DECISION OF THE UPPER TRIBUNAL

(ADMINISTRATIVE APPEALS CHAMBER)

 

The DECISION of the Upper Tribunal is to allow the appeal by the Appellant.

 

The decision of the London (Taylor House) First-tier Tribunal dated 19 March 2013 under file reference SC160/12/00984 involves an error on a point of law and is set aside.

 

The Appellant’s appeal against the Respondent’s decision in relation to housing benefit and council tax benefit dated 30 November 2009 is remitted to be reheard by a different First-tier Tribunal, subject to the Directions below.

 

This decision is given under section 12(2)(a) and 12(2)(b)(i) of the Tribunals, Courts and Enforcement Act 2007.

 

 

 

DIRECTIONS

 

The following directions apply to the re-hearing:

 

(1) The re-hearing will be at an oral hearing;

 

(2) The new tribunal should be differently constituted from the First-tier Tribunal which considered this appeal at the hearing on 19 March 2013;

 

(3) The new tribunal must consider all the evidence afresh and is not bound in any way by the decision of the previous tribunal;

 

(4) The District Tribunal Judge who gives directions for the further conduct of the appeal may wish to consider directing that a tribunal judge sit with an accountant member, in accordance with paragraphs 6 and 7 of the Senior President’s Practice Statement on the Composition of Tribunals in Social Security and Child Support Cases in the Social Entitlement Chamber on or after 01 August 2013.

 

 

 

These directions may be supplemented or modified as appropriate by later directions by a District Tribunal Judge in the Social Entitlement Chamber of the First-tier Tribunal. 

 

 

REASONS FOR DECISION

 

A completely unacceptable delay

1. If a claimant is unhappy with a decision that the local authority makes on their housing benefit claim, then he or she has a right of appeal to an independent tribunal, the First-tier Tribunal (Social Entitlement Chamber). The appeal has to be made by the claimant writing to the local authority within a certain time. But there is no express statutory requirement on the local authority to process the appeal and pass it to the First-tier Tribunal administration within a specified time. This case is a good example of the possible injustice that may result.

 

2. In the present case the local authority made a decision on 30 November 2009 that the Appellant was not entitled to housing benefit. The Appellant asked for the decision to be reconsidered. The local authority refused, and so on 27 January 2010 the Appellant wrote a letter of appeal to the council. This letter was not referred to the First-tier Tribunal administration until 29 February 2012, more than two years later. A delay of that magnitude is, to put it mildly, completely unacceptable.

 

A complex and difficult case

3. This is, undoubtedly, a difficult and complicated case. The Appellant and his wife have 10 children. For some years he ran a property business, owning a number of properties in the UK and in Eastern Europe. With the collapse of the property market in 2009, the Appellant’s business went into a downward spiral. He was subject to repossessions and it appears that he ended up having to sell his own home in August 2009 to pay debts, so making no effective net profit on the sale. The new owner allowed the Appellant and his family to remain in the property as tenants.

 

4. In September 2009 the Appellant claimed housing benefit from the council. On the claim form he stated he was involved in two property investment companies. In answer to a question as to whether he had any property other than his home, he referred to another property worth £900,000 but subject to a mortgage of £1,100,000. This entry was then crossed out. Instead, the Appellant included a schedule referring to four other addresses, said to be worth in total £935,000 but subject to mortgages totalling £1,100,000.

 

5. Understandably the council wrote back to the Appellant seeking further documentary evidence. Further correspondence ensued leading to the decision of 30 November 2009 that the Appellant was not entitled to housing benefit. In his letter of appeal dated 27 January 2010 the Appellant conceded that the value of the properties that he owned exceeded £16,000 but argued that they were business assets and as such should be disregarded. Thereafter it seems that the Appellant’s mental health deteriorated significantly in the course of 2010 as he struggled to cope with what was, in effect, a financial meltdown. I note that in April 2011 he was made bankrupt on the petition of Her Majesty’s Revenue and Customs. I also note that a subsequent claim to housing benefit in October 2011 was successful.

 

6. Meanwhile, correspondence had continued to pass between the Appellant and the council. However, the fact remains that the Appellant had appealed (in time) in January 2010 and that appeal was not passed to tribunal until February 2012. The First-tier Tribunal eventually heard the appeal on 19 March 2013. The tribunal confirmed the council’s decision of 30 November 2009 and in doing so ruled that the Appellant was not entitled to housing benefit (and council tax benefit) as from 28 September 2009 because he “had not provided sufficient information/evidence to determine his entitlement.”

 

7. I merely interpose here that the bundle before the First-tier Tribunal ran to 283 pages, a good proportion of which comprised evidence supplied by the Appellant in the course of the protracted correspondence with the council. It certainly included a substantial amount of financial information (the documentation included copies of bank statements, Land Registry documents, mortgage paperwork and company accounts). Whether it included all the necessary information remains a matter to be decided.

 

The Upper Tribunal’s grant of permission to appeal

8. I granted the Appellant’s application for permission to appeal to the Upper Tribunal. Rather than seek to summarise the observations I made on that occasion, it is simplest to cite them in full:

 

“Introduction

1. There are two grounds of appeal set out on Form UT1, the application for permission to appeal. The first, in essence, is that the local authority took too long under regulation 86 of the Housing Benefit Regulations 2006 (SI 2006/213) to seek extra information from the Appellant. The second is that the First-tier Tribunal (FTT) that heard the appeal failed to have regard to relevant evidence that had been submitted, namely certain financial accounts.

 

2. Both grounds of appeal are arguable, for the reasons that follow. It therefore follows that I should give permission to appeal. I start with three preliminary observations.

 

3. First, I accept that local authorities have a responsibility to ensure that housing benefit is paid only to those members of the community who are entitled to that benefit. To that end, councils can call for certain evidence and information, exercising their powers under regulation 86.

 

4. Second, this Appellant’s personal, financial and medical circumstances were highly complex. In particular, the complexity of his business interests was such that this was never going to be a straightforward claim that could be processed promptly.

 

5. Third, the further observations that follow are preliminary and provisional in nature. I am open to further argument. They are, however, expressed in strong terms, not least because it is at this stage difficult to see quite what the local authority’s explanation and submissions in response are going to be. It is important that the local authority realises the case that it has to answer. I stress that I simply have no idea as to whether or not the Appellant was entitled to housing benefit when he made his claim. But what does seem to be plain, on the evidence on file as it stands, is that both his claim to benefit and his subsequent appeal were comprehensively mishandled by the local authority and then in turn by the FTT.

 

Ground of appeal 1

6. The FTT confirmed the local authority’s decision of 30 11 2009 that the Appellant was not entitled to housing benefit as from 28 09 2009. The FTT made this decision on 19 03 2013 (p.293).

 

7. The local authority’s decision of 30 11 2009 is at pp.49-50 and is described as a “nil qualify decision”. It was to the effect that the Appellant had not made a claim in the right form and right manner, and that he was therefore assumed (amongst other matters) to have (i) too much capital; (ii) too much earned income; and (iii) too much other income to qualify for benefit. The letter told him he could appeal.

 

8. This was followed by further correspondence. The local authority sent a further letter headed “Request for revision of your claim” dated 14 01 2010 (pp.55-56). This again informed the Appellant of his right of appeal.

 

9. On 27 01 2010 the Appellant wrote a letter of appeal (p.1). This was acknowledged with a request for further information (p.56), which seems, in this case, to be the council’s default position. There was then a further acknowledgement by the local authority dated 22 February 2010 (p.58), indicating that the decision stood and that the appeal would be referred to the independent FTT. That undertaking was repeated in a letter dated 01 03 2010 (p.66).

 

10. In fact the local authority did nothing of the sort. Its officers kept writing letters to the Appellant for more information. He kept replying, sending more and more information. The local authority even purported to make further decisions on a claim that had already been adjudicated upon – see letters dated 02 11 2010 (pp.190-191) and 21 02 2011 (pp.226-227) – and informing the Appellant of his appeal rights (which, of course, he had already exercised). It is difficult to see the legal basis for such decisions.

 

11. So far as I can tell the Appellant’s appeal dated 27 01 2010 was not referred by the local authority to the FTT office until 29 02 2012, i.e. more than 2 years after it had been first lodged. The local authority’s written submission to the FTT describes this delay as a “procedural error”. I rather suspect that if this matter were to go before the Local Government Ombudsman a rather different term would be used (namely “maladministration”).

 

12. It is important to go back to first principles here. The local authority’s duty is set out in rule 24(1)(b) of the Tribunal Procedure (FTT) (Social Entitlement Chamber) Rules 2008 (SI 2008/2685). Once an appeal has been received, the local authority “must send or deliver a response to the Tribunal... as soon as reasonably practicable” (emphasis added). What is “reasonably practicable” is not defined by legislation. The DWP and local authorities inevitably have some leeway in the light of the Court of Appeal’s decision in R v Secretary of State for Social Services ex p. CPAG [1990] 2 QB 540, and operational factors can influence what is “reasonably practicable”. However, I am at present struggling to see how, on any reckoning, a delay of more than 2 years would fall within such a “reasonable” leeway.

 

13. In an earlier decision, CH/3497/2005, a council had delayed forwarding a series of appeals to the appeal tribunal. The oldest such appeal was more than 19 months old, although in five cases the delay in referring the appeals was only about 4 months. Mr Deputy Commissioner (now Judge) Mark commented as follows in that case:

 

“4. Under Article 6 of the European Convention on Human Rights a claimant is entitled to have his appeal heard within a reasonable time by an appeal tribunal. It is of crucial importance to many benefits claimants to have their appeals heard very promptly. This is clearly liable to be the case in housing benefit disputes, where delay could cost them their homes. In this case, it would seem that at least in the case of the two 2003 appeals, and possibly also in the other cases, the claimant may have been denied a hearing within a reasonable time by the local authority’s failure to forward the appeals promptly to the Appeals Service.

 

5. Under section 6(1) of the Human Rights Act 1998, it is unlawful for a public authority to act in a way which is incompatible with a Convention right. “An act” for this purpose includes a failure to act (see section 6(6) of that Act). I have not sought or received any explanation from the Harlow District Council for the delays in the processing of these appeals, but it appears to me that it may well have acted unlawfully at least in the case of the two 2003 appeals.

 

6. In any event, it is wholly unacceptable to the proper operation of the system of appeals in housing benefit and council tax benefit appeals that delays of this sort should occur. If a local authority receives an appeal, it must be processed promptly and passed to the Appeals Service without delay. This applies also in cases where there is an issue which requires to be dealt with by a legally qualified panel member under regulation 20(7) or (8) of the 2001 Regulations.”

 

14. I made similar observations in FH v Manchester CC (HB) [2010] UKUT 43 (AAC) at paragraphs 13-15, where the delay was “only” about 9 months.

 

15. I am surprised that the FTT judge in the present case made no comment on this inordinate delay on the local authority’s part. I accept, of course, that simply because the council was at fault (as it appears to be) in delaying its reference of the Appellant’s appeal to the FTT does not mean that the Appellant is entitled to housing benefit. However, the Appellant may have other remedies open to him in respect of this delay, as to which he may wish to seek legal advice.

 

Ground of appeal 2

16. The fundamental problem with the FTT’s statement of reasons is that it seeks to provide a narrative account of this protracted claim and appeal. It fails properly to analyse the decision under appeal. The FTT appears to have proceeded on the assumption that the issue before it was whether or not the Appellant had provided sufficient evidence within a reasonable time, relying on regulation 86(1) (see e.g. at paragraphs [9], [16] & [17] of the statement of reasons).

 

17. In doing so, it seems to me that the FTT asked the wrong question; it therefore arguably erred in law. The question it should have asked itself was whether or not the disallowance decision of 30 11 2009 was correct as a matter of law and fact. In that decision the local authority had made certain adverse assumptions about the Appellant’s circumstances. Those assumptions may or not have been correctly made. The Appellant had since provided information, which may or may not have dealt with those issues. However, the FTT simply failed to examine such evidence (e.g. the accounts) to see what the Appellant’s capital and income position was at the material time.

 

18. In contrast, both the local authority and the FTT seem to have worked on the assumption that regulation 86 provides the council with an automatic power to refuse a claim if the claimant fails to provide the information requested. It does not. Regulation 86 is headed “Evidence and information” and is obviously an important data-gathering power (see paragraph 3 above). However, it appears in the Housing Benefit (General) Regulations 2006 and not in the Housing Benefit and Council Tax Benefit (Decisions and Appeals) Regulations 2001 (SI 2001/1002), other than e.g. by way of reference (e.g. in regulation 13(2)(c)).

 

19. Thus if housing benefit is already in payment, then a failure to comply with regulation 86 may well lead a council to instigate suspension and possibly termination of an award under the procedures set out in the 2001 Regulations (see regulations 11, 13 and 14). If housing benefit is not in payment, as in the present case, then a decision has to be made on the outstanding claim. That decision may well be that the claimant is assumed to have too much capital and/or income. But that is the decision which is then under appeal – a point simply ignored by the FTT here.

 

Conclusion

20. For all these reasons I think it is right to give permission. Case management directions follow to indicate what happens next in this appeal. I should add that, assuming this appeal is successful, it is unlikely that I will be able to re-make the decision under appeal. There is a considerable amount of fact-finding still to be done. So, if the appeal to the Upper Tribunal succeeds, the most likely outcome is that the Appellant’s appeal will be sent back to a different FTT to be properly adjudicated upon.”

 

The parties’ submissions on the appeal

9. The council’s response is two-fold. First, the council recognises the frustration caused by the delay in his appeal being submitted to the tribunal and acknowledges that the Appellant may seek redress for that delay “through other offices such as the Ombudsman”. However, the council points out – as I intimated at paragraph 15 of the grant of permission – that the mere fact that there had been delay on the council’s part did not mean that the Appellant was entitled to housing benefit.

 

10. As to the second ground of appeal, the council accepts that the tribunal may have placed an “unnecessary emphasis” on regulation 86, rather than on the council’s actual decision under regulation 89. However, the council argues that the tribunal “must have, and indeed did, examine the evidence of the accounts and other documents provided by the Appellant” and found it wanting. Accordingly, the tribunal had agreed that the council was entitled to draw an adverse inference to the effect that the value of the Appellant’s assets was above the capital limit and so he was not entitled to housing benefit (relying on R(H) 3/05).

 

11. The Appellant’s reply also falls into two parts. First, he argues that the council’s delay amounted to maladministration and that the two year delay was unacceptable. Second, he submits that the tribunal failed to consider all the evidence that was submitted, and in particular his own accounts.

 

The first ground of appeal

12. There is little more that can be said about this sorry saga. Under section 6(1) of the Human Rights Act 1998 it is unlawful for a public authority (such as the council) to act in a way which is incompatible with a Convention right. An act includes a failure to act (see section 6(6) of the 1998 Act), in this case the failure to refer the appeal to the tribunal within a reasonable time. I refer back to the analysis in paragraphs 12-14 of the grant of permission (see paragraph 8 above). In fairness the council has not sought to pretend that it referred the appeal to the tribunal “as soon as reasonably practicable”, as required. However, neither the First-tier Tribunal nor the Upper Tribunal has the power to make an award of compensation for breach of a Convention right (see section 8(2)). Furthermore, the council’s delays cannot be attributed to the tribunal, and there is no error of law on the tribunal’s decision in this respect. The Appellant’s remedies as regards the delay of two years lie elsewhere.

 

The second ground of appeal

13. This ground of appeal requires some analysis of the tribunal’s statement of reasons. This document ran to just over 4 sides (with double-spacing). The first three paragraphs dealt with introductory matters. The next three paragraphs summarised the Appellant’s case. Paragraph 7 summarised the decision notice. Paragraphs 8 and 9 read as follows:

 

“Findings of fact

8. Facts not in dispute:

The Appellant claimed Housing and Council Tax Benefit on [his home] from 22.10.2009.

 

9. Facts in dispute

The Appellant failed to provide sufficient information, which was reasonably required by the London Borough of Hackney in connection with his claim.”

 

14. I make two observations on those findings at this juncture. The first, as regards paragraph 8, is a technicality. The claim form was received by the council on 22 October 2009. However, the Appellant had first registered his wish to claim on 22 September 2009 and was given a month to do so. He had also asked his claim to be backdated to 31 July 2009. The second is that paragraph 9 is at best a very generalised finding.

 

15. The remainder of the statement of reasons, comprising paragraphs 10-17, is headed “reasons”. Paragraph 10 recited regulation 86 and its council tax benefit equivalent. Paragraphs 11-15 comprises a mixture of a chronology of the case and a recital of some of the parties’ submissions. In summary, it provides a narrative rather than a process of reasoning. The tribunal’s decision concludes at paragraphs 16 and 17 (on which the council rely) as follows:

“16. [The Appellant and his friend] on his behalf said they did provide things. However having considered the chronology above, the Appellant has not satisfied me that he provided such information and evidence in connection with the claim as was reasonably required by Hackney Council in order to determine his entitlement to Housing and Council Tax Benefit. The information was requested on 28.10.2009. He did not provide it within one month of being required to do so. The Council required further evidence outside the 28 days and although some evidence was submitted, there were no profit and loss accounts. The Accountants gave an estimate of income but did not provide evidence on which the estimate was based. I find that by 1.2.2010, insufficient evidence had been provided. He has not satisfied me that he provided sufficient evidence within a 13 month period, which would have enabled the Council to consider revising the decision to determine entitlement to benefit.

 

17. For the above reasons the Appellant has not satisfied me that he was entitled to Housing and Council Tax Benefit from 28.9.2009. This was because he had not provided sufficient information and evidence to determine his entitlement. The Appellant has said that he was suffering from medical issues. However he has an accountant. If properties were being sold or put into company names, there should be evidence of this. I do not find that his health excuses his failure to provide the requested information.”

 

16. I cannot accept the council’s arguments based on paragraphs 16 and 17 as regards the second ground of appeal. It is plain to me that the tribunal treated this as a question of whether the appellant had complied with an information requirement. This is confirmed by the final comment which considers whether the Appellant’s health provided any mitigation. There was no real attempt to analyse the copious amount of material which the Appellant had provided to the council between 2009 and 2011 about both his income and capital circumstances. To take just one example, the tribunal found (agreeing with the council) that the Appellant had been asked for his profit and loss accounts but had failed to provide them. However, p.153 of the file is a profit and loss account for the Appellant for the 2008/09 tax year, supplied to the council on 1 November 2010. That statement of a profit and loss account may or may not have been satisfactory; it may or may not have raised more questions than it answered. However, it was wrong to say one had not been supplied. There was no explanation as to why it was inadequate.

 

17. This tribunal’s statement of reasons is strong on narrative and weak on analysis. It fails to make proper findings of fact as to the Appellant’s income and capital at the material time. Furthermore, there is persuasive evidence that the tribunal simply asked itself the wrong question. I therefore find the second ground of appeal made out and allow the Appellant’s appeal to the Upper Tribunal. This is because the First-tier Tribunal’s decision involves an error on a point of law.

 

The Upper Tribunal’s decision

18. The appeal is allowed. The tribunal’s decision is set aside. The Upper Tribunal is not in a position to substitute (or to “re-make”) its own decision for the one that the tribunal made. This means that the appeal will need to be re-heard by a different tribunal judge at the First-tier Tribunal.

 

19. The outcome of the re-hearing depends on the view taken by the new tribunal of all the evidence in the case. The fact that the Appellant’s appeal to the Upper Tribunal has succeeded on a point of law is no indicator one way or the other as to the likely result of the re-hearing, which will be determined on the facts.

 

20. I do not underestimate the difficulties posed by this appeal in terms of fact-finding. The District Tribunal Judge may well wish to make detailed directions for the further conduct of the appeal. In particular, it may be that consideration should be given to directing that a tribunal judge sit with an accountant member, in accordance with paragraphs 6 and 7 of the Senior President’s Practice Statement on the Composition of Tribunals in Social Security and Child Support Cases in the Social Entitlement Chamber on or after 01 August 2013.

 

Conclusion

21. I conclude that the decision of the First-tier Tribunal involves an error of law for the reasons summarised above. I therefore allow the Appellant’s appeal and set aside the decision of the tribunal (Tribunals, Courts and Enforcement Act 2007, section 12(2)(a)). The case must therefore be remitted for re-hearing by a new tribunal subject to the directions above (section 12(2)(b)(i)). 

 

 

 

 

 

Signed on the original Nicholas Wikeley

on 30 January 2014 Judge of the Upper Tribunal