R (Howard) v Official Receiver

JurisdictionEngland & Wales
CourtQueen's Bench Division (Administrative Court)
JudgeMr Justice Stadlen
Judgment Date28 Jun 2013
Neutral Citation[2013] EWHC 1839 (Admin)
Docket NumberCase No: CO/2346/12

[2013] EWHC 1839 (Admin)




Royal Courts of Justice

Strand, London, WC2A 2LL


Mr Justice Stadlen

Case No: CO/2346/12

R (on the application of Amanda Howard)
The Official Receiver

Ben McCormack (instructed by Oldham Citizens Advice Bureau) for the Claimant

Scott Redpath (instructed by Treasury Solicitor) for the Defendant

Hearing dates: 25 October 2012 and 9 November 2012

Approved Judgment

Mr Justice Stadlen

This is a claim for judicial review of a decision by the Official Receiver ("the OR") made on 6 December 2011 to revoke a Debt Relief Order ("DRO") which had been made in respect of the Claimant on 26 May 201The Claimant asserts that she is a person with severe and long-standing health problems which rendered her "disabled" for the purposes of section 6 and Schedule 1 of the Equality Act 2010 ("the 2010 Act"). The ground of her challenge is that the decision to revoke the DRO is said to have been unlawful in that in taking it the OR failed to comply with the public sector equality duty set out in section 149 of the 2010 Act. In reaching her decision the OR accepted that the claimant was "disabled" within the meaning of section 6 and Schedule 1 of the 2010 Act. However, she denies that the decision was unlawful for two principal reasons. First, she contends that in making the decision to revoke the DRO she was exercising a judicial function within the meaning contemplated by paragraph 3(1)(a) of Schedule 18 to the 2010 Act, so that by reason of that paragraph section 149 did not apply to the making of the decision. Alternatively, if that is wrong she contends that she substantially satisfied the requirements of section 149 in reaching her decision to revoke. In the further alternative, even if she failed to consider the matters identified in section 149, if the matter were to be remitted back to her she would not have carried out her decision-making function any differently and/or arrived at a different decision.


Accordingly the principal issue raised by this claim is whether in deciding to revoke the DRO, the OR was exercising a judicial function within the meaning contemplated by paragraph 3(1)(a) of Schedule 18 to the 2010 Act. The questions raised by the OR's alternative defences arise only if the answer to the first question is no.


Application for the DRO


On 25 May 2011, the Claimant applied for a DRO pursuant to s.251 of the Insolvency Act 1986 ("The 1986 Act"). As required by the legislation governing the DRO jurisdiction (which is set out in detail below), the Claimant's application was submitted on her behalf by an 'approved' intermediary, that is to say a debt advisor, who in this case was her representative at the Oldham Citizens Advice Bureau.


In her application, the Claimant declared that:

(1) her 'qualifying debts' (as specified in the list of her creditors) were about £10,300. She put as her reason for her debt problems, "loss of debtor's employment";

(2) her monthly expenditure was £679;

(3) her declared monthly income was £679, the source of which appeared to have been state benefits.


Her application disclosed no surplus income and no property. In answer to the question "Do you consider yourself to have a disability?" she answered "No".


The Claimant declared in her application that the information provided was, to the best of her knowledge and belief, correct at the date of the submission. The intermediary confirmed that she had discussed the application with the Claimant and confirmed the information provided according to the Guidance for intermediaries.


It was commented in the "Income and Expenditure Account" part of the application that the Claimant was paying rent arrears in the context of a notice seeking possession. This was clarified as amounting to £5 per week in an email dated 25 May 2011 from the intermediary which stated that a suspended possession order had been made on the basis that she continued to pay that amount.



Based on the information provided in the application, and in the subsequent email on 25 May, the OR approved the Claimant's application and made a DRO on 26 May 2011. The OR then informed the Claimant and the intermediary of her decision. A one-year moratorium period commenced in relation to each of the qualifying debts specified in the order, running from the date the OR made the order.

Further information


By a letter dated 15 August 2011, the Claimant wrote to the OR's office concerning the DRO stating that she would be receiving an amount from HMRC in respect of underpayment of working tax credits (WTC) in the period 4/09/10 to 16/11/10 of £516.71. In her letter she stated she wanted to apply the money towards rent arrears and a proposed college course as follows:

"If I'm entitled to this money, I would like to use it towards rent arrears as the C.A.B. advised me to keep paying £5.00 a week off my rent arrears as if I didn't pay my rent arrears, they could throw me out when my D.R.O. was finished!

There is also a college course I wanted to pay for too @ £200 if possible.

This is to help me gain confidence + when I'm better get back into work.

The courses aren't government funded …"

OR's intention to revoke the DRO


By a letter dated 26 August 2011, Kevin Ridge, a manager in the DRO Unit, wrote to the Claimant informing her that the OR intended to revoke the DRO with effect from 16 September 2011, on the basis that the amount she had declared in her letter, if considered as income received over a three month period, meant that her surplus and disposable income during the moratorium period would materially exceed the £50 threshold allowed for monthly surplus income set by the DRO legislation.


In a witness statement dated 10 July 2012 Ms Carol Butler, the OR for Plymouth (in which area the DRO Unit is situated), explained that in reaching that decision, for the purposes of the statutory limits, she treated the amounts the Claimant informed her she would be receiving as 'income', as opposed to a lump sum payment representing 'property'. Moreover, in measuring the amount as "surplus income", she stated that she treated it as income received over a three-month period, being the period over which the arrears were said to have been paid.


She stated that the general policy intention in treating the payment in that way was so as not to disadvantage a debtor by artificially placing them beyond the statutory limit, while balancing the potential mischief of a debtor seeking a DRO shortly before receiving a significant payment.


In an email dated 12 September 2011 the Claimant's representative challenged the basis on which the OR had measured the amount to be received as surplus income. It was submitted that she ought to have treated the amount received as income received before the DRO, and accordingly discounted the amount received on the basis that, had it been received, it would have been spent on living expenses. It was argued that had she received the money when the financial statement was being prepared, her household expenditure would have been greater. At the end of the email, the Claimant's representative stated:

"The reality is that my client has mental health issues and will not be returning to work in the near future if at all. She is therefore dependent on the following benefits – Employment Support Allowance, Housing and Council Tax Benefit."


In response to that email, Mr Ridge wrote to the Claimant's representatives on 14 September 2011, confirming the OR's decision. However, as it appeared from further correspondence on 14 September that the Claimant's representatives were seeking advice from their Specialist Support unit concerning a potential challenge to the OR's decision, it was agreed that action to revoke the DRO would be suspended for 14 days.


In emails dated between 20 and 28 September 2011, the Claimant's representatives indicated that it was possible that they would make an application for judicial review, but that further time was needed as specialist advice was still being taken. Accordingly, Mr Ridge informed the Claimant's representatives by an email on 28 September that the revocation would again be postponed to 7 October.

Claimant's letter dated 5 October 2011


By a letter dated 5 October 2011 addressed to Mr Ridge the Claimant's representatives set out the basis for her challenge to the OR's decision to revoke the DRO. The letter set out various background matters, including in relation to her employment history, her entitlement to state benefits, and some explanation as to underpayments of benefit.


There was also reference in the letter to various medical issues which her representatives claimed she suffered from. It was claimed that she had the following health issues: back/neck pain, sleeping difficulties, irritable bowel syndrome, asthma, depression, panic attacks and anxiety. They referred to various descriptors, for the purposes of Employment Support Allowance ("ESA") entitlement being satisfied, citing Schedule 2 ESA Regulations as follows:

"13c – Reduced awareness of risks of everyday hazards has led or would lead to frequent instances of or to near-avoidance of: (1) injury to self or others; (2) significant damage to property or possessions but to such an extent that overall day to day life cannot be managed when such incidents occur.

14c – Frequently forgets or loses concentration to such an extent that overall day to day life can only be...

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