abuse provisions. But it is clear from my reasoning that I was influenced by the open-ended operation of the provision. It operated without any limit on time. In that case, the claimant had not been in occupation of the premises for over a decade when he resumed occupation, this time as a tenant. Even for an anti-abuse measure, it was capable of operating in a draconian manner in circumstances that were far removed from any possibility of abuse.
12. The new version is more limited in its operation. It has a time limit of 5 years. In those circumstances, the features that troubled me in the former version do not apply. The new, time-limited version strikes a balance between the broad brush nature of an anti-abuse provision and the interests of a claimant who may quite innocently come back into occupation of the property. In those circumstances, there is no reason to limit the scope of the provision to cases where there is continuity of occupation. That requirement is limited to the exception at the end of the provision.

The exception

13. The exception only applies if the claimant continued to occupy the dwelling and could only do so by relinquishing ownership. As the claimant was not in occupation when the original No 54 was sold, he did not continue in occupation for the purposes of this exception. In the absence of continuity of occupation, the exception does not apply.

The change to the premises

14. Does it matter that the property formerly owned by the claimant has now been extended and divided?

Does it matter that the property has now been divided?

15. This makes no difference. I have already said that the word 'owned' must be interpreted consistently with the definition of the word 'owner'. On that approach, the claimant was the person who was entitled to dispose of the fee simple of the original No 54. So, he was the person who was entitled to dispose of the fee simple of that part of No 54 that is now No 54A.

Does it matter that the property has now been extended?

16. This makes no difference. Ownership is defined in terms of the power to dispose of the fee simple. The fee simple relates to an estate in land. It does not relate to the particular attachments to that land. The buildings on the land may be demolished, reduced in size, extended or left as they are. It makes no difference to the fee simple. So, on general principles, the claimant owned the fee simple regardless of the changes that have been made to the premises. This interpretation is confirmed by the anti-abuse nature of the provision. Should a claimant be able to avoid the provision by the simple expedient of adding a conservatory or converting the attic?

Conclusion

17. The chairman's full statement of his tribunal's decision is short on analysis of the legal issues raised by the appeal. But his conclusion was correct in law. Substituting a decision to the same effect as the one he reached would be an empty exercise. I dismiss the appeal.

Signed on original

Edward Jacobs Commissioner 12 January 2004