DECISION OF THE SOCIAL SECURITY COMMISSIONER
Commissioner's Case No: CH/396/2002
- My decision is as follows. It is given under section 14(8)(b) of the Social Security Act 1998.
- 1. The decision of the Sunderland appeal tribunal, held on 3rd October 2001, is erroneous in point of law.
- 2. I set it aside and remit the case to a differently constituted appeal tribunal.
- 3. I direct that appeal tribunal to conduct a complete rehearing of the issues that arise for decision.
In particular, the appeal tribunal must determine whether the claimant is to be treated as not liable to make payments to her son under regulation 7(1)(h) of the Housing Benefit (General) Regulations 1987. In the interpretation of that provision, the tribunal must follow my decision in CH/3853/2001, paragraphs 10 to 17. A copy of that decision is in the papers at pages 80 to 84.
If the appeal tribunal considers that another head of regulation 7(1) may apply, it must warn the parties and allow them to prepare a case on that provision.
The appeal to the Commissioner
- This is an appeal to a Commissioner against the decision of the appeal tribunal brought by the claimant with my leave. The local authority does not support the appeal.
The history of the case
- The claimant has lived in the same property since at least 1994. She lived there first as a council tenant. She then purchased the property, with the help of a loan from her son, and continued to live there as owner. As a result of her increasing debts, her son tried to persuade the local authority to buy back the property from his mother. Those attempts met with no success. So, the claimant transferred the property to her son. She then entered into a tenancy agreement with him and remained in the property as a private tenant. In those circumstances, the local authority refused her claim for housing benefit. The claimant exercised her right of appeal to an appeal tribunal, but the tribunal confirmed the refusal of the claim.
The law
- The refusal of the claim was based on regulation 7(1)(h) of the Housing Benefit (General) Regulations 1987:
'(1) A person who is liable to make payments in respect of a dwelling shall be treated as if he were not so liable where:
(h) he previously owned, or his partner previously owned, the dwelling in respect of which the liability arises except where he satisfied the appropriate authority that he or his partner could not have continued to occupy that dwelling without relinquishing ownership'.
The tribunal's reasoning
- The tribunal correctly identified regulation 7(1)(h) as the relevant legislation. It accurately summarised the terms of that provision. It then referred to the claimant's argument, which was in essence that given the state of both her health and her finances, the sale to her son was the only way that she could continue to live in the property. The tribunal rejected this argument. Its reasons were:
'Having considered all these matters the Tribunal is satisfied that the arrangement entered into between the appellant and [her son] was one designed to take advantage of the Housing Benefit Scheme and accordingly the Council were justified in their decision that she was not entitled to Housing Benefit.'
Did the tribunal go wrong in law?
- Yes, it did. It made one of three mistakes.
Regulation 7(1)(l)
- The first possibility is that, instead of confirming the refusal under regulation 7(1)(h), the tribunal substituted a refusal under regulation 7(1)(l). That possibility is supported by the language used by the tribunal in the passage I have quoted. If that is what the tribunal did, it did it without giving any warning to the parties and without allowing them to make submissions on it. That would make its proceedings in breach of both natural justice and the claimant's Convention right to a fair hearing under article 6(1) of the European Convention on Human Rights and Fundamental Freedoms.
- I would be surprised if that is what the tribunal. If a tribunal is considering whether to change the basis of a decision, it is almost instinctive to warn the parties. The absence of any warning provides a strong argument against the tribunal making this mistake. So is the fact that the statement of reasons contains a clear statement that the decision depended on regulation 7(1)(h).
Regulation 7(1)(h) and motivation
- The second possibility is that the tribunal considered that the claimant's motivation was relevant to the application of regulation 7(1)(h). If that it is what it did, it misinterpreted the provision. The issue was whether the claimant could have continued to live in her home without relinquishing her ownership. Motivation was irrelevant to that.
- Again I would be surprised if the tribunal made this mistake. The terms of regulation 7(1)(h) are clear. There is no scope for misinterpreting it in this way. Tribunals are used to interpreting 'could not' in social security legislation and to applying provisions that depend on motivation. It would be astonishing if the tribunal confused the two concepts of ability and motive.
- So, why did the tribunal refer to taking advantage of the housing benefit scheme? I suspect that the tribunal used this expression as a way of referring to regulation 7(1)(h). The expression is often used not only to refer to regulation 7(1)(l), but as an umbrella term to cover all the heads of regulation 7(1). I have seen it used in that way both by tribunals and by local authorities. In every case, it has led to confused thinking and poor quality decision-making. Regulation 7(1) contains a number of heads, each with its own conditions that must be satisfied if it is to be applied. The use of general, umbrella terminology diverts attention away from those conditions and can result in transferring conditions from one provision to another where they do not belong.
Adequate findings
- The third possibility is that the tribunal did not make adequate findings of fact and give adequate reasons. This assumes that the tribunal was applying regulation 7(1)(h), did not misinterpret it and did not take an irrelevant factor into account in applying it. This is the most likely of the three mistakes for the tribunal to have made.
- The starting point was for the tribunal to make findings of fact on what had happened. It then had to decide whether, on its findings of fact, the claimant could have continued to live in her home without transferring ownership to her son or to someone else. The tribunal set out the argument put on behalf of the claimant, but it did not make it clear whether or not it accepted the evidence of the claimant and her son. Nor did it investigate the extent of her financial difficulties or of her health problems that were said to be a result of those difficulties. At least, if it did, the evidence is not recorded in the chairman's record of proceedings. So, the tribunal did not have a proper foundation of evidence from which to make its findings and it did not in fact make findings. It did not investigate or make findings on the central issue of what other possibilities were open to the claimant. In these respects at least, the tribunal went wrong in law.
The local authority's observations
- The local authority's observations do not support the appeal.
- The local authority points out that the claimant's occupation of the property was not at risk if she defaulted on repayments of her son's loan to buy the property. That is correct as a matter of fact. However, it takes too narrow an interpretation of regulation 7(1)(h). I dealt with the interpretation of 'could' in CH/3853/2001, paragraphs 10 to 17. I do not need to repeat it, as a copy of the decision is in the papers. It is not merely legal compulsion, but also practical compulsion, that has to be considered. That involves considering the nature and extent of the claimant's health and financial problems. The point made by the local authority is relevant to the application of regulation 7(1)(h), but not decisive.
- The local authority also points out that by transferring the property to her son the claimant deprived herself of the equity in the property. That is also correct, although it overlooks the debts for which the son became responsible. The point is also relevant to whether another head of regulation 7(1) might apply, specifically head (l). But the case has not been presented on that basis.
Disclosure of information to appeal tribunals
- There is a feature of this case which I mention because it is of concern to me and to my fellow Commissioners who are hearing housing benefit and council tax benefit appeals. In response to a point made by the claimant's son, the local authority has now produced a copy of a record of an interview with him. This is not the first time that relevant information has been provided by a local authority only when a case has come before a Commissioner. I make no judgment on the motives of the officers involved. What concerns me is what they do.
- On appeal against a local authority's decision, the appeal tribunal has to undertake a complete reconsideration of the issues that arise. In effect, the tribunal stands in the position of the decision-maker in the local authority and makes the decision afresh. It can only fulfil its duty if it is provided by the local authority with all material from its files that is potentially relevant to the appeal. The Secretary of State in social security appeals takes that approach and local authorities must do the same. Without it, the appeal tribunals cannot provide good quality decision-making for both parties. Commissioners are primarily concerned with issues of law, not of fact. It is too late to produce evidence to a Commissioner. The Commissioner will determine whether the tribunal went wrong in law on the evidence before it.
- I direct the local authority in this case to provide to the tribunal and the claimant any other evidence from its files that is, or may be, relevant to the issues raised by this appeal. This is not just a requirement for this case. It is a duty that must be complied with in all cases at the time the local authority makes its submission to the appeal tribunal.
Summary
- The appeal tribunal went wrong in law and its decision must be set aside. The evidence has not been fully investigated, I am not in a position to give a final decision. I direct a rehearing so that the issues may be further investigated.
| Signed on original |
Edward Jacobs
Commissioner
25th April 2002 |
