Upper Tribunal (Administrative Appeals Chamber)

IN THE UPPER TRIBUNAL Appeal No.  CPC/85/2013

ADMINISTRATIVE APPEALS CHAMBER

Before: Upper Tribunal Judge PA Gray

The decision of the Upper Tribunal is to dismiss the appeal. 

Under section 12(2)(a) of the Tribunals Courts and Enforcement Act 2007 if I find that the making of a decision involved the making of an error on a point of law I may, but need not, set aside the decision of the First-tier Tribunal.

The decision of the Sheffield Tribunal made on 28 August 2012 under number SC 147/11/04689 2011 involves an error on a point of law, however I decline to interfere with the decision and it stands.

In this decision I will initially set out the background to the appeals before the FTT and the Upper Tribunal.  I will then explain the way that each party put their case, and examine the legal issues raised in the context of the development of the law deAng with the interpretation of “alternative accommodation more suited to the special needs of a disabled person than the accommodation which was occupied before the acquisition by the claimant" under paragraph 10 of schedule11 to the State Pension Credit Regulations 2002 (where housing costs are incurred or increased during a ‘relevant period’ of receipt of benefit ) by discussing three decided cases. I will then explain my conclusion that although there may have been matters overlooked or insufficiently explained the judge below reached the only proper decision on the facts of the case given the appropriate application of the legal principles, hence my decision not to set aside the decision under appeal.

REASONS FOR DECISION

1. This appeal to the Upper Tribunal arose from a decision made by the First-Tier Tribunal (FTT) considering a decision of the Secretary of State made on 1 March 2011 that the appellant was not entitled to the housing costs he claimed within his state pension credit claim.
2. I was saddened to read of the death of Mr Mohammed Ajom A during the currency of the appeal. The matter has been conducted throughout by his son, originally as his representative and later as the appointee.  His son is familiar with all aspects of the case and the history, having previously been the point of liaison between the family and those whose responsibility it was to assess housing needs and provide accommodation.
3. I refer to Mr Mohammed Ajom A as Mr A Senior in this decision, and his son as Mr A Junior, as a convenient way of distinguishing between them where a distinction needs to be made.  In doing that I mean no disrespect to either.

The background and original decision

4.  Mr A had been in receipt of state pension credit from 6 October 2003. On 22 June 2010 he applied for an increase in his award to take account of housing costs, those being mortgage interest on the sum of £103,600 which had been taken out on 18 July 2008.  That was as a matter of law an application to supersede the existing state pension credit decision.
5. The taking out of the loan was a relevant change of circumstance which might have founded a supersession decision, and the application was considered by a decision maker on 18 February 2011 following the receipt of some further information that had been requested. 
6. There was no dispute that the loan which constituted the housing costs in this case was taken out during what is known as a relevant period. A relevant period is a period during which certain benefits, including state pension credit are in payment.
7. The statutory provision in this case was the State Pension Credit Regulations 2002 schedule 11 paragraph 5 (4). During a relevant period housing costs are generally restricted to amounts allowable prior to the relevant period beginning, subject to some limited exceptions. The only relevant exemption put forward was whether the loan was taken out to acquire alternative accommodation more suited to the special needs of a disabled person under paragraph 10 of schedule 11 to the State Pension Credit Regulations 2002. 
8. The decision maker was of the view that the housing costs claimed did not fall within paragraph 10 of schedule 11 of the State Pension Credit Regulations 2002, in that the mortgage was taken out during a "relevant period" during which subject to certain exceptions the amount of allowable housing costs in relation to any loan is deemed to be nil. The decision refusing the housing costs within the state pension credit claim.
9. An appeal was lodged against that refusal to supersede decision which although late was accepted.

The ‘more suited’ test.

10. The grounds of appeal were that the loan, a mortgage on 53 F Road, was taken out to acquire alternative accommodation more suited to the special needs of a disabled person.  Mr A Senior, his wife Mrs N and his daughter Miss B were the three family members rehoused.  For the purposes of the “more suited” test a disabled person is someone who is over 75, or blind, or who receives attendance allowance, disability living allowance or certain other benefits connected with ill-health. Each member of the family moving into the new home was disabled within those definitions.
11. The "more suited" exemption is set out in paragraph 10 of schedule11 to the State Pension Credit Regulations 2002: 

"the condition specified in this subparagraph is that the loan was taken out, or an existing loan increased, to acquire alternative accommodation more suited to the special needs of a disabled person than the accommodation which was occupied before the acquisition by the claimant."

The Housing Background

12. It is convenient at this stage to outline the family background so far as residential matters are concerned. 
13. Mr A Senior and his family lived until April 2000 at 20 F Road, a four-bedroom property which he had been purchasing with the aid of a mortgage. Unfortunately he had a heart attack in 1997 following which he stopped work, and due to problems paying the mortgage in March 1998 he sold the property to his son Mr A Junior who has been representing him in these proceedings.
14.  Initially Mr A Senior, his wife and daughter remained at that address, making a claim for housing benefit which was rejected.
15. In April 2000 they moved to 40St BRoad which they rented and housing benefit was paid. That was a three bedroom house with one bathroom. When that property was no longer available due to the needs of the landlord the family moved in July 2006 to 25 L Street, provided by a charity "Safe Haven".  Housing benefit was payable in respect of this property also.
16. All the above properties are within about 300 metres of each other. 
17. The family were at L Street only a short time; I was told that there was intimidating conduct towards the family by people working for the charity. The details are, at this stage, not of legal significance within this appeal, but have been put forward to me as the reason the family left L Street.
18. In September 2006 the family moved back into their old home at 20 F Road with Mr A Junior who was living there.  The move had originally been intended to be on a temporary basis only, but they stayed there from September 2006 to September 2008.  During that time they were offered other accommodation by the housing authorities but deemed it unsuitable.  Mr A has told me that there were either insufficient bedrooms or it was a considerable distance away, and in areas where there was crime and drug dealing.  Once again these issues are not factors in the appeal. 
19. In 2008 a property close by at number 53 F Road became vacant and available to purchase.  It was bought in the name of Mrs N in July 2008. As the family had purchased and not rented the house there could be no housing benefit claim; any claim would be by way of housing costs within state pension credit.
20. It was in September of that year that the family, minus obviously Mr A Junior who owned and remained at number 20, moved to number 53 F Road.
21. The claim for Mr A Senior’s state pension credit award to be increased to cover the mortgage interest was made on June 2010.

  The appeal to the FTT

22. The matter came before a FTT, composed of a judge sitting alone on 28 November 2012.  The evidence before him was that number 53 F Road was a house with 3 bedrooms and a bathroom across the road from 20 F Road. It was bought in the name of Mrs N in July 2008 as Mr A’s health was deteriorating. A deposit of £25,900, was paid, £8707.70 of that sum having been received by Mr A Senior as backdated pension credit on 3/3/2008. £5000 was from Mrs N's savings and the remaining balance of the deposit being from their three sons. The rest of the purchase cost, some £103,000, was funded by the mortgage, the interest upon which was claimed.  The issues were limited as set out above. 
23. The FTT dismissed the appeal, finding that the property was not ‘more suited’ to the special needs of a disabled person than 20 F Road, the accommodation which was occupied immediately before the acquisition.

The appeal to the Upper Tribunal

24. Following the unsuccessful FTT appeal Mr A sought a statement of the reasons for the decision, and then permission to appeal.  Permission was granted by the District Tribunal Judge on the basis that the reasons were inadequate to support the conclusion reached as to the “more suitable” test. Upper Tribunal Judge Bano directed submissions and then an oral hearing.  The Secretary of State filed a submission which did not support the appeal.  The appellant filed a further submission expanding on his previous arguments.
25. I heard the case in Leeds. Mr A attended as the appointee and the Secretary of State was represented by Mr Cooper. I am grateful to both of them for their assistance to me.

Mr A’s case

26. Mr A explained to me about the disabilities of his parents Mr A and Mrs N, which were physical in nature, and about those of his sister Miss B who lived with them, who has suffered from severe and enduring mental health problems. He argued cogently before me from CIS/145511996, a decision of Upper Tribunal Judge (then Mr Commissioner) Mesher, in which he said that the special needs of a disabled person needed to be a reason, but not the sole or predominant reason for the move. He emphasised that the test was of accommodation that was more suited, and not a test of reasonableness. He said that the overall condition of the disabled person must be taken into account.  I accept all these points. 
27. Mr A put forward security of tenure being a general improvement for the whole family.  He argued specifically that the lack of tenancy rights was a negative feature of the accommodation at 20 F Road, which was his house where the family were living rent-free with him, and gaining rights was an improved factor of the new house.  He said it had helped his sister and the improvement in her condition was something from which all the family would benefit. He also said that having their own accommodation meant that the family did not have to put up with what he described as his hostility to them; not having him around was an improvement in their health and well-being.
28. The predominant feature, however, in Mr A's case here and below was that he wanted his family to leave his house. He had set out in the papers, and repeated to me how his own well-being was affected by their continued presence, and that he had the health problem of high blood pressure. There had been other options during the 2 year period, but he had on the family’s behalf, rejected a number of offers of accommodation. He said that this was in part because the council had been trying to offer them two bedroomed properties whereas he felt that there were problems with his parents sleeping in the same room because their different medical conditions meant that they needed different room temperatures.  Finally the local authority had accepted that a three bedroomed property was needed, but those offered were in what he described as "disagreeable locations." In my view the motive would not matter if the new accommodation satisfied the “more suited” test. 
29. Part of Mr A’s case was that the period spent at 20 F Road was temporary in nature, and he advanced the argument that the correct comparator against which to apply the ‘more suited ‘ test was 25 L Street, the property that the family were in briefly prior to them moving in to number 20F Road.

The position of the Secretary of State

30. Mr Cooper maintained the views set out in the Secretary of State’s submission.  He said whilst I may find errors in the decision, they were not material, and that I should either confirm the decision, or decide the issues myself to similar effect. He said that the statement of reasons made it clear that the judge had considered the disability aspects and accepted that each of the three people had disabilities which needed to be taken into account, but the new accommodation was in fact not better suited to those.  He disagreed that there may have been too narrow an approach by the FTT given the psychological issues of Miss B; those were catered for at number 20 just as well as at number 53 because due to the proximity of the properties the local facilities and family support were the same at both.  The more practical bathroom issue was no better at the new house.  Mr A Junior's personal needs could not be relevant to the special needs of a disabled person.

The legal principles

31. The satisfaction of the “more suited” test requires some demonstration as to what the special needs are, and how the new accommodation caters better for them.  It was put forward before the FTT and before me that Mr A’s parents had physical needs, in particular for separate bedrooms, and that the special needs of the appellant's sister were to live in a familiar area with family support.  Since her obsessive-compulsive disorder meant that she spent a very considerable time washing, a separate bathroom for her might have been considered to be a special need, although that was not put forward. I agree with Mr Cooper that Mr A Junior’s health and wellbeing could not be a factor in the application of the ‘more suited’ test to the new accommodation. 
32. I have examined the fact finding of the FTT that the property was not more suited to the special needs of a disabled person than the property which was occupied by the claimant before the acquisition to see whether or not it was sustainable.  Did the judge in deciding that make an error of law; if so was it material?
33. I have looked at the documents from the FTT including the submissions of the appointee to that tribunal and his evidence as recorded by the judge below.

CIS/14551/1996

34.  I accepted some points made by Mr A in paragraph 16 above.  One was that the needs of the disabled person do not have to be the sole or predominant reason for the move. I accepted that following CIS/14551/1996, a decision on a mirror provision in relation to income support.  In that case Judge Mesher also decided that the special needs must stem from the persons disability.  His stresses at paragraph 12 the force of the word "special", saying that "disabled person" is given quite a wide definition in subparagraph (8) including those who are suffering disablement and in capacities which are not pertinent, or even for the 75 is, who have no disability at all apart from the effects of age. He considered, and I accept Mr A's submission to that effect, that the persons "overall mental and physical condition must be taken into account, not merely what condition it is that in the circumstances triggered the application of the definition. However, only needs stemming from something which amounts to a specific disease or bodily or mental disablement, i.e. of the kind identified by medical science, or from the effects of ageing for the over 75s, can be special needs of the disabled person." That latter phrase is important in this case in relation to the argument that the strains associated with a lack of tenancy and related uncertainties were aided by the move.  The other factor in that case was the apparent alleviation by the move (which was to a property which was less expensive to upkeep) of the financial stresses upon the claimant. That, to Judge Mesher’s mind, caused difficulties. He opined that “many income support claimants will be under financial stress, which is the cause of anxiety and turmoil. If the claimant concerned happened to be a disabled person, that cannot transform a "trading down" for the sole reason of reducing overall mortgage interest liabilities into something within subparagraph (8)”. He accepted that the overall picture was a complex one, but warned against the adoption of what he thought of as a circular argument in relation to the financial issues. He felt that the question to be asked was "whether the accommodation itself is more suited to the special needs of the disabled person, not whether the terms of the acquisition of the new accommodation make the circumstances as a whole more suited to those special needs.” Whilst not finding that argument on all fours with the present circumstances, I heed his concern and approach the argument as to the alleviation of mental stress by the security of tenure afforded at the new property cautiously.

R(IS)12/08 and Ahmed-v-SSWP[2011]EWCA Civ 1186

35. I have also been assisted by the decision of Upper Tribunal Judge Wikeley CIS/102/2008 reported as R (IS) 12/08, in which he reviews the development of the law and summarises certain principles in relation to the "more suited" test in the income support context, to which I return below.
36. I also referred in directions prior to the oral hearing to the more recent case of Ahmed-v-SSWP[2011]EWCA Civ 1186 in which the approach of Upper Tribunal Judge Lloyd Davies was approved by the Court of Appeal in relation to a mirror provision under the Income Support Regulations . Whilst the decision itself is not wholly on the point I asked for argument on this case as it seemed to me that the case may yet be of relevance.  It concerned a gap between leaving the first accommodation and the acquisition of more suitable accommodation. Whilst the factual matrix is different there is some assistance in relation to one of the legal problems in this case, that is to say whether there can be a time lag between the date of leaving the comparator accommodation and the date of purchase of the current accommodation. At paragraph 20 Warren J considered that matter.  He commented in respect of a provision of Schedule 3 to the Income Support General Regulations, which bears a similar wording "it may well be correct that there will be cases within paragraph 4 (9) where there is a gap between leaving the first accommodation and the acquisition of the more suitable accommodation."  He gives two examples, the second, more pertinent to this situation being :

"the applicant lives in property A. It is destroyed by fire and she moves to live with her parents whose house coincidentally provides accommodation more suitable the property which has been destroyed for the purposes of paragraph 4 (9). After a month or so she acquires with the aid of a loan a new property, property B which is more suitable than property A had been (although no more suitable than her parents house)”

37. That issue was not resolved, Mr Justice Warren taking the view that the point was not necessary to decide on the facts of the case. However his view that in each of the examples cited there was an obvious link between the acquisition, the loan and the move led to the comment that "it may well be that, in each case, property B is to be seen as "alternative accommodation" and that property A was " occupied before the acquisition" of property B. I say "may well be" because it is arguable that paragraph 4 (9) should be strictly construed so that any gap is fatal".
38. Although the point did not require deciding, shortly after that in his judgement Mr Justice Warren went on to find that there needed to be a close linkage between the loan and the acquisition. Although it is not this link which is being tested in this case, the link in relation to the accommodation occupied before the acquisition by the claimant is of a similar kind. The adumbration of a strict approach by Mr Justice Warren as to the need for a level of contemporaneity between the loan and the acquisition fortifies me in my view that there is a similar need in relation to construing what was “the accommodation which was occupied before the acquisition by the claimant”  on the facts of this case.
39. This approach follows the general development of the law in this area as helpfully set out by Judge Wikeley in paragraph 47 of R(IS) 12/08.  His analysis also showed a tendency for the rule to be construed on the basis of a strict interpretation. I see no reason to depart from that approach.
40.  In my judgement there requires a similar level of linkage to a comparator property in this case, and although the facts of cases will differ so that it will not be helpful to try to quantify the time in weeks or months, I am able to say that a period of 22 months between leaving 25 L Street for number 20 F Road and the acquisition of number 53 is a period which cannot be ignored to enable me to take 25 L Street as the comparator property. I do not need to decide whether a shorter period in that accommodation would have allowed the family to use L Street as the comparator.  Matters in fact moved on, and if that option had at one time been open to them, it was not at the time of the actual move.

41. I am therefore satisfied that the judge below was correct in considering the appropriate comparator to be 20 F Road.  The next step was for me to examine the basis for the judge’s findings of fact which led to the conclusion as to the more suited test not being satisfied.  
42. The accommodation in numbers 20 and 53 F Road is physically much the same; there is a bedroom each for the 3 family members living there, and one bathroom.  There would appear to be some improvement for the family emotionally and socially, in that the move gave them more independence. I agree that living in someone else’s house on a grace and favour basis is not ideal, and there may be psychological benefits upon a move to a home of one’s own, but it seems to me that this is a universal feature of all people; it is common to disabled people and others Ake, and therefore it cannot be something that renders the accommodation “more suited to the special needs of a disabled person”. I take this cautious approach following my analysis of the case law, and in particular the comments of Judge Mesher set out above.
43. Being close to community and family support is something which may be of particular importance to people with disabilities; Judge Wikeley accepted the applicability of these wider social issues of proximity to health facilities and family members who provide care and support, as do I. However the co-location of the old and the new properties meant that no distinction could be drawn between them on these factors; there was simply no difference in terms of local facilities or support.
44. The papers before the FTT indicated that Mr A Senior, whose health deteriorated following the move due to dementia, was as a consequence offered a grant to put in a bathroom for his own use at number 53.  This was in 2009.  The work had not been begun prior to his death, and the offer was withdrawn. The recognition of that need occurred after the move; it could not have been considered at the time the loan was taken out as a special need to be better catered for in the new accommodation.  The judge did not specifically deal with that issue, but it did not affect the correctness of the conclusion he reached. 

Why I am not setting aside the decision of the FTT

45. The question for me under section 12 (1) of the Tribunals Courts and Enforcement Act 2007 is whether or not the decision of the FTT involved the making of an error on a point of law.  It did.  The reasons were inadequate. The judge did not address the possible use of 25 L Street as the comparator property.  He did not explain the relevance or otherwise of factors other than the physical ones or the argument that the tenancy was of itself beneficial. The reasons lacked an analysis of the suitability criteria.  The result, however, was inevitable due to there being no factor that was put forward which could have amounted to the proper satisfaction of the “more suited” test.
46. On an analysis of the relevant legal provision and following the way in which it has been interpreted in case law the decision that the judge came to was the only one which was possible in the circumstances.  If I set that decision aside and substituted my own it would be to the same effect, so the exercise would be futile.
47. Accordingly I confirm the decision under appeal, any error having no effect on the correctness of the outcome.

PA Gray

Judge of the Upper Tribunal

Signed on the original on 19 November 2013