Upper Tribunal (Administrative Appeals Chamber)

[2009] UKUT 20 (AAC) (27 January 2009)

 


IN THE UPPER TRIBUNAL Case No CH/3571/2008

ADMINISTRATIVE APPEALS CHAMBER

Before UPPER TRIBUNAL JUDGE WARD

Decision: The appeal is allowed. The decision of the appeal tribunal sitting at Wakefield on 1 August 2008 involved the making of an error of law and is set aside. The case is referred to the First-tier Tribunal (Social Entitlement Chamber) for rehearing before a differently constituted tribunal in accordance with the directions set out in paragraphs 24-26 of the Reasons.

REASONS FOR DECISION
1. The claimant had appealed to the appeal tribunal against a decision dated 9 April 2008 that he was to be treated as not liable to make payments in respect of a property which he and his family occupied as their home under a tenancy. The effect of being treated as not so liable was that he was outside section 130 of the Social Security Contributions and Benefits Act 1992 and so not entitled to housing benefit. (The appeal was heard together with an appeal against a previous decision, dated 3 December 2007, refusing benefit for failure to supply information, but that decision is not under appeal to the Upper Tribunal and I need say no more about it.)
2. The decision of 9 April 2008 was taken under regulation 9(1)(h) of the Housing Benefit Regulations 2006 which, so far as relevant, is in the following terms:

"9.-(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 five 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."

3. The appeal tribunal which heard the claimant's appeal on 1 August 2008 issued a decision notice on the day, in the following terms:

"The Housing Benefit appeal is disallowed.

The decision of the Respondent in relation to Housing Benefit issued on 09/04/2008 is confirmed.

Although I accept that possession proceedings had been issued I do not find that [the claimant] made any other enquiries [to] continue to occupy the property without relinquishing ownership in the manner that he did.

Regulation 9(1)(h) of the Housing Benefit regulations."

4. The claimant appeals against that decision with leave of a chairman of the First-tier Tribunal. The appeal is not supported by the respondent.
5. The claimant was previously the owner of the property. It was subject to a mortgage in favour of Abbey National. The claimant asserts that part of the security over the property was for the payment of debts: whether this means there was a second charge e.g. to Blemain Finance (document 69) is not entirely clear. He lived there with his wife and three children. On 27 December 2006, the claimant lost his job, due to a reduction in work, and on 24 January 2008 he claimed Income Based Jobseeker's Allowance ("IBJSA"). From May 2007, he fell behind on the mortgage. On or around 6 July 2007 he approached a property company to buy the property and grant him a tenancy over it, as a way of addressing their financial problems. On 2 August 2007 Abbey National started possession proceedings. At that stage the arrears were £1,799.37. On 9 August (a) the property was sold and (b) the claimant ceased to be entitled to IBJSA, on the grounds, according to him, that he was not available for work. The possession proceedings came to court on 5 September. Abbey National were no longer concerned as their mortgage had been paid off. The proceedings were adjourned and eventually dismissed. A further claim for housing benefit was made on 4 October 2007. A number of letters were sent by the Respondent and not replied to by the claimant, leading to the decision of 3 December 2007. A further claim was made on 19 March 2008, on which the decision which is the subject of the present proceedings was given on 9 April 2008. On 2 May 2008 the respondent wrote indicating that the decision of 9 April had been based on the information held for the October 2007 claim and indicating the respondent's view that the claimant had not succeeded in demonstrating that he could not have continued to reside in the property without selling it.
6. There are other facts which will require to be found, but that will be for the new tribunal and it is better, since I do not need them for the purposes of these reasons, that I am silent on them.
7. The claimant's grounds of appeal to the Upper Tribunal are set out in a letter dated 24 October 2008 from his representative. I paraphrase them as follows, I trust without doing them an injustice:

a. the tribunal applied the wrong legal test, confusing the claimant's ability to continue to occupy the property without relinquishing ownership with whether or not he made sufficient enquiries and thus failed to apply regulation 9(1)(h) correctly

b. the tribunal failed to deal with an argument put in the written submission and elsewhere to the effect that the waiting period for help with mortgage costs for IBJSA claimants and the limitations on what could be covered meant that any assistance would be too late and insufficient in amount to have enabled the claimant to forestall the possession proceedings on the timescale on which they were running

c. the statement of reasons was "vastly different" from the written decision given on the day of the hearing

d. the tribunal failed to deal with what the representative says the evidence was regarding the taking of alternative steps

e. the tribunal's decision was, in effect, perverse, in that it was predicated on the failure to make sufficient enquiries, but in fact no matter how many enquiries were made it would not have changed the situation

f. the tribunal failed to apply relevant provision of the Housing Benefit Guidance Manual

g. the tribunal failed to make a decision on a further point made, namely that the respondent should not have been permitted to base its decision on the March 2008 claim on material provided with the previous claim, given that information was said to be not available from the previous claim.

8. The respondent says:

a. the tribunal did not err in law

b. the assertions by the claimant's representative as to when housing assistance would have become available are incorrect on the facts

c. whether any alternative strategy would have succeeded is a matter of conjecture, but without any investigation by the claimant of available options he has not satisfied the respondent that he could not have continued to occupy the property as his home without relinquishing ownership of it.

9. The appropriate starting point is regulation 9(1)(h) itself. This provision, which in the predecessor Housing Benefit (General) Regulations 1987 was numbered as regulation 7(1)(h), was considered by Mr Commissioner Jacobs in R(H) 6/07, in which he said:

"14. As I have said, the issue I have to decide is not best formulated in terms of an objective or subjective test. Regulation 7(1)(h) contains elements of both.

15.There is a distinction between the legal test to be applied and the circumstances to which it has to be applied. Regulation 7(1)(h) deals with both. It identifies the legal test as whether the claimant or her partner could have continued to occupy the dwelling without relinquishing ownership. I stand by what I wrote in CH/3853/2001 that, as a matter of language, 'could not' does not mean that it was completely impossible to do otherwise. That is not how 'could' is used and there is nothing in the context or the likely policy of the legislation to suggest a different interpretation. That is the test, but what are the circumstances to which it must be applied? The reference to the claimant and her partner makes the test not a general one of what is possible, but a targeted one of what is possible for them. In other words, the test has to be applied to their circumstances.

16. In the context of this case, the test had to be applied to the claimant's family and financial circumstances. But was her perception of what was possible, sensible or appropriate in those circumstances relevant to the application of the test?

17. The claimant's perceptions may be relevant as evidence of what was practically possible. But in this case the claimant admitted that she did not investigate the full range of possibilities. It seems that, motivated by a desire to rid themselves of their debts, the claimant and her husband hit upon an idea and did not consider any other options. Her perception in those circumstances is not relevant as evidence of what was actually possible.

18. The claimant's perceptions may also affect or limit the options that are available. For example, a claimant might be under so much stress as a result of debts and worries that it is in the interests of her own mental health to dispose of ownership as quickly as possible without investigating and regardless of other options that are available. But that would be an exceptional case and there is no evidence that the claimant or her husband were so much or so badly affected in this case.

19. Apart from these possibilities, the claimant's perceptions are not relevant to the application of the test. It is impossible in the normal use of language to interpret 'could not' to mean 'believe she could not'. The language is not susceptible to such an interpretation. And there is no justification for subverting the language to be found in policy, in any feature of the legislative context, or in the practical consideration relevant to the application of the legislation. "

10. As paragraph 15 of the above extract, with which I respectfully agree, makes clear, the issue is whether the claimant and partner could have continued to occupy the dwelling without relinquishing ownership. But what is the relevance of whether the claimant has made enquiries as to alternatives, or has taken advice? The claimant's representative cites a sentence in paragraph 13 of R(H)6/07 that "It is irrelevant that the claimant did not seek or receive proper advice; the legislation deals with fact, not fault." The representative has taken the sentence out of context, as the opening words of paragraph 13 indicate that the Commissioner was there recording an argument on behalf of the local authority. The Commissioner indicated: "I broadly accept those arguments, but with some qualifications" and went on to write paragraphs 14 to 19 of his decision, quoted above. I do not believe therefore that the Commissioner was laying down a proposition of law that whether advice was obtained is irrelevant to the test in regulation 9(1)(h). It is true that that provision is not applying a test based on a claimant's conduct of itself; but showing what steps have been taken to explore alternatives, whether by direct action taken by a claimant or by the claimant obtaining suitable advice, may well be an integral part of establishing whether or not it was possible for the claimant and partner to remain in occupation without relinquishing ownership. It should not be overlooked that both on general principles of statutory interpretation and the wording of regulation 9(1)(h) itself, it is for a claimant to make out his case on this aspect; a claimant who does not address what steps have been taken to explore alternatives does so at his peril. As paragraph 18 of R(H)6/07 indicates, there may be exceptional cases where a claimant's circumstances mean that investigation of options may not be required, but it follows that in cases which are not exceptional, it is likely to be a material factor.
11. Whatever the position in relation to the adequacy or otherwise of the various letters from the Respondents requesting information (with which I am not concerned here), by the time the matter came before the tribunal, the claimant was represented and should not have been in any doubt what the issues were. By then, it was being argued that there were a number of specific alternative options which the claimant might have followed up, as to which the representative made written submissions:

a. the available amount of assistance with mortgage costs under IBJSA and its timing would not have been enough to forestall possession proceedings

b. the claimant could look for a job and was doing so, as indeed his Jobseeker's Agreement required him to

c. the claimant had been to the Citizens Advice Bureau but in any event that did not assist unless the advice would lead to a positive intervention enabling the claimant to stay on in the property without disposing of it.

12. At the hearing, a further possibility was put (136), that the claimant's wife could find work, but there is no indication that any response was made by the claimant on this.
13. The tribunal's statement of reasons does not contain anywhere any indication of what it was it thought the claimant could have done to enable him to stay on without disposing of the property. Given that the claimant, with the help of his representative, had presented arguments as to why the routes suggested were not in fact open to him, the duty to give adequate reasons in this case required a tribunal that was correctly interpreting regulation 9(1)(h) to indicate what it was that that the claimant had failed to satisfy the tribunal about.
14. An alternative explanation for the lack of discussion of the claimed alternatives is that the tribunal was applying the wrong test, incorrectly concerning itself with the adequacy of enquiry of itself, rather than as a route to establishing what alternative options were open to the claimant.
15. In this regard, I do consider that the interaction between the decision notice and the statement of reasons also led to – or evidenced - an error of law. A similar issue was considered by Mr Commissioner Turnbull in CIS/2345/2001, where he observed as follows:

"(1) The Decision Notice is prepared at or immediately after the hearing and, as a matter of common sense, if it positively indicates, however briefly, that the Tribunal did not apply the law correctly, that is likely to be accepted as a more reliable statement of the Tribunal's reasons than a subsequent, conflicting explanation in the full statement of reasons;

(2) In any event, a conflict between the reasons given in the Decision Notice and those given in the full statement is likely of itself to amount to an error of law in that, when the two documents are taken together, the Tribunal will not have made its actual reasoning sufficiently clear;

(3) However, there is no obligation to set out any reasons in the Decision Notice. If reasons are set out which, although in some respect unsatisfactory, are not inconsistent with an adequate explanation of the reasons contained in the full statement, the unsatisfactory nature of the explanation in the Decision Notice is unlikely to render the decision wrong in law." [Emphasis mine.]

16. In the present case, the lack (as the tribunal found) of enquiries made by the claimant were by no means irrelevant to the correct test, set out in the final line of the statement of reasons, that "he has not shown that he could not have continued to occupy the property without relinquishing ownership as he did." However, as noted, the statement of reasons itself does not in terms address what the claimed alternatives were and, following a similar line of reasoning to that of Mr Commissioner Turnbull, I consider that it is likely that the terms of the decision notice, considered in the light of the – as I have found, inadequate - statement of reasons, evidence that the tribunal's decision –taking was inappropriately coloured by treating the adequacy of enquiry as a self-contained issue.
17. In summary, even if the right test were being applied, the tribunal failed to deal adequately with points raised on behalf of the claimant and to explain its reasoning adequately. However, taking the decision notice and the statement of reasons together, I infer that the tribunal was in any event misapplying the test in regulation 9(1)(h). I therefore allow the claimant's appeal on the points which I have summarised above as grounds (a) to (c).
18. As to the respondent's three points, I have explained why there are in my view errors of law in the decision. The Respondent's second and third points do not affect this conclusion, but the points can be made again at the new hearing before the First-tier Tribunal which is now necessary.
19. As the decision falls to be set aside on other grounds, I need do no more than briefly refer to the remainder.
20. As to ground (d), what the representative says the evidence was is not borne out by the record of proceedings. The latter document does not purport to be a full note of evidence and I would have needed to seek further evidence as to what the evidence actually was if it had been necessary to take this point further. As there will be a rehearing in any event, it is now academic.
21. As to ground (e), I do not rule on this as a distinct ground. The new tribunal will have to make findings on all material facts (which may well go beyond those found by the first tribunal, particularly when it comes to the explanations put forward on the claimant's behalf for why possible options were in the event not available to him. Issues such as the job prospects and earning potential of the claimant and his wife at the material time (including the circumstances in which the claimant became unavailable for work from 9 August 2007), the impact on the household budget of any work they might have been able to find, the equity in the house and the commercial position likely to have been adopted by the lender(s) may all require further explanation. It will be for the new tribunal to reach its own conclusions based on its findings of fact.
22. Point (f) is not well-founded. The Guidance Manual is not law. There is no statutory provision giving its provisions any particular weight. Further, I note that in any event, there is other material in it which is far less supportive of the claimant's case (see e.g. paragraphs 3.283 and 3.286).
23. I am not sure that I understand point (g). On appeal, the First-tier Tribunal to whom this case is remitted will stand in the shoes of the Respondents in tasking a decision. In the usual way, the tribunal will have to apply the "down to the date of decision " rule contained in paragraph 6(9) of schedule 7 of the Child Support, Pensions and Social Security Act 2000. The decisions on the equivalent provision for other forms of social security, R(DLA) 2/01 and R(DLA)3/01, indicate that the rule does not prevent a tribunal having regard to evidence that was not before the respondent and came into existence after the decision was made or to evidence of events after the decision under appeal was made for the purpose of drawing inferences as to the circumstances obtaining when, or before, the decision was made. So the new tribunal is free to consider all available evidence bearing on the circumstances pertaining at or before the date of decision (9 April 2008).
24. I direct that the new tribunal apply the interpretation of regulation 9(1)(h) set out in R(H)6/07, as explained by the present decision. It will have to make findings of fact on all material aspects and give adequate reasons for its decision, including explaining how it has dealt with arguments advanced on behalf of the claimant. It will need to apply the "down to the date of decision" rule as set out in paragraph 23.
25. I further direct (subject to any further Direction by a District Tribunal Judge) that the hearing of the further appeal be expedited so far as reasonably possible.
26. I further direct that the file be placed before a District Tribunal Judge to consider whether any direction is required for any appeal that may be outstanding in respect of the claimant's further claim (dated 29 May 2008) to be heard together with the re-hearing pursuant to this appeal.
27. The fact that this appeal on a point of law has succeeded should not be taken as an indicator of the final outcome, which is a matter for the tribunal to which this case is now remitted.

(signed)

C.G.Ward

Judge of the Upper Tribunal

28 January 2009