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England and Wales Court of Appeal (Civil Division) Decisions |
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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Braintree District Council v Thompson [2005] EWCA Civ 178 (07 March 2005) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2005/178.html Cite as: [2005] EWCA Civ 178 |
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM
The Social Security Commissioner
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE MAY
and
LORD JUSTICE DYSON
____________________
BRAINTREE DISTRICT COUNCIL |
Appellant |
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- and - |
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ALISDAIR STUART THOMPSON |
Respondent |
____________________
Smith Bernal Wordwave Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Mr Alisdair Stuart Thompson appeared in Person
____________________
Crown Copyright ©
Lord Justice Ward :
Introduction.
The Background Facts
"prosecuted the appeal on the basis that he had in fact moved out and referred to the microfiche records latterly disclosed by the Respondent showing uplift in benefit when the local authority was notified that he had moved out of the premises. The chairman pointed out that his conviction was on the basis that he had not moved out and had remained in the premises. The second ground of the appeal as put today was that Mr Unsworth had a underlying entitlement even if Mr Thompson was resident and that it was either an error to fix him with an overpayment or it should only be to the extent of the difference between the rate payable for sole occupancy and the shared occupancy."
On 19th September 2003 the Tribunal dismissed his appeal on the basis that:-
"I found neither argument attractive and concluded that they failed to address the kernel of the conviction and the overpayment decision namely that Mr Thompson and Mr Unsworth had claimed a liability to take advantage of the housing benefit scheme. Mr Thompson had failed to persuade the jury that he had not in fact been sharing the property. The trial judge in his sentencing comments stated "During this period, by pretending you were living apart, you dishonestly obtained just under £18,000 from, in effect, the taxpayer." The judge with brevity went to the heart of the issue. For me the question I have to ask is whether there is anything in the papers or in what has been said to me that convinces me on the balance of probabilities that Messrs Thompson and Unsworth were engaged [in] anything other than a scam to take advantage of the Housing Benefit system? I regret not. Indeed in view of the oft recited claims of being resident in his own property when addressing other audiences (such as the electorate) I conclude that even if the burden had been fixed on the Respondent authority [to prove the facts supporting the conviction] I would have found the case established on the balance of probabilities. But living in the same household is not enough. Housing Benefit is payable to resident landlords but why should these two men have pretended to the local authority that the appellant was non-resident? Mr Thompson is clearly an intelligent and articulate man and he had already had experience of being paid as a resident landlord. The only logical conclusion is that it was to further a device to take advantage of the housing benefit scheme. There may have been other reasons. …
I am therefore satisfied that for the period of the overpayment that the evidence overwhelming supports the only conclusion that the arrangement was a device to take advantage of the housing benefit scheme. …
The core issue is whether the letting was a device or not? The weight of the evidence is such that regardless of whom the onus of proof fell upon there is only one conclusion namely that the alleged agreement was a sham to facilitate a scam to take advantage of the housing benefit scheme and the limited monies the local authority seek to recover are recoverable."
"14. The appellant had essentially two arguments. The first argument was that by 1995 he had in fact moved out of the flat so that U [the tenant] was there alone, and there was no overpayment during the period in question. That is a pure question of fact. There is abundant evidence on which the tribunal was entitled to conclude that the appellant was resident in the flat throughout that period, and I can see no error of law in the tribunal's conclusion on this point.
15. The second argument, as developed orally, was that even if he had not moved out, any scam there had been in pretending to have moved out was not relevant to housing benefit. The benefits of moving out, or pretending successfully to have moved out, related (a) to council tax and (b) to the extent to which the rent would be taken into account as income in calculating the appellant's entitlement to income support while he was employed. He pointed out that, as appears from the council's own documents (file, pp.66-75) U had been in receipt of the same amount of housing benefit, £80 per week, while the appellant had been openly living in the flat to the knowledge of the council (see file, p.71) as after he had purported to move out. The council's own council tax records (file p.99) showed him to have been there until 17 July 1992, and this was confirmed by the council's revenue manager, Mrs King, in her evidence at the criminal trial (pp.126G-H, 129C). This led the judge at the criminal trial, in his summing-up (p.129D-E) to state that there was no evidence at all to gainsay the proposition that between April 1991 and July 1992 housing benefit was being paid perfectly properly to U, who was declaring himself at that time sharing the accommodation with the appellant.
16. It is right to say that this is not quite how the appellant presented the point to the tribunal, and indeed initially to me. His point had been that before he moved out, or purported to move out, the housing benefit had been fixed by the rent officer at £75.93 per week, and that it was raised to £80 because he had moved out. In this he overlooked that the £80 per week was awarded before he had moved out and was retrospective to 8th April 1991 (p.71).
17. If there had been no increase in housing benefit, then it is difficult to see how the appellant could have pretended to move out in order to increase the amount of housing benefit to which he was entitled, despite what was said about this by the judge at the criminal trial and by the tribunal in its decision.
18. However, this is not how the case was presented to the tribunal, where the appellant argued that the housing benefit rose from £75.93 per week to £80.00 per week as a result of his leaving. The tribunal must approach the case on the basis of the facts and arguments presented, and unless there is something obvious that he ought to have investigated, he cannot be in error of law for failing to deal with issues of fact that were never put before him. Here the written evidence to which I have referred was all before the tribunal (other than p.99 which simply corroborated the evidence of Ms King to which the judge referred in his summing up) but that evidence was presented differently by the appellant who was contending that there was a housing benefit increase as a result of his supposed departure, albeit a small one.
19. In the end I have come to the conclusion that there was an error of law on the part of the tribunal when he stated [as set out above] …
20. It is apparent from the papers that if the appellant had not pretended to be non-resident, U would still have gone on receiving housing benefit at £80 per week. The real scam for which he was convicted was the pretence that he had moved out of the flat to obtain relief from council tax. If the jury concluded that it was also to obtain additional housing benefit for U, then that is contradicted by the new evidence from the council at p.71 of the file which shows that, contrary to what the judge understood and instructed the jury, the level of housing benefit remained unchanged after the appellant pretended to move out. The scam also appears to have enabled the appellant, while he was unemployed, to obtain income support without bringing into account all or most of that £80 per week because on the basis that the appellant was not resident that sum could be set off against the mortgage payments on the flat. That, however, is a matter for investigation by the secretary of state, and is not a matter before the jury in the criminal prosecution or before me now.
21. While the tribunal was fully entitled to find that there was a scam, by the pretence that the appellant had moved out of the flat, it is apparent that the purpose of the scam was not to obtain extra housing benefit but to obtain the other benefits to which I have referred. I therefore find that the tribunal was in error of law and I set aside the decision. …
25. No evidence has been adduced by the council to support the proposition that the original tenancy or other agreement was contrived to obtain housing benefit. Nor has any argument been put to me to support that proposition. There was nothing artificial about the level of rent charged, there was no suggestion that it was not actually paid to the appellant, and there was no reason advanced why the appellant should not have charged a reasonable rent to U in return for accommodation. The council was presumably satisfied at the time that the agreement was not created to take advantage of the housing benefit scheme, otherwise it would not have paid benefit. In the light of the passage I have cited from the judge's summing-up, and in the absence of any evidence of what was reported to the council by the employee who attended the trial, it is impossible to see on what basis the council can have come to the conclusion that the tenancy was contrived from the start, and the only possible conclusion to which I can come on the evidence before me is that the council has failed to show any ground for the decision that the tenancy was created to take advantage of the housing benefit scheme.
26. Neither has any contention been put forward by the council that there was any form of non-disclosure or misrepresentation by the appellant or by U at the time of the original application for housing benefit which misled the council into being satisfied that entitlement to housing benefit existed. Unless there is some evidence that the council was being misled as the motive for the tenancy in 1991, I cannot see any reason to question the direction of the judge cited … above. The deception, made for other purposes, was to pretend that the relationship had changed in order to obtain other benefits. In fact, it had not changed and no change in housing benefit was sought. If the real arrangement was a genuine one in 1991, and it appears that no evidence to the contrary was adduced at the criminal trial as the judge pointed out, it did not cease to be the real arrangement between the parties simply because the appellant had pretended to move out."
The Statutory Scheme.
"(a) he is liable to make payments in respect of a dwelling in Great Britain which he occupies as his home; …"
"Except where regulations otherwise provide, the amount of housing benefit paid in excess of entitlement may be recovered in such manner as may be prescribed either by the Secretary of State or by the authority which paid the benefit."
By virtue of s. 75(3) an amount recoverable under s. 75 is in all cases recoverable from the person to whom it was paid.
"The following persons shall be treated as if they were not liable to make payments in respect of a dwelling - …
(b) a person whose liability to make payments in respect of the dwelling appears to the appropriate authority to have been created to take advantage of the housing benefit scheme …"
The regulations were amended in 1999 by the Housing Benefit (General) Amendment (No. 2) Regulations 1998, the relevant change more of form than substance, regulation 7 (1) (l) now providing that a person who is liable to make payments in respect of a dwelling shall be treated as if he were not so liable where:-
"in a case to which the preceding paragraphs do not apply, the appropriate authority is satisfied that the liability was created to take advantage of the housing benefit scheme …"
"(1) Subject to the provisions of this section, an appeal lies to a Commissioner from any decision of an appeal tribunal under section 12 or 13 above on the ground that the decision of the tribunal was erroneous in point of law. …
(8) Where the Commissioner holds that the decision appealed against was erroneous in point of law, he shall set it aside and –
(a) he shall have the power –
(i) to give the decision which he considers the tribunal should have given, if he can do so without making fresh or further findings of fact; or
(ii) if he considers it expedient, to make such findings and give such decision as he considers appropriate in the light of them; and
(b) in any other case he shall refer the case to a tribunal with directions for its determination."
An appeal from the commissioner's decision to this court again lies only on a question of law.
Discussion.
"I enclose a print out of the only information not previously provided, that is on our computer system (annotated A). The only information we have relating to these dates is enclosed and has been printed off of our microfiche. I do not think you will find the information of any use, due to it not being of sufficient claim detail to assist you …"
i) The representations made that the tenant alone was in occupation. That they were is not challenged.
ii) The falsity of those representations. The respondent's challenge was directed to this fact. The Tribunal found against him. The Commissioner rightly held there was an abundance of evidence to justify that conclusion.
iii) Prejudice in that had the truth been known less housing benefit would have been paid. There was no challenge to that before the Tribunal. That fact was therefore found by it. The issue which now arises and upon which the outcome of this appeal depends is whether the Tribunal erred in law in so deciding.
"In a nutshell, what this case is about is this, is it not? The prosecution case against these two defendants, James Unsworth and Alisdair Thompson, is that they agreed together to defraud Braintree District Council by promoting a complete fiction: that James Unsworth was the sole tenant of 23 Trafalgar Court, Braintree, the tenant of the owner and absent landlord, Alisdair Thompson. By so doing, it is said, James Unsworth was able to obtain from the state the cost of his rent payable to Alisdair Thompson, and Alisdair Thompson a discount on his council tax. Had the true position been stated – namely, that the defendants were either sharing the accommodation or occupying it as partners – the amount payable by way of housing benefit would have been very much less and the amount chargeable to Alisdair Thompson by way of council tax very much more. In essence, the Crown maintains that the two defendants were unlawfully and knowingly obtaining a subsidy of their cost of living from the State."
"As I have said, there is no dispute in this case that some benefit was paid. Secondly, there is no dispute at all in this case that if in fact Mr Unsworth had been living with Mr Thompson at number 23, then less benefit would have been received." (I have added the emphasis).
"She then said that, from their records, it was from 17th July 1992 that Mr Unsworth had been living as sole occupier at 23 Trafalgar Court. Now, just let us pause there for a moment, because this goes as to the duration of this alleged fraud. You will remember that the date on the indictment for the commencement of this alleged conspiracy is the date that appears on the rent book. But you will also bear in mind that there is no evidence at all to gainsay the proposition that certainly between the period from April 1991 until July 1992, there is nothing to gainsay the fact that the housing benefit was being perfectly properly paid to Mr Unsworth, who was declaring himself at that time sharing the accommodation with Mr Thompson."
As I understand that passage the judge is pointing out that there was no misrepresentation before 17th July 1992 and that had to be the earliest date for the commencement of the fraud.
"Option A is on the basis that both Mr Unsworth and Mr Thompson would have been living at the flat at the same time, but in individual bedrooms, but sharing the accommodation. If that had been the position, then £43 would have been payable instead of the £74 that was in fact paid. Option B is on the basis that both men were living at the property and sharing one bedroom; in other words, were in a relationship. If that was the case, then only £25 would have been payable by benefit, rather than the £74 that was actually paid. Then, finally, Option C is where Mr Unsworth would be entitled to no benefit whatsoever."
"He said: "We assess rents from our knowledge and expertise of various rates in the local area. If two people were sharing but with separate bedrooms, with a common area, the rent would have roughly been £43 per week." That is your Option A on your schedule at page 167. "If two people were sharing the same bedroom, £25". That is your Option B. …
In other words, what Mr Pearne was saying is, if you have a record of somebody receiving a payment of £80 per week by way of benefit in 1993, it could not conceivably be on the basis that that person was sharing with anybody else, whether in the same bedroom or as in bed-sits."
"[The police officer]. "Let me just explain briefly for the tape and for you, just to make sure we are both going in the same direction, the allegation is that, put simply, you have been living at 23 Trafalgar Court for some time. During that period Mr Unsworth has also been living there. He has been in receipt of various benefits, because he is unemployed, and one of those benefits is housing benefit. He has therefore been paid an allowance of, shall we say, £80 per week, because he has claimed he has lived there on his own throughout that period. The allegation is that in fact you lived there as well, and that would mean that he is in fact only entitled to £43 per week, which means an additional £37 has been paid to you to which he is not entitled, and neither are you. That is, put quite simply, what the allegation is. You have had an opportunity to go through those forms?"
"Yes".
"With your legal representative".
Mr Thompson added:- "I have no disagreement with the documents as such. The fact is, I have not been living there, and I see it's noted in the documents that rent is for only one of the bedrooms, the other one being used for my storage of personal property.""
"This fraud, I am quite satisfied, started in 1993 and concluded with its discovery in 1999. During this period, by pretending you were living apart, you dishonestly obtained just under £18,000 from, in effect, the taxpayer."
i) The point was not taken before them.
ii) The letter under cover of which the microfiche was sent acknowledged the limited utility of the record due to the insufficiency of detail. There is no evidence that further explanation was given to overcome that deficiency.
iii) There was direct evidence at the trial that less benefit was paid in cases of shared occupation and the inference drawn by the Commissioner is in stark contrast to that.
"Where the existence or non-existence of a fact is left to the judgment and discretion of a public body and that fact involves a broad spectrum ranging from the obvious to the debatable to the just conceivable, it is the duty of the court to leave the decision of that fact to the public body to whom Parliament has entrusted the decision-making power save in a case where it is obvious that the public body, consciously or unconsciously, are acting perversely."
Lord Justice May :
Lord Justice Dyson :