Szoma v Southwark [2003] EWHC 356 (Admin)

Case No CO/3849/2002[2003] EWHC 356 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT
Venue Royal Courts of JusticeDate Monday, 17th February 2003
Strand
London WC2
B E F O R E:
MR JUSTICE WALL
IWONA SZOMA
(CLAIMANT)
-v-
THE LONDON BOROUGH OF SOUTHWARK
(DEFENDANT)
Computer-Aided Transcript of the Stenograph Notes of
Smith Bernal Wordwave Limited
190 Fleet Street London EC4A 2AG
Tel No: 020 7404 1400 Fax No: 020 7831 8838
(Official Shorthand Writers to the Court)
MR MARK HENDERSON (instructed by McMillen, Hamilton, McCarthy. Solicitors, 17-19 Alie Street, London, E1 8DE) appeared on behalf of the CLAIMANT
MS SIÂN DAVIES (instructed by London Borough of Southwark Legal Services, South House, 30-32 Peckham Road, London, SE5 8UB) appeared on behalf of the DEFENDANT
J U D G M E N T
Between
SzomaClaimantSouthwarkDefendant
[1]MR JUSTICE WALL: In these proceedings for judicial review permission was granted by Crane J on 18th November 2002 for the claimant, Mrs Szoma, to challenge what he described as the issue "in principle regarding the change between payment in advance and payment in arrears" of monies which were being paid to Mrs Szoma by the London Borough of Southwark. Those payments were being made under the Asylum Support (Interim Provision) Regulations 1999.[2]The claimant and, in effect, her family have been refused asylum, although their case, as I understand it, is currently being reconsidered. The history of the matter is complex, but, I think, important for me to go through in order to explain both the decision I have reached, and the way in which I have reached it.[3]The claimant arrived in the United Kingdom on 9th September 1996 and claimed asylum on arrival. She is currently living with her husband and, altogether, six children. Her eldest child, Kamil, is now in fact 18. Following Kamil, she has twins, who are 16. She has a son who was born on 23rd May 1989 and so is 13, rising 14. She has a daughter, Zuzanna, who is aged 15 months, born on 16th November 2001. In addition to those children, she is also acting as a foster mother for a child of 6, who has been placed with her by the London Borough of Westminster. Although it is not material to my decision, it is worthwhile noting, I think, that Vanessa is the subject of care proceedings, and the local authority's care plan in relation to Vanessa is that she should live permanently with the claimant and her husband.[4]This case arises because, as asylum seekers, the family was receiving support under the regulations. On their behalf Mr Henderson argues, correctly I think, that they were entitled to that support because otherwise they would be destitute. The support consists of accommodation and cash payments for food and other essential living needs. The level of asylum support is a matter for the local authority in the claimant's case, although there are guidelines laid down by the Home Office. The Home Office's view appears to have been that the amount payable should be something in the order of 70 per cent of the rates that would be payable on income support to British citizens. It is, therefore, a fairly basic level of support.[5]Until July 2002 the claimant received a cash payment of interim support every fortnight in order to pay for the food and other essential living needs of her family, and that payment was made in advance. What happened was that on 9th July 2002, when she went for her regular fortnightly payment, she was told by the local authority that she would not receive another payment for three weeks. Thus, she was left for one week without support. For reasons which I will amplify in just a moment, her efforts to find out why this was happening failed to elicit a sensible response. When she appeared on 30th July, as directed, she was again given a fortnightly payment, two weeks' money, but was once again told that she would not receive any further payment for three weeks, and thus it was that in this process she was not paid for two weeks.[6]The claimant had solicitors. They contacted the local authority to see why this was. And thus begins what I have to say is correspondence which is no credit to the local authority in any shape or form. Sitting as I do in the Family Division, I am only too well aware of the enormous responsibilities placed on local authorities and the limited resources which they have to deal with them. It is nonetheless dispiriting to find that in this field, where no doubt the responsibilities are as acute, the administration seems, to me at least, to be substantially deficient.[7]The first letter from the claimant's solicitors is dated 7th August, and took up the point which I have just identified. They asked for an explanation. They pointed out that asylum seekers must be accepted as destitute in order to qualify for support from the local authority under the Interim Provision Regulations, and therefore the solicitors could not understand why it was, or how it could be, that the claimant could be deprived of a week's payment.[8]The answer which came back on 9th August from the local authority was in these terms:
"We confirm that all clients receiving financial assistance by the local authority were informed of the change in how payments are to be made in the future. This information was in writing. The change has come into operation as a result of the most recent Home Office Directorate [sic]. "
We are instructed that £420.00 for a three-week period is not unreasonable, taking into consideration that your client was made aware of the new procedure in advance."[9]That letter is almost entirely untrue. There is no evidence of any kind that clients receiving support under the regulations had been informed of the change in how payments were to be made in the future. The only document which has been produced is a letter dated 11th July 2002 from a Mr Jacobs, who is the manager (inter alia) in the asylum seekers' service, which is addressed to all families receiving support, and which simply says:
"Under instruction from the Home Office the financial support levels relating to couples will be reduced to 70% of Income Support Rates effective from 22/07/02. "
If you have any queries, please speak to your caseworker who will be able to explain in depth."[10]It is, I think, worth pointing out that prior to the receipt of the letter of 9th August, the claimant's solicitors had been informed that the decision to alter the payments, which is described in the letter of 7th August, had been undertaken on the advice of auditors. The solicitors comment that, whilst they appreciated that that was the case, it seemed to them nonetheless perverse, for the reasons I have already identified. However, that explanation also turns out to be untrue. With commendable frankness, counsel for the local authority told me today that although the auditors had reported at that time, she had seen their report and there was nothing in it which related directly to advice from auditors.[11]The solicitors for the claimant then took up the reference in the letter of 9th August quoting the most recent "Home Office Directorate", and asked to see it. Needless to say, it was not forthcoming, no doubt because there had been no such "Home Office Directorate", certainly in relation to payments in advance or payments in arrears.[12]The next attempt at an explanation dated 14th August from the local authority referred to the direction from the Home Office about NASS payments. It reads as follows:
"Please see as follows instructions from NASS regarding payments. We have been instructed that in view of this document, it appears that the Asylum Team over paid your client. This came to their attention when audited. In order to recoup this over payment and to ensure the minimum disruption to your client, she was notified that she would be paying the sum of £840 over a six week period instead of four, paid in two three week blocks. At the time of writing we do not have copy of the letter sent to your client confirming this."
No doubt the reason the local authority does not have a copy of that letter is that it does not exist. The letter goes on:
"We would like to avoid any further litigation on this matter and would ask if you have any alternative suggestions as to how the outstanding arrears can be paid by your client."
So there, at that point, is the local authority, notwithstanding that they had failed to pay the claimant on two separate weeks, claiming that she owed them money. I have to say that I find that quite extraordinary.[13]By this time the claimant's solicitors, who had, of course, been threatening judicial review, made one final attempt to try and understand what had happened to the payments to their client. The only result was the faxing to them of the letter of 11th July from Mr Jacobs, to which I have already referred, and that produced, as I have indicated, no further information. The claimant therefore issued proceedings for judicial review, relying on the Regulations and seeking interim relief.[14]That application came before the single judge on the papers. He appreciated the urgency, and on 19th August directed that any acknowledgment of service which the defendant wished to file, setting out in summary form the grounds on which the claim was contested, must be filed by 4 o'clock on 27th August, and if no acknowledgment of service had been filed by then, the papers should be resubmitted to the urgent judge as soon as possible for further consideration.[15]Here we get yet another extraordinary twist in the tale, because the local authority, having identified the issue as being the change from payment in advance to payment in arrears, stated in terms in a document sent by counsel:
"2. That decision has been withdrawn by the Defendant, and the withdrawal notified to the Claimant's representatives on 27 August 2002."
[16]It goes on to say:
"3. It is noted by the Defendant that correspondence after 9th August 2002 refers to recoupment of an overpayment to the Claimant and to alterations in the rate of support payable to asylum seekers. "4. The Defendant will investigate the matters raised by the Claimant in the judicial review claim form and the Claimant will be notified of the outcome of the investigation, and of any further decision in relation to her entitlement to support, the rate and frequency thereof, as soon as possible. "5. For the avoidance of doubt, the Defendant's position is that the challenged decision has been withdrawn and a fresh decision on the Claimant's support payments will be taken. "6. In the meantime the Claimant has been provided with a payment of £120.08 on 16th August 2002 and continues to receive fortnightly support payments of £448.84 per fortnight."
[17]I pause simply to notice that the local authority's decision to alleviative hardship, when the payment should have been £448 a fortnight, was to make one payment of £120.08.[18]Not surprisingly, when the single judge read the response and the acknowledgment of service from the defendant local authority, he refused permission to apply for judicial review, commenting that "the subject of the claim has been withdrawn by the defendant".[19]Unfortunately, it seemed that that was not true either, because it was quite clear, not only that the defendant was continuing with the new regime of payments, but was also seeking repayments from the claimant. And thus it was that the claimant returned to the tray and came back to the court, with the result that Crane J, as I indicated earlier, gave permission to apply for judicial review, limited to the issue in principle regarding the change between payment in advance and payment in arrears.[20]It was, however, only on 13th December 2002, in a statement from Mr Chatterton, who is the Service Manager of Specialist Services in the children's division of the local authority, that one gets a rationale for the change from payment in advance to payment in arrears. It is relatively easy to see what happened, and in a sense I have already described it. Over the period I have described, the payment of two weeks for a three weekly period enabled the local authority to demonstrate that it was now paying in arrears rather than in advance. That is clearly what happened, but what was the ultimate justification for it? Mr Chatterton says this:
"During July to August 2002, cash payments to asylum seekers were transferred from two weeks in advance to two weeks in arrears. This change applied to all asylum seekers supported by the authority at that date. "
This was done in order to avoid overpayments which were occurring when an advance payment was made to a supported person, who during the period for which the payment had been made was granted leave to remain, or withdrew their claim for asylum, and ceased to be eligible for support under the Interim Provisions. "In addition, mainstream benefits such as jobseekers allowance and income support are paid in arrears. The transition to arrears therefore brings asylum support into line with these other benefits and makes the path from asylum support to benefits smoother when a supported person is granted status. The last asylum support payment would be made in arrears and then other benefits would follow the fortnightly in arrears cycle. "The means by which the change from advance to arrears was accomplished was by way of a transitional period between July and August 2000." He attaches a schedule which was already in evidence, I think, or at least had been disclosed, before dealing with the way in which the payments had been phased in:
"Payments numbered 8-10 in bold demonstrate the transitional period. Payment no.8 was in advance. The new regime was phased in at payment no.9 (which was one week in advance and one week in arrears) made three weeks after payment no.8. This took Ms Szoma halfway through the transition, as she was now one week in arrears. Payment in arrears was operational by payment no.10, which is 2 weeks in arrears and was 3 weeks after payment no.9. It should be noted that it was between payments 9 and 10, i.e. at the time any hardship caused to Ms Szoma by the transition would have been felt, that the one off hardship payment was made. "
The local authority recognised that the transition might cause some hardship to supported persons and a one off hardship payment was made on 16.8.2002 of £120.08 in recognition of the Claimant's claimed financial hardship. "The Local Authority provide a service for over five hundred asylum seekers and since the change in payment from advance to arrears, this has been the only case in which a supported person has complained of suffering hardship. As set out above, the one off payment was in recognition of this. In my opinion the transition is in the interests of supported persons because they receive a payment at the end of their period of local authority support and are 'cushioned' from hardship by the transition to state benefits."[21]I am now told by counsel on the defendant's behalf that the attempt to recoup was a mistake, and no further attempt will be made. The defendant, therefore, justifies the change on the basis of saying that, under the interim provisions, it is for the local authority to decide both the level and manner of support it provides. There is no requirement that payment be made in advance or in arrears. It is a matter within the administrative discretion of the local authority, and the decision to switch from payments in advance to payments in arrears was rational, for the reasons given by Mr Chatterton.[22]In addition, the authority says that it is obliged under regulation 6(1)(d) to have regard to the cost of providing support. Reduction of irrecoverable overpayments provides additional funds for the asylum support scheme generally, and the payment in arrears is in line with the standard practice used by the other benefit agencies, and eases the transition to conventional state benefit when the time comes. Counsel also argues that appropriate transitional provisions were put in place to ensure minimum hardship, in particular the payment of £120.08. It is, therefore, argued that the claimant had suffered no hardship, and the decision was a lawful one.[23]For the claimant, Mr Henderson points once again to the fact that these regulations are designed to support people who would otherwise be destitute, and whatever "spin" one puts on the move from payment in advance to payment in arrears, the reality is that it caused hardship by the absence of payment for two weeks, and was irrational in so far as it dealt with someone who would otherwise be destitute. I was told by counsel for the local authority that nowadays, and as the system currently operates, responsibility for these payments is gradually moving to the Home Office. The regulations were due to be phased out this year, but in fact are going to go on until 2004. It is very unusual nowadays for the local authority to have to deal with someone who comes to them, as it were, at the very outset of the processs and who is destitute. But in those circumstances, the local authority's policy is to make a hardship payment pending the kicking in of the payments in arrears which would then be made under the regulations. Mr Henderson submits that all this is unlawful and irrational, and is contrary to both the spirit, and indeed, I think, the letter, of the regulations, given that they are designed to deal with people who are destitute.[24]As I indicated earlier, the variety of shifting and untrue explanations put forward by the local authority does it absolutely no credit. Equally, it is extremely difficult for me to decide, as is so often, I regret to say, the case with local authorities, precisely when and by whom the relevant "decision" was made. But in all the circumstances of the case, having read the statement of Mr Chatterton, I think I have to remind myself, as in all decisions for judicial review, that the question is not, "Would this have been my decision?", but, "Is this a decision within the range of decisions open to the decision-maker?". And with one considerable proviso, and not without a little hesitation, I have come to the conclusion that it is open to the local authority to pay interim payments, under the regulations, in arrears, and that there are rational reasons for that conclusion. But the important proviso seems to me to be that within that process they should not step outside the regulations and cause hardship to people who would otherwise be destitute. I have not been taken in detail through the regulations, but I do notice in paragraph 4(3) of the regulations that:
"Temporary support must appear to the local authority by whom it is provided to be adequate for the needs of the person claiming support and his dependants (if any)."
[25]I have to say here that whilst I am persuaded that the decision to move from payments in advance to payments in arrears was lawful, the decision to limit the relief to the claimant and her family to £120.08 for the fortnight of the transition during which she was not paid, is entirely unacceptable and outside the ambit of any person who, in my judgment, would be properly applying their mind to that particular decision. To put the matter another way, within regulation 4(3) I cannot see how any decision-maker, properly applying his mind to the decision, could properly say that temporary support of £120.08 for a family of two adults and five or six children would be sufficient for them for the period of a fortnight.[26]In these circumstances what I propose to do is this. I will direct that judicial review of the decision to move payment in advance to payment in arrears will be refused, but that there will be a review of the defendant's decision to limit the hardship payment to the claimant to the sum of £120.08 for the fortnight during which she was not receiving any payment, and the local authority will consider the amount of that payment in the light of any further representations made to it by the claimant. It does not seem to me that it is for this court to identify the amount that should be paid. The claimant has had to borrow money from friends. The payment of £120.08 is, in my judgment, manifestly inadequate. Quite what payment there should be seems to me a matter for the local authority, once further representations have been made by the claimant to it. To that extent, therefore, and to that extent only, the application for judicial review will succeed.[27]Do you need any costs orders, Mr Henderson?[28]MR HENDERSON: My Lord, I would ask for our costs of the application, though we have not succeeded.

MR JUSTICE WALL: Are you publicly funded?

[30]MR HENDERSON: We are.[31]MR JUSTICE WALL: It just means that for local authorities, even more strapped for cash (inaudible) from one public pocket into another.[32]MR HENDERSON: My Lord, that is an argument that is often advanced both by the Home Office and the defendant local authorities in these cases.[33]MR JUSTICE WALL: The only other way of doing it would be to punish the local authority for the way they have behaved. Is that really appropriate?[34]MR HENDERSON: My Lord, in my respectful submission, it is appropriate that the local authority should pay the costs of this action, when their conduct-- I would respectfully say in the light of your Lordship's judgment -- is not apparently attributable simply to lack of resources, but does show incompetence and, as your Lordship said, prolonged proceedings as a result of various untrue assertions being made. In those circumstances I do submit it is highly appropriate that the local authority pay the costs of this action rather than the Legal Services Commission, which also has great demands upon its funds in order to fund meritorious actions.[35]MR JUSTICE WALL: Yes. What do you want to say, Ms Davies?[36]MS DAVIES: Two points, my Lord. Firstly, my submission would be that there should be no order for costs, that the appropriate order is no order for costs. I accept that the conduct of the local authority in this matter has not been exemplary, to say the very least, and I accept that I would be on shaky ground were I to argue that the local authority should have its costs.

MR JUSTICE WALL: Shaky ground? Non-existent ground, I am afraid.

[38]MS DAVIES: Indeed. I would say that the appropriate order is no order for costs. The claimant has not succeeded in the claim. I take your Lordship's point about the conduct of the local authority, but that is not an appropriate basis to award costs. As your Lordship pointed out, it all comes out of the public purse in one shape or form, and therefore the local authority should not be paying the claimant's costs.[39]The other point I am bound to point out is that the grant of permission did not extend to the amount of hardship payment --[40]MR JUSTICE WALL: It is essentially part of the principle. You accept that as part of the decision-making process of changing the system, you had to consider hardship.[41]MS DAVIES: I will take instructions on that. It is not something we are going to seek to challenge. The local authority will in any event review the amount of the hardship payment that was made.[42]MR JUSTICE WALL: That point did cross my mind as I was thinking about judgment. It occurred to me that it was so much inherently a part of the decision-making process that you had to be alert to the hardship created, that it really was part of the principle, and I am grateful to you for the steps you are taking.[43]It is very tempting, Mr Henderson, I know, but I think I am going to resist temptation in this case. I think that probably the Legal Services Commission is marginally better off than the local authority. I am going to say no orders for costs. Would you like an assessment?[44]MR HENDERSON: Yes.

MR JUSTICE WALL: You may have one.

[46]MR HENDERSON: My Lord, obviously I have not had a chance to take instructions in the light of the order which your Lordship did make, but it is usually highly inconvenient and inefficient to try to come back to the court some time hereafter to seek permission to appeal, so I will, if I may, make a very short application at this stage for permission to appeal in respect of the relief which the claimant was refused. I will not repeat any of the submissions that I have made, but I would simply submit that, as your Lordship indicated that the result was reached with some hesitation, and given the issues concerned, there is a realistic prospect that the Court of Appeal might reach a different conclusion.[47]MR JUSTICE WALL: Thank you, Mr Henderson. I am going to refuse that application, partly, at least, because I hope these are transitional provisions. There may well be a case in which you find an asylum seeker who is not given money up front, and would be well advised to apply for judicial review, but I think on the facts of this case, and the fact that one hopes the local authority's involvement is going to be largely phased out soon, I am going to refuse permission. If the Court of Appeal thinks it is an interesting point and wants to take a different view, of course, it will. Thank you very much.