Upper Tribunal (Administrative Appeals Chamber)

IN THE UPPER TRIBUNAL Appeal No.  CH/1923/2009

ADMINISTRATIVE APPEALS CHAMBER

Before Judge S M Lane

The decision

1       The appeal is dismissed.  The First-tier Tribunal’s decision dated 27/02/09 heard under reference 232/08/00827 did not involve the making of an error of law.  The result of the appeal is that the Housing Benefit (HB) in respect of the appellant’s occupation of D Street is to be paid to his former landlord.  There is no overriding interest which requires those arrears to be paid to the appellant.

The request for an oral hearing of the appeal

2       An oral hearing was not granted.  The applicant’s desire for one is based on his wish to explain the facts of the case, as he sees them, to the Upper Tribunal.  Questions of fact are for the First-tier tribunal.  The purpose of a hearing of an appeal is to assist the Upper Tribunal with the question of whether the First-tier Tribunal has made an error of law.  I am able to deal with that question properly on the papers.  In so deciding, I have considered the overriding objective of the Tribunal Procedure (Upper Tribunal) Rules 2008 to deal with cases fairly and justly.  I do not consider that the interests of justice would be served by an oral hearing in the circumstances of this case. 

The parties to the appeal

3       Because a number of complex procedural questions arose, Secretary of State agreed, at my invitation, to be joined as a party.  I am grateful to him for his analysis of the issues. 

4       The landlord was plainly a person interested in the outcome of the appeal.  He had been a party before the First-tier Tribunal.  He was joined as a respondent and made submissions.  These were aimed at factual matters rather than the law.

What the appeal concerns

5       The specific legal question in issue is whether arrears of Housing Benefit (HB) during the currency of the appellant’s tenancy at D Street between 24 November 2006 to 18 January 2008 should be paid to him or to his former landlord.  While this is superficially a straightforward issue, it became complicated because the Authority had made two previous decisions relating to entitlement and calculation of the arrears owing to the appellant before the instant decision on the person to whom payment should actually be made.  As I see it, a previous tribunal made an error of law in deciding how the arrears were to be calculated, but that decision was not appealed by the Authority. That question is of public importance because, as a result of that unappealed decision, either the appellant or his former landlord will receive a large sum of public money to which neither is probably entitled.  However, the Secretary of State’s submissions have persuaded me that the previous decision was an outcome decision no longer amenable to scrutiny.  I must take that decision as I find it.  For completeness’ sake, I explain this briefly later in this decision. 

Background

6       The appellant, who was born in 1935, was the owner of his home on D Street.  Owing to financial difficulties, he sold his home (‘the property) to the purchaser on 8/8/05.  He remained in the property as a tenant of the purchaser by a tenancy agreement effective from and including that date.  He made only three payments of rent and applied for Housing Benefit in November 2006.  By this time, his rent was already in arrears by more than 8 weeks.  The Authority initially refused the appellant’s Housing Benefit claim under regulation 9(1)(h) of the Housing Benefit (Persons who have attained the qualifying age for state pension credit) Regulations 2006 (presumably, as he was already of pensionable age).  Under this regulation, a claimant is deemed to have no liability to pay for a dwelling where, having previously owned it, he continues to occupy it and 5 years have not elapsed.  An exception is made where the claimant can show that he could not have continued to occupy the property unless he relinquished ownership.  The appellant appealed the decision.  He was successful before a First-tier Tribunal with the result that he was held entitled to HB.  This is ‘the first decision’ (ref. no 232/07/00817, page 59).  The tribunal judge remitted the case for a determination of the amount of benefit to be paid.

7       In the meantime, the appellant’s relationship with his landlord soured over business dealings they had with each other and over the basis upon which the appellant sold the property to him.  Litigation ensued under which the landlord sought possession of the property.  This resulted in a Tomlin order (p152) which, by consent, stayed all proceedings on terms set out in a schedule to the order.  Under the terms of the order, the stay could only be lifted on application to the court and only for the purpose of carrying the terms of the schedule into effect. 

8       The formal part of the order records the parties’ agreement (i) that the landlord be given possession of the property, (ii) that the defence and counterclaim by the appellant be dismissed (iii) that on the appellant’s vacating the property, all of the landlord’s claims against the appellant under the tenancy of 8/8/05 be dismissed, and that (iv) the proceedings were stayed on the terms set out except for the purpose of carrying out those terms.  The Schedule set out more detailed terms agreed by the party, including an undertaking by the appellant to pay the landlord £1.00 on vacating the premises, in full and final settlement of all claims against the tenant under the tenancy including all arrears of rent. 

9       The Tomlin order is a court order which, as correctly stated by the First-tier judge hearing the instant appeal, needs no further ratification.  The Schedule represents a contract between the parties settling their dispute.  Such a compromise is binding on the parties: Miles v New Zealand Alford Estate Co. (1885) 32 Ch D 266, whether or not it is contained in a Tomlin order.  Although the appellant has not supplied a copy of the defence and counterclaim to the action, it is sufficiently clear from his correspondence (pages 34, 42 at [3], 43) that they involved his claim that there had been a buy-back agreement upon which the purchaser had reneged.  As a result of the order, these claims were dismissed.  He can no longer sue on them.  For this reason, it would be wrong to permit the appellant to bring this issue before the Upper Tribunal. 

10    The appellant left the property on 18/1/08 in accordance with the order, but says he never paid £1.00 to the landlord.  He submits that this made the order invalid.  This is not correct.  On ordinary contractual principles, a party cannot rely on his own wrongdoing, in this case his failure to pay £1.00, to terminate a contract, and still less to render a court order void.  That is a matter for the court itself.

11    The landlord could have pursued his claim to £1.00 had he wished to go to the trouble and expense of doing, but not surprisingly, he has not done so.  That was a matter for him.  The £1.00 was patently a nominal consideration in a larger package in which there was plenty of other consideration moving from both sides to support the agreement:  the landlord gave up his right to pursue the appellant through the courts to eviction while the appellant gave up his defence and counterclaim, amongst other things. 

12    The Authority then came to assess the amount of Housing Benefit due.  Having regard to the Tomlin order, the Authority awarded £1.00 in respect of HB for the period at issue and paid this to the appellant.  It is not necessary for me to decide whether this sum represented ‘rent’ at all.  I note, however, that under reg. 12 of the Housing Benefit (Persons who have attained the qualifying age for state pension credit) Regulations 2006, in order for a payment to qualify, it must be a periodical payment. 

13    The appellant appealed the Authority’s decision and was once again successful before the same tribunal judge.  This is the second decision, dated 11/7/08 (ref. 232/08/00321, page 153).  The tribunal judge found that, despite the terms of the settlement, someone (be it the appellant or his landlord) was entitled to periodical payments representing the rent which had been determined by the rent officer.  The tribunal judge remitted the appeal to the Authority to calculate the HB to be paid and to decide to whom the arrears would be paid. 

14    I consider that the previous tribunal’s decision was wrong in law.  The correct question for the tribunal to ask was whether, at the date of decision, the tenant had any obligation to pay rent under the definition of reg. 12.  He did not.  The liability to pay rent throughout the entire period had been replaced by an undertaking to pay £1.00 in respect of all claims under the tenancy. 

The decision under appeal

15    The decision now under appeal, which is the third in the decision making process, was then taken by the Authority on 15/9/08.  The Authority decided that the arrears (the amount of which were unspecified) should be paid to the landlord under regulation 76(1)(b) of the regulations cited earlier.  As relevant to this appeal, the regulation provides: 

Circumstances in which payment is to be made to a landlord

76. — (1) Subject to paragraph (2) … a payment of rent allowance shall be made to a landlord (and in this regulation the “landlord” includes a person to whom rent is payable by the person entitled to that allowance) —

(a)   n/a; or

(b)  where sub-paragraph (a) does not apply and the person is in arrears of an amount equivalent to 8 weeks or more of the amount he is liable to pay his landlord as rent, except where it is in the overriding interest of the claimant not to make direct payments to the landlord.

16    This regulation is mandatory unless it is in the overriding interest of the claimant not to make direct payment to the landlord. 

17    The Authority decided that it was not in the appellant’s overriding interest that the arrears be paid to him, having regard to the facts that the appellant had only made three payments of rent throughout the period in question, the outstanding arrears were considerable, there was an arrangement with the landlord to settle the rent arrears from the proceeds of sale of the property but that sale had not occurred, he no longer lived in the premises and had no compelling reason to pay the arrears over to the landlord, and that he had not withheld rent for good reasons (for example, to try to force the landlord to make repairs).  The appellant appealed this decision on the basis (i) that he did not think the Tomlin order was binding; (ii) he felt that the landlord still owed him money from the house purchase and (iii) that it was understood by the parties, or by the order, that arrears were to be paid to the appellant.  The appeal was heard by a fresh tribunal judge on 27/2/09 (p160). 

18    The tribunal dismissed the appeal.  Although it formulated the question to be answered incorrectly, by asking itself whether the Authority’s decision was inappropriate, capricious or improper, it had in mind the correct evidence and considerations.  In paragraph 12, it refers to the Authority having sought the views of the party, and in its duty as a tribunal it undoubtedly had read the Authority’s decision, reconsideration decision and Submission in which they explain how they reached their decision.  The tribunal takes particular note of the irrelevance of the appellant’s arguments about the Tomlin order.  Once that order and the settlement incorporated in it are disposed of, quite properly, there are no considerations which the tribunal could reasonably have entertained to find that the appellant had an overriding interest in payment of the arrears paid to himself.

19    The appeal is accordingly dismissed.

[Signed on original] S M Lane

Judge of the Upper Tribunal

[Date] 23 December 2010