Waltham Forest v Roberts [2004] EWCA Civ 940

[2004] EWCA Civ 940Case No B2/2003/2595
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CENTRAL LONDON
CIVIL JUSTICE CENTRE
Mr. Recorder Barnard Q.C.
Case No. ED205900
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate Thursday 15 July 2004
Before
LORD JUSTICE PETER GIBSONLORD JUSTICE SEDLEYMR. JUSTICE NEWMAN
Between
MAYOR AND BURGESSES OF THE LONDON BOROUGH OF WALTHAM FORESTAppellant/HELENA TERESA ROBERTSRespondent/
Alison Meacher (instructed by London Borough of Waltham Forest Legal & Democratic Services of Waltham Forest) for AppellantRobert Salis (instructed by Messrs Garcha and Co. of London E1) for RespondentHearing Hearing dates : 24 th June 2004
Judgment
[1]The London Borough of Waltham Forest (“the Authority”), acting in its capacity as housing authority and landlord, sought possession of premises at 45 Hungerdown, Chingford, London E4, which it had let to Mrs Helena Roberts, under a secure tenancy commencing on the 12th February 1996. The claim, made under grounds 1 and 5 of Schedule 2 to the Housing Act 1985, required the Authority not only to establish a ground for possession, but also to satisfy the County Court that it was reasonable to grant possession. As a result, according to section 77(6) of the County Courts Act 1984, no right of appeal exists on any question of fact, and the Authority appeals to this court on grounds that the judge (Mr Recorder Barnard) erred in law in refusing to grant possession.[2]The Recorder gave a reasoned judgment dated 25th November 2003. It is submitted by the Authority that he correctly concluded that Mrs Roberts had knowingly made a false statement in her housing application but, because he adopted the wrong approach in law to the issue of inducement, wrongly concluded that the Authority had not been induced to grant the tenancy (the ground 5 complaint). As to ground 1 of Schedule 2, he dismissed the claim because he concluded that the arrears had arisen only because Mrs Roberts had been wrongfully denied housing benefit by the Authority. It is submitted that the Recorder had no jurisdiction to determine Mrs Roberts’ entitlement to housing benefit, in particular where the Authority, having the power to make the determination under the prescribed statutory scheme, had concluded that she had no such entitlement.[3]Since the Recorder held that no ground for possession had been established, he was not required to consider whether it was reasonable to make a possession order but, on the assumption that he was wrong, he concluded that had a ground for possession being made out, he would not have considered it reasonable to grant possession.

THE FACTS

[4]On 18th January 1995 Mrs Roberts completed a form of written request to be re-housed by the Authority. At that date she was living in premises at 1 Stewart Road, Leyton, this being accommodation provided by the Authority to her in connection with her employment by it as a warden of sheltered housing. She had been so employed since about 1987 but, by 1995, because of ill health, she was required to retire and to vacate the premises at 1 Stewart Road.[5]Mrs Roberts was born on the 30th July 1930. Her application included a request that her son, Jeffrey (d.o.b. 10th May 1957), be re-housed with her. It stated that Jeffrey was living with her at 1 Stewart Road. Question 4 on the form requested her to list her last two previous addresses. She gave her current address and an address at 90 Downsell Road, E15. Prior to living at 1 Stewart Road, she had lived at 143 Westdown Road, not Downsell Road. Question 12 headed “Ownership of your own Property”, asked the question:
“Do you or anyone on your application own the freehold or leasehold of any property (including business premises)?”
She answered: “No” by ticking the appropriate box.[6]Following the receipt of the form by the Authority, a housing officer visited Mrs Roberts on 5th February 1995 at 1 Stewart Road and completed a Visit Sheet Report. Under the section of the report headed “Other Factors”, the housing officer noted that, according to Mrs Roberts, she bought a business in 1970 which was sold in 1973. It also records that she said: “Nothing owned at present”.[7]Shortly after having been granted a tenancy at 45 Hungerdown, E4, Mrs Roberts made an application for housing benefit. On her application form she stated that she did not own any property. Further, she did not disclose the receipt of any rental income from any property.[8]According to the evidence in these proceedings, the recorded position in connection with Mrs Roberts’ ownership of property prior to 1996 was as follows. In February 1983 she was the tenant of premises at 143 Westdown Road, E15. As such, she had the right to buy the premises under the Right to Buy Scheme. On 7th February 1983 she purchased 143 Westdown Road jointly with her son Jeffrey. The property was purchased at a discount to which she, as the tenant, was entitled and with the benefit of a joint mortgage from a building society to herself and Jeffrey. At full valuation the property was worth £24,000, but it was acquired for £14,880. It has recently been sold for £180,000. Between 1983 and 1987, when she took up her job as a warden of sheltered housing, she lived at 143 Westdown Road with her son Jeffrey and another son called Danny. According to the electoral records, her son Jeffrey lived with her at 1 Stewart Road in the period between 1987 to 1995.[9]Between 24th July 1995 and 26th September 1995 Danny and another (D. Drake) were jointly liable for council tax at that address. Thereafter, from 26th September 1995 to 10th March 1997 D. Drake is recorded as being solely liable for council tax at 143 Westdown Road. Between 1st April 1996 and 10th March 1997 Mrs Roberts received, as “landlord”, rent payment from the housing benefit section of the Authority in respect of 143 Westdown Road, the tenant named being Mr David Drake. For the period 10th March 1997 to 29th May 2000 Mrs Roberts received, as “landlord”, rent payments from the housing benefit section in respect of 143 Westdown Road in connection with the tenancy of her son Danny. These facts were not disputed but, on Mrs Roberts’ behalf, it has been submitted that the payments were received by her only in her capacity as agent for Jeffrey.[10]The coincidence of the claims made by her for housing benefit and the claims made by Danny Roberts and David Drake, which identified her as the landlord of the property in respect of which they were claiming benefit, gave rise to an investigation as to her entitlement to housing benefit. The investigation included interviews with her. She was requested to provide documents in support of her claim that, although she was registered as a legal owner, she had no interest in the property. No documents were produced. The investigation was completed in January 2000 and the recommendation, made by the Senior Investigation Officer, was that the housing benefit payments for 45 Hungerdown should be stopped and, in so far as payments had been made, they should be claimed back. On 17th May 2000 the Authority wrote to her confirming that housing benefits were stopped and with effect from 6th May 1996. Accordingly, it was said there had been an overpayment for the period 6th May 1996 to 22nd May 2000, totalling £7,278.90 which should be recovered.[11]Mrs Roberts appealed to the Housing Benefit Review Board against this determination. She was represented at the hearing on 3rd April 2001 by a solicitor or legal executive in a firm of solicitors, Messrs Kenneth Elliot & Rowe, Mr Spanjar, and her appeal was dismissed. The Review Board made the following findings of fact:-(1) that Mrs Roberts had received rent from 143 Westdown Road until 29th May 2000 when the tenant ceased his claim for benefits;(2) that she had declared on her benefit forms that she was not the owner of any house or flat elsewhere. That that declaration was incorrect as she was and remained the legal owner of 143 Westdown Road;(3) that she had failed to declare additional income in the form of rent she had received from the property at 143 Westdown Road;(4) that Mr Spanjar, her representative, had accepted on her behalf that she retained legal ownership of the property. He also accepted the amount claimed and the date of the claim.(5) the Review Board also decided that Mrs Roberts’ joint ownership of 143 Westdown Road should be included in any assessment of her benefit claim. The Board also upheld the decision that the overpayment of housing benefit should be recovered. Mrs Roberts was informed that her appeal had been unsuccessful on 9th April 2001. On 10th July 2001 she received a copy of the Board’s written decision.[12]On 30th October 2001 she signed over her share of 143 Westdown Road to her son Jeffrey for nil consideration. Thereafter, on 7th March 2002 she made a housing benefit claim with a request for backdating, namely backdating to a date shortly prior to the date when she signed over her share to Jeffrey.[13]By letter dated 13th August 2002 the Authority refused the backdated claim because the view was taken that she could have made the claim earlier, if not immediately after she had signed away her interest in 143 Westdown Road. In the meantime, she had been in receipt of housing benefit from 11th March 2002 amounting to £1,684.03. However by letter dated 17th September 2002 she was informed that such payment was to be regarded as having been overpaid, because she was to be treated as having capital in excess of £16,000 and because she had decided to deprive herself of such capital, in order to take advantage of the benefit system, by relinquishing her joint ownership of 143 Westdown Road. She was informed that she could ask for the decision to be put on appeal and that it would be heard by an independent tribunal. She appealed but at the date of the County Court proceedings, the appeal had been adjourned pending the outcome of the possession proceedings and it has remained adjourned.

THE PROCEEDINGS

[14]The Authority commenced proceedings for possession against Mrs Roberts by Particulars of Claim dated 7th August 2002. They had previously served a notice seeking possession on 14th March 2002. Mrs Roberts filed a defence form on 17th October 2002 signed by Mr Spanjar, and a full defence, drafted by counsel, was filed on 27th January 2003.[15]The case was allocated to the multi-track and was set down in August for two days commencing on 17th November 2003. The trial before the Recorder included live evidence from three officers on behalf of the Authority and from Mrs Roberts and her son Jeffrey.[16]At the date of the issue of the proceedings, up to the week ending 5th August 2002, there were arrears of rent outstanding of £7,319.05. The weekly rent payable being £72.11. The Authority’s pleading relied upon the false statement in answer to question 12 as the false statement knowingly or recklessly made which induced the grant of the secure tenancy.[17]The full defence, settled by counsel, included the following contentions:-(1) that Mrs Roberts and her son Jeffrey were registered as joint legal owners. That her interest was transferred on 30th October 2001 for no consideration, and that all the purchase money for the acquisition was paid by Jeffrey;(2) that the property was held by her and Jeffrey on express trust, alternatively on presumed resulting trust for Jeffrey as sole beneficial owner;(3) that at all material times Mrs Roberts had held the honest belief that she never had any financial interest in 143 Westdown Road and that her son Jeffrey was the only person who since 24th January 1983 held any financial interest in the property. It was denied that she committed any fraud, made any material misrepresentation or concealed any matter;(4) so far as housing benefit was concerned, it was maintained that she was entitled to housing benefit and that the decision to cease payment to her of housing benefit was wrong in law, that the decision to refuse her housing benefit for the period 30th October 2001 to 11th March 2002 was wrong in law and that the decision to cancel her benefit with effect from 17th September and to treat the payment for the period 11th March 2002 to 16th September 2002 as an overpayment was wrong in law. Entitlement to possession was, as a matter of law, denied;(5) further, it was maintained that since 15th May 1997 the Authority had been aware that Mrs Roberts had held, or alternatively had believed herself to hold, the legal title to 143 Westdown Road jointly with Jeffrey on trust for Jeffrey as the sole beneficial owner. That being so aware, she was informed by one John Bagnall, acting on behalf of the Authority, in or around July 1997 that there would be no further action with regard to her joint legal ownership of the property and that to seek possession “five years after such an assurance was contrary to Mrs Roberts’s legitimate expectations”;(6) that she suffered from ill health and that, in the circumstances, it would be unreasonable for the court to grant possession to the Authority.

THE LEGAL FRAMEWORK

[18]Section 84(1) of the Housing Act 1985 provides that the court shall not make an order for the possession of a dwelling-house let under a secure tenancy except on one of the grounds set out in Schedule 2. Ground 1 of Schedule 2 provides that:- “Rent lawfully due from the tenant has not been paid or an obligation of the tenancy has been broken or not performed”. Ground 5 of Schedule 2 provides that:- “The tenant is the person, or one of the persons, to whom the tenancy was granted and the landlord was induced to grant the tenancy by a false statement made knowingly or recklessly by:(a) the tenant, or(b) a person acting at the tenant’s instigation.” Section 84(2)(a) of the Housing Act 1985 provides that the court shall not make an order for possession on the grounds set out in Part 1 of that Schedule, namely grounds 1 to 8, unless it considers it reasonable to do so.

HOUSING BENEFIT LEGISLATION

[19]Various enactments relating to social security contributions and benefits were, in accordance with the recommendations of the Law Commission and the Scottish Law Commission, consolidated by the Social Security Contributions and Benefits Act 1992 (“the 1992 Benefits Act”) and the Social Security Administration Act 1992 (“the 1992 Administration Act”). Housing benefit is an income-related benefit and is provided for in Part 7 of the 1992 Benefits Act. Section 123 states that prescribed schemes shall provide for the following benefits (in this Act referred to as “income-related benefits”) –(a) income support;(b) family credit;(c) disability working allowance;(d) housing benefit; and(e) council tax benefit.[20]Section 137(1) of the Act defines ‘prescribed’ as meaning specified in or determined in accordance with regulations.[21]Express statutory authority for establishing a housing benefit scheme is provided for by section 130 of the 1992 Benefits Act. The prescribed scheme has been provided for by regulations made under section 130, namely the Social Security Housing Benefit General Regulations 1987, and as amended thereafter. Section 130 provides, in its material parts:- “(1) A person is entitled to housing benefit if -(a) he is liable to make payments in respect of a dwelling in Great Britain which he occupies as his home;(b) there is an appropriate maximum housing benefit in his case; and(c) either - (i) he has no income or his income does not exceed the applicable amount; or (ii) his income exceeds that amount, but only by so much that there is an amount remaining if the deduction for which subsection (3)(b) below provides is made”. (a) he is liable to make payments in respect of a dwelling in Great Britain which he occupies as his home; (b) there is an appropriate maximum housing benefit in his case; and (c) either - (i) he has no income or his income does not exceed the applicable amount; or (ii) his income exceeds that amount, but only by so much that there is an amount remaining if the deduction for which subsection (3)(b) below provides is made”.[22]Subsection (3) provides:- “Where a person is entitled to housing benefit, then -(a) if he has no income or his income does not exceed the applicable amount, the amount of the housing benefit shall be the amount which is the appropriate maximum housing benefit in his case; and(b) if his income exceeds the applicable amount, the amount of the housing benefit shall be what remains after the deduction from the appropriate maximum housing benefit of prescribed percentages of the excess of his income over the applicable amount”.[23]Subsection (4) provides:- “Regulations shall prescribe the manner in which the appropriate maximum housing benefit is to be determined in any case.”[24]As the title to the 1992 Administration Act suggests, the administration of claims for and payments of and the general administration of benefit is provided for by that Act. Section 1 provides that, except in prescribed cases and subject to other exceptions, a person is not entitled to benefit unless a claim has been made in the prescribed manner and within the prescribed time limit or is treated by virtue of regulations as making a claim.[25]Section 63 headed ‘Adjudication’ provides:- “Regulations shall provide that, where a person has claimed –(a) housing benefit; or(b) council tax benefit the authority shall notify the person of its determination of the claim. Any such notification shall be given in such form as may be prescribed.[26]Subsection 3 provides: “Regulations shall make provision for reviews of determinations relating to housing benefit or council tax benefit”.[27]Section 134(1) provides that the housing benefit scheme is to be funded and administered by the appropriate housing authority or local authority. Section 191 includes the local authority as a “housing authority”.[28]The regulations providing the detailed process for the determination of a housing benefit claim are contained in the Housing Benefit (General Regulations) 1987. The regulations set out the rules which regulate the making of decisions in respect of housing benefit and they provide a mechanism for challenging such decisions. Regulation 76 requires that the determination “shall” in the first instance be by the appropriate authority. Any such determination or decision may be reviewed by a Review Board (regulation 79).[29]The provisions of the 1987 Regulations have been repealed and were replaced, as from 2nd July 2001, by a new review procedure contained in the Child Support, Pensions and Social Security Act 2000, Schedule 7. The relevant regulations are the Housing Benefit and Council Tax Benefit (Decisions and Appeals) Regulations 2001 S.I. 2001/2002 which came into force on 2nd July 2001.[30]Given that the present appeal concerns housing benefit decisions prior to and after 2nd July 2001, brief mention should be made of the applicable legislative provisions for the review of those decisions that existed prior to that date and subsequently, according to the new provisions in force after that date.[31]Prior to the 2nd July 2001 any determination or decision of a Review Board could be reviewed at any time by the relevant authority if there had been a change of circumstances or where, by fresh evidence, it was satisfied the determination was made in ignorance or based on a mistake of fact or, except in the case of a Review Board decision, was based on a mistake of law. A person could request a review under the regulations and thereupon there could be a review of the Review Board’s decision. After 2nd July 2001 the person affected by a decision had a right of appeal to an Appeal Tribunal.

THE JUDGMENT IN THE COUNTY COURT

The judge found the following:

[32]-(1) that after discussion among the family, it was decided that Mrs Roberts and her son Jeffrey would get a mortgage and that Jeffrey would be responsible for discharging the mortgage instalments on 143 Westdown Road;(2) that she and Jeffrey were joint legal owners of the property;(3) that mortgage repayments were made from a joint account (in Mrs Roberts’ and Jeffrey’s name) at the Co-op Bank in Stratford into which cash from Jeffrey’s wages and payments of housing benefit in respect of tenants at 143 Westdown Road were paid;(4) that Mrs Roberts took her job as warden on the understanding that she would be re-housed when she retired. That she was asked to fill in the housing application form as part of the process of allocating her re-housing;(5) that after retirement she was living on a very small pension and was “therefore entitled to housing benefit”;(6) that the arrears of rent arose entirely from the refusal of the Authority to pay or backdate housing benefit; As to ground 5:-(7) that she was not knowingly making a false statement in not declaring her nominal interest in 143 Westdown Road as legal owner;(8) that she understood the question as going to whose property it was, not whether she was one of the legal owners;(9) that so far as she stated that Jeffrey did not own the property, she knowingly made a false statement.[33]The Recorder concluded that she had made the false statement deliberately because she was concerned to ensure the Authority honoured their obligation to provide her with suitable accommodation. Further, she was unwell and needed to have accommodation for Jeffrey or someone to stay to look after her and had avoided making a reference to Jeffrey’s ownership because it would have led to enquiries and may have prejudiced her request for a flat with two bedrooms.[34]Notwithstanding his conclusion that she deliberately made a false statement to avoid “inquiries” being made and to obtain a two bedroom flat, the judge concluded that he “could not be satisfied” the Authority was induced to allocate the accommodation to her. On the evidence it was more likely than not she was allocated the accommodation because it was appropriate for her as a retiring member of staff. Further, had she told the Authority the true position, namely that Jeffrey owned the property, she would have been considered “deserving special consideration” and allocated a flat with a spare bedroom to enable a member of the family to stay over to look after her when she was ill.[35]It is unnecessary to recite the detail of the judgment in connection with ground 1. It is sufficient to record that the judge concluded that the issue as to whether she had any beneficial interest in 143 Westdown Road was for him to determine. Having determined that she had no beneficial interest in the property, he stated that it “inevitably follows that they stopped payment of housing benefit on a mistaken appreciation of the true position as to what property and income was available” to her and had “wrongfully” created a situation in which she was in arrears. THE GROUND 5 COMPLAINT INDUCEMENT

THE GROUND 5 COMPLAINT

[36]Ground 5 of Schedule 2 requires a landlord to establish fraud but, unlike the position at common law where fraud is established, there is no entitlement to rescind. The Act requires, for an entitlement to possession to arise, proof that the false statement induced “[the] grant [of] the tenancy”. The question on this part of the appeal is, what has to be proved to establish inducement?[37]The Act does not define “induced”. The judge was strongly influenced by the absence of evidence from the actual decision maker and rejected the evidence which was before him about the Authority’s policy in responding to housing applications. In so far as he is to be taken to have concluded that without evidence from the actual decision maker, the burden of proof could not be discharged, he was plainly wrong. No basis for the existence of such a strict evidential requirement has been made out. Nor could it be, for there are none save that it is to be noted that in certain circumstances, to which I shall refer later, a presumption of inducement can arise. The Authority called its rehousing manager, Mr Bourne. His evidence, which was uncontradicted, was that in accordance with its policy, the Authority would have wanted to investigate the true position. As a result, he stated it was unlikely that Mrs Roberts would have been granted a tenancy of this particular accommodation, at the date it was granted, had the Authority known of her joint ownership of 143 Westdown Road. Her ownership would have generated inquiries into who was living at the property, the type of security the owners had and the amount of equity in the property.[38]The Recorder stated, in connection with this evidence:- “I have considered that evidence very carefully. I am not satisfied that the authority were induced by the false information on the form to allocate this accommodation to Mrs Roberts. I must of course have regard to the policies being followed by the housing department of the authority but I have to decide what would really have happened to this elderly and unwell employee. I have not heard from the decision maker”.[39]Having emphasised that, because he had not heard from the actual decision maker, he could not conclude that the Authority were induced to grant the tenancy, the Recorder nevertheless felt able to conclude that the decision maker, on the balance of probability, allocated the accommodation to her because it was suitable to her needs as a retiring employee and in discharge of the Authority’s obligation to her.[40]It was, of course, open to the Recorder to take into account all the evidence which went to the question as to whether the “decision maker” was induced to grant the tenancy. The Authority’s obligation to provide accommodation was relevant in that regard, but so also was the evidence of Mr Bourne. Despite the Recorder’s statement that he had considered it, it appears to me that he decided to disregard it because the decision maker had not been called. That is, it has to be said, a reason which, if legitimate, would equally have applied to whether the decision maker would have allocated the tenancy for the reason the Recorder found. Further, it has to be said that, although the Recorder summarised Mr Bourne’s evidence in his judgment, he did not include in his summary the conclusion to which it was directed, namely that the Authority “would not have signed the tenancy at the time they did had they been aware of the Defendant’s joint ownership of 143 Westdown Road, E15” (Mr Bourne’s witness statement, paragraph 9).[41]In addition to the above, there are other substantial reasons why his conclusion on inducement cannot stand. He did not have to decide “what really would have happened”. He had to decide whether the false statement had played “… a real and substantial part, though not by itself a decisive part, in inducing the Authority to act” (see Stephenson LJ in JEB Fasteners Ltd v Marks Bloom & Co 1983 1 All ER 583, 589 A-B). In the leading case of Edgington v Fitzmaurice (1885) 29 Ch D. 459, each of the following Lord Justices stated, when considering the issue of inducement, that what had to be established was that the false statement operated on the mind of the representee and acted as one of the inducing causes. Cotton LJ at page 481:- “It is not necessary to shew that the misstatement was the sole cause of his acting as he did. If he acted on that misstatement though he was also influenced by an erroneous supposition, the Defendants will be still liable”. Bowen LJ (page 483):
“… if his mind was disturbed by the misstatement of the Defendants, and such disturbance was in part the cause of what he did, the mere fact of his also making a mistake himself could make no difference”
. Fry LJ (page 485): “But in my opinion if the false statement of fact actually influenced the Plaintiff, the Defendants are liable, even though the Plaintiff may have been also influenced by other motives”.[42]In considering whether a misstatement has induced the misrepresentee to act to his detriment, it is helpful to start by considering the materiality of the misstatement (see Hobhouse LJ in Downs v Chappell [1997] 1 WLR 426 433). In connection with a housing application the applicant’s ownership of a property is obviously material. Further, given that in this instance the purpose of making the false statement was, as the Recorder found, deliberate and designed to avoid the inquiries and investigations to which the disclosure of the truth would have been likely to give rise, there was ample evidence upon which the court could have concluded that the Authority was induced.[43]A false statement on a material matter is likely to have induced the misrepresentee. The judge did not consider the materiality of the false statement as it affected the responsibilities of the Authority in the discharge of its public functions. The uncontradicted evidence that the same question had been repeated at a visit to Mrs Roberts pointed to the significance which the Authority attached to the question. Once materiality has been established it is a “fair inference” of fact that the misrepresentee has been influenced by the statement. “I think that if it is proved that the defendants with a view to induce the plaintiff to enter into a contract made a statement to the plaintiff of such a nature as would be likely to induce a person to enter into a contract, and it is proved that the plaintiff did enter into the contract, it is a fair inference of fact that he was induced to do so by the statement” (Lord Blackburn in Smith v Chadwick (1884) 9 App Cas 187 1961).[44]For the above reasons, I have concluded that the judge erred in law in his approach to the evidence of inducement. Had he applied the correct test and approach he would have been bound to conclude that the Authority had established that the false statement induced the grant of the tenancy to Mrs Roberts.

THE GROUND 1 COMPLAINT

[45]The Recorder was taken to the case of Haringey London Borough Council v Cotter (1997) 29 HLR 682 CA, but his reasons for concluding that there were no arrears of rent upon which the Authority could rely made no reference to the case or the clear principle for which it stands as authority. In this court Mr Salis, counsel for Mrs Roberts, has suggested that it is to be regarded as deciding only that there is no right to bring a private law action for breach of statutory duty in connection with the determination of an entitlement to be paid housing benefit and that the case has no application where an entitlement to housing benefit is raised by way of defence in a private law action. I am unable to accept the submission.[46]At page 688 of the judgment in Cotter, Mummery LJ stated:
“The important point about the procedure for determination and for internal and external review is that, pursuant to the authority of primary legislation, the Regulations provide a detailed, self-contained and exhaustive procedure for enforcing the duties of the appropriate local authority in relation to the determination and payment of housing benefits. Until a determination is made under that procedure, there is no duty on the appropriate authority to make a payment of housing benefit either to the claimant entitled to it or to any other person. If there is any dissatisfaction with a determination which has been made, the appropriate procedure for challenging that determination is that laid down in the 1987 Regulations. It is not possible to discern either in the primary legislation or in the detailed regulations a legislative intention to confer on a claimant or, a fortiori, any other person, a right to enforce by an ordinary private law action a claim for breach of statutory duty in the determination of entitlement to payment of housing benefit”
. The above citation, down to the last sentence concerning the alleged statutory duty, is a statement of general application derived from an analysis of the prescribed scheme. Its validity is not in any way undermined by the particular conclusion to which its application in that case gave rise.[47]Mr Salis drew the court’s attention to certain authorities which demonstrate that in certain circumstances a public law issue can be raised, by way of defence, in a private law case. He referred to Pawlowski (Collector of Taxes) v Dunnington [1999] STC 550, Wandsworth LBC v Winder (1985) 1 AC 461 HL, and Warwick DC v Freeman (1994) 27 HLR 616.[48]In Pawlowski, a taxpayer and director of a company was subject to a direction made by the Board of Inland Revenue to the effect that the Board was of the opinion that he, as an employee, had received his emoluments as a director knowing that the company, his employer, had wilfully failed to deduct the amount of tax it was liable to deduct under PAYE. The Board issued a summons in the County Court claiming the unpaid tax. The director denied having the necessary knowledge. Although he could have challenged the direction by way of judicial review, he was allowed to raise his denial by way of defence in the private law action in the County Court. The question was whether his action in so doing was to be regarded as an abuse of process. Simon Brown LJ delivered a judgment with which the other members of the court agreed. He concluded:- i) if the raising of a public law defence in private law proceedings had no significant disadvantages to the parties, the public or the court, it would not normally be regarded as constituting an abuse of process; ii) the director’s statutory relationship to the Revenue conferred on him conditional rights to resist payment by raising a public law defence, so that it was not an abuse of process.[49]Simon Brown LJ referred to Winder, which concerned rent demands made by a local authority landlord on one of its tenants and could find no distinction between it and the case he had to decide. In neither Pawlowski nor Winder was the court considering the right of a litigant to raise by way of defence an entitlement, the existence of which was not only susceptible of challenge by way of judicial review, but also depended, for any entitlement to arise, upon a determination reached in accordance with a “detailed, self-contained and exhaustive procedure”, including rights of appeal. In Warwick v Freeman, as Mummery LJ observed in Cotter, the allegation involved a flaw in the procedure for internal and external review of a determination.[50]In the instant case, the Authority had followed the prescribed scheme and, on appeal, it was held that Mrs Roberts had no entitlement to housing benefit in the period from 6th May 1996 to 22nd May 2000. There was no challenge by way of judicial review to this determination. Had there been one and it had succeeded, I venture to doubt that a determination of entitlement would have resulted, as opposed to the question being remitted to the statutory authority having exclusive power to determine entitlement.[51]It is not apparent how the Recorder was able to conclude that there was an entitlement to housing benefit for he neither applied public law principles to the Review Board’s determination, nor did he apply the regulations which govern entitlement. In truth, having reached the conclusion that Mrs Roberts had no beneficial interest in 143 Westdown Road and a limited income, he concluded the Authority had behaved wrongfully.[52]Miss Meacher, counsel for the Authority, submitted that the judge was wrong to determine the beneficial interest question. In my judgment he was wrong in concluding that it provided a legitimate basis for him to decide Mrs Roberts’ entitlement to housing benefit. In the overall context of the case, including the question whether she knowingly or recklessly made a false statement and on the issue as to whether it would be reasonable to grant possession, I do not think the judge can be criticised for coming to a conclusion on the evidence he had heard. That said, the conclusion which had been reached on evidence in court was not one which it can be said the Authority was bound to come to in the course of its investigations. In the circumstances, the judge’s conclusions that the Authority had acted wrongfully cannot stand.[53]In my judgment there was no basis for impugning the Authority in this way. It had considered the material. It had followed the prescribed scheme. It was not bound to accept the assertion by Mrs Roberts, without more, that she had no beneficial interest. The Review Board’s findings cannot be impugned as irrational and outside the range of conclusions which the material before it justified, particularly having regard to the limited representations advanced by Mr Spanjar.[54]Contrary to the submission of Mr Salis, this is not a case which offends the principle established in the well known case of Pyx Granite Co Ltd v Ministry of Housing and Local Government (1960) AC 260, HL. The prescribed scheme for the determination of entitlement to housing benefit is exclusive for the purposes of issues of determination and, in essence, the scheme is indistinguishable from the statutory remedy at issue in Barraclough v Brown (1897) AC 615 which was referred to by Viscount Simonds in Pyx v Granite and distinguished because it was an exclusive statutory remedy. Parliament has in recent decades created a variety of exclusive remedies and procedures for the determination of rights. In so doing, the general principle that access to the courts is to be preserved is met by the remedy of judicial review.[55]For the above reasons, I have concluded that the Recorder exceeded his powers and reached a determination in connection with Mrs Roberts’ entitlement to housing benefit which was not open to him. It follows that ground 1 of Schedule 2 was made out as a ground for possession.

The issue of reasonableness

[56]The judge considered whether it would have been reasonable to grant possession, had he concluded a ground for possession had been made out, first in connection with ground 5 and later and separately in connection with ground 1.[57]As to ground 5, he took into account that obtaining accommodation by a misstatement was “a serious matter” and was “unfair to other applicants”. Against that, he weighed the age and health of Mrs Roberts. He then added:- “I also take into account the fact that the claimant authority knew as long ago as 1997 that she and Jeffrey had bought Westdown. I think it is important that proceedings for possession under ground 5 should be brought with expedition ….. I do not think it would be reasonable after such a length of time to make an order for possession”.[58]As to ground 1, he stated:- “I should also state for the sake of completeness that, if I had found that benefit could not be set off against rent and so ground 1 was made out, I would not have considered it reasonable to make an order for possession in such circumstances”.[59]In this court both counsel have suggested that the most appropriate course to follow, should the appeal succeed, is that the issue as to whether it would be reasonable to make an order for possession should be remitted to the County Court for determination by a different judge, in the light of all the relevant circumstances, including evidence as to the current state of affairs. It has been pointed out that the Appeal Tribunal hearing stands adjourned and the outcome, when known, will be relevant.[60]I agree that the most appropriate course is that the necessary inquiry into the issues to which this case gives rise should be the subject of a hearing. All the relevant circumstances must be taken into account and weighed. No single circumstance is likely to be determinative.[61]In these circumstances, it would be inappropriate to descend into too much detail which it must be for the parties and the judge to consider. However, in the light of the approach taken by the Recorder, the following observations may be of assistance.[62]In considering whether the Authority delayed in bringing the proceedings for possession under ground 5, it is likely that the course of events, including Mrs Roberts’ appeals in connection with housing benefit, will be relevant.[63]Although the Recorder has been criticised for making a finding as to Mrs Roberts’ beneficial interest, I regard his conclusion, which has not been challenged, as a relevant factor in considering whether it is reasonable to grant possession. That said, consideration will have to be given to the Authority’s position in the face of the non-disclosure of the true position. The facts of this case amply demonstrate that when applicants apply for housing and/or housing benefit, the law imposes upon them an obligation to be full and frank in their answers to material questions. Whatever may be the explanation for not making full disclosure, any failure to do so will be likely to bring about consequences for which they will be responsible.[64]When considering the circumstances in connection with ground 1, it is not simply, as the Recorder suggests, the absence of the existence of a set-off which gives rise to a valid ground 1 claim. At all material times there have been arrears of rent, but the sale of the flat purchased by virtue of Mrs Roberts’ right to buy has now yielded a substantial profit. Should the arrears be paid off, it would represent a significant change in circumstances which would be material to the overall question as to whether it was reasonable to make an order for possession.[65]For the above reasons, I would allow the appeal in connection with both grounds for possession and remit the matter to a different County Court judge to determine whether it is reasonable to make an order for possession.[66]I agree with the judgment of Newman J. and with the disposal he proposes.[67]I add a short word about the reliance placed by Mr Salis on Lord Simonds’ well-known dictum in Pyx Granite [1960] AC 260 286, “that the subject’s recourse to her Majesty’s courts for the determination of his rights is not to be excluded except by clear words”.[68]Pyx Graniteconcerned an uncommon provision – s.14 of the Town and Country Planning Act 1947 – designed to give individuals a cheap and simple way of ascertaining from their local planning authority whether they needed planning permission for a particular development. This is, in general, a question of law, so that an unfavourable answer would be challengeable, whether through the courts or through the planning system. A favourable answer, on the other hand, would ordinarily bind the local planning authority and allow the applicant to go ahead with confidence.[69]It is unsurprising that their Lordships House held this not to be a preclusive provision. It was a simple alternative way of dealing with a potentially complicated issue, but one which carried no need to exclude recourse to the courts. In distinction to this stand the many instances, of which the housing benefit system is one, where a carefully structured administrative mechanism, involving inquiry and fact-finding as well as adjudication according to law, is given the function of determining individuals’ rights to benefits. Here the entire purpose of the system is to make the administrative route the single appropriate one, leaving the courts in whatever supervisory or appellate role the law accords them.[70]I fear that the sympathy which the Recorder understandably felt for the elderly former warden of sheltered housing in poor health led him astray. For the reasons given by Newman J. with which I am in entire agreement, I too would allow the appeal and make the order for a remittal which he suggests.

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