Housing Benefit Review Board of The City of Westminster Ex Parte Mehanne

The House considered the construction of regulation 11 of the Housing Benefit (General) Regulations 1987 as in force on 1 January 1996, and in particular whether an authority or review board, when required by regulation 11(2) to treat a claimant's eligible rent as reduced, may take account of the claimant's personal circumstances in deciding the amount of that reduction.

The court held that regulation 11(2) imposes a mandatory duty to make a reduction where it applies but preserves a discretion as to the amount of that reduction by the phrase "by such amount as it considers appropriate". The words "in particular" do not restrict the range of matters that may be taken into account and the authority may take into account other factors that are reasonably relevant to the claimant's housing situation, including personal circumstances where they bear on the housing position (subject always to the rule that the reduced eligible rent may not be fixed below the cost of suitable alternative accommodation).

The court emphasised the statutory context, including the objective of preventing needless public expenditure while avoiding interpretation that would produce avoidable homelessness, and directed that the review board's decision be quashed and the matter remitted for reconsideration.

Background and parties: The respondent, Mr Mehanne, an asylum seeker who later became a recognised refugee, took an assured shorthold tenancy for a one-bedroom flat in London at a weekly rent of £174.51. He applied for housing benefit. The local authority's housing benefit officer determined that his eligible rent should be treated as reduced to £150 per week under regulation 11(2) on the basis that his rent was unreasonably high compared with suitable alternative accommodation. A review board confirmed that approach and, in doing so, stated that it was precluded from having regard to the claimant's personal circumstances when fixing the appropriate reduction.

Procedural history: The deputy judge at first instance gave a negative answer to the question whether personal circumstances could be taken into account. The Court of Appeal (Stuart-Smith, Thorpe and Mummery LJJ) gave an affirmative answer ([2000] 1 WLR 16). The Housing Benefit Review Board appealed to the House of Lords.

Issues framed:

• Whether, when regulation 11(2) applies and regulation 11(3) does not, the authority or review board may consider the claimant's personal circumstances (so far as relevant to his housing situation) in deciding the amount by which the claimant's eligible rent should be treated as reduced.
• How the phrase "in particular" in regulation 11(2) affects the scope of relevant considerations.
• Whether an authority may reduce eligible rent below the alternative rent.

Court's reasoning: The House held that regulation 11(2) requires a deduction where it applies but leaves a judgment as to the extent of that deduction. The expression "in particular" makes the cost of suitable alternative accommodation a mandatory and weighty consideration but does not exclude other matters reasonably relevant to the housing situation of the claimant. Factors identified in regulation 11(3) (the "priority" cases) would not be ignored where relevant in non-priority cases; nor would other factors relevant to avoiding homelessness and balancing public expenditure be excluded. The court relied on the statutory context of housing benefit and the local housing authority's duties to avoid an interpretation that would unreasonably promote homelessness. The power to reduce the eligible rent remains subject to the limitation that the reduced figure may not be set below the alternative rent.

Relief sought: The appeal sought to impugn the Court of Appeal's affirmation that personal circumstances relevant to housing could be considered. The House dismissed the appeal, quashed the review board's decision and remitted the matter for reconsideration by a differently constituted board.

Appeal dismissed. The House held that regulation 11(2) creates a mandatory duty to make a reduction where it applies but leaves the authority a discretion as to the amount of the reduction "by such amount as it considers appropriate." The phrase "in particular" does not confine consideration to the cost of suitable alternative accommodation; an authority may take into account other factors reasonably relevant to the claimant's housing situation, including personal circumstances that affect housing needs, provided the reduced eligible rent is not fixed below the alternative rent. The review board's decision was quashed and the matter remitted for fresh consideration.

Deputy judge (Mr Gerald Moriarty QC) gave a negative answer in an unreported judgment dated 11 December 1997. The Court of Appeal (Stuart-Smith, Thorpe and Mummery LJJ) decided the issue in favour of the claimant ([2000] 1 WLR 16). The Housing Benefit Review Board appealed to the House of Lords which dismissed the appeal ([2001] UKHL 11).