UK Social Security and Child Support Commissioners' Decisions

CH 1556 2006

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1. I allow the appeal. For the reasons below, the decision of the tribunal is wrong in law. I set it aside. I direct that the decision be retaken by a tribunal in accordance with the directions below.

The appeal

2. This is an appeal by the London Borough of Hounslow ("the Council"). The Council is appealing, with permission of a chairman, against the decision of the Sutton appeal tribunal on 28 10 2005 under reference U 42 173 2005 00585. The tribunal allowed an appeal by the claimant and respondent ("Ms J") against a decision of the Council. The Council had decided that Ms J's housing benefit could not be increased on 01 08 2004.
3. Permission to appeal was allowed by the chairman because the appeal raised issues about the proper interpretation of regulations 12A and 68 of the Housing Benefit (General) Regulations 1987. On first considering the papers I indicated that if the tribunal had interpreted the relevant regulations properly then in my view there was no other error of law in its decision and the appeal should be dismissed. Ms J is qualified as a solicitor. Her case was put clearly before the tribunal both orally by counsel and in her formal written submissions. There was agreement over the key facts, including a useful chronology. The question of law identified by the chairman is therefore directly in issue. As it may raise an issue of general importance, I asked the Secretary of State if he wished to be joined as a party. The secretary of state's representative indicated that the Secretary of State wished to be joined as a party, and he was therefore joined. I directed that he be the second respondent.
4. I have now received full written submissions from all parties. No new issues have been raised since the submission of secretary of state's representative. No one asked for an oral hearing and I agree that there is no strong reason for holding one. But there should be a hearing by the new tribunal.
5. DIRECTIONS FOR THE NEW HEARING

A The rehearing will be at an oral hearing.

B The new tribunal should not involve any member who has previously been a member of a tribunal involved in this appeal.

C The claimant is reminded that the tribunal can only deal with the appeal as at the date of the original decision under appeal.

D If the claimant has any further written evidence to put before the tribunal, this should be sent to the tribunal within one month of the issue of this decision.

These directions are subject to any later direction by a district chairman.

REASONS FOR THE DECISION

The facts

6. Ms J was single and living alone at the relevant time. She had rented her home from her mother ("L") from 01 08 2003 under an assured shorthold tenancy at a rent of £125 a week. She claimed housing benefit. After an initial reference led to an assessment of benefit at slightly less than the rental level, the rent officer on 21 11 2003 assessed the rent at £125 a week for the benefit period from 28 7 2004 to 25 7 2005. The Council paid benefit to Ms J. On 10 02 2004 L served notice of an increase of rent to £150 and on 01 08 2004 the rent was increased to that level. On 7 08 2004 Ms J applied for an increase in her housing benefit. On 18 11 2004 the Council apologised for the delay. But it stated that a rent increase could not be considered until 52 weeks after the date of the last reference to the rent officer. Following representations by Ms J, the Council assessed Ms J's housing benefit at £150, but only from 22 11 2004. Further correspondence followed in which the Council offered, but Ms J rejected, the opportunity to apply for discretionary benefit. A formal appeal was made by Ms J.
7. Behind that chronology are several issues of law. Some were made clear in a letter from the Council to Ms J dated 10 10 2003. This gave a full apology to Ms J for delay and confusion in handling her application for housing benefit, and lack of information to her about it. But it then raised an issue under regulation 7(1)(h) of the Housing Benefit (General) Regulations 1987 ("the Regulations") and another under regulations 37 and 45 of the Regulations. Ms J had previously been the owner of the house in which she was now a tenant. The Council had to be satisfied that Ms J could not have continued to live in the house without letting go of ownership. In addition, regulations 37 and 45 required that consideration be given to any net proceeds of sale of the house received by Ms J, and to the capital she possessed during the period. Ms J was asked to provide details relevant to both those issues. After the production of documents and a meeting of both parties, the Council accepted on 13 11 2003 that Ms J was entitled to benefit and none of these points are in issue. But this correspondence explains why the key reference to the rent officer was made in November 2003 and not at the date of claim.
8. The decision to refuse to allow the increase in benefit before 22 November 2004 was also the subject of correspondence. The decision was originally based on regulation 12 of the Regulations. It became common ground that regulation 12 was irrelevant and that the basis for the Council's decision was regulation 12A of the Regulations.

The tribunal decision

9. The tribunal held an oral hearing at which Ms J was represented by counsel and the Council by one of its officers. There were detailed submissions made about the proper interpretation of regulation 12A. The case for Ms J was also fortified by reference to article 6 of the European Convention on Human Rights and the Human Rights Act 1998 as interpreted by the deputy High Court Judge in Beaulane Properties Ltd v Palmer [2005] EWHC 817 (Ch).
10. The tribunal allowed the appeal. Its decision is:

"The increase in [Ms J's] rent from 1 08 2004 was a "change relating to rent allowance" under Housing Benefit Regulation 12A(8) so should have been referred immediately to the rent officer under 12A(a)(b).

Also regulation 68(2) applies so that the effect of any recalculation takes effect from the first day of the benefit week in which the change actually occurs."

11. The tribunal reasons are set out concisely:

"Regulation 12A(1) requires an application to the Rent Officer where ((1)(b)) the Authority has received notification of a change relating to rent allowance, but not ((2)) where the notification relates to an "excluded tenancy" under Schedule 1A(b).

There is a separate requirement to apply again after 52 weeks, but no bar to an earlier application.

Schedule 1A, paragraph 2(1) would exclude [Ms J's] tenancy but for (3)(c) which prevents exclusion where there has been a rent increase under the terms of the tenancy which was included at the time of the previous referral.

[Ms J's] original tenancy did not mention rent increase but that tenancy ended on 31 07 2004 and since then [Ms J] has held over on a statutory tenancy under the Rent Act. That Act provides a mechanism for the landlord to seek

increase by using a prescribed notice. That mechanism was used, so 2(1) does not apply and the tenancy is not an excluded tenancy.

Because 2(3)(c) of Schedule 1A applies, the increase is a "change relating to the rent allowance" under regulation 12A(8). That brings it within 12A(1)(b) so that referral to the Rent Officer was required.

Regulation 68(2), "change in the amount of rent … payable … shall take effect from the first day of the benefit week in which it actually occurs …".

The grounds of appeal

12. The Council set out its grounds of appeal at considerable length. The essence is that the holding over was a periodic tenancy under section 5 of the Housing Act 1988 and not a tenancy under the Rent Act. The provisions for a rent increase under a periodic tenancy are in section 13 of that Act. It was under that provision that notice of the rent increase was given and accepted.
13. The secretary of state's representative endorsed the Council's argument. The submission also set out argument about the decision. This covered the same ground as the reasons of the tribunal save that, unlike the tribunal, the secretary of state's representative considered that there should be an annual reference of rent and that the first proper reference in this case was as the Council and not Ms J contended.
14. In response, Ms J endorsed comments previously made by her when she was notified of the application by the Council to the tribunal chairman. These drew attention to section 6 of the Housing Act 1988. They accepted the facts (not found by the tribunal) that the original tenancy was for 6 months and ended on 31 01 2004, that a proper notice under section 6 of the Housing Act 1988 was served on Ms J on 01 02 2004, and that no reference was made to the rent assessment committee at that time. An alternative argument was based on paragraph 2(2) of Schedule 1A to the Regulations. In addition, they contended that the Council had failed to make the reference that was made within a reasonable time or the time within which it accepted that it should have been made. Ms J also contended that the tribunal failed to deal with her arguments under the Human Rights Act 1998. Not only that, but counsel had expressly asked for a ruling on this issue, and the chairman had indicated that one would be given. As a result of the delay and failure, she had suffered loss, distress and anxiety as a result of the Council's decisions. The "human rights" points were endorsed by her in her response to the two official submissions.

The basis on which the rent was increased

15. The difference between the parties in this case is limited but important. When is the Council required to give effect to the increase in the rent paid by Ms J from £125 to £150 for the purposes of her housing benefit award? Neither the amount of the increase nor the fact that the increase took effect on 01 08 2004 after proper notice are in issue. The Council, supported by the Secretary of State, contends that the correct date is 22 11 2004. This is 52 weeks after the last application by the Council to the rent officer. The tribunal, agreeing with counsel for Ms J, decided it was the first day in the benefit week in which the change on 01 08 2004 occurred. The difference depends on the basis on which the rent was increased.
16. It is necessary to go back to the initial agreement to identify where the parties diverge in their views. The tribunal has absorbed its acceptance of agreed facts and its own findings of fact into its reasons in concise form. In so doing it has assumed some aspects of the agreement that need fuller identification in the light of the parties' arguments. And it failed to deal with other relevant points.
17. It is common ground that Ms J's tenancy started on 01 08 2003, the date of the agreement in the papers. The agreement is for an assured shorthold tenancy under Part II chapter I of the Housing Act 1988 for a fixed term of six months from the date of agreement. The rent is stated as being £125.00 per week payable in advance on the Friday of each week. The agreement contains no provisions for its extension or renewal and no provisions allowing an increase in rent. As that is a written contractual agreement, its terms are a matter of law, not fact.
18. Although the tribunal made no express finding on this, it is clear that Ms J remained in occupation of the rented house from 1 08 2003 without a break paying the rent as agreed. A landlord's notice proposing a new rent under an assured periodic tenancy was served on 1 02 2004 to take effect on 1 08 2004. This proposed a new rent of £150 per week "in place of the existing one of £125 per week." Again there is no express finding, but both parties have argued their cases on the assumption that there was no new or separate tenancy agreement documented between the landlord and Ms J after the agreement signed on 1 08 2003.
19. The finding of the tribunal conflicts factually with that approach. As quoted above, it found that the "original tenancy did not mention rent increases but that tenancy ended on 31 07 2004." I do not see as a matter of law, fact, or concession the basis for that finding. The tenancy agreement is in the papers and is clear in its terms. That may be important because different rules apply to yearly tenancies and shorter tenancies and also because of the point immediately following that in the tribunal's decision:

"[Ms J] has held over with a statutory tenancy under the Rent Act. That Act provides a mechanism for the landlord to seek increase by using a prescribed notice. That mechanism was used…"

The "mechanism used" is the notice in the papers. It does not say in terms that it is a notice under the Rent Acts or the Housing Acts or any other specific provision. But it clearly follows a standard form, including guidance notes about the notice. And it is expressly addressed to a rent under an assured periodic tenancy.

20. The term "assured tenancy" is defined by the Housing Act 1988, section 1.

The term "assured periodic tenancy" appears in the heading to section 13 of that Act. Section 13 deals with increases of rent under assured periodic tenancies. Subsection (1) defines the scope of the section:

"(1) This section applies to –

(a) a statutory periodic tenancy other than one which, by virtue of paragraph 11 or paragraph 12 in Part I of Schedule 1 to this Act, cannot for the time being be an assured tenancy; and

(b) any other periodic tenancy which is an assured tenancy, other than one in relation to which there is a provision, for the time being binding on the tenant, under which the rent for a particular period of the tenancy will or may be greater than the rent for an earlier period."

21. Section 13 lays down the required procedure to increase rent of an assured periodic tenancy. It also requires notices to be given in prescribed forms. The prescribed form at the time that the landlord gave notice to Ms J of the rent increase was form 4A added to the forms prescribed by the Assured Tenancies and Agricultural Occupancies (Forms) Regulations 1997 (SI 1997 No 194) by the Assured Tenancies and Agricultural Occupancies (Forms) (amendment) (England) Regulations 2002 (SI 2002 No 337, coming into effect in February and June 2002).

The form and guidance notes followed by the landlord's attorney in this case clearly follow that standard form save for one point. It fails to use the full heading of the standard form: "Housing Act 1988 Section 13(2) – Landlord's Notice proposing a new rent under an Assured Periodic Tenancy". Had it done so, the provision under which it was made would have been clear.

22. There is also a procedure for increasing rents under the Rent Act 1977, and it appears to be this that the tribunal had in mind. Notices of increase can be given under section 49 of that Act. Again there are standard forms. The relevant regulations are the Rent Act 1977 (Forms etc.) 1980 (SI 1980 No 1697) as amended (most recently by SI 1993 No 655). As with the Housing Act forms, the regulations set out a series of standard forms to be used by a landlord in giving notice to a tenant. The landlord's attorney used none of these forms in this case. But this point does not appear to have been explored in argument.
23. I have added the key statutory instruments to the papers. I see no useful point in setting them out in this decision. The only conclusion I can come to on that point is the view that all the documentation appears to indicate that the landlord did not use the Rent Act 1997 "mechanism" but did use the Housing Act standard forms save for the omission of the reference to the Housing Act 1988. That also appears to be the approach adopted by Ms J herself in Ground 1 of the Grounds set out by her in her comments on the grounds of appeal for the council. The tribunal has therefore either erred in law in its reference to the Rent Act or alternatively failed adequately to explain how it arrived at the conclusion it reached on that point.
24. If the tribunal erred on that issue, then the argument on which it decided in the next sentence that " 2(1) does not apply and the tenancy is not an excluded tenancy" no longer has a basis. The reference to "2(1)" is to Schedule 1A paragraph 2(1) to the Housing Benefit (General) Regulations 1987 (as amended by SI 1990 No 946). Paragraphs 1 and 2 of that Schedule provide:

"1. An excluded tenancy is any tenancy to which any of the following paragraphs applies.

2. (1) Subject to sub-paragraphs (2) to (5), where a rent officer has made a determination, which relates to the tenancy in question or any other tenancy of the same dwelling this paragraph applies to –

(a) the tenancy in respect of which the determination is made; and

(b) any other tenancy of the same dwelling on terms that are substantially the same, other than the term relating to the amount of rent, as those terms were at the time of that determination or, if earlier, the end of the tenancy."

25. In the view of the tribunal, sub-paragraph (3) item (c) does apply to this tenancy. That excepts from sub-paragraph (1):

"…where subsequent to the making of the determination in that paragraph …

(c) there has been a rent increase under the term of the tenancy and the term under which that increase was made was either included in the tenancy at the time when the application for that determination was made (or was a term substantially the same as that term) and that determination was not made under paragraphs 1(2), 2(2) or 3(3) of Schedule 1 to the Rent Officers Order …"

The Council contends this does not apply, and the secretary of state's representative agrees with the Council.

26. I am unable to work out from its decision and reasons how the tribunal has reached the conclusion that Schedule 1A paragraph 2(3)(c) applies. Either its decision is wrong in law or it fails adequately to explain how it reaches this conclusion. The terms of the original tenancy are in the papers. As a matter of law they contain, as already noted, nothing about rent increases. And I can see no evidence pointing to any other basis for saying that a term entitling the landlord to increase the rent was part of the tenancy. If the Housing Act 1988 notices were used, and were properly used, then I agree with the Council that there is no ground for this finding.
27. I conclude that I must set aside the decision of the tribunal on the ground that it has made inadequate findings of fact and/or failed adequately to explain its decision. It has failed to explain why the Rent Act (which I assume to be the Rent Act 1977) applies to this case, and it fails to explain how it decided that the mechanism used to increase the rent was a mechanism under the Rent Act and not the mechanism which appears to have been used, namely that from the Housing Act 1988.
28. As the tribunal failed to make a number of relevant findings of fact, I am not in a position to substitute my own decision for that of the tribunal. I therefore refer the matter to a new tribunal for rehearing.

Human rights

29. I add a comment about the Human Right Act arguments. I agree with Ms J that if she raised an argument before the tribunal then it must be met in the tribunal's reasoning, even if only briefly.
30. I assume that the argument was not rehearsed by the tribunal as it considered that it had decided in the appellant's favour. But the Council and the secretary of state's representative have also failed to mention it. I must therefore comment on it. For myself, I find it difficult to see how Ms J properly that the actions of the Council are in breach of any Convention right. The case cited in the papers concerns a loss of disputed land as a result of the application of the Land Registration Act. Article 1 of Protocol 1 was clearly engaged in that case. Consideration of section 3 of the Human Rights Act 1998 then follows. But the breach for which Ms J contends in this case (in her reply to Respondents' appeal submission) is of Article 6 – the right to a fair hearing. That imposes a duty on the tribunal but not on the Council. Article 6 gives a right to a fair trial in the determination of civil rights and obligations. Even accepting for the purposes of argument both that Ms J is a "victim" in the sense required to invoke the Convention rights, and that this case concerns a "civil right", the duty is on the tribunal as a judicial body, not on the Council as an executive body. I must therefore reject her current argument that she is assisted in her challenge to the actions of the Council by reference to Convention rights on the ground that she has not identified any right that is engaged in this case. If the claimant wishes to argue that her rights are engaged, then she must identify which right she contends is engaged and how it is engaged.

David Williams

Commissioner

13. 12. 2006

[Signed on the original on the date stated]