CH 3700 2006
| Jurisdiction | UK Non-devolved |
| Judge | Judge E. Jacobs |
| Judgment Date | 30 November 2007 |
| Court | Upper Tribunal (Administrative Appeals Chamber) |
| Docket Number | CH 3700 2006 |
| Subject Matter | Capital |
R(H) 7/08
|
Mr E Jacobs Commissioner 30 November 2007 |
CH/3700/2006 |
Capital – whether a caravan is capital – whether to be disregarded as a personal possession
The claimant was refused housing benefit and council tax benefit on the ground that he had capital of £30,000 in the form of a caravan on a non-residential site. The local authority ruled that it could not be disregarded as a personal possession because it was static and connected to services and therefore was to be classed as property. He appealed to a tribunal, arguing that the value of the caravan should be disregarded as a personal possession under regulation 38(2) of, and paragraph 11 of Schedule 5 to, the Housing Benefit (General) Regulations 1987 (consolidated in the Housing Benefit Regulations 2006 as regulation 44 and paragraph 12 of Schedule 6). The tribunal found that the caravan was capital, but its conclusions on the issue whether it should be disregarded as a personal possession were unclear. The question whether the claimant had acquired the caravan with the intention of reducing his capital in order to secure entitlement to housing benefit or to increase the amount of that benefit was not in issue. The tribunal dismissed the appeal and the claimant appealed to the Commissioner, who invited the Secretary of State to join the proceedings as a party. The Secretary of State’s representative supported the appeal on the basis of CPC/370/2006
Held, allowing the appeal, that
1. the tribunal had erred in law in failing to deal adequately with the issue of whether the caravan was a personal possession and therefore to be disregarded under paragraph 11 of Schedule 5 (paragraphs 21 and 22);
2. the caravan was capital for the purposes of the housing benefit and council tax legislation (paragraphs 23 to 28) but fell to be disregarded as a “personal possession”. Having regard to the context of the words and the history of the legislation, “personal possessions” mean any physical assets other than land and assets used for business purposes (broadly the same conclusion as was reached in CPC/370/2006) (paragraphs 53 to 55).
DECISION OF THE SOCIAL SECURITY COMMISSIONER
1. My decision is given under paragraph 8(4) and (5)(a) of Schedule 7 to the Child Support, Pensions and Social Security Act 2000:
I SET ASIDE the decision of the Wigan appeal tribunal, held on 24 July 2006 under reference U/06/079/2006/00472, because it is erroneous in point of law.
I give the decision that the appeal tribunal should have given, without making fresh or further findings of fact.
My DECISION is that the claimant’s entitlement to benefit is to be determined on the basis that his caravan is not to be taken into account as capital, because it is disregarded as a personal possession.
REASONS
The issues and how they arise
2. This case raises two issues. Is a caravan based at a non-residential site capital for the purposes of the housing benefit and council tax benefit legislation? If it is, is it a personal possession and as such to be disregarded?
The facts and the history of the case
3. The facts of the case have not been in issue, only their interpretation.
4. The claimant claimed housing benefit in 2003. This claim was refused on the ground that he had capital in excess of £16,000. At the time, he and his wife had over £1,000 in a current account, £30,000 each in an ISA, and 135 shares in Marks and Spencer. The £60,000 in ISAs represented the balance of the proceeds of sale of their home after redeeming the mortgage and paying legal and other fees.
5. The claimant claimed housing benefit again on 18 July 2005. The couple now had about £2,000 in the bank and 106 shares. On inquiry, the claimant explained that they had given £11,000 each to their son and daughter and used £30,000 to buy a caravan. They had owned several caravans in their lives, at first mobile ones and then a static one. As their current static caravan was not ideal for them in view of the claimant’s disabilities, they replaced it in May 2005, using the money from the ISAs. It was kept on a site in Wales. The site was a small one for 12 caravans. It was non-residential, being closed from the beginning of November to the end of February. Only the owners and their family and friends were allowed to use the site; subletting was prohibited. The caravan was moveable, having a hitch and wheels. The claimant used bottled gas for heating and cooking. Electricity and water were connected, although they can be easily disconnected.
6. The local authority refused the claim. The decision-maker decided that the value of the caravan was capital as “the caravan you have purchased is classed as a second home”. When the claimant exercised his right of appeal, the ground for refusing benefit was changed. The new ground was explained in a letter of 21 October 2005:
“I consider that the value of your static caravan should still be excluded as capital. For it not to be included as capital, it would have to be classed as a personal possession. As the caravan is connected to services and due to its size is not easily moved I consider it to be property and as such a capital asset.”
7. The tribunal dismissed the appeal. That is clear, although there are difficulties in interpreting the chairman’s reasons. I deal with those difficulties below.
The parties and their positions
8. I have issued a number of directions in order to try to clarify my thinking. I am grateful to the parties for their responses and forbearance.
9. The claimant has consistently argued that the value of the caravan should be disregarded as a personal possession. Although the claimant has succeeded, I have not been able to accept his representative’s reasoning, because it was based on a confusion of concepts.
10. The local authority has argued that in the absence of any definition or guidance, each case must depend on its unique facts and the tribunal had come to the correct decision. I have considerable sympathy for this approach. My first instinct on receiving this case was that a personal possession was a limited class of possession with some close intimate or personal connection to the claimant. I have now persuaded myself that my first impression was wrong.
11. In view of the nature of the issue, I invited the Secretary of State to join the proceedings as a party. The representative supported the appeal and invited me to remit the case for rehearing in accordance with the decision of the deputy Commissioner in CPC/370/2006. I drew attention to some difficulties with the reasoning in that case. The representative accepted those difficulties, but continued to support the decision.
The legislation
12, Housing benefit and council tax benefit are governed by the Social Security Contributions and Benefits Act 1992. They are both income-related benefits: section 123(1)(d) and (e). For convenience, I will refer only to the housing benefit legislation. The council tax benefit legislation is in equivalent terms.
13, Section 134 of the Act provides for claimants to be excluded from benefit on account of the amount of their capital:
“(1) No person shall be entitled to an income-related benefit if his capital or a prescribed part of it exceeds the prescribed amount.”
Regulation 37 of the Housing Benefit (General) Regulations 1987 (SI 1987/1971) was made under that authority and sets the threshold at £16,000.
14. Section 136 of the Act also provides for Regulations to be made:
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