Farah v London Borough of Hillingdon

The appellant is aged 30 and has three children. She is physically disabled having suffered from polio as a child. In 2009 she separated from her husband following allegations of domestic violence. In April 2011 she moved with her children into a privately owned property at 69 West Drayton Road, Hillingdon which was let to her on an assured shorthold tenancy at a rent of £1,300 per month which equated to £300 per week.

In order to pay the rent, the appellant applied for and was awarded housing benefit of £242.31 per week. She was also in receipt of income support, child tax credit, disability living allowance and child support and for certain periods received discretionary housing payments. Notwithstanding these payments, she fell into arrears with her rent and in January 2012 the landlord served notice on her requiring possession. Subsequently, in April, proceedings for possession were commenced and on 30 May 2012 she was ordered to give up possession by 8 June. She was eventually evicted on 16 July 2012.

On 9 July she applied to the respondent Council for accommodation under Part VII of the Housing Act 1996 (“HA 1996”). The Council informed her on 30 August 2012 that she was not eligible for assistance under Part VII. A review of that decision was requested and on 26 September the appellant’s solicitors were informed by the Reviewing Officer that the decision had been set aside.

On 27 September 2012 the Council made a new s.184 decision that it had no duty to secure accommodation for her because, although eligible, homeless and in priority need, she had in the Council’s view become homeless intentionally by deliberately failing to pay her rent as it fell due.

She had explained to the Council that she had been unable to pay the rent because in every week her expenses exceeded her income. To substantiate this, she completed an income and expenditure form showing income from benefits of £311.42 per week and expenditure of £349.69. Further inquiries of the Department of Work and Pensions disclosed that, prior to the commencement of the lease in April 2011, her disability living allowance was raised to £51.40 per week from £18.95 thereby increasing her income from benefits to £344.52 per week. The expenditure included £10 for the cost of haircuts for her children and £10 for a weekly swimming session for them. A further £50 was included in the form for taxi fares with a note that, because of her disabilities, the appellant cannot walk for more than 3-5 minutes at a time and has to use taxis in order to do her shopping. She also gave the Council her January 2012 bank statement.

The points about her disability were included in the notes of her interview in which she also said that her rent had fallen into arrears by about £300 per month and that she had been unable to reduce the arrears. The housing officer’s notes recorded shortfalls in the amount of available housing benefit over rent which fluctuated in amount depending on whether the appellant was in receipt of discretionary housing benefit in any particular period. Importantly, the notes also refer to a period between May and August 2011 when the appellant was required to repay a social fund loan by weekly deductions of £34.27 from her income support payments thereby increasing the shortfall in her income.

In the s.184 decision made on 27 September 2012 the Council’s Senior Housing Officer, Mr Auchombit said:

“Your monthly rent was £1,300 which amounts to £300 per week. The weekly local housing allowance rate (LHA) for the property … was £242.31. This is the figure that housing benefit was calculated from. This meant that you incurred a rent shortfall of £57.60 a week from the start of your tenancy …

On 16th May 2011 you applied for discretionary housing benefit (DHP). DHP was awarded to you at a rate of £20 a week until July 2011. This brought your weekly HB from £242.31 to £262.31. This means that you had to pay a weekly shortfall of rent of £37.69 until 17 July 2011.

On 15th July 2011 you were awarded £10 DHP until 23rd October 2011. Therefore your shortfall of rent increased to £47.69 a week. On 24th October 2011, DHP of £26 was awarded to you until 22nd April 2012. Your shortfall of rent for this period decreased to £31.60.

Your weekly income during this period was DLA £51.40, CTC £149.67, CB £47.10, IS £96.35 [totalling] £344.52. During the term of your tenancy you were paid £18,177.91 towards your rent. Therefore your rent shortfall for this period amounted to £1,322.09.

Your landlord Mr Dass has confirmed: Your tenancy began on 21st April 2011 at a monthly rent of £1300. The main reason why he sought to evict you from his property was because of your rent arrears which amounted to £3,800 (with court costs) at time of eviction.

…

I have considered your weekly income and expenditure supplied by you. Having regard to the information therein it shows the following:

Income	Total	Expenditure	Total
CB	47.00	Food	150.00
CTC	143.07	Clothes	50.00
IS	96.35	Credit Card	25.00
DLA	25.00	Electricity	6.90
		Gas	11.53
		Telephone	5.76
		Water Rates	25.00
		TV Licence	5.50
		Taxi	50.00
		Hair Cut	10.00
		Swimming	10.00
Total	311.42	Total	£349.69
Shortfall	-38.27

Your income and expenditure shows that you had expendable income of -£38.27. However this reflects items we would not consider to be necessities such as payment to credit card and swimming which amounts to £35.00 according to your estimate. This still leaves you in a minus figure of £3.27 which would show that the property may have been unaffordable for you.

However, according to the DWP your weekly income was £344.52 and not £311.42. This shows your weekly expendable income as -£5.17. However, when we remove the items that are not considered essential, your weekly expendable income amounts to £29.83.”

It appears from these figures that there was a shortfall between rent and housing benefit which varied between £31.69 per week and £57.60 per week over the course of the tenancy. During the same period, as the Housing Officer recognised, the excess of other expenditure over income meant that the appellant was never able to pay the rent in full unless she reduced her expenditure on what the Housing Officer described as inessential items. These were the credit card payments and swimming. Even so the property would have been unaffordable by £2 for about 5 months, by £7.86 for about 2 months, by £17.86 for about 3 months and by £27.77 for 3 months.

But the Housing Officer added that:

“I have also noted that some items in your weekly expenditure are exaggerated for a family of 4 with 3 children being under the age of 11. Therefore taking all above into consideration I am satisfied that the property was affordable for you.

….

I can therefore only conclude that you failed to give adequate priority to the payment of your monthly rent, which was lawfully due. The fact that you incurred rent arrears and eventual eviction from 69 West Drayton Road, Hillingdon, UB8 3LD was due to you failing to make your rent payments your priority.”

Mr Preston for the appellant says that the decision letter does not make clear what items of expenditure were considered to be exaggerated nor did it take into account the fact that between 19 May 2011 and 25 August 2011 some £34.27 was deducted from the appellant’s income at source by the Department of Works and Pensions in order to repay the social fund loan of £503.57. For this period the overall shortfall increased to between £42.13 and £52.13 per week without making further deductions from the remaining items of expenditure on the housing officer’s list.

A review of the s.184 decision was requested. There was correspondence between the appellant’s solicitors and Hillingdon about the s.184 decision coupled with a request for accommodation pending review. The latter request was refused in a letter of 10 October 2012 from Ms Brickwood, the Council’s Senior Review Officer, who said:

“I do not consider that the merits that you have put forward on Ms Farah’s behalf are such as to warrant the provision of interim accommodation pending the s.202 review.

It is clear that Ms Farah is intentionally homeless from her last settled accommodation of 69 West Drayton Road, Hillingdon, UB8 3LD, as a direct result of failing to meet her rental liability.

More specifically, she was evicted at 8:00 am on 16^th July 2012 due to the accrual of rent arrears to the sum of £3,800.00 (including court costs). These arrears accrued because Ms Farah deliberately failed to pay the shortfall between her housing benefit entitlement and her full rental amount.

An affordability assessment carried out for the period during which Mr Farah was resident at the property shows that the rent shortfall would have been affordable to her had she prioritised those payments over non-essential and secondary financial liabilities.”

The appellant’s solicitors responded by saying that the Council had failed to give proper consideration to the fact that the appellant was on income support and could not afford to pay the rent. But they also went further by criticising the Council for making value judgments about how the appellant chose to spend her benefits. This later matured into an argument (now abandoned) that income support and disability living allowance should be treated by the housing authority as ring-fenced and should not be taken into account as available to meet the cost of rented accommodation.

The Council’s legal department responded on 15 October 2012 in these terms:

“We take a different view to yours regarding your assertion that the original decision maker did not consider your client’s financial position, to the contrary, the decision maker considered whether she had enough to live on.

Your client’s income was £311.42 per week, which is broken down as follows:

Child Benefit - £47.00

Child Tax Credits - £143.07

Income Support - £96.35

DLA - £25.00

The weekly expenditure figure that she gave us amounted to £349.69 creating a minus amount of -£38.27 but her expenditure breakdown included £50.00 per week on clothing, £25.00 per week on credit card payments (a secondary financial liability as unsecured debt), £50.00 per week on taxis and £10.00 per week on haircuts.

These details make it clear that Ms Farah was not properly prioritising the payment of her primary financial liabilities over her secondary liabilities and non-essentials. From the above, it is quite clear where your client could have made weekly savings.”

It is noticeable that the analysis in this letter differs from that in the s.184 decision I have quoted from. The appellant’s income is taken at the figure of £311.42 rather than the £344.52 we know it to be but perhaps more significantly the items of expenditure which the writer seems to be suggesting should have been reduced or eliminated in order to meet the rent include not only the credit card payments but also the sums spent on clothing and taxis.

In a decision letter of 3 December 2012 the Reviewing Officer, who was again Ms Brickwood, upheld the earlier s.184 decision. She said:

“Ms Farah deliberately failed to pay the shortfall between her housing benefit entitlement and her full rental amount, despite being in receipt of the correct amount of housing benefit due to her.

An affordability assessment carried out for the period during which Ms Farah was resident at the property shows that the rent shortfall would have been affordable to her had she prioritised those payments over non-essential and secondary financial liabilities.

Ms Farah’s former landlord has also informed us that she failed to pay the gas bills and the water rates associated with her occupation of the Property. In addition, Ms Farah refused to allow her landlord’s entry to the Property to inspect it or to clean up the garden. When the landlord finally did gain entry to the Property following the execution of the Bailiff’s warrant he discovered that the property had become damp because of Ms Farah’s own failure to maintain it properly and keep it adequately ventilated.

…

In arriving at my decision, I have considered the representations that you have put forward in your letter dated 8^th October 2012. However, there is no new material, information or argument contained within it which could result in a positive decision being made on Ms Farah’s homeless application.

Ms Farah deliberately failed to pay her rental liability for her last settled accommodation at [the property]

…

Was the accommodation reasonable for [her] to continue to occupy? … [it] was suitable to her needs … There is no suggestion that she was subject to any form of violence or harassment there and as I have already discussed, I am satisfied that the property would have been affordable to her had she properly prioritized the payment of her rent liability.”

Under s.183(1) HA 1996 a person is entitled to apply to a local housing authority for accommodation or for assistance in obtaining accommodation if the authority has reason to believe that he is or may be homeless or threatened with homelessness. It is common ground that those conditions are satisfied in this case. In such circumstances, a full housing duty arises under s.193 if the applicant is eligible for assistance, homeless and in priority need. The housing authority must also be satisfied that the applicant did not become homeless intentionally: see s.193(1). This is defined in s.191:

“(1)

A person becomes homeless intentionally if he deliberately does or fails to do anything in consequence of which he ceases to occupy accommodation which is available for his occupation and which it would have been reasonable for him to continue to occupy.

(2)

For the purposes of subsection (1) an act or omission in good faith on the part of a person who was unaware of any relevant fact shall not be treated as deliberate.

(3)

A person shall be treated as becoming homeless intentionally if—

(a)

he enters into an arrangement under which he is required to cease to occupy accommodation which it would have been reasonable for him to continue to occupy, and

(b)

the purpose of the arrangement is to enable him to become entitled to assistance under this Part,

and there is no other good reason why he is homeless.”

As mentioned earlier, the only issue for the housing authority in this case was whether the appellant had become intentionally homeless by deliberately failing to pay her rent. All the other conditions were satisfied. Some guidance from government on whether a failure to pay rent amounts to intentional homelessness has been provided to local housing authorities in chapter 11 of the Homelessness Code of Guidance for Local Authorities (July 2006) (“the Guide”). A housing authority is bound by s.182 of HA 1996 to have regard to such guidance. The Secretary of State has also exercised the power conferred by s.177(3)(b) and 210(2)(b) of HA 1996 by making the Homelessness (Suitability of Accommodation) Order 1996 (SI 1996 No. 3204) which requires the housing authority to take certain matters into account in determining whether it would have been reasonable for a person to continue to occupy particular accommodation. These factors include the financial resources of the tenant; the costs of the accommodation; and the tenant’s reasonable living expenses.

The Guide stresses that one factor which must be considered in all cases is affordability. “An act or omission should not generally be treated as deliberate, even where deliberately carried out, if it is forced upon the applicant through no fault of their own”. The Guide goes on:

“11.5.

It is for housing authorities to satisfy themselves in each individual case whether an applicant is homeless or threatened with homelessness intentionally. Generally, it is not for applicants to “prove their case”…

11.6.

Housing authorities must not adopt general policies which seek to pre-define circumstances that do or do not amount to intentional homelessness or threatened homelessness (for example, intentional homelessness should not be assumed in cases where an application is made following a period in custody – see paragraph 11.14). In each case, housing authorities must form a view in the light ofall their inquiries about that particular case…

…

17.40.

In considering an applicant’s residual income after meeting the costs of the accommodation, the Secretary of State recommends that housing authorities regard accommodation as not being affordable if the applicant would be left with a residual income which would be less than the level of income support or income-based jobseekers allowance that is applicable in respect of the applicant, or would be applicable if he or she was entitled to claim such benefit. This amount will vary from case to case, according to the circumstances and composition of the applicant’s household. A current tariff of applicable amounts in respect of such benefits should be available within the authority’s housing benefit section. Housing authorities will need to consider whether the applicant can afford the housing costs without being deprived of basic essentials such as food, clothing, heating, transport and other essentials.”

This guidance is broadly in line with the relevant authorities. A failure to pay the rent (even if, in one sense, intentional) will not be treated as deliberate for the purpose of s.191 HA 1996 if it was caused by a lack of adequate resources: see R v Wandsworth LBC, ex p. Hawthorne [1994] 1 WLR 1442 at 1447-8. In such circumstances, it will not be reasonable for that person to continue to occupy the accommodation if, in order to do so, they must deprive themselves and their family of the ordinary necessities of life. In R v Brent LBC, ex p. Baruwa (1997) 29 HLR 915 Schieman LJ said:

“On a strict reading of the statute, a person who deliberately refrained from paying his rent in circumstances where he used the only assets at his disposal for buying necessary food for himself and his family would be regarded as homeless. There is ample authority for the proposition that this is not so. Kennedy, J put it thus in a different context from the present in an oft cited dictum in R v London Borough of Hillingdon, ex p Tinn (1988) 20 HLR 305 at p 308:

"As a matter of common sense, it seems to me that it cannot be reasonable for a person to continue to occupy accommodation when they can no longer discharge their fiscal obligations in relation to that accommodation, that is to say, pay the rent and make the mortgage repayments, without so straining their resources as to deprive themselves of the ordinary necessities of life, such as food, clothing, heat, transport and so forth."

The decision-maker, for these purposes, is the housing authority. It is for them, rather than the court, to assess whether the applicant could or could not have afforded to make the payments of rent without reducing her standard of living and that of her family below the minimum level described above: see R v Brent London Borough Council ex p Grossett (1996) 28 HLR 9. There is a right of appeal to the county court on a point of law under s.204 HA 1996 which includes any of the grounds of challenge that would normally be available in proceedings for judicial review. In Runa Begum v TowerHamlets London Borough Council [2003] UKHL 5 Lord Millett said::

“A decision may be quashed if it is based on a finding of fact or inference from the facts which is perverse or irrational; or there was no evidence to support it; or it was made by reference to irrelevant factors or without regard to relevant factors. It is not necessary to identify a specific error of law; if the decision cannot be supported the court will infer that the decision-making authority misunderstood or overlooked relevant evidence or misdirected itself in law. The court cannot substitute its own findings of fact for those of the decision-making authority if there was evidence to support them; and questions as to the weight to be given to a particular piece of evidence and the credibility of witnesses are for the decision-making authority and not the court.”

To this I would add that the decision of the housing authority must be adequately reasoned. This does not require the court to take an over-technical or over-critical approach to the review decision. As Lord Neuberger of Abbotsbury said in Holmes-Moorhouse vLondon Borough of Richmond upon Thames [2009] UKHL 7:

“… a Judge should not adopt an unfair or unrealistic approach when considering or interpreting such review decisions. Although they may often be checked by people with legal experience or qualifications before they are sent out, review decisions are prepared by housing officers, who occupy a post of considerable responsibility and who have substantial experience in the housing field, but they are not lawyers. It is not therefore appropriate to subject their decisions to the same sort of analysis as may be applied to a contract drafted by solicitors, to an Act of Parliament, or to a court's judgment.”

But s.203(4) HA 1996 does require the housing authority to give reasons for the review decision and they should be sufficiently detailed, specific and intelligible to enable the applicant to know why the review has been unsuccessful and why any particular points of criticism in respect of the initial s.184 decision have been rejected. The applicant must be told why he has lost and be able to see whether the review decision is itself open to challenge: see R v Westminster City Council, ex parte Ermakov [1996] 2 All ER 302 at [309f]; R v London Borough of Croydon ex p Graham (1993) 26 HLR 286 at [291-2].

The appellant in this case appealed against the review decision of 3 December 2012 on four main grounds:

The appeal was heard by Mr Recorder Widdup in the Willesden County Court who dismissed it. The fourth ground of appeal about not being given an opportunity to deal with the allegations about non-payment of gas bills and the damp was not pursued. But Mr Preston, on behalf of the appellant, did rely on the fact that she was in receipt of income support which, like disability living allowance, was not intended, he said, to pay for housing costs. It was therefore, he submitted, wrong for the reviewing officer to have regarded those monies as available to make up the shortfall in the rent left by housing benefit. To support this submission he relied on the decision of this Court in Burnip v Birmingham City Council & Anor [2012] EWCA Civ 629 where, in the context of an Article 1 and Article 14 challenge to the Council’s calculation of housing benefit for claimants who were severely disabled, Henderson J said at [45] that:

“… I think it is necessary to draw a clear distinction between the benefits which Mr Burnip was entitled to claim for his subsistence, and those which he was entitled to claim in respect of his housing needs. His incapacity benefit and disability living allowance were intended to meet (or help to meet) his ordinary living expenses as a severely disabled person. They were not intended to help with his housing needs. This is demonstrated, in my view, not only by the availability of HB and discretionary housing payments as separate benefits with separate rules applicable to them, but also by the way in which HB is structured.”

The Recorder rejected the submission that, for the purpose of assessing the affordability of the accommodation, it was not permissible to take into account all sources of income including income support. He held that although shortly expressed, the decision of the reviewing officer did contain sufficient reasons for the decision. It affirmed the earlier s.184 decision for the same reasons which, in terms of figures, were set out in detail in the 27 September decision and in subsequent correspondence. On the issue of residual income, he accepted that, by managing her finances, the appellant could have afforded the rent. His judgment does not deal in terms with the appellant’s complaint that on the housing authority’s figures the shortfall between the rent and all housing benefit was never less than £31.60 per week and that even taking into account all sources of income, the appellant’s income exceeded her other expenditure by only £29.83 still leaving a shortfall in rent of £1.77 even after eliminating expenditure on credit card payments and swimming sessions. Nor does he comment on the failure of the s.184 decision letter to identify what other economies the appellant should have made in order to eradicate the surplus of expenditure over income.

Permission was given for a second appeal by Gloster LJ. Before us Mr Preston no longer pursued the argument that in assessing the affordability of the rented accommodation it is wrong to treat income support as available to meet the rent. It is now common ground that the housing authority was entitled to have regard to all sources of income. His principal challenges to the review decision are that the reviewer does not appear to have considered the appellant’s financial circumstances in making the assessment of affordability or the other matters referred to in the Guide and that the review decision is unreasoned.

As part of this challenge, he relies on the correspondence with the Council between the s.184 and the s.202 decisions as disclosing that it considered the £50 expenditure on taxi fares and clothing to be unnecessary. This, he says, failed to take account of the appellant’s physical disabilities as disclosed to the Council during her interview. If, on the other hand, this correspondence is not to be treated as part of the s.184 decision under review then it serves to highlight the inadequacy of its reasoning. No indication is given in the 27 September letter as to which further items of expenditure ought to have been reduced or eliminated and no consideration was given as part of that exercise as to how any such savings could have effectively eliminated not only the weekly deficit in the payment of the current rent but also any arrears which had accrued in the past through, for example, the repayment of the £500 to the social fund.

It is, I think, common ground that the right question for the housing authority to determine was whether the rent was affordable and therefore whether it was reasonable for the appellant to have continued to occupy the premises. It was strictly irrelevant to this exercise that the appellant may in fact have spent part of her benefits on other things apart from basic expenses or (which she denies) have failed to pay the whole of her housing benefit to her landlord. If the accommodation was never in fact affordable on her income, it was never reasonable for her to occupy it and her eviction cannot amount to intentional homelessness.

Although this inevitably places the focus on how the housing authority tackled the issue of affordability and the reasons which it gave for its decision, the correct starting point is the review decision itself. This appeal can only succeed if we are satisfied that the review decision discloses an error of law in one of the senses referred to earlier. The reviewing officer correctly set out her task as being to ascertain whether the s.184 decision was a correct legal decision, that the conclusions were fair and reasonable and that the facts could have led to no other outcome. But the decision as recorded in the letter of 3 December does not in my view carry out this exercise. The passage quoted earlier at [14] is a verbatim repetition of what Ms Brickwood said in her earlier letter of 10 October when refusing the appellant’s request for accommodation pending review. It makes no reference to the Guide; to the appellant’s own explanation for her expenditure and the consequent arrears of rent; to the housing officer’s judgment as to what items of expenditure were non-essential; or to the issue of whether other items of expenditure were excessive. Nor does it review any of the conclusions in the s.184 decision. Instead, it merely states that the affordability assessment that was carried out shows that the rent would have been affordable had the appellant prioritised her expenditure. No reasons are given for accepting the correctness of that assessment.

For these reasons alone, the s.202 decision must, in my judgment, be set aside. There has been no proper review of the earlier decision nor any reasons given for reaching the same conclusion.

If it is necessary to look beyond the review to the s.184 decision itself then there are still problems. I accept, of course, that it is neither realistic nor necessary to expect already burdened local authorities to identify each and every paragraph of the guidance they have taken into account or provide an over-detailed set of reasons for reaching their financial conclusions. Cases like Birmingham City Council v Balog [2013] EWCA Civ 1582 show that this is not necessary. But, as in all cases, the level of detail necessary will usually depend upon the issue to be decided and the facts of the particular case. In some cases it will be enough to say that the housing authority concluded that the amount spent on a particular form of expenditure was excessive or unnecessary without going into further detail or qualification. In other cases, where the tenant has produced and relied on a justification for the expenditure under review, a more detailed explanation of the reasons for rejecting those arguments may be required.

The present case falls, in my view, into the latter category. The housing officer had already in his s.184 decision letter made specific deductions in expenditure by removing the credit card and swimming payments. But he had not explained which of the remaining items was in his view excessive or why. Given that one of these items was the £50 spent on taxis (which was arguably essential) and the other items were money spent on food and clothing, it was, I think, incumbent on the reviewing officer to re-visit this part of the assessment and to explain why she had reached the same conclusion. It is not enough to say that the appellant’s solicitors failed to raise those specific points when requesting the s.202 review. The reviewing officer was under a statutory duty to review the decision which had been taken and the reasons for it. This involved considering any obviously relevant matters: see Cramp v Hastings Borough Council [2005] EWCA Civ 1005 at [14].

The decision in the present case was on any view a marginal one which called for a reasonable explanation of the key points on which the appellant failed. Mr Lane says that it would have been obvious to the appellant why she had failed but I disagree. She was never told what other expenditure she should have postponed and the sums she spent on food, clothing and taxis were not so large or obviously excessive as to require no explanation for being treated as excessive. Nor is there any indication of how the social fund payments were factored into the decision. The letter from the Council’s legal department of 15 October also raises an obvious concern that the assessment which has been made may simply be wrong.

For those reasons, I consider that the review decision does disclose an error of law and that the appeal should be allowed. I would therefore quash the decision and remit the s.204 appeal to the Council to be re-considered by another housing officer.

I agree.

I agree also.