Upper Tribunal (Administrative Appeals Chamber)

IN THE UPPER TRIBUNAL Case No. CIS/330/2010

ADMINISTRATIVE APPEALS CHAMBER

 

Before Judge Robin C A White

 

Decision: The decision of the First-tier Tribunal of 17 August 2009 is erroneous in law and I set it aside. I remit the appeal for reconsideration by a differently constituted Tribunal in the light of the guidance and directions contained in this decision.

 

REASONS FOR DECISION

Background

1.       The respondent, who was born on 19 June 1957, claimed income support on 26 August 2008. His claim included a claim for housing costs.

2.       The respondent had re-mortgaged his home in April 2003, and had used the borrowed money to redeem an earlier mortgage and to carry out certain works on his home.

3.       There is no dispute concerning the £48,000 the respondent used to redeem the original mortgage used to buy the home

4.       Initially, the Department allowed £27,650 as eligible housing costs in respect of repairs and improvements to the home.

5.       The respondent appealed on the grounds that the amount allowed for housing costs would not be ‘enough to pay the interest on my mortgage.’

6.       The Department then reviewed the original decision, and changed it. The amount of eligible housing costs allowed for repairs and improvements to the home was reduced to £12,750.

7.       The appeal came before the First-tier Tribunal on 17 August 2009. The respondent’s representative had previously submitted a detailed written submission on behalf of the respondent. The respondent attended with his representative. The Secretary of State was not represented.

8.       There is a very brief record of proceedings. Although the statement of reasons indicates that the respondent gave oral evidence, there is no record of what he said in the record of proceedings.

9.       The outcome was that the Tribunal allowed £40,000 as eligible housing costs in respect of the improvements. A full statement of reasons was subsequently provided.

10.   The Secretary of State has appealed the decision. The appeal now comes before me with the permission of a Judge of the Upper Tribunal.

The grounds of the appeal

11.   The grounds put forward by appellant (the Secretary of State) are, in essence that the Tribunal ‘failed to apply the caselaw to the circumstances of the case and also failed to apply the fitness for human habitation test contained in the legislation.’

What is in dispute

12.   The following table shows which items are agreed and which are in dispute (part of some of the amounts in dispute have been allowed):

Allowed improvement costs (not in dispute)	In dispute
Gutters and downspouts £1,500	New fascias etc £3,500
Water mains £1,200	Double glazing £7,500
Re-pointing works £900	Pebble dashing £6,600
Work to roof £600	Demolition of outbuildings & patio £2,000
Re-wiring £2,500	Internal plastering £1,300
Certain insulation works £450	Loft insulation/boarding £900
New drains £2,200	House re-plumbing £1,300
Part kitchen works £1,000	Certain kitchen work £4,100
Plumbing £2,400	New rear gate and fence £400
Allowed £12,750

13.   A number of aspects of the interpretation and application of the relevant provision of the regulations is disputed by the parties.

The relevant statutory provision

14.   The relevant statutory provisions are Regulation 17(1)(e) and paragraph 16 to Schedule 3 of the Income Support (General) Regulations 1987, as amended, and as in force at the date of the decision on the respondent’s claim. These provide that certain items are to be regarded as housing costs taken into account in determining a claimant’s applicable amount. The key provision is in paragraph 16 to Schedule 3, which provides:

Loans for repairs and improvements to the dwelling occupied as the home

16.—(1) A loan qualifies under this paragraph where the loan was taken out, with or without security, for the purpose of—

(a) carrying out repairs and improvements to the dwelling occupied as the home;

(b) paying any service charge imposed to meet the cost of repairs and improvements to the dwelling occupied as the home;

(c) paying off another loan to the extent that the other loan would have qualified under head (a) or (b) of this sub-paragraph had the loan not been paid off,

and the loan was used for that purpose, or is used for that purpose within 6 months of the date of receipt or such further period as may be reasonable in the particular circumstances of the case.

(2) In sub-paragraph (1) “repairs and improvements” means any of the following measures undertaken with a view to maintaining the fitness of the dwelling for human habitation or, where the dwelling forms part of a building, any part of the building containing that dwelling—

(a) provision of a fixed bath, shower, wash basin, sink or lavatory, and necessary associated plumbing, including the provision of hot water not connected to a central heating system;

(b) repairs to existing heating systems;

(c) damp proof measures;

(d) provision of ventilation and natural lighting;

(e) provision of drainage facilities;

(f) provision of facilities for preparing and cooking food;

(g) provision of insulation of the dwelling occupied as the home;

(h) provision of electric lighting and sockets;

(i) provision of storage facilities for fuel or refuse;

(j) repairs of unsafe structural defects;

(k) adapting a dwelling for the special needs of a disabled person; or

(l) provision of separate sleeping accommodation for persons of different sexes aged 10 or over but under the age of 20 who live with the claimant and for whom the claimant or the claimant’s partner is responsible.

(3) Where a loan is applied only in part for the purposes specified in sub-paragraph (1),only that portion of the loan which is applied for that purpose shall qualify under this paragraph.

15.   In allowing some of the amounts claimed for repairs and improvements, the Secretary of State has clearly accepted that, at least in these respects, the respondent did carry out repairs and improvements to his home with a view to maintaining the fitness of the dwelling for human habitation. The regulation makes clear that, in order to qualify, the expenditure must not only fall within one of the 12 listed heads, but must also be, in all cases, for the purposes of maintaining the fitness of the dwelling for human habitation.

The appellant’s submissions

16.   Although the Secretary of State argues that the Tribunal failed to apply the fitness for human habitation test contained in the legislation correctly, the Secretary of State does not offer any argument on the proper approach to this aspect of the relevant statutory provision.

17.   In regarding the pebble dashing work as ‘damp proof measures’, the Tribunal erred in law, since, having regard to observations made in R(IS) 2/07, such work does not fall within the ordinary meaning of such works.

18.   In regarding the provision of double-glazing as the provision of insulation, the Tribunal erred in law since ‘the use of the word “provision” implies installing something not already in existence or the replacement of something which no longer functions.’

19.   In regarding the demolition of outbuildings as the provision of natural lighting, the Tribunal erred in law since the purpose was not necessary to maintain the fitness of the home for human habitation. Nor could it be regarded as the repair of an unsafe structural defect.

20.   In allowing the full amount for works to the kitchen, the Tribunal erred in law in not making findings of fact about what existed already, and whether there was a provision of facilities for preparing and cooking food.

21.   The Tribunal erred in law in allowing the cost of bricking up fireplaces as measures of insulation.

The respondent’s submissions

22.   The respondent’s representative argues that a broad view should be taken of what constitutes maintaining the fitness of the dwelling for human habitation.

23.   The renewal of the pebble dash, and the provision of double glazing were required to bring the home up to required modern standards.

24.   It is argued that, when a broad view is taken of maintaining the fitness of a dwelling for human habitation, then the Tribunal made decisions that it was reasonable for them to make. The respondent’s representative sums up as follows:

What the legislation seeks to do, we feel, is to differentiate between measures undertaken principally out of choice, or preference, as against those measures undertaken by the sensible and prudent householder to ensure that his/her dwelling is maintained at the appropriate level.

Did the Tribunal err in law?

25.   The Tribunal’s decision must be set aside for inadequacy of reasoning. This was an appeal raising significant questions relating to the interpretation and application of paragraph 16 to Schedule 3 of the Income Support (General) Regulations. It required the making of full and careful findings of fact and for reasons to be spelled out on the identified points of difference in the positions of the Secretary of State and the respondent.

26.   The absence of the Secretary of State did not assist the Tribunal. Had the Secretary of State been represented, then it seems certain that a number of the points taken before me would have been addressed to the First-tier Tribunal with the greater prospect of a correct decision on that appeal without the need for a further appeal and remission to the Tribunal for a rehearing.

27.   Since there is no record of the oral evidence given by the respondent to the Tribunal, and since some of that evidence is central to the issues concerning the eligibility of certain items as expenditure on repairs and improvements within the regulations, I must remit the appeal for a complete rehearing before a differently constituted Tribunal.

My assessment

28.   The new Tribunal should approach the determination of the appeal having regard to the following observations on the proper interpretation and application of paragraph 16 to Schedule 3 of the Income Support (General) Regulations.

‘Maintaining the fitness of the dwelling for human habitation’

29.   As already noted, in order to be eligible as housing costs, expenditure on repairs and improvements must be for the purpose of ‘maintaining the fitness of the dwelling for human habitation’.

30.   There appears to be no direct authority on what constitutes ‘fitness of the dwelling for human habitation’ in this context. But the notion of fitness for human habitation is well-known to landlord and tenant law. Section 10 of the Landlord and Tenant Act 1985 provides:

10 Fitness for human habitation

In determining for the purposes of this Act whether a house is unfit for human habitation, regard shall be had to its condition in respect of the following matters—

            repair,

            stability,

            freedom from damp,

            internal arrangement,

            natural lighting,

            ventilation,

            water supply,

            drainage and sanitary conveniences,

            facilities for preparation and cooking of food and for the disposal of waste water;

and the house shall be regarded as unfit for human habitation if, and only if, it is so far defective in one or more of those matters that it is not reasonably suitable for occupation in that condition.

31.   That may provide some guidance, but not, I fear, much. The landlord and tenant definition, for example, is silent on matters related to the heating of the property, whereas repairs to heating systems, and insulation to prevent heat loss are specifically referred to in the income support regulations.

32.   The wording of the income support regulations refers to the purpose of the repairs or improvements as being with a view to maintaining the fitness of the dwelling for human habitation. While there must be a risk that, without the repairs or improvements being carried out, the home will fall, before too long, into a state which renders it unfit for human habitation, there is no guidance as to how close to unfitness the home must be in order for the repairs or improvements to qualify. But the reference to ‘maintaining’ the fitness of the dwelling implies that it is not necessary that the property has fallen in some respect below the standard of fitness before the costs can be allowed.

33.   The assessment of the reasonableness of the repairs or improvements in order to maintain the fitness of the home for human habitation must be a matter for the judgment of decision makers and tribunals. In making that assessment, the suggestion of the respondent’s representative puts it rather well. The legislation seeks to differentiate between measures undertaken principally out of choice, or personal preference, from those measures undertaken by the sensible and prudent householder to ensure that fitness of the home for human habitation is maintained.

34.   The judgment must be exercised in the light of the particular circumstances of each case. The standard must be that of the sensible and prudent home owner, properly advised as to the reasonable necessity of the repairs and improvements, and the likely consequences if they are not undertaken.

The meaning of the word ‘provision’

35.   Next, there appears to be some uncertainty about the meaning of the word ‘provision’, as it appears at a number of points in the relevant paragraph of the regulations.

36.   In R(IS) 2/07, the Commissioner said that the word ‘provision’ referred to ‘something not already in existence or the replacement of something which no longer functions.’ (para.40) I agree with that definition of the term, which is to be found in a reported decision. What this means where the costs relate to replacement is that evidence is required to show that what is being replaced reasonably needs to be replaced because it no longer meets a purpose recognised within paragraph 16(2). There must be some element of risk that, without the replacement, the home will fall below fitness for human habitation.

‘Damp proof measures’ and ‘insulation’

37.   The appeal raised the question of what repairs and improvements constitute ‘damp proof measures’ (paragraph 16(2)(c), and ‘the provision of insulation of the dwelling’ (paragraph 16(2)(g).

38.   In R(IS) 2/07, the Commissioner said:

“Damp proofing” and “insulation” are to my mind terms of art in the building trade which have found their way into ordinary language. As used in [paragraph] 16(2) the former is, I think, limited to measures taken to prevent rising damp or damp from condensation in an existing building. The latter is limited to such things as the installation in an existing building of double glazing, loft insulation and cavity wall insulation to reduce the loss of heat from the building. (para. 40).

39.   That is very helpful guidance. It makes clear that double glazing constitutes insulation. What is required since double glazed windows normally replace single glazed windows is that the existing windows have reached a state when they provide inadequate insulation. That will be a question of fact in the light of the particular circumstances of each case.

40.   However, I do not read the reference to ‘rising damp or damp from condensation’ as intended to be an exhaustive list of the causes of damp which may be remedied by damp proof measures. A further cause of damp which damages property is penetrating damp. Provided that the work undertaken is for the purpose of curing penetrating damp, my view is that it will constitute damp proof measures within the meaning of paragraph 16(2)(c).

41.   It follows that re-rendering a wall can constitute damp proof measures where the existing state of any rendering on the property or the state of the brickwork gives rise to damp penetration which is remedied by the works. This will involve the making of careful findings of fact on the basis of all the evidence available. Some people will have their homes rendered or re-rendered for cosmetic reasons, while others will have this work done because they have to in order to remedy damp penetration.

42.   There may also be difficult questions arising as to whether the whole of the work constituted damp proof measures. For example, it may be necessary to render or re-render the front of the property for this reason (perhaps because it is particularly exposed to the elements), but not the sides or back of the property. It is, however, probably unreasonable to take too strict a view. In my opinion, rendering or re-rendering the whole of the front of the house in order to cure damp penetration is reasonable even if the damp penetration only affects a substantial part of the front of the house. But that situation again requires judgment. A patch repair may do the trick in some cases, but in others more extensive re-rendering may be required. A patch repair to cure damp penetration does not mean that the whole of the front of the house needs such attention.

43.   Certain internal plastering may constitute damp proof measures (or even conceivably fall within one of the other heads of paragraph 16(2) in certain circumstances), but may also be for cosmetic reasons. More evidence on the extent and nature of, and reasons for, the internal plastering is required.

44.   The Secretary of State says that the replacement of gutters and downpipes is allowable, but not the provision of new barge boards and fascias. The claimed sum of £3,500 has been reduced to an allowed amount of £1,500. Here again whether the costs of replacing barge boards and fascias is allowable will turn on the particular facts of the case. If they are rotten and their replacement is a necessary accompaniment to the replacement of guttering and downpipes, then it seems to me that they will be part of the damp proof measures (although it seems to me that new guttering and downpipes may well also fall within the ‘provision of drainage facilities’ specified in paragraph 16(2)(e)).

45.   The respondent argues that the cost of loft insulation and boarding the loft should be allowed and that ‘the amount should not be split arbitrarily’. The regulations only specify the provision of insulation. I cannot see how boarding a loft falls within any of the specified heads. It is undertaken in order to make it easier to move around the loft area. This means that where a loft has been insulated and boarded, the costs of each must be reasonably apportioned in determining what is an eligible housing cost. I would not expect this to be an insuperable task.

The provision of ventilation and natural lighting

46.   The respondent has argued that demolishing outbuildings and laying a patio fell within ‘the provision of ventilation and natural lighting’ (subparagraph 16(2)(d)) or ‘repairs of unsafe structural defects’ (subparagraph (j)).

47.   I would regard such works as coming within subparagraph (j) only in the most unusual circumstances, and in any event the laying of a patio could not be said to fall within this head (although making good the ground level following demolition of an unsafe structure if that could be brought within subparagraph (j) would be allowed).

48.   I also consider that there would need to be very special features before such works, or part of them, could be brought within paragraph 16(2)(d). Findings of fact would need to be made about the level of natural light with the outbuildings in situ, and the additional level after their removal. Increasing the amount of light available is not the same as the ‘provision of natural light’ as referred to in the statutory provision. A simple assertion that presence of the outbuildings made the back of the house dark does not seem to me to suffice to bring their demolition within the scope of the statutory provision.

Repairs of unsafe structural defects

49.   I would need compelling evidence before regarding the replacement of the rear garden gate and fence as constituting repairs of unsafe structural defects, even assuming that it were accepted that a rotten gate and fence constitute structural defects. It is also difficult to envisage how these repairs and improvements maintain the fitness of the home for human habitation.

Paragraph 16(2)(a)

50.   The respondent finally argues that a greater proportion of the costs of works to the kitchen should be allowed. That is a matter which will need to be considered in the light of the particular circumstances of this case. I could see no evidence in the bundle before me of what was there before and why it needed to be replaced. I also note that the works included a kitchen and garage extension, including a new fitted kitchen. The extent to which this work was replacement of inadequate provision of faculties for preparing and cooking food is not at all clear from the evidence before me.

51.   I think this just leaves some observations to be made on the disputed disallowance of the costs of certain plumbing work including the provision of an immersion heater.

52.   Again, in the absence of compelling evidence of rather unusual circumstances, I cannot see how this would fall under paragraph 16(2)(f): the provision of facilities for preparing and cooking food.

53.   In the alternative the respondent argues that it falls to be allowed as ‘the provision of a fixed bath, shower, wash basin, sink or lavatory, and necessary associated plumbing, including the provision of hot water not connected to a central heating system’ (paragraph 16(2)(a)). I have not fully understood the nature of the evidence of how the specific works in issue were required to maintain the fitness of the property for human habitation. The new tribunal will need further evidence on this.

What level of evidence is required?

54.   It is for the respondent (the claimant) to show on the balance of probabilities that the costs of repairs and improvements constitute eligible housing costs.

55.   The works in question were carried out some years ago. It would appear that there are no contractual documents or receipts available for the work, and certainly no breakdown of the individual items in the overall works. But the respondent will be able to give evidence as to whether the works were carried out by a single contractor, or multiple contractors with separate bills. He will also be able to give evidence as to what advice he received, if any, about the necessity of having certain works done, and about the state of his property prior to the carrying out of these works.

56.   It is admitted by the respondent that the works consisted of a mixture of necessary works and works of improvement which have nothing to do with maintaining the fitness of the property for human habitation (such as the extension to the kitchen and the garage).

57.   The new tribunal will have to do its best on the basis of the evidence available to it. The respondent should be aware that he will have to try to remember as much as he can about the renovations and repairs in issue. His evidence will be of particular assistance to the new tribunal, and should be recorded with some care.

Directions to the new tribunal

58.   The new tribunal should approach the interpretation and application of paragraph 16 to Schedule 3 of the Income Support (General) Regulations 1987 in the light of the guidance given above.

59.   The new tribunal should hold an oral hearing at which the respondent can given such detailed evidence relating to the issues raised above as he can.

60.   The Secretary of State should provide a representative to assist the tribunal.

61.   It will assist the new tribunal if both parties produce fresh written submissions outlining the arguments they intend to present to the new tribunal.

62.   In addition to the above matters the Judge of the First-tier Tribunal may wish to make further case management directions.

A word of caution for the respondent

63.   Since I have set aside the decision of the tribunal, the respondent is back to square one with this appeal. All issues relating to the allocation of eligible housing costs in respect of repairs and improvements to the property will be in issue before the new tribunal (though I suspect that items that were not in dispute at the earlier hearing will not be disputed at the fresh hearing).

 

 

 

 

 

Signed on the original Robin C A White

on 17 August 2010 Judge of the Upper Tribunal