Upper Tribunal (Administrative Appeals Chamber)

 

DECISION OF THE UPPER TRIBUNAL

ADMINISTRATIVE APPEALS CHAMBER

 

The Secretary of State's appeal to the Upper Tribunal is allowed. The decision of the Leeds appeal tribunal dated 27 May 2008 involved an error on a point of law, for the reasons given below, and is set aside. It is appropriate for the Upper Tribunal to re-make the decision on the claimant's appeal against the Secretary of State's decision dated 15 March 2007 after making additional findings of fact (Tribunals, Courts and Enforcement Act 2007, section 12(2)(b)(ii) and (4)). The decision as re-made is that the claimant's appeal is disallowed and as from whatever is the appropriate date down to 15 March 2007 the decision establishing the level of his entitlement to income-based jobseeker's allowance is not to be superseded to include any housing costs in his applicable amount.

 

 

REASONS FOR DECISION

 

1. This appeal raises interesting questions about eligibility for housing costs within the jobseeker's allowance (JSA) and income support schemes of payments made under home financing arrangements specifically designed to be compliant with Shari'a principles in not involving the payment of any interest. The answers turn on whether the payments constituted rent relating to a long tenancy, defined as "a tenancy granted for a term of years certain exceeding 21 years", and so qualified as a housing cost (Jobseeker's Allowance Regulations 1996, Schedule 2, paragraph 16(1)(a), and regulation 1(3)). In my view, given the prevalence of such financing arrangements of varying forms in the Muslim community, the regulations should have been amended some time ago to set out in substance the proper treatment of the various forms of such arrangements, under which claimants in economic reality are the owners of their homes. A start on that has been made in the tax context, but not for benefits. As it is, there is a lot of chance, not related to the real merits of particular circumstances, in how cases fall into the existing legislative categories and in drawing a line between what qualifies for housing benefit purposes and what for other means-tested benefits, let alone immense scope for confusion and misunderstanding. In the present case, the initial decision did not allow the claimant any JSA housing costs and he was apparently not allowed housing benefit either, which indicates that something was wrong somewhere.

 

The background

2. The evidence as it stood when the appeal tribunal gave its decision must be established with some care. The claimant apparently became entitled to income-based JSA from 16 May 2006. According to the details recorded from his claim form he had a mortgage on his home from HSBC taken out on 1 October 2004. Because no housing costs would be allowed for the first 39 weeks of entitlement, that initial award of JSA would have included no housing costs. I do not know what happened about gathering information at the end of the 39 weeks, but in March 2007 a form MI12 was re-issued to the claimant. On the form the claimant described a mortgage loan of £55,000 and said that only capital repayments were made, although he also gave an interest rate. HSBC gave the date of the taking out of the loan as 13 December 2004 and stated that the mortgage was an Islamic mortgage. On that evidence, the decision-maker of 15 March 2007 took the view that no interest was payable so that there could be no housing costs allowed, assuming I think that the only model was the sort of arrangement in issue in Commissioner's decision CIS/14483/1996.

 

3. The claimant appealed on the ground that he was making rental payments that were equivalent to mortgage interest. He attended an appeal tribunal hearing on 5 November 2007 taking with him annual statements to the end of November 2005 and November 2006 from Amanah Home Finance (AHF) within HSBC, which showed a breakdown of the nature of the payments made between "on account" payments, going to reduce the outstanding balance, and rental. A lump sum of £20,000 had been paid on account at the outset. There were also two letters from 2007 showing revised monthly payments on changes in the AHF percentage rate. There was rightly an adjournment for further information and evidence to be provided by the claimant, in particular "the contract with HSBC for the loan and the land registry showing ownership of [the house]". The chairman had still been treating the arrangement in question as a loan, despite the clues to the contrary in the annual statements and in the claimant having said that he did not own the house.

 

4. The claimant attended the next hearing on 18 December 2007. By that time he had solicitors, Williscroft & Co, acting for him, who faxed a submission and copies of three documents on 17 December 2007. The three documents all purported to be deeds executed and delivered by HSBC and by the claimant on 13 December 2004. They were in what was obviously a standard form drafted by Irwin Mitchell, solicitors. They were stated to have been executed as a deed by "HSBC BANK plc acting by [a name - Howard William Wade - printed by a rubber stamp]", with an illegible squiggle opposite. There was no witness to that signature. The claimant's signature was witnessed by his then solicitor. One document was a promise to buy by the claimant on being required to do so by HSBC in certain defined circumstances. One was a promise to sell to the claimant by HSBC, in particular on the claimant having made "on account" payments totalling £75,000, the purchase price. The other document was what purported to be the grant of a tenancy of the house by HSBC to the claimant for a term of 25 years at a commencing rent of £272.43 per month and calculated thereafter in accordance with the product terms.

 

5. There was also a copy of a letter dated 12 December 2007 from HSBC to Williscroft & Co, as follows:

 

"Our mutual client has HSBC Ijarah method of finance based on a Residential Lease Purchase. HSBC will purchase property from the vendor and then lease it to the client over an agreed term. During this period the client makes one monthly payment to HSBC which consists of a payment towards the purchase price of the property, a rental payment and a building insurance payment.

 

...

On this basis there is no interest charge, however we do charge a rental rate currently 7.07%. The customer's monthly payment consists of £303.17 rental, £78.35 contribution to capital cost and £36.10 building insurance, a total of £417.62 per month.

 

...

Under the Ijarah method the client does not own a share of the property; however the current outstanding balance is £52,180.93.

 

Finally, at the end of the finance term the Bank will arrange to transfer ownership of the property into [the claimant's] name."

 

6. The claimant took to the hearing a leaflet introducing HSBC Amanah Home Finance as a Shariah compliant method. The leaflet, apparently an April 2007 printing (page 114A) described the Diminishing Musharakah method of financing, under which the property was held by HSBC Trust Company on trust for the buyer and HSBC jointly and, as monthly payments were made, the buyer's share of the property would increase and HSBC's decrease.

 

7. The written submission from Williscroft & Co unfortunately disregarded the difference between the nature of the three deeds and what was described in the leaflet. It asserted that the arrangement was as described in the leaflet. It said that, although on the face of the deeds the claimant was renting the house from HSBC, normally a tenant would not pay a deposit of £20,000 and would have no interest in the property at the end of the term. The submission suggested both that the claimant could be regarded as having taken out a loan of £55,000 to acquire an interest in the property and that, under paragraph 16 of Schedule 2 to the JSA Regulations, was making payments by way of rent relating to a long tenancy or under a co-ownership scheme. Finally, the rent was said to have incorporated eligible interest at the rate of 7.07%.

 

8. The hearing on 18 December 2007 was adjourned for lack of time and to enable the Department for Work and Pensions to consider the new evidence and make a new submission addressing in particular paragraphs 14 (loans) and 16(a) of Schedule 2 to the JSA Regulations (rent on a long tenancy). The claimant had apparently said that he had not been able to get the Land Registry documents.

 

9. Paragraphs 14 and 15 of Schedule 2 sets out the conditions on which a loan qualifies for the award of housing costs on a claimant's home. Paragraph 16(1)(a) provides:

 

"(1) Subject to the deduction specified in sub-paragraph (2) and the reductions applicable in sub-paragraph (5), there shall be met under this paragraph the amounts, calculated on a weekly basis, in respect of the following housing costs--

(a) payments by way of rent or ground rent relating to a long tenancy and, in Scotland, payments by way of feu duty;

..."

 

Sub-paragraphs (2) and (5) are not relevant to the present case. "Long tenancy" is defined in regulation 1(3) of the JSA Regulations as:

 

"a tenancy granted for a term of years certain exceeding twenty one years, whether or not the tenancy is, or may become, terminable before the end of that term by notice given by or to the tenant of by re-entry, forfeiture (or, in Scotland, irritancy) or otherwise and includes a lease for a term fixed by law under a grant with a covenant or obligation for perpetual renewal unless it is a lease by sub-demise from one which is not a long tenancy;"

 

10. By way of contrast, the Housing Benefit Regulations 2006 (the 2006 Regulations), which contain an identical definition of "long tenancy" in regulation 2(1), prevent the payment of housing benefit in respect of periodical payments "under a long tenancy except a shared ownership tenancy" (regulation 12(2)(a)).

 

11. The Department's written submission dated 28 February 2008 was, I fear, even more hopelessly confused than had been that from Williscroft & Co (although I recognise at once that some of the documents involved might have been rather impenetrable for anyone without relevant legal expertise). The substance was as follows:

 

"As per the regulations `Housing Costs' referred to is any INTEREST charged to borrow the money for the mortgage/loan used to buy a house, or do repairs - paragraphs 14 and 15.

 

Any calculation of housing costs has to have a sum of money the customer owes to his lender. This sum/debt will have interest charged on it each month that the customer has to pay for borrowing the money. This amount of money borrowed, if allowable, is used to calculate the `interest' that the customer is entitled to, using the standard rate of interest set by the Department of Work & Pensions. The interest is then awarded, but paid direct to the mortgage lender - see paragraph 9, calculation for loans.

 

As per the deeds (page 117), customer does not own the property, but has a PROMISE with HSBC to BUY the property from the bank. He does this when he pays the bank each month - his share in the property increases as the bank's share decreases - see 110b, copied from the HSBC booklet about Amanah Home Finance. Until the end of the borrowing period is reached (25 years) the customer does not fully own the property, he buys it back slowly.

 

Re: point 7 of the solicitor's letter - re co-ownership - For co-ownership a customer would have a mortgage to own a percentage of the property and pay rent for the rest. So this person would only ever own the percentage he has the mortgage on.

 

I did contact Bradford Council - Housing Benefit team - who state customer not covered for help with `rent' as he is still buying the property."

 

12. The final hearing was on 27 May 2008. Williscroft & Co faxed another written submission which, among other things, did clearly argue that the claimant was a tenant for a 25 year term, within the definition of a long tenancy. The Department did send a presenting officer to the hearing, whose response to the chairman's specific question about the application of paragraph 16(a) of Schedule 2 (totally ignored in the written submission) was that "the arrangement here is that app will acquire the freehold, so under what sense can he be considered to be a tenant?"

 

The appeal tribunal's decision

13. The appeal tribunal allowed the claimant's appeal and decided that he was entitled to housing costs in respect of the rent that he paid, leaving the precise dates and amounts to be put into effect by the Secretary of State. It concluded that there had been no loan taken out to acquire an interest in the property, but that there were housing costs in the form of rent relating to a long tenancy, ie a tenancy granted for a term of years certain exceeding 21 years. Paragraph 7 of the statement of reasons was as follows:

 

"The tenancy dated 13 December 2004 entered into between HSBC Bank plc and the Appellant was a long tenancy. It was for a term of 25 years commencing from 13 December 2004. It was clearly to be read in the context that there were 3 documents entered into between the bank and the Appellant on the same day. However, each of the documents also stood in its own right. The tenancy document clearly reflected an arrangement which was a tenancy in fact. It referred to a term of years and payable rent. It contained a long list of tenant's obligations. It contained a few obligations from the landlord. It made other provisions typical in tenancy agreements. It also included a provision that at the end of the term the tenant had to deliver up the property to the bank as landlord. Clearly, it would not have been in the minds of either the bank or the Appellant that this would occur. However, provision was made for it in the tenancy agreement."

 

The appeal to the Commissioner/Upper Tribunal

14. The chairman of the appeal tribunal granted the Secretary of State leave to appeal to a Commissioner. The main point in the application was that the arrangement as a whole did not have the characteristic of a long tenancy, but of the acquisition of freehold ownership and that the payments made by the claimant were not rent but mesne profits as in paragraphs 6 and 7 of CIS/14483/96. But there was also reference to the decision of Mr Deputy Commissioner Paines QC in R(H) 3/07, signed on 10 November 2006. In paragraph 25 the Deputy Commissioner had suggested that if the tenancy was not registered it could not come within the definition of a long tenancy. It had not been established in the present case what interest, if any, had been registered. The notice of appeal dated 27 August 2008 went into more detail and had attached to it a copy of the entries on the proprietorship and charges registers of the Land Registry as at 18 August 2008. This showed HSBC Bank plc with absolute title, subject only to restrictive covenants from a previous transfer of the property in 2001.

 

15. Following a round of written submissions, including a detailed submission on behalf of the Secretary of State dated 26 January 2009 identifying the relevant legal issues with commendable thoroughness, I directed an oral hearing. The new point raised in that submission was that the tenancy deed had not been executed properly by HSBC, because if the person named as signing for and on behalf of HSBC had been acting under a power of attorney his signature should have been witnessed. The company seal had not been used, nor was there a signature by two directors or one director and the company secretary.

 

16. The oral hearing took place on 14 July 2009. The Secretary of State was represented by Mr Mark Mullen of counsel, instructed by the Office of the Solicitor to the Department for Work and Pensions. The claimant attended and was represented by Mr Benedict Wray, of counsel, acting through the Free Representation Unit, as Williscroft & Co were not funded for representation. I am grateful to both of those representatives for thoroughly prepared submissions. Since documents were produced at the hearing to show that the claimant's leasehold interest had been entered on the Land Registry property register on 29 June 2009 (official copy of the register and copy of letter to the claimant from his conveyancing solicitors, Last Cawthra Feather, dated 30 June 2009 telling him that that had been done), I later gave the opportunity for the production of further evidence and submissions that might be relevant if I were to set aside the appeal tribunal's decision and substitute a decision on the appeal against the decision of 15 March 2007. That process was completed by the end of November 2009. The subsequent delay has been entirely my responsibility.

 

Discussion: failure to register under the Land Registration Act 2002

17. Section 27(1) of the Land Registration Act 2002 provides:

 

"(1) If a disposition of a registered estate or registered charge is required to be completed by registration, it does not operate at law until the relevant registration requirements are met."

 

Subsection (2)(b)(i) includes in the category of dispositions of a registered estate required to be completed by registration, "the grant of a term of years absolute for a term of more than seven years from the date of the grant". It was not disputed that on the assumption for present purposes the tenancy agreement had been properly executed as a deed by HSBC (see further below), these provisions would have applied on the evidence before the appeal tribunal. The appeal tribunal had no evidence of the state of the register and it is now known that no entry was actually made until 29 June 2009. I come back below in my substituted decision to whether there is any basis for giving effect to that registration at any earlier date. It was also not disputed I think that the effect of section 27(1) was that only an equitable interest was transferred prior to registration, although that would not preclude the operation of the agreement between the immediate parties, eg as to the liability to pay rent of the amount and at the intervals specified, on a contractual basis.

 

18. On the face of it, therefore, the appeal tribunal could not in law have found that the definition of "long tenancy" was satisfied if the decision in R(H) 3/07 is correct. There, a document purported to create a tenancy of 25 years at a rent of £80 per week, but was not made by deed. In accordance with section 52 and 53(1) of the Law of Property Act 1925 the document was therefore "void for the purpose of conveying or creating a legal estate". An appeal tribunal decided that the tenant's claim for housing benefit was not excluded by the equivalent of regulation 12(2)(a) of the 2006 Regulations because a long tenancy had to be a legal estate of a term of years absolute and only an equitable lease had been created. The Deputy Commissioner disallowed the local authority's appeal from that decision and agreed that a tenancy was only granted if granted at law. If all that was created was an agreement to grant a lease, enforceable against the landlord in equity by the tenant through an order for specific performance by a court with jurisdiction to make such an order, there had been no grant within the definition. Appeal tribunals and Commissioners, and now First-tier Tribunals and the Upper Tribunal have no jurisdiction to order specific performance. Cogent reasons were put forward for that conclusion, which being contained in a reported decision I should follow unless satisfied that it is wrong. In fact, I agree with and endorse the conclusion and the reasons. I also agree that in the circumstances of R(H) 3/07 a weekly tenancy would have been in existence by virtue of the claimant's entry into possession and payment of rent on a weekly basis.

 

19. Mr Deputy Commissioner Paines therefore did not need to decide on the effect of non-registration of the leasehold interest in that case, but was asked for some guidance although the parties had not put forward any competing submissions. He said this in paragraph 25:

 

"By virtue of sections 4 and 7 of the Land Registration Act 2002, a lease for more than seven years of unregistered land, even if made by deed, is ineffective to create a legal estate but has effect `as a contract made for valuable consideration to grant or create the legal estate concerned'. This means that it creates an equitable interest only. By section 27, a lease for more than seven years of registered land likewise `does not operate at law until the relevant registration requirements are met'. It therefore seems to me that, like leases for more than three years (and certain leases for not more than three years) that are not made by deed, leases for more than seven years that are not registered will, at most, take effect in equity only. This means that they do not amount to a `tenancy granted' within the meaning of the 1987 Regulations."

 

That did not mean that there was no legal tenancy at all in existence. In the circumstances there would be a weekly periodic tenancy, but that could not be a long tenancy.

 

20. Mr Mullen for the Secretary of State of course submitted that that principle applied directly to the present case. Mr Wray for the claimant put forward a number of arguments as to why it should not be decisive. First, he said that the main focus in R(H) 3/07 was the ineffectiveness of a document not made as a deed, not the effect of non-registration and that the Deputy Commissioner only offered "some tentative observations". The Deputy Commissioner's modesty should not be held against him. Since the correctness of the main part of the decision has been accepted, the observations about the effect of non-registration follow entirely logically and consistently. If those observations had been considered by the majority of Commissioners at the time to be flawed, the decision would not have been given reported status. Nor can I agree that those observations are undermined by a failure to consider the purpose of the Land Registration Act 2002, to deal with priorities and protection of rights as between the parties to transactions and third parties, rather than the effectiveness of the tenancy as between HSBC and the claimant here. Mr Wray submitted that here the fundamental mutual obligations were not affected by the failure to register the claimant's leasehold interest and that was what mattered in relation to qualification for housing costs, so that a long tenancy should be regarded as having been granted. However, section 27(1) (and sections 4 and 7 on unregistered land) shows clearly that the Act was not restricted to questions of priorities and protection. Its terms are completely unqualified and apply to the nature of the legal relations between the landlord and tenant just as much as to the effect in relation to third parties.

 

21. For the same reason I reject the distinction drawn in the submission in paragraph 50 of Mr Wray's skeleton argument that:

 

"while it is difficult to fault the logic of the reasoning in R(H) 3/07, there is a significant difference between an invalid grant of a lease and an incomplete registration; the first is invalid at common law and can only take effect in equity if at all, while the second is valid at law and its effect [is] merely suspended pending registration. It is not the disposition of the legal estate itself; that is done by the earlier deed."

 

22. Mr Wray finally submitted that it was unfair to penalise the claimant here when he had done all that he personally could have been expected to do towards having all necessary formalities completed. He suggested, by reference to some of the correspondence discussed below, that the fault lay at the door of the Land Registry (in which case for benefit purposes he should be treated as it had carried out its duties properly) or of Last Cawthra Feather. Whatever claims might possibly be made for any failures by the Land Registry or solicitors (about which I express no views), that cannot affect the actual state of affairs as at 27 May 2008 that the claimant's leasehold interest had not been registered. Anyone must have great sympathy for the claimant having got tangled up in an exceptionally complicated legal situation which was misunderstood for a long time by a great many of those concerned who were meant to be in command of the relevant law and practice. The most important consequence of the misunderstanding was the apparent disallowance of his housing benefit claim, when the logic of the legal situation as revealed by R(H) 3/07 (signed and published on the Commissioners' website some months before the claim for JSA was made) was plainly in favour of qualification for housing benefit. (Again I do not know what steps the claimant's advisers may have taken, for instance to request that the decision disallowing housing benefit be revised on the ground of official error). But all that sympathy also cannot alter the actual state of affairs.

 

23. I have considered briefly whether that argument on unfairness could be re-cast into a technical point on the precise terms of paragraph 16(1) of Schedule 2 to the JSA Regulations, which refers to payments by way of rent "relating to a long tenancy". For housing benefit only payments "under a long tenancy" are excluded from qualification. Could it possibly be argued that a payment of rent made in pursuance of a transaction that would be a long tenancy but for the absence of registration "relates to" a long tenancy? There would be attractions in such a solution, especially if by the date of decision registration had taken place. It would avoid a case falling outside the scope of housing costs during the almost inevitable "registration gap" (Megarry and Wade's Law of Real Property, 7th edition 2008, by Harpum, Bridge and Dixon, paragraph 7-150) between the date of the disposition and the date when the application for registration is made. But on the other hand, it could lead to payments apparently qualifying for both housing costs and housing benefit at the same time, which would not be a desirable result. I have concluded that a payment made at any date can only relate to a long tenancy if one exists at that date. Registration has effect only from the date of the application in pursuance of which the entry in the register was made (Land Registration Act 2002, section 74(b)). The effect does not relate back to the date of the disposition itself. Thus even if it is known that registration has taken place, payments made during the "registration gap" cannot relate to a long tenancy. That conclusion in my view reinforces the need for reconsideration of the definitions of housing costs for income support, JSA and pension credit and of rent for housing benefit.

 

24. Accordingly, I conclude that the appeal tribunal of 27 May 2008 erred in law in concluding that the claimant was paying rent relating to a long tenancy as at 15 March 2007, which should therefore be included in housing costs for JSA purposes. It does not matter that the effect of non-registration of the tenancy was not specifically raised on behalf of the Secretary of State before the appeal tribunal. The decision is simply inconsistent with the proper legal position. And the question of registration was sufficiently raised by the evidence produced and the absence of any Land Registry copy entries as requested by the appeal tribunal of 5 November 2007, especially in the light of the existence of decision R(H) 3/07. That is sufficient to require the setting aside of its decision.

 

Discussion: the validity of the execution of the tenancy

25. It is therefore unnecessary for me to adjudicate on the complicated and learned arguments about whether, under the law as it stood at the time (before some significant new legislation), the signature of Mr Wade, without any accompanying statement or attestation that it had been witnessed by another person, and without the exhibition of any power of attorney granted by HSBC, was sufficient for the tenancy agreement to have been validly executed as a deed. For the period before registration took effect (which I find below to have been 29 June 2009) even if it had been validly executed it could not have effect as a grant of a long tenancy. From that date onwards, the claimant is deemed by virtue of section 58 of the Land Registration Act 2002 to have the legal leasehold estate, following the entry in the register, regardless of whether the tenancy agreement was properly executed as a deed or not. As it turns out, as noted below, when the Land Registry eventually gave close consideration to the documents created in 2004 it raised very similar point to those made for the Secretary of State and required the tenancy agreement and promise to sell to be re-executed by Mr Wade with an attestation. That was duly done, so that from that time onwards there appears to be no problem as to the validity of the documents.

 

The Upper Tribunal's decision on the appeal against the decision of 15 March 2007

26. It is plainly expedient in the circumstances for a decision to be substituted under section 12(2)(b)(ii) of the Tribunals, Courts and Enforcement Act 2007. I gave the opportunity after the oral hearing for the production of documents that could throw light on when the application was made in pursuance of which the entry was made on the register. That was in case, given the very confused history as it appeared at the time, the relevant application for the purposes of section 74(b) of the Land Registration Act 2002 on the date of effect of registration could have been made prior to 15 March 2007. Some interesting material has been produced and I think it would be helpful to set out briefly how I see matters as a result.

 

27. It is not at all clear what Last Cawthra Feather actually did about registration in 2005 after the completion of the transaction itself on 13 December 2004. Irwin Mitchell wrote to them on 11 March 2005 as follows (page 290):

 

"Further to the completion of this matter we would be grateful if you could note that we have today submitted HSBC's application for registration to The Land Registry. We take this opportunity to remind you that you should now submit your application for registration of the Tenancy and Promise.

We confirm that our application contains a letter to The Land Registry that you will be submitting the Tenancy Agreement and Promise to Sell as a registrable interest."

 

As a consequence, HSBC was registered as the holder of the freehold title on 22 March 2005. Unhelpfully, the date put on the register is the date that the entry is made, not the date of the application pursuant to which it was made, at least as I understand it.

 

28. When the claimant, following the appeal tribunal hearing on 5 November 2007, made enquiries to Last Cawthra Feather about obtaining copy Land Registry entries, this reply was sent on 7 November 2007 (page 287):

 

"Following your telephone call to our office today I enclose the Official Copy of the Register of Title relating to [the property].

I also enclose a certified copy of the Promise to Buy, Promise to Sell and Tenancy Agreement relating to [the property]. The originals of these documents were forwarded to the Land Registry back in 2005 but it appears from the Register that they were not actually registered against the property. I have therefore written to the Land Registry to request that they register the Tenancy Agreement and the Promise to Sell as registrable interest and as soon as I hear back from the Land Registry I will be back in touch with you."

 

The register would of course only have shown HSBC's freehold title.

 

29. There is no copy of Last Cawthra Feather's letter to the Land Registry in the papers, although there is a copy of an AP1 form applying to register a tenancy agreement and a promise to buy, stating that certified copies were enclosed, but no fee. Although the Land Registry has later denied that it received any application in 2007, a letter from them to Last Cawthra Feather dated 12 November 2007 rejecting an application is now in the papers (pages 304 - 5):

 

"I refer to your application for registration affecting the above property received on 12 November 2007.

An initial inspection only of your application shows that it is substantially defective under the provisions of rule 16(3) of the Land Registration Rules 2003 for the following reasons:-

The lease dated 13 December 2004 does not contain the prescribed clauses required by rule 58A Land Registration Rules 2003, nor does your application contain a certificate or other evidence to satisfy the registrar that the lease is an exempt lease in accordance with rule 58A(4)(c) and (d) Land Registration Rules 2003.

The application to transfer the property to the HSBC Bank PLC was lodged by Messrs Irwin Mitchell of St Peter's House, Hartshead, Sheffield and we do not appear to have received any subsequent application from you to register the lease and promise to buy.

If the original documents had been lodged it is unlikely that we would have accepted the lease for registration for the reasons given above.

Any new or renewed application should be accompanied by the original documents, or declaration accounting for their loss, a completed SDLT certificate or self certificate and appropriate scale 1 fee.

I am therefore rejecting your application and enclose all the documents that accompanied it. Please renew your application once you have corrected the defect(s) referred to."

 

I am not at all sure of the validity of the objection based on rule 58A of the Land Registration Rules 2003, because sub-paragraph (b) of the definition of "prescribed clauses lease" in rule 58A(3) requires the lease to have been granted on or after 19 June 2006 and this was no problem when the tenancy was eventually registered in 2009. But, be that as it may, the application was rejected and there is no evidence of any further or renewed application in 2007 or 2008.

 

30. What Last Cawthra Feather said about matters in a letter dated 7 August 2009 (pages 306 - 7) was as follows:

 

"Following the acquisition the vendor’s existing mortgage secured upon the property was discharged and documentation passed to Irwin Mitchell to effect the registration of the freehold interest into the name of HSBC Bank Plc in accordance with the terms of finance.

However it would appear that the registration of [the claimant's] leasehold interest was not dealt with due to some confusion of this unusual transaction.

In November 2007 [the claimant] contacted the firm as he had a query concerning the registration. We attach herewith a copy in which Mr Stewart then acting on behalf of [the claimant] indicated he would look into the matter with HM Land Registry.

It then appears that the file was overlooked until our correspondence with your firm in 2009 and you raised with us a concern that the tenancy agreement still appeared not to have been registered with HM Land Registry. You then returned the file to us and we put in place the appropriate registration procedure to rectify the register."

 

31. Also in the papers are copies of letters from the Land Registry to Last Cawthra Feather dated 11 June 2009 (pages 310 - 1) and 17 June 2009 (page 312). The letter of 11 June 2009 contains the following:

 

"I refer to your application for registration affecting the above property received on 11 June 2009.

An initial inspection of your application showed that it was not accompanied by a power of attorney or conveyancer's certificate in Form 1 in Schedule 3 of Land Registration Rules 2003 (as amended) to support a primary deed, and one was required.

The signature of Howard William Wade has not been witnessed on the enclosed Tenancy and Promise to Sell. Could you please arrange for the documents to be re-executed and for details of the witnessing to be set out in the Tenancy and Promise to Sell.

I am therefore rejecting your application and enclose all the documents that accompanied it. Please renew your application once you have corrected the defect(s) referred to....

...

We will reject any renewal of your application, if the original defects remain unresolved."

 

The letter of 17 June 2009 was as follows:

 

"Thank you for returning your application with a copy of the power of attorney. Unfortunately, the following points still arise:

1. The signature of the attorney has not been witnessed on either the Tenancy or the Promise to Sell.

I am therefore rejecting your application and enclose all the documents that accompanied it. Please renew your application once you have corrected the defect(s) referred to. A fee of £40 was paid on this application. If you lodge the original or a copy of this letter with the renewed application we will credit this amount to the fee payable on it."

 

32. Finally, Last Cawthra Feather were informed by a letter dated 29 June 2009 (pages 308 - 9) that the application lodged on that date had been completed. The claimant's leasehold title was entered on the register.

 

33. The upshot of that rather sorry tale is that it is quite impossible to say that the entry on the register on 29 June 2009 was made in pursuance of any application earlier than that received on that date. Certainly, that entry cannot be related back to an application made in 2005, even if I was satisfied (which I am far from being) that any application was made at that time. Relation back to the application in November 2007 would not do any good in the present appeal because section 12(8)(b) of the Social Security Act 1998 prohibits the taking into account of any circumstances not obtaining at the time of the decision under appeal (15 March 2007). And in any case, where an application has been rejected, as were all the applications prior to that lodged on 29 June 2009, no subsequent entry made after a further application can be regarded as made pursuant to the rejected application. References to renewal, rather than to making a new application, cannot alter that. Thus, a long tenancy as defined in the legislation did not exist until 29 June 2009 and no payments of rent made in accordance with the tenancy agreement of 13 December 2004 could be payments relating to a long tenancy.

 

34. Accordingly, the only decision that can be made on the claimant's appeal against the decision of 15 March 2007 is to disallow the appeal. At all times from whenever housing costs could otherwise have become part of his applicable amount down to 15 March 2007 he was not

making payments relating to a long tenancy or any other payments that qualified as housing costs for the purposes of JSA. The existing decision under which his JSA was calculated therefore did not fall to be superseded.

 

 

 

 

 

 

(Signed) J Mesher

Judge of the Upper Tribunal

 

Date: 26 July 2010