MH v London Borough of Waltham Forest

When assessing capital derived from property, a tribunal must consider the available valuation evidence before drawing adverse inferences from a claimant’s failure to provide further information. It must make only inferences that are reasonable on that evidence.

For housing benefit overpayments, actual capital must be subject to the diminishing-capital calculation required by Housing Benefit Regulations 2006. Capital between the relevant lower and upper limits may instead produce tariff income.

In exceptional concurrent appeals, an inconsistent First-tier Tribunal determination of income support need not prevent a fresh determination of housing and council tax benefit capital entitlement. A local authority cannot ordinarily invoke the fraud exception to go behind an income-support award that the First-tier Tribunal has upheld after investigating the facts.

The claimant appealed against First-tier Tribunal decisions concerning housing benefit and council tax benefit. The tribunal had found that she retained a beneficial interest in a buy-to-let property and that its value exceeded the capital limit throughout the relevant period. It therefore upheld revision of her awards and recovery of substantial overpayments.

In separate, concurrent appeals, the same tribunal allowed her appeal concerning income support. It held that she remained entitled to that benefit, despite making factual findings inconsistent with its housing-benefit decision.

The Upper Tribunal considered whether the property valuation and remortgage proceeds had been properly assessed, whether the diminishing-capital rule had been applied, and what effect the income-support decision had on the housing and council tax benefit appeals.

1. Appeals allowed. The First-tier Tribunal’s housing benefit and council tax benefit decisions involved material errors of law. They were set aside and remitted to a differently constituted tribunal for redetermination.

2. The First-tier Tribunal was entitled to reject the claimant’s and her husband’s evidence that she knew nothing of the further advance and remortgage. Its reasons were adequate. It was also entitled to find that she retained a one-half beneficial interest in the property.

3. However, it erred in finding that her interest in the property exceeded £16,000 throughout without analysing the valuation evidence available. A failure to return a valuation form could justify adverse inferences only to the extent reasonable. The tribunal had to consider the lending history, the estimated value, the mortgage debt and the statutory 10% deduction for sale costs under regulation 47 of the Housing Benefit Regulations 2006.

4. It also erred by omitting the diminishing-capital calculation required by regulation 103. Even where actual capital initially exceeded £16,000, housing benefit overpaid in each year could reduce the capital used to calculate any overpayment. Capital between £6,000 and £16,000 could instead affect entitlement through tariff income.

5. The First-tier Tribunal had wrongly made inconsistent factual determinations in the income-support and local-authority appeals. In the exceptional circumstances, the fresh tribunal was not bound merely because the earlier tribunal had allowed the income-support appeal. It was to determine the property and proceeds issues on their merits.

6. The fraud-based principle in R v South Ribble DC HBRB ex p Hamilton [2000] 33 HLR 102 did not permit the Council to go behind an income-support award which a tribunal had upheld after a full factual investigation. The claimant’s bankruptcy did not bar recovery because the recoverability decisions were made after the bankruptcy order; fraud was unnecessary.

• Upper Tribunal (Administrative Appeals Chamber): Allowed the claimant’s appeals, set aside the housing benefit and council tax benefit decisions of the First-tier Tribunal, and remitted them to a differently constituted tribunal.
• First-tier Tribunal: On 4 July 2014, dismissed the claimant’s housing benefit and council tax benefit appeals, while allowing her separate income-support appeal.