Tendring District Council v Secretary of State for Work and Pensions & Anor

Factual and Procedural Background

The appellant, an administering authority referred to as Company A, appeals a decision by Judge Perez of the Upper Tribunal (UT) dated 30 June 2022. The UT partially overturned a First-tier Tribunal (FTT) determination that an overpayment of £67,421.79 in Housing Benefit was recoverable from both the Defendant (formerly the first respondent) and his wife, the Third Respondent. The UT set aside the part of the FTT decision concerning recoverability from the Third Respondent but maintained recoverability from the Defendant. The Defendant's liability to repay was established, but following determinations that the Defendant lacked capacity to litigate, he ceased to be a party in the proceedings as of 18 October 2024.

The litigation has spanned over nine years, involving multiple hearings before the FTT and UT. The Secretary of State was joined in 2019 but did not actively participate in the appeal. The appellant was represented by Attorney Rutledge KC, while the Third Respondent represented herself.

Factual background includes that prior to 2000, the Defendant claimed Housing Benefit for a rented property. In March 2000, the Third Respondent applied for a pre-tenancy determination. On 31 March 2000, the Defendant and Third Respondent jointly purchased a property, which became their home. Housing Benefit was paid in respect of this property from 2000 to 2012. The Defendant made declarations indicating tenancy status and requested payments by BACS. After the Defendant suffered a stroke in 2007 causing severe impairment, the Third Respondent managed financial affairs.

In 2008, the Third Respondent sent letters to Company A seeking a review of Housing Benefit based on an alleged rent increase, which later formed the basis of criminal charges for dishonesty. In 2012, an application for a Disabled Facilities Grant led to suspension of Housing Benefit and a fraud investigation. The Third Respondent was convicted of two counts of dishonesty related to these letters and received a suspended sentence. The convictions became spent in 2019.

Company A issued Benefit Decision Notices on 18 July 2012 addressed to the Third Respondent but referring to the Defendant, stating an overpayment had occurred. An invoice for the overpayment was issued in 2018, with no payments made by either party. Solicitors were instructed by the Defendant and Third Respondent, with Company A asserting joint and several liability as a couple.

Appeals were lodged concerning Housing Benefit, Council Tax, and State Pension Credit. In 2015, the FTT upheld the Benefit Decision Notices. The UT remitted appeals for re-hearing in 2017. In 2018, the FTT found both liable for the overpayment, but in 2022, the UT found only the Defendant liable. Permission to appeal the UT decision was granted in 2023, with the Third Respondent joined to the appeal.

Legal Issues Presented

1. Whether the overpayment of Housing Benefit is recoverable from the Third Respondent, a person other than the claimant to whom the benefit was paid.
2. Whether Company A made a valid decision and notification to recover overpayment from the Third Respondent.
3. The procedural and substantive implications of the Third Respondent’s status in the litigation, specifically whether she was a party or representative.
4. Whether the Upper Tribunal erred in law in its treatment of the decision and notification requirements under relevant Housing Benefit regulations.
5. Whether the Third Respondent’s spent criminal convictions should have been considered in the decision-making process.

Arguments of the Parties

Appellant's Arguments

• There was a recoverable overpayment of Housing Benefit from both the Defendant and the Third Respondent under the Administration Act 1992 section 75(3)(b) and relevant Housing Benefit regulations.
• Company A made a valid decision to recover overpayment, evidenced by the 18 July 2012 Benefit Decision Notices, which complied with regulatory requirements.
• The Third Respondent was notified of the decision by virtue of the Notices being addressed to her, despite the claim being in the Defendant’s name.
• The Notices should be read as notification to both parties since Housing Benefit can only be claimed by one person in a couple, and the Third Respondent was acting as the Defendant’s representative.
• Any defect in notification was cured by the full hearings before the FTT and UT, where the Third Respondent participated extensively and the issue of recoverability from her was addressed.
• The Third Respondent acted both as a representative for the Defendant and defended her own position, effectively making her a de facto party.
• If no decision or notification was made to the Third Respondent, Company A had a mindset that both were liable, as evidenced by correspondence, enforcement actions, and procedural conduct.
• Any failure to notify or decide to recover from the Third Respondent should be assessed for whether it caused substantial harm.

Third Respondent's Arguments

• Company A never made a decision to recover overpayment from her, and therefore no claim exists against her.
• The 18 July 2012 Notices were addressed to her only as a matter of administrative practice, since she managed the Defendant’s affairs post-stroke, but the decision was directed at the Defendant alone.
• She was not a party to the proceedings before the FTT or UT, only acting as the Defendant’s representative, and thus did not have an opportunity to present her own case.
• She declined to be joined as a party despite invitations, due to concerns about capacity issues and inability to afford a litigation friend.
• Her criminal convictions are spent and should not have been considered by the Upper Tribunal in its decision.

Table of Precedents Cited

Court's Reasoning and Analysis

The court examined the statutory framework governing Housing Benefit claims and overpayment recovery, including the Administration Act 1992 and the Housing Benefit regulations of 1987 and 2006. It emphasized that under Regulation 71(1) of the 1987 Regulations, only one person in a couple can claim Housing Benefit, and the Defendant was the sole claimant.

The court found that Company A’s Benefit Decision Notices dated 18 July 2012, which are the only documents evidencing a decision to recover overpayment, were addressed to the Third Respondent but clearly referred to the Defendant as the claimant and the person liable. There was no express decision or notification that recovery was sought from the Third Respondent personally.

The court rejected Company A’s argument that subsequent correspondence or a general "mindset" of joint liability could amount to a decision or notification to the Third Respondent. It held that a decision to recover overpayment from a person must be clear and properly notified to that person to confer appeal rights and binding effect.

The court analyzed the procedural history and status of the Third Respondent in the proceedings, concluding that she was never formally a party in her own right but acted as a representative or appointee for the Defendant. The court noted that the Third Respondent repeatedly declined to be joined as a party and that the tribunals implicitly accepted her representative role without formally elevating her to party status.

The court addressed the issue of the Defendant’s capacity to litigate, finding that the Defendant lacked capacity and should have had a formally appointed litigation friend, which was not the case before the tribunals. The Third Respondent’s authority to represent the Defendant did not include conducting litigation on his behalf.

The court concluded that the procedural protections and rights of appeal that attach to a party were not available to the Third Respondent as a non-party and that her participation as a representative did not cure the absence of a formal decision or notification to her personally.

Accordingly, the court found that Company A failed to establish a lawful decision and notification to recover overpayment from the Third Respondent and that the UT’s decision to set aside recoverability from her was correct.

The court further held that the issue of the Third Respondent’s spent convictions did not require determination given the dismissal of the appeal on other grounds.

Holding and Implications

The appeal is dismissed.

The court upheld the Upper Tribunal’s finding that Company A did not make a valid decision or notification to recover the Housing Benefit overpayment from the Third Respondent. Consequently, the overpayment is not recoverable from her. The Defendant remains liable for the overpayment as previously determined.

This decision directly affects the parties by limiting recoverability to the Defendant and confirms procedural requirements for decision-making and notification in Housing Benefit overpayment cases. No new legal precedent beyond the application of existing statutory and procedural principles was established.