R Zacchaeus 2000 Trust v The Secretary of State for Works and Pensions
| Jurisdiction | England & Wales |
| Judge | Lord Justice Sullivan,Lord Justice Maurice Kay,Lord Justice Ryder |
| Judgment Date | 31 July 2013 |
| Neutral Citation | [2013] EWCA Civ 1202 |
| Court | Court of Appeal (Civil Division) |
| Date | 31 July 2013 |
| Docket Number | Case No: C1/2013/0768 |
[2013] EWCA Civ 1202
IN THE COURT OF APPEAL
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
(MR JUSTICE UNDERHILL)
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Sullivan
Lord Justice Maurice Kay
and
Lord Justice Ryder
Case No: C1/2013/0768
Ms Elisabeth Laing QC and Mr Christopher Knight appeared on behalf of the Applicant.
Mr Martin Chamberlain QC appeared on behalf of the Respondent.
Introduction:
This is an appeal with the permission of Underhill J, as he then was, against his order dismissing the appellant's claim for judicial review of the Rent Officers (Housing Benefit Functions) (Amendment) Order 2012 ("the 2012 Order").
The appellant had challenged the 2012 Order on two bases: (a) that it was ultra vires, and (b) that it was made in breach of the public sector equality duty in section 149 of the Equality Act 2010 ("the 2010 Act").
The 2012 Order amended the Rent Officers (Housing Benefit Functions) Order 1997 ("the 1997 Order"). The effect of the 2012 amendments to the 1997 Order was summarised by the judge in paragraph 1 of his judgment, neutral citation number [2013] EWHC 233 (Admin) as follows:
"(1) Housing benefit for private-sector tenants is calculated by reference to an "appropriate maximum housing benefit" ("AMHB"): see section 130 (1) and (3) of the Social Security Contributions and Benefits Act 1992 ("the 1992 Act"). The amount of benefit payable is the lower of the actual rent paid by the claimant and the AMHB.
(2) Section 130A of the 1992 Act provides for AMHB to be determined by regulations, which may provide for it to be ascertained "by reference to rent officer determinations": see sub-sections (2) and (3).
(3) The relevant regulations — most recently the Rent Officers (Housing Benefit Functions) Order 1997 ("the 1997 Order") — provide for rent officers to determine, for each "broad rental market area" ("BRMA"), a "local housing allowance" ("LHA") for each of a series of categories of dwellings, defined by the number of bedrooms: see article 4B.
(4) Until the changes challenged in these proceedings the nature of the exercise performed by the rent officer under the 1997 Order was that he would ascertain the range of actual levels of rent being charged in the BRMA for each category in that month, using information gathered locally, and would fix the LHA at a prescribed point in that range. Originally the prescribed point was the median of the rents in question. The LHA so determined constituted the AMHB. With effect from April 2011 changes were introduced which (a) substituted for the median the thirtieth percentile point in the range, (b) introduced an overall monetary cap for the LHA in each category and (c) removed the previous five-bedroom category, so that the maximum rate of housing benefit would relate only to four-bedroom houses. These changes were effected by the Rent Officers (Housing Benefit Functions) Amendment Order 2010 ("the 2010 Order"). The introduction of the cap was unsuccessfully challenged in R (Child Poverty Action Group) v Secretary of State for Work and Pensions [2011] EWHC 2616 (Admin) ("the CPAG case").
(5) The effect of the 2012 Order is to substitute for that regime a system under which the LHAs in force as at 2 April 2012 are frozen until April 2013 and are thereafter to be uprated annually to the lower of (a) the figure produced by a determination using the method described at (4) above and (b) the current figure as uprated by the percentage annual increase in the Consumer Price Index ("the CPI"). In crude terms, the effect is that any increases in housing benefit will be capped at the level of general inflation, even if inflation in the rental market has been higher."
The statutory framework:
In paragraph 6 of his judgment, the judge said that the statutory scheme could be understood only by piecing together a peculiarly intricate jigsaw puzzle. He set out the essential pieces of the jigsaw in paragraphs 7 to 11 of his judgment.
In my judgment, the five pieces of the statutory jigsaw that are of critical importance for the purposes of the ultra vires challenge are as follows:
One: Section 130A of the Social Security Contributions and Benefits Act 1992 ("the 1992 Act") which provides that:
"(1) For the purpose of section 130 above, the appropriate maximum Housing Benefit (in this section referred to as the AMHB) is determined in accordance with this section.
(2) Regulations must prescribe the manner in which the AMHB is to be determined.
(3) The regulations may provide for the AMHB to be ascertained in the prescribed manner by reference to rent officer determinations."
And subsection (7):
"A rent officer determination is a determination made by a rent officer in the exercise of functions under section 122 of the Housing Act 1996."
Two: Section 122 of the Housing Act 1996 ("the 1996 Act") which provides that:
"(1) The Secretary of State may by order require rent officers to carry out such functions as may be specified in the order in connection with…Housing Benefit…
(6) An order under this section (a) shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament…"
Three: The Housing Benefit Regulations 2006 as amended, which were made under section 130A of the 1992 Act ("the 2006 Regulations"). The amount of a person's AMHB is 100 per cent of his "eligible rent", calculated in accordance with these regulations (see Regulation 70). For present purposes, the amount of a person's "eligible rent" is "the maximum rent (LHA)" (local housing allowance); see regulation 12D.
Regulation 13D of the 2006 Regulations provides:
"(1) Subject to paragraphs (3) to (11), the maximum rent (LHA) shall be the local housing allowance determined by the rent officer by virtue of article 4B(2A) or (4) of the rent officer's order, which is applicable to:
(a) the broad rental market area in which the dwelling to which the claim or award of Housing Benefit relates is situated at the relevant date, and
(b) the category of dwelling that applies at the relevant date in accordance with paragraph 2…"
Paragraph 2 cross-refers to the categories of dwelling, which are specified in schedule 3B to the Rent Officers Order. The Rent Officers Order is defined by Regulation 2 as the 1997 Order.
Four: The 1997 Order made under section 122 of the 1996 Act, as it stood prior to the amendments which were made by the 2012 Order, on 2 April 2012. So far as material, article 4B provided:
"1A. On 20 March 2008 and so often thereafter as a rent officer considers appropriate, a rent officer shall in relation to each local authority:
(a) determine one or more broad rental market areas which will (during the month which next begins after the determination is made) fall in whole or in part within the area of the local authority so that every part of the area of that local authority falls within the broad rental market area, and no part of the area of that authority falls within more than one broad market rental area…
2A. No more than ten and not less than eight working days before the end of each month, the rent officer shall:
(a) in each broad market rental area determine in accordance with the provision of schedule 3B:
(i) a local housing allowance for each of the categories of dwelling set out in paragraph 1 of schedule 3B…
3A. Any broad rental market area determination made in accordance with paragraph 1A or local housing allowance determination made in accordance with paragraph 2A before 7 April 2007 shall take effect on 7 April 2007 and any subsequent determination shall take effect on the first day of the month which begins after the day on which the determination is made."
Schedule 3B referred to in paragraph 2A of article 4B prescribes in paragraph 1 the various categories of dwelling. Paragraph 2 sets out the manner in which the rent officer is to determine an LHA for each category of dwelling in paragraph 1. In summary, the rent officer must compile a list of rents for dwellings let under assured tenancies within the BRMA.
Subparagraph 2(9) of schedule 3B then provided:
"Subject to paragraph 12, the local housing allowance for each category of dwelling specified in paragraph 1 is the amount of the rent at the 30th percentile in the list of rents for that category of dwelling."
Subparagraphs (10) and (11) set out how the 30th percentile is to be calculated and subparagraph (12) sets out the cap which was introduced by the 2010 Order on the maximum LHA, so that, for example, the maximum LHA for a four-bedroomed dwelling is capped at £400.
Five: The 2012 Order. The relevant amendments to article 4B and schedule 3B of the 1997 Order are as follows:
A: Paragraph 11A of article 4B is amended so that the Secretary of State must agree to a rent officer's decision to determine a BRMA.
B: For the obligation in paragraph 2A to make a monthly determination of an LHA for each BRMA, there is substituted an obligation to make an annual determination within 20 days after the applicable consumer pricings index (CPI) is published.
C: A substituted paragraph 3A and a new paragraph 3B are introduced into article 4B. They provide that any LHA determination made under the new paragraph 2A will take effect on the following 1 April, thus freezing the LHAs in force on 2 April 2012 until April 2013.
D: Schedule 3B is amended by the introduction of a new paragraph 1A...
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