West Law Report

Rent officers should not use too large an area

Posted in House of Lords (case), Times Law Report by mrkooenglish on September 3, 2008

From The TimesAugust 20, 2008

Rent officers should not use too large an area
Regina (Heffernan) v Rent Service in the House of Lords
House of Lords

Regina (Heffernan) v Rent Service

Published August 20, 2008

Before Lord Hope of Craighead, Lord Scott of Foscote, Lord Rodger of Earlsferry, Lord Walker of Gestingthorpe and Lord Neuberger of Abbotsbury

Speeches July 30, 2008

Rent officers should not base a local reference rent on too large an area.

The House of Lords (Lord Rodger and Lord Walker dissenting) allowed an appeal by Daniel Heffernan from the Court of Appeal (Lord Justice Pill, Lord Justice Rix and Lord Justice Long-more) ([2007] EWCA Civ 544) who had allowed an appeal by the Rent Service from Judge Gilbart, QC, sitting as a High Court judge, who, on Mr Heffernan’s application for judicial review, had quashed two redeterminations made by rent officers.

Mr Richard Drabble, QC and Mr Jamie Burton for Mr Heffernan; Mr David Pannick, QC and Mr James Strachan for the Rent Service.

LORD NEUBERGER said that Schedule 1 to the Rent Officers (Housing Benefit Functions) Order (SI 1997 No 1984), as amended by the Rent Officers (Housing Benefit Functions) (Amendment) Order (SI 2001 No 3561) reflected a balancing exercise that had to be carried out when a person claimed housing benefit.

On the one hand, it would be a waste of public funds to pay for accommodation that was inappropriately expensive or extensive. On the other hand, it would be unduly harsh to require a radical deterioration in such a person’s residential circumstances.

Accordingly, the Schedule involved a graduated approach on the part of the rent officer.

First, under paragraph 1, he decided whether the rent payable for the tenant’s dwelling was significantly higher on the basis of rents payable within a relatively small area, “the vicinity”.

Second, under paragraph 2, he asked whether the dwelling was too large for the tenant, in which case he fixed a market rent for an appropriately sized dwelling in the vicinity.

Third, under paragraph 3, he inquired whether the rent was exceptionally high by reference to similarly sized dwellings in the same neighbourhood, a rather larger area than the vicinity.

Finally, under paragraph 4, he had to assess the local reference rent. It was clear that the “locality” was larger than the “neighbourhood”, not least because it had to consist of at least two neighbourhoods.

Two redeterminations of the local reference rent for assessing Mr Heffernan’s housing benefit had been carried out by the rent officers on the basis that the neighbourhood of his apartment was central Sheffield and that the locality was the whole of the city of Sheffield and some of its surroundings, which his Lordship would call “the Sheffield area”.

The area was made up of 13 neighbourhoods, including Sheffield Central.

The rent officers had proceeded on the basis that the meaning of “locality” was “a broad geographical area made up of a number of neighbourhoods with a mix of property types and tenure where a tenant could, as an alternative to the property in question, reasonably be expected to live and benefit from similar amenities”. That formula had been taken from Rent Service Circular GA/18a/2001.

Mr Heffernan contended that it had been impermissible to take the whole of the Sheffield area as the locality for the purpose of paragraph 4(6) of Schedule 1.

In his Lordship’s view, once the rent officer had assembled enough neighbourhoods to satisfy, in his judgment, the requirements of paragraph 4(6)(c), he was required to stop looking for, or including any further neighbourhoods; he had identified the locality.

The question, next, was whether the words “having regard to” in paragraph 4(6)(b) were exclusive. When deciding whether a neighbourhood was one in which the tenant could reasonably be expected to live, did the rent officer have to restrict his inquiry to the facilities and services specified? In his Lordship’s view, the specified amenities were intended to be exhaustive.

As to the meaning of “locality, it was legitimate to bear in mind its ordinary English meaning. It would not normally convey an area as large as a city, but it was such an imprecise word that it could not be said that that was excluded.

Subject to that, it was hard to be prescriptive about what paragraph 4(6) meant, beyond ana-lysing the effect of sub-paragraphs (a), (b) and (c).

Care should be taken, particularly in the case of cities or urban areas, not to interpret “neighbourhood” as comprising too large an area. It could not have been envisaged that, at least in a city or town, a neighbourhood would normally be very large or sprawling.

The redeterminations under challenge could not stand. In taking the Sheffield area as the locality, the rent officers appeared to have adopted an approach generally taken by the Rent Service when assessing local reference rent for dwellings in that area, which in turn was based on the guidance in the circular.

The circular could be misleading when it referred to a locality being “a broad geographical area”. “Broad” might encourage rent officers to take a larger area than was appropriate, as had

probably happened here, and “geographical” appeared to add nothing and hence risked misleading.

The judge’s order quashing the redeterminations should be restored.

Lord Hope delivered an opinion agreeing with Lord Neuberger; Lord Scott agreed with Lord Hope and Lord Neuberger.

LORD RODGER, dissenting, said that at the conclusion of the hearing he had been inclined to favour a construction of paragraph 4(6) along the lines of Lord Neuberger’s. On further consideration, however, he had come to the view that it introduced too many elements that were not to be found in the text. He could detect no error in principle in the rent officers’ approach.

LORD WALKER said that he had had great difficulty in the resolution of the appeal but had concluded that the appeal should be dismissed for the reasons given by Lord Rodger.

Solicitors: Irwin Mitchell, Sheffield; Treasury Solicitor.

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