Secretary of State for Work And Pensions v Chiltern District Council & Anor

LADY JUSTICE HALE: This is the Secretary of State's appeal under paragraphs 8(2)(a) and 9(3)(a) of Schedule 7 to the Child Support, Pensions and Social Security Act 2000 against the decision of Mr Commissioner Jacobs, dated 15th July 2002. The Commissioner himself granted the Secretary of State permission to appeal on 21st October 2002.

The case concerns the recovery of overpayment of housing benefit. The parties to the appeal before the Commissioner were respectively the local authority concerned and the Warden Housing Association, the landlord to whom the benefit in question had been paid. Neither of those parties has appeared before this court.

The facts are simple. Mr McVeigh, who has played no part in these proceedings at all, was in receipt of housing benefit of some £108 a week while on job seeker's allowance. This was paid to his landlord. His job seeker's allowance ended. Accordingly, the local authority determined that he was no longer entitled to housing benefit from 23rd October 2000. On 8th January 2001 they wrote to Mr McVeigh stating that he had been overpaid housing benefit (totalling some £769) and that the overpayment would be recovered from his landlord. That same day they wrote to the landlord stating:

The Commissioner commented that:

The first is whether an Appeal Tribunal has jurisdiction to hear an appeal against the local authority's exercise of their discretion as to person from whom they will recover any overpayment. The Commissioner held that it does not. The Secretary of State argues that it does. Miss Demetriou, on behalf of the Secretary of State, points out that landlords may well have legitimate complaints against the exercise of the local authority's discretion to recover the money from them. It is of course easier for the local authority to recover the money from the landlord, to whom it has been paid, but it may be unfair. The reasons for the overpayment are often within the control of the claimant, and within the knowledge of the claimant, but not within the knowledge of the landlord. The landlord simply continues to provide accommodation at the lawful rent in return for the money. He has not necessarily any reason to suppose that the claimant has ceased to be entitled to the benefit in question.

The second issue to arise on this appeal is whether the local authority must terminate housing benefit when a passport benefit ceases, or whether they must first determine whether other factors gave the claimant a continuing entitlement. The Commissioner held that they must consider other factors first. The Secretary of State argues that housing benefit should cease once entitlement to the passport benefit ceases.

Presumably, had they been here, the landlord would have supported the Secretary of State on the first issue and not on the second, and the local authority would have supported the Secretary of State on the second issue but not on the first.

First, the Tribunal's jurisdiction. Section 75 of the Social Security Administration Act 1992 deals with overpayment of housing benefits. At the material time section 75(3) provided:

The right of appeal to a tribunal in housing benefit cases is governed by paragraph 6 of Schedule 7 to the Child Support, Pensions and Social Security Act 2000. Paragraph 6(1)(a) applies to any relevant decision of a relevant authority which is made on a claim for, or an award of, housing benefit, subject to the exceptions in paragraph 6(2). These include in subparagraph 6(2)(e):

At first sight, it looks as if anyone from whom it has been determined that an overpayment is to be recovered, may appeal by virtue of paragraph 6(6) of Schedule 7 to the Act. The Decisions and Appeals Regulations exclude many decisions, but in paragraph 1(f) of the Schedule they preserve decisions under regulation 101. Paragraph 1(3) of the Schedule excludes the exercise of discretion, but subject to the preservation of appeal rights against decisions under Regulation 101. Thus it contemplated that there might be an appeal against the exercise of a discretion.

The Commissioner, however, drew a distinction between the decision that the overpayment was "recoverable from a person" and the decision that the overpayment would be recovered from that person. Section 75(3) of the 1992 Act talked of overpayment being "recoverable" from the person to whom it was paid, but provided that it "may also be recovered" from someone else. It was, therefore, concerned with recoverability not actual recovery. That was left to the discretion of the local authority. Regulation 101 was, in terms, concerned only with recoverability. It is limited to identifying the circumstances in which and the person, other than the payee, from whom recovery may be sought:

Miss Demetriou argues that that conclusion is wrong. Firstly, Regulation 101 must contemplate a decision being taken by the local authority. Paragraph 1(f) of the Schedule to the Decisions and Appeals Regulations refers to a decision under Regulation 101: what decision could this mean other than a decision to seek recovery from one rather than the other? Secondly, section 75(3) gives no power to recover from anyone other than the payee without further provision. That further provision is in Regulation 101. That is the only source of the power to recover from someone other than the payee. Hence it must also be the source of the power to choose. Thirdly, a decision that the overpayment might be recovered from either (a) or (b) is not a decision at all. It is simply a ground for the real decision, which is whom to choose as between the two. Fourthly, paragraph 3 clearly refers to the exercise of a discretion. The question of whether someone is either a payee or a claimant is a question of fact not an exercise of discretion. The only discretion which could be contemplated by paragraph 1(3) is the choice between them.

Miss Demetriou also, for what it is worth, refers to a parliamentary written answer from Angela Eagle, MP, who was a junior minister in the Department at the time in question, given on 10th January 2001, stating:

There is to my mind no real ambiguity about the statutory position which requires us to consider the parliamentary answer. Appeals are against decisions, not against the basis or grounds for the decision, just as appeals are against orders and not the reasons for the orders. There would be no power to choose without Regulation 101. The exercise of that power of choice must be a decision under that Regulation. It is quite clear that the legislation contemplates a right of appeal against the exercise of a discretion in this context. This is clear without reference to Miss Eagle's statement of policy.

So, on this aspect of the matter, I would allow the appeal, while recognising the much greater familiarity with this area of law enjoyed by the Commissioner. In this case, in my judgment, he allowed himself to be beguiled by an unusually seductive argument, presented to him in the face of clear and sensible provision the other way.

Secondly, as to cessation of benefit. Regulation 67(1)(a) of the Housing Benefit Regulations provides that where a claimant is on income support and/or income-based job seeker's allowance and ceases to be so entitled, then the benefit period ends with the last day of the benefit week in which the change of circumstances occurs, unless subparagraph (b) applies. Subparagraph (b) applies where a claimant ceases to be entitled to income support or income-based job seeker's allowance because of an award of benefit under the Benefit Acts. In that case, the benefit period ends at the end of the benefit week in which payment of income support or income-based job seeker's allowance ceases.

Regulation 72(14)(a) provides that a local authority shall invite a person to whom housing benefit has been granted to make a claim for a further grant of that benefit where the benefit ended in circumstances to which Regulation 67(1)(a) and (b) refer, in other words the cessation of a passport benefit.

These provisions are quite separate from Regulation 104 of the Housing Benefit Regulations which is concerned with reducing the amount of a recoverable overpayment:

In this case, the local authority had asked the claimant to make a fresh claim for housing benefit for the period of the overpayment under Regulation 72(14)(a) so as to be able to determine the amount of any offset under Regulation 104. The Commissioner, however, found that the local authority must not end housing benefit at all until it has obtained enough information to be able to apply Regulation 104 and, indeed, had applied that Regulation. They should have used the power under regulation 73(1) to require information from the claimant; this applied whenever there was doubt about whether there would be continuing entitlement. Regulation 104 is mandatory. It had to be applied as part of the process of determining the overpayment. Until it was applied, the authority did not have the information to decide whether to terminate the award altogether or merely to reduce the amount of any overpayment or duration.

Miss Demetriou argues that the Commissioner failed to apply regulation 67(1) at all. Indeed he does not mention it. This states quite clearly that entitlement to housing benefit ends once entitlement to, or payment of, a passport benefit has ended. There is no power to postpone termination until the local authority has the required information. The local authority must invite a fresh claim and can use that fresh claim in order to apply Regulation 104 so that the claimant is not disadvantaged by the amount of the overpayment sought to be recovered.

Clearly, in my judgment, ending the benefit period under regulation 67 is quite separate from determining the amount of any offset under regulation 104. Regulation 104(2) makes that plain because it saves it for the purpose of calculating the offset. Again, in my judgment, the Secretary of State succeeds on this issue as well.

I would allow the appeal on both points.

LADY JUSTICE ARDEN: I agree. The Commissioner's memorable allusion to a person finding use of his decision on a desert island, to which my Lady has drawn attention, may connote a tinge of regret on the Commissioner's part about his conclusion that there is no right of appeal for a landlord to a specialist tribunal, even where the landlord considers that it has an arguable case to contest a decision to seek recovery of the overpayment of housing benefit from it. On these colder shores, with non-tropical temperatures and vegetations, a right of appeal to a specialist tribunal is a matter of importance particularly in the light of the European Convention on Human Rights.

In my judgment, the Secretary of State's construction is correct in law and, with respect the right of appeal, is consistent with sound principle and policy.

LORD JUSTICE BROOKE: I agree with both judgments.