Upper Tribunal (Administrative Appeals Chamber)

 

IN THE UPPER TRIBUNAL Appeal No: CH/2067/2012

 

ADMINISTRATIVE APPEALS CHAMBER

 

Before: Upper Tribunal Judge Wright

 

 

DECISION

 

 

The Upper Tribunal dismisses the appeal of the appellant.

 

The decision of the First-tier Tribunal sitting at Chester on 27 March 2012 under reference SC065/11/02942 did not involve an error on a material point of law and is not set aside. Its decision therefore stands.

 

This decision is given under section 11 of the Tribunals, Courts and Enforcement Act 2007. 

 

 

 

REASONS FOR DECISION

 

 

Introduction

 

1.                This appeal is concerned with the meaning of the phrase “the exclusive use of” in regulation 13D(2)(b) of the Housing Benefit (Person who have attained the qualifying age for state pension credit) Regulations 2006 (“the HB Regs”). That regulation is materially in the exact same form as regulation 13(D)(2) in the Housing Benefit Regulations 2006 –with which the AA case below was concerned – and so what is said in this decision will apply equally to that regulation.

 

2.               Does “exclusive use” mean, as the appellant contends, rooms he practically has control over and sole use of, or does it mean, as the First-tier Tribunal found and as the respondents both contend, a legal right to exclude others from the rooms?

 

 

3.               The answer to this question has important practical consequences, and not just for the appellant. Regulation 13 is titled Determination of maximum rent (LHA) and is key to assessing the maximum level of housing benefit payable under the Local Housing Allowance scheme. For present purposes it is sufficient say that if the appellant’s practical control test for “exclusive use” is correct then it is accepted on the facts that his maximum rent for housing benefit purposes would be set at the (higher) one bedroom self-contained accommodation rate, with a likely consequent increase in the level of housing benefit payable. If, however, the test for “exclusive use” is the legal right to exclude others from the rooms then his maximum rent for housing benefit purposes would be calculated on the basis of the (lower) one bedroom shared accommodation criterion, which is likely to reduce the level of housing benefit payable. The First-tier Tribunal found it was the latter. The issue to be decided on this appeal was whether that was correct.

 

Decision in Summary

 

4.               I agree with the decision of the First-tier Tribunal and so dismiss the appeal. In common with Upper Tribunal Wikeley’s opinion in AA –v- Chesterfield BC and SSWP [2011] UKUT 156 (AAC) (followed by Upper Tribunal Poynter in CH/2483/2012), I have concluded that “exclusive use” in regulation 13D(2)(b) of the HB Regs means the legal right to exclude others from the rooms and not just the practical circumstance of that in fact being the case. As it is common ground that the appellant did not have the legal right to exclude his ex-partner from the rooms he occupied in the property concerned (they were joint tenants of the whole property), it must follow in my judgment that the second respondent and the tribunal were correct to apply what is termed the ‘one-bedroom shared accommodation’ criterion under regulation 13D(2)(a)(ii) of the HB Regs.

 

 

 

Relevant background – factual   

5.               The appellant at the material time lived in a rental property which I will call BC.  He shared that property with his former partner. There is now no issue that he and his former partner were joint tenants of the property. The rental property consisted of one living room, two bedrooms, two bathrooms and a kitchen.  Initially the local authority decided that the appellant and his former partner were living together as husband and wife and so any claim for benefit had to be assessed on the basis that they were a couple.  However after representations made by and on behalf of the appellant the local authority revised its initial decision. It is the decision as revised with which this appeal is concerned. That decision was to the effect that the appellant and his former partner were not a couple and were maintaining separate households from one another, but that as they shared a kitchen the maximum rent for housing benefit purposes benefit had to be assessed under the one-bedroom shared accommodation criterion.

 

6.               The appellant appealed this decision to the First-tier Tribunal (“the tribunal”).  The tribunal upheld the decision of the local authority and dismissed the appeal. In its decision notice of 27 March 2012 it said that it accepted the appellant’s evidence about how he and his former partner in fact occupied BC, but “[a]s joint tenants, although they actually had sole use of two separate sets of rooms, they did not legally have exclusive use of any rooms under the tenancy agreement. Entitlement to housing benefit had been correctly calculated on the one-bedroom shared accommodation rate”. The statement of reasons of the tribunal did not take matters much further on this point other than to show that the tribunal relied on Judge Wikeley’s decision in AA above. The tribunal in that regard said:

 

“Judge Wikeley considered the question of what amounted to exclusive use of rooms….Although these comments were not necessary to his decision and therefore obiter the Tribunal nevertheless found them persuasive.  “Exclusive use” under Regulation 13D(2)(b) consisted of having a legal right to exclude all others under the tenancy.  Judge Wikeley summarised the position “one joint tenant cannot exclude the other joint tenant from any part of the tenancy concerned” It was clear that the tenancy agreement in this case did not provide for such exclusion”.

 

7.               The tribunal therefore concluded that the local authority had been correct to calculate the appellant’s entitlement to housing benefit on the basis of the one bedroom shared accommodation rate as he did not meet the conditions set out in regulation 13D(2)(b) of the HB Regs.

 

8.               The appellant then sought permission to appeal to the Upper Tribunal. Part of his arguments concerned whether he was a joint tenant at the relevant time. These arguments are no longer being pursued and so I say no more about them.  Permission to appeal was refused by the First-tier Tribunal but was granted by Judge Wikeley on 9 August 2012.  In doing so Judge Wikeley said:

 

“The appeal…throws into stark relief the question of whether the expression “exclusive use” means (i) having the formal and legal right to exclude all others from the room or rooms in question; or (ii) simply in practice having the sole and exclusive use of such space, irrespective of the formal legal position under the tenancy (or possibly licence). In [AA] I expressed the view that the proper interpretation was (i). However, the issue was …. “obiter” [in that case]”.

 

9.               Given the possible wider significance of the appeal, Judge Wikeley gave the Secretary of State for Work and Pensions the opportunity to be joined to the appeal before the Upper Tribunal; an opportunity which he took. Judge Wikeley also said that given the view he had expressed in AA it was probably right in the circumstances for this appeal to be transferred to another Judge of the Upper Tribunal to decide.

   

10.            In written submissions dated 9 November 2012 the Secretary of State argued that “exclusive use” meant “only those situations in which the person concerned has a legal right to exclude all others”. He said that this was the policy intention behind regulation 13D(2)(b) of the HB Regs; and he relied on the definition of “room” at the end of that regulation and the terms regulation 95A(2(g) of the HB  Regs and parts of the Rent Officers (Housing Benefit Functions) Order 1997 (the “Rent Officers Order”) as supporting his argument.

 

11.             Further submissions were then made by the appellant on his appeal. At that point he was acting alone. However, given the importance and potential complexity of the point in issue on the appeal, the Free Representation Unit (“FRU”), agreed to provide the appellant with legal representation on his appeal. I am very grateful for them agreeing to do so.  In times where “legal aid” is shrinking as a resource and with it the ability of lawyers to act in such appeals, FRU continues to play a key role in helping claimants to be represented on appeals of importance before the Upper Tribunal. 

 

12.            The appeal was then passed to me and I held a hearing on it at which the appellant was represented by Matthew Jackson from FRU and the local authority was represented by David Graham of counsel. The Secretary of State neither attended nor was he represented at the hearing.

 

13.            At the end of the hearing I raised two points with the parties on which I indicated they could make further written submissions if they wished. These points concerned whether the definition of “occupier” in regulation 13D(12) of the HB Regs and the decision in R –v- Swale Borough Council ex parte Marchant [1999] 1 FLR (QBD); [2000] 1 FLR 246 (CA) were of any assistance in determining the meaning of the phrase “has the exclusive use of”. Both Mr Jackson and Mr Graham supplied such submissions promptly to the Upper Tribunal’s office. Regrettably it then took a considerable period of time – for which I have no explanation- for those submissions to find their way to me.  I am grateful to both advocates for the assistance they have provided to me both in writing an orally.

 

 

 

Relevant background – Law

 

14.             Regulation 13D of the HB Regs provides, so far is material, as follows:

 

“13D.—(1) Subject to paragraph (3) to (11), the maximum rent (LHA) shall be the local housing allowance determined by the rent officer by virtue of article 4B(2A) or (4) of the Rent Officers Order which is applicable to–

(a) the broad rental market area in which the dwelling to which the claim or

award of housing benefit relates is situated at the relevant date; and

(b) the category of dwelling which applies at the relevant date in accordance

with paragraph (2).

(2) The category of dwelling which applies is–

(a) the category specified in paragraph 1(1)(a) of Schedule 3B to the Rent Officers Order (one bedroom shared accommodation) where paragraph (b) does not apply because neither sub-paragraph (b)(i) nor (ii) are satisfied in the claimant’s case and–

(i) neither the claimant nor his partner (where he has one) is a person to

whom paragraph 6 of Schedule 3 (severe disability premium) applies; or

(ii) the claimant’s partner is not a care leaver;_

(b) the category specified in paragraph 1(1)(b) of Schedule 3B to the Rent Officers Order (one bedroom self contained accommodation) where that applies in the claimant’s case at the relevant date in accordance with the size criteria as set out in paragraph (3) and–

(i) the claimant (together with his partner where he has one) has the exclusive

use of two or more rooms; or

(ii) the claimant (together with his partner where he has one) has the exclusive use of one room, a bathroom and toilet and a kitchen or facilities for cooking,

and in this sub-paragraph “room” means a bedroom or room suitable for living in except for a room which the claimant shares with any person other than a member of his household, a non-dependant of his, or a person who pays rent to him or his partner; or

(c) in any other case, the category which corresponds with the number of

bedrooms to which the claimant is entitled in accordance with  paragraph

(3) up to a maximum of four bedrooms.

(3) The claimant shall be entitled to one bedroom for each of the following categories of occupier (and each occupier shall come within the first category only which applies to him)–

(a) a couple (within the meaning of Part 7 of the Act);

(b) a person who is not a child;

(c) two children of the same sex;

(d) two children who are less than 10 years old;

(e) a child.

and one additional bedroom in any case where the claimant or the claimant’s partner  is a person who requires overnight care (or in any case where both of them are).

(4) The relevant authority shall determine–

(a) the cap rent (in accordance with the definition in paragraph (12)); and

(b) whether the cap rent exceeds the applicable local housing allowance.

(5) Where the applicable local housing allowance exceeds the cap rent, the maximum rent (LHA) shall be the cap rent…..

(10) The relevant authority shall apply to the rent officer for a board and attendance determination to be made in accordance with article 4C of the Rent Officers Order where-

(a) the relevant authority is required to determine a maximum rent by virtue of regulation 13C; and

(b) part of the rent under the tenancy appears to the relevant authority to be likely to be attributable to board and attendance …….

(12) In this regulation–

“cap rent” means the aggregate of such payments specified in regulation 12(1)

(rent) which the claimant is liable to pay, or is treated as liable to pay by virtue of regulation 8 (circumstances in which a person is treated as liable to make payments in respect of a dwelling) subject to regulation 12B(3) (mixed use accommodation), (4) (more than one person liable to make payments) and (6) (discretion in relation to eligible rent)….

“occupiers” means the persons whom the relevant authority is satisfied occupy as their home the dwelling to which the claim or award relates except for any joint tenant who is not a member of the claimant’s household….

“tenancy” includes

(a) in Scotland, any other right of occupancy; and

(b) in any other case, a licence to occupy premises,

and reference to a tenant, landlord or any other expression appropriate to a tenancy shall be construed accordingly”

 

 

15.            The term “Rent Officers Order” in the above regulation refers, in England and Wales, to the Rent Officers (Housing Benefit Functions) Order 1997 (see regulation 2(1) of the HB Regs). Paragraphs 1(1)(a) and 1(1)(b)  of Schedule 3B to the Rent Officers Order – relevant because of the terms of regulation 13D(2)(a) and (b) above - provided at the material time as follows:

 

“1.—(1) The categories of dwelling for which a rent officer is required to determine a local housing allowance in accordance with article 4B(2A)(ai) are–

(a) a dwelling where the tenant has the exclusive use of only one bedroom and where the tenancy provides for him to share the use of one or more of–

(i) a kitchen;

(ii) a bathroom;

(iii) a toilet; or

(iv) a room suitable for living in;

(b) a dwelling where the tenant (together with his partner where he has one) has the exclusive use of only one bedroom and exclusive use of a kitchen, a

bathroom, a toilet and a room suitable for living in”

 

16.            Reverting back to the HB Regs, regulation 95A of the HB Regs, so far as is relevant, was in the following form at the material time:

 

“95A.—(1) This paragraph applies to every claim for or award of housing benefit in the form of a rent allowance where the eligible rent has been, or is to be determined, in accordance with–

(a) regulation 12(3)(a) (rent) or 12C (eligible rent and maximum rent), as the

case may require;

(b) regulation 12D (eligible rent and the maximum rent (LHA)) or any of

regulations 12E to 12K (transitional protection for pathfinder cases), as the

case may require; or

(c) regulations 12 (rent) and 13 (maximum rent) as set out in paragraph 5 of

Schedule 3 to the Consequential Provisions Regulations.

(2) No earlier than the first, and no later than the fifth, working day of every month a relevant authority shall provide the following information to the rent officer in relation to every claim for or award of housing benefit to which paragraph (1) applied in the preceding month–

(a) the address, including any room or unit number, house or flat number or

name, and the postcode of the dwelling to which the claim or award relates;

(b) where the claim or award relates to mooring charges for a houseboat, or

payments in respect of the site on which a caravan or mobile home stands,

the mooring or plot number and the address of the mooring or site, including

the postcode;

(c) the date on which the tenancy began;

(d) the amount of rent and the rental period, whether calendar monthly, four

weekly, weekly or some other period;

(e) where the claimant has the use of two or more bedrooms, the number of

bedrooms and rooms suitable for living in that there are in the dwelling, and

in this sub-paragraph “bedroom” does not include a bedroom which the

claimant shares with any person other than a member of his household, a

non-dependant of his, or a person who pays rent to him or his partner;

(f) whether the tenant (together with his partner where he has one) has exclusive use of only one bedroom, and if so, whether they have exclusive use of a kitchen, bathroom, toilet and a room suitable for living in;

(g) whether the tenant has exclusive use of only one bedroom, and if so, which, if any, of the following the tenancy provides for him to share–

(i) a kitchen; (ii) a bathroom; (iii) a toilet; or (iv) a room suitable for living in;

(h) the date on which entitlement to housing benefit began; and

(i) where applicable, the date on which entitlement to housing benefit ended….

(8) In relation to the tenancy to which the claim or award relates, the relevant

authority shall provide the following information……..

(b) if the tenancy is furnished, and if so, to what extent;

(c) the rental period, whether calendar monthly, four weekly, weekly or some

other period;

(d) the length of the tenancy;

(e) when the tenancy began and, if appropriate, when it ended;

(h) the landlord’s or letting agent’s name;

(i) the landlord’s or letting agent’s business address;

(j) whether the landlord is a housing association, private registered provider

of social housing or registered social landlord; and

(k) such other information as the rent officer may reasonably require to make a determination.

(9) In relation to the claimant and the other occupiers of the dwelling to which the claim or award relates, the relevant authority shall provide the following information–

(a) such information regarding the relationship of the claimant to the occupiers and the occupiers to each other, as is necessary for the rent officer to make the determination;

(b) the age and sex of each occupier under 18;

(ba) whether the claimant or the claimant’s partner is a person who requires

overnight care; and

(c) any other information that is relevant to the rent officer in making the

determination, including visits to the dwelling…...

(12) In this regulation “tenancy” includes–

(a) in Scotland, any other right of occupancy; and

(b) in any other case, a licence to occupy premises,

and reference to a tenant, landlord or any other expression appropriate to a tenancy shall be construed accordingly”

 

 

 

17.            In AA, as has already been indicated, deciding what was meant by the phrase “has the exclusive use of” in regulation 13D of the HB Regs was not necessary to the decision Judge Wikeley had to make.  This was because the appeal in AA was decided on the basis that the appellant and his father were joint tenants and members of the same household, and so fell to be assessed on the basis of their occupying a two bedroom dwelling under regulation 13(D)(2)(c) and (3)(b)of the HB Regs. (These provisions do not apply here because it is accepted that the appellant and his former partner were not members of the same household).

 

18.            However, as all the parties before Judge Wikeley in AA had made detailed submissions on what was meant by “exclusive use”, the judge said he would comment briefly on the matter. 

 

19.            It was accepted in AA, as it is here, that there is no statutory definition of what is meant by “exclusive use”.  Judge Wikeley’s view was that it meant where the claimant “has a legal right under the tenancy to exclude all others”.  He went  on:

 

“by definition joint tenants each have the joint and several right to possession of the whole of the property as one of the four “unities” (possession, interest, time and title). It is fundamental to the very nature of a joint tenancy that one joint tenant cannot exclude the other joint tenant from any part of the property concerned: Bull v Bull [1955] 1 QB 234 and Hammersmith & Fulham LBC v Monk [1991] UKHL 6”.

 

 

That analysis is not disputed here, so far as it goes, nor, as I have said, is it disputed that the appellant and his former partner were joint tenants of BC. However, it is not accepted by the appellant that it is this legal test that applies to determining whether he had “exclusive use” of rooms in BC

 

20.           Judge Wikeley rejected the argument that “exclusive use” simply means “what the facts on the ground are, rather than what the legal technicalities may provide for”. He did so for four reasons:

 

(i) first, the choice of statutory language. If the regulations were concerned simply with actual use as a matter of fact, it would have been straightforward to use some phrase such as “the claimant has the sole use of two or more rooms”.  In Judge Wikeley’s view, “the very epithet “exclusive” imports the concept of the power to exclude, which must be based on the underlying legal relations”;

 

(ii) second, the language of regulation 13D(2)(b) as a whole. Judge Wikeley pointed out that the rider to the sub-paragraph provides that “‘room’ means a bedroom or room suitable for living in except for a room which the claimant shares with any person other than a member of his household, a non-dependant of his, or a person who pays rent to him or his partner”(underlining added).  This supported the view that “exclusive use” means a legal right to exclude because any room a claimant shares with a third party who is not a member of his or her household is probably a room he shares with that other or others under the terms of the tenancy agreement, which implies in turn that exclusivity of use is also referable to the terms of the tenancy;

 

(iii) third, the wider context of the HB Regs. Regulation 95A deals with information to be provided to rent officers and paragraph (2)(g) refers to a tenant’s “exclusive use” of one bedroom in the context of various other rooms which, in addition, “the tenancy provides for him to share”.  Judge Wikeley agreed that this wording meant that the term “exclusive use” thereby implies a legal right to do so. He did not accept an argument that the clause referring to the tenancy in regulation 95A(2)(g) is an additional requirement rather than simply an exposition of the meaning of “exclusive use”;

 

(iv)          fourth, the HB Regs, although governing a modern social security benefit, necessarily have to be set against the background of general housing law and, insofar as its scope may be different, the law of landlord and tenant.  In that context Judge Wikeley noted that although the courts have not always been consistent in their usage of the expressions “exclusive use”, “exclusive occupation” and “exclusive possession”, there was “a long tradition of Rent Act case law which deals with sharing and exclusive use of particular rooms, all of which is predicated on the legal rights and obligations under the relevant tenancy agreement – see e.g. Neale v Del Soto [1945] 1 KB 144, Cole v Harris [1945] 1 KB 474, Goodrich v Paisner [1957] AC 65 and more recently Uratemp Ventures Limited v. Collins [2001] UKHL 43”.

 

Analysis

 

21.            I shall address the arguments made to me by the parties in the course of my analysis of what is meant by “has the exclusive use of”, though I will not necessarily refer at each stage to which party made which particular argument.

 

22.           The starting point is that determining the meaning of either the longer phrase “has the exclusive use of” or just the shorter “exclusive use”, is an exercise in statutory construction.  In this regard I do not find helpful the appellant’s reliance on what is termed the “commonsense construction rule” from Bennion on Statutory Interpretation – 5th Edition (2008) at pages 551-552 that:

 

“It is a rule of law..…that when considering, in relation to the facts of the instant case, which of the opposing constructions of the enactment would give effect to the legislative intention, the court should presume that the legislator intended common sense should be used in construing the enactment”.

 

23.           I say I do not find this helpful for a number of reasons.

 

(i)             First, as a quick glance at Bennion shows, this is but one aspect or rule of the rules of statutory construction.

 

(ii)           Second, and more importantly, the rule, if I may say, so is uncontroversial and some may even say anodyne.  All it is saying is that as matter of approach common sense is to be used in construing a statutory provision. In other words, the exercise of construction must not be approached in an overly technical or absurd (i.e. irrational) way.

 

(iii)         Third, and perhaps most importantly, this “rule” does not say that the starting point is that a word or phrase has to be given its common or lay meaning (as the appellant contended). All it lays down is that in seeking the meaning of the word of phrase common sense is to be used in construing its meaning. This in fact is exemplified by the case on which the appellant relied – Lee-Verhulst (Investments) Ltd –v- Harwood Trust and another [1973] 1 QB 204 (CA) - where the issue was what was meant by the word “occupied” in section 23 of the Landlord and Tenant Act 1954.  As Lord Justice Stamp said at 217 D:

 

“As Sachs LJ has pointed out and as a glance at Stroud’s Judicial Dictionary will show, the words “occupation” and “occupier” are not words of art having an ascertained legal meaning applicable, or prima facie applicable, wherever you find them in a statute, but take their colour from the context of the statue in which they are found….” (my underlining added for emphasis – see further Sachs LJ at 212 G-H and 213 E[1]).

 

That, it seems to me, encapsulates the correct starting point: ascertaining what is meant by the phrase “exclusive use” in the context of the statutory scheme within which it appears. Moreover, it seems to me that, despite the appellant’s arguments to the contrary, that was precisely the exercise Judge Wikeley conducted in AA.

 

(iv)          Fourth, it is by no means clear to me that there is one common sense, ordinary or natural meaning, or just one meaning, that attaches to the phrase “exclusive use”, even outwith the HB Regs.  That seems plain from the attempts to divine such a meaning by way or recourse to the dictionary definition of the word “exclusive” in the Oxford English Dictionary, which would seem to cover both uses of the word which I have to decide between. However, even just looking at the dictionary definitions they would seem, in my judgment, to lean towards the legal meaning as opposed to the practical control/use meaning. For example, two of the meanings referred to (numbers 1 and 6 in the OED passage put before), referred to “having the power or function of excluding” and “of a monopoly or grant: Excluding all other persons from the rights conferred”, both of which suggest some legal authority (‘power’ or ‘right’) to exclude; whereas only one (number 8) referred to the practical state of affairs “employed or followed to the exclusion of everything else”.  I therefore consider there is considerable force in Judge Wikeley’s observation that the word “exclusive” carries with it the import of the legal power to exclude

24.           What all of the above tells me is that the search for identifying the meaning of the phrase “exclusive use” or “has the exclusive use of” must be carried out by identifying what the phrase means in its statutory context: per Lee-Verhulst (Investments) Ltd. 

 

25.           I therefore reject the argument of the appellant that Judge Wikeley erred as a matter of approach in determining the meaning of the phrase “exclusive use”. In my judgment Judge Wikeley’s approach was correct. Moreover, I respectfully agree with his conclusion and the four considerations that led him to that conclusion.  I also, for the reasons  given above,  reject the appellant’s argument that as a matter of law or a matter of approach the starting point is that the phrase “exclusive use” has to be given a non-technical and ordinary meaning and that that meaning  is “as a matter of fact or practice has the sole use of the rooms”.  I expand on this further below.

 

26.           As I have said above, the phrase “exclusive use” has to be considered in the context of the statutory provision within which it appears. That context, it seems to me, must include reading regulation 13D(2) together with the relevant terms of the Rent Officers Order.  I say this because the opening words of sub-paragraphs (a) and (b) in regulation 13D(2) both expressly refer to and, to an extent, incorporate in the terms of paragraph 1(1) in Schedule 3B to the Rent Officers Order. There is also a direct equivalence between the wording of paragraph 1(1)(a) and 1(1)(b) of Schedule 3B to the Rent Officers Order and, respectively, regulation 95A(2)(g) and 95A(2)(f) of the HB Regs. 

 

27.            Moreover, if the word “occupying” or the phrase “normally occupying” in what would now be regulation 7 of the HB Regs could not be construed by giving it its “straightforward” meaning and had instead to construed within the statutory scheme as a whole including the relevant Rent Officers Order (per R –v- Swale Borough Council ex parte Marchant [1999] 1 FLR (QBD); [2000] 1 FLR 246 (CA)), that in my judgment must apply equally, if not more, here given that regulation 13D(2) requires parts of paragraph 1(1) in Schedule 3B to the Rent Officers Order to be read into it.

 

28.           Further, I consider there is force in the point made by the local authority that rent officers acting under the terms of the Rent Officers Order – and I would add housing benefit officers making the paper referrals to the rent officers - are not concerned with ascertaining how a particular dwelling is being used in fact but with what the rental levels are under the terms of the tenancy agreements.  The rent officer’s primary function under the local housing allowance (LHA) scheme at the relevant time was set out in article 4B(2A) of the Rent Officers Order and required him before the end of each month “to determine, in accordance with the provisions of Schedule 3B a local housing allowance for each of the categories of dwelling set out in paragraph 1 of Schedule 3B”.  The rent officer’s function is not to identify a fixed rental allowance for each dwelling to which paragraph 1 of Schedule 3B may apply, but rather the local housing allowances for all such dwellings that fall within each of the paragraph 1 categories. 

 

29.           The relevant terms of paragraph 1 in the said Schedule 3B have already been set but I will repeat them.

 

1.—(1) The categories of dwelling for which a rent officer is required to determine a local housing allowance in accordance with article 4B(2A)(ai) are–

(a) a dwelling where the tenant has the exclusive use of only one bedroom and where the tenancy provides for him to share the use of one or more of–

(i) a kitchen;

(ii) a bathroom;

(iii) a toilet; or

(iv) a room suitable for living in;

(b) a dwelling where the tenant (together with his partner where he has one) has the exclusive use of only one bedroom and exclusive use of a kitchen, a

bathroom, a toilet and a room suitable for living in

 

Pausing at this point, as I have said above, the expressions used in this a paragraph – in particular, “exclusive use”  - must be read in the same way as the same expressions used in regulation 13D(2) of the HB Regs, given the express and intimate linkage between the two provisions. If it were otherwise then, for reasons I give below concerning the correct construction of “exclusive use” in the Rent Officers Order, on the appellant’s argument councils would be required to determine a maximum rent based on the “one-bedroom self-contained accommodation” test for both joint tenants where each has in fact exclusive use of the relevant rooms, under regulation 13D(2)(b) of the HB Regs, notwithstanding that the test under paragraph 1(1)(b) of Schedule 3B to the Rent Officers Order would lead to the opposite conclusion

30.           However, if the appellant’s argument as to the meaning of “exclusive use” is correct then two, odd consequences follow in applying that meaning to the Rent Officers Order.

 

31.            First, in respect of both paragraph 1(1)(a) and (b) the rent officer would need to identify what the factual state of affairs was in each dwelling notwithstanding what the tenancy agreement may provide for. However, there is no machinery for his so doing. I appreciate that justice may not always be the handmaiden of administrative convenience (per Brooke LJ in Hourigan –v- SSWP [2002] EWCA Civ 1890; R(IS)4/03)); but as a matter of statutory construction I consider I am entitled to search for the machinery which ought to have been put in place in the statutory schemes if the legislature had intended exclusive use to be determined by reference to how as a matter of fact the rooms were being used.

32.           Second, the appellant’s approach sits very oddly with the express terms of paragraph 1(1)(a) in Schedule 3B and its requirement to consider whether the “tenancy provides for” shared use of the kitchen, bathroom etc.  If the appellant is correct then the inquiry under paragraph 1(1)(a) requires the rent officer to look at whether the person in fact has the exclusive use of a bedroom and then whether under the tenancy, and regardless of actual use in fact, the person shares the kitchen and bathroom.  What then if in fact that person has exclusive use of the kitchen and bathroom (in the sense contended for by the appellant) but the tenancy provides for him to share them? Which of 1(1)(a) or 1(1)(b) applies?  On the face of it – if the appellant is correct - the answer is both. But that would be to render the system unworkable.  It is, however, workable if exclusive use means the legal right to exclude. The words the “tenancy provides for” in my judgment, therefore provide a very powerful, if not compelling, indicator that what “exclusive use” means under paragraph 1(1) in Schedule 3B to the Rent Officers  Order means the legal entitlement of the tenant (or licensee) to exclusive use of the room or rooms.

 

33.           If that is the meaning that applies under the Rent Officers Order I can see no sensible basis for according it a different meaning under regulation 13D(2) the HB Regs.  The function of article 4B(2A) and paragraph 1(1) of Schedule 3B to the Rent Officers (Housing Benefit Functions) Order 1997 is to determine the local housing allowance (LHA) for the categories of dwelling set out in paragraph 1 of Schedule 3B. Regulation 13D of the HB Regs performs a similar function, save its focus is applying the LHA as a maximum rent for an individual claimant and it creates some exceptions (for example, if the claimant’s partner is a care leaver then the one bedroom shared accommodation LHA rate does not apply – regulation 13d(2)(a)(ii)).

 

34.           I can no good reason why the legislature would have mandated the local housing allowance machinery to operate by way of different tests depending on which body was applying the test.  The appellant’s argument that the housing benefit scheme has to be construed differently because of its differing purpose takes matters no further, in my view; or at least it does not provide a sound basis for distinguishing the “exclusive use” test under regulation 13D from that in Schedule 3B to the Rent Officers Order notwithstanding all the counter pointers referred to above.

 

35.           The appellant’s purposive construction argument is based on part of Lord Bingham’s speech in R -v- Westminster City Council HBRB ex parte Mehanne [2001] UKHL 11; [2001] 1 WLR 539, where at paragraph [5] Lord Bingham said:

 

“Two points emerge clearly from this brief reference to the housing benefit regime. First, it is directed to the humane objective of assisting those of modest means to provide themselves with a roof over their heads. This is, after all, one of the most basic of human needs, and it is not surprisingly accepted as a proper object of public expenditure. But, secondly, such expenditure must be directed to meeting real needs. Thus expenditure may be restricted if a claimant is housed more expensively than necessary, whether because his accommodation is unnecessarily large, or because he is paying more than the market rate for the area in which he lives, or because he could be housed adequately but more economically in similar accommodation in an accessible but less expensive quarter. Special consideration is, however, given to those who are elderly, or unable to work, or who are responsible for a child or young person living with them”

 

I can find nothing in this passage which requires the view that the one bedroom self-contained accommodation rate of the LHA has to be paid where in fact joint tenants have arranged the dwelling such that they each have sole use of certain rooms.  Indeed the passage can just as easily be read as supporting the “legal right to exclude others” meaning of “exclusive use”, as holding a dwelling under such an agreement (with, for example, the security that comes with it), may be viewed in policy terms as likely to give rise to a higher market rent and thus require a higher local housing allowance figure.

36.           I was troubled for some time with how paragraph 1(1) of Schedule 3B to the Rent Officers Order and regulation 13D(2) of the HB Regs are to fit together.  My concern was as follows.  The structure of regulation 13D(2) is such that one works through from sub-paragraph (a) onwards to work out which category applies (confirmed by the words, “in any other case” in sub-paragraph (c) in regulation 13D(2)).  On one reading, the one-bedroom shared accommodation rate will apply (that is, the LHA in respect of accommodation coming under paragraph 1(1)(a) of Schedule 3B to the Rent Officers Order), only where regulation 13D(2)(b) does not apply because neither sub-paragraph (b)(i) nor (ii) are satisfied in the claimant’s case. However, regulation 13D(2)(b) might be said only to apply where paragraph 1(1)(b) in Schedule 3B to the Rent Officers Order applies in the claimant’s case and the claimant has either exclusive use of two or more rooms or exclusive use of one room, a kitchen (or facilities for cooking) and bathroom and toilet. But if  regulation 13D(2)(b) does not apply for the sole reason that, as here,  paragraph 1(1)(b) in Schedule 3B to the Rent Officers Order does not apply, then regulation 13D(2)(b)’s lack of application will not be “because neither sub-paragraph (b)(i) nor (ii) are satisfied in the claimant’s case”, and so, on this reading, regulation 13D(2)(a) of the HB Regs could no application either.

37.            If this analysis is correct – and it was not an analysis which any of the parties can be accused of arguing for – then I was further troubled that:

 

(a) the appellant may have been wrongly assessed as meeting  regulation 13D(2)(a) of the HB Regs (though assessing him under regulation 13D(2)(c) on the basis of having one bedroom may have come to the same result[2]); and

 

(b) perhaps more importantly, it would seem to rob regulation 13D(2)(a) of much practical effect.

 

38.           On further consideration, however, I consider this analysis is wrong. The error lies in the view that the local authority is applying the definitions in paragraph 1(1) of Schedule 3B to the Rent Officer Order substantively to the facts of the claimant’s case in an adjudicatory exercise (i.e. it is deciding that paragraph 1(1)(b) in Schedule 3B to the Rent Officer Order does not in fact apply to a claimant’s dwelling – or that the rent officer has in fact carried such an individual adjudication).  However, all regulation 13D(2)(b) requires the local authority to do is apply the maximum rent figure determined  by the rent officer be applicable  for the area in respect of the paragraph 1(1) categories of dwelling and apply that relevant category figure to the claimant if the claimant either has exclusive use of two or more rooms or he has exclusive use of one room, a bathroom and toilet and a kitchen (or facilities for cooking.  

 

 

 

39.           That this is the correct reading is shown, in my view, if the terms of regulation 13D in the Housing Benefit Regulations 2006 are considered.  Regulation 13D(2)(a)(i) of those regulations provides as follows:

 

“13D.—(1) Subject to paragraph (3) to (11), the maximum rent (LHA) shall be the local housing allowance determined by the rent officer by virtue of article 4B(2A) or (4) of the Rent Officers Order which is applicable to–

(a) the broad rental market area in which the dwelling to which the claim or

award of housing benefit relates is situated at the relevant date; and

(b) the category of dwelling which applies at the relevant date in accordance

with paragraph (2).

(2) The category of dwelling which applies is–

(a) the category specified in paragraph 1(1)(a) of Schedule 3B to the Rent Officers Order (one bedroom shared accommodation) where–

(i) the claimant is a young individual who has no non-dependant residing

with him and to whom paragraph 14 of Schedule 3 (severe disability premium) does not apply”(underlining added for emphasis).

 

 

The provisions of sub-paragraph (a)(i) plainly have nothing to do with the accommodation the claimant in fact is living in.  What is provided for is that the one–bedroom shared accommodation rate of the LHA as determined by the rent officer will apply to the claimant if he is a single young person who is not severely disabled, regardless of what accommodation he may in fact be living in.  That it seems to me underscores the perspective that the local authority is not required to decide which part of paragraph 1(1) of Schedule 3B to the Rent Officers Order in fact applies to a claimant’s dwelling.

 

40.           To that extent at least, the test of “exclusive use” under regulation 13D(2)(i) and (ii) of the HB Regs is a separate one, and is one that the local authority has to apply (just as it has to decide whether a claimant’s partner is a care leaver under regulation 13D(2)(a)(ii)). However, for the reasons given above and below it carries the same meaning, in my judgment, as “exclusive use” in paragraph 1(1) of Schedule 3B to the Rent Officers Order.

 

 

 

41.            Another telling factor in favour of “exclusive use” meaning “has the legal right to exclude” is the choice of statutory language used, and in particular the use of the word “exclusive”. I do not repeat here what Judge Wikeley said on this (see paragraph 2o(i) above) or what is said in paragraph 23(iv) above about the dictionary meanings. However, just as a matter of impression it seems to me, as it did to Judge Wikeley, that the word “exclusive” when taken with “use” is seeking to import more than “sole” use as matter of fact. I am not sure in truth if the point is capable of much more elaboration, but if a person has had sole use of a room as a matter of fact or history it is in my view at least an odd use of language to say he also had exclusive use of the room, if only because that factual circumstance says nothing about his ability to exclude others from the room.

 

42.           There is also, to my mind, the related difficulty of how “exclusive use” is to be gauged in fact.  For the reasons given immediately above sole use seems to be a lesser form of use than exclusive use.  For example, I may in fact have had sole use of the car for one particular journey but that does not mean I had exclusive use of the car; another family member with a more pressing need for the car may have had a better claim to use it and thus used it instead. 

 

43.           Anticipating this difficulty the appellant argued that the phrase “exclusive use” should equate with something a person has “sole use of” and “practically controls”.  However, how is practical control to be gauged?  The word “control” itself suggests an underlying authority that gives the basis for the control. Perhaps more importantly, in the context of a case such as this one – that is a joint tenancy – it is unclear what practical control adds to sole use in fact if as matter of law the other joint tenant has a full legal right to use all the rooms in the dwelling.  The appellant may as a matter of fact have sole use of his rooms but I struggle to see how it can be said he also has practical control over them given that as matter of law he cannot exclude his ex-partner from them.

44.           In addition, there is the problem as to how the appellant’s definition of “exclusive use” makes sense in terms of the rent charged for a dwelling.  I accept that it is perhaps now only a broad purpose of the housing benefit scheme that it is to meet market rental levels, but it remains a purpose of the scheme that housing benefit is there to assist with rents charged. However, rent levels will depend upon the terms of the tenancy or licence agreement and not how joint tenants then seek to arrange their affairs in the dwelling. The effect of the appellant’s submission cuts against this. On his case he and his ex-partner ought, if both claimed housing benefit, each be assessed on the higher LHA rate for one-bedroom self-contained accommodation simply because they have arranged their occupation of the dwelling in a certain way, notwithstanding that the rent officer, going on the terms of the joint tenancy, would have assessed the applicable LHA for that category of dwelling as the lower one-bedroom shared accommodation rate. 

 

45.           In a nutshell, the curious result of the appellant’s argument is that the happenstance of how the living accommodation is divided up once the tenancy has been granted will not affect the level of rent charged under the tenancy, but it will have the effect of allowing a LHA (which is meant to be based on the categories of dwelling arising the terms of the tenancy agreement) based on an agreement for occupation which the tenant does not have.  I would require clearer language in regulation 13D of the HB Regs to favour such a result.

 

46.           Insofar as I have not already addressed these above, further considerations which support the “legal right to exclude” meaning of “exclusive use” are the three additional points made by Judge Wikeley in AA that are summarised in paragraph 20(ii) to (iv) above, which I respectfully agree with and adopt.

 

47.            I do not consider the definition of “occupiers” in regulation 13D(12) of the HB Regs really assists with the analysis or takes it any further. 

48.           Much was made before me about the fact that the draftsperson had not used the phrase “exclusive possession” in place of “exclusive use”. The argument made by the appellant here was as follows: (i) “exclusive possession” would undoubtedly cover the legal right to exclude; (ii) it was not used so as to accommodate ‘licensees’, which regulation 13D of the HB Regs was intended to cover (see definition of ‘tenancy’ under regulation 13D(12); (iii) as a matter of law a licensee had no power to legally exclude any other person from the room or rooms he was occupying under the terms of his licence; (iv) therefore the phrase “exclusive use” had to have a meaning other than the legal right to exclude so as to be able to cover licensee as well, and (v) to effect cover for licensees as well, the appropriate test was “sole use in fact and practical ability to  control”.

 

49.           It was also argued that to construe regulation 13D(2)(b) as never applying to those occupying under a licence was unfair, discriminatory and unjustified.

 

50.           I am mindful of the local authority’s submission to me that the appellant in this case is not a licensee and is a tenant, and therefore any ruling on whether regulation 13D(2)(b) can in principle extend to cover licensees would be obiter (not necessary to my decision) and so not binding in any case which did involve a licensee trying to rely on regulation 13D(2)(b).  Strictly speaking that may be correct. However, the argument the appellant makes here is about the legal scope of the phrase “exclusive use” in regulation 13D(2)(b) and that arguably is informed by whether it can cover licensees. It is thus an issue that calls to be addressed.

 

51.            The first point to note on this argument is that the word ‘tenancy’ does not appear anywhere in regulation 13D(1) or (2) of the HB Regs: regulation 13D(2)(b) in particular is silent on it applying to a ‘tenancy’.  The only place the word ‘tenancy’ appears in regulation 13D is in paragraph (10), which is concerned with cases where part of the rent under the ‘tenancy’ is likely to attributable to ‘board and attendance’.  The phrase “exclusive use” may be said therefore to take its meaning free from this extended definition of ‘tenancy’ and unencumbered by concerns about the position of licensees.

 

52.           The appellant’s response to this is that to exclude licensees from regulation 13D(2)(b) of the HB Regs altogether is arbitrary, unfair, discriminatory and lacking in justification.  I do not consider there is any real merit in these objections.  A single licensee or a licensee couple would only be excluded from the one-bedroom self-contained accommodation rate of the LHA: the one-bedroom shared accommodation rate would apply.  In policy terms that may be perfectly justifiable (if licensees cannot fall within regulation 13D(2)(b)), because the licensees lack of security of tenure may be reflected in their  ‘rent’ level generally being lower than tenants with security.

53.           Having said this, both regulation 95A(12) of the HB Regs and paragraph article 2(1) of the Rent Officers Order provide that the word ‘tenancy’ includes a licence and references to ‘tenant’ are to be construed as including references to a ‘licensee’.  Reading the statutory schemes as a whole may therefore give rise to the question how a licensee may have ‘exclusive use’ of the rooms he has been licensed to occupy, in the sense of being able legally to exclude others from the rooms.

 

54.           It seems to me that there may be two answers to this question. 

 

55.           The first is that if it is the case that as a matter of law a licensee cannot legally exclude all others from the rooms (though see discussion below), the statutory provisions simply misfire in respect of licensees.  This is not unknown in social security drafting: see for example Lord Hoffman in Chief Adjudication Officer -v- Wolke [1997] UKHL 50; [1997] 1 WLR 1640 at page 1657 letter [B]; R(IS)13/98.  This may be bold step to take however, and I am mindful that the Secretary of State did not address this issue (though he had the opportunity to do so). Arguably, the starting point ought to be that the legislature intended the statutory scheme to be rational and for all its terms to be effective. If that is correct then the aim is to seek to construe the phrase “exclusive use” as if it can apply to a licensee. That takes me to the second possible answer.

 

56.           The second answer is that as a matter of law a licensee may have exclusive use of the rooms and be able legally to exclude others from using them as rooms for themselves.  Some support from this can be found in case-law.

 

57.            In the seminal decision of the House of Lords in Street –v- Mountford [1985] 1 A.C. 809 concerning the distinction between tenants and licensees, Lord Templeman, giving the leading judgment, recognised that an occupier may “enjoy exclusive possession without necessarily being a tenant” (at 818E-F, and see also 823E), and drew a distinction between what he termed a “lodger” and a “tenant”, with the former being provided by the landlord with “attendance or services which require the landlord or his servants unrestricted access to and use of the premises”  (818A).  This may cover what may be termed a bare licence to occupy.  However, it suggests that there may be other cases where the terms of the agreement to occupy - to use a neutral term - are such that the landlord does not have the right to unrestricted access to and use of the rooms. If that is the case then on Lord Templeman’s thesis it may be that the occupier has exclusive possession (and exclusive use) of the rooms and may even be a tenant; and that further suggests that defining “tenancy” to include “a licence to occupy” in the HB Regs and the Rent Officers Order may have been intended to do no more than ensure that merely because the agreement said on its face it was a licence the occupier could not be said, for that reason alone, not to have exclusive use of the rooms.

58.           It may be argued against this that Street –v- Mountford was concerned with the distinction between tenancy (or lease) and licence and that the ‘licence’ in the HB Regs and the Rent Officers Order has to be read as meaning that which is a licence even after Street –v- Mountford.  However, even if that is the case there is still some support for the view that even a licensee has a legally enforceable right to exclude others from using his rooms as rooms to live and sleep in. The decision in Manchester City Airport Plc –v- Dutton (C.A) [2001] 1 QB 133 shows that a person with a limited licence to occupy land may legally enforce that right so as to have another with a lesser right in the land removed from it. Moreover, it may arguably be necessary to imply a necessary term into a licence that a landlord could not use the bedroom as a bedroom for himself at the same time as the licensee was using it, and “exclusive use of [the rooms]” in the HB Regs and the Rent Officers Order has to be read in this sense[3].

 

59.           Neither of the two answers is necessarily free from difficulty. However neither do I consider that the possible difficulties in respect of licensees leads to “exclusive use” not having the meaning I have accorded to it and instead ought to have the meaning accorded to it for which the appellant contends.  All the other points made above, in my judgment, point strongly in favour of the “legal right to exclude” meaning of “exclusive use”.

 

 

 

 

 

 (Signed) S. M. Wright

Judge of the Upper Tribunal

Dated 23^rd January 2014