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[2008] UKUT 26 (AAC) (01 December 2008)

 


Decision of the Upper Tribunal
(Administrative Appeals Chamber)

This decision is given under section 11 of the Tribunals, Courts and Enforcement Act 2007:

The decision of the Stratford appeal tribunal under reference 249/07/00357, held on 25 October 2007, did not involve the making of an error on a point of law.

I shorten to one month the time within which an application for permission to appeal to the Court of Appeal may be made: rule 5(3)(a) of the Tribunal Procedure (Upper Tribunal) Rules 2008 (No 2698).

Reasons for Decision

A The jurisdiction of the Upper Tribunal
B The issue and how it arises
C The appeal to the appeal tribunal
D The oral hearing
E Housing benefit legislation
F The case law
G The housing benefit scheme as a whole
H Analysis
I Council tax benefit
J Disposal

A. The jurisdiction of the Upper Tribunal

1. These proceedings began as an appeal to the Social Security Commissioner by the London Borough of Hackney against the decision of the Stratford appeal tribunal. They were transferred to the Upper Tribunal under the Transfer of Tribunal Functions order 2008 (No 2833).

B. The issue and how it arises

2. The issue in this case is whether a single dwelling can comprise separate properties rented under different tenancies. The local authority argues that it cannot. The appeal tribunal decided that it could.
3. The facts are not in dispute.
4. The claimant has tenancies of two flats in the same building. She has had a tenancy of the first flat since March 1995. Her landlord is the freehold owner of the building. The claimant was awarded housing benefit in respect of this flat. As she has a large family (at the time, she and her husband had nine children), she rented a second, adjacent flat in August 2006. This was a subtenancy from an intermediate lessee. At first, the flats were physically separate. Later, her husband knocked through the connecting wall.
5. The claimant claimed housing benefit and council tax benefit in respect of both flats on 11 September 2006. The local authority refused to award either benefit in respect of the second flat.

C. The appeal to the appeal tribunal

6. The claimant exercised her right of appeal and was successful. The tribunal decided that she was entitled to both benefits in respect of both flats. The chairman's reasons were summarised in her decision notice:

'Reasons: [The two flats] adjoin each other and have been knocked through to provide accommodation for the one family of 12 people (including the new baby). Although the two flats are technically let through different landlords – [the first] is let by the freeholder while [the second] is let by a charitable trust which sublets from the freeholder – they are in practical terms one dwelling.'

D. The oral hearing

7. Having received the written observations of the parties, I directed an oral hearing. It took place in the Upper Tribunal's court at Harp House on 28 November 2008. I heard argument from Mr Chodhury of counsel, who was instructed by the local authority, and from Mr Rutledge of counsel, who was instructed by the Mary Ward Legal Centre on behalf of the claimant. I am grateful to both of them for their clear and concise arguments.

E. Housing benefit legislation

8. Housing benefit is governed by section 130 of the Social Security Contributions and Benefits Act 1992:

'130 Housing benefit

(1) A person is entitled to housing benefit if-

(a) he is liable to make payments in respect of a dwelling in Great Britain which he occupies as his home; …'

9. Section 137(1) defines 'dwelling':

'137 Interpretation of Part VII and supplementary provisions

(1) In this Part of this Act, unless the context otherwise requires-

…

"dwelling" means any residential accommodation, whether or not consisting of the whole or part of a building and whether or not comprising separate and self-contained premises; …'

10. Mr Chodhury relied on this definition. He emphasised that 'dwelling' was defined separately from occupation of the property as the claimant's home. He also drew my attention to the fact that it differed from the definition of dwelling for the purposes of council tax benefit in section 131(11). Mr Rutledge emphasised that only 'dwelling' was defined and that this had to be read in the context of the whole expression 'dwelling in Great Britain which he occupies as his home'.
11. I accept Mr Rutledge's argument on this point. It is correct that 'dwelling' is defined separately, but in the housing benefit context it is inseparable from occupation as the claimant's home. The word is isolated for definition, because it deals with the organisational aspects rather than the functional aspects – how premises relate to a particular structure rather than the use that is made of them. The terms of the definition does not support Mr Chodhury's argument that two properties that are separate legally and physically cannot comprise a single dwelling. Nor does the fact that 'dwelling' is the subject of separate definition.
12. Lord Bridge's remark, made in a different statutory context in Woodling v Secretary of State for Social Services [1984] 1 WLR 348 at page 352 is apposite here:

'The language of the section should, I think, be considered as a whole, and such consideration will, I submit, be more likely to reveal the intention than an attempt to analyse each word or phrase separately'

13. Mr Chodhury emphasised that the meaning of dwelling depended on its context. I accept that argument. But I also note that the definition in section 137(1) is not limited to housing benefit; it applies to all benefits within Part VII of the 1992 Act.
14. The 1992 Act confers power to make regulations on a number of matters:

'137 Interpretation of Part VII and supplementary provisions

…

(2) Regulations may make provision for the purposes of this Part of this Act-

…

(h) as to circumstances in which a person is or is not to be treated as occupying a dwelling as his home;

(i) for treating any person who is liable to make payments in respect of a dwelling as if were not so liable;

(j) for treating any person who is not liable to make payments in respect of a dwelling as if were so liable;

(k) for treating as included in a dwelling any land used for the purposes of the dwelling; …'

15. The Housing Benefit Regulations 2006 are made under the Act:

'7. Circumstances in which a person is or is not to be treated as occupying a dwelling as his home

(1) Subject to the following provisions of this regulation, a person shall be treated as occupying as his home the dwelling normally occupied as his home—

(a) by himself or, if he is a member of a family, by himself and his family; …

and shall not be treated as occupying any other dwelling as his home.

(2) In determining whether a dwelling is the dwelling normally occupied as a person's home for the purpose of paragraph (1) regard shall be had to any other dwelling occupied by that person or any other person referred to in paragraph (1) whether or not that dwelling is in Great Britain.

…

(6) Where a person is liable to make payments in respect of two (but not more than two) dwellings, he shall be treated as occupying both dwellings as his home only—

…

(c) in the case where, because of the number of persons referred to in paragraph (1), they have been housed by a housing authority in two separate dwellings; …'

16. Section 191 of the Social Security Administration Act 1992 defines 'housing authority':

'191 Interpretation - general

In this Act, unless the context otherwise requires-

…

"housing authority" means a local authority or a new town corporation or the Development Board for Rural Wales; …'

17. Mr Chodhury argued that a claimant who was occupying two dwellings was only entitled to housing benefit under regulation 7(6)(c). As that provision only applied if the local (housing) authority had housed the claimant in separate dwellings, it was impossible for a claimant to qualify for housing benefit if the tenancies were privately arranged. Apart from regulation 7(6)(c), any claim in respect of two dwellings would be refused. The claimant would then have to make a claim in respect of one dwelling only.
18. Mr Rutledge argued that this approach misunderstood the structure of regulation 7. Regulation 7(1) and (2) contained the general rule – the dwelling occupied as the claimant's home was the dwelling normally so occupied. Regulation 7(6) contained a series of exceptions to that general rule. The claimant did not come within regulation 7(6). It only applied if she was occupying separate dwellings and, on the facts found by the tribunal, she was not. As she was occupying only one dwelling, the general rule in regulation 7(1) applied.

F. The case law

19. At the oral hearing, the focus of discussion was on the decision of the Court of Appeal in Secretary of State for Work and Pensions v Miah reported as R(JSA) 9/03. This was an appeal from a decision of Mr Commissioner Bano, who had decided that the claimant was entitled to housing costs in respect of two properties that he owned in the same street, because he occupied them together as his home. The Court of Appeal dismissed the appeal. It decided that together the properties constituted the dwelling he occupied as his home. Ward LJ commended what he described as a functional rather than a structural test (paragraph 32). Applying this approach, he emphasised the wording of the legislation, which is the same in this case:

'26. … Because the single word is expanded into a phrase "dwelling occupied as the home" I am given the impression that the legislature intended to convey the function to be served by the concept of a dwelling rather than to connote its constituent elements, the bricks and mortar of the dwelling. The function is a place serving as home for the claimant. That place is not necessarily confined to a single building.'

20. Ward LJ also made a remark that is relevant to the workability of the scheme as a whole. He said:

'30. Commonsense dictates that the court can construe the words in a way which does not make them unworkable or impractical.'

21. Mr Chodhury argued that this case could be distinguished and that, in the context of the housing benefit legislation, it was appropriate to take a structural approach and not a functional one. Mr Rutledge argued that the functional approach was appropriate in the housing benefit context.
22. I accept that the legislative context of jobseeker's allowance and housing benefit are different. I accept that Miah is not a binding authority on the interpretation of the housing benefit legislation and that it does not require me to take a functional approach. However, it is an authority that it is permissible in appropriate circumstances to take a functional approach. Also, although the context may be different, the actual expression that the Court of Appeal had to consider is exactly the same as in this – 'dwelling occupied as the home'. And Ward LJ considered it important that that was the expression used, not just 'dwelling'. The addition of occupation inevitable indicates a functional inquiry.
23. In his written argument, Mr Rutledge referred to the decision of the House of Lords in Uratemp Ventures Ltd v Collins [2002] 1 AC 301. The issue was whether the lack of cooking facilities prevented the claimant's home being a dwelling for the purposes of the Housing Act 1988. The House decided that it did not. Mr Rutledge referred me to some general comments on the interpretation of 'dwelling' in its context, which are surely beyond dispute. Beyond that, I do not attach great significance to the reasoning in the case, because the decision was an anti-avoidance one. Landlords were so defining the scope of the premises let to tenants as to avoid the legislation. The House was concerned to deprive this device of effect.
24. Mr Rutledge also referred to R(H) 3/08. In that case, Mr Commissioner Howell was concerned with council tax benefit and a claimant who occupied two flats. Mr Howell decided that together the flats constituted the claimant's sole or main residence for council tax benefit purposes. I note that Mr Howell described his analysis (at paragraph 15) as being the one that 'accords best with the practical reality'. Mr Chodhury did not comment on this decision. It is concerned with different legislation that uses a different definition. However, it does show that it is permissible in appropriate circumstances to take a functional approach.

G. The housing benefit scheme as a whole

25. In its written observations, the local authority set out a series of difficulties that were said to arise if the tribunal's interpretation were correct. Mr Chodhury referred me to these. In summary, they refer to difficulties: (i) for a rent officer fixing a rent; (ii) if one tenancy were terminated and not the other; and (iii) if there was an overpayment.
26. Another consideration mentioned by the local authority was the fact that its systems and software did not allow it to cope with a dwelling rented from different landlords. I reject that as irrelevant. The systems operated by a particular local authority or the software that it has bought cannot affect the interpretation of the legislation.
27. Mr Rutledge addressed the others in his written argument. He argued that some did not apply in the circumstances of this case, which rather misses the point that 'dwelling' would have the same meaning regardless of the circumstances. For the others, he argued that they did not make the housing benefit scheme unworkable.
28. I accept Mr Rutledge's argument that the points made by the local authority do not show that the scheme is unworkable. For some, I cannot see that any difficulty arises. For example, if the claimant terminated one tenancy, that would be a change of circumstances that would be taken into account on supersession. For others, I accept that in some circumstances it might be necessary to apply some common sense to resolve an issue. However, I cannot see that any of the problems identified by the local authority are such that they must cause me to interpret 'dwelling' differently from the meaning it would otherwise have in its context.

H. Analysis

29. 'Dwelling' is an ordinary word whose general meaning is well understood with or without the aid of a dictionary. As such, I have to take the approach explained by Lord Hoffmann in Moyna v Secretary of State for Work and Pensions [2003] 1 WLR 1929:

'24. Lord Reid was here making the well-known distinction between the meaning of a word, which depends upon conventions known to the ordinary speaker of English or ascertainable from a dictionary, and the meaning which the author of an utterance appears to have intended to convey by using that word in a sentence. The latter depends not only upon the conventional meanings of the words used but also upon syntax, context and background. The meaning of an English word is not a question of law because it does not in itself have any legal significance. It is the meaning to be ascribed to the intention of the notional legislator in using that word which is a statement of law. It is because of the nature of language that, in trying to ascertain the legislator's meaning, it is seldom helpful to make additions or substitutions in the actual language he has used.'

30. A glance at Stroud's Judicial Dictionary shows that 'dwelling' and cognate expressions have been used in a variety of statutory contexts and have regularly been the subject of consideration by the courts. The cases show that the word has a core meaning but that the scope of the peripheral meaning varies according to the context. That is what one would expect.
31. The housing benefit legislation largely avoids terms of art from property law. For example: regulation 9 refers to payments in respect of a dwelling rather than rent and to agreement rather than tenancy. This reflects the breadth of the arrangements that are covered by the legislation. It is concerned with the economic substance of an arrangement rather than with the precise legal form. In that context, it is appropriate to take account of the reality of the claimant's living arrangements and not place too much emphasis on the legal structure. The editors of CPAG's Housing Benefit and Council Tax Benefit Legislation: 20^th Edition 2007/2008 hit the write tone in saying of the definition of 'dwelling' (at page 22): 'The emphasis on the "residential" aspects in the definition given in s137 suggests that in the HB context it should be given a wide interpretation, because the essence of the HB scheme is to include all rent and allied payments for different types of accommodation.'
32. I must, of course, take account of the context and of the statutory definition. As to the legislative context, this points (as I have just said) towards an approach that is not dictated by the legal ownership, physical structure or organisation of the premises. As to the statutory definition, this is concerned with organisational aspects. It broadens, or serves to emphasise, the scope of the word 'dwelling' in its context. I do not read it as a restrictive definition. It would be surprising if it were, as it has to cover all sorts of residential accommodation. The housing benefit scheme applies not only to houses and flats. It also covers caravans, mobile homes and houseboats: see regulation 12(1).
33. I can find nothing in regulation 7(6)(c) or any other element of the housing benefit scheme that affects the interpretation or application of the statutory words 'a dwelling in Great Britain which he occupies as his home'.
34. My interpretation is that these words give rise to a single question of fact: what is the extent of the dwelling occupied by the claimant? The tribunal's answer was that her dwelling consisted of both flats. That was a finding of fact. On the evidence it was one that the tribunal was entitled to make. It was not perverse. The tribunal did not overlook any relevant factor. Nor did it take account of any irrelevant factor.
35. On the tribunal's finding, no issue arose on regulation 7(6)(c), because the claimant was not occupying separate dwellings.

I. Council tax benefit

36. The local authority has not pursued its appeal in respect of council tax benefit, which is in payment. In order to explain why it has taken a different approach from housing benefit, I need to set out the relevant legislation.
37. Council tax benefit is governed by section 131 of the Social Security Contributions and Benefits Act 1992:

'131 Council tax benefit

(1) A person is entitled to council tax benefit in respect of a particular day falling after 31st March 1993 if the following are fulfilled, namely, the condition set out in subsection (3) below …

(3) The main condition for the purposes of subsection (1) above is that the person concerned-

(a) is for the day liable to pay council tax in respect of dwelling of which he is a resident; …

(11) In this section "dwelling" and "resident" have the same meaning as in Part I or II of the Local Government Finance Act 1992.'

38. The 1992 Act provides:

'3 Meaning of "dwelling"

(1) This section has effect for determining what is a dwelling for the purposes of this Part.

(2) Subject to the following provisions of this section, a dwelling is any property which—

(a) by virtue of the definition of hereditament in section 115(1) of the General Rate Act 1967, would have been a hereditament for the purposes of that Act if that Act remained in force; and

(b) is not for the time being shown or required to be shown in a local or a central non-domestic rating list in force at that time; and

(c) is not for the time being exempt from local non-domestic rating for the purposes of Part III of the Local Government Finance Act 1988 ("the 1988 Act");

and in applying paragraphs (b) and (c) above no account shall be taken of any rules as to Crown exemption.'

'6 Persons liable to pay council tax

…

(5) In this Part, unless the context otherwise requires-

…

"resident", in relation to any dwelling, means an individual who has attained the age of 18 years and has his sole or main residence in the dwelling.'

39. Section 115(1) of the General Rate Act 1967 contained this definition:

'"hereditament" means property which is or may become liable to a rate, being a unit of such property which is, or would fall to be, shown as a separate item in the valuation list.'

40. I can now explain why the local authority has not pursued the appeal in respect of council tax benefit. The reason is that the two flats have been rebanded as a single hereditament for council tax purposes. The local authority is appealing against that decision, but in the meantime it has accepted that the claimant is entitled to council tax benefit.

J. Disposal

41. I dismiss the appeal.
42. The local authority cannot appeal against my decision in respect of council tax benefit. However, it may wish to do so in respect of housing benefit. In order to provide some certainty for the claimant and her family, I have applied rule 5(3)(a) of the Tribunal Procedure (Upper Tribunal) Rules 2008 (No 2698) to shorten to one month the time within which an application for permission to appeal to the Court of Appeal may be made.

Signed on original on 01 December 2008

Edward Jacobs Upper Tribunal Judge