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[2009] UKUT 12 (AAC) (19 January 2009)

 


IN THE UPPER TRIBUNAL Appeal No. CH/2726/2008

ADMINISTRATIVE APPEALS CHAMBER

1. This is an appeal by East Hertfordshire District Council ("EHDC"), brought with the permission of a legally qualified panel member, against a decision of an appeal tribunal sitting at Enfield on 16 July 2008. For the reasons set out below that decision was in my judgment wrong in law and I allow the appeal and set it aside. In exercise of the powers in section 12 of the Tribunals, Courts and Enforcement Act 2007 I make the finding of fact set out below and substitute a decision dismissing the Claimant's appeal against the decision of EHDC made on 14 December 2007.
2. The issue before the Tribunal was whether the Claimant's accommodation was "exempt accommodation" within the following definition in para. 4(10) of Schedule 3 to the Housing Benefit and Council Tax Benefit (Consequential Provisions) Regulations 2006:

"accommodation which is –

(a) …………………………………; or

(b) provided by ………. a registered charity ……where that body or a person acting on its behalf also provides the claimant with care, support or supervision."

3. The Claimant is a man now aged 39 with a degree of learning disability, which means that he needs some care and support in order to assist him to live independently. He is in receipt of the lower rate of the mobility component and the middle rate of the care component (by reason of needing frequent attention throughout the day) of disability living allowance. Hertfordshire County Council ("HCC") has the statutory obligations to provide him with care and support. I proceed on the footing that HCC also has statutory obligations to provide him with accommodation in the event of accommodation not being available to him from elsewhere.
4. The Claimant has since September 2007 been living in a two-bedroomed maisonette ("No. 3") which is owned by Mr and Mrs P. The other bedroom has been occupied by another male person pursuant to arrangements similar to those entered into in respect of the Claimant.
5. Mr and Mrs P live in a house which is no more than a minute's walk away from No. 3, and the care and support which the Claimant requires is provided to him by Mrs P. The relationship between the Claimant and Mrs P is very similar to that between a foster parent and the child being fostered, save that of course the Claimant is an adult. Between 1998 and September 2007 the Claimant lived with Mr and Mrs P as effectively part of their family, and Mrs P has been able to go on providing to the Claimant in his new accommodation the care and support which she previously did.
6. The Tribunal found as follows in relation to the care and support provided by Mrs P:

"[Mrs P] visits [the Claimant] daily to check that he is up and out of bed, washed, dressed and has taken some breakfast, prepared for lunch and organised his clothes for the day. She assists in compiling any necessary shopping list but [the Claimant] does his own shopping as and when required unless there is a major item to purchase. In which event [Mrs P] assists. A significant amount of the furniture at the property has been chosen and paid for by the Claimant. Otherwise the Claimant spends time at [Mrs P's family home] and is always to be found there on special occasions like Christmas and takes an annual holiday in the company of family P which this year will be in Sardinia."

7. The whole arrangement is known as an "adult placement scheme", and is given legal effect by an Agreement dated 1 September 2007 ("the Agreement") between (1) Mrs. P (2) the Claimant (3) a charity called "Guideposts Trust" ("Guidepost") and (4) "Adult Care Services", which can be regarded as HCC for these purposes.
8. Under the Agreement Mrs P agrees to "provide a heated and comfortable furnished bedroom for the sole use of" the Claimant, and (in essence) to provide the necessary care and support to the Claimant. The Claimant agrees to pay a specified amount of rent to Mrs P (£133 per week, which includes £21.10 for meals and other sums for hot water, laundry etc.). There is no separate tenancy agreement. Guideposts' obligations under the Agreement are as follows:

"1. Designate an Adult Placement Scheme Manager to monitor the placement and offer support, training and practical assistance to the carer.

2. Arrange payments for trial stays as appropriate.

3. Provide a bridging loan for the time the placement begins until the user's benefits are paid regularly.

Arrange payment of topping up to the carer – if needed.

Assist with the organization of an appropriate package of care, in conjunction with the user's social worker, the user and other relevant individuals, to include day care, respite care etc.

4. To arrange regular reviews of the carers.

5. To attend regular review of the user, arranged in conjunction with the user's social worker.

6. To advise the carer with regard to insurance and tax.

7. To give the carers three months notice of intention to terminate the placement except in cases of emergency.

8. In exceptional circumstances arrange some payment in lieu of notice. (Applies to confirmed permanent placement only)."

Adult Care Services agrees to "agree a level of payment, and amount of use contribution ….. in line with fairer charging", and is entitled to give one month's notice of its intention to terminate the placement.

9. Essentially, the nature and purpose of the arrangement was that HCC arranged for the fulfilment of some of its responsibilities to the Claimant by contracting with Guideposts that Guideposts would arrange the adult equivalent of a foster placement, and would take reasonable steps, by way or training and monitoring, that the foster "parent" carries out his or her obligations satisfactorily. As I understand it HCC pays an agreed sum to Guideposts in respect of the care and support, and Guideposts in turn pays the carer (in this case Mrs P) at an agreed rate, possibly topped up by payments by the Claimant from his own resources. The Claimant is liable to pay "rent" to Mrs P, it being contemplated that that would be funded by means of housing benefit.
10. It is apparent from its website that Guideposts has entered into similar adult placement schemes in respect of other persons in need of support. It therefore employs staff who locate placements, provide training to the carers, monitor their performance etc.
11. The decision under appeal to the Tribunal was a decision made by EHDC on 14 December 2007 that the Claimant's accommodation was not "exempt accommodation", and therefore in effect that the amount of his rent eligible for housing benefit was limited to the amount determined by a rent officer. A rent officer had determined that the "local reference rent" was £80 per week (which included ineligible services of £28.16 per week), which meant that EHDC awarded housing benefit of only £58.90 per week.
12. The Tribunal held an oral hearing, at which Mrs P gave evidence.
13. The Tribunal decided that the Claimant's accommodation was "exempt accommodation" and so allowed the Claimant's appeal. Having set out the facts, as appearing from the documents and Mrs P's evidence, the Tribunal set out the essence of its reasoning as follows:

"17. I find that the relationship between [Mrs P] and [Guideposts] is a very close one and where the degree of regular contact and supervision means that [Mrs P] is acting on behalf of Guideposts in all that she does for [the Claimant].

18. [Mrs P] is providing the care for [the Claimant] as a paid person and answers not to [the local authority] but to [Guideposts].

19. Although the property which is the subject of accommodation for [the Claimant] is not in the ownership of [Guideposts] and cannot be understood to have been provided by [Guideposts], I read the [Agreement] as set out in the papers to be constructed in such a way that the only logical and reasonable way to approach the issue is to read it that all the controlling interest lies with [Guideposts] at all times and the only factor missing from the situation is that [Guideposts] does not own or rent out the property in which [the Claimant] lives. I find that this does not fatally flaw the Claim for Housing Benefit/Council Tax Benefit because without the existence of such premises there would be no prospect of the assisted person being led towards an independent life and the entire scheme which is funded by [the local authority] would effectively be defeated.

20. The fact is that [Mrs P] is really an employee and acting on behalf of [Guideposts] notwithstanding how it is dressed up for Tax purposes which means that the situation considered in CH 3900 2005 and particularly at paragraph 20 is different and I am not bound by that decision of Commissioner Pacey.

21. The [Agreement] forms a legal contract of rights and obligations on the part of amongst others [Guideposts] and where in the absence of accommodation the agreement would be wholly frustrated.

22. I conclude that the property is therefore exempt accommodation and should not have been referred to the Rent Service by [the local authority]."

14. In my judgement the Tribunal's decision was wrong in law. In my judgment the only possible conclusion which the Tribunal could have reached, on the evidence before it, was that, for the purposes of the definition of "exempt accommodation", the accommodation at No. 3 is not "provided by" Guideposts, but by Mr and Mrs P. Whilst it is true that Mrs P also provides care and support, she is not of course a charity (or any of the other types of entity mentioned in the definition).

15. It must be borne in mind that the definition of "exempt accommodation" is in the context of provisions relating to housing benefit, which is of course a benefit intended to assist with payment of sums in the nature of rent or licence fee payable by a claimant in respect of his living accommodation. In my judgment, given that context, the natural meaning of the definition is that the accommodation is "provided" by the owner or other person (e.g. a tenant) who, but for the grant to the claimant of the tenancy or licence, would have the right to possession, and therefore the right to permit occupation of it, and to whom the obligation to pay rent or licence fee is owed.

15. As the Tribunal acknowledged, No. 3 is owned by Mr and Mrs P. They, not Guideposts, were entitled to permit the Claimant to occupy his room in No 3, and it was to them that the Claimant agreed to pay the rent or licence fee in return for the right to occupy. As I have pointed out, under the Agreement it was Mrs P (not Guideposts) who agreed (by Clause 1) to "provide a heated and comfortable furnished bedroom for the sole use of the service user".
16. The most which Guideposts could be said to have done, so far as the accommodation is concerned, is to have organised or arranged for it to be provided by Mr and Mrs P to the Claimant. But that in my judgment does not amount to providing it, within the meaning of the definition. I agree entirely with the decision of Mr Commissioner Pacey in CH/3900/2005, and in particular with what he said in paragraph 20):

"In my judgment "provided by" as used in regulation 10(6) will not reasonably suffer the wide interpretation adopted by the tribunal. It does not in my judgment include instructing, arranging or facilitating privately rented accommodation through a third party, as happened in the instant appeal. In this appeal it is not disputed that the local authority arranged for a third party to obtain accommodation for the claimant, a person with special needs, from a private landlord."

17. The precise basis for the Tribunal's reasoning, when closely examined, is not entirely clear. In paragraph 19 the Tribunal accepted that the accommodation "cannot be understood to have been provided by [Guideposts]". However, the Tribunal went on in that paragraph to say that "the controlling element lies with Guideposts at all times" and that the fact that Guideposts was not the owner "does not fatally flaw the claim for Housing Benefit/Council Tax Benefit because without the existence of such premises there would be no prospect of the assisted person being led towards an independent life and the entire scheme which is funded by LA would effectively be defeated."
18. As has been pointed out in EHDC's submission in this appeal, the mere fact that this particular scheme would not work if the definition is not found to be satisfied cannot affect the meaning to be given to the words "provided by", still less can it be a reason for holding that the definition is satisfied even though (as the Tribunal appears at the beginning of that paragraph to accept) the definition is not strictly satisfied. Further, whilst it is true that the fact that Guideposts was not the owner "does not fatally flaw the claim for housing benefit …..", the issue of course is not whether the claim for housing benefit is "fatally flawed", but whether the definition of "exempt accommodation" is satisfied.
19. In paragraph 17 the Tribunal said that "the relationship between [Mrs P] and [Guideposts] is a very close one and where the degree of regular contact and supervision means that [Mrs P] is acting on behalf of [Guideposts] in all that she does." In paragraph 20 the Tribunal said that "the fact is that [Mrs P] is really an employee and acting on behalf of [Guideposts] notwithstanding how that is dressed up for tax purposes." It is submitted in para 12 of the Claimant's representative's submission in reply that the accommodation is "provided under a contract of employment between Mrs P and Guidepost and as a consequence the accommodation is provided by a charity i.e. Guidepost …"
20. However, a distinction must be drawn in this respect between Mrs P's actions in acting as carer, and her action in granting a tenancy or licence to the Claimant permitting him to occupy his room. As regards the former, Mrs P may be acting on behalf of Guideposts. It matters not for present purposes whether, in carrying out her caring and support function, she is an employee or an independent contractor.
21. However, there is nothing in the Agreement which could warrant a conclusion that in letting or licensing a room in No. 3, Mrs P was acting as an employee of or in any sense on behalf of Guideposts. As I have said, the Agreement does not contain an obligation on the part of Guideposts to provide accommodation for the Claimant which it needs to employ someone else to carry out on its behalf, whereas Clause 1 of Mrs P's obligations is to "provide a heated and comfortable furnished bedroom for the sole use of the service user." If the Claimant's current accommodation were to become unsuitable (e.g. owing to a serious fire), then on the face of the Agreement Mrs P would be bound to provide some other accommodation. There would be no obligation on Guideposts to do so. Even if the Agreement could be construed as containing a term that in the event of the current accommodation ceasing to be available (for whatever reason), Guideposts would arrange substitute accommodation with another carer, that would not in my judgment mean that the substitute accommodation would be "provided by" Guideposts, within the meaning of the "exempt accommodation" definition. It would be provided by the new carer. I have considerable doubt that it could ever be a term of a contract of employment that the employee provide accommodation for another person. Even if it could, I am clear that there was no such term in the present case. Mr and Mrs P, in licensing the Claimant to occupy a room, were doing so on their own behalves as owners of No 3, and not on behalf of Guideposts.
22. I do not find it necessary to decide whether, for the purposes of the definition of "exempt accommodation", the accommodation can ever be "provided by" someone other than the owner (or other person with the right to immediate possession). It may be that there are circumstances in which that would be so, but they would be exceptional. For the reasons which I have given, there were in my judgment no such circumstances in the present case.

Charles Turnbull

Judge of the Upper Tribunal

19 January 2009