Heffernan v Rent Service (Rev 1)

A rent officer determining a local reference rent must exercise an evaluative professional judgment directed to identifying the mid-point of the rental market, rather than mechanically identifying the numerical extremes. The statutory assumptions do not require housing-benefit-supported rents to be excluded. They may be considered where they assist in obtaining a sufficient picture of the market, provided the officer considers whether they distort rental values. A decision based on limited data is not irrational merely because the data admits another interpretation. Reasons must be adequate in context. An evaluative assessment may require less detailed explanation than a decision based on a purely analytical exercise, but the reasons must identify the essential matters considered and explain the outcome sufficiently to permit understanding and review.

The claimant challenged rent officer determinations of local reference rents used in assessing housing benefit for December 2004 and May 2005. He alleged that the rent officer had acted irrationally in selecting the highest and lowest rents for the statutory formula and had failed to give adequate reasons, particularly concerning rents supported by housing benefit.

The determinations followed an earlier successful challenge concerning the geographical locality. The remaining issues concerned the rent officer’s evaluation of market data, the statutory assumption relating to housing benefit, the significance of exceptional rents, and the adequacy of the reasons given.

1. Claim dismissed. The rent officer had not been shown to have adopted a wrong approach, reached an irrational decision, or given inadequate reasons. The claimant was ordered to pay the defendant’s costs, subject to the appropriate costs order.
2. The statutory scheme requires the rent officer to identify the mid-point of the rental market. The exercise is not directed to establishing the absolute highest and lowest rents. Extreme rents may distort the mid-point and may properly be excluded as exceptionally high or exceptionally low.
3. The assessment is evaluative. The rent officer may rely on professional judgment, knowledge and experience, as well as market data and the views of consulted rent officers. A relatively small dataset does not make the decision irrational, provided the officer makes the required judgment on the material available.
4. Housing-benefit-supported rents may be included in the market data. The relevant question is whether their presence has distorted the rental values under consideration. The rent officer had considered that issue and was entitled to conclude that several comparable supported rents did not distort the market.
5. Reasons must be assessed in their particular context. The principles discussed in R (Asha Foundation) v Millennium Commission [2003] EWCA Civ 88 applied. An essentially evaluative decision may not require extensive reasons, although a decision-maker may need to explain why one interpretation of data was preferred where the data is capable of more than one interpretation.
6. The explanation given was sufficient in the circumstances. The court emphasised that this did not mean rent officers were generally free to give short reasons; adequacy depended on the decision’s context and the nature of the assessment.

The judgment records that an earlier challenge in the same litigation had succeeded in the House of Lords in R (Heffernan) v Rent Service [2008] UKHL 58. The present proceedings concerned subsequent determinations made following that decision. The claim in the present proceedings was dismissed.