- This appeal is from a decision of Mr Commissioner Jacobs given on 20th May
2003 when sitting as a Social
Security
and Child Support Commissioner. He dismissed appeals in 5 cases
decided by Mr Richard Poynter, the
Social Security Appeal Tribunal.
Mr Commissioner
Jacobs gave permission to appeal to this Court. The 5 appellants
claim housing benefit ("HB").
This has wrongly been refused
contends their counsel, Mr James
Goudie QC.
- The decisions
below set out with commendable clarity the details of the facts.
Essentially
the position is simply as follows. All the
appellants are members of the
Jesus
Fellowship Church. They have become what are called "Style Three" members.
This
means that they have agreed to live communally, pooling their
income in
a common purse, and giving all
their
capital to the Church Trust. They occupy properties owned by
the Church under agreements of various
types. These agreements are genuine
legal
agreements, not shams. There are real legal liabilities for
rent. It is not suggested the
agreements were created to take
advantage of the HB scheme.
- The provision with which we are concerned is regulation 7 of the Housing
Benefit (General) Regulations 1987 as amended by regulation 3 of
the Housing Benefit (General) Amendment (No 2) Regulations 1998.
This reads:
"(1) A
person
who is liable to make payments in respect of a dwelling shall
be treated as if he were not so liable
where –
(a) the
tenancy
or other agreement pursuant to which he occupies the dwelling
is not on a commercial basis ….
(1A) in
determining
whether a tenancy or other agreement pursuant to which a person
occupies a dwelling is not on a commercial
basis regard shall be had inter
alia
to whether the terms upon which the person occupies the dwelling
include terms which are not enforceable
in law.
- The Tribunal,
upheld by the Commissioner, held that the agreements pursuant
to which
the appellants
occupied their dwellings were not "on
a commercial basis." So by the regulation, they are treated
as if they do not have to pay
rent and hence are not entitled
to HB.
- Mr Goudie has two main points, one under the ECHR and the other relating
to how regulation 7 came to be amended in 1998. His ECHR point does
not challenge the validity of the regulation as such – his point
relates to what he claims is an error of approach caused by a failure
to take the ECHR into account in reaching the decision. His alternative
point about the amendment, if right, would have the consequence that
the amendment would be ultra vires and invalid. It is a pure domestic
law point.
The ECHR Point
- I begin by setting out the Tribunal’s reasons for holding that the
agreements were not on a commercial basis. It did so in a
model way, first identifying
the "commercial" factors and
then those which were "non-commercial."
"Factors
which
tend to suggest the agreements are commercial
75. The
factors
which tend to suggest that the agreements are commercial are
as follows:
(a) The
Trust
is non-charitable. The Trustees are under legal obligations
to protect
Trust property, to ensure that it is only used for proper purposes
and to
secure a proper return on Trust assets. Its finances
are properly
managed by Mr Farrant and are subject to detailed and
rigorous financial controls.
(b) Those
Conditions
of Residence which deal with the Board and Lodging charge create
a genuine and legally enforceable
liability on the part of Community
Members
to make payments in respect of the occupation of Community
Houses.
(c) The
Trust
takes reasonable measures to enforce payment of arrears of
the Board and Lodging charge by former residents
of Community Houses who have
left.
(d) The
Trust
takes reasonable measures short of eviction against Community
Members
who are in arrears of the Board and Lodging charge but are
otherwise
in good
standing with the Church and who wish to remain as Community
Members.
Factors which tend to suggest the agreements are not
commercial
76. The
factors
which tend to suggest that the agreements are not commercial
are as follows:
(a) The
Lifestyle
Conditions which (inter alia) require
Members to pool their income in a Common Purse, actively to pursue
a particular religious lifestyle, submit to the authority of the
Elders, bring up their children in a specified way and participate
wholeheartedly in the activities of the Church and the communal life
of the Community Houses.
(b) In
the case
of the Elders’ Conditions of Residence, the requirements to
be responsible for oversight of the religious
life of the Community House,
including matters of religious
discipline.
(c) Full
Style
3 Members are required to donate all their belongings to the
Trust.
(d) The
Board
and Lodging charge is not set so as to maximise the Trustees’
return
on their investments but so as to cover costs and provide a
reasonable
return on capital. It is also
relevant that:
i. The
Board
and Lodging charge is not based on the current values of the
Trust’s property portfolio but on its historic
cost;
ii. The
Board
and Lodging charge is not based on the actual value of the
property occupied by the payor but on figures
calculated on the value of the
Trust’s property portfolio as
a whole;
iii. The
Board
and Lodging charge is not related to the size of the accommodation
occupied by the payor and his or
her family;
iv. As
the Board
and Lodging charge is based on bed-spaces, the return which
the Trust receives from the Elders (who are, in
effect, the Head Licensees) varies
according to the number of occupiers.
(e) The
Board
and Lodging charge can be increased by the Trustees, on occasion
with retrospective effect, without consulting
or securing the prior agreement
of the payor.
(f) The
Elders
may unilaterally change the sleeping arrangements of Community
Members.
(g) The
Elders’
conditions of residence may be unilaterally changed by the
Trustees.
(h) The
procedure
of merging a Common Purse which is in financial trouble with
one which is not. The possibility that
one group of sub-licensees of
a Landlord
should intervene to assist the Landlord by assuming the financial
responsibilities of another
group of the Landlord’s sub-licensees
is without any parallel in the
commercial letting market.
(i) Community Members in good standing are permitted
to run up arrears of Board and Lodging charge indefinitely without
being evicted as long as the failure to pay the charge results from
factors outside that Member’s control, such as non-payment of housing
benefit. Mr Farrant said in evidence that, in the long run, the Trustees
stood a better chance of recovering their money by keeping the person
with arrears as a Style 3 member and that since a continuing Style
3 member would already be paying all of his or her income into the
Common Purse there would be no assets against which any legal judgment
could be enforced. That may be so in the short or even the medium
term but ultimately there would come a point when a commercial landlord
would cut his or her losses and seek to replace a tenant who could
not pay the ongoing charge with one who could, even at the risk of
making it more difficult to recover any arrears. A commercial landlord
would not have permitted the Elders of … to accumulate arrears in
excess of £84,000 without taking steps to terminate their licenses
no matter what the reasons for
the arrears may have been.
(j) When
pursuing
arrears, even through the courts, the Trust or the Elders do
not normally make a claim for interest."
- For convenience I set forth the Convention provisions relevant to this
case:
"Article 8 – Right to respect for private and family
life
1. Everyone
has the right to respect for
his private and family life, his home and his correspondence.
2. There shall be no interference by a public authority with the
exercise of this right except such as is in accordance with
the law and is necessary in a democratic society in the interests
of national security, public safety or the economic well being
of the country, for the prevention of disorder and crime, for
the protection of health or morals, or for the protection of
the rights and freedom of others.
Article 9 – Freedom of thought, conscience and religion
- Everyone has the right to freedom of thought, conscience and
religion; this right includes freedom to change his religion
or belief and freedom, either alone or in community with others
and in public or private, to manifest his religion or belief,
in worship, teaching, practice and observance.
- Freedom
to manifest one’s religion or beliefs shall be subject
only
to such limitations as are prescribed by law and are
necessary in a
democratic society in the interests of public safety,
for the
protection of public order, health or morals, or for
the protection
of the rights and freedom of others."
"Article 14 – Prohibition of discrimination
The
enjoyment of the rights and freedoms set forth in this Convention
shall be
secured without discrimination
on any ground such as sex, race, colour, language, religion, political
or other
opinion, national or social origin,
association with a national minority, property, birth
or other status."
Protocol 1 Article 1 – Protection of property
Every natural or legal person is entitled to the peaceful
enjoyment of his possessions. No one shall be deprived of his possessions
except in the public interest and subject to the conditions provided for
by law and by the general principles of international law.
The
preceding provisions shall not, however, in any way impair the right
of a State
to enforce such laws as it deems
necessary to control the use of property in accordance with the general
interest
or to secure the payment of taxes or other contributions
or penalties."
- Mr Goudie’s argument goes in a number of steps. I take them from his
skeleton argument:
(1) Was
the Tribunal
obliged to consider the appellants’ Convention rights in drawing
the inference about commerciality?
(2) Are
the appellants being discriminated against?
(3) Was
Art. 14 engaged?
(4) Was
the discriminatory
treatment imposed in furtherance of a legitimate aim?
(5) Was
the discrimination proportionate to the aim?
- As will be seen from what I say below, I would answer these questions
as follows:
(1) No;
(2) No;
(3) No because there is no violation of any substantive
Article;
(4) There is a legitimate aim and no discriminatory
treatment, and
(5) In any event if there is discrimination it is proportionate
in furtherance of a legitimate aim.
Commerciality and the Convention
- Mr Goudie accepts that this point is crucial to his argument. In essence
he contends that the Tribunal was wrong in law to take into account
any actual facts if the cause of them is the appellants’ religious
beliefs. His argument is that the overall evaluation of whether there
is a commercial basis involves taking into account a number
of primary detailed facts – as the Tribunal so clearly set out. Thus
the question is analogous to the exercise of a discretion where one
weighs relevant factors. In his skeleton argument he actually went
so far as to suggest that the determination of whether or not there
was a commercial basis was an exercise of discretion.
- Perhaps
recognising that would not do (and it obviously will not) in
oral argument
he shifted
his position. He said the overall evaluation "had
a lot in common" with the exercise of a discretion in which
one weighed a number of factors.
And, he submitted, in weighing
the various factors, the weight to be given to those factors the
reason
for which was religious belief
should be nothing or very slight.
This was because the Convention was engaged - the factors were manifestations
of the belief. To take into account
factors due to manifestation
of religion was to take into account
factors which were not lawfully
relevant.
- Mr Goudie’s argument then proceeded to examine the various negative
factors identified by the Tribunal, factors which he accepted overlap
in part with one another. Most of the factors had some connection
with the religious belief indeed only (c) was wholly untouched by
belief. The key factor was (a). If weight was given to these factors,
manifestations of religious belief, then, he submitted there was
an interference with the appellants’ religious practices contrary
to Art.9. It followed that the enjoyment of the right to freedom
of religion – and particularly the freedom to manifest that religion
- should be secured by Art.14.
- I would reject this argument. The issue of whether or not there is
a commercial basis is one of fact. True it is that this overall
question involves weighing a number of factors – sub-facts so to
speak. But everything in the evaluation is purely factual. The Convention
cannot and does not purport to change facts or make evidence relevant
to a factual inquiry inadmissible. The true position is that the
arrangements are non-commercial for religious reasons. Religious,
or indeed any other, reasons cannot turn that which is non-commercial
into that which is.
- Although we were taken to a number of authorities, both UK and in the
ECHR, none came near to establishing that at the stage of a factual
investigation reality should be ignored. Perhaps the nearest, but
only at first blush, was Thlimmenos v Greece (2001) 31 EHRR
411. A Jehovah’s witness was convicted of refusing to enlist in the
army. Greek law said that anyone who had a conviction could not be
a chartered accountant. The reason for the conviction did not matter.
The ECHR held that there was a violation of Art. 14 taken in conjunction
with Art. 9. It said:
"44. The
Court
has so far considered that the right under Article 14 not to
be discriminated against in the enjoyment
of the rights guaranteed under
the Convention
is violated when States treat differently persons in analogous
situations without providing
an objective and reasonable justification.
However,
the Court considers that this is not the only facet of the
prohibition of discrimination
in Article 14. The right not
to be
discriminated against in the enjoyment of the rights guaranteed
under the Convention is also violated when
States without an objective and
reasonable
justification fail to treat differently persons whose situations
are significantly different."
"47. The
Court
considers that, as a matter of principle, States have a legitimate
interest to exclude some offenders
from the profession of chartered
accountant.
However, the Court also considers that, unlike other convictions
for serious criminal offences,
a conviction for refusing on
religious
or philosophical grounds to wear the military uniform cannot
imply any dishonesty or moral turpitude
likely to undermine the offender’s
ability
to exercise this profession. Excluding the applicant on the
ground that he was an unfit person
was not, therefore, justified.
The Court
takes note of the Government’s argument that persons who refuse
to serve their country must be appropriately
punished. However, it also notes
that
the applicant did serve a prison sentence for his refusal to
wear the military uniform. In these circumstances,
the Court considers that imposing
a further
sanction on the applicant was disproportionate. It follows
that the applicant’s exclusion from
the profession of chartered accountants
did not
pursue a legitimate aim. As a result, the Court finds that
there existed no objective
and reasonable justification
for not
treating the applicant differently from other persons convicted
of a felony.
48. It
is true
that the authorities had no option under the law but to refuse
to appoint the applicant a chartered
accountant. However, contrary
to what
the Government’s representative appeared to argue at the hearing,
this cannot absolve the respondent
State from responsibility under
the Convention.
The Court has never excluded that legislation may be found
to be in direct breach of
the Convention. In the present
case
the Court considers that it was the State having enacted the
relevant legislation which violated
the applicant’s right not to
be discriminated
against in the enjoyment of his right under Article 9. That
State did so by failing to introduce
appropriate exceptions to the
rule
barring persons convicted of a felony from the profession of
chartered accountants."
- So it was the Greek law itself which violated the Convention. By way
of contrast in this case no challenge is made to the relevant law,
amended Reg. 7. The argument before us did not go into why there
was no challenge. Mr Sales, for the Secretary of State, said that
if there had been a challenge he had plenty of answers to it. What
is clear is that Thlimmenos is not authority for the proposition
that facts are changed by the Convention.
- Since Mr Goudie accepts that this first point is crucial to the rest
of his argument it is not necessary to go further. I will, however,
consider some of the later stages of the argument too, for in my
judgment his argument fails at later stages too. The points of failure
are
(a) the absence of a material interference with the
appellants’ religious practice;
(b) the proportionality of the grounds for refusal of
HB;
(c) the lack of a sufficient nexus (close link) between
the alleged discrimination and the refusal of HB.
No material interference
- It is said
that reg.7(1)(a) indirectly discriminates against the appellants
because the lifestyle conditions
of residence
are manifestations of their religious practice.
In this
context "manifestations" should
be given a wide interpretation,
see R (Williamson) v Secretary
of State [2003] QB 1300. So, it is said, refusal of HB is a material
interference with the appellants’ religious practices – without HB
they will have to abandon or modify lifestyles dictated by their
religious beliefs.
- But I cannot see that is so. The Tribunal so held as a matter of fact.
It put it this way:
"Further,
the type
of communal living desired by the appellants is not incompatible
with the receipt of housing benefit.
In order to receive housing benefit,
it is
not necessarily that, as between themselves, they should abandon
any of their religious
beliefs, practices or discipline,
or the
pooling of their income and capital, or the donation of surplus
income to the Church. All
that is required is that they
should
have a normal commercial relationship with those who let or
licence them to occupy their homes. Given my
conclusions on the commerciality
issue,
this will require that the terms on which they occupy those
homes should not impose those religious
practices and discipline as a
condition
of occupation and that the properties occupied should not be
let or licensed by the Church,
the Trust or, possibly, the Housing
Association.
(In this, the position of the appellants is analogous to that
of the claimant in the Tucker case
who is free to rent accommodation
from
any landlord in the country who is willing to let it except
from
the father of her child). It is no part of the Statement of
Faith
and Practice that the communal living which is considered
desirable
should necessarily take place in property owned by the Church
or persons and organisations
connected with it."
- We were
taken to the Church’s "Statement of Faith and Practice".
I can find nothing in that which suggests the Tribunal’s conclusions
were wrong. So far as I can see you can be a member of the Church,
even a Style 3 member, and yet have entirely commercial arrangements
vis-à-vis a commercial landlord. And if you otherwise qualify
for HB under that arrangement
you will be entitled to it.
- Furthermore this point seems to be one of fact and appeal to this Court
lies only on points of law (see s.15 of the Social Security Act 1998).
Proportionality and insufficient nexus
- Moreover I can see no real distinction between this case and that of Tucker
v Secretary of State [2002] HLR 500. HB was refused under
one of the other heads of the amended reg. 7(1) – reg.7(1)(d).
This is, in effect, where the landlord is responsible for the
applicant’s child. It was said that the circumstances were
within the scope of Art. 8 (respect for private and family
life and home) and that Art. 14 was engaged when read together
with Art. 8. Mr Goudie argues that here, though he suggested
his strongest case was Art. 14 with Art.9. Waller LJ (with
whom the other members of the Court agreed) assumed that the
facts brought the matter within the scope of Art. 8 on the
basis that Art 8 with Art. 14 applied. On that assumption he
upheld Maurice Kay J’s rejection of an ECHR attack on the provision.
It was not disproportionate, aimed as it was against abuse.
- The position is exactly the same here. Assume that Art. 14 with Art.
9 applies. Is the regulation or its operation disproportionate? In
my view manifestly not. The practice of religious beliefs of any
kind does not receive a positive subsidy from the State. Yet if the
appellants were right, their special form of communal non-commercial
arrangements would be entitled to a subsidy by way of HB because
it was based on religious belief. Uniquely, as compared with that
of any other religion, the practice of the applicants’ religion would
get a subsidy.
- Mr Sales pointed to other cases which, he submitted, were stronger
than the present yet in which it was held there was no breach of
Convention rights.
- In Logan v UK 22 EHRR CD 178 the Commission held inadmissible
a claim by a father that the amount of maintenance he was ordered
to pay left him with inadequate funds to enable him to maintain reasonable
contact with his children in violation of Art.8. That was rejected.
So also was his complaint that the maintenance payments restricted
his ability to practise his religion by restricting his ability to
attend places of Buddhist worship:
"The
Commission
is not persuaded … that visits to the priories can be considered
an indispensable element of the
applicant’s religious worship."
- In Botta v Italy (1998) 26 EHRR 241, a physically disabled person
complained to the carabinieri that the relevant authorities
(e.g. the Mayor) had failed to equip bathing establishments with
appropriate facilities required by Italian law. He said there was
a violation of Art.8. The ECHR held there was no violation of Art.8
because there was no direct link between the measures he said should
be taken and his private life. And the Court made it clear that Art.14
complements the substantive provisions of the Convention – you have
to find that a substantive right is engaged before Art. 14 can come
into play.
- It is to
be noted that the Court applied a "direct link" test.
Here, submitted Mr Sales, in my judgment correctly, there can be
no question of a "direct link" between the refusal of HB
and the rights of the appellants
under Art.9. to their freedom
to manifest their religion. The link here is even more tenuous than
the insufficient link in Botta.
- In Chapman v UK (2001) 33 EHRR 399 a gypsy lived in a caravan
on her own land in violation of planning control. She said there
was a violation of her Art. 8 rights, that there was discrimination
because she was a gypsy and an interference with her right to respect
for private life, family life and home. The ECHR rejected the claim,
holding that enforcement of planning control was proportionate and
legitimate in a democratic society. The fact that alternative accommodation
was not available at suitable prices was not relevant. The Court
accepted that the imposition of far-reaching positive obligations
on a State was not required by Art. 8.
- This seems to me to be a point of importance. There is a real difference
between requiring a State to observe the rights conferred by the
Convention in a negative way – refraining from acts which would interfere
with those rights - and a positive obligation on a State to subsidise
or allocate scarce resources to enable a particular lifestyle or
belief to be practised. Proportionality dictates that this must be
so.
- Another example of the application of the difference between negative
and positive obligations on a State is Sentges v Netherlands 8th July
2003 Appn. No. 27677/02. The applicant had MS. The evidence was that
the provision of some relatively expensive equipment would greatly
improve his life. The Court said:
"In
the instant
case the applicant complained in substance not of action but
of a lack of action by the State. While
the essential object of Article
8 is
to protect the individual against arbitrary interference by
the public authorities, it does not merely
compel the State to abstain from
such
interference: in addition to this negative undertaking, there
may be positive obligations inherent
in effective respect for private
or family
life. These obligations may involve the adoption of measures
designed to secure respect for
private life even in the sphere
of the
relations of individuals between themselves (see, inter alia, X and Y v The Netherlands,
cited
above, § 23), Stubbings and Others v the United Kingdom, judgment
of 22 October 1996, Reports 1996-IV, p. 1505, §.
The Court has held that Article 8 may impose such positive
obligations on a State where there is a direct and immediate link
between the measures sought by an applicant and the latter’s private
life (see Botta v Italy, cited above, § 34). However, Article
8 does not apply to situations
concerning interpersonal relations
of such broad and indeterminate scope that there can be no conceivable
link between the measures the
State is urged to take and an
individual’s private life each time
an individual’s everyday life
is disrupted, but only in the exceptional cases
where the State’s failure to
adopt measures interferes with that individual’s right to personal
development
and his or her right to establish
and maintain relations with other
human beings and the outside world. It is incumbent on the individual
concerned to demonstrate the
existence of a special link between
the situation complained of and
the particular needs of his or
her private life (see Zehnalovà and Zehnal v the Czech
Republic (dec.
no. 38621/97, ECHR 2002-V).
Even assuming that in the present case such a special
link indeed exists – as was accepted by the Central Appeals Tribunal
-, regard must be had to the fair balance that has to be struck between
the competing interests of the individual and of the community as
a whole and to the wide margin of appreciation enjoyed by States
in this respect in determining the steps to be taken to ensure compliance
with the Convention (see Zehnalovà and Zehnal, cited
above).
The margin of appreciation is even wider when, as in
the present case, the issues involve an assessment of the priorities
in the context of the allocation of limited State resources ….
In view of their familiarity with the demands made on
the health care system as well as with the funds available to meet
those demands, the national authorities are in a better position
to carry out this assessment than an international court ….
In the present case the Court notes that the applicant
has access to the standard of health care offered to all persons
insured under the Health Insurance Act and the Exceptional Medical
Expenses Act (see Nitecki v Poland (dec. no. 65653/01, 21
March 2002, unreported). It thus
appears that he has been provided
with an electric wheelchair with an adapted joystick. The Court by
no means wishes to underestimate
the difficulties encountered
by the applicant and appreciates the
very real improvement which a
robotic arm would entail for his personal
autonomy and his ability to establish
and develop relationships with other human beings of his choice.
Nevertheless the Court is of
the opinion that in the circumstances
of the present case it cannot be said that the respondent State exceeded
the margin of appreciation afforded
to it."
- All of that reasoning applies here. It is true that Mr Goudie primarily
relies upon Art 9 rather than Art 8 but I can see no relevant difference
between the two Articles. Neither right is absolute. Art 9 in particular
confers a right on all, including the applicants, to manifest their
religion. It does not confer a right to have that manifestation subsidised
by the State. The State is in the best position to allocate its limited
resources – which includes the provision of HB.
The Art
1 of Protocol 1 ("1P1") Point
- Although
not advanced below, we permitted Mr Goudie to raise the point.
The oral
argument
was supplemented by written submissions from Mr Sales and Mr
Goudie. Mr Goudie
contended
that the removal of the applicants from their previous entitlement
to HB amounted to "deprivation
of a possession" within the meaning of 1P1. The removal from
entitlement was effected by the
1998 amendment to the regulations
(see below for more detail).
- At first
blush this is a startling proposition. The appellants never "owned" a
right to HB in any meaningful sense. HB is a non-contributory State
benefit given to certain persons who have housing needs and who satisfy
the relevant criteria. If it is right, then so far as I can see,
any form of State benefit would count as a "possession." So,
once a State has allowed payment
of a benefit, it could never
be withdrawn or even, I suppose, reduced. And Mr Goudie did not shrink
from so contending.
- Standing in the way of Mr Goudie’s proposition is the decision of this
Court in Carson v Secretary of State for Work and Pensions [2003]
EWCA Civ 797, [2003] 3 All ER 577. It was a case concerned with jobseeker’s
allowance and income support – welfare benefits which it was not
suggested differed in any material way from HB. After reviewing the
Strasbourg authorities, particularly the case of Gaygusuz v Austria (1997)
23 EHRR 364. Laws LJ concluded:
"47. It seems to me, then, that the law of the
Convention is settled on this point as to the scope of "possessions" for
the purpose of Article 1P. The
policy of the cases is, I think,
that while States are in general free to grant, amend or discontinue
social
security benefits and to change
the conditions for entitlement
to them as they please without any ECHR constraint, yet where contributions
are exacted as a price of entitlement
the contributor should be afforded
a measure of protection: it has,
so to speak, cost him something
to acquire the benefit."
- If that conclusion is right, then Mr Goudie must fail here. But, he
says, it is wrong; things have moved on in Strasbourg since Carson.
Although he refers to other cases, at the heart of his argument is
the recent Strasbourg case of Poirrez v France 30th Sept.
2003, Appn. No. 40892/98. The
case concerned a refusal by France
to award to a non-French national an allowance ("AAH")
for disabled adults (allocation aux adultes handicapés).
The ECHR held that AAH was a "possession" within 1P1 and
that there was a violation of
Art 14. It said:
"37. The Court also points out that it has already
held that the right to emergency assistance – in so far as provided
for in the applicable legislation – is a pecuniary right for the
purposes of Article 1 of Protocol No 1. That provision is therefore
applicable without it being necessary to rely solely on the link
between entitlement to emergency assistance and the obligation to
pay "taxes or other contributions" (see Gaygusuz,
cited above, § 41). In that connection the Court considers that the
fact that, in that case, the applicant had paid contributions and
was thus entitled to emergency assistance (ibid., § 39) does not
mean, by converse implication,
that a non-contributory social
benefit such as the AAH does not also give rise to a pecuniary right
for
the purposes of Article 1 of
Protocol No 1.
38. In
the instant
case it was not disputed that the applicant had been registered
as 80% disabled and issued with
an invalidity card. His claim
for an
allowance for disabled adults was refused solely on the grounds
that he was neither a French national
nor a national of a country that
had signed a reciprocity agreement
in respect of the AAH.
Accordingly, the Court notes that the allowance could
be awarded both to French nationals and to nationals of a country
that had signed a reciprocity agreement with France to that end.
39. In
the Court’s
view, the fact that the applicant’s country of origin had not
signed such an agreement, whereas the applicant
had been issued with an invalidity
card,
resided in France, was the adopted son of a French citizen
residing
and working in France and, lastly, had previously been receiving
the minimum welfare benefit,
did not in itself justify refusing
him the
allowance in question. As the allowance is moreover intended
for persons with a disability,
the Court also refers to the
recommendation
of the Committee of Ministers no. R (92) 6, adopted on 9 April
1992 (see paragraph 27 above), which
is aimed at the adoption of a
policy
and measures adapted to the needs of the persons with disabilities,
and to the conclusions of
the European Committee of Social
Rights (see paragraph 29 above).
40. Furthermore,
the Court
notes that the nationality condition for the award of the allowance
was abolished by the Act
of 11 May 1998. The AAH has therefore
been
awarded without any distinction on grounds of nationality since
that Act was enacted. The applicant
has indeed received it since
June 1998, that is immediately
after the Act was passed.
41. The
Court
considers finally that the refusal to award the allowance to
the applicant prior to June 1998 was based
on criteria – possession of French
nationality
or the nationality of a country having signed a reciprocity
agreement with France in
respect of the AAH – which amount
to a distinction for the purposes
of Article 14 of the Convention.
42. Having
regard
to all the foregoing considerations, the Court holds that the
applicant had a pecuniary right for the
purposes of Article 1 of Protocol
No. 1
and that Article 14 of the Convention is also applicable in
the instant case."
- I do not
read this as laying down a general rule that all social security
benefits
are "possessions." If that were so, then all reference
to "contribution" in the other cases would be misleading
because it would be wholly irrelevant.
I here refer to Gaygusuz para.
41, Neill v UK (App. No. 56721/00), Domalewski v Poland (App
34610/97, pp.5-7), Walden v Liechtenstein (Appn. 33916/96
p.6) and the cases referred to by Laws LJ in Carson.
- Mr Goudie submits that these cases are all admissibility cases only
and that Poirrez has swept all that away. I cannot see that
is so. Poirrez seems to me to be a case on very special facts,
facts which indeed the Court felt it necessary to take into account
as the rather lengthy citation shows.
- Mr Goudie suggests that Carson has itself been departed from
by this Court in R (Purja) v Ministry of Defence [2004] 1
WLR 289. This was the claim concerning the pensions of Gurkha soldiers.
Mr Goudie submitted that there was no contribution there. I do not
agree. On the contrary, paragraph 42 of Simon Brown LJ’s judgment
explicitly considers that although there may have been no distinct
abatement of pay for pension provision, the Gurkhas’ overall pay
package in effect included a pension entitlement. Far from dropping
the contribution requirement, this Court looked for and found what
was in substance a contribution.
- Moreover in Poirrez there
was direct
discrimination – refusal of AAH because the applicant was not
French (or a citizen of a relevant
convention country). Hence Art.
14 came
into play. It by no means follows, even if one regards HB as
a "possession," that
an indirect link with what is
said
to be discriminatory State conduct would apply. On the contrary
the reasoning in Sentges seems
to me to apply just as much to the 1P1 argument as it does to those
under Art. 8 and 9. The reason that the present appellants are being
refused HB is not because of their religious practices, it is because
their arrangements are non-commercial.
- There is
a further reason in this particular case for rejecting the
1P1 argument.
The amendment
to the regulation was made before the Human Rights Act came
into force.
The Act
was not retrospective. So when the Act came into force the
appellants were not entitled
to HB and thus were not deprived
of a
1P1 property. Mr Goudie’s answer to this point is that the
relevant decisions to refuse HB were made
after the Act came into force.
That
misses the point. At the date when the Act came into force
there was no entitlement to HB under
the amended regulation and so
there could be no "possession."
The Ultra Vires Point
- It is common ground that the amending regulations would be ultra vires
and invalid if a committee called the Social Security Advisory Committee
was misled as to the effect of the proposed amendments into agreeing
that a formal reference to it was unnecessary pursuant to s.173(1)
of the Social Security Administration Act 1992. The machinery is
described in detail in the judgment of Peter Gibson LJ in Howker
v Secretary of State for Work and Pensions [2003] ICR 405 and
there is no need to repeat it here. In this case the only question
is whether the Committee was misled in the advice it was given which
led to its decision not to have the draft regulations formally referred
it.
- Before I turn to the relevant parts of the documents leading up to
the decision I should state the position before the amendment. The
unamended Regulation 7 provided:
"(1) The
following persons shall be treated
as if they were not liable to make payments in respect of a dwelling
–
- a person who resides with the person to whom he is liable to
make payments in respect of the dwelling and either –
…
(ii) the
tenancy or other agreement between
them is other than on a commercial basis …"
- The relevant proposed change was therefore to widen the class of those
who were not entitled to HB. Prior to the amendment the exclusion
applied to a person who both resided with [his landlord] and had
an agreement not on a commercial
basis. After, the former condition
was dropped, leaving just the "other than commercial" test.
Prior to the amendment the appellants
did not reside with their landlords
and so the exclusion from HB did not apply to them even if the arrangements
were other than commercial.
- Before a meeting of the Committee on 7th October 1998, it
was given the following papers:
- A note (I think prepared by the Secretary to the Committee);
- The draft amending Regulation;
- A letter from the Department of 2nd September 1998
to the Secretary of the Committee;
- A Departmental Note on comments received from the Local Authority
Associations;
- Some comments made by the Local Authority Associations.
It was not given (as probably would be better practice) the
unamended regulation.
- The letter of 2nd September said:
"These regulations aim to simplify and clarify
long standing Housing Benefit provisions against abuse. Housing Benefit
is generally available to people on low incomes who have a genuine
rent liability. However, some people and some organisations occasionally
set out to exploit the social security system, and construct rent
liabilities whose primary purpose seems to be to bring tenants within
Housing Benefit. Successive governments have sought to deny claimants
access to Housing Benefit in these circumstances and the current
regulation 7(1) excludes from benefit people whose liabilities have
been "created to take advantage of the Housing Benefit scheme".
However, local authorities have
found these regulations increasingly
difficult to apply and interpret.
In a recent Appeal Court hearing, involving a determination
that the liability of an Elder of the Jesus Fellowship Church has
been created to take advantage of the Housing Benefit scheme, the
judgment left local authority Housing Benefit departments with no
clear test to apply in such cases. The proposed amendment to regulation
7(1) seeks to provide such a test, and to make such determinations
easier to understand for both LA housing benefit personnel and for
claimants. We propose to make and lay the regulations as soon as
is practicable with a commencement date agreed with the Local Authority
Associations.
This proposed amendment does not change the policy intention
on who should be treated as not liable, but it does simplify interpretation
of the regulation. It attempts to achieve this in two ways. Firstly,
it states the basic principle involved in the regulation, which is
that HB should not be payable where the substance of the liability
amounts to an abuse of the Housing Benefit scheme.
Secondly,
it provides
a list of the situations in which such a liability can be said
to have arisen. Some of these categories
are already contained in Regulation
7, ie
those whose liability is to a close relative with whom they
reside, and some joint tenants
who were previously non-dependents
(sub-paragraphs
(b) and (g)). However, we have included additional categories
to represent particular
cases where a person has arranged
his affairs
in such a way as to be liable to make payments for his accommodation
when he could have
avoided such a situation and
still
been adequately accommodated. Such arrangements are those that
were meant to be covered by the
so-called "contrived tenancy" provision in Regulation 7(1)(b),
and they are the sorts of cases
on which housing benefit departments
seek guidance from DSS Headquarters on a daily basis.
There should be no effect on genuine Housing Benefit
claimants from this amendment. It is intended to be a simplification
of the existing provision, that is clear to administrators and claimants
alike. We would expect that any claimants affected by the amended
provision would have been similarly affected by the current one.
We hope, however, that the clearer wording and the explicit list
will mean that not only will benefit be refused when people seek
to exploit the benefit system, but that people who are not seeking
to do so will receive their proper entitlement. To prevent LAs having
to search for claims which may be affected, there is a saving
provision for existing claimants
which provides that the change
does not become effective until the end of their current benefit
period."
- The note accompanying the papers said:
"Attached
at Annex
A is a letter from the Department seeking the Committee’s approval
to make the above regulations which
would simplify and clarify the
Housing
Benefit provisions against abuse. This would be done by providing
a test to allow local authorities
to decide whether a rent liability
had been
constructed to bring the tenant within Housing Benefit and
by making such determinations
easier for all involved to understand.
The proposals
would not alter existing policy on non-liability for rent."
- The form of the draft amended regulation read:
"(1) A
person
who is liable to make payments in respect of a dwelling shall
be treated as if he were not so liable
where the appropriate authority
is satisfied
that the substance of the liability amounts to an abuse of
the housing benefit scheme established
under Part VII of the Social
Security Contributions and Benefits
Act 1992.
(1A) Without
prejudice
to the generality of paragraph (1), persons falling within
that paragraph include any person:
(a) whose
tenancy
or other agreement pursuant to which he occupies the dwelling
is not on a commercial basis."
- The comments from the Local Authority Associations included the following:
"The added list is essential to avoid confusion
and make the regulation "tighter" in certain cases."
- The Departmental note on the comments from the Local Authority Associations
included the following;
"7(1B)(a)
(referred
to as 1A(j)) is not intended to tackle religious groups who
live communally. Insofar as they seek
to abuse the HB scheme by the
terms
of their residence, we would expect them to be caught by 1A(a)
ie non-commercial arrangements."
- The Committee met on 7th October.
The minutes
record that it was concerned about a lack of definition of "abuse" and
that the wording was too general. There was no discussion about whether
or not the overall effect might be to widen the excluded classes.
Professor Ogus, a distinguished lawyer in this field and a member
of the Committee, particularly followed up after the meeting on the
ambiguity of the word "abuse". A letter from the Department
to the Secretary of the Committee
in dealing with this included
the sentence:
"The
new draft regulation is a clarification,
not a change of direction."
- Mr Goudie contends that the Committee was misled in much the same way
as it was misled in the Howker case. In that case the Department’s
practice was found to be that
a proposed amendment to the regulations
was specifically marked "technical", "neutral", "adverse" or "beneficial".
The amendment in question was given the indicator "neutral" when
the correct indicator should have been "adverse". The prior
regulation was not supplied.
The Commissioner and Court of
Appeal had little difficulty in holding that the Committee had been
misled.
- Although
there was no specific marking of "neutral" here,
Mr Goudie suggests that certain
passages
in the material supplied to the Committee in the case here
had the same effect. He particularly
points to that part of the Department’s
letter
of 2nd September
saying that the proposed amendment "does not change the policy
intention on who should be treated as not liable," and the statement
that there was "clarification, not a change of direction." He
also submits that the word "abuse" in the papers was used
merely to describe the conduct
of those who tried artificially
to arrange things so as to be entitled to HB. Thus, he submits, the
Committee did not appreciate
that people such as his clients
(whose arrangements are not made
for the purpose of obtaining
HB) were or might be excluded when they had
been included before.
- I reject
that submission. I do so for two reasons. Firstly it seems
to me to be clear
that
in general the Committee were not told by implication that
the proposals
were
wholly neutral. On the contrary there were clear indications
that
they might not be in some cases. The reference to "saving provisions" in
the letter of 2nd September
can only refer to this. Moreover
the same letter explicitly referred
to "additional categories." The Local Government Association’s
comment about making the regulation "tighter" shows that
it too understood that the scope
would be narrowed. And that comment
was itself before the Committee.
- Secondly
it seems to me clear that the position of religious groups
who lived
communally
was explicitly drawn to the Committee’s attention in the Department’s
comments
on the
Local Authority Associations observations. The Committee was
told
that it was expected they would be caught by the "non-commercial arrangements" provision.
True it is the same comment describes that as "abuse" but,
I think it is clear that the term in context is not being used in
a pejorative sense – in context it means those who as a matter of
policy ought not to receive HB. That particularly appears, for instance,
from the draft regulation itself which began with a general reference
to "abuse" in sub-paragraph (1) and went on to particularise
instances in sub-paragraph (1A).
- I therefore conclude that the Committee was not misled and reject the
ultra vires point.
- In the result I would dismiss the appeal.
Sir William Aldous:
- I have read the judgments of Peter Gibson and Jacob LJJ. I agree that
the appeal should be dismissed for the reasons they give.
Peter Gibson LJ:
- I agree that this appeal should be dismissed. In deference to the careful
arguments of Mr. Goudie Q.C. for the Appellants, Mr. Sales for the
Secretary of State and Mr. Findlay for the Council, I will briefly
state my reasons in my own words.
- It is not in dispute that the Appellants can only succeed if they can
show that there has been a relevant error of law. Two errors of law
are alleged by Mr. Goudie. The first is that the Tribunal erred in
law by weighing the evidence in a way that infringed the Appellant’s
rights under the Human Rights Act 1998. The second is that the Commissioner
erred in law in not recognising that the amendments made in 1999
to Reg. 7 of the 1987 Regulations were ultra vires because the Department
misled the Social Security Advisory Committee in the course of the
making of the new regulation.
Human rights
- On the
first point, Mr. Goudie submits that the Tribunal, in applying
the Regulation
and in
determining whether or not the Elders’ tenancy agreements were "other than on a commercial basis," discriminated
against the Appellants on the ground of their religious beliefs contrary
to Art. 14 of the European Convention on Human Rights read in conjunction
with Art. 8, Art. 9 or Art. 1 of the First Protocol to the Convention
("Art. IPI"). He argues that in making that determination,
the Tribunal was drawing an inference
and had a discretion as to the
weight to be given to the various primary facts. He says that
the Tribunal is obliged pursuant
to s. 6(1) of the Human Rights
Act 1998 to leave out of account, or give no weight to, any element
of
the relationship between the
Appellants and their landlords
which suggested that the agreement was not on a commercial basis
if that
element existed as a result of
the Appellants’ religious beliefs.
- I am not able to accept that submission. If the Tribunal were given
a discretion, then it is not disputed that that discretion must be
exercised conformably with the Convention. However, it is plain that
Reg. 7 (1)(a) gives neither the local authority nor the Tribunal
any discretion at all. What has to be decided is a pure question
of fact as to whether or not the tenancy agreements are or are not
on a commercial basis. If a relevant factor has some relation to
the Appellants’ religious beliefs, it is not for the local authority
or Tribunal to leave that factor out of account. That would be to
distort the test. Mr. Goudie was invited to indicate which of the
factors which the Tribunal helpfully listed as tending towards or
against the commerciality of the tenancy agreements should, on his
submission, be left out of account. The impracticality of such a
blue pencil exercise was rapidly demonstrated and the result was
wholly to distort the assessment required by the Regulation. I might
have understood the submission better if it was directed at a proposition
that the Regulation itself contravened the 1998 Act, but that was
not Mr. Goudie’s submission, no doubt rightly.
- Accordingly, I would reject Mr. Goudie’s first ground, even before
one comes to the difficulties which he faces over establishing that
the facts fell within the ambit of Art. 8 or Art. 9 or Art. IPI so
as to be capable of bringing Art. 14, which has no independent effect,
into play. I add too that the argument based on Art. IPI was not
even put forward before the Commissioner nor was it raised by the
Appellant’s Notice. I do not find it necessary to say anything further
on those difficulties nor on the arguments of Mr Sales rebutting
Mr. Goudie’s contentions.
Howker
- Mr. Goudie’s second point was not raised before the Tribunal because
the decision of this court on which it was based, Howker v Secretary
of State for Work and Pensions [2003] ICR 405, came after the
Tribunal decision.
- Mr. Goudie submits that the Social Security Advisory Committee was
materially and seriously misled by comments made by the Department
to it over the scope of the proposed changes just as the Committee
was found to have been misled in Howker. He says that while
the Department did not expressly
attach the indicator "neutral" to
the proposed amendment, that
was the effect of what was said,
the content not the categorisation being relevant.
- I accept that some of the remarks made by the officials to the Committee,
for example that the amendments were merely to simplify and clarify
the existing regulations, could have been better expressed. Nevertheless,
I do not see the facts of the present case as being comparable with
those in Howker. In the Department’s letter of 2 September
1998, it was stated that the
proposed amendment included "additional
categories", that is to say categories additional to those already
covered by Reg. 7. The reference to "abuse" was not, to
my mind, intended to define who
should now become excluded from
benefit. It was made plain (in the document headed SSAC 44/98 Annex
C) to
the Committee that by the terms
of their residence some religious
groups living communally might be caught by Reg. 7 (1)(a) because
the tenancy agreements did not
satisfy the test of commerciality.
It is clear that members of the
Committee focussed specifically
on the effect of the amendment.
In my judgment the Commissioner
was right to conclude that the Committee was not misled.
- I too would dismiss this appeal.