UK Social Security and Child Support Commissioners' Decisions

[2006] UKSSCSC CH_2484_2006 (18 December 2006)

CH/2484/2006

DECISION OF THE SOCIAL SECURITY COMMISSIONER

I have to dismiss this appeal as the decision of the Fox Court appeal tribunal dated 10 January 2006 is not erroneous in law.

REASONS
1. This appeal raises familiar issues about the boundary between 'mere' alleged errors of fact (i.e. factual conclusions that a party disagrees with), which do not ground an appeal to the commissioner, and errors of law in an appeal tribunal's handling of the facts.
2. There was no direct conflict of evidence; the tribunal accepted an account of the facts given to it by the claimant which was not directly contradicted by any other oral or written evidence but was in large part not supported by any corroborating evidence either. The thrust of the local authority's case in its appeal is that the claimant's account was implausible and was contradicted or at least put in doubt by such a weight of other evidence that the tribunal erred in law in accepting it or at least in not dealing with the points of doubt in its reasoning.
3. I have been unable to find an error of law in the tribunal's decision. As far as concerns the factual correctness of the tribunal's conclusion (which, as already stated, is not a matter for me) I think it is right that I should say that I could imagine an appeal tribunal (particularly one that that had had the benefit of the very thorough submissions that the local authority's current representative has made to me) not accepting the claimant's account. But the oral hearing which I held was on the issues of law in the appeal, not on the underlying facts; I have not heard the claimant fully on the points relied on by the local authority. I am not therefore in a position to reach a view on the underlying facts, and emphasise that I have not reached any view. It would be unfair to the claimant for me to imply otherwise.
4. As far as concerns error of law, I do not consider that the points now relied on by the local authority render the tribunal's decision erroneous in law. A number of them do not appear to have been drawn to the tribunal's attention but are the fruit of the impressively thorough work of the representative now acting for the local authority; they do not emerge so starkly from the papers as to have required the tribunal to deal with them of its own motion. As regards those that were drawn to the tribunal's attention, I do not consider that as a matter of law they required express coverage in the statement of reasons.
5. To the extent that the local authority is dissatisfied with the outcome of this case, that perhaps highlights the need for thorough preparation of a local authority's factual case in advance of tribunal hearings, so that all the points can be raised there. Even the most thoroughly prepared appeal to a commissioner is not an adequate substitute for doing so, for the reason that, however strongly a commissioner might doubt the factual correctness of a tribunal decision (and I repeat that I have not formed a view about the facts in this case), the commissioner's doubts are irrelevant in the absence of an error of law. And it will seldom be an error of law for a tribunal to fail to deal with a point that a local authority representative has not raised before it.

The facts

6. I need to deal with the facts in more detail in order to explain my conclusion on the issue of law in the appeal. In summary the claimant, who is a man born in 1939, claimed housing benefit (HB) in respect of rent paid to his son for what is agreed to have become a separate flat occupying the first floor of a house owned by his son. The (non-controversial) evidence was that the claimant's son, although employed in other parts of the country, has since the late 1990s occupied the house as a base and has continued to occupy what is now the ground floor flat.
7. The claim was refused on various grounds: initially in reliance on regulation 7(1)(b) of the Housing Benefit (General) Regulations 1987 (payment to a close relative) and subsequently (after it was accepted that the flat was a separate dwelling not occupied by the son) on the alternative grounds that the claimant was not in truth liable to pay rent to his son (regulation 6(1)(a)), that the tenancy was not on a commercial basis (regulation 7(1)(a)) or that the liability was created in order to take advantage of the HB scheme (regulation 7(1)(l)).
8. Allowing his appeal, the tribunal found that there was a rent liability between father and son, that the tenancy was on a commercial basis and that it had not been contrived in order to take advantage of the HB scheme. In so concluding, the tribunal accepted the claimant's evidence that, while he had previously lived as a lodger occupying a bedroom in the undivided house, his son had planned since 2001 to create a separate first floor flat to let on the open market; the conversion works had dragged out between 2001 and January 2004, but were then complete and the first floor flat was ready for letting. The claimant's bedroom was on the first floor and he had been asked by his son to leave; he had taken the tenancy in January 2004 in order to avoid having to leave.
9. The alternative view of the facts for which the local authority contends is that the conversion into two flats was only done after the claimant had been made redundant in late 2003 (and was thus due to become financially eligible for HB) and was only done in order to create a claim for HB which would otherwise have been barred by the 'close relative' rule. Because the tribunal did not take that view of the facts, it did not need to consider whether such a situation would amount to a 'contrived' liability of the sort excluded from HB by regulation 7(1)(l), and I have not done so either. Argument on the appeal centred on the tribunal's acceptance of the claimant's account of the facts; my conclusion that the decision cannot be set aside for error law makes it superfluous to consider what the legal result of the alternative view of the facts would have been.
10. The claim form (pages 1F-33 of the papers) was dated 1 February 2004 but appears not to have been submitted until 4 March. The local authority draws my attention to the disclosure on page 2 that the claimant had claimed HB from another local authority a few years earlier, and drew both the tribunal's and my attention to page 20, where the address given for the landlord is an address in Scotland and the question whether the claimant was related to his landlord was answered 'no' (there is a dispute, which I do not need to resolve, as to whether the answer was filled in by the claimant or by the local authority housing benefit office). On page 22 the claimant wrote that he and landlord paid 50% each of the council tax and gave the council tax reference number of the house (which at that time was still registered for council tax purposes as a single dwelling).
11. On 4 March 2004 the claimant showed the local authority various documents; these included evidence that the claimant had been awarded pension credit with effect from October 2003 and a copy of the tenancy agreement that he said had been entered into between himself and his son (pages 35ff). It is a fairly standard form of shorthold tenancy agreement for six months from 24 January 2004; it describes the property let as "part of [giving the address of the house]" and sets a rent of £725 per month, with a deposit of one month's rent.
12. There are certain specially drafted clauses to which the local authority's representative drew my attention: these read

The tenant agrees to give access to the builders and workmen engaged by the landlord or his agent to convert the cloakroom (at the entrance of the property) to a hallway and porch. The tenant further agrees to allow the landlord or his agent(s) to enter the locked bedroom at reasonable times of the day.

There is to be no smoking and no pets in the property.

That all letters, parcels and packages addressed to the landlord, his agent, previous tenants and/or any person other than the signatories of this tenancy agreement be delivered to the post box mounted at the back of the property, next to the kitchen door.

13. The claimant also produced letters from his employer dated 28 November 2003 giving notice of redundancy and entitlement to a severance payment of £6,890, comprising statutory redundancy pay and two months' pay in lieu of notice (pages 42-43). On 15 March he produced copies of bank statements (pages 46-49) showing, among other things, a bank payment to his son equal to two months' rent on 26 January 2004 (but no further payments of £725, though the statements cover the period to 4 March).
14. On 22 March the council wrote (page 50) asking the claimant whether he was related to the landlord and asking for the landlord's address. The letter said that the council were not aware of the conversion of the property into flats and that the council tax reference number supplied was the landlord's. The claimant replied on 30 March (page 52) admitting that the landlord was his son, giving the address of the property as his son's address and saying that the council tax department had now been informed of the conversion of the property into two flats.
15. On 2 April 2004 (page 54) the council wrote rejecting the claim for HB pursuant to the 'close relative' rule. The claimant completed a 'dispute form' (page 57) asserting that his flat was separate. He was asked to complete an appeal form and did so through a representative on 28 April (pages 68ff); he also supplied a copy of a letter dated 20 April from his son to the council tax section of the local authority consenting to the house having two council reference numbers 'provided that this does not affect future changes if they arise'. The letter also stated that the house had been commercially let in the past, that the claimant had lived there as a lodger and was now occupying an independent part of it paying rent and 50% of the council tax.
16. There was then a delay until November 2004, when the local authority asked further questions with a view to reconsidering its decision. In response the claimant wrote on 26 November stating among other things that the conversion work had been protracted but had been completed in mid-January 2004; his son's intention had been to create two separate flats, one for his own occupation and one to rent out. He also supplied copies of bank statements evidencing payments to his son of £3,300 (not an exact multiple of a month's rent) on 4 August, two months' rent on 20 September and one month's rent on 25 October. The papers also contain (page 102) a print-out showing a payment of a month's rent on 22 November, but it is not clear when this was shown to the local authority. There is also a copy of a tenancy agreement in respect of the letting of the house to three other tenants in 1997 (page 105ff).
17. It appears that the claimant's representative wrote a chasing letter in April 2005 and a further letter in July 2005 (page 111), from which it appears that a further decision letter had been issued, mysteriously dated 1999; there is no copy of such a letter in the papers, but the council accepted on page 124 that such a misdated letter had been sent on 12 April 2004. There is also (page 112) a copy of a letter dated 12 July rejecting the claim on the grounds that the claimant was not liable to make payments, that the tenancy was not on a commercial basis and that it was contrived to take advantage of the HB scheme.
18. Through his representative the claimant completed a further dispute form (page 118) and was again asked to complete an appeal form, which he did (pages 121ff). The decision was reconsidered but not changed (page 137), the reasons given being that the tenancy was not commercial and was 'contrived' (page 139). The council found that the claimant's son had not converted the property into flats in order to let it out commercially but purely in order to continue to accommodate the claimant and gain HB payments, and this was done to take advantage of the HB scheme.

The appeal to the tribunal

19. On the day set for the tribunal hearing the claimant produced a written submission with supporting documents and a written statement from himself (pages 142ff). He asserted that the house was let commercially between 1996 and 1998/99; the claimant's son then moved back in but decided to create a separate flat for commercial letting. The claimant moved in as a lodger when he separated from his wife. In November 2003 the claimant was made redundant and realised that he would need HB; he started looking for a flat in the area (apparently realising that he was not eligible for HB if he lodged with his son) and the son put the newly created flat on the open market. The claimant was told by a third party that he could get HB even though his landlord was a relative. He contacted the HB office by telephone and in person and was told he could claim HB if he had a commercial tenancy from his son and the property was rented for a reasonable length of time. Accordingly he asked his son for a tenancy and signed the tenancy agreement on 20 January 2004.
20. He attached supporting evidence of the commercial tenancy for the house in 1996, the issue of a separate council tax reference for the flat in June 2004, with retrospective effect from 21 January 2004, separate council tax bills and a council building control services' certificate of completion, dated January 2002, of work described as 'single storey extension, removal of chimney breasts and formation of toilet' (page 219). A written statement from the claimant's son (pages 223ff) gave the same account as the claimant.
21. After an adjournment for consideration of the further material, the case came back before the tribunal (which consisted of a chairman sitting alone) in January 2006. The council's written submission to the tribunal pointed out that the claimant had lived in the house since 2000 (as declared by him on the claim form); there was no evidence to support the assertion that he had paid rent - on the contrary, the claimant's son had told the local authority's council tax service in February 2001 that the house was used by friends and relatives (and, by implication, not pursuant to a commercial arrangement). The conversion into two flats had been done in early 2004. The son had not intended to let the flat commercially; the conversion was done in order to take advantage of the HB scheme, since the parties were aware that eligibility for HB would be barred by the close relative rule if father and son shared an undivided house. The tenancy was not on a commercial basis, as was evidenced by the fact that the claimant had fallen into arrears but had not been evicted.
22. From the record of proceedings (pages 227ff) it appears that the presenting officer on that occasion (who was not the council's representative before me) drew attention to the incorrect statement on page 20 of the claim form, the description of the property let as 'part of' the house in the tenancy agreement, some of the correspondence, the redundancy notice and the bank statements. He also referred to the land registry entry relating to the property, pointing out that it described the property as a single freehold house.
23. The tribunal allowed the claimant's appeal. Its decision (page 232) was expressed to be 'on the balance of probability' and was that the tenancy was of a commercial nature and was not contrived to take advantage of the housing benefit scheme; father and son had separate flats, and the arrangement was genuine and necessary even if the rent paid was less than a commercial rent. Its dominant purpose was to satisfy the son's need for a tenant and the claimant's need for accommodation
24. The statement of reasons (pages 235-236) sets out 18 numbered findings of fact; these correspond to the account given by the claimant. Under the heading 'reasons for decision' the tribunal held that the claimant did not live in the same dwelling as his son, so that the close relative rule in regulation 7(1)(b) did not apply. The reasons then reiterate the finding that the claimant's son had always intended to let the flat commercially; following the conversion he needed a tenant and the claimant needed accommodation, and it was a logical arrangement for the claimant to rent the flat from his son. The claimant had paid his son rent as a lodger (as previous lodgers had done); there was a legally binding tenancy agreement between them which was on a commercial basis and was not contrived to take advantage of the housing benefit scheme.

The appeal to the Commissioner

25. The local authority applied for leave to appeal. Its submissions (pages 244-247) raise the issues whether the tenancy was a sham and not commercial and whether it was contrived; the submissions criticise a number of the tribunal's factual findings as being unsupported by evidence or perverse. The claimant responded in some detail (pages 261ff).
26. In August 2006 a commissioner gave leave to appeal and directed an oral hearing. In his reasons he indicated that only some of the local authority's grounds were in his view arguable, but he considered it arguable that the tribunal failed to take into account matters that it ought to have taken into account. He directed the parties to produce skeleton arguments and to indicate whether, if the decision was set aside, they wished the commissioner to give the decision that the tribunal ought to have given.
27. I held an oral hearing on 8 November. The local authority's representative provided a written argument referring to relevant commissioners' decisions and amplifying the local authority's arguments, which she further developed orally. The claimant attended with a representative who also made written and oral submissions. I have to observe that none of the submissions were received within the time specified in the commissioner's direction, but only on the morning of the hearing. The self-evident purpose of the direction was to give the commissioner more time than I was given to consider the submissions in advance of the hearing. This is unsatisfactory in a factually complicated case. Neither party asked me to give the decision that the tribunal ought to have given in the event that I set aside the decision, and I indicated at the hearing that I did not in any event consider it appropriate to do so.
28. The main focus of the local authority's attack is on the tribunal's finding that there had been a longstanding plan to create the first floor flat with a view to letting it on the open market; it argues that, in accepting that, the tribunal made some findings which were unsupported by evidence, were findings that no reasonable tribunal cold come to and were reached without taking into account a weight of material casting doubt on the account.
29. First, the council's grounds of appeal attack certain of the tribunal's factual findings. The findings that the claimant had lived in the property since 2000 as a lodger, paying rent in cash apart from a period living with another partner (findings 4, 5, 7, 10 and 11 in the statement of reasons) are criticised on the grounds that there was no evidence to support, in particular, the finding that the claimant paid rent in cash, which was contradicted by the council tax services log (which was before the tribunal at page 132) of a telephone conversation in February 2001 in which the claimant's son had asked for a 50% council tax discount for an empty property and had allegedly said that the property was used by friends and relatives and became 'defensive' when asked for details.
30. The grounds also attack the findings (findings 8 and 9) that the claimant's son decided in 2001 to partition the house into two flats and that by January 2004 the house was converted into two flats with separate entrances and separate council tax liability. This is on the grounds that the only evidence was that there had been the single storey extension, removal of chimney breasts and formation of a toilet in 2002. The documents contradict the tribunal's findings: the council tax liability was not amended until June 2004 and the specially drafted clauses in the purported tenancy agreement show that the conversion was not complete by the date of the agreement.
31. The finding (finding 10) that the claimant's son proposed to let the flat on the market was criticised as being unsupported by any written or recorded verbal evidence. Findings 13 and 14 - that in January 2004 the claimant was faced with the choice of giving up his accommodation or renting the flat are attacked on the grounds that it had not been substantiated that the claimant previously used the house as anything more than a postal address. The finding (15) that the claimant contacted the local authority, and was advised that he would be eligible for HB provided the letting was on a commercial basis, before making the claim was contradicted by the council logs at pages 132 and 135, which contain no such entry.
32. Secondly, the local authority criticises the tribunal for not dealing in its reasoning with the alternative interpretation of the facts contended for by it. This was that, prior to November 2003 the claimant was in a well-paid job and not financially eligible for HB. That changed in November 2003 with his imminent redundancy and award of pension credit. The Land Registry document showed that a mortgage was taken out in November 2003; the inference was that this was to fund the conversion work which was only embarked upon at that time. Moreover, the tenancy agreement was bogus as it suggested a rental liability with effect from 24 January 2004 whereas the property remained listed as empty on the council tax register until 1 February 2004.
33. The local authority's representative amplified these grounds in her written and oral submissions to me. In summary, she criticised the tribunal for failing to weigh up, or deal in its reasoning with, the cumulative effect of pieces of evidence which she said tended to cast doubt on the claimant's account. On the issue of whether the conversion had been carried out in stages between 2001 and 2004, she pointed out that the building control certificate (page 219) was at best equivocal but tended to disprove the claimant's account: it referred to completion of works and these did not amount to the separation of the house into flats; the tribunal had failed to take proper account of that. She added that telephone calls by her to the planning department and building control departments had confirmed that no application in respect of the creation of separate flats had ever been received by them.
34. Nor had the tribunal dealt with the implications of the entry in the Land Register. This showed not only that the property remained registered as a single house, but that it had been unmortgaged before November 2003; that suggested both that the claimant's son had no financial need for a tenant and also that a loan had been raised at that time to finance the conversion, which was inconsistent with the account of a process of conversion over three years and suggested instead that the creation of separate flats had been done with a view to contriving an HB entitlement when the claimant's redundancy was in prospect. The local authority submitted that the tribunal had erred in law in failing to inquire into these matters.
35. The tribunal had also erred in failing to inquire into why the claimant's alleged rent as a lodger and the rent allegedly paid by lodgers prior to him was paid in cash; without such an enquiry, its conclusions that the claimant's son had consistently sought to earn rent from the property and that the claimant had paid such rent were flawed.
36. All in all, the local authority submitted that the weight of evidence casting doubt on the claimant's account was such that the tribunal had erred in accepting it without any consideration of the contradictory evidence. In that connection the representative referred to: doubt over whether the claimant had in truth resided in the house before 2004 and over whether he or previous alleged lodgers had paid rent; the absence of any support for the assertion that the conversion of the house had been planned since 2001 and carried out in stages since then (which she said the certificate at page 219 tended to contradict); the fact of the claimant's notice of redundancy in November 2003 which, it was reasonable to suppose, led the claimant to know that he would become financially eligible for HB; the fact of the loan taken out in November 2003, which suggested both that the loan was taken out to fund conversion works and also that the claimant's son had not previously been short of funds, which cast doubt on whether the had really charged rent to lodgers; the special conditions in the tenancy agreement which indicated that, contrary to the claimant's and his son's assertions, the flat was not ready for letting on the open market in January 2004 and contradicted the assertion that the claimant's son had proposed to let the flat on the open market at that time; the reference in the tenancy conditions to a locked bedroom in the flat, in the light of which there were insufficient other rooms to form a viable flat; the fact that the earliest date as at which there was independent evidence that the flat had been completed was June 2004, the date the property was inspected for council tax purposes; the fact that, despite purporting to enter into the tenancy with effect from January 2004, the claimant had not made a claim for HB until March 2004, after pension credit had been awarded to him. All of this suggested that the conversion into flats was not a longstanding project but had only been embarked on in late 2003 with a view to contriving a way round the close relative rule and an entitlement to HB.
37. The local authority also criticised the tribunal's approach: it was apparent, from its findings that the house had been let commercially between 1996 and 1998 and a room let to lodgers thereafter, that the tribunal had erred by considering the entire house rather than the first floor flat to which the HB claim related. It was incumbent on the tribunal to consider specifically the reasons for the creation of the tenancy, but the statement of reasons omitted any such consideration.
38. In response, the claimant's representative submitted that the tribunal had not erred in law. It had been correct to decide the case on the balance of probabilities. In response to the local authority's submissions she suggested that the building control certificate at page 219 was not inconsistent with the works described in it being a stage in an already planned conversion of the house into flats; the Land Register was a register of dealings with the title to the house; the absence of any entry relating to the flat simply reflected the fact that there had been no registrable disposal of the flat; the suggestion that the loan of November 2003 was for the purpose of financing conversion work was pure speculation which the tribunal was not required to enter into; the council tax department's log of an alleged conversation with the claimant's son (page 132) was incomprehensible and in any event could not logically impact upon the claimant's claim.
39. The representative submitted that the tribunal had not failed to consider the reasons for the creation of the tenancy; it had complied with the guidance in commissioners' decisions, to consider where relevant dealings prior to the tenancy in question and the circumstances as a whole. She submitted to me that it was more probable than not that there was a commercial tenancy that was not contrived: there was evidence of a valid tenancy agreement containing all the necessary and usual terms.
40. She and the claimant also explained that the special clause regarding access reflected the fact that the conversion had been completed defectively and the claimant's son had to be sure that any tenant would allow access for rectification works. The conversion was nevertheless more or less complete as at the date of the tenancy. (I do not need to make a finding about this, for the reason I explain below.)

My decision

41. My task is to decide whether the tribunal erred in law. That does not involve my deciding what, on the balance of probabilities, are the true underlying facts. It simply involves my deciding whether the tribunal erred in law either in its approach or in failing to deal with the matters with which the local authority submits it should have dealt.
42. I find that the tribunal's conclusions are adequately supported by the findings of fact that it made; in other words, given its findings of primary fact, the conclusion that there was a genuine tenancy on a commercial basis which was not contrived was one that was open to the tribunal. I do not agree with the local authority that the tribunal wrongly considered the former position in relation to the house as a whole or failed to consider the reasons for the creation of the tenancy of the flat. The facts that (as the tribunal found) the claimant's son had sought to earn rental income from the house in the past, and in particular that the claimant had not been housed free of charge, were material to the issue of whether the tenancy had been contrived: the local authority's argument on that would be stronger if, at a time when the claimant was not financially eligible for HB, he had been housed free of charge. In considering the position prior to January 2004, the tribunal did not therefore err by considering an irrelevant matter.
43. Moreover, its reasoning in the final paragraph of the statement of reasons shows that it was considering the reasons for the creation of the tenancy of the flat between father and son: it concluded that the tenancy was created because the son intended to let the flat to a tenant and, given the father's need for accommodation, it was a logical solution for the tenant to be him.
44. The issue is therefore whether the tribunal erred in law in reaching those conclusions of primary fact. I note that the statement of reasons does not refer to the claimant's redundancy or to any of the other matters which the local authority has relied on in its submissions to me as needing to be dealt with. I have to decide whether that omission amounts to inadequate reasoning or otherwise discloses an error of law.
45. As regards some of the points made by the local authority's representative to me, it seems to me that the tribunal cannot be criticised for not dealing with them because either there was no evidence relating to them before the tribunal or they were not (so far as can be ascertained from the record of proceedings) drawn to the tribunal's attention and did not emerge so starkly from the papers that it was an error of law for the tribunal not to raise them of its own motion. Neither of the representatives who appeared before me had appeared before the tribunal and I had no information from the local authority representative who did appear suggesting that the record omitted reference to any evidence or argument; in those circumstances, as I pointed out at the hearing, I have had to make a judgment about what was covered at the hearing on the basis of the record of proceedings.
46. I appreciate that a record of proceedings is not a complete verbatim note and that it is possible for points made to be omitted, but if an appellant to the commissioner wishes to base a submission on the overlooking of evidence or submissions and the evidence or submissions are not recorded in the record, it seems to me to be necessary as a general rule for it to equip itself with evidence (such as a statement by someone who was present) that that piece of evidence or submission was in fact made. It should also raise the matter with the other side in advance, so as to avoid surprise and facilitate agreement on the position if possible.
47. I now deal with each of the local authority's points, starting with points that do not seem to me to have been expressly raised.
48. The building control certificate: though the record of proceedings contains page references to various pages of the papers referred by the local authority representative, page 219 is not among them. I think it more likely than not that the chairman would have noted down the page reference if it had been referred to. But even assuming in the local authority's favour that it was, I do not consider that the tribunal was legally obliged to deal with it in its reasoning; the document is in my judgment equivocal as regards the issues in the case: it is just as consistent with the 2002 works (which included the formation of what was probably the only downstairs toilet) being a stage in a planned separation into flats as with those works being the only works in contemplation at that time. A tribunal is not legally obliged to recite in its reasons that it has found a piece of evidence equivocal - which in my judgment would have been the tribunal's likely conclusion on considering the document.
49. No application for permission for the conversion: this is a more telling point, since it is more consistent with a rushed conversion started in late 2003 than a long premeditated one. But there is no indication that the tribunal was told of it. The claimant's assertion (page 248) that planning permission had been granted for the conversion does not appear to have been challenged. The tribunal cannot have erred in law in that regard.
50. The conditions in the tenancy agreement: the reference to the locked bedroom does not seem to me to call for mention by the tribunal: I do not agree with the local authority that, if there was a locked bedroom in the flat, there cannot have been enough other rooms for a self-sufficient flat; it seems to me that the most likely inference is that the locked bedroom was the claimant's bedroom, and I do not consider that the tribunal would have been obliged to spell this out.
51. On the other hand, the special condition regarding access for builders does strike me as a more telling point: on the face of the clause, the creation of a hallway and porch had either not been started or at least not completed as at the date of the agreement; this strongly suggests that the flat was not ready for the open letting market as at the date the agreement was entered into, contradicting the evidence that the conversion was by then complete.
52. As to that, the issue for me is not what the underlying factual position really was; the claimant's explanation at the hearing that the clause in fact related to the correction of some faulty work is not something I need to make a judgment about. The issue for me is whether the tribunal erred in law in failing to deal with the clause.
53. It is clear that the tenancy agreement was referred to at the hearing (see page 227), but the only submission noted in relation to it was that it described the property let as 'part of' the whole house; there is no indication that the tribunal's attention was drawn to the special conditions, which appear on the fourth page of the document. I consider that if reference had been made to these conditions, there would be some note in the record of proceedings either of the page reference or of the point being made. I have to take it that the point was not made, so that the issue is whether the tribunal was obliged to notice it of its own motion.
54. The local authority's representative reminded me of the tribunal's duty to act inquisitorially. I can agree that a tribunal which had the special condition drawn to it attention could have been expected to consider and enquire into its implications for the claimant's case, but the prior question is whether the tribunal erred in law in failing to notice the special condition in circumstances where it was on the fourth page of the lease and the local authority's representative did not draw attention to it either in its written submission or (I have to infer) at the hearing. In my judgment it would be unrealistic - especially in a case like this where both parties were represented - to expect tribunals to read every clause of a tenancy agreement in case a representative fails to rely on a clause which might be helpful to his case. I do not therefore consider that the law's requirements go that far.
55. The Land Registry certificate: the document was not in the papers, but was produced and referred to at the hearing; however, the only submission recorded is that it showed the title as a single house. I do not consider that the tribunal was obliged to deal with that in its reasoning: the register is simply a register of title, the claimant's son continued to own the freehold of the whole house, and the fact of conversion into flats would not call for an entry in the register unless and until there was a disposal of a flat requiring registration; a shorthold tenancy for six months does not require registration. In that respect the Land Registry document did not at all undermine the claimant's case, and it was unnecessary for the tribunal to say so.
56. The entry (in the charges section of the Register) regarding the mortgage does not appear to have been drawn to the tribunal's attention. In the circumstances, I do not consider that the tribunal can be faulted for failing to notice the entry and embark on a train of inquiry. Furthermore, the entry regarding the November 2003 mortgage is at best equivocal. As the claimant's representative submitted, it is pure speculation whether the loan secured on the mortgage was for the purpose of funding conversion works; it is also possible that the loan replaced some previous loan arrangement. Even if (contrary to my view) the tribunal could be faulted for not having spotted the entry, I do not consider that it could have been faulted for not inquiring into whether the claimant's son's financial position before November 2003 was so strong that he cannot have wished to earn rental income from the property; that is not a natural inference from the fact of the loan. Natural curiosity might have prompted an enquiry into what the loan was used for but, since the claimant was not himself the borrower, enquiries directed at him might well not have been fruitful.

No record of the claimant's alleged enquiries of the council in January 2004

57. Pages 131-136 of the papers are print-outs of council tax records. They contain no reference to any enquiry about HB by the claimant in January 2004, though the claimant contended that he made one. But it is not obvious that the council tax log would have contained such a record even if an enquiry had been made; the absence of an entry is not therefore very telling. The local authority does not appear to have made any submission about this to the tribunal (the submission that was made about page 132 was about the claimant's son's telephone conversation in 2001). I do not consider that there was any obvious difficulty about accepting the claimant's account of his alleged enquiry, such that the tribunal was legally obliged to discuss the logs with him in the absence of express reliance on them by the local authority's representative.
58. The remaining points relied upon by the local authority, of which the tribunal was aware, were:

(1) that there was no record of the rent allegedly paid by the claimant and previous lodgers, which was said to have been paid in cash;

(2) the local authority's written submission to the tribunal had referred to the telephone conversation noted on page 132 and submitted that it was inconsistent with an intention to exploit the house commercially (and the local authority also submitted to me that the entry cast doubt upon the claimant's occupation of the house at that time or his payment of rent);

(3) the claim form wrongly stated that the parties were not related and gave a different address for the claimant's son;

(4) the tenancy agreement referred to the property let as 'part of' the whole house, the flat had not at that time been separately registered for council tax and the plan was for the parties to the council tax on the house in equal shares;

(5) the alleged completion of the conversion and the entry into the tenancy agreement followed closely upon the claimant's redundancy;

(6) the claim had not been made until March 2004, whereas occupation was said to have started in January: as to that, the local authority's representative submitted to me that the claimant appeared to have delayed putting in his claim until he had been awarded pension credit; and

(7) the claimant had fallen into arrears and yet not been evicted, which was inconsistent with a commercial arrangement.

59. The tribunal recorded its acceptance of the claimant's account without referring to these matters, but I do not consider that it was obliged to refer to them.
60. No proof of rent payments by lodgers: the assertion that the claimant and previous lodgers had paid their rent in cash was not particularly suspicious or implausible; in finding that rent had been paid the tribunal was not in my judgment obliged to explain why it had accepted the assertion despite the absence of a record of payments through a bank.
61. The telephone conversation logged at page 132: a sceptic might infer from this either that the claimant's son was falsely claiming that the property was empty or that the claimant was not in truth residing there at the time of the conversation (February 2001). The claimant had given evidence (see page 230) that during some of the period 1999-2002 he had stayed with another woman with whom he had had a relationship, but there was other evidence that he was resident at the property before 2004: for example, his employer had corresponded with him at that address in November 2003 (pages 42-43).
62. I do not consider that the log entry cast sufficient doubt on the claimant's evidence of living in the house to require to be expressly dealt with in the decision. It may be that the claimant's son had at times underpaid council tax, because the local authority has told me that the property was recorded as empty until February 2004 and it seems fairly clear that the claimant had resided there during some of the previous period; but, while that might cast some shadow over the claimant's son's dealings with his council tax affairs, that would not undermine the claimant's own account of the facts relevant to his HB entitlement to an extent requiring express consideration in the decision.
63. Page 20 of the claim form: the claimant had either wrongly answered that he was not related to his landlord or (as he says) left the answer box empty and it had been wrongly ticked within the HB office. Either way, this suggests at least a degree of evasiveness on the claimant's own part; but, whilst a sceptically minded tribunal might regard this as calling for caution in accepting the claimant's evidence generally, the fact is that the tribunal did accept the claimant's account. Evaluating the credibility of witnesses is a matter for the tribunal and I can only interfere if I find that the tribunal erred in law by failing to deal with the point in its reasoning. I do not consider that this matter - which did not directly contradict any part of the claimant's evidence - was one that the law required the tribunal to deal with expressly.
64. The tenancy of "part of" the house and the sharing of council tax liability: the description of the let premises as part of the house rather than, for example, "the first floor flat" might suggest that the house had not been completely separated into flats. It would have lent weight to an argument (if one had been made) based on the special conditions in the agreement. On its own, however, this slightly clumsy wording did not point so strongly against the claimant's evidence as to require express consideration. The fact that the claimant's son had not arranged for separate registration of the flat for council tax purposes might cast doubt on his assertion that the flat was ready for commercial letting. But it did not completely undermine it. It was possible that the son equally contemplated that a third party tenant would pay 50% of the council tax assessed on the house. I do not therefore consider that the failure to apply for separate registration until the local authority itself said this was necessary cast such doubt over the evidence as to require express consideration.
65. The claimant's redundancy shortly before the tenancy was entered into: this could at most supply a motive for contriving the tenancy; it did not on its own even tend to show that that had been done. The tribunal found as a fact that the parties had entered into a genuine tenancy on a commercial basis, and the tribunal's acceptance of that is not in my view undermined by tribunal's failure expressly to consider the fact that they could have had a motive for acting otherwise.
66. HB claim delayed until after award of pension credit: it seems to have been suggested to the tribunal (see pages 227-228) that the claimant was not in truth financially entitled to HB as early as January 2004, because he was still in receipt of severance payments from his former employer. However, the local authority has not appealed against the tribunal's failure to find that the claimant was not financially entitled to HB. As I understand the submission, it is that the claimant's abstention from making his HB claim until pension credit had been awarded (so that he had the benefit of regulations 22 and/or 23 of the Housing Benefit and Council Tax Benefit (State Pension Credit) Regulations 2003) cast doubt on the credibility of his evidence; I take it to be suggested that the claimant had misled the pension credit decision-maker and this affected his general credibility.
67. As to that, I do not consider that the tribunal was required to conduct an investigation into the claimant's dealings with pension credit; the question whether or not pension credit had been correctly awarded was not an issue in the HB appeal and the tribunal was in my judgment entitled to assume that the pension credit decision-maker had satisfied himself that the award was due; it was not required to reinvestigate that separate issue with a view to establishing whether the claimant's general credibility was thereby put in doubt.
68. The claimant's arrears of rent: on the material before the tribunal, there was evidence that the claimant had paid rent - albeit not exactly in accordance with the agreement - until November 2004; it was accepted that he had thereafter fallen into arrears but had remained in occupation. His son had said (pages 222-223) that he had threatened eviction, but - bearing in mind that he had in his father a tenant whom he could trust to take care of the flat - had agreed to await the outcome of the appeal to the tribunal. The issue for me is whether the initial erratic payment of a fairly substantial amount by way of rent (not funded by HB), followed by a period of non-payment during which the claimant was not evicted in the circumstances described in the son's statement, cast such a degree of doubt on the commerciality of the arrangements as originally entered into as to require express consideration in the statement of reasons.
69. I do not consider that it did. As Mr Commissioner Jacobs indicated in paragraph 26 of CH/0296/2004 (referred to by the local authority's representative) many landlords will be prepared to accept the rent that can be obtained rather than insist on the full contractual rent, or to be patient while the claim and appeal process takes its course, without the arrangement losing its commercial character. I do not consider that the evidence cast such as degree of doubt on the commerciality of the arrangement as to require express consideration in the decision.
70. The combined weight of the points of doubt: the local authority's representative submitted that even if, had they stood alone, any of the points of doubt in the case would not have required express consideration, the fact that there were so many of them required the tribunal to consider them. That submission has to be evaluated by reference to the points of which the tribunal was aware. I can accept that, as a general rule, the greater the number of respects in which a claimant's account is implausible, the more carefully a tribunal should scrutinise it, but on the other hand, if the points taken individually do not sufficiently undermine the account, the fact that there are more than one of them does not alter their individual lack of weight. A commonsense approach is needed.
71. Taking such an approach, I do not find that the points of which the tribunal was aware have, in combination, such a degree of weight as to require the tribunal to deal expressly with them given that (as I have found) none of them was individually so weighty as to require consideration.

(signed on the original) Nicholas Paines QC

Deputy Commissioner

18 December 2006