MM v Secretary of State for Work and Pensions (IS) [2012] UKUT 358 (AAC)

UKUT-AAC
MM v Secretary of State for Work and Pensions (IS)
[2012] UKUT 358 (AAC) · 2012-10-11
[1]The First-tier Tribunal’s decision involves an error of law. I therefore allow the Appellant’s appeal to the Upper Tribunal and set aside the First-tier Tribunal’s decision. There will need to be a re-hearing before a fresh tribunal.[2]Simply because this appeal to the Upper Tribunal has succeeded on the law does not necessarily mean that the appellant will win at the FTT re-hearing on the facts . It all depends on the findings of fact that the new FTT makes in the light of the relevant law and on the evidence before it. The background to this appeal[3]In summary, the issue in this appeal was whether or not the Appellant had capital in excess of £16,000 such that he was not entitled to income support. The Appellant had claimed income support from 16 July 2009, declaring a small amount of savings. It subsequently came to light that he owned a house which he was not apparently living in.[4]The Secretary of State’s decision maker took the view that this was capital that was available to the Appellant which was not subject to any relevant “disregard”. As the Appellant’s interest in the property was valued at over £16,000, a revision decision was taken on 10 May 2011 that the Appellant was not entitled to income support with effect from 16 July 2009.[5]The Appellant’s case was that the property in question, No 65, was the family home. He argued at the outset that he was temporarily not living there. Instead, he said that he was staying at No 16, his father’s home (“the grandfather’s house”), in order to act as his father’s 24/7 carer, but with every intention of moving back to No 65 when his father’s condition had improved. The First-tier Tribunal’s findings and reasons in this case[6]The Wakefield First-tier Tribunal (FTT) dismissed the Appellant’s appeal at a hearing on 31 January 2012 and so confirmed the Secretary of State’s decision dated 10 May 2011. In doing so the FTT made various findings of fact. These may be summarised as follows:(i) the Appellant was the co-owner of No 65 with his wife, having bought that house in 1999;(ii) the Appellant had not lived at No 65 since 2002 but rather lived with his wife at No 16, so as to look after his elderly father;(iii) No 65 was unoccupied and not let;(iv) the Appellant, although he visited No 65 occasionally, or even daily, for a few hours, had in effect abandoned No 65; (iv) the Appellant had moved back to No 65 with effect from 31 October 2011.[7]The Appellant’s representative lodged grounds of appeal, arguing that the FTT had failed to make adequate findings of fact as to the nature of the Appellant’s occupancy of and/or absence from No 65. The District Tribunal Judge gave permission to appeal, noting that the terms of the statutory disregard in paragraph 1 of Schedule 10 to the Income Support (General) Regulations 1987 (SI 1987/1971; see also regulation 2(1)) may not have been adequately addressed. This disregard relates to the “dwelling occupied as the home”.[8]When giving directions on the appeal, I commented that there might also be an issue as to whether the FTT had dealt with the co-ownership question adequately. The proceedings before the Upper Tribunal[9]Ms Sue Clapham has provided a written submission on the appeal on behalf of the Secretary of State at the Department for Work and Pensions (DWP). She supports the appeal to the Upper Tribunal but not in such a way as to assist the Appellant in the long run. Ms Clapham’s argument is that, applying the proper meaning of “normally reside”, there was only one possible outcome on the evidence in this case. Given that the Appellant and his family had not lived at No 65 for the previous 9 or 10 years, the only possible conclusion was that they lived at the grandfather’s house and not at No 65. It followed that No 65 was the Appellant’s capital asset and not subject to any relevant disregard.[10]However, Ms Clapham argues that there was an error of law on the co-ownership point. The Appellant and his wife were living in the same household (at No 16) and were the sole co-owners of No 65. The FTT had therefore been wrong to fix the Appellant as owning the value of only a half share in the property. The couple’s assets had to be aggregated. On that basis the Appellant owned the whole value of the property (which appears to have been about £73,000). Ms Clapham therefore invites me to allow the appeal, to set aside the decision for this reason only, and re-make the decision to the same effect, i.e. that the Appellant owned capital above the £16,000 limit and so was not entitled to income support as from 16 July 2009.[11]The Appellant’s representative argues that the FTT erred in law on the issue of occupancy “as the home”, and invites me to allow the appeal and send the case back for rehearing.[12]My initial response to reading the case file was that, irrespective of whether the FTT committed any error of law, there could be only one practical outcome on the facts of this case. However, I now take the view that(i) the FTT certainly erred in law; and(ii) there is sufficient doubt about the eventual outcome such that the Appellant should have the benefit of a fresh hearing before a new tribunal, which can explore all the facts in the light of the proper statutory test. The Upper Tribunal’s analysis Introduction[13]There is certainly considerable force in Ms Clapham’s argument. If indeed it was the case that the Appellant had not lived at No 65 for the previous 9 or 10 years, it may be difficult to see how No 65 could be the “dwelling occupied as the home”. But the matter may not be that straightforward.[14]Paragraph 1 of Schedule 10 to the 1987 Regulations provides for “The dwelling occupied as the home” to be disregarded as capital, but “only one dwelling shall be disregarded under this paragraph”. Regulation 2(1) then defines “the dwelling occupied as the home” as (ignoring terms that do not apply in the present context) “the dwelling ... normally occupied by the claimant as his home” (emphasis added).[15]There is, inevitably, a considerable body of case law on the meaning of “the dwelling ... normally occupied by the claimant as his home” in the context of various means-tested benefits. These authorities make it clear that the question is ultimately one of fact, depending on all the circumstances and the relevant evidence in the particular case (see CH/1786/2005). According to Mr Commissioner Howell QC, “it is a mistake to try and chop up what is essentially a single factual question, of what dwelling an individual is currently normally occupying as his or her home, into a series of individual tests for particular factors such as the ‘centre of interest’” (CH/1786/2005 at paragraph 15).[16]If I was satisfied that the FTT in the present case had properly applied the “normally occupied as his home” test without any further gloss, I would have had no hesitation in upholding the tribunal’s decision. However, there are three problems with the FTT’s statement of reasons. Problem 1 – the lack of sufficient fact-finding by the FTT[17]The first problem is that the FTT did not find sufficient primary facts; associated with this, the inferences drawn from those facts are not adequately explained. The Appellant’s clear evidence was that he returned to No 65 every day and slept there for a couple of hours every afternoon (“he says he goes there to sleep in order to get some peace and quiet because his father tends constantly to shout his name”). The FTT seemed to accept this evidence, albeit rather grudgingly, finding that “he returned to No 65 for a few hours occasionally (or even daily)”. This was immediately followed by the tribunal’s conclusion that, despite this use of No 65, the Appellant “had, effectively, abandoned that property”.[18]It is unclear how the FTT squared the factual conclusion that the Appellant had “effectively abandoned” No 65 with its further findings that:(a) he had carried out repairs on No 65, such as fixing a shower and a burst pipe;(b) he paid gas and electricity bills on No 65 of about £60 a quarter for each utility (the FTT simply stated that “the amount of consumption is comparatively small”);(c) he occasionally ate snacks at No 65 and kept food there;(d) he kept clothes at both addresses;(e) his bank and insurance statements went to No 65, but other mail was delivered to No 16; and(f) he had not let No 65, in part because he wanted to be able to use the house every day. Plainly findings (a)-(f) might support a conclusion that the Appellant made limited use of No 65, but they hardly reflect abandonment of that property. Rather, they are all evidence that he had not abandoned No 65.[19]Furthermore, there were no findings as to the respective size of each property and the living arrangements at the grandfather’s house. There was no finding as to where the Appellant’s belongings (other than his clothes) were stored – for example, was his furniture all at No 65 or at No 16? Or divided across both properties? Where were his ‘white goods’? There were also no findings as to other factors which might be relevant, e.g. at which address he was registered to vote, where he was liable for council tax (for example, was there an exemption in place for No 65 on the basis that it was unoccupied?), and where he was registered for purposes of e.g. DVLA, family doctor, dentist etc.[20]There was also, crucially, no finding as to the relative proximity of the two properties. It may be that this was a matter of local knowledge to the tribunal judge. If so, it was not made clear. The wonders of the internet, and in particular Google map, demonstrate that No 65 and No 16 are almost on adjoining streets; the two roads in question are about 100 metres apart and linked by a third street. The relative proximity of the two houses may have further significance, as discussed below in the context of Problem 3. Problem 2 – the legal test applied by the FTT[21]The second problem with the FTT’s statement of reasons concerns the legal test to be applied. In order for the disregard in paragraph 1 to apply, No 65 had to be found to be “the dwelling ... normally occupied by the claimant as his home”. No 65 was on any reckoning at least in principle a “dwelling”, and there was evidence that the Appellant carried out the three ‘basic necessities of life’ (sleeping, cooking and eating) at least some of the time at that address ( Wright v Howell [1947] 92 SJ 26, but see also Uratemps Ventures Ltd v Collins [2001] 3 WLR 806 ). The question, therefore, was whether he “normally occupied [No 65] as his home”, bearing in mind that “normally occupied” is a less demanding test than “permanently occupied” (CH/1085/2002 at paragraph 13). Furthermore, “It is plain that as a matter of general law occupation does not require the personal presence of the tenant if the property is under her control and is being used by her to store her goods and for no other purpose” (R(H) 9/09 at paragraph 13). Ms Clapham refers in her submission to various authorities from the case law on the meaning of “normally reside” (e.g. Chief Adjudication Officer v Bate , reported as R(IS) 12/96). However, “normally reside” is not necessarily quite the same as “normally occupy ... as his home”.[22]The difficulty with the FTT’s decision is that nowhere does the judge actually pose the question as to whether the Appellant “normally occupied” No 65 “as his home”. Rather, the question is put in different ways with different nuances of meaning. For example, the FTT found he had not “lived there” (i.e. at No 65) since 2002 (at [2]). The Appellant had “in fact, lived with his father in his father’s house since 2002” (at [4]) but had “moved back into his own house” in October 2011 (at [13]). Finally, the FTT concluded that the Appellant “was in permanent residence at his father’s property” (at [14]). It may reasonably be said that all these findings are by definition inconsistent with holding that the Appellant normally occupied No 65 as his home. However, a tribunal acts at its peril when it defines the relevant legal test in terms of “living at” or “permanently residing at” property B when the proper test is whether or not the Appellant “normally occupies ... [property A] ... as his home”.[23]The problem with the FTT’s approach is compounded by the factors which the tribunal took into account in reaching its decision. Reading the statement of reasons, it is clear that the tribunal was strongly influenced by two factors.[24]First, the FTT devoted a significant part of its statement of reasons to exploring whether it was necessary for the Appellant to live at No 16 in order to care for his father. It was first said that the grandfather’s care needs required the Appellant to ‘live in’ (my words, not the tribunal’s) to deliver that care (at [4], although this may be simply the FTT reciting the Appellant’s case). Then the FTT was “curious” about the Appellant’s hope that his father would no longer require “24 hour care”, given the grandfather’s advanced years (at [10]). Finally the FTT concluded that, given that the Appellant had continued to provide care after October 2011, it was “therefore clear that actual residence in his father’s house was not a necessary part of his delivering care to his father” (at [13]). Putting to one side any difficulty associated with the fact that events occurring in October 2011 were not circumstances obtaining at the time of the Secretary of State’s decision in May 2011 (see section 12(8)(b) of the Social Security Act 1998), any requirement (or not, as the case may be) to ‘live in’ at No 16 to provide care was not conclusive of the question for the tribunal, which was whether the Appellant “normally occupied [No 65] as his home”.[25]Second, the FTT was plainly exercised by the fact that No 65 was “empty” (although the limited findings of fact do not suggest that the property was ‘unfurnished’ or literally empty in a physical sense; was the Appellant sleeping on the floor each afternoon when he escaped from the grandfather’s demands?), had not been let out to tenants and the Appellant was deriving no income from it (paragraphs [5], [8] and [14]). Again, it is less than clear how those factors helped answer the central question for the tribunal, which (I repeat) was whether or not the Appellant normally occupied No 65 as his home. Problem 3 – the ‘two properties/one home’ issue unexplored[26]If the evidence reveals that the Appellant spent the majority of his free time and slept every night at No 65, that he had had the bulk of his belongings there since 2002 (at least until October 2011), and that the Appellant’s use of No 65 was no more than occasional and minimal, then a tribunal might be properly satisfied that the Appellant normally occupied No 16 rather than No 65 as his home. If so, that will be the end of the matter.[27]However, the question of which property was the dwelling “normally occupied” as the Appellant’s home may not be a binary choice. The next tribunal must therefore consider a further point which was not addressed by the previous FTT. I describe this as the “two properties/one home issue”. In e xceptional cases a claimant may occupy two physically separate units of accommodation as a single home. This unusual possibility is contemplated by the legislation. True, paragraph 1 of Schedule 10 to the 1987 Regulations provides for “the dwelling occupied as the home” to be disregarded as capital, and that “only one dwelling shall be disregarded under this paragraph”. However, it would be a mistake to read “only one dwelling” as being synonymous with “only one property”, for at least two reasons.[28]First, the obvious policy imperative is that a claimant should only qualify for a disregard in respect of a single home , rather than a single property (see e.g. CH/1786/2005 at paragraph 17). As Mance L.J. (as he then was) observed in Secretary of State for Works and Pensions v Miah [2003] EWCA Civ 1111 (reported as R(JSA) 9/03), dealing with the parallel capital disregard in the jobseeker’s allowance scheme, the phrase “only one dwelling shall be disregarded under this paragraph” was “probably directed to situations in which a claimant might claim to occupy, either alone or with his family, more than one house, including a second house abroad, rather than to situations where it could properly be said that a claimant had one home only, but spread over two physical buildings” (at paragraph 60).[29]Second, and putting the point beyond any doubt in this context, the term “dwelling” is defined for the purposes of the income support scheme (but not, curiously, for jobseeker’s allowance) as “any residential accommodation, whether or not consisting of the whole or part of a building and whether or not comprising separate and self-contained premises ” (Social Security Contributions and Benefits Act 1992, section 137(1), emphasis added).[30]The classic two properties/one home scenario arises where one of the properties alone is not large enough to accommodate the claimant’s family (see R(SB) 10/89, where two properties 600 yards apart, neither big enough to house the family, comprised one home; see also Secretary of State for Work and Pensions v Miah , another large family case, where the two properties were closer and separated by only two other houses). However, I do not understand the authorities as holding that two physically separate properties can constitute a single dwelling normally occupied as the claimant’s home only where one of those properties alone is not large enough to accommodate the family unit as a whole. This is simply the most typical example of an admittedly unusual occurrence. As Mance L.J. explained in Miah (at paragraph 48, emphasis added):
“A person may acquire two neighbouring houses or flats, but may not or may not be able to incorporate them into one physical building. He may nonetheless, although no doubt relatively rarely, occupy them to all intents and purposes as if they constituted a single enclosed unit. This is particularly likely , if, as here, neither house by itself caters for all his family’s needs.”
[31]As Mance L.J. further noted in Miah , “cases of the present nature are fact-intensive” (at paragraph 59). Thus in R(SB) 10/89 Mrs Commissioner Heggs found that the appeal tribunal had erred in law by concluding that the distance between the two properties was the crucial issue:
“Although the locality of the units of accommodation is an important factor, all other relevant factors must be taken into account in determining whether or not the definition of ‘the home’ is satisfied”
(at paragraph 14). In finding that the claimant in R(SB) 10/89 occupied both properties as his home, the Commissioner indicated that she had been influenced by the following factors (also at paragraph 14):
“Neither property was capable of accommodating all members of the assessment unit; the mode of life of the assessment unit supports the conclusion that the house at F Road was in effect “an extension” to or “an annex” to the house in B Street, it was not suggested at the date of the adjudication officer’s decision or at any other time that the claimant had purchased the house at F Road as a potential investment; the two houses in question were within walking distance of each other and were not incompatible with the conclusion that they constituted a single unit of accommodation. I have considered the interpretation given to “normally occupied” and I am satisfied that the claimant’s assessment unit “normally occupied” the two houses in question. A sharp distinction exists between a claimant who owns two houses, each of which can accommodate all members of his assessment unit and which are used at different times for different purposes e.g. one during weekdays and one during weekends and cases such as the present one where each house is inappropriate for the size of the assessment unit so that by necessity both houses in question are used to accommodate the assessment unit. It cannot be overstressed that each case must be determined by reference to its individual facts.”
[32]The Commissioner thus identified four relevant factors in the first sentence of the extract quoted above. In the present case, the first of those factors (one property alone being too small) does not appear to be an issue. However, the other three factors (mode of life, purpose of acquisition and geographical proximity) may well all be found to be present on the facts of the current appeal. Again, I do not regard the Commissioner’s reference to the “sharp distinction” drawn between the two sets of circumstances described as meaning that the “two properties/one home” scenario can only arise where either property alone is not large enough to accommodate the claimant’s whole family. To hold as such would be inconsistent with the conclusion that “It cannot be overstressed that each case must be determined by reference to its individual facts”.[33]It follows that a tribunal must adopt a holistic approach to the determination of this question, having considered all the relevant facts. The Court of Appeal in Miah also held that a functional and purposive approach should be taken, rather than a purely structural test. As Ward L.J. explained, a dwelling “is not necessarily confined to a single building” (at paragraph 26). Rather, his Lordship had “the impression that the legislature intended to convey the function to be served by the concept of a dwelling rather than to connote its constituent elements, the bricks and mortar of the dwelling. The function is a place serving as home for the claimant” (also at paragraph 26).[34]Encapsulated in a single sentence, the claimant’s home “is the place where he lives, where he eats, sleeps, bathes, relaxes, enjoys with his family” (per Ward L.J. in Miah at paragraph 32). In making that assessment, the Court of Appeal approved (at paragraph 27) the formulation adopted by Mr Commissioner (now Judge) Bano earlier in those same proceedings in the following terms:
“A test for determining where home is can conveniently be expressed in the way the Commissioner directed the Tribunal to approach the question, viz., by asking whether ‘the claimant’s arrangements were such that one house was, in effect used as an annex of the other, or to put it another way, whether this was a single home on a split site. Occasional use of the second house by the claimant or his dependent children will not assist him, because the tribunal must be satisfied that the second house was “normally” occupied by the claimant as his home’.”
[35]In applying the test in this way, it is important to bear in mind that the inquiry for the purposes of paragraph 1 of Schedule 10 and regulation 2(1) must be directed to establishing which is the dwelling “normally occupied by the claimant as his home” (see also Mance L.J. in Miah at paragraph 52). In the present case the Secretary of State’s representative argues that there is no mention of the Appellant’s wife or children living at or visiting No 65 since 2002. It may be, of course, that the question was simply not asked. However, the test under the legislation, as interpreted by the case law, is whether or not the Appellant himself in effect used No 65 as an annex to No 16 and so had “a single home on a split site”.[36]I am also not persuaded on the facts of the present case that paragraph 3(1) of Schedule 3 extends the scope of that inquiry to considering which is the dwelling normally occupied by the claimant’s family as their home. This is because Schedule 3 is concerned solely with housing costs, and in the present case No 65 was found to be mortgage-free, so there is no evidence of any need to determine amounts in accordance with that Schedule (see paragraph 17(1)(e)).[37]Finally, Ward L.J. in Miah also referred “if one needs to look further” to seeing where “commonsense, fairness and justice” take one in applying the statutory test (at paragraph 28). However, Mance L.J. made no express reference to such broader considerations, treating the matter as a narrow one of construction, while Nelson J. agreed with both of their Lordships’ judgments. I would just respectfully suggest that some caution needs to be exercised in this respect.[38]In the present case the FTT judge, although he did not put in quite these explicit terms, clearly considered that “commonsense, fairness and justice” meant that the Appellant should have either sold No 65, to realise its capital value, or let it out to tenants for the duration. In that way, of course, the Appellant would have been self-sufficient and would not need to have relied on a means-tested social security benefit. Furthermore, it might be thought to be in the wider public interest that scarce economic resources such as housing are kept in full use rather than being left “empty”.[39]Another FTT, however, might take a very different view. It might consider that the Appellant was to be commended for the considerable personal sacrifices involved in providing such a level of care, which may have saved the State much more by way of public expenditure than if the grandfather had had to be cared for by way of residential care (the grandfather was said to be in receipt of the higher rate of attendance allowance and was variously described as bed-bound or house-bound). It might also consider that the Appellant was not to be criticised either for his optimism that his father’s condition would improve or for his concern that he might be unable to evict tenants.[40]It may therefore be best if the primary focus of the inquiry as to what constitutes the Appellant’s dwelling had been as set out at paragraph 34 above. It may well be difficult for any tribunal, on the evidence currently available, to conclude that, at all material times, the Appellant normally occupied No 65 as his home. However, the FTT in this case should have considered whether the Appellant normally occupied No 16 and No 65 together as his home, with No 65 as in effect an annex. Occasional use – a term which ultimately is a question of fact – would not suffice. Conclusion[41]For the reasons explained above, the decision of the First-tier Tribunal involves an error of law. The tribunal failed to find sufficient facts, failed to apply the correct legal test and failed to consider the possibility that the dwelling occupied as the Appellant’s home comprised both No 16 and No 65. I therefore allow the appeal, set aside the FTT’s decision and direct a re-hearing before a new tribunal, which should follow the directions and guidance above (Tribunals, Courts and Enforcement Act 2007, section 12(2)(a) and 12(2)(b)(i)). Signed on the original Nicholas Wikeley on 11 October 2012 Judge of the Upper Tribunal

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