Saleem v. Secretary of State for Social Security [2001] UKSSCSC CIS_834_1997 (18 January 2001)
R(IS) 5/01
(Saleem v. Secretary of State for Social Security [2001] EWCA Civ 69)
Mr. J. Mesher CIS/834/1997
22.9.99
CA (Mantell and Hale LJJ and Cresswell J)
18.1.01.
Housings costs - move to more expensive property - whether the test that change of dwelling was made solely by reason of the need to provide separate sleeping accommodation for children of different sexes be applied objectively or subjectively - whether the provision is ultra vires
The claimant was in receipt of income support on grounds of incapacity. He was married with seven children, four boys, all over the age of ten, and three girls, all under ten. The family lived in an owner occupied house containing three bedrooms. The size of the rooms made it necessary for some of the boys and girls to share a bedroom. There was an outstanding mortgage of £19,000. On 10 May 1994 the family moved to a new house. It also had three bedrooms, but as the rooms were generally larger, it was no longer necessary for any of the boys to share with any of the girls. The claimant took out a mortgage of £34,000 to finance the purchase of the new house. He told the Benefits Agency that the reason for the move was to gain space.
On 2 May 1994 amending regulations came into force which introduced a new paragraph 5A into Schedule 3 to the Income Support (General) Regulations 1987. Sub-paragraph (3) had the effect that, with certain exceptions, a person in receipt of income support who incurred a new liability to housing costs after 2 May would only have it met in the assessment of his benefit to the extent of any existing liability. The adjudication officer therefore decided to restrict the amount of housing costs allowed in the claimant's assessment to the amount allowed in respect of the previous house.
The claimant appealed to a social security appeal tribunal, arguing that he came under the exceptions in either sub-paragraphs (8) or (9) of paragraph 5A, because the move was (a) in order to acquire accommodation more suited to the special needs caused by his disability; or (b) solely by reason of the need to provide separate sleeping accommodation for children of different sexes aged ten or over. The tribunal rejected the appeal, finding that (a) the facilities to provide for his disablement were no better at the new house than at the old; and (b) the need to provide separate sleeping accommodation for children of different sexes "was not the sole reason, the reason was mainly to provide more adequate, i.e. roomy accommodation".
The claimant appealed to a social security Commissioner, arguing that the tribunal had wrongly interpreted the meaning of the phrase 'solely by reason of' in sub-paragraph (9). At the hearing before the Commissioner it appeared that the exchange of contracts for the purchase of the new house might well have taken place before May 3. The Commissioner held, following CIS/2978/1995, that the tribunal had erred in law for failing to investigate this possibility and that the claimant should be regarded as having incurred the new liability on the date of exchange of contracts because that placed him under a legal obligation to pay the purchase price. However he found no error of law in the way that the tribunal had applied sub-paragraph 9. He suggested that in interpreting the phrase "solely by reason of", it was necessary to look primarily at the reasons for moving from the old home, rather than the reasons for choosing the particular new home. The case was remitted to a new tribunal.
It subsequently transpired that the exchange of contracts had taken place after May 2. The claimant therefore appealed to the Court of Appeal to dispute the Commissioner's ruling on the legal issues. He argued that sub-paragraph (9) should be interpreted as imposing an objective rather than a subjective test. However, if a subjective test was appropriate, the sub- paragraph would never apply, because there would in practice always be reasons for selecting the particular new home additional to the nature of the sleeping accommodation. Therefore the provision should be held to be ultra vires on the grounds that (a) it was irrational for the Secretary of State to make such a regulation; and (b) the Secretary of State had misled Parliament in his statement under section 174(2) of the Social Security Administration Act 1992 by saying that the sub-paragraph would give effect to the relevant recommendation of the Social Security Advisory Committee.
Held, dismissing the appeal, that:
- in applying sub-paragraph (9) of paragraph 5A of Schedule 3 to the Income Support (General) Regulations 1987, it was necessary to focus on the reason for the change of home. If the operative reason for the change of home was not the need to provide separate sleeping accommodation for children of different sexes of ten or over, the sub-paragraph would not apply. If the sole or exclusive reason for the change of home was the need to provide such accommodation, the sub-paragraph would apply even if the new home selected incidentally carried other benefits for the family (para. 19);
- on that interpretation, there was no difficulty in foreseeing situations in which sub-paragraph (9) could apply. Therefore there was no basis for finding it ultra vires on grounds of irrationality or misleading Parliament (paras. 22 and 29). In any event, due to the provisions of Article 9 of the Bill of Rights 1689, the Court could not entertain any argument to the effect that Parliament had been misled (para. 27).
DECISION OF THE SOCIAL SECURITY COMMISSIONER
- The claimant's appeal is allowed. The decision of the Birmingham social security appeal tribunal dated 17 April 1996 is erroneous in point of law, for the reason given below, and I set it aside. The case is referred to a differently constituted social security appeal tribunal for determination in accordance with the directions given in paragraph 20 below (Social Security Administration Act 1992, section 23(7)(b)).
- The appeal stems from the adjudication officer's decision, after the claimant and his family moved house on 10 May 1994 and increased the amount of the mortgage, to restrict the amount of housing costs to the amount allowed on the old house. The restriction was applied under paragraph 5A of Schedule 3 to the Income Support (General) Regulations 1987. Paragraph 5A came into force on 2 May 1994. Its general rule was that housing costs for mortgage interest incurred after 2 May 1994 were not to be met. Among the exceptions from that rule was that, where housing costs had been allowed on a former liability before the new liability was incurred, the amount of the former liability would continue to be met (sub-paragraphs (3) and (4)). In a number of other cases the full new liability would be met if specified conditions were satisfied. The immediately relevant provisions in the present case are sub-paragraphs (8) and (9):
"(8) The conditions specified in this sub-paragraph are that the loan was taken out, or an existing loan increased, either-
(a) to make adaptations to an existing property to meet the special needs of a disabled person; or
(b) to acquire alternative accommodation more suited to the special needs of a disabled person than the accommodation which was occupied before the acquisition by the claimant;
and in this sub-paragraph a disabled person is a person in respect of whom a disability premium [or certain other premiums is included in the applicable amount].
(9) The conditions specified in this sub-paragraph are that-
(a) the loan commitment increased in consequence of the disposal of the dwelling occupied as the home and the acquisition of an alternative such dwelling; and
(b) the change of dwelling was made solely by reason of the need to provide separate sleeping accommodation for children of different sexes aged 10 or over who are part of the same family as the claimant."
- The facts as found by the appeal tribunal were as follows (correcting a typing error):
"1. [The claimant] lives with his wife and now eight children. At the time of his claim he had seven children.
2. He has four boys born 29 October 1979, 11 October 1980, 26 November 1981, 28 November 1982. His four youngest children are all girls, the eldest born 16 January 1985, the other aged six, two and one years approximately.
3. [The claimant] was awarded the higher rate mobility component of DLA from 30 June 1993 to 29 June 1996 and the lowest rate care component from 9 November 1993 to 29 June 1996. The awards were made on the basis of arthritis, dizzy spells and low blood pressure.
4. Before 10 May 1994, [the claimant] lived in a three bedroomed property at 200 Warwick Road, Birmingham on which he had a mortgage of some £19,000. The size of the rooms at Warwick Road were as follows:
[details omitted: three bedrooms, two living rooms]
[The claimant] slept downstairs in one of the living rooms so that he was on the same floor as the bathroom. His eldest son had the smallest bedroom to himself as he preferred to sleep alone; the youngest and sometimes the second youngest children slept with his wife in another bedroom and all the remaining children were in the third bedroom.
5. On 10 May 1994, [the claimant] sold 200 Warwick Road for £38,000 and moved to 20 Fernley Road, Sparkhill, Birmingham, which he bought for £38,000 having taken out a mortgage of £34,000. The balance payable to [the claimant] after these transactions was £14,549.83.
6. Fernley Road is a bigger property than Warwick Road, having the following accomodation:
[details omitted: three bedrooms, three living rooms, bathroom later built downstairs]
[The claimant] now sleeps in one living room downstairs, the four older boys sleep in one bedroom, the girls sleep in the other bedroom although the younger ones may sleep with his wife in the third bedroom."
- In correspondence before the adjudication officer's decision under appeal was made the claimant had described the reason for the move as being to gain space. The new house had a loft that he hoped to convert. Some of the proceeds of the sale of the old house were to be used to renovate the new house and to build an extension for a kitchen/bathroom (about £7,500). The claimant had repaid a loan of £5,000 and used £2,000 on a visit to Mecca. At the hearing before the appeal tribunal it was submitted in addition that the new house was more suited to the claimant's needs as a disabled person.
- The appeal tribunal confirmed the adjudication officer's decision. It recorded that there was no dispute that the claimant had moved and increased his loan after
2 May 1994.
- On paragraph 5A(8), it found that the claimant counted as a disabled person and continued:
"We decided that [the claimant] did not satisfy the requirements of this legislation because the facilities to provide for his disablement were the same at Warwick Road as at Fernley Road, namely a bathroom and toilet on the same floor as his sleeping accommodation. In fact when he first moved to Fernley Road, the bathroom was not downstairs and he had to make that adaption after he moved."
- On paragraph 5A(9) the appeal tribunal said:
"[The claimant] has four boys and four girls and the same number of bedrooms in each house with, in each house, one living room being used as a bedroom for [the claimant]. The living and sleeping arrangements can therefore be said to be identical.
We consider that [the claimant] reasonably moved to larger accommodation because of his expanding family but the regulations appear to make no provision for this. This is curious because it appears that if someone had a very large family of children all of the same sex then no provision is made for an increased loan whereas a smaller mixed sex family might well mean that a claimant may qualify. The argument put forward by the representative in respect of both disability and the separate sleeping accommodation requirement related mainly to the need for a larger property. But it was argued quite reasonably that when [the claimant] was sleeping downstairs at the smaller property, there was little living accommodation for the remainder of the family. The bigger bedrooms in the new house clearly provide better accommodation for the children. Nevertheless the arguments relating to both disability and to the children are concerned with the need for larger accommodation. The needs of [the claimant] for his disablement alone are met equally by both properties. Sub-paragraph (9) states that the change of dwelling must be made "solely" by reason of a need to provide separate sleeping accommodation for children of different sexes. In this case it was not the sole reason, the reason was mainly to provide more adequate i.e. roomy accommodation."
- The claimant now appeals against the appeal tribunal's decision, with the leave of its chairman. The appeal was not supported by the adjudication officer in written submissions. I directed on oral hearing, as there seemed to me to be a number of legal difficulties involved. At the hearing, the claimant was represented by Mr. Allan Norman of J. M. Wilson, solicitors. The adjudication officer was represented by Mr. Leo Scoon of the Office of the Solicitor to the Department of Social Security. I am grateful to both representatives for their helpful submissions.
- Mr. Norman's first point repeated one put forward rather tentatively in an earlier written submission. However, now it was supported by a Commissioner's decision of which I was previously unaware. The point arises because the documents before the appeal tribunal included a copy of the offer to the claimant of a mortgage advance of £34,000 dated 25 February 1994. The offer contained the sentence "Your acceptance of this offer, and the resulting agreement, only takes effect when you have executed the Mortgage Deed and it has been dated by the Solicitor on your behalf". There seems to be no doubt that the mortgage deed was dated 10 May 1994, the date of completion of the purchase, and Mr. Norman has submitted that it was executed on 4 May 1994. He went on to submit that it was extremely likely that contracts had been exchanged for the purchase of the new home before 3 May 1994 (although he did not have any documents showing the precise date). The claimant would on exchange of contracts have become the beneficial owner of the property and have been under a liability to pay the purchase price on completion. Mr. Norman submitted that in those circumstances, accepting that the test was when liability to make payments of interest on the mortgage loan arose, the housing costs were incurred before 3 May 1994. In support he cited the decision of Mr. Commissioner Howell in CIS/2978/1995.
- In that case, the claimant became liable under a County Court order made by consent on 31 March 1994 to pay her ex-husband £13,000 on his transferring to her his interest in the former matrimonial home subject to her taking over responsibility for the existing mortgage. Before committing herself to the terms of the order the claimant had obtained the firm offer of a further advance of £13,000 from the existing lender. Because of various delays, the transfer of the ex-husband's interest and the drawing down of the further advance did not take place until 10 June 1994. The Commissioner held that an appeal tribunal had not erred in law in deciding that the housing costs in relation to the £13,000 had been incurred before 3 May 1994. He held that paragraph 5A(1) did not apply a cut-off to all instalments of mortgage interest due after 2 May 1994, but that the test was the point at which the claimant's liability to make the increased payments of interest arose. In paragraphs 19 to 21, he said:
"On the one hand it seems obvious that the claimant did not become bound to start paying the building society any additional interest until the money was actually advanced to her to enable her to complete the purchase of her husband's interest in June 1994 ... On the other hand there can be no doubt whatever that on the making of the county court order on 31 March 1994 she became irrevocably bound to go through with the purchase of her husband's interest, of which she thereupon became the absolute owner in equity, and thus to make the payment of the £13,000 forthwith upon the delivery of a proper instrument of transfer to her. This could have occurred at any point from then on, whenever the husband or his solicitors produced it. From the date of the court order therefore, the claimant had an existing obligation to pay her husband the whole sum of £13,000 forthwith whenever called on to do so by the production of a transfer. The only practical way in which she could do this was by taking up the agreed further advance on the mortgage loan pursuant to the offer made by the building society which she had already accepted ... Balancing these alternative ways of looking at the situation against one another, it seems to me that the tribunal did have material before them from which they could properly and reasonably conclude ... that on 31 March 1994 she had entered into a commitment to go through with the loan and therefore to pay additional costs by way of interest ... On this basis her new liability had arisen, and her costs relating to it had been "incurred" in the relevant sense for para 5A(1), before the cut-off date of 2 May 1994 even though the payments in respect of her housing costs did not start until after that date."
- Mr. Norman submitted that in substance the claimant's position in the present case was the same. The only practical way in which he could from the date of exchange of contracts meet his existing obligation to pay the purchase price for the new home was by taking up the offer of the mortgage advance. He was therefore committed to going through with the loan and the costs were incurred from the date of exchange of contracts.
- Mr. Scoon submitted that a housing cost for the interest on a loan could not be incurred before the advance was made and the interest began to accrue. In the context of the sale and purchase of houses, the commitment to the payment of interest on the loan did not arise until the point of disposal of the old home and acquisition of the new home on completion of the transactions, including the mortgage. That was shown by the condition put on the mortgage offer by the building society. Mr. Scoon had not been aware of Commissioner's decision CIS/2978/1995 before the oral hearing, but was content not to take an opportunity to make a further written submission after taking time to consider it.
- The position is that I should follow the legal principle applied in CIS/2978/1995 unless satisfied that that decision was wrong (tribunal of Commissioners' decision R(I) 12/75). Mr. Scoon's submission is one which is very strong indeed in the abstract, but it does not satisfy me that CIS/2978/1995 is wrong when the question is considered in the context of paragraph 5A. Paragraph 5A(1) cannot be given an absolutely literal meaning, as Mr. Commissioner Howell showed. First, the new provision cannot be interpreted as biting on any instalment of loan interest falling due after 2 May 1994, including interest on loans taken out well before 3 May 1994, even though that might literally be said to be a housing cost incurred after 2 May 1994. Second, the new provision cannot be interpreted as biting on a loan on which the first actual payment of interest is due after 2 May 1994 if the liability to pay interest was incurred before 3 May 1994. It is accepted that if a loan was taken out on 30 April 1994 and interest started to accrue from that date, but the first repayment was not due until 31 May 1994, it would be unfair to subject that interest to the new regime of paragraph 5A. If those two steps away from an absolutely literal interpretation have to be taken, to give a practical and fair interpretation, it is only a small further step to say that where the claimant is before 3 May 1994 under a legal obligation to make a payment for the transfer of what will be the home and the only practical way of doing so is to take up the offer of a loan in reliance on which the obligation was undertaken, the liability to pay interest on the loan was incurred before 3 May 1994. That secures a practical and fair result. Although in CIS/2978/1995 the legal obligation arose from a court order and in the present case the obligation arose from a contract, I do not think that that is a difference of substance.
- Accordingly, I am satisfied that the appeal tribunal of 17 April 1996, although it was not referred to CIS/2978/1995, erred in law in not considering whether the claimant's housing costs on the new mortgage were incurred before 3 May 1994 and in not investigating the date when contracts were exchanged. That is so even though it was apparently agreed that the claimant had "moved and increased his loan" after
2 May 1994 and it seemed to be assumed by all parties that paragraph 5A applied. Even if a specific concession had been made by the claimant's representative about the interpretation of paragraph 5A i.e. on a question of law, that cannot in an inquisitorial jurisdiction prevent the appeal tribunal's decision being found on appeal to be in error of law on that question.
- For that reason, the appeal tribunal's decision must be set aside as erroneous in point of law. It seems very unlikely indeed that contracts were not exchanged until after 2 May 1994, but it is possible. Therefore, I agree that the case must be referred to a differently constituted social security appeal tribunal for the necessary findings of fact to be made to apply the legal principle set out above. However, in those circumstances I can deal very briefly with the other points made by Mr. Norman, which would be relevant if the claimant does not succeed on the above basis.
- I would not have found any other error of law in the appeal tribunal's application of paragraph 5A. Mr. Norman made three further points. First, that the appeal tribunal misinterpreted the meaning of the phrase "solely by reason of" in paragraph 5A(9)(b), which is that the need to provide separate sleeping accommodation for children of different sexes aged ten or over was the only factor which gave rise to a need to move, rather than a desire to move to a particular new home. Second, if "solely by reason of" was not to be interpreted in that way, paragraph 5A(9) was ultra vires for irrationality. Third, if, contrary to his submission, it was said that in view of the use made of the proceeds of sale of the old home the claimant's loan commitment had not increased in consequence of the disposal and acquisition of the homes, paragraph 5A(5) on loans for repairs and improvements should be considered.
- The first issue, the meaning of "solely by reason of" in paragraph 5A(9)(b), is a very difficult one. I think it is fair to say that Mr. Scoon struggled to find a sensible meaning to put forward. The problem is that in practice in every case there will be some additional reason for choosing the particular new home as well as the need to provide separate accommodation for children of different sexes. If liking the garden of the new home or the colour of the front door takes the case outside paragraph 5A(9), then the provision can never have any practical application. Such an interpretation is therefore to be avoided. I think that it can be avoided by looking primarily at the reasons why it was decided to move from the old home. However, I shall not go into all the difficulties, because in my view the appeal tribunal did not err in law in concluding that the claimant did not come within paragraph 5A(9)(b). The basis for its conclusion was that the main reason for moving from the old home was to acquire more roomy accommodation generally. That was a finding which it was entitled to make on the evidence and was one which meant that the change of home was not solely by reason of the need to provide separate accommodation for children of different sexes, within the proper interpretation of paragraph 5A(9)(b). That result also seems to me to be in line with the statement of the Secretary of State on the Social Security Advisory Committee's recommendations on the draft amending regulations (see Cm 2537). In paragraph 6(1)(b)(xi) the Secretary of State rejected a recommendation to exclude cases where a move was to alleviate statutory overcrowding caused by an increase in the number of children, but in paragraph 6(1)(b)(xii) accepted the recommendation about excluding cases where the move was to provide separate sleeping accommodation for children of opposite sexes.
- On the second issue, I accept that the decision of the Court of Appeal in O'Connor v. Chief Adjudication Officer (3 March 1999) [now reported as R(IS) 7/99] is authority that the previously understood approach to the question of whether regulations are invalid on the ground of irrationality was too limited. But I am unable to accept that the result of interpreting paragraph 5A(9) as I have done above is irrational, in the sense that no reasonable Secretary of State could have made a regulation with that effect. The result might produce hardship in individual cases or cause differences in treatment between claimants who seem equally meritorious, but that does not make it irrational.
- On the third issue, I agree that, if it were said that the claimant did not need to increase his borrowing to make the change in homes, because all the proceeds of sale of the old home could have been put towards the purchase of the new home, then paragraph 5A(5) would need to be considered. On that basis some of the new mortgage would have been needed to finance repairs and improvements. However, it is a question of fact for an appeal tribunal to resolve whether one of the reasons for an increase in borrowing was the change in homes. The appeal tribunal of 17 April 1996 was, on the evidence, entitled to proceed on the assumption that the increase in borrowing was in consequence of the change. If the issue arises for the new appeal tribunal, it must be resolved on whatever evidence is then before it.
Directions to the new appeal tribunal
- There must be a complete rehearing of the claimant's appeal against the adjudication officer's decision issued on 1 August 1994. The new appeal tribunal must apply the legal approach set out in paragraph 13 above to the question of whether the provisions of paragraph 5A of Schedule 3 to the Income Support (General) Regulations 1987, as introduced with effect from 2 May 1994, apply to the circumstances of the present case. Mr. Norman will no doubt ensure that whatever evidence is available is put to the new appeal tribunal about the date on which contracts were exchanged on the purchase of the claimant's new home in Fernley Road and of any other arrangements or agreements between the claimant and his building society. If paragraph 5A does not apply, the question of the appropriate housing costs must be decided according to the other provisions of Schedule 3. The adjudication officer's written submission to the new appeal tribunal should include a submission about what the appropriate housing costs would be on that basis. If paragraph 5A does apply, the new appeal tribunal must then have regard to the points made in paragraphs 17 to 19 above. In that event, I also direct that the new appeal tribunal is to apply the principle that a need to provide separate sleeping accommodation for children of different sexes aged ten or over may exist before all the children involved have actually reached the age of ten (following Commissioner's decision CIS/14657/1996 in a different context). Action may need to be taken to secure that result when the relevant children have reached the age of ten.
Date: 22 September 1999 (signed) Mr. J. Mesher
Commissioner
The claimant appealed to the Court of Appeal. The decision of the Court of Appeal follows.
DECISION OF THE COURT OF APPEAL
Miss S. Elliott (instructed by Messrs J M Wilson, Birmingham) appeared on behalf of the Appellant.
Mr. D. Forsdick (instructed by the Office of the Solicitor to the Department of Social Security) appeared on behalf of the Respondent.
Judgment
- LORD JUSTICE MANTELL: I will invite my Lord, Mr. Justice Cresswell, to give the first judgment.
- MR. JUSTICE CRESSWELL: This is a challenge, by permission of Lord Justice Laws, to a decision of social security Commissioner Mesher dated 22 September 1999.
- The Commissioner allowed Mr. Saleem's appeal against the decision of the Birmingham social security appeal tribunal held on 17 April 1996 and remitted the matter to a fresh appeal tribunal. However, Mr. Saleem was only successful on a limited point, that the tribunal had not considered whether his housing costs were incurred before 3 May 1994. It is now accepted by the appellant that his housing costs were incurred after that date, and therefore this part of the decision is of no benefit to the appellant. The appellant therefore challenges the second part of the Commissioner's decision (paras. 16 and following). At issue is whether the appellant is entitled to have the full amount of his mortgage interest payments taken into account for the purposes of the calculation of income support.
- The appellant lives with his wife and eight children. He has four boys, born 29 October 1979, 11 October 1980, 26 November 1981 and 28 November 1982. The four youngest children are all girls, the eldest born on 16 January 1985.
- The appellant was awarded the higher rate mobility component of disability living allowance from 30 June 1993 to 29 June 1996 and the lowest rate care component from 9 November 1993 to 29 June 1996. The awards were made on the basis of arthritis, dizzy spells and low blood pressure.
- Before 10 May 1994 the appellant lived with his family in a three-bedroom property at 200 Warwick Road, Birmingham. The property was subject to a mortgage of some £19,000. There were three bedrooms and two living rooms at Warwick Road. The appellant slept downstairs in one of the living rooms so that he was on the same floor as the bathroom. His eldest son had the smallest bedroom to himself because he preferred to sleep alone; the then youngest daughter (and sometimes the second youngest daughter) slept with his wife in another bedroom, and all the remaining children were in the third bedroom.
- On 10 May 1994 the appellant sold 200 Warwick Road for £38,000 and moved to 20 Fernley Road, Sparkhill, Birmingham, which he bought for £38,000, having taken out a mortgage of £34,000. The balance payable to the appellant after these transactions was £14,549. Fernley Road is a bigger property than Warwick Road, having three bedrooms and three living rooms. A bathroom was subsequently added downstairs. The appellant now sleeps in one living room downstairs, the four boys sleep in one bedroom and the girls sleep in the other bedroom, although the younger girls may sleep with his wife in the third bedroom.
- The adjudication officer decided to restrict the amount of applicable housing costs to the amount allowed in respect of the old house. This restriction was made under Schedule 3, paragraph 5A of the Income Support (General) Regulations 1987. Paragraph 5A came into force on 2 May 1994.
- On 17 April 1996 the Birmingham social security appeal tribunal upheld the adjudication officer's decision. Social security Commissioner Mesher did not find any error of law in the appeal tribunal's application of paragraph 5A (save for the point referred to above which, it is now accepted, does not arise on the facts).
- Three issues arise on this appeal:
1. Did the Commissioner err in law in his construction of sub-paragraph 5A(9)(b)?
2. Was sub-paragraph 5A(9)(b) ultra vires for irrationality?
3. Was sub-paragraph 5A(9)(b) ultra vires for failing to comply with the enabling legislation?
- Section 174(2) of the Social Security Administration Act 1992 provides:
"If after receiving a report of the [Social Security Advisory] Committee the Secretary of State lays before Parliament any regulations or draft regulations which comprise the whole or any part of the subject-matter of the proposals referred to the Committee, he shall lay with the regulations or draft regulations a copy of the Committee's report and a statement showing-
(a) the extent (if any) to which he has, in framing the regulations, given effect to the Committee's recommendations; and
(b) in so far as effect has not been given to them, his reasons why not."
- I now refer to the regulations in force at the relevant time.
- Schedule 3 to the Income Support (General) Regulations 1987, paragraph 1, sets out the eligible costs for the purpose of calculating applicable amounts in regulation 17. Paragraph 5A sets out certain housing costs which are not met by income support. These are prima facie those which are incurred after 2 May 1994. Sub-paragraph 5A(6) provides that housing costs falling within the conditions in sub-paragraph (9) shall be met.
- Sub-paragraphs 5A(6) and (9) provide:
"(6) Notwithstanding sub-paragraph (1), the housing costs shall be met in accordance with the provisions of this Schedule in the case of a claimant who satisfies the conditions specified in sub-paragraph (7), (8), (9) or (10) below, but-
(a) subject to any additional limitations imposed by the sub-paragraph;
and
(b) where the claimant satisfies the conditions in more than one of those sub-paragraphs, only one sub-paragraph shall apply in his case and the one that applies shall be the one most favourable to him.
(9) The conditions specified in this sub-paragraph are that-
(a) the loan commitment increased in consequence of the disposal of the dwelling occupied as the home and the acquisition of an alternative such dwelling; and
(b) the change of dwelling was made solely by reason of the need to provide separate sleeping accommodation for children of different sexes aged 10 or over who are part of the same family as the claimant."
- 1. Did the Commissioner err in law in his construction of sub-paragraph 5A(9)(b)?
- The social security appeal tribunal held:
"We consider that Mr. Saleem reasonably moved to larger accommodation because of his expanding family but the regulations appear to make no provision for this. This is curious because it appears that if someone had a very large family of children all of the same sex then no provision is made for an increased loan whereas a smaller mixed sex family might well mean that a claimant may qualify. The argument put forward by the representative in respect of both disability and the separate sleeping accommodation requirement related mainly to the need for a larger property. But it was argued quite reasonably that when Mr. Saleem was sleeping downstairs at the smaller property, there was little living accommodation for the remainder of the family. The bigger bedrooms in the new house clearly provide better accommodation for the children. Nevertheless the arguments relating both to disability and to the children are concerned with the need for larger accommodation. The needs of Mr. Saleem for his disablement alone are met equally by both properties. Sub-paragraph (9) states that the change of dwelling must be made "solely" by reason of a need to provide separate sleeping accommodation for children of different sexes. In this case that was not the sole reason, the reason was mainly to provide more adequate i.e. roomy accommodation."
- The Commissioner dealt with the meaning of "solely by reason of" in paragraph 17 of his decision as follows:
"The first issue, the meaning of "solely by reason of" in paragraph 5A(9)(b), is a very difficult one. I think it is fair to say that Mr. Scoon struggled to find a sensible meaning to put forward. The problem is that in practice in every case there will be some additional reason for choosing the particular new home as well as the need to provide separate accommodation for children of different sexes. If liking the garden of the new home or the colour of the front door takes the case outside paragraph 5A(9), then the provision can never have any practical application. Such an interpretation is therefore to be avoided. I think that it can be avoided by looking primarily at the reasons why it was decided to move from the old home. However, I shall not go into all the difficulties, because in my view the appeal tribunal did not err in law in concluding that the claimant did not come within paragraph 5A(9)(b). The basis for its conclusion was that the main reason for moving from the old home was to acquire more roomy accommodation generally. That was a finding which it was entitled to make on the evidence and was one which meant that the change of home was not solely by reason of the need to provide separate accommodation for children of different sexes, within the proper interpretation of paragraph 5A(9)(b)."
- Miss Elliott, for the appellant, has submitted that the Commissioner erred in law in deciding that, in order to ascertain if the requirements of sub-paragraph 5A(9)(b) were satisfied, it was necessary to look "primarily at the reasons why it was decided to move from the old home". The Commissioner's definition was, she submitted, erroneous in that it did not satisfy the requirements of the sub-paragraph, namely that the change of dwelling was made solely for the one reason specified. The definition the Commissioner proposed created a subjective test. Miss Elliott submitted that the appropriate test should be an objective one: was the move to prevent the offence which occurs when children of the opposite sex over ten share sleeping accommodation?
- In my view the Commissioner's construction of the sub-paragraph was correct. The relevant question was whether the change of dwelling was made solely by reason of the need to provide separate sleeping accommodation for children of different sexes aged ten or over. It was necessary to focus on the reason for the change of home. If the operative reason for the change was not the need to provide separate sleeping accommodation for children of different sexes of ten or over, the condition would not be met. Warwick Road and Fernley Road contain the same number of bedrooms. The appeal tribunal found that "the reason was mainly to provide more adequate i.e. roomy accommodation". As the Commissioner said, that was a finding which the appeal tribunal was entitled to make on the evidence, with the result that the condition was not met. Each case will turn on its own facts. If the sole or exclusive reason for a change of home is the need to provide separate sleeping accommodation for children of different sexes aged 10 or over, the condition would be met even if the new home selected incidentally carried other benefits for the family.
- 2. Was sub-paragraph 5A(9)(b) ultra vires for irrationality?
- Miss Elliott submitted that the use of the word "solely" renders the sub-paragraph ultra vires for irrationality, and that the Commissioner erred in law in failing to find the sub-paragraph invalid on the ground of irrationality. Parliament, she argued, cannot have intended, when enabling the Secretary of State to make the regulations, to create an exception by way of sub-paragraph (9)(b) that could never be satisfied or to make an exception which conflicted with sub-paragraph (6)(b).
- I cannot accept the submission that sub-paragraph (9)(b) could never be satisfied. On the contrary, if the reason for the change was the need to provide separate sleeping accommodation for children of different sexes aged ten or over, it would be satisfied. Further, there is no conflict between sub-paragraphs (6) and (9). Where the claimant satisfies the conditions in more than one of sub-paragraphs (7), (8), (9) or (10), the sub-paragraph that applies will be the one most favourable to the claimant.
- 3. Was sub-paragraph 5A(9)(b) ultra vires for failing to comply with the enabling legislation?
- I have already referred to section 174(2) of the 1992 Act.
- The Statement by the Secretary of State in accordance with section 174(2) set out the extent to which he had, in framing the regulations, given effect to the Committee's recommendations and, in so far as effect was not being given to them, his reasons why not. The material passage read:
"The Committee have made a number of recommendations in their report. These recommendations and the Government responses to them are given below:
...
(iii) to provide for new housing requirements due to an increase in the number of dependent children living in the claimant's household where the children would be regarded as living in overcrowded conditions for the purposes of the Housing Act 1985;
RESPONSE: The purpose of income support help with mortgage interest is to help people retain their existing reasonable accommodation. We believe that where that accommodation is inadequate help is best focused through Government housing policy which is administered by the Department of the Environment in the form of home improvement grants and rehousing for vulnerable groups. This is a more efficient way of addressing such problems than using the benefits system, particularly when the help in question is not available to people in work on low incomes. In addition, owner-occupiers who do not receive income support have to plan for family size in relation to their expected income and we see no reason why income support recipients should be treated differently.
(iv) to provide for separate sleeping accommodation for dependent children of different sexes aged 10 or over living in the claimant's household;
RESPONSE: We accept this recommendation."
- Miss Elliott submitted that the regulation was ultra vires for failing to comply with the enabling legislation. The legislative provision, she contended, was not in keeping with the intentions expressed and was ultra vires for the misleading of Parliament irrespective of irrationality or bad faith. It should be noted that this was an argument not advanced below.
- This Court cannot entertain any argument to the effect that Parliament was misled. By Article 9 of the Bill of Rights 1689:
"Freedome of speech - that the freedome of speech and debates of proceedings in Parlyament ought not to be impeached or questioned in any court or place out of Parlyament."
- It is to be noted that the regulations were subject to parliamentary control, namely the negative resolution procedure.
- Further, I would add for completeness that in my view the wording of sub-paragraph (9)(b) did in fact reflect the response given, accepting the relevant recommendation of the Committee.
- Further, as has been pointed out by the Court in course of argument, it would probably not be in the interests of Mr. Saleem if the relevant paragraph was struck down.
- In the result, despite the attractive presentation of the argument by Miss Elliott, I would dismiss the appeal.
- LADY JUSTICE HALE: I agree.
- LORD JUSTICE MANTELL: I also agree.
Order: Appeal dismissed; public funded costs assessment for the appellant.
