Upper Tribunal allows appeal on rent calculation for Coventry property

NUNEATON AND BEDWORTH BOROUGH COUNCIL V [NAME] AND THE SECRETARY OF STATE FOR [NAME] UPPER TRIBUNAL CASE NO: CH/1987/2016 [2017] UKUT 471 (AAC)

1 DECISION OF THE UPPER TRIBUNAL (ADMINISTRATIVE APPEALS CHAMBER)

As the decision of the First-tier Tribunal (made on 8 February 2016 at Coventry under reference SC015/14/00849) involved the making of an error in point of law, it is SET ASIDE under section 12(2)(a) and (b)(i) of the Tribunals, Courts and Enforcement Act 2007 and the case is REMITTED to the tribunal for rehearing by a differently constituted panel. DIRECTIONS: A. The tribunal must undertake a complete reconsideration of the issues that are raised by the appeal and, subject to the tribunal’s discretion under paragraph 6(9)(a) of Schedule 7 of the Child Support, [NAME] Security Act 2000, any other issues that merit consideration. B. The reconsideration must be undertaken in accordance with KK v Secretary of State for [NAME] [2015] UKUT 417 (AAC). C. In [NAME], the tribunal must investigate and decide how [NAME] applies on and from 7 April 2014. D. We shorten the time within which a party may apply for permission to appeal to the Court of Appeal to one month pursuant to rule 5(3)(a) of the Tribunal Procedure (Upper Tribunal) Rules 2008 (SI No 2698).

Reasons for Decision A. The issue 1. This is another case on the meaning of ‘bedroom’ in [NAME] of the [NAME] 2006 (SI No 213) and the [NAME] occasion on which the Chamber President has directed a three-judge panel on the issue.

2. That deceptively simple word has given rise to literally hundreds of cases before the Upper Tribunal raising a number of issues. We call the issue in this case the connection issue. It is this. Is a room in a dwelling classified without reference to the [NAME] individual or class of individual who may occupy it or must the room in question be one that can be used as a bedroom by the actual occupants or class of occupants? 3. This is a distinct issue from the classification issue, which is whether the room could be used as a bedroom at all. This issue embraces a number of questions: The features question: could this room be used a bedroom given its size or other features?

2 The description question: what is the relevance if any of the way in which the landlord has described the room? The use question: what is the relevance if any of the way in which the room has been used? The change of use question: this is a variation of the use issue and arises when a room that was used as a bedroom is used for a different purpose. Analytically, the change of use question is not distinct from the use question.

B. The oral hearing 4. We held an oral hearing on 14 July 2017. [NAME] appeared for the local authority, [NAME] appeared for the claimant, and [NAME] appeared for the Secretary of State. At the end of the hearing, we directed further written submissions, which have now been made. We are grateful to all counsel for their written and oral submissions.

C. The legislation 5. These are the relevant provisions of [NAME] of the [NAME] 2006: [NAME] Determination of a maximum rent (social sector) (1) The maximum rent (social sector) is determined in accordance with paragraphs (2) to (4). (2) The relevant authority must determine a limited rent by- (a) determining the amount that the claimant’s eligible rent would be in accordance with regulation 12B(2) without applying regulation 12B(4) and (6); (b) where the number of bedrooms in the dwelling exceeds the number of bedrooms to which the claimant is entitled in accordance with paragraphs (5), to (7), reducing that amount by the appropriate percentage set out in paragraph (3); and (c) where more than one person is liable to make payments in respect of the dwelling, apportioning the amount determined in accordance with sub-paragraphs (a) and (b) between each such person having regard to all the circumstances, in [NAME], the number of such persons and the proportion of rent paid by each person. (3) The appropriate percentage is- (a) 14% where the number of bedrooms in the dwelling exceeds by one the number of bedrooms to which the claimant is entitled; and

3 (b) 25% where the number of bedrooms in the dwelling exceeds by two or more the number of bedrooms to which the claimant is entitled. (4) Where it appears to the relevant authority that in the [NAME] circumstances of any case the limited rent is greater than it is reasonable to meet by way of [NAME], the maximum rent (social sector) shall be such lesser sum as appears to that authority to be an appropriate rent in that [NAME] case. (5) The claimant is entitled to one bedroom for each of the following categories of person whom the relevant authority is satisfied occupies the claimant’s dwelling as their home (and each person shall come within the first category only which is applicable)- (a) a [NAME] (within the meaning of Part 7 of the Act); (b) a person who is not a child; (ba) a child who cannot share a bedroom; (c) two children of the same sex; (d) two children who are less than 10 years old; (e) a child.

D. How the issue arises on the facts 6. The claimant occupies her home with her husband and two sons. At the relevant time (28 March 2014), the [NAME] son was 9 years old and the younger son was 7 years old. The tenancy agreement provided that the property had three bedrooms, but that the maximum number of [NAME] who could live there was four. In other words, the agreement envisaged that the smaller two bedrooms could not be shared. That was how the claimant’s family used the accommodation: the [NAME] occupied the largest room and the boys had a room each. The local authority imposed a 14% reduction under [NAME] on the ground that two children of the same sex could share one of the rooms, leaving one spare. That would, of course, have complied with the terms of the tenancy, since the number of occupants was still only four.

7. The First-tier Tribunal at first dismissed the claimant’s appeal, but the decision was set aside by Upper Tribunal Judge Lloyd-Davies under reference CH/0571/2015. At the rehearing, the judge allowed the appeal. She decided that neither of the smaller rooms could be shared. One of the two rooms could accommodate a single bed, but a bunk would obscure much of the natural light. That was not in dispute. The other room could accommodate a bunk bed without interfering with the doorway, natural light, and access to the room, but the child sleeping on the top bunk would be unacceptably close to the light fitting, even if it were changed to a flat rather than pendant fitting, and the bunks would not allow the wardrobe to be opened fully.

4 E. Our analysis 8. We first explain how we analyse [NAME] and then consider two cases in which the reasoning is inconsistent with our analysis.

9. The regulation operates to reduce the amount of the claimant’s otherwise eligible rent by reference to the number of bedrooms in excess of the claimant’s entitlement. Paragraph (5) provides that that entitlement depends on ‘the categories of person’ occupying the dwelling as their home. That depersonalises the assessment so that the characteristics of the actual individuals concerned are irrelevant. The first task in applying paragraph (5), therefore, is to identify the individuals who occupy the dwelling as their home and then to place them into the categories listed. That was not in dispute.

10. The argument for the Secretary of State and the local authority was that the next task is to identify the number of bedrooms in the dwelling without reference to the categories of person who would have to occupy them. We tested this by asking [NAME] how many bedrooms there would be in a house that had three small bedrooms that could only be occupied by a child under ten. His answer was: three.

11. It may be significant that [NAME] did not avoid the question by saying that it was wholly unrealistic to posit such a property as they do not exist. That may be the case, but the purpose of the question was to test [NAME]’s argument to the point of destruction. In any event, our example could easily be made more realistic. Assume a family consisting of mother, father and two sons. Their home has three rooms designated as bedrooms by the landlord. One is a double room, occupied by the parents. The other rooms are smaller and can accommodate only a single bed. The property is a cottage with sloping ceilings in all the bedrooms, such that it would not be possible to use bunk beds. [NAME] would say that that property had three bedrooms and the claimant was only entitled to two, regardless of the fact that neither of the smaller rooms could accommodate both boys. 12. [NAME] described that result as absurd. We do not need to go that far. What we say is this. First, to us that is not the natural meaning of the language of paragraph (5). On [NAME]’s approach, the paragraph sets up a calculation by reference to the actual occupants as classified into [NAME] categories but then ignores the inevitable characteristics of the categories, such as that they consist of two [NAME] or [NAME] of a [NAME] age. The paragraph provides that the claimant is entitled to a bedroom for each category. The natural expectation of that language is that the room would be a bedroom for the persons bearing the characteristics of that category, not a room that ignored those characteristics. This leads on to our [NAME] reason. If the legislation were to produce the result that [NAME] and [NAME] contended for, it would need much clearer language to show that it was necessary to sever the claimant’s entitlement from the characteristics of the categories as set out in paragraph (5). The language does not do that.

5 13. It is now necessary to apply our reasoning to the circumstances of this case. The opening words of paragraph (5) stipulate that ‘the first category only which is applicable’ applies. In other words, paragraph (5) works in descending order. At the time of the decision under appeal, there were two boys living in the property with their parents. On the face of it, it looks as if head (c) would apply. However, the room in paragraph (5) must be a bedroom for persons bearing the characteristics of the category, namely two children of the same sex, and must not be a room which ignores those characteristics. In this case, putting both boys into either of the bedrooms would mean that each of the rooms ignores the category’s characteristic of two children, because on the First-tier Tribunal’s findings the rooms are too small to accommodate two children. That category cannot therefore be applicable because it ignores the connection issue. The word ‘applicable’ must refer back to this issue. Moving down the list, head (d) might apply as the boys are under 10, but this head would also fail the connection issue because the rooms would still be too small. That leaves head (e).

14. An alternative analysis, which produces the same result, is to say that paragraph (5) must be read as a whole. The boys may fall within the wording of head (c) or (d), but they do not fall within their meaning. If there is no room that can accommodate two children of the same sex, neither head (c) nor head (d) is an applicable category within the meaning of the paragraph.

15. Head (e) covers a child and has to be applied twice to ensure that the claimant is entitled to one room for each of her children. It is inherent in the regulation that this double application may have to be taken. Suppose that the claimant has twin boys. When they attain the age of 16, they cease to be children and the claimant becomes entitled to a room for each of them under head (b), despite the fact that it refers to a person who is not a child. The same is true of head (ba), which may have to be applied to more than one child who cannot share a bedroom.

16. This means that the number of bedrooms to which a claimant is entitled may vary from time to time. This can happen even if we are wrong on the connection issue. If a [NAME] have a [NAME] and a girl, the claimant’s entitlement will increase by one bedroom when the [NAME] attains the age of 10. Likewise if a [NAME] have a daughter aged seventeen who then moves out, the claimant’s entitlement will reduce by one bedroom.

17. Contrary to [NAME]’s argument, our analysis does not amount to legislation, it does not gloss the language, and it does not read in words. All we have done is to explain how the actual words of paragraph (5) operate. That is a necessary and appropriate task when dealing with words that are not defined in order to show how they have to be applied. 18. [NAME] argued at the hearing that our analysis was contrary to the policy or purpose underlying [NAME], which was to encourage mobility so that the social [NAME] stock could be allocated most appropriately. The underlying policy has been the subject of much discussion in the discrimination cases that

6 have arisen under the regulation. We gave [NAME] the chance to produce evidence that threw light on how the policy or purpose of the legislation might apply to what we have called the connection issue. The Secretary of State’s answer came in the form of a witness statement from [NAME] of the Working Age Strategy Directorate of the Department for [NAME], together with extensive attachments. We are grateful to her for her statement and for the information she provided. [NAME] made a short submission with less extensive attachments and [NAME] made a detailed submission. We have studied the material, including the Parliamentary material, but we have not found anything that assists us in answering the connection issue. It contains numerous examples of how the legislation should apply apart from the connection issue, but we can find nothing that indicates any policy or purpose on that specific issue. Just to take one obvious example, we do not doubt that financial considerations were important in devising the policy represented by [NAME], but that does not help us to decide whether the precise extent of the savings included cases such as the one before us. We were also referred to the facts of some of the cases involved in the [NAME] litigation, but again they do not assist on the connection issue.

F. Secretary of State for Work and Pensions v Glasgow City Council and IB [2017] CSIH 35 19. This is a decision of the Inner House of the Court of Session in Scotland, the equivalent of the Court of Appeal in England and Wales. The facts as found by the First-tier Tribunal 20. [NAME] has a severe learning disability and autistic traits. The house she was renting had formerly been her parents’ home, but they had died and she moved to live there with [NAME] who are her guardians. The property originally had four bedrooms. The claimant occupied one of them and [NAME] occupied another. Both rooms were on the first floor along with a third bedroom; there was no dispute about the classification of that room. The issue concerns a further room, which was on the ground floor. In terms of [NAME], the issue was whether the claimant’s eligible rent should be reduced by 14% or 25%. It would be the latter if the ground floor room was a bedroom and the former if it was not.

21. The local authority decided that the ground floor room was a bedroom and reduced the claimant’s maximum rent under [NAME]. The First-tier Tribunal found that this room was not a bedroom. It had been converted on the advice of a social worker for use as a living room for the claimant, allowing her some privacy from [NAME] who used the original sitting room. The claimant spent some time there on her own, especially when she was agitated or unsettled, or with her carers when they visited.

[ADDRESS] of Session’s reasoning 22. The Upper Tribunal dismissed the appeal against the First-tier Tribunal’s decision, but the Court of Session allowed the appeal. This was its reasoning: [18] In the present case the focus is on the meaning of the word ‘bedroom’ in the Regulations. Counsel for the parties were agreed that there was no definition in the Regulations of the word ‘bedroom’ albeit the word appears frequently in different parts of the Regulations in a scheme which has become very complex. We consider that it is essential to consider the statutory context in interpreting the word ‘bedroom’ in [NAME]. The 2006 Regulations, as amended, are designed to assist a person liable to make payments in respect of a dwelling in Great Britain which he occupies as his home (section 130 of the Social Security Contributions and Benefits Act 1992). The scheme provides a detailed and complex system for calculating [NAME] and payments in respect of properties ‘rented’ by ‘tenants’. The dwellings covered are classified in different ways. A common classification which is used in the statutory scheme is by reference to number of bedrooms. [19] There was no real dispute in this case about the purpose of the Regulations and we consider that purpose would be frustrated if a tenant who rented what was objectively classified, for example, as a three bedroom property could by his use or unilateral structural changes to the property change the classification to a two or one bedroom property. [20] In the present case the appellant did not challenge that the five rooms in the dwelling rented by the applicant contain one livingroom, kitchen and bathroom. That leaves four rooms which the appellant submitted are properly classified as bedrooms. In our opinion the classification and description of a property used as a dwelling is a matter of fact to be determined objectively according to relevant factors such as size, layout and specification of the [NAME] property in its vacant state. That classification cannot be changed except by structural alterations made with the landlord’s approval which have the result of changing the classification of the property having regard objectively to its potential use in a vacant state. Thus the classification of a property as having one or more bedrooms does not change depending on the actual needs of the occupants or how they use the rooms for whatever reason from time to time. This may work both in favour of and against the applicant for [NAME]. For example, if the property considered objectively is classified as three bedrooms, the fact that the tenant always uses the livingroom as a bedroom should not result in reclassification of the property for the purposes of the 2006 Regulations as a four bedroom property. In contrast, if a tenant chooses or requires to use one of the three bedrooms as a storeroom for essential medical equipment, that should not result in a reclassification of the property from a three bedroom property to a two bedroom property. We note, for example, that one of the factual cases considered in R(MA) was the application summarised in

8 appendix 1 at page 4576. He had a three bedroom property and used one bedroom as a store for essential equipment required because of disability. It was not submitted by any party nor raised by any of the Justices that the property should be classified as having only two bedrooms which would determine the relevant reduction under [NAME]. The issue of the interpretation of ‘bedroom’ and the relevant factors to be considered was not of course raised directly in R(MA). [21] The issue was raised directly at tribunal level in a number of cases. A three judge panel was convened in [NAME] v [NAME] against a background that there were a number of different approaches taken by First-tier Tribunals to the interpretation of the word ‘bedroom’ in [NAME]. We consider that there is merit in the approach of the Upper Tribunal to the extent that they recognised that the assessment should focus on the property when vacant rather than how it is actually being used from time to time (paragraph 28) and in their practical approach to considering what may be relevant factors illustrated in paragraphs 30 to 33. To the extent however that the Upper Tribunal entertained the possibility that the designation or choices made by family members as to who should occupy bedrooms or how rooms should be used had any relevance, we do not agree. [22] In our opinion, in a disputed case in the first instance it is for the local authority who is responsible for administering the [NAME] system to come to a decision objectively about the classification of the property offered for rent in its vacant state. That may involve taking into account, for example, the number of rooms, their size, layout and function as living/dining space, kitchen, washing/toilet facilities and what other space is available. This may include deciding whether a room is suitable to accommodate a bed with, for example, sufficient space, height, light, privacy to be classified as a bedroom. The classification decision is not dependent on suitability for occupancy by more than one person. We accept that the landlord’s description of the property as offered to rent will often be a useful starting point in the relevant factual assessment but it is not definitive. [23] In this objective assessment, we do not consider that assistance can be drawn from paragraphs (5) and (6) of [NAME] in concluding whether a room is properly classified as a bedroom. We are not clear what assistance the Upper Tribunal in the [NAME] decision derived from these provisions. For example, in a [NAME] property there may be a room available which is not big enough for a double bed but the room is otherwise suitable as a bedroom to accommodate a child in a single bed. In our opinion that room may still properly be classified as a bedroom even although the [NAME] occupants of the property have no child and the room is too small for the [NAME] who live in the property and need a bedroom. We consider that what is required in assessing whether a room is a bedroom is an objective assessment of the property as vacant which is not related to the residents of the property or what their actual use or needs might be. The use and needs

9 of the residents may vary from time to time and the number or residents may also vary. This may lead to what might be regarded as overcrowding or under occupation as defined by [NAME] at a [NAME] time. None of that however affects the prior question which in our opinion is to be determined objectively as to the number of bedrooms in the property. [24] We are of the opinion that if a room is converted by the landlord or with his consent in such a way that it can no longer be classified objectively as a bedroom, for example, if it is converted into a wet room or if a wall is knocked down between two small bedrooms to provide a larger bedroom, the result of objective assessment of the property may be that it has one less bedroom after the conversion work. That result arises regardless of whether the physical reconfiguration is done because of the mental or physical disability of one of the occupants or merely as a way of upgrading the landlord’s property or for some other reason. We would expect the landlord to reflect the conversion work in the lease terms and in the landlord’s description of the property. That may impact on the rent which the landlord is able to charge. [25] It follows therefore that we consider both the First-tier Tribunal and the Upper Tribunal judge to have erred in law in concluding that the re- designation of a bedroom to a livingroom by or on behalf of [NAME] with or without professional advice about that re-designation was a relevant factor. An applicant for [NAME] and the occupants of a dwelling may choose or need or be advised to use the property in a way which best suits their needs but in our opinion that is not relevant to the issue of what is a bedroom for the purposes of the 2006 Regulations. [26] We consider that our approach to the interpretation of the word ‘bedroom’ for the purposes of the 2006 Regulations does not raise any discrimination issue. Discrimination may arise under the 2006 Regulations, because of the specific rules set out in [NAME] as to the number of bedrooms deemed to be appropriate by reference to the list set out in [NAME] paragraphs (5) to (9). In the developing case law which was considered in R(MA), the alleged discrimination focused on the additional needs for an additional bedroom because of disability and other reasons. In the present case it is not submitted that [NAME] requires an additional bedroom. [27] For the reasons given, we conclude that the property occupied by [NAME] is a four-bedroom property and that the number of bedrooms in the dwelling exceeds by two, the number of bedrooms to which [NAME] is entitled under the 2006 Regulations. Accordingly in terms of [NAME](3)(b) of the 2013 Regulations the maximum rent is limited by 25%. Why we do not follow the reasoning [NAME]

23. Decisions of the Court of Appeal are binding on the Upper Tribunal. This does not mean that decisions of the Court of Session are also binding. Laws LJ

10 explained why in [COMPANY] v [NAME], Clarke v Frank Staddon Ltd [2004] ICR 1502 at [32]: The rules of precedent or stare decisis cognisable here are given by the common law . . . The essence is that precedent confines the very power of the courts subject to it. It is not a rule of discretion or comity or anything of the kind. It is therefore of necessity a doctrine whose reach is limited to the jurisdiction in which the courts in question operate. The House of Lords is no exception; by statute its writ runs to three jurisdictions, and accordingly it binds the lower courts within each of those jurisdictions. Statute might also extend the scope of precedent, as was done by the European Communities Act 1972 . . . Now, statutory provisions which give dominion to courts in one jurisdiction (international or otherwise) over courts in another are apt, here at least, to father constitutional tensions. But it is at least clear, and here is the point on this part of the case, that it would be a constitutional solecism of some magnitude to suggest that by force of the common law of precedent any court of England and Wales is in the strict sense bound by decisions of any court whose jurisdiction runs in Scotland only or – most assuredly – vice versa. Comity and practicality are another thing altogether. They exert a wholly legitimate pressure. [NAME] is persuasive authority in the Upper Tribunal when it exercises jurisdiction in England (as it is doing in this case), but no more.

24. More importantly, we doubt whether we would have followed the reasoning in [NAME] even if it had been a decision of the Court of Appeal in England and Wales. We say that because [NAME] was not concerned with the connection issue. Rather, it was concerned with the classification issue and in [NAME] with the change of use question. The room in question had been a bedroom, but it had been changed for use as a living room for the claimant. So it is not necessary for us to decide whether the Court was right on the issue before it. What we have to decide is whether we should apply the Court’s reasoning to the issue before us. We have decided not to do so. [ADDRESS] did not consider the issue before us and, so far as the decision shows, the reasoning on which we rely was not put to the Court in argument. [ADDRESS] did not consider that reasoning, let alone reject it.

G. Secretary of State for Work and Pensions v Nelson and Fife Council [2014] UKUT 525 (AAC), [2015] AACR 21 25. This is a decision of the Upper Tribunal sitting as a three-judge panel in two joined Scottish cases. [NAME], this decision does mention the connection issue.

26. The panel dealt with the correct general approach to provisions like [NAME] in these paragraphs:

19. When an ordinary or familiar English word such as ‘bedroom’ is used in a statutory test and is not defined in the legislation:

11 i) the test should not be re-written or paraphrased, and ii) the ordinary or familiar word should be construed and applied in its context having regard to the underlying purposes of the legislation. The decision of the House of Lords in Uratemp Ventures Ltd v Collins [2001] UKHL 43; [2002] 1 AC 301 which was relied on by the Secretary of State is an example of this well established approach.

20. So a problem for courts and tribunals in giving guidance, and for fact- finders in reaching and explaining their conclusions on the application of a test using ordinary or familiar English words that are not defined is that they cannot re-write the test and as Lord Upjohn explains in Customs and Excise Commissioners v Top Ten Promotions [1969] 1 WLR 1163, at 1171, they must adopt the following approach: ‘It is highly dangerous, if not impossible, to attempt to place an accurate definition upon a word in common use; you can look at examples of its many uses if you want to in the Oxford Dictionary but that does not help on definition; in fact it probably only shows that the word normally defies definition. The task of the court in construing statutory language such as that which is before your Lordships is to look at the mischief at which the Act is directed and then, in that light, to consider whether as a matter of common sense and every day usage the known, proved, admitted or properly inferred facts of the [NAME] case bring the case within the ordinary meaning of the words used by Parliament.’ 21. It follows that the underlying purposes of the relevant test using such language and the context in which the language is used are important and often determinative factors to be taken into account in determining whether on the facts of a given case the relevant test is satisfied.

22. It also follows that in most cases the decision-maker’s understanding of the test and approach to its application in a given case is best provided by the reasons given for the decision (eg albeit in an obvious case it is a bedroom because it has room for two single beds and storage, good ventilation and either it has been or could be used as room in which two [NAME] have slept or could sleep).

23. The approach reflects the old adage that it is difficult to define an ‘elephant’ but we know one when we see one and so we can explain why we think we have seen one by describing what we have seen.

27. The panel then considered how to apply that approach to [NAME]. It first identified that the ‘underlying purposes is to limit the [NAME] entitlement of those under occupying accommodation’. Extracting the points relevant to the connection issue, it then went on to say at [27] and [28] that:

12 ‘the use or potential use of the relevant room or rooms can be by any of the [NAME] listed in sub-paragraphs (5)-(6)’ ‘the underlying purpose of [NAME] would be undermined if this was not the case’ ‘that purpose and that interpretation of the regulation shows that the test is focused on the availability of rooms that could be used as bedrooms by any of the listed [NAME] and thus essentially the assessment of the property when vacant; rather than how it is being used from time to time.’ 28. We agree with the panel on the general approach to [NAME], but we do not agree with the passages we have just quoted for the reasons we have given in our analysis of the regulation. It is fair to ask why those statements are not decisive of the issue before us, given that they were made by a three-judge panel in what is now a reported decision. (For the Upper Tribunal’s doctrine of precedent, see Dorset Healthcare NHS Trust v MH [2009] UKUT 4 (AAC) at [37] and Secretary of State for Defence v AD and MM [2009] UKUT 10 (AAC) at [132].) These are our reasons for differing from the reasoning in [NAME]. First, the Upper Tribunal’s approach to precedent is not rigid. It recognises that there may be compelling reasons why even a single judge should not follow a decision by a three-judge panel; and a slavish adherence to the standard approach should not allow the perpetuation of error. [NAME], we were appointed to consider the connection issue by our Chamber President, who presided in [NAME]. He can only have done so in the knowledge that we might disagree with that decision. Third, the connection issue did not arise in [NAME]. Fourth, although the panel mentioned the connection issue and, no doubt, considered it an important part of its analysis, the actual focus of the reasoning thereafter was on the classification issue and in [NAME] the features and use questions. We can find nothing to indicate that the panel’s reasoning on those questions was affected by its view of the connection issue. Finally, as with [NAME] and so far as the decision shows, the reasoning on which we rely was not put to the panel in argument. The panel did not consider that reasoning, let alone reject it.

H. Why we have directed a rehearing 29. A rehearing is needed to make findings of fact on the problems, if any, that might arise if the room in question were furnished with bunk beds. We were not persuaded by the First-tier Tribunal’s concern over the light fitting. Changing the fitting so that it was close to the ceiling is one of those minor adjustments that a claimant can be expected to make and the use of LED bulbs should reduce,

13 if not eliminate, any danger that the [NAME] sleeping in the upper bunk might burn himself. We are, though, conscious that basing findings on the features of a room from written descriptions and diagrams can be difficult. We note that photographs can be misleading, even unintentionally, so care should be taken to provide the tribunal rehearing this appeal with clear and unambiguous information about the features of both rooms.

Signed on original on 01 December 2017 Mrs Justice Gwynneth Knowles Upper Tribunal Judge Jacobs Upper Tribunal Judge Hemingway

[2019] AACR 27 ([NAME] v [NAME] and [NAME]) 1

[2019] AACR 27 (The Secretary of State for Work and Pensions v Rachel Hockley and Nuneaton and Bedworth Borough Council) [2019] EWCA Civ 1080

Longmore LJ CH/1987/2016 Hickinbottom LJ Nicola Davies LJ 24 June 2019

[NAME] – meaning of “bedroom” in [NAME] of the [NAME] 2006 – whether assessment requires authority to take into account how bedroom would be used by [NAME] family unit The claimant lives with her husband and their two sons in a property described in the tenancy agreement as having three bedrooms. Two of the bedrooms are small and awkwardly shaped. Originally, the family’s [NAME] ([NAME]) covered their whole rent. The local authority, applying [NAME], decided they had one excess bedroom and reduced their [NAME] by £740 per year. The claimant successfully appealed to the First-tier Tribunal ([NAME]). A three-judge panel of the Upper Tribunal set aside the [NAME]’s decision and held that the [NAME] assessment required the characteristics of the category of persons to the considered. The Secretary of State appealed to the Court of Appeal. Held, allowing the appeal, that: 1. “bedroom” is an ordinary word which is neither defined nor qualified in the regulations. The word has to be construed and applied in its context having regard to the underlying principle of the legislation, which is to limit [NAME] entitlement to those occupying social [NAME]. The language of the regulations demonstrates that the criteria identified as limiting such [NAME] is the entitlement of a tenant to a bedroom for persons listed in subparagraphs (5) and (6). Such an assessment is an objective one (paragraph 38); 2. pursuant to [NAME](5), the word “bedroom” should be interpreted as meaning a room capable of being used as a “bedroom” by any of the listed categories and not a room capable of being used as a “bedroom” by a [NAME] (paragraph 41). [ADDRESS] of Appeal quashed the decision of the Upper Tribunal and, applying [NAME], decided that the claimant is entitled to a two-bedroomed property.

DECISION OF THE COURT OF APPEAL

[NAME] (instructed by Government Legal Department) for the Appellant

[NAME] (instructed by [COMPANY]) for the First Respondent

[NAME] (instructed by Nuneaton and Bedworth Borough Council) for the [NAME] Respondent

Lady Justice Nicola Davies:

1. The appeal, brought by the Secretary of State for [NAME] in respect of a decision of the Upper Tribunal (“[NAME]”), concerns the interpretation of [NAME] of the

[2019] AACR 27 ([NAME] v [NAME] and [NAME]) 2

[NAME] 2006 (as amended). [NAME] was introduced with effect from 1 April 2013 by way of amendment of the 2006 Regulations by the [NAME] (Amendment) Regulations 2012 (SI 2012/3040) as further amended by the [NAME] (Amendment) Regulations 2013 (SI 2013/665). It introduced into social sector [NAME] a cap on [NAME] (“[NAME]”) in cases of deemed under occupancy. It did so by applying what has been described as the size or bedroom criteria set out in [NAME].

2. The issue for consideration in this appeal is: what is a “bedroom” for the purpose of [NAME](5)? The size criteria pursuant to [NAME]) entitle an [NAME] claimant to “one bedroom for each of the following categories of person” in occupation of the property. The categories are listed (a) to (e) as at the relevant time of the first respondent’s determination.

[NAME]

3. [NAME] of the regulations:

“Determination of a maximum rent (social sector)

[NAME]. (1) The maximum rent (social sector) is determined in accordance with paragraphs (2) to (4).

(2) The relevant authority must determine a limited rent by—

(a) determining the amount that the claimant’s eligible rent would be in accordance with regulation 12B (2) without applying regulation 12B (4) and (6);

(b) where the number of bedrooms in the dwelling exceeds the number of bedrooms to which the claimant is entitled in accordance with paragraph (5), reducing that amount by the appropriate percentage set out in paragraph (3); and

(c) where more than one person is liable to make payments in respect of the dwelling, apportioning the amount determined in accordance with sub-paragraphs (a) and (b) between each such person having regard to all the circumstances, in [NAME], the number of such persons and the proportion of rent paid by each person.

(3) The appropriate percentage is—

(a) 14% where the number of bedrooms in the dwelling exceeds by one the number of bedrooms to which the claimant is entitled; and

(b) 25% where the number of bedrooms in the dwelling exceeds by two or more the number of bedrooms to which the claimant is entitled.

(4) Where it appears to the relevant authority that in the [NAME] circumstances of any case the limited rent is greater than it is reasonable to meet by way of [NAME], the maximum rent (social sector) shall be such lesser sum as appears to that authority to be an appropriate rent in that [NAME] case.

[2019] AACR 27 ([NAME] v [NAME] and [NAME]) 3

(5) The claimant is entitled to one bedroom for each of the following categories of person whom the relevant authority is satisfied occupies the claimant’s dwelling as their home (and each person shall come within the first category only which is applicable)—

(a) a [NAME] (within the meaning of Part 7 of the Act); (b) a person who is not a child; (c) two children of the same sex;

(d) two children who are less than 10 years old; (e) a child, and one additional bedroom in any case where the claimant or the claimant’s partner is a person who requires overnight care (or in any case where each of them is).”

4. Subsequent to the decisions in R ([NAME] & Others) v Secretary of State for [NAME] [2016] UKSC 58 (“[NAME]”) and Burnip v Birmingham City Council [2012] EWCA Civ 629 [2013] AACR 7 further categories have been added to [NAME])(a) to (e) to reflect the findings of the courts, however they postdate the relevant determination in this appeal.

5. The interpretation of [NAME] is the subject of two contradictory three judge decisions of the [NAME]. The first is the Scottish case of Secretary of [NAME] v [NAME] [2014] UKUT 0525 (AAC) (“[NAME]”) comprising inter alios [NAME], the Chamber President. The [NAME] being the [NAME] decision in this case [2017] UKUT 471 (AAC). There is a further decision, that of the Inner House of the Court of Session, Secretary of State for [NAME] v [NAME] of [NAME] [2017] CSIH 35 (“[NAME]”).

Social policy background

6. [NAME] claimants living in the social rented sector previously had no restrictions placed upon the size of the accommodation occupied. The introduction of size criteria for [NAME] claimants living in the social rented sector was intended to replicate or at least reflect the size criteria applicable to [NAME] claimants in the private rented sector. It applies only to working age [NAME] claimants. Its stated purpose is to contain [NAME] expenditure, encourage greater mobility within the social rented sector, make better use of available social [NAME] stock and improve work-incentives for working age claimants. It was intended to provide a mechanism through which there would be a greater incentive to make the most efficient use of available social [NAME] by ensuring a better match between [NAME] need and the accommodation provided to a tenant.

The facts

7. The first respondent (“[NAME]”) lives with her husband and their two sons (born in [DATE] and December 2006) at [ADDRESS], Nuneaton (“the property”). The property is described in the tenancy agreement as having three bedrooms, however bedrooms two and three are small and awkwardly shaped. The landlord permits a maximum of four

[2019] AACR 27 ([NAME] v [NAME] and [NAME]) 4

occupants. The First-tier Tribunal ([NAME]) found that the two small rooms are not capable of sleeping two [NAME], even children. [NAME] and her husband sleep in the double room, one [NAME] sleeps in each of the small rooms. There is no spare room. [NAME] works, her husband had to give up work in 2007 on the grounds of ill health. The family income is sufficiently low so as to entitle them to support with their [NAME] costs through [NAME].

8. Originally the family’s eligible maximum rent at the property was their whole rent. From April 2013 [NAME] was applied to them. The local authority decided they had one excess bedroom and reduced their eligible maximum rent and thus their [NAME] by £740 per year. Following the reduction [NAME] applied to the local authority for a discretionary [NAME] payment (“DHP”) to meet the shortfall between rent and [NAME]. Her application was refused. Following her successful appeal to the [NAME] in 2017 [NAME] was granted a DHP for the duration of this appeal.

The decision of the Upper Tribunal

9. The [NAME] identified the relevant issue, described as the “connection issue”, as being: “Is a room in a dwelling classified without reference to the [NAME] individual or class of individual who may occupy it or must the room in question be one that can be used as a bedroom by the actual occupants or class of occupants?” The [NAME] regarded the connection issue as being distinct from what it described as the “classification issue”, namely whether the room could be used as a bedroom at all.

10. The [NAME] analysed [NAME] as follows:

“9. The regulation operates to reduce the amount of the claimant’s otherwise eligible rent by reference to the number of bedrooms in excess of the claimant’s entitlement. Paragraph (5) provides that that entitlement depends on ‘the categories of person’ occupying the dwelling as their home. That depersonalises the assessment so that the characteristics of the actual individuals concerned are irrelevant. The first task in applying paragraph (5), therefore, is to identify the individuals who occupy the dwelling as their home and then to place them into the categories listed. That was not in dispute.

10. The argument for the Secretary of State and the local authority was that the next task is to identify the number of bedrooms in the dwelling without reference to the categories of person who would have to occupy them. …

…

12. … First, to us that is not the natural meaning of the language of paragraph (5). On [NAME]’s approach, the paragraph sets up a calculation by reference to the actual occupants as classified into [NAME] categories but then ignores the inevitable characteristics of the categories, such as that they consist of two [NAME] or [NAME] of a [NAME] age. The paragraph provides that the claimant is entitled to a bedroom for each category. The natural expectation of that language is that the room would be a bedroom for the persons bearing the characteristics of that category, not a room that ignored those characteristics. This leads on to our [NAME] reason. If the legislation were to produce the result that [NAME] and [NAME] contended for, it would need much clearer language to show that it was necessary to sever the claimant’s entitlement from

[2019] AACR 27 ([NAME] v [NAME] and [NAME]) 5

the characteristics of the categories as set out in paragraph (5). The language does not do that.”

11. The [NAME] considered but did not follow [NAME]. It did not accept that a decision of the Court of Session was binding upon the [NAME], further it stated that [NAME] was not concerned with the connection issue. The [NAME] considered the authority of [NAME], it did not accept its analysis and found that the connection issue did not arise in [NAME].

Relevant decisions of the courts or the Upper Tribunal

Secretary of Work and Pensions v Nelson and Others [2014] UKUT 0525 (AAC) [2015] AACR 21

12. Two brothers, as individual respondents, appealed decisions made pursuant to [NAME] which had reduced their [NAME]. The central issue of law in the appeals was identified as “the approach that should be taken to determine what is a bedroom for the purposes of the [NAME]”.

13. The court identified the approach to be taken to [NAME] as follows:

“19. When an ordinary or familiar English word such as ‘bedroom’ is used in a statutory test and is not defined in the legislation:

i) the test should not be re-written or paraphrased, and

ii) the ordinary or familiar word should be construed and applied in its context having regard to the underlying purposes of the legislation.

The decision of the House of Lords in Utratemp Ventures Ltd v Collins [2002] 1 AC 301 which was relied on by the Secretary of State is an example of this well established approach.

…

21. It follows that the underlying purposes of the relevant test using such language and the context in which the language is used are important and often determinative factors to be taken into account in determining whether on the facts of a given case the relevant test is satisfied.

…

The application of this approach to [NAME]

24. The underlying purpose is to limit the [NAME] entitlement of those under occupying accommodation and the language as a whole shows that the trigger for a reduction is set by reference to the entitlement of a tenant to bedrooms for the occupation of the [NAME] listed in sub-paragraphs (5) and (6). Sub-paragraphs (7) to (9) set out how that entitlement is to be assessed.

…

[2019] AACR 27 ([NAME] v [NAME] and [NAME]) 6

27. In our view, when read as a whole [NAME] provides that in determining whether there is under occupancy that triggers a reduction in [NAME]:

i) the use or potential use of the relevant room or rooms can be by any of the [NAME] listed in sub-paragraphs (5) and (6),

ii) the impact of this is that it has to be considered whether the relevant room or rooms could be used by any of the listed [NAME], and

iii) designation or choices made by the family as to who should occupy rooms as bedrooms or how rooms should be used is unlikely to have an impact on the application of the regulation.

(We have not expressed point (iii) in absolute terms because it was not the focus of argument in this case and without such focused argument we do not consider that it would be appropriate to say that such designation or choice can never be relevant and the qualification made in paragraph 29 below is relevant.)

28. As to the points made in paragraph 27(ii) and (iii). It is in our view clear:

i) that the underlying purpose of [NAME] would be undermined if this was not the case, and

ii) that purpose and that interpretation of the regulation shows that the test is focused on the availability of rooms that could be used as bedrooms by any of the listed [NAME] and thus essentially the assessment of a property when vacant; rather than how it is actually being used from time to time. It seems to us that this is so because a part of the underlying purpose must be to free up homes that are being under occupied so that they can be used by others with an entitlement to the number of bedrooms in the property or to encourage the existing occupiers to make under occupied bedrooms available to others.

…

31. When an issue arises as to whether a [NAME] room falls to be treated as a bedroom that could be used by any of the persons listed in [NAME] (5) and (6) a number of case sensitive factors will need to be considered including (a) size, configuration and overall dimensions, (b) access, (c) natural and electric lighting, (d) ventilation, and (e) privacy.

…

60. As already indicated under the heading ‘The application of this approach to [NAME]’ we do not agree that the language or purposes of the regulation supports the conclusion that under it a bedroom must generally be reasonably fit for full- time occupation of this nature, as opposed to short-term or irregular occupation as a visitor or overnight guest. Rather, as we have said, we consider that the language and purposes of the regulation point firmly in favour of the view that each room should be assessed by reference to occupation by any of the persons referred to in sub-paragraphs (5) and (6) of [NAME].”

[2019] AACR 27 ([NAME] v [NAME] and [NAME]) 7

Secretary of State for [NAME] v [NAME] of [NAME] [2017] CSIH 35

14. Ms [NAME] is an adult single woman. She has severe learning disabilities and autistic traits and is unable to live alone. [NAME] is a tenant of a property comprising five main rooms plus kitchen and bathroom. She lives with [NAME] who care for her. [NAME] is in receipt of [NAME] administered by [NAME]. The [NAME] of [NAME] was reduced by 25 per cent when [NAME] applied [NAME](3)(b) of the regulations and concluded that she was under occupying the rented property by two bedrooms.

15. The focus of the case was on the meaning of the word “bedroom” in the regulations. The court considered it essential to consider the statutory context in interpreting the word “bedroom” in [NAME]. In so doing the court stated:

“19. There was no real dispute in this case about the purpose of the Regulations and we consider that purpose would be frustrated if a tenant who rented what was objectively classified, for example, as a three bedroom property could by his use or unilateral structural changes to the property change the classification to a two or one bedroom property.

20. … In our opinion the classification and description of a property used as a dwelling is a matter of fact to be determined objectively according to relevant factors such as size, layout and specification of the [NAME] property in its vacant state. That classification cannot be changed except by structural alterations made with the landlord’s approval which have the result of changing the classification of the property having regard objectively to its potential use in a vacant state. Thus the classification of a property as having one or more bedrooms does not change depending on the actual needs of the occupants or how they use the rooms for whatever reason from time to time. ...

21. The issue was raised directly at tribunal level in a number of cases. A three judge panel was convened in [NAME] v [NAME] against a background that there were a number of different approaches taken by First-tier Tribunals to the interpretation of the word “bedroom” in [NAME]. We consider that there is merit in the approach of the [NAME] to the extent that they recognised that the assessment should focus on the property when vacant rather than how it is actually being used from time to time (paragraph 28) and in their practical approach to considering what may be relevant factors illustrated in paragraphs 30 to 33. To the extent however that the Upper Tribunal entertained the possibility that the designation or choices made by family members as to who should occupy bedrooms or how rooms should be used had any relevance, we do not agree.”

R ([NAME] & Others) v Secretary of State for [NAME] [2016] UKSC 58

16. The Supreme Court considered a number of appeals from claimants who have disabilities or who live with dependent family members who have disabilities or who live in what are known as “sanctuary scheme” homes. They all receive or have received [NAME]. The claimants challenged the validity of [NAME] as it applied to them on equality grounds, specifically they contended that there had been a violation of their rights under Article 14 of the European Convention for the Protection of Human Rights and Fundamental Freedoms (“ECHR”) taken with Article 8 and/or Article 1 of the First Protocol (“A1P1”) and in MA’s

[2019] AACR 27 ([NAME] v [NAME] and [NAME]) 8

case that there had been a breach by the Secretary of State of the public sector equality duty under the Equality Act 2010.

17. In the Court of Appeal R (on the application of) MA & Ors, v The Secretary of State for [NAME] [2014] EWCA Civ 13 accepted that [NAME] had a discriminatory effect on some [NAME] with disabilities, but it held the discrimination was justified, primarily because the Secretary of State was entitled to take the view that it was not practicable to exempt an imprecise class of persons to whom the bedroom criteria would not apply because they needed extra bedroom space by reason of disability. The DHP scheme had the [NAME] of flexibility and was also appropriate because the nature of a person’s disability and disability- related needs may change over time. In reaching this conclusion the court applied the test whether the Secretary of State’s policy was “manifestly without reasonable foundation” [21- 22].

18. At [29] Lord Toulson JSC cited from the judgment of Baroness Hale in Humphreys v Revenue and Customs Comrs [2012] UKSC 18 as follows:

“15. The proper approach to justification in cases involving discrimination in state benefits is to be found in the Grand Chamber’s decision in [NAME] v United Kingdom 43 EHRR 47. …

16. The court repeated the well-known general principle that:

‘A difference of treatment is, however, discriminatory if it has no objective and reasonable justification; in other words, if it does not pursue a legitimate aim or if there is not a reasonable relationship of proportionality between the means employed and the aim sought to be realised.’ (para 51)

…

18. The same test was applied by Lord Neuberger of Abbotsbury … in R (RJM) v Secretary of State for [NAME] [2009] AC 311 …. He concluded, at para 57:

‘The fact that there are grounds for criticising, or disagreeing with, these views does not mean that they must be rejected. Equally, the fact that the line may have been drawn imperfectly does not mean that the policy cannot be justified. Of course, there will come a point where the justification for a policy is so weak, or the line has been drawn in such an arbitrary position, that, even with the broad margin of appreciation accorded to the state, the court will conclude that the policy is unjustifiable.’”

At [32] and following Lord Toulson stated:

“32. The fundamental reason for applying the manifestly without reasonable foundation test in cases about inequality in welfare systems was given by the Grand Chamber in [NAME] (para 52). Choices about welfare systems involve policy decisions on economic and social matters which are pre-eminently matters for national authorities.

33. The claimants seek to counter that point by arguing that this case involves no challenge to a decision of that kind. They have no quarrel with the policy of [NAME]. Their complaint is at a lower level and involves no question of economic or social

[2019] AACR 27 ([NAME] v [NAME] and [NAME]) 9

judgment. Their complaint is simply that the manner of implementation of the policy discriminates against a vulnerable group, and that it is right to require weighty reasons to justify the discrimination rather than the broader policy itself.

34. Rejecting that argument, Lord Dyson MR said (paras 54 to 55) that although the precise detail and scope of the Regulations may not be matters of high policy in themselves, they formed an integral part of a high policy decision and could not be dismissed as technical detail; that the law in this area would suffer from undesirable uncertainty if the test were to vary according to whether the challenge were to high level policy or lower level policy; and that there was no hint of such a distinction in the European or domestic case law.”

At [41] Lord Toulson concluded:

“41. In MA the Divisional Court and the Court of Appeal concluded after careful scrutiny that the Secretary of State’s decision to structure the scheme as he did was reasonable. In general terms I agree. There was certainly a reasonable foundation for the Secretary of State’s decision not to create a blanket exception for anyone suffering from a disability within the meaning of the Equality Act (which covers anyone who has a physical or mental impairment that has a more than minimal long term effect on the ability to do normal daily activities) and to regard a DHP scheme as more appropriate than an exhaustive set of bright line rules to cover every contingency.”

19. Lord Toulson allowed the appeal of [NAME] who was unable to share a bedroom with her husband because of her disabilities. He found that her position was directly comparable to that of the [NAME] who required separate bedrooms for disability reasons in a previous decision of the Court of Appeal. The Supreme Court held that there was no reasonable justification for the differences between the two cases and on that basis allowed [NAME]’s appeal.

20. The significance of the [NAME] decision is that the Supreme Court accepted that in considering challenges pursuant to Articles 8 and 14 of the ECHR, [NAME] did have a discriminatory effect upon some [NAME] with disabilities. However, it held that the discrimination was justified because the Secretary of State was entitled to take the view that it was not practicable to exempt an imprecise class of persons to whom the bedroom criteria would not apply because they needed extra bedroom space by reason of disability. The DHP scheme had the [NAME] of flexibility which was appropriate because of the nature of a person’s disability and needs. In so doing the court applied the test of whether the Secretary of State’s policy was “manifestly without reasonable foundation” and concluded that it was not.

The appellant’s case

21. The purpose of [NAME] is the calculation of rent, it is not intended to provide a [NAME] type of social [NAME]. It requires the local authority/[NAME] authority to look at entitlement under [NAME](2) irrespective of knowledge of the family unit or property. It is a method of calculating entitlement to [NAME], the provisions do not attempt to identify actual need. They identify the proxy criteria in order to establish the amount of assistance which is required by way of [NAME]. Regulation 12(b) provides a mathematical calculation of what is the eligible rent.

[2019] AACR 27 ([NAME] v [NAME] and [NAME]) 10

22. In applying [NAME] the relevant authority identifies the number of bedrooms in a property and thereafter identifies what a family is entitled to. If the number of bedrooms exceeds the family’s entitlement then the reduction is applied to the [NAME]. Within the legislation there is no definition of bedroom, no concept of the double bedroom. There is nothing of a qualifying character or reference to a special case of [NAME] need, for example medical needs. There is nothing to direct the legislation to look at the facts of specific cases. Qualifications to the regulation have subsequently been introduced following the decisions in [NAME], the purpose being to identify specific scenarios.

23. [NAME]’s family unit, namely a [NAME] and two children of the same sex under 16, prima facie entitles them to a two-bedroom house pursuant to [NAME]). It is accepted that the two bedrooms in the home in [ADDRESS] used by the [NAME] are small. There is a dispute which has been remitted to the [NAME] for consideration as to whether one of the bedrooms is suitable for sharing.

24. The Secretary of State submits that in assessing the maximum rent pursuant to [NAME] there are two stages:

i) Objectively identify the number of bedrooms in the dwelling, it is accepted in this case that there are three;

ii) Pursuant to the criteria set out in [NAME]) interpret the size criteria.

25. For the purpose of quantifying state assistance, entitlement is computed by reference to categories not the persons within them. The categories are depersonalised. Thus, fifteen-year- olds are treated the same as babies even though their needs are different. The language of [NAME]) is mandatory, there is no provision for a bedroom which is not qualitatively appropriate for the identified category. The language does not allow for the taking of an individual out of the first category and placing that person into a lower category. The analysis to be performed is the same whatever the number of rooms. The entitlement is to rent not an individual bedroom.

The first respondent’s case

26. The focus of the social policy was on properties with spare rooms and the removal of the “spare room subsidy” as evidenced in the Department for [NAME]’ “Equality Impact Assessment, [NAME] for [NAME] in the Social Sector” (June 2012). The legislative language reflects that policy, [NAME] with spare rooms are to be affected; [NAME] without spare rooms are not. In this case there is no spare room, [NAME] and her family live in a house which fits four [NAME].

27. The natural construction of the legislative language supports the [NAME]’s reasoning. Bedroom entitlement is expressed in [NAME] as being for [NAME] categories of occupants. Its intention was not to treat entitlement to a bedroom as being discharged by a bedroom in which it would be impossible to accommodate the relevant categories of persons.

28. The first respondent accepts:

i) The use of proxies is an inevitable part of social security legislation;

ii) For the purpose of the [NAME] calculation the property has to be considered in a vacant state;

[2019] AACR 27 ([NAME] v [NAME] and [NAME]) 11

iii) The [NAME] was correct to find that [NAME]) depersonalises the assessment to be performed such that the characteristics of the actual individuals concerned are irrelevant.

29. It is the first respondent’s case that [NAME]) has to be read in the context of the regulation as a whole. In construing the subsection, the critical word is “applicable”. In considering each of the categories (a) to (e), [NAME]’s sons would fall within category (c). However the [NAME] looked at the legislation as a whole and asked whether the category was applicable for the two boys who were unable to share the room by reason of its size. Implicit in the word “applicable” is the question whether Parliament intended that category (c) was applicable to the two boys when the bedroom could not in fact accommodate them. In construing the word “applicable” in the context of the legislation as a whole the intention was that the applicable category was one which would entitle any one of the individuals living in the property to a bedroom which could accommodate them.

30. The legislation could not have intended that a person should be entitled to one bedroom for two [NAME] in which it was impossible to accommodate them. [NAME](5) has to be read as a whole and applicability includes the construction that the room can accommodate the relevant category.

Discrimination

31. The first respondent contends that the provision of [NAME] to families engages article 8 ECHR ([NAME] [49]). It is her case that the treatment of the children is upon the basis of a status protected by article 14 ECHR. They were initially required to share a room because both were aged under ten, from 1 December 2014 they had been required to share a room because they are of the same sex. Children aged under ten with a sibling aged under ten are treated differently under [NAME] to single adult family members and to child family members aged at least ten with a different sex sibling. The first category of a person must share a room while the latter two categories of persons are permitted a room of their own.

32. This different treatment is said to amount to prima facie discrimination on the ground of age, it being a relevant status for the purpose of Article 14 ECHR. Further, children aged at least ten with a sibling of identical sex are treated differently to children aged at least ten with a sibling of a different sex. The first category of person must share a room while the [NAME] category of person is permitted his/her own room. This different treatment is said to amount to prima facie discrimination since one category is treated less favourably than the other and it is exclusively the ground of sex which leads to the less favourable treatment. Alternatively the categories “Children aged under ten with a sibling aged under ten” and “Children aged at least ten with the same-sex sibling” themselves form a relevant status for the purposes of Article 14.

33. The fundamental difficulty with the first respondent’s discrimination arguments is that [NAME] determined that the legislation and the overall scheme were compatible with the ECHR and thus lawful, even in cases where there were compelling medical needs for individuals to occupy [NAME] properties. On the facts of this case no such needs arise. The state makes appropriate provision by way of assistance to the family of the first respondent, the problem is that they are in occupation of a property which is not appropriate from the perspective of the scheme.

[2019] AACR 27 ([NAME] v [NAME] and [NAME]) 12

34. There would be no alleged discrimination if [NAME]’s family were in appropriate two- bedroom accommodation. The issue arises because they occupy an inappropriate three- bedroom property when viewed objectively and by reference to other family units who could occupy it. As the size criteria themselves are non-discriminatory they cannot become discriminatory when applied to a [NAME] family unit, particularly when one has regard to the mitigation (DHP) that forms a part of the overall scheme.

The [NAME] respondent

35. The [NAME] respondent adopts and supports the submissions of the appellant. Discussion 36. The regulations represent an instrument of social policy applicable to the usage of social entitlement. The intention of the legislation is to: ensure that social [NAME] is used in the most effective way possible; improve the mismatch of property with those living within it; reduce overcrowding; place families in appropriately sized accommodation; increase mobility in the socially rented sector; incentivise work; introduce greater fairness between claimants living in the private and socially rented sector; and reduce public expenditure. The purpose of the regulations is to calculate what, if any, caps are to be applied to welfare benefits, in [NAME]. The regulations do not provide social entitlement to physical [NAME].

37. The methodology of the regulations is that the bedroom is used as a proxy for need. The size criteria/bedroom criteria are a means of quantifying cash entitlement. A “bedroom” does not represent a precise proxy. The Secretary of State accepts that it is an imprecise means of measuring need but it serves the purpose because all persons in [NAME] need a bedroom and thus it is useful. It is also accepted that mismatches can arise but can be met, for example, by DHPs.

38. “Bedroom” is an ordinary word which is neither defined nor qualified in the regulations. The word has to be construed and applied in its context having regard to the underlying purposes of the legislation. The underlying purpose of the regulations is to limit [NAME] entitlement to those occupying social [NAME]. The language of the regulations demonstrates that the criteria identified as limiting such [NAME] is the entitlement of a tenant to a bedroom for persons listed in subparagraphs (5) and (6). The assessment is to be carried out by the relevant authority in respect of a notionally vacant house. A point accepted by the first respondent. It is also accepted by the first respondent that [NAME]) depersonalises the assessment to be performed such that the characteristics of the [NAME] individuals are irrelevant. It follows that such an assessment is an objective one.

39. There is nothing in the regulations to indicate that any such assessment is required to take account of how a property and, in [NAME], the bedrooms in the property would be used by a [NAME] family unit. Were that to be so, the purpose underlying the legislation would be frustrated as a tenant could, by use of the property, change the objective classification so as to reduce the relevant number of bedrooms. This further demonstrates the objective nature of the assessment and, with it, the interpretation of “bedroom” within [NAME]).

40. Such reasoning is consistent with that of the [NAME] in [NAME] and the Court of Session in [NAME] which considered the underlying purpose of the legislation and the use of the word “bedroom” in that context. It is not consistent with the approach of the [NAME] in this case, which

[2019] AACR 27 ([NAME] v [NAME] and [NAME]) 13

introduced a subjective element into that assessment, which I find is supported neither by the words of the regulation nor the intention of the legislation.

Conclusion

41. For the reasons given I find that pursuant to the size criteria ([NAME](5) of the [NAME] 2006, which entitles the [NAME] to “one bedroom for each of the following categories of person” in occupation of the property) the word “bedroom” should be interpreted as meaning a room capable of being used as a “bedroom” by any of the listed categories and not a room capable of being used as a “bedroom” by the [NAME]. In holding that the correct interpretation was a room capable of being used as a “bedroom” by the [NAME], the [NAME] erred in law and its decision was wrong.

42. The appeal is allowed. The decision of the [NAME] is quashed. In applying r egulation [NAME] to the property at the centre of this case, I find that [NAME] is entitled to a two-bedroomed property.

Lord Justice Hickinbottom:

43. I agree.

Lord Justice Longmore:

44. I agree also.