Carlisle City Council v SC (HB) [2011] UKUT 480 (AAC)

UKUT-AAC
Carlisle City Council v SC (HB)
[2011] UKUT 480 (AAC) · 2011-11-02
[1]This appeal came before me for an oral hearing on 18 October 2011. The appellants are Carlisle City Council who were represented by Mr Farrar. The Secretary of State was represented by Mr Cooper, Solicitor. The claimant was represented by Mr Owens of Resource Solutions. Cumbria Action for Social Support applied to be added as a party to the appeal. By ruling dated 10 October 2011 the Registrar to the Upper Tribunal added them as a party to the appeal. They were represented by Mr Waller. I refused the Secretary of State’s motion to adjourn the appeal until after a hearing by the Court of Appeal in CH/0322/2010, [2011] UKUT 136 (AAC) .[2]The claimant appealed against the decision of the Council which decided that his housing benefit entitlement from 27 July 2009 to 5 April 2010 is in the amount of £75.67 per week. That decision was intimated to the claimant on 29 July 2009 in the following terms:
“You continue to qualify for Housing Benefit and your revised benefit is £75.67 a week from the 27 July 2009. Your Benefit entitlement is as follows: From 27 Jul 2009 to 05 Apr 2010 an amount of £75.67 per week. It was calculated as follows: Total Rent Payable £ 213.46 Weekly Heating Charge £ 5.57 Weekly Water Rates £ 1.36 Weekly ineligible Support Charges £ 78.44 Weekly Rent Eligible for Benefit £ 75.67 Weekly Housing Benefit £ 75.67”
[3]The claimant’s appeal was successful. The tribunal set aside the decision of the local authority and found that the increase in rent was not unreasonably high compared to the level of increases for suitable alternative accommodation. The tribunal also found: “The service charges are all eligible services charges. The tribunal finds that the eligible rent in increased service charges are not unreasonably high. The tribunal finds the rent charges are due under the contractual rent and payment is a conditional occupancy and no elements of the rent are ineligible service charges under schedule 1 of the Rent Officers (Housing Benefits Functions) Order 1997”.[4]In the appeal before me the findings in fact in paragraphs 3(a) to (d) were accepted by all the parties to the appeal apart from the fact that the appellants were not prepared to accept the finding that the claimant falls to be treated as a vulnerable adult for housing purposes. The parties also accepted the findings in 3(e) from the beginning down to “bathroom/shower room and toilet, and kitchen.” The tribunal went on to make the following further findings in paragraph 3(e): “I am satisfied that in practice and in law [the claimant] had a licence giving him shared use of the whole property and its facilities and temporary exclusive use of one bedroom. At all material mates [the claimant] did in fact share the property with one other person who occupied the other bedroom. [The claimant] contracted to pay a licence charge totalling £172.33 a week. The licence agreement broke this figure down into a “charge for accommodation” of £65.16, “heating and light” of £5.33, “TV licence” of £1.19, “water charge” of £1.48, “general services” of £26.97 and “support services” of £72.20”.[5]In paragraph 10 of their reasons the tribunal said:
“Accordingly for the reasons set out above the appeal succeeds. I remit to the respondents the assessment of HB on the basis that eligible rent claimed by [the claimant] does not fall to be limited.”
[6]It was a matter of agreement by all the parties to the appeal and I am satisfied that the decision of the tribunal errs in law and must be set aside. There are a number of reasons for this. The tribunal applied the wrong legislative provisions. It was a matter of agreement by the parties to the appeal and I accepted this that the relevant version of regulation 12 of the Housing Benefit Regulation 2006 to be applied in this case was that contained in paragraph 5 of schedule 3 of the Housing Benefit and Council Tax (Consequential Provisions) Regulations 2006 by virtue of the accommodation in which the claimant was residing being exempt accommodation in accordance with paragraph 4(1) of schedule 3. As is apparent from paragraph 7 of the tribunal’s statement, this was not the version they applied. Further the Rent Officers and (Housing Benefits Functions) Order 1997 referred to in the decision notice does not apply in this case for the reasons set out in paragraph 16 of the Secretary of State’s written submission in this appeal.[7]The material provisions in respect of the calculation of rent under regulation 12 contained in paragraph 5 of the Consequential Provisions Regulations are 12(1)(b)(d) and (e) which are:
“ [¹5. -(1) For the purposes of paragraph 4(1), regulation 12 of both the Housing Benefit Regulations and the Housing Benefit (State Pension Credit) Regulations is as follows – “Rent 12. -(1) Subject to the following provision of this regulation, the payments in respect of which housing benefit is payable in the form of a rent rebate or allowance are the following periodical payments which a person is liable to make in respect of the dwelling which he occupies as his home – (a) ….. (b) payments in respect of a licence or permission to occupy the dwelling; (c) ….. (d) payments in respect of, or in consequence of, use and occupation of the dwelling; (e) payments of, or by way of, service charges payment of which is a condition on which the right to occupy the dwelling depends; Sub-paragraph (3) provides: “(3) …… the amount of the person’s eligible rent shall be aggregated to such payment specified in paragraph (1) as he is liable to pay less – (b) where payments include service charges which are wholly or partly ineligible, an amount in respect of the ineligible charges determined in accordance with schedule 1.”
Service charges are defined in paragraph (7) as follows:
“(7) In this regulation and Schedule 1 – “service charges” means periodical payments for services, whether or not under the same agreement as that under which the dwelling is occupied, or whether or not such a charge is specified as separate from or separately identified within other payments made by the occupier in respect of the dwelling; and “services” means services performed or facilities (including the use of furniture) provided for, or rights made available to, the occupier of a dwelling.”
The failure to apply this version is material and fatal to their decision.[8]It is further not clear what service charges the tribunal accepted being eligible for the purposes of the calculation of housing benefit. It would appear from finding in fact 3(e) that they considered that the whole licence charge was included. This included support services. However, as was pointed out by Mr Cooper and accepted by the other parties to the appeal, these services were not related to housing benefit at all but were paid for by the local authority under a scheme funded by the Department of Work and Pensions entitled “Supporting People”. Thus the inclusion of a figure for these services was an error in law, if it was intended by the tribunal, as it would appear to be, that the cost should be taken into account in calculating the eligible rent. In addition the figures given in paragraph 3(e) were not the figures claimed for the period in question as can be seen from the spreadsheet at page 27, which insofar as it is material is attached as an appendix to this decision and is the basis for the Council’s calculation at page 30 set out above.[9]I should perhaps add that the Upper Tribunal Judge who granted permission to appeal in giving reasons for doing so said that it was arguable that the tribunal’s decision erred in law, for amongst other things, not addressing paragraph 8 of schedule 1 to the Housing Benefit Regulations 2006 and whether the accommodation constituted “sheltered accommodation”. Mr Owens submitted and Mr Waller did not dissent from that submission that it was not being asserted in this case that the accommodation was sheltered. The position of the claimant was that it was supported accommodation. In these circumstances it was not necessary to deal with the issues in CH/0322/2010 which has the neutral citation number of [2011] UKUT 136 (AAC). Both Mr Farrar and Mr Cooper had addressed me on this issue but as it by concession does not arise it is not necessary for me to deal with it.[10]It was also accepted by parties that the appropriate disposal of this appeal by me was to remit the case to a freshly constituted tribunal for a re-hearing. That tribunal should note the findings in fact made by the tribunal whose decision I have set aside and which have been accepted by the parties to the appeal. The freshly constituted tribunal will be aware of the version of regulation 12 of the Housing Benefit General Regulations 2006 as altered for the purposes of exempt accommodation by the Consequential Provisions Regulations, to which I have referred and which they require to apply. They will also require to apply schedule 1 of the Housing Benefit Regulations 2006 in respect of ineligible services charges. The freshly constituted tribunal will note what I have said in respect of the support services which are paid for under a separate scheme funded by the Department and which does not form part of the Housing Benefit Scheme.[11]In giving further directions to the tribunal I would refer them to the spreadsheet which I have referred to. What the sheet seeks to do is to set out the CASS charge for specific items and what was allowed for housing benefit by the appellants. It will not be necessary for the tribunal to take any decision in respect of what is described as “core rent” as Mr Farrer conceded that the figure charged was allowable. Mr Owens and Mr Waller have properly conceded that the charges for personal fuel, water rates and TV licence are not allowable and neither as I have indicated earlier are the support services charged at £78.44 per week. The calculation of the 15% service management and 10% voids bad debt figures are dependent upon the extent to which the other charges have been allowed. I direct the appellants to amplify this in their submission to the tribunal.[12]I will deal with the remaining items in turn.[13]In relation to furniture renewals and depreciation I consider that it was significant that the Council was prepared to accept such charges as allowable. Mr Farrar in his submission indicated that they had conceded this charge and had accepted that it was covered under regulation 12(1)(e). Before me he was ambivalent in respect that the Secretary of State in his written submission had submitted that these charges were not for services being provided to the tenant but are for the recovery of the landlord’s costs in providing the accommodation. Mr Owens submitted that they were allowable and he directed me to schedule 1 which deals in part 1 with ineligible service charges other than for fuel. Amongst these are the charges contained in paragraph 1(b) namely “(b) charges in respect of –(i) the acquisition of furniture or household equipment; and(ii) use of such furniture equipment where that furniture or household equipment will become the property of the claimant by virtue of an agreement with the landlord;” There is no suggestion that the furniture or household equipment will become the property of the claimant by virtue of an agreement with the landlord. However, as the provision makes a rule in respect of the acquisition of furniture or household equipment which in the circumstances set out in the paragraph are not eligible service charges that would tend to imply that otherwise the acquisition of furniture is encompassed within the concept of a service. I am persuaded by Mr Owens that it is allowable and the tribunal are directed to proceed accordingly.[14]As I understood Mr Owens’ submission the service charge claimed in relation to communal fuel under paragraph 5 of schedule 1 was only related to the communal areas in the property such as landings and hallways and was not intended to cover anything else. On that basis a charge is allowable. It was submitted that the charge made for these entries, landings and hallways was a fair charge. The tribunal in the event that the amount of the charge is disputed by the appellants will have to determine whether the charge for these communal areas was a charge which properly reflected the fuel used in the “communal areas” provided for in paragraph 8 of schedule 1.[15]It was the position of Mr Owens that the council tax in respect of the property was paid by CASS as a matter of convenience to all the parties concerned. I agree that it is a practical and pragmatic arrangement. However the question is whether or not the undertaking by CASS of the liability for council tax for the property and for charging the claimant for his share of that undertaking is encompassed within regulation 12(1). The Secretary of State’s position was that charges for council tax do not meet the definition of service charges set out in regulation 12(7). It was his position that the claimant would claim council tax benefit in respect of his council tax liability if he was entitled to that benefit. It was however pointed out that the liability for council tax in the property would be joint and several amongst the licensees in the property. Mr Farrar submitted that the appellant had accepted that this was an allowable charge but that the appellants would have to look at this again in the light of the submission of the Secretary of State. He submitted that it may be an appropriate charge to be encompassed within the payment in respect of a licence or permission to occupy the building. I am sympathetic to the pragmatic approach to council tax adopted by CASS. It is however apparent from the terms of the licence at page 15 that they regarded the council tax element as a service rather than being encompassed within the charge for occupation. I am not persuaded that the undertaking of the liability for council tax on behalf of the claimant and other licensees within the premises falls within the concept of services such as to be a service charge within the definitions contained in regulation 12(7). Accordingly I direct the freshly constituted tribunal that the undertaking of council tax liability on the property is not a service provided to the claimant and that the charge cannot be recovered. I consider that the Secretary of State is right in his analysis. It is appreciated that the effect is one which means that licensees will require to make individual applications for council tax benefit which in the circumstances is unfortunate and will lead to complications for all the parties concerned. However within the tight parameters set out in the statutory provisions I do not consider that I can interpret them so as to achieve a convenient practical result.[16]The charges for communal cleaning appear to fall into two components, first a general clean and secondly a deep clean when a licensee leaves the premises. Having heard the arguments by all the parties to the appeal I am satisfied that in terms of schedule 1 paragraph 1(iv) the cleaning of rooms and windows except the cleaning of communal areas is ineligible. Communal areas are defined in paragraph 8 as meaning areas other than rooms of common access including halls and passageways and does not include rooms of common access. Rooms of common use are only encompassed in sheltered accommodation which was accepted by Mr Owens was not the nature of the accommodation in this case. I do not consider as was asserted by Mr Owens that these charges can simply be regarded as falling within the provisions in regulation 12(1). Even if they otherwise would have been encompassed by regulation 12(1) they are subject to the exclusions set out in paragraph 1 of schedule 1. It will be noted that in paragraph 1(iv) window cleaning is an ineligible service charge except the cleaning of the exterior of any windows where neither the claimant nor any member of his household is able to clean them himself. There is no suggestion that a payment is made in respect of such cleaning by a local authority to the claimant or another person on their behalf. Thus the tribunal will in applying require to obtain evidence from the claimant as to whether or not he is able to clean the exterior of the windows charged for.[17]Reactive repairs and cyclical repairs and the servicing of the unspecified equipment fall properly to be considered in the manner set out in paragraph 6 and 7 of the Secretary of State’s written submission at pages 180 and 181. I do not accept that all of these are in themselves encompassed within regulation 12(1) as regulation 12 falls to be considered in respect of service charges in the context of the ineligible charges set out in schedule 1, paragraph 1 including 1(g) though 1(g) has to be applied having regarding to the exceptions set out therein.[18]These directions deal specifically with the matters raised in the course of the appeal before me. As is apparent the statutory provisions are very complex and the directions may not encompass all of the issues which may arise. It is accordingly open to the parties who now include CASS to make further submissions on matters which are not covered by these directions. (Signed) D J MAY QC Judge of the Upper Tribunal Date: 2 November 2011 A P P ENDIX Core Rent Furniture renewals and depr CCTV LL serv serv Service Test of Equip Fire Equip Refuse Disp Comm Fuel ctax Common clean Reactive repairs Cyclical repairs Window cleaning 15% Service Mgt 10% voids & bad debt Personal fuel WR TV Licence Care line Support Cass charge allowed for HB 66.34 33.17 12.02 12.02 0.00 0.00 0.00 0.00 2.84 2.84 0.53 0.53 0.82 0.82 4.78 4.78 9.74 9.74 6.14 2.87 1.90 0.00 7.21 0.00 1.92 0.00 7.19 5.04 5.51 3.86 5.57 0.00 1.36 0.00 1.15 0.00 78.44 0.00

Cited in 1 later judgment