Mr Justice Langstaff:
- On 7 November 2008 a rent officer, Mr Harrison, made a determination which it is claimed in this action is wrong in law. He is said by the claimant to have assessed the average market rental known as the local reference rent in a locality consisting of parts of Sheffield not merely wrongly but unlawfully so. Alternatively, if he indeed did reach a legitimate decision as to the level of that rental, it is said that he did not explain how he did so sufficiently to satisfy the law. The effect of his determination is said to have been to depress the level of housing benefit which the claimant might expect if the determination had been done properly.
- The legal regime which provides for the payment of housing benefit to claimants is established by the Social Security Contributions and Benefits Act 1992 Section 130, and it is achieved through the means of the Housing Act 1996, Section 122, the Housing Benefit General Regulations 1987 (Statutory Instrument 1971 of 1987), and the Rent Officers (Housing Benefit Functions) Order 1997 (Statutory Instrument 1984 of 1997). It is to this latter as it was in force in December 2004 to which I now turn.
- The Order (as I shall call it) provides by Article 3 so far as material that:
"…where a local authority, in accordance with regulations made under section 136(2) or (3) of the Social Security Administration Act 1992, applies to a rent officer for determinations in respect of a tenancy of a dwelling, a rent officer shall -
(a) make the determinations in accordance with Part I of Schedule 1 (determinations);
(b) comply with Part II of Schedule 1 when making the determinations (assumptions etc.); and
(c) give notice in accordance with Part III of Schedule 1 (notifications) [within the relevant period or as soon as is practicable after that period]."
- Schedule 1 which provides for determinations and to which Article 3 makes reference provides for a four stage process of determination. First, by paragraph 1(1), the rent officer has to determine "whether, in his opinion, the rent payable under the tenancy of the dwelling at the relevant time is significantly higher than the rent which the landlord might reasonably have been expected to obtain under the tenancy at that time". It is right to record that in the circumstances of the claimant's case to which I shall come the rent officer did not determine under this paragraph that the accommodation occupied by the claimant to which this claim relates was significantly higher in this regard. In carrying out that exercise the rent officer must by virtue of paragraph 1(3) have regard to the levels of rent under similar tenancies of similar dwellings "in the vicinity". This therefore requires a focus upon vicinity which is defined by 1(4) as meaning the area immediately surrounding the dwelling.
- The second assessment for the rent officer to make is that under paragraph 2(1), which requires him to determine whether the dwelling at the relevant time exceeds the size criteria for the occupiers. In this case the rent officer uncontroversially came to the conclusion it did not.
- Thirdly paragraph 3(1) requires the rent officer to determine whether in his opinion the rent payable for the tenancy of the dwelling at the relevant time is exceptionally high. Paragraph 3(4) states that when carrying out this exercise:
"…the rent officer shall have regard to the levels of rent under assured tenancies of dwellings which -
(a) are in the same locality as the dwelling (or in as similar a locality as is reasonably practicable); and
(b) have the same number of bedrooms and rooms suitable for living in as the dwelling…"
Thus, interposing, under paragraph 3 the rent officer is to have regard not to the vicinity but to the locality: as will be explained below, a locality is composed of one or more neighbourhoods. In this case no issue arises directly as to the rent officer's determination that the rent payable for the tenancy of the dwelling at the relevant time was not exceptionally high for the neighbourhood.
- By paragraph 4 the rent officer is to make a determination of a local reference rent. This is in accordance with a formula. The formula, which is set out in paragraph 4(1), is:
"
where -
R is the local reference rent;
H is the highest rent, in the rent officer's opinion, -
(a) which a landlord might reasonably have been expected to obtain, at the relevant time, for an assured tenancy of a dwelling which meets the criteria in sub-paragraph (2); and
(b) which is not an exceptionally high rent; and
L is the lowest rent, in the rent officer's opinion, -
(a) which a landlord might reasonably have been expected to obtain, at the relevant time, for an assured tenancy of a dwelling which meets the criteria in sub-paragraph (2); and
(b) which is not an exceptionally low rent"
The opinion to which the rent officer thus has to come is as to the highest reasonable rent. It is not directly as to what is or what is not exceptional. The purpose of paragraph 4(1) and the formula is not to establish the extremes of a range in which rents fall but it is designed to identify the mid point of the housing market so far as rents are concerned. It is worth noting at this stage that paragraph 4(1) appears to assume that a landlord might reasonably expect to obtain as between him and his tenant a rent which is reasonable but which is still exceptionally high or for that matter exceptionally low so far as the locality is concerned.
- Paragraph 4(2) provides for the criteria. The criteria are:
"The criteria are -
(a) that the dwelling under the assured tenancy -
(i) is in the same locality as the dwelling;
(ii) is in a reasonable state of repair; and
(iii) has the same number of bedrooms and rooms suitable for living in as the dwelling (or, in a case where the dwelling exceeds the size criteria for the occupiers, accords with the size criteria)"
And it goes on in respects which are not material for present purposes. Sub-paragraph (3) provides that:
"Where ascertaining H and L under sub-paragraph (1), the rent officer:
(a) shall assume that no one who would have been entitled to housing benefit had sought or is seeking the tenancy; and
(b) shall exclude the amount of any rent which, in the rent officer's opinion, is fairly attributable to the provision of services which are ineligible to be met by housing benefit."
It is worth noting that the tenancy here refers to the tenancy under which the highest reasonable rent or for that matter the lowest reasonable rent is established. It is an hypothetical tenancy; this does not relate to the tenancy which has given rise to the claim for benefit.
- Paragraph 4(6), which has been the subject of authority at the highest level, provides:
"For the purposes of this paragraph … 'locality' means an area -
(a) comprising two or more neighbourhoods, including the neighbourhood where the dwelling is situated, each neighbourhood adjoining at least one other in the area;
(b) within which a tenant of the dwelling could reasonably be expected to live having regard to facilities and services for the purposes of health, education, recreation, personal banking and shopping which are in or accessible from the neighbourhood of the dwelling, taking account of the distance of travel, by public and private transport, to and from facilities and services of the same type and similar standard; and
(c) containing residential premises of a variety of types and including such premises held on a variety of tenancies."
- It is therefore plain that the distinction between neighbourhood and locality is that a locality may comprise two or more neighbourhoods and is therefore necessarily larger than a neighbourhood. Thus of the three terms used to describe an area in which the accommodation in question is situated, vicinity covers the smallest distance, the immediate area, neighbourhood is a larger area, and the locality is the largest; and it is to be observed that the locality will be an area which necessarily (because statute so provides) contains a comprehensive mixture of premises and tenancies. It is thus not difficult to understand that any individual premises may be let at a rent which is reasonable for those premises as between landlord and tenant, which may not be out of step with those in the vicinity but which is either significantly higher, using that phrase in a sense other than the statutory, or for that matter lower than those in the neighbourhood into which the vicinity falls; and similarly it may be that rents in a neighbourhood are higher generally or lower generally than those in the locality of which the neighbourhood is part. It is not difficult to think of practical examples to illustrate this, such as a niche enclave of new purpose built housing in an area of otherwise poor housing but which is anticipating urban regeneration that has not yet happened.
- In the case of the claimant, he made claims for housing benefit which were assessed as at December 2004 and as at May 2005. Those determinations by the rent officers concerned were challenged in earlier proceedings. The claimant was successful. It was established in the case of R (Heffernan) v Rent Service [2008] UKHL 58; [2008] 1 WLR 1702 that the rent officer had taken the wrong approach to his assessment of what the locality should consist. He had taken far too broad an approach. It is right to record that the determinations to which this claim now relates were made in the light of the judgments of the majority of their Lordships in that case and no issue now arises as to the correctness of the locality which Mr Harrison (the rent officer) adopted for the purposes of his determination.
- It is however worth noting that at paragraph 49 in the leading judgment of their Lordships' house by Lord Neuberger of Abbotsbury he set out the determination containing the reasons which the rent officer (in that case not Mr Harrison) had had for determining that the whole of Sheffield was a suitable locality. As to this Lord Neuberger observed at paragraph 80 that in his opinion sub-paragraph 4(6)(b) does not require minute and detailed analysis and comparison of one area with another but did give rise to a need for something more than a generalised assertion such as that which he detected in the rent officer's evidence. He observed that in that evidence the rent officer concerned did not really address the issues which had been raised by the sub-paragraph of the Schedule, and had considered the issues in far too cursory a manner. That was in the context that what he was doing was seeking to justify taking as large and populous an area as the city of Sheffield together with some outlying rural areas as the relevant locality. The terms of paragraph 4(6)(b) plainly require consideration of matters such as health, education, recreation, personal banking and shopping and their accessibility given the distance of travel, and the availability of transport to and from facilities of the same type and standard. All this appears as Lord Neuberger suggested to call for some detail in its consideration.
- As a consequence of the successful appeal to the House of Lords the claimant applied for redetermination of the amount of housing benefit to which he might be entitled. This necessarily involved a further rent officer considering the four statutory assessments which I have set out earlier in this judgment. It also however required the rent officer to have regard to and comply with Schedule 3. That provides that:
"Schedule 1 … shall apply in relation to a redetermination as they apply to a determination, but as if references in those Schedules to the relevant time were references to the date the application for the original determination was made or, if earlier, the date the tenancy ended."
and, significantly here:
"(2) … the rent officer shall seek, and have regard to, the advice of one or two other rent officers in relation to the redetermination."
- The principal focus of the provisions which I have set out is thus to determine the amount of housing benefit by establishing a figure which is not so low that a claimant is obliged by reason of lack of funds to leave the accommodation in which he is living and move to accommodation of a much lower standard unsuitable for his needs, but is rather designed to ensure that public funds do not provide for over-lavish accommodation; and to that end the Statute works so as to cap the amount of benefit which will be paid at a level which reflects the mid point of the housing rental market. This is a matter of policy as to which I shall say no more in this judgment, but it necessarily focuses the attention of the rent officer concerned upon what is the mid point of that market, rather than what might be its very extremes.
- Mr Harrison in a witness statement of 4 September 2009 has explained his reasons for setting the figure as he did. He set it in relation to the 2004 redetermination relative to a local reference rent of £458.50. To reach that figure he determined that H was £500 and L was £317, all those figures being per month. In relation to the May 2005 redetermination he determined that H was £650, L was £350 and accordingly the LRR was £500. Those figures are a significant shortfall on his expenditure so far as the claimant is concerned, since he occupies a centrally located purpose built flat for which he pays a rent, which though reasonable and not significantly high as between him and his Landlord is considerably in excess of those figures, being around £700 per month.
- Mr Harrison, to return to his witness statement, explained how it was that he came to those figures. Having dealt with the first of the three matters to which I referred earlier in this judgment he turned to the fourth. He said this:
"23. In exercising my professional judgment in selecting the H and L figures for each substitute re-determination, having regard to the available data, I did not believe that I was bound to exclude the evidence of rents supported by housing benefit from my consideration, nor am I aware of any policy to do so. Under the requirements of paragraph 4(3)(a) of Schedule 1 of the Order, my understanding and my approach in this case was that in ascertaining H and L figures, I was required to assume that no one who would have been entitled to housing benefit had sought or is seeking the tenancy for the H and L figures respectively."
- He then went on to say that he had looked at the market data for the locality. He had two lists, one for April 2004 from which he derived the December determination and one for April 2005 from which he derived the May determination. He said at paragraph 26 that he considered these rents: there were 69 of them unsupported by housing benefit and 43 rents which had been supported by housing benefit, and he took the view that those supported by housing benefit when viewed as a whole did not appear to distort the market. He was satisfied that the market data including those figures would enable him to ascertain H and L figures, namely that rent which in his opinion was not exceptionally high and the lowest rent which was not exceptionally low. He formed the same conclusion in respect of 2005.
- At paragraph 30 he said this:
"The identification of the H and L figures has always required the rent officer to use his professional judgment, knowledge and experience and to consider the 'full market' or as much of the market as the rent officer had knowledge of. In this way the data, which would include rents funded by the provision of housing benefit, would form a part of the overview of rents for the locality."
And he went on to repeat the assumption to which he had earlier referred.
- At paragraph 32 he dealt in particular detail, having set out the general approach at paragraph 30, with the way in which he set the H and the L figures. For April 2004 he said:
"In order to ascertain the highest rent that was not exceptionally high, I viewed the whole data set to get as clear a picture as possible of the whole of the local market. I considered there to be a type of plateau of rents at the £138.46 per week (£600.00 pcm) mark, and I took the view on balance, that this was the point at which the rents within the locality were not exceptionally high. Rents in the area are generally quoted on a calendar monthly basis and for that reason it is important that the H figure relates to a monthly rental. I noted that in addition to eight unsupported rents at this level, there are also 2 supported rents supporting the same view. Above this point I considered there to be a marked rise in rent until the next smaller plateau of 6 rents of £150.00 per week or £650.00 pcm, which I considered to be exceptionally high for the locality in the light of the market data overall. This view based on the market data, and my own judgment and experience was shared by the rent officers with whom I consulted, and who had detailed knowledge of the market in the locality."
This last sentence refers to the duty to which the rent officer was subject under Schedule 3 of the Order.
- At paragraph 33 he turned to the similar question in respect of the April 2005 referral. He says that he approached the identification of the H figure in a similar way and considered there to be a form of plateau of four rents at the £150 per week or the £650 per calendar month mark. Then this:
"I took the view that this was the point at which the rents were the highest that might reasonably be obtained in the locality, without being exceptionally high. Above this point I considered there to be a marked, steep rise to £155.77 per week (£675.00 pcm) in rent, which rent I considered to be exceptionally high for the locality. I considered that generally the incidence of each rent level reduced above the £150.00 per week mark (with the exception of four housing benefit supported rents at £171.92 per week) and the curve was generally steeper…" [the curve is a reference to the presentation of the data in terms of a bar graph]. "Again, the view that I formed based on the market data and my own judgment and experience was shared by the rent officers with whom I consulted, who have detailed knowledge of the market in the locality."
So far as the L figures were concerned he said at paragraph 34:
"In relation to the substitute re-determination of the April 2004 referral I approached the identification of the L figure, applying the relevant statutory assumptions, as follows. I considered that the lettings database generally showed a steady rise in rents from the market evidence item of a rent unsupported by housing benefit at £317.00 pcm or £73.15 per week. I did not consider that this rent was exceptionally low. I considered it to be supported by evidence of other lettings in the locality at around this range. The supporting evidence was in the form of several rents at around this level supported by housing benefit. However, as there were at least four at comparable levels, I was satisfied that the housing benefit support for these rents was not distorting the picture. For one entry, there may sometimes be a greater concern that the availability of housing benefit has affected the rent a tenant might pay, but where there are several entries it would generally be very unlikely that they were all led by the availability of benefit. It seemed that slightly below the £73.15 per week unsupported rent, the market evidence showed exceptionally low rents, with a drop off from £69.23 per week (£300.00 pcm) for a housing benefit supported rent to £60.00 per week (£260.00 pcm). Again, the opinion I formed based on the market evidence and my knowledge and experience was confirmed by the judgment of the rent officers with whom I consulted, who have detailed knowledge of the market in the locality".
- For the 2005 referral there was a similar picture. He said the lettings database generally showed a fairly steady rise in rents from a piece of market evidence of a rental at £350 per calendar month, £80.77 per week, unsupported by housing benefit. It was his judgment that this piece of evidence represented a rent that was not exceptionally low for the locality, and he considered that was supported in the same way by evidence of other lettings in the locality at that level. He repeated very much what he had said in similar terms as to the impact of those rentals supported by housing benefit upon the market. No conflicting evidence as to the market has been filed before me.
- As to those determinations and those reasons, the claimant makes a number of criticisms in his grounds which in argument before me have been refined to two matters. First, Mr Burton on the claimant's behalf says that the determination by Mr Harrison was irrational. Secondly, he says that if it was not irrational then insufficient reasons were expressed for it. When one considers the market data, he argues, which were exhibited, upon which Mr Harrison as the extracts from his witness evidence show relied, it is apparent that Mr Harrison viewed the 2004 higher figure (see page 252) as determined at a point where there was a plateau. But if that was his reasoning then there was also a plateau at a higher figure. What Mr Harrison had done was to reject the upper rents as being exceptionally high. In order to determine them as being exceptionally high he was omitting some 16 rents from his consideration, because above the level which he determined was the dividing line between that which was not exceptionally high and that which was there were some 16 rents. In a database which extended to 111 in total that was a significant proportion, therefore it could not be said that he was looking at exceptional rents. Inferentially, therefore, what he did was irrational and although it might be (Mr Burton accepted in argument) that there were particular reasons for there being a group of rents at the £150 level, Mr Harrison did not say that that was the case - so if it were the fact that the determination was rational it was not sufficiently explained by him in the words which he had chosen.
- As to the lower rental, Mr Burton argued that his determination was influenced by housing benefit supported rentals. The £73.15 unsupported rent is one rental in what is otherwise a sea of supported rents. The chart displaying the market data in colour graphically shows a single purple mark in a sea of yellow. It looks inferentially very much an outlier so far as other unsupported rents are concerned.
- There is no sufficient evidence from the market data, argued Mr Burton, to show that the lowest rent which a landlord might reasonably expect someone not on housing benefit to pay was as low as £73.15. As a side issue to this Mr Burton argued that the rent officer did not sufficiently consider, or if he did, did not sufficiently explain the conclusion that he had reached, whether housing benefit depressed or raised the levels of rent at this part of the housing market. It was plain not only as a matter of fact but as a matter of statutory assumption that the payment of housing benefit might have some effect upon the market. That is obvious so far as statute is concerned as being the purpose for the requirement that when the rent officer assesses the local reference rent he has to assume that the tenancy which hypothetically is granted by a landlord to a tenant is not granted to a tenant who is either on or is seeking the payment of housing benefit.
- Mr Burton accepted that the word exceptional necessarily involved the making of a judgment. He submitted that no particular assistance was given by statute as to the content of exceptional in this context, and he accepted that what was or was not exceptional could not be determined simply by numbers. That is, it could not be said that because there was a large number of properties rented at above a particular figure identified as the dividing line, that the dividing line was necessarily wrongly placed. Similarly, the existence of a significant number of rentals, which the data which had been obtained showed fell below a particular dividing line, would not in itself indicate the dividing line was wrongly placed.
- It was no longer, though it had been, a criticism that the rental officer had paid regard to housing benefit supported rents: it was accepted he could. This concession seems to me to be rightly made. What has to be considered is the whole of the market in order to establish the rent at which an hypothetical tenancy would be granted, or at least the range of rents between lowest and highest within which the reference rent would fall as a mid point. It was a necessary consequence of the House of Lords decision in the claim first brought by Mr Heffernan that the localities to be considered, since the whole of Sheffield and some outlying areas was too wide an area, would be necessarily smaller, and that the dataset produced to look at what the market appeared to show to inform the knowledge and experience of the rent officer would be correspondingly less extensive, and it followed that in order to obtain a sufficient sample to get an idea of the market it would be likely that supported rents would be considered along with unsupported rents. A mathematician might still observe, however, that even with then inclusion of these rents the datasets are small. The rent officer has to do the best with what he has and it is no doubt in part because of this that reliance is placed upon his judgment, skill and expertise.
- Mr. Strachan for the respondent answers that the case for the claimant depends first, as to rationality, upon there being an inference to be drawn from examining the dataset on its own and concluding that unless otherwise explained the dataset implies different higher and lower levels. He argues that that inference cannot properly be drawn as Mr Burton seeks to draw it from consideration of the data. He emphasises that the Statute envisaged that a rent officer would need to identify that which is exceptional, but that that word had to be seen in the context of what the rent officer was about; and the Statute itself contemplates that rents as between landlord and tenant may be entirely uncontroversial and reasonable but nonetheless may, when they are considered in the broader area which the locality constitutes, be exceptional for that locality taken as a whole. This is the background to the expression of the opinion of the rent officer, which Mr Strachan emphasised again and again was that which was expressly required by the Statute and was essentially an evaluative opinion.
Discussion
- Where a challenge is made to a determination upon the basis that the reasons given for it are inadequate, the approach of the courts must be considered. Here I was referred in particular to the case of R (Asha Foundation) v Millennium Commission [2003] EWCA Civ 88 (see in particular the citations from R v Higher Education Funding Council ex p Institute of Dental Surgery [1994] 1 WLR 242), and what is said at paragraphs 21, 24 and 25, but the content is familiar. The parties to any dispute are broadly entitled to be told why it is one has succeeded or the other has lost. In the context of an administrative decision affecting rights, they are entitled to know broadly why it is that their rights have been determined as they have been. Secondly, the need to give reasons where it exists provides a checklist for the decision maker against which he can ensure that he has had regard to appropriate decisions, the appropriate relevant matters and has not had regard to those matters to which it is inappropriate to pay regard. Thirdly, it permits a court of review such as this to review the quality of the decision making, and thus it enables the decision maker to demonstrate the fairness with which he has approached his task. There are many administrative decisions in which reasons may not be needed, but although Mr Strachan was at pains to emphasise that the rent officer's determination here was one where reasons were not required by statute, the fact is that Mr Harrison did give reasons and therefore it seems to me right to consider and review the adequacy of those reasons.
- Some decisions are less susceptible to the giving of reasons. Thus those judgments or assessments which are principally evaluative do not easily lend themselves to the expression of reasons at any great length. Thus, for instance, the valuer of antiques may need to do no more than to state a conclusion and might be very surprised if he were invited to explain precisely why it was this figure rather than that figure which he had adopted. Much the same may be so where (for example) a barrister determines the quantum of a personal injury claim. There may be some reasons which can be given, but where an assessment is essentially evaluative these are likely to be less comprehensive than they may need to be in other contexts. It seems to me that an example of one other context in which reasons would plainly be required would be the determination of the locality under paragraph 4(6) of the Article. Sometimes, however, the evaluative decision which is made may be susceptible of further explanation, as where a conclusion is drawn from and only from a dataset viewed in isolation. Then the information may be capable of more than one interpretation, and it may though not necessarily will be incumbent on a decision maker to say why he prefers his interpretation rather than another, and it is a necessary part of the determinative process to be ready with an explanation if asked.
- As to the questions arising here, what Mr Harrison says at paragraph 30 is that he took an overview of rents in the locality. He did not, according to him, regard the data as being the sole basis for his determination. Indeed if it were, it would turn the rent officer into a technician or mathematician rather than a professional exercising an evaluative judgment, and the statutory basis calls for the latter. The task upon which he is engaged is aimed at fixing the mid point or the average of market rents. It is plain that the reason for eliminating that which is exceptional is that the extreme cases at either end of the spectrum of rents which are in fact paid are liable to distort where the mid point is to be placed by pulling that mid point either up or down depending on whether the extreme case is at the top or the bottom end of the range, and, being extreme, to be liable to do so to a disproportionate extent. A clutch of data (and the number constituting the clutch is irrelevant) which is above or below the territory occupied by the broad run of rental values may be within the extremes and may not be part of the broad run of rental values in respect of which it is the rent officer's essential task to determine the mid point.
- Here the point may be easily demonstrated when considering Mr Burton's argument about that which the dataset shows. He rightly points out that so far as the 2004 determination is concerned, Mr Harrison excluded 16 rents at the top end and seven at the bottom. He argues that the plateau which Mr Harrison identified is all very well but there was a second plateau and no very obvious reason for not including that too in his determination. However, if the approach is, as in my view it is, to determine the mid point of the rental market uninfluenced by extremes, then a clear indication of the pattern which the available data shows can be given by the bar graph contained at page 250. It is open to the observation, as it seems to me, that the data falls into three parts. At the upper end of the slope which constitutes the central market data there is a curve which on the chart is concave. At the other end there is correspondingly a part of the data which gives rise to a convex curve. The part between is broadly represented by a straight line progression from low to high. That itself may indicate simply to the observer that those rents which form part of the noticeable curves at either end are liable to have a distorting effect upon the broad run of rentals which constitute the market, and because the shape of the curve may indicate their exceptional nature this may demonstrate that it is broadly speaking the mid point of the straight line graph which has to be determined. This is no more than another way of saying that which Mr Harrison said in his evidence about the top end rents to which I have already referred, namely that he regarded there as being something of a significant step up from the rents of £138.46 on the 2004 chart to those at £150. Viewed simply as an exercise based on the dataset alone I could not conclude that he was necessarily wrong or irrational in so concluding. Similarly, such is the drop off in rents (if supported rents are considered) below £73.15 per week as to make the same point at the converse end of the spectrum. If a similar graphic approach is taken to the data in respect of 2005, again a similar picture appears. There is broadly speaking a change of slope shown by the data above the figure which Mr Harrison identified of £150 at the top end and below about £80.77 which he identified at the bottom. He does not explain his reasoning by reference to the graphical appearance of the data, but essentially he makes the same point in what he says about the steps in the data beyond a certain figure. Between the upper figure which he adopted and the lower figure which he adopted there was, even upon what is undoubtedly a relatively small dataset in statistical terms, a relatively smooth progression and that is what, according to him, influenced Mr Harrison.
- Looked at, therefore, simply as a matter of data, and paying regard to the data alone, it seems to me that I could not say that the decision which Mr Harrison reached, explained in the way that he explained it, was necessarily an irrational one.
- I should add in case it be relevant that there is statistically always a slightly greater risk that extreme high figures in any dataset reflective of life will skew a market more than extreme lower figures will.
- It follows that if one views the challenge as one simply based upon the dataset, then there is no inherent irrationality to be explained such as Mr Burton's arguments would have it.
- However, the reasoning which Mr Harrison adopted was not based upon datasets alone, so in case my conclusion as to this is in error I consider what else he said. He placed the local reference rent where he did in part he said because of the market data, in part because of his judgment and experience, and in part reflecting the views of other rental officers whom he consulted. He does not go so far as to say what particular features of his judgment and experience helped him to interpret the dataset. He does not go into any detail as to that which other rent officers said save that they agreed with him.
- I have considered whether he might have said more and whether it was a failing in law for him not to have said more about the process of reasoning in addition to his views about the dataset which led him to the conclusions that he formed. I have come to the view, not without some hesitation, that here he was entitled to say no more than he said. That is because his opinion is that which is required by statute. The role of the rent officer was explained insofar as it involved the determination of locality by Pitchford J in the case of R (Cumpsty) v Rent Service [2002] EWHC 2526 (Admin), see in particular at paragraph 91. Pitchford J was at that time considering a different part of the Schedule, and what he said has to be read now subject to what was said in R (Heffernan) v Rent Service in the House of Lords, but it is nonetheless useful to see that he was emphasising the broad discretion which must necessarily be afforded to a decision maker within which the bounds of a proper decision may lie. An opinion which is evaluative is inevitably more difficult to subject to scrutiny, at least where it is not obviously capricious. There are situations where the subtle nuances of fact, the lessons learnt from experience and all those matters which go to professional judgment of value come into play. Valuing rentals and understanding the rental market, particularly with what is necessarily a limited selection of data, involves such issues.
- It seems to me therefore that what Mr Harrison said in his witness statement was in the circumstances of this challenge and in the circumstances of these assessments a sufficient explanation to indicate to the claimant why it was the local reference rent had been placed where it was and sufficient to indicate the essential matters which so far as they could be explained were explained, and I conclude therefore that the rent officer here could not be shown to have taken a wrong approach to identifying the local reference rent, he could not be shown to have reached an intrinsically irrational decision and he has sufficiently explained that decision.
- These being the only extant challenges to the decision, the claim must fail.
- I could not however let it pass without paying tribute to the quality of the arguments which Mr Burton advanced in support of the claim, though ultimately without success.
MR STRACHAN: My Lord, will it assist that I just identified I think six points of the judgment where there may be some … typographical …
MR JUSTICE LANGSTAFF: I am sure there may be quite a number. It is an ex tempore judgment, not reserved but considered overnight.
MR STRACHAN: I offer it in that spirit and, my Lord, there are just two notes, I think earlier on in the judgment your Lordship referred to local reference rate whereas it should be rent.
MR JUSTICE LANGSTAFF: Thank you. I think I have called it both throughout.
MR STRACHAN: I think you did, my Lord. There were two references earlier on. My Lord, secondly, your Lordship referred to the claimant's applying for re-determination. It doesn't particularly matter but in this case because the House of Lords decision quashed the ….
MR JUSTICE LANGSTAFF: Yes, I follow.
MR STRACHAN: … re-determine in any event, my Lord. Your Lordship referred to the claimant's rent as being in excess of £700 but there were two different rents …
MR JUSTICE LANGSTAFF: £695 it was in the end, wasn't it?
MR STRACHAN: There was one at £750 and one at £695, so again it's not a significant matter …
MR JUSTICE LANGSTAFF: Around the £700 will do, it was a broad-brush figure, simply, the actual figures don't really matter as to the judgment but I will correct that. Thank you for that.
MR STRACHAN: My Lord, the other matter is, or just three other matters, one is that your Lordship quoted from paragraph 32 of Mr Harrison's statement, my Lord, and I just note that that was corrected by the second witness statement so as to include…
MR JUSTICE LANGSTAFF: Thank you.
MR STRACHAN: My Lord, two very small matters. I believe your Lordship referred to page 250 of the bundle for the figures or the tables, whereas I think the reference should be 252.
MR JUSTICE LANGSTAFF: 252.
MR STRACHAN: And finally, my Lord, it appears in the transcript, I think Crumpsty should be Cumpsty, without the 'r'.
MR JUSTICE LANGSTAFF: Thank you.
MR STRACHAN: I hope those are of assistance, my Lord.
MR JUSTICE LANGSTAFF: Yes they certainly are.
MR STRACHAN: My Lord, in those circumstances I would ask for an order that the claim be dismissed and I would also ask for an order that the claimant pay the defendant's costs to be subject to detailed assessment if not agreed, but subject to Section 11 of the … Section 11 of the costs order in respect of those costs incurred before the date that the claimant's certificate expired. I say that, my Lord, because I understand … sorry, my Lord, may I just …?
MR JUSTICE LANGSTAFF: Yes, certainly.
MR STRACHAN: My Lord, I am grateful. (Inaudible) so, my Lord, I seek, can I just confirm, I seek an order the claimant pay the defendant's costs subject to Section 11. I don't know if that is sufficient for the purposes of drawing up the order although …
MR JUSTICE LANGSTAFF: Well, since you are going to have to draw up the first draft of the order you have to determine that, I think.
MR STRACHAN: Yes, my Lord.
MR JUSTICE LANGSTAFF: I am certainly happy to grant whatever the appropriate order for costs is in whatever the appropriate form is.
MR STRACHAN: I am grateful, my Lord. It is obviously to protect the ….
MR JUSTICE LANGSTAFF: I understand the purpose of it but … Mr Burton?
MR BURTON: My Lord, I am most grateful for a very detailed and considered judgment. There are just two matters. The first is a matter of possible concern but at the moment I am not putting it in the form of an application for permission to appeal, and it relates to in fact the as it were caveat position that your Lordship in saying that if you are wrong about the initial analysis (inaudible) points to be made about the extent of reasons given. I would simply ask your Lordship to confirm that it is in the circumstances of this case that you are saying that what Mr Harrison did was enough.
MR JUSTICE LANGSTAFF: Yes. Well, reasons have always to be viewed in their particular context.
MR BURTON: Quite. I am most grateful.
MR JUSTICE LANGSTAFF: And I am certainly not saying that rent officers are free to give short reasons. In fact I had hoped that was obvious by my, not only reference, but so far as it's worth anything, express acceptance of that which Lord Neuberger said.
MR BURTON: : No, my Lord, I think that was very much clear. I think the reason I am asking for this to be clarified and therefore be put in the transcript is that we lawyers sometimes have a habit of extracting particular sentences from judgments and then using them for purposes which after all is necessary and entirely foreseen by ….
MR JUSTICE LANGSTAFF: So you want me to qualify that by making it quite plain it is the circumstances of this case?
MR BURTON: I would be most grateful for that if that were the case. My Lord, in terms of permission to appeal I shall be frank. I don't think any considered view about whether or not the claimant will seek permission has even been reached at this stage, but if we do intend to do that it is right that we ought to put a brief submission to your Lordship this morning, and I do that in really just a couple of sentences. It relates to the issue of the consideration of housing benefit which, whilst I understand your Lordship's decision to be in effect that Mr Harrison provided sufficient reasons, it would be my submission that the data evidence irrespective of Mr Harrison's opinion was suggestive that the guidance indicates some overt consideration of whether or not an adjustment, not a decision to exclude altogether, but an adjustment…
MR JUSTICE LANGSTAFF: Yes I didn't deal with that, did I, in the decision?
MR BURTON: Not particularly.
MR JUSTICE LANGSTAFF: Which I meant to do but I missed.
MR BURTON: Well one of the dangers of a welcome ex tempore judgment, because obviously the parties have been waiting for some time, I mean I don't have an objection if your Lordship wants to say anything about that now, it may assist consideration of matters at a later stage.
MR JUSTICE LANGSTAFF: Yes, well, certainly. My view is this: that it was accepted by Mr Burton on behalf of the claimant that the rent officer was entitled to look at housing benefit assisted rents. It is plain from the size of the dataset that indeed he would have to have regard to that if he was going to have a decent number of comparables within which to establish the range, the point of the exercise being to find out the true centrepoint of that range. The argument has been that there is plainly a possibility that housing benefit might interfere with the market. It is suggested that when one looks at the lower end of the scale -- see page 252 -- that the £73.15 rent which the rent officer adopted as the bottom end of his range stands on its own, and similarly for the 2005 determination the figure of £80.77 in a range of its own. The rent officer considered whether it was appropriate not only as a matter of general practice to take account of the housing benefit supported rents which it is accepted he was entitled to do, but whether so far as he could see the presence of housing benefit rents had disturbed the rental values which he was considering more generally. He concluded that it had not. He did so in these terms (paragraph 34):
"The supporting evidence was in the form of several rents at around this level [at £73.15] supported by housing benefit. However, as there are at least four comparable levels, I was satisfied that the housing benefit support for these rents was not distorting the picture. For one entry, there may sometimes be a greater concern that the availability of housing benefit has affected the rent a tenant might pay, but where there are several entries it would generally be very unlikely that they were all led by the availability of benefit."
It seems to me that he has there set out reasons why he felt that fixing in particular upon the lower end of the market, which is where Mr Burton's arguments have been focussed, why it is that he took the view that housing benefit had not distorted the market. I cannot say that that view is irrational, and it seems to me, taking account of the point which I made earlier reflective of his general approach of taking a graphical view of the data that it fits entirely with that approach.
So it seems to me that he was entitled to regard the low negotiated rents, negotiated without the support of housing benefit of £73.15 for the 2004 determination and £80.77 for the 2005 determination, as not simply being outliers or exceptional or extreme cases, but ones which fell within the market generally, established as it was by both housing benefit and non housing benefit supported rents.
It follows that I cannot conclude that his decision was flawed in this respect.
MR BURTON: My Lord, in that respect then I do make the following application which is as follows: that it is irrational, certainly without the benefit of further reasons, to say that a supported rent is not an indication of a supported market where there are other similar rents, where those other similar rents are similarly supported rents and not unsupported rents, and I take as my guide for that submission the guidance produced by the rent service which would seem to suggest that a distortion may occur when housing benefit rentals, ie supported rents, generally do not reflect unsupported rents at any point in the market. And in my submission that is the case that this court was presented with and indeed Mr Harrison was presented with, and therefore, as I say, in the absence of additional reasons, it was irrational to conclude that there was no distortion and that therefore no consideration of an adjustment was necessary.
I might just add at that stage that, perhaps unlike your Lordship's very considered reasons in relation to the issue of exceptionality, the point about paragraph 4(3) and the issue of the assumption that the person seeking the tenancy is not in receipt of housing benefit nor seeking it is clearly an important one which runs through all four paragraphs. It has never been considered by a court before. It is not perfectly drafted in my submission. It may not be entirely consistent with the guidance that the rent service has produced in accordance with it. But all of those reasons in my view make it all the more pertinent that it may be necessary to have further consideration by the Court of Appeal on that particular issue.
MR JUSTICE LANGSTAFF: The test I apply is whether a) there are reasonable prospects of success upon appeal; b) whether for some other compelling reason an appeal ought to be heard. In my view there are not reasonable prospects of success on the appeal for the reasons broadly which I have set out in the judgment, and I do not regard the opposite as being sufficiently arguable notwithstanding Mr Burton's further points as to justify permission under that ground. I do consider this as the right case in which to examine 4(3) and its impact so as to make it a case in which it is a matter of compelling interest that the Court of Appeal should consider it. So accordingly Mr Burton you have to seek your permission elsewhere.
MR BURTON: I am most grateful, my Lord.
MR JUSTICE LANGSTAFF: Do you want to say anything about costs?
MR BURTON: No I don't think I can resist my learned friend's (inaudible).
MR JUSTICE LANGSTAFF: Would you be so kind, then, Mr Strachan, to draw up the appropriate order, preferably run it past Mr Burton to make sure that he is content with its … that it reflects the order of the court, and that will be the order the judge will make. I shall be here all day. But, Mr Burton, I am sorry that you were delayed…
MR BURTON: I did intend to apologise for that, yes …
MR JUSTICE LANGSTAFF: You didn't miss very much of the judgment …
MR BURTON: Okay, well I am most grateful. I am sure my learned friend will fill me in on anything I did miss.
