S, R (on the application of) v Social Security Commissioner & Ors

This is a renewal of the Claimant’s application for permission to apply for judicial review. On the 11^th June 2008, Mitting J. refused permission on the papers.

The Claimant seeks permission to challenge the Commissioner’s decision of the 11^th of December 2007 (file No. CG/2751/2007 et al), which is set out at section A, 21 to 28 in the bundle refusing leave to appeal from the decision of the Social Security Appeal Tribunal of the 23^rd of February 2007.

Although it is nominally the decision of the 11^th of December 2007 that is challenged, in fact, the point of law that is really challenged was not decided against the Claimant in the hearing before the Appeal Tribunal, because it was conceded on behalf of the Claimant that an earlier decision of Commissioner Turnbull in R(H) 2/07, which can be found at B, 23 to 38, was decisive of the legal issue which was raised both in R(H) and in the Claimant’s case, namely the construction of the words “acting on its behalf” in paragraph 4 of schedule 3 of the Housing Benefit and Council Tax Benefit (Consequential Provision is) Regulations 2006.

The Claimant suffers from learning difficulties and displays challenging behaviour. From the 19^th of October 2004 he had been residing at 33 Victoria Avenue, Bloxwich, Walsall in supported housing provided by Rivendell Lake Housing Association (“Rivendell”) where the support was being provided by staff employed by Lifeways Community Care (“Lifeways”). The Claimant shared the house with two fellow residents. The package of support was commissioned and funded through Walsall Social Services. The Claimant had previously lived in a large Social Services hostel. He was moved to the accommodation provided by Rivendell following the Government White Paper, “Valuing People”, which expressed the policy that people with learning disabilities have the same rights as everyone else to their own home in the community.

Until July 2006 the Claimant’s rent of £195.27 per week was paid by Walsall Housing Benefit Department. Following the ruling in R(H) 2/07, that department took the decision to refer the Claimant’s claim to a rent officer under the rent restriction rules. As a result his entitlement to benefit was restricted to £65 per week. He could not afford to pay the shortfall from his benefits. He wished to remain at 33 Victoria Avenue, as he was thriving within the structured routine provided there. He made payments from his own savings totalling £2,605 to enable him to remain, but he was unable to continue to do this. Rent arrears continued to accrue and possession proceedings were issued. By the 20^th of August 2007 the Claimant had accrued rent arrears of £5,080.61. Possession was subsequently granted by Walsall County Court on the 21^st of December 2007.

Lifeways, acting as appointees for the tenants, instructed Mr Simon Ennals to represent the Claimant and six other tenants before an appeal tribunal. Mr Ennals abandoned the argument that Lifeways provided support “on behalf of” Rivendell given the ruling in R(H)2/07. The only issue, therefore, before the tribunal was whether support was provided directly to the tenants by Rivendell. The tribunal dismissed the appeal in February 2007 and Mr Ennals did not request a full statement of reasons.

The Claimant’s current advisers, the Community Law Partnership, became involved in May 2007 through the possession proceedings. It was contended that the possession proceedings were a direct consequence of the “Turnbull ruling”. Accordingly, the partnership wrote to the Tribunal Service and then to the Office of the Commissioners arguing that the Turnbull ruling was wrongly decided and that as the present case was “on all fours” with the facts in the Turnbull ruling, the appellants should have an opportunity of challenging the reasoning in the Turnbull ruling. The Commissioner granted an oral hearing to consider the matter on the 6^th of December 2007.

The Claimant and other appellants have subsequently obtained new accommodation but they all remain a potentially liable for outstanding rent arrears of approximately £5,000 and all have used their savings to try to remedy the housing benefit shortfall, approximately £2,500 each.

The conditions for entitlement to Housing Benefit are governed by section 130 of the Social Security Contributions and Benefits Act 1992. The 1992 Act also gives the Secretary of State a general power to make transitional provisions.

Part 3 of the Housing Benefit Regulations 2006 deals with the calculation of the maximum rent for housing benefit purposes. Regulation 14(1) requires the housing benefit authority to refer a claim for housing benefit to a the rent officer for a rent determination where the claim attracts rent allowance (paid to non-local authority tenants).

The rent officer will normally carry out a claim-related rent determination and a local reference rent determination. The housing benefit authority must use the lower of these two figures to calculate the maximum benefit payable towards the rent. As a result, housing benefit will normally only cover a rent up to the level set by the rent officer’s determination.

Prior to a the Turnbull ruling, landlords providing supported housing could rely on the exemption for supported housing in the Housing Benefit and Council Tax Benefit (Consequential Provisions) Regulations 2006 schedule 3, paragraph 4. This provides that a claim for housing benefit will not be referred to a rent officer if the accommodation is provided by a non-Metropolitan county council and the landlord or a person acting on its behalf provides the Claimant with care, support or supervision. “Exempt accommodation” is defined as including accommodation which is “provided by a non-Metropolitan county council …, a housing association, a registered charity or voluntary organisation where that body or a person acting on its behalf also provides the Claimant with care, support or supervision.”

The phrase “acting on its behalf” was considered by Commissioner Turnbull in R(H) 2/07. In that case, the facts surrounding a similar but not necessarily identical arrangement between Rivendell, Citizens First (“CF”), who provided care support and supervision and the landlords of Rivendell, Supported Living Ltd (“SLL”) (Sheffield City Council, the local authority and others were funding CF) were established by findings of the tribunal who had a substantial amount of documentation before it, which included an agreement in the nature of a joint-venture agreement, between CF, SLL, and Rivendell. A similar agreement existed in this case, but it is challenged by the Second Interested Party that the facts of this case are identical with R(H) 2/07.

It was accepted for the purpose of the regulations considered in that case, which for current purposes, utilise the same definition regulation as that considered in the instant case, that Rivendell was a voluntary organisation within the definition of exempt accommodation, but the Council decided that the dwelling occupied by the appellants in R(H) 2/07 was not exempt accommodation because the care, support and supervision provided to the appellants by CF was not provided by or on behalf of Rivendell.

The tribunal found in that case that it had been the Council who had first nominated CF as the care provider and the Council’s social services department carried out assessments of what support and care were necessary in principle and CF provided details of actual care.

The tripartite agreement sets out each party’s responsibility. The tribunal found that Rivendell had not itself provided any care, support or supervision to the appellants, which care etc was provided by CF. It also found that CF received payments from a number of sources, including the appellants, ILL and the social services. On the basis of its factual findings the tribunal found that care etc was provided by CF for and on behalf of Sheffield City Council social services department and not by Rivendell. It should be stressed that that was the decision of the tribunal on the factual background that it found after enquiry.

The Commissioner found that the tribunal was correct in that conclusion and the matters he considered important are set out in paragraphs 31 and succeeding paragraphs in his judgment:

“31.

…First, Rivendell was not under any contractual obligation to the appellants to provide them with care, support or supervision, neither was it and any statutory obligation to do so.... Rivendell was not, therefore, under any contractual or other obligation to provide care, support or supervision which it needed to find someone else to perform on its behalf.

33.

…Secondly, CF did not provide the care, support and supervision pursuant to a contract under which Rivendell engaged CF to do so and CF received no remuneration from Rivendell for doing so.... I of course recognise that clause 5.2.1 of the agreement provided that CF should be ‘responsible for’ providing all necessary care, support and supervision for the tenants ‘on behalf of’ Rivendell. If CF were to fail to do so that would no doubt constitute a breach by CF of the agreement (as well as being a breach of the contracts which must have existed between CF and the Council and between CF and the appellants). But the agreement was in my judgment in the nature of a joint-venture agreement in which each of the three joint-venture partners agreed, as principal, to play it is defined apart: it was not in substance an agreement in which Rivendell engaged CF to perform services for it or on its behalf.

35.

… It is not, however, self evident that if CF ceased to provide the care, Rivendell would in practice have to seek to ensure that it was received from another source, and the tribunal made no finding to that effect. Indeed, it expressly found (see paragraph 26 above) that another provider would have to be arranged by the Council.

36.

… In my judgment, the fact that the provision of the care etc benefits Rivendell in the sense that without it the scheme would not be viable does not mean that the care is provided by CF ‘on Rivendell’s behalf’.”

Because of that decision, as is indicated in the factual history above, it was conceded before the tribunal in this case that it could not find that Lifeways, the providers of care, support and supervision in this case, provided support on behalf of Rivendell.

In argument, I was informed that although the decision of a commissioner carries significant persuasive weight, it does not bind another commissioner. It follows that the concession that made by Mr Ennals was not inevitable and the legal point sought to be argued in this appeal could have been argued below.

In any event, the only issue decided by the tribunal was whether support was provided directly to the Claimant and his fellow tenants by Rivendell.

An Application for Permission to Appeal was made to Commissioner Turnbull and, as I have said, the real challenge was to the decision in R(H) 2/07, which it was contended was wrong, amongst other reasons, because the first instance decision in Gaspet -v- Ellis [1985] 1 WLR 1214, a decision of Gibson J (as he then was), which Commissioner Turnbull had found helpful in his previous decision, had, on appeal, been upheld with slightly modified reasons.

In refusing permission to appeal, Commissioner Turnbull, considering whether his decision in the previous case was wrong, dealt in this way it with that decision:

“25.

I think that it is clear from my reasoning in R(H)2/07 that I was very conscious that Gaspet v Ellis could not be direct authority on the meaning of ‘exempt accommodation’ because it related to different wording in a different statutory context. (I said in paragraph 46 merely that I derived ‘some support’ for my conclusions from Gaspet v Ellis). The same must be true in relation to the Court of Appeal’s reasoning.

In my judgment it is reasonably clear from the judgments of Kerr and Nicholls L.J. in that case that they agreed with that statement [that of Gibson J.], subject only to the qualification that the relationship giving rise to the agency or something akin to it did not have to be a direct contractual one. Kerr L.J. said (p.775B):

As the judge said, the phrase ‘on behalf of’, in particular, in the context of the phrase ‘by or on behalf of’, denotes the concept of agency. This is a perfectly straightforward concept, even if in a context such as the present it may require a wider interpretation than agency resulting from a direct contractual relationship. Where as here, the taxpayer company did not directly undertake the work itself, I therefore ask myself whether the work was undertaken by anyone as its agent, allowing for this wider sense…”

He then considered the application of the Court of Appeal decision to the instant case at paragraphs 33 and 34:

“33.

But in any event it does not seem to me that Rivendell can be said to have commissioned the research in circumstances where (see para. 32 of R(H)2/07) none of the care provider’s remuneration came from Rivendell and where it was the social services department of the relevant council which engaged and (to a large extent) paid the care provider……

At the end of the day, it is clear that (a) Rivendell had no statutory or contractual obligation to provide care, support or supervision which it needed to engage someone else to carry our on its behalf (b) the relevant social services departments did have statutory obligations in that respect, and engaged the care provider to provide care, support and supervision, at an appropriate remuneration. In those circumstances, for the reasons given in R(H) 2/07, it is in my judgment, clear that the care etc. was not being provided by the care provider on Rivendell’s behalf, within the meaning of the definition of exempt accommodation.”

In argument, Mr. Knafler for the Claimant readily acknowledges that words such as “on behalf of” must be considered in their proper legislative context and will be sensitive to the particular facts of each case. In Gaspet the words were prefaced by “directly”. He cites the same words appearing in a criminal context in R. v O’Loughlin [1988] 3 All ER 431, in which the words appeared in section 13 (3) of the Criminal Justice Act 1925 and were considered in the context of the prosecution seeking to rely under that section on the depositions of witnesses who, it was alleged, were being kept out of the way, not by the defendant directly or even, that it could be proved, with his authority, but by those who considered they were acting for his benefit.

Kenneth Jones J., in the like way as the Commissioner in R(H) 2/07, considered only the first instance decision in Gaspet. He could not accept that those acting in the defendant’s interests, but not with his authority, could bring the case under section 13 (3) and said (at 435 h):

“I have no doubt that what has to be shown here in order to establish that the witnesses have been kept out of the way on the defendant’s behalf is that the person or persons making the threats were acting in his interest in the sense of meaning in such a way as to help him to escape conviction or to secure an acquittal and were so acting with his authority or consent or approval, express or implied.”

The reference in the Court of Appeal in Gaspet, for example, in Nicholls L.J.’s judgment: “I agree with the judge that to be within the phrase “on behalf of” the relationship must be one of agency, or akin thereto, although I think there need not necessarily be a direct contractual link…” is, in my judgment, consistent with the reasoning in O’Loughlin. The two essential elements appear to be first, benefit and second, authority, or, perhaps, having regard to the context, consent or approval.

Is it right in these judicial review proceedings, to challenge the determination of the Commissioner, where the interpretation of the words “on behalf of” in any individual case may be fact sensitive and where the factual determinations of the tribunal are not known in the absence of a statement of facts? Is it not, indeed, better to await a more appropriate challenge to a similar decision in which the core facts are indeed established?

The interested parties contend that it is not appropriate to resort to the judicial review tool. In Walsall’s Grounds of Defence they contend that Walsall entered into an agreement with Lifeways for it to provide care and support to those to whom Walsall owed duties. Rivendell was not a party to that agreement. Lifeways provided support to the vulnerable adults from some time prior to their taking assured tenancies from Rivendell. Moreover, they contend (at page 132) that as a result of the concession made before the Commissioner documents “which might now be relevant were not put in evidence and there was no evidence on the very issues which would now be in dispute if the concession were to be withdrawn”.

It does not seem to me that the absence of full factual findings such as those contended for by Walsall is necessarily fatal to the claim for judicial review. There is, in fact, very little, if any factual dispute between the parties as to the arrangement between the various actors. Nor is there any dispute that there was a contract between Rivendell and Lifeways, the care provider, whereby Lifeways was both authorised, and, indeed, required (so that its obligation could be enforced by Rivendell) to provide care services on behalf of Rivendell. It is not, I believe, in dispute that, unless Lifeways provided the care services, Rivendell would not be able to provide accommodation for the occupiers who were unable to live independently. Without that provision the joint enterprise would fail. It appears to me strongly arguable that the fact that Lifeways was also under a contractual obligation to and paid by the Council is somewhat beside the point. In many ways this might be said to be a stronger case than that of Gaspet. In this case there was a direct contract between the care provider and the accommodation provider. An agent can act on behalf of two principals.

Moreover, if judicial review is granted and the Commissioner’s decision is quashed, the Commissioner may hear the whole case again and look at all the facts afresh or, alternatively, he may remit the case to the tribunal for them to establish all necessary key facts.

In my judgment, it is, at the least, arguable that the interpretation of the words “on behalf of” by the Commissioner, was wrong. He did not have the benefit of full argument on the issue and O’Loughlin was not cited to him. Here, despite there having been no full establishing of the facts, it is not in dispute that the provision of care services was for the benefit of Rivendell and authorised (indeed, required) by them. That strongly suggests to me that the care services were, thus, on a proper construction, provided “on their behalf”.

Both the interested parties contend, however, that permission should not be given because this is not an appropriate case for judicial review. The appeal structure in relation to housing benefit is contained in the Child Support Pensions and Social Security Act 2000. The sole ground for an appeal to the Commissioner from a tribunal decision is that the decision was wrong in law. Either the Commissioner or the Court of Appeal may grant permission to appeal but there is no statutory avenue of appeal granted against a refusal of permission by the Commissioner.

In principle, the only route of challenge of the Commissioner’s refusal, is by way of judicial review (see Regina v Secretary of State for Social Services ex parte Connolly [1986] 1 WLR 421). However, whether or not that remedy is appropriate must be judged against the background that Parliament has determined that basic structure for appeals in housing benefit cases, as it has in other specialist subject areas. The tribunals are staffed by specialist judges and the Commissioners have particular expertise in the complex law surrounding benefits.

In a similar specialist jurisdiction, that of leasehold valuation, and a refusal by the Lands Tribunal of permission to appeal from a leasehold valuation tribunal, the Court of Appeal in R (on the application of Sinclair Gardens Investments (Kensington) Ltd.) v Lands Tribunal [2006] 3 All ER 650 held that judicial review of such a refusal should only be granted in exceptional circumstances, namely jurisdictional error in the narrow sense, or procedural irregularity of such a kind as to constitute a denial of a Claimant’s right to a fair hearing. Before permission to seek judicial review could be granted it would not be enough to show that refusal by the Lands Tribunal of permission to appeal was plainly wrong in law. It would also have to be established that the error was sufficiently grave to justify the case being treated as exceptional.

In this permission hearing, however, the parties were content that I should apply the seemingly somewhat less stringent test applied by Mr. Nicholas Blake QC sitting as a Deputy High Court Judge in an application for permission to apply for judicial review of a Social Security Commissioner in R. (on the application of Stephen Hook) v The Social Security Commissioner [2007] EWHC 1705 (Admin.). I am by no means convinced that there was full argument before the learned deputy High Court Judge in that case as to what the correct test was. At paragraph 6 of his judgment he appears to indicate that it was not necessary for him to decide that having regard to the fact that it was there common ground that the test to be applied to avoid unnecessary expense and to achieve the desirable aim of finality was that a “very substantial point of law is required”.

As this is a permission hearing only, I am content to apply the same test as did Mr. Blake QC. Both interested parties contend that that test is not met here. They contend that this is not a “life and death” case such as those considered in the asylum system. The tribunal members are highly qualified and expert in the complex schemes which they administer and the Commissioners are all legally qualified and acknowledged experts in this field. I bear very much in mind the words of Hale LJ, as she then was, in Cooke v. Secretary of State for Social Security [2001] EWCA Civ. 734:

“But the ordinary courts should approach such cases with an appropriate degree of caution. It is quite probable that on a technical issue of understanding and applying the complex legislation the Social Security Commissioner will have got it right.”

That said, while the context of such a phrase as “on behalf of” must properly influence its construction, I am not persuaded that its construction in this case involves such expertise and knowledge of the intricacies of the benefits legislation as may have been the case in Cooke.

Moreover, there is evidence before me that not only does the issue in this application affect the vulnerable applicants very substantially – they have had to be re-housed, have expended savings they can ill afford paying arrears and are liable to pay further arrears, but I am satisfied from representations made to the Secretary of State from a group of national membership bodies comprising and representing people with learning disabilities, social housing organisations and those who support people with learning disabilities to achieve independent lives in the communities, that the impact of the Commissioner’s two decisions affects adversely several thousand more equally vulnerable people. It is certainly arguable that it runs directly contrary to the Department’s policy of encouraging such individuals to live independently in the community.

I am not convinced that it is right to say that the mere fact that no statement of reasons in this case means that a more appropriate challenge by some other applicant should be awaited. Achieving public funding of such a challenge is uncertain. There is likely to be even more delay in resolving the issue. There are no very obviously significant factual issues which cannot be agreed in this case to enable the legal issue to be adequately resolved by the judicial review process. The practical result of the decisions of the Commissioner standing is that they will tend to be followed by tribunals and Commissioners, even though not strictly binding on them.

My only task in determining whether to grant permission is whether it is arguable that the Commissioner’s decision raises a very substantial point of law and that the Commissioner made an error of law in his interpretation of the phrase. In the event I am satisfied on both of those bases that it is so arguable and I grant permission.