[2008] UKSSCSC CH_2411_2006 (17 January 2008)

CH/2411/2006

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1.	The decision of the Reading tribunal given on 23 February 2006 is erroneous in point of law.  Although an oral hearing was requested by one of the parties, I consider this is unnecessary and refuse the application. The matter can be dealt with adequately on the basis of the written evidence.   I set aside the tribunal’s decision and in accordance with paragraph 8(5)(a) Schedule 7, Child Support Pensions and Social Security Act 2000 I substitute my decision which is that the benefit paid to the Housing Association (‘the landlord’) in respect of the claimant for the period 25 May 1998 to 4 August 2002, a sum of £14,555.48, is recoverable from both the landlord (to whom it was paid) and the claimant.  Neither the tribunal nor the Commissioner has the power to decide to what extent any concurrent liability should be enforced against a landlord rather than a claimant.  The local authority’s discretion as to the party from whom it seeks recovery is a question for the local authority alone.  It must consider the representations made by the parties, but subject to that its exercise of its discretion is subject to challenge only on the narrow grounds available on an application for  judicial review. 

2.	The tribunal allowed the landlord’s appeal and found that overpaid benefit was not recoverable from it.  As the tribunal decided a question which is within the discretion of the local authority, and is a question for the local authority alone, not for the tribunal, it exceeded its jurisdiction. This renders its decision erroneous in point of law.  There was a further error, in that the tribunal failed to record a decision in respect of the claimant.  The landlord has suggested that this was not really in issue, but I note that the claimant did indeed appeal against the local authority’s recovery decision and therefore a decision concerning her appeal should have been recorded.  The landlord is, however, correct in stating that the claimant, far from disputing that there was a recoverable overpayment, asked that the tribunal should find that the overpayment was recoverable from her, and not from her landlord.  Representations were made to the tribunal on the claimant’s behalf by the Shelter legal team, but she has otherwise played little part in this appeal, and in particular has failed to respond to various invitations which have been issued to her by the Commissioners Office.  There can be no doubt that she is aware of this appeal and of the representations made by the other two parties.  Therefore, and bearing in mind that she invited the tribunal to find the overpayment recoverable from her, there is no injustice in my recording a decision in the absence of any further representations from her that the overpayment is recoverable both from her and from the landlord to whom the benefit was paid.

3.	Leave to appeal was granted in this case by the tribunal chairman and the appeal has thereafter been subject to regrettable delay.  The claimant failed to make a submission after she had been invited to do so on 3 November 2006.  Mr Commissioner Rowland issued further directions on 6 August 2007 directing that any further observations were to be made by the parties within one month of that direction being issued.  No further submissions were received with the result that the matter has been listed for hearing.  As the law in this complex area can now be regarded as settled by C(H) 6/06, I can deal with the facts comparatively briefly.  In 2002 the Department for Work and Pensions superseded the claimant’s entitlement to income support from 1995 on the basis of the claimant’s alleged cohabitation with a man who was in remunerative work.  The claimant appealed against that decision, though she had requested that any appeal hearing was delayed until after her court case was heard.  I note that on 14 February 2003 the claimant pleaded guilty at Reading Crown Court to various charges of fraudulently obtaining housing benefit, council tax benefit and income support.  The indictments against her relate to charges from 2 August 1996 onwards.  The tribunal which heard her appeal against the income support supersession on 15 January 2004 (by coincidence, the same chairman as dealt with the housing benefit appeal on 23 February 2006) revised the Secretary of State’s decision and found there was an overpayment of income support for the period 25 May 1998 to 23 September 2002.  This was a shorter period than covered by the original DWP decision and overpaid benefit, which was found to be recoverable, was recalculated in the sum of £18,870.73.

4.	The decision making process in relation to overpaid housing benefit and excess council tax benefit appears to have been  protracted.  The local authority acted promptly to cease payment of benefit when evidence came to its attention concerning questions over the claimant’s continued entitlement. In August and September 2002 it obtained witness statements from officers of the landlord. These underpinned the successful prosecution of the claimant early the following year.  The local authority’s first decision on overpaid benefit was issued to the claimant on 27 September 2002 claiming repayment of overpaid housing benefit for the period 7 April 1997 to 4 August 2002 in the sum of £17,841.89, and excess council tax benefit for a similar period in the sum of £3,119.41.  It is clear that even at this stage the landlord was aware that the local authority might ask it to repay the overpaid benefit. I note that in information supplied to support the possession summons it issued against the claimant in November 2002 (see page 242 of the tribunal bundle) the landlord argued in support of the possession summons that in addition to the claimant’s existing rent arrears, the local authority intended to claim back from the landlord overpaid housing benefit in the sum of approximately £17,000.  I note also that in a letter dated 14 January 2003 (page 134 of the bundle) the landlord was seeking guidance from the local authority, and acknowledged that the local authority could recover the overpayment either from it or from the claimant.  Slough County Court had by this time already made a suspended possession order against the claimant and its order dated 7 January 2003 can be seen at page 110 of the tribunal bundle.

5.	The excess council tax benefit is not in issue in the present appeal.  The only person from whom it could be recovered is the claimant.  However in the submission made on her behalf in the appeal to the tribunal, the claimant’s then representative had argued that there should be no recovery of any benefit for any date before 25 May 1998.  The local authority at this point became aware of the tribunal’s decision of 15 January 2004 and it revised its decision. The new decision was that there was no recoverable overpayment for any date before 25 May 1998.  This reduced the excess council tax benefit to £2,477.35, and reduced the  housing benefit overpayment to £14,555.48 for the period 25 May 1998 to 4 August 2002.  That revised decision was issued on 17 November 2005.  No one has suggested that the overpayment has been incorrectly calculated, and I note that the local authority obtained all the evidence it reasonably could to enable it to consider underlying entitlement.  Given that no one has disputed that £14,555.48 represents the correctly calculated overpayment for the period, I make no further mention of this aspect of the appeal. 

6.	The appeal before me is that of the local authority.  The claimant, who I can see from the evidence supplied on her behalf, has very considerable health problems as well as difficult social circumstances, has not participated further in the appeal.  The landlord’s solicitors, while urging that the tribunal’s decision should stand, nonetheless claim that the tribunal was wrong to reject its arguments under regulation 101 Housing Benefit (General) Regulations.  The landlord’s position on regulation 101 has at all times been misconceived.  The version of regulation 101 in force at the time the decision was made came into force from 1 October 2001.  This, for the first time, provided some limited protection from recovery for landlords who were able to show that they had brought themselves within the circumstances set out within that regulation.  Before 1 October 2001, there was no such protection for a landlord.  It could have no effect before that date, and therefore even if the argument on regulation 101 was well made, it would assist the landlord in this case only for the period 1.10.2001 – 4.8.2002. To take advantage of regulation 101, the landlord needed to notify the relevant authority in writing that he suspected that there had been an overpayment.  It was not available to a landlord who had colluded with the claimant so as to cause the overpayment, or who had acted or neglected to act in such a way as to contribute to the period, or the amount, of the overpayment.  The landlord’s solicitors persisted in arguing that the landlord had made such disclosure, relying on the witness statements obtained by the local authority from officers of the Housing Association.  As was pointed out by the local authority’s adviser, Mr John Zebedee (co‑author of a well known text on housing benefit and council tax benefit) the landlord’s officers had only given evidence after the local authority had suspended payment, and therefore had not, during the award of benefit, notified the relevant authority that it suspected that there had been an overpayment.  The tribunal chairman, in his statement of reasons for the decision, made the same point.  

7.	Neither the tribunal, nor the parties to this case, can be criticised for failing to take into account the point established by R(H)6/06, which was not published until some four months after the date of the tribunal hearing. In R(H) 6/06 a Tribunal of Commissioners considered the history of judicial interpretation of regulation 101 as it was between 1 October 2001 and 9 April 2006, from which date it was replaced by an amended regulation 101.  The tribunal in this case sought to apply R(H) 3/04, another decision of a Tribunal of Commissioners, which considered the practical implications of the Court of Appeal’s decision in Secretary of State for Work and Pensions v. Chiltern District Council [2003] EWCA Civ 508.  As noted by the Tribunal of Commissioners in R(H) 6/06, the Chiltern decision had confronted the Tribunal of Commissioners with what appeared to be “the novel situation of a right of appeal being conferred in respect of a non justiciable exercise of discretion” (paragraph 23 R(H) 6/06).  R(H) 6/06 follows B v.  Secretary of State for Work and Pensions [2005] EWCA Civ 929 in which the Court of Appeal affirmed a long line of earlier authorities accepting a distinction between “recoverability” and “recovery”.  Where legislation provides that an overpayment is recoverable from two parties, there is a right of appeal against the decision that there has been an overpayment, i.e. the ‘recoverability’ decision, but not against the ‘recovery’ decision, which is an executive discretion.

8.	This still leaves the period 25.5.1998 – 30.9.2001 to be considered. Could the landlord take advantage of the version of regulation 101 in force at that time? The answer to this must be ‘no’. Until the Court of Appeal’s decision in Chiltern it did not occur to anyone that there was a right of appeal against a recovery decision, as opposed to a recoverability decision. Regulation 101 must be read in a way that is compatible with Section 75(3) Social Security (Administration) Act 1992. This provided, as it stood up to 30.9.2001:

                  An amount recoverable under this section is in all cases recoverable from the 
                  person to whom it was paid; but, in such circumstances as may be prescribed,     
                  it may also be recovered from such other person as may be prescribed.

Regulation 101(1)(a) provided that where the overpayment was in consequence of a misrepresentation or failure to disclose a material fact, recovery of the overpayment could be made from the person who misrepresented or failed to disclose that material fact, but regulation 101(1)(b) provided that in any case, a recoverable overpayment shall be recoverable from the claimant or the person to whom the overpayment was made (emphasis added).

As noted at paragraph 28 of R(H)6/06, section 75(3) as originally enacted did not permit regulations to be made that had the effect that an overpayment might be recoverable from another person instead of the person to whom the overpayment was made; it permitted only regulations having the effect that an overpayment might be recoverable from another person as well as the person to whom the overpayment was made. If a proper interpretation of  regulation 101 prior to 1.10.2001 is that it did enable an adjudicating authority to decide that an overpayment was recoverable from another person instead of the person to whom it was paid, not as well as the person to whom it was paid, then it was ultra vires section 75(3) and of no effect. The Court of Appeal’s decision in B v Secretary of State for Work and Pensions is binding authority for the proposition that ‘an executive discretion’ not to enforce recovery of an overpayment against a person from whom it has been found recoverable exists independently of the recoverability decision against which the right of appeal lies.

This means that the landlord is not able to benefit from regulation 101 as it was up to 30.9.2001, nor can it benefit from the new regulation 101 from 1.10.2001.

9.	For the reasons set out above the tribunal’s decision was erroneous in point of law and it is replaced by my decision set out in paragraph 1 above, namely that the overpayment is recoverable both from the claimant and from the landlord.  Even in a case such as this, where the responsibility for the overpayment was that of the claimant, as the Tribunal of Commissioners set out at paragraph 24 of R(H) 6/06, there can be many reasons why a local authority might choose to recover from a landlord.  The Tribunal of Commissioners also noted:

	“… [deciding] from whom to recover an overpayment [is] non-justiciable in the sense that it was not an issue on which the tribunal could properly substitute its own view for that of a local authority.”

			(Signed on the Original)	Mrs A Ramsay
							Deputy Commissioner    
                                 Date                                      17 January 2008