A1/01/1116, 1118 & 1119
Neutral Citation Number: [2001] EWCA Civ 1364
IN THE SUPREME COURT OF JUDICATURE          
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE SOCIAL SECURITY COMMISSIONER
 
                                    Royal Courts of Justice
                                    Strand
                                    London WC2
 
                               Monday, 23rd July 2001
B e f o r e :

LADY JUSTICE HALE

MR. JUSTICE WILSON

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ANDREW WILLIAM READ
Applicant

‑ v ‑

CHIEF ADJUDICATION OFFICER
SECRETARY OF STATE FOR THE D.S.S.

Respondents
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(Computer Aided Transcript of the Stenograph Notes
of Smith Bernal Reporting Limited
190 Fleet Street, London EC4A 2AG
Telephone No: 0171‑421 4040
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Official Shorthand Writers to the Court)
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THE APPLICANT appeared in person.

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J U D G M E N T
1.	MR. JUSTICE WILSON: Mr. Read, the applicant, seeks permission to bring appeals to this court from various decisions relating to his entitlement to social security made by Mr. Commissioner Lloyd‑Davies, a social security commissioner, on 20 November 2000. The commissioner has refused permission to Mr. Read to appeal. The refusal was communicated to him only on about 14 May 2001 so the applicant is not out of time for making this application. But, just as an appeal to a commissioner can be only on a point of law, so also any appeal to this court is similarly limited (section 15, Social Security Act 1998); and we should not grant an application for permission to appeal unless we think that the proposed appeal on the point of law has a real prospect of success (Rule 52.3(6) of the Civil Procedure Rules 1998).
2.	Before the commissioner were three separate appeals from three decisions of the Social Security Appeal Tribunal, all dated 8 April 1998. Although the applicant had some success before the commissioner, he still wants to challenge the commissioner's disposals of all three of the appeals, and so strictly we have three separate applications before us. Nevertheless there is a common factual background which relates to the applicant's entitlement to income support, including housing costs, from 1994 onwards.
3.	The issues are narrow and have generated a monument of paper and a volume of litigation over the last seven years which bear no relation to their size. Prior to the tribunal's decision in 1998 there had been appeals to it on at least three earlier occasions.
4.	The relevant facts can be brought within nine headings.
(1) In 1994 the applicant was the part owner of a flat at 11 Partridge Close, Beckton, East London. I say that he was a part owner because he shared ownership with a housing association. He was a long lessee entitled to call for a sale and, in the event of sale, entitled to one half of the proceeds. His interest was subject to a charge in favour of the Abbey National Building Society, as it then was; and, notwithstanding a long‑running dispute between the applicant and the society, the tribunal took the society as having financed his interest in Partridge Close with an advance of £18,750.
(2) On 25 February 1994 the applicant acquired and moved into a second property, namely 3 Selby Close, also in Beckton. It cost £58,500 and was purchased on mortgage from the Halifax Building Society, as it then was, with an advance, on terms of repayment of capital, amounting to £46,655.
(3) The applicant had made no attempt to sell his interest in Partridge Close before he bought Selby Close. He believed that the property market was rising and decided to let Partridge Close rather than to sell it.
(4) On 14 March 1994, having lost his job, the applicant applied for income support. By that date two “for sale” boards were up outside Partridge Close but, unless a particularly good offer was made for it (and none was made), the applicant intended to let it.
(5) His application for income support was slow to be determined. First of all, it was refused on the basis that he had too much capital. His appeal was dismissed by a tribunal. Later that decision was set aside; and by early 1995 the rehearing of his appeal was pending.
(6) Meanwhile the applicant had found a succession of tenants for Partridge Close. As someone with an unusual degree of knowledge of and interest in social security law, the applicant was keen for tenants not to pay rent to him directly. He had in mind, in particular, the well‑known textbook on social security law written by Messrs Ogus & Barendt, in particular page 434 of the then current edition. At first he directed his tenants to pay rent partly to the housing association, his co‑owner, and partly to the Abbey National, the purported mortgagee. Then in April 1995 he took out a personal equity plan (a PEP) with M & G Financial Services Limited. He says that he granted a charge to the Halifax, his mortgagee in relation to Selby Close, over the PEP, and that all sums thereafter paid into the plan became subject to it. He says that that was part of a re‑organisation of his repayment mortgage consequent upon the fact that he had no income and that, even if he won his case for income support, the DSS would, at best, be paying only interest on that mortgage. It is, as I will explain, still a matter of dispute with the DSS whether he did create such a charge over his PEP and, if so, whether it is valid. The documentation in that regard is still, after all these years, highly unsatisfactory. At all events, after April 1995, his tenants in Partridge Close paid their rent into his M & G PEP fund. He himself made certain other payments into it.
(7) When the applicant redirected the rent away from the housing association and away from the Abbey National, arrears, followed by disputes, arose between him and both of them. Ultimately, in March 1997, the Abbey National obtained a possession order in relation to Partridge Close and sold it. Apparently the half of the net proceeds to which the applicant was entitled proved to be slightly less than the sum found by the county court to be owing by the applicant to the society.
(8) By the end of 1995 the mortgage held by the Halifax was also in arrears. They took proceedings for possession of Selby Close. The proceedings were discontinued in April 1996 upon a payment of £6,000 by the applicant to them, which seems to have been the amount of the arrears. He had borrowed the £6,000 from his mother. That payment seems to have brought the sum owing to the Halifax down to about £47,000. Nothing turns upon the precise figure.
(9) In November 1996 the benefits agency made two payments which recognized the applicant's entitlement to income support from the date of his claim, 14 March 1994, until 2 May 1995. Nothing turns on the first payment, which was of £993, to the applicant. But the second payment, in the sum of £2,829, was sent to the Halifax for the credit of the applicant's account. It seems that arrears had built up again in the seven months between April and November; but the payment received seems to have been applied by the Halifax not only to eradicate those further arrears but to reduce the capital sum owing from about £47,000 to about £46,000.
5.	With that background I can turn to the three proposed appeals.
6.	In his oral presentation to us this morning, Mr. Read said that his main complaint was that the numerous arguments that he had put before the commissioner had not been properly considered in the latter's written decision. I can assure Mr. Read that I spent many hours yesterday in reading all his arguments, which have been clearly expressed, in notices, letters and other memoranda in the documents before us.
7.	I turn first to application 1116/2001 in this court, which relates to the appeal to the commissioner numbered before him as 1525/1999. This proposed appeal has two limbs. First the applicant has contended, and would wish to contend in this court, that, although he was ultimately paid housing costs referable to the mortgage on Selby Close with effect from 14 March 1994, he was also entitled to housing costs for the first four weeks, i.e. to 11 April 1994, referable to the mortgage on Partridge Close. That argument depends upon the proper construction of paragraph 4(6) of the Income Support (General) Regulations 1987. That provides:
“Where a person is liable to make payments in respect of two (but not more than two) dwellings, he shall be treated as occupying both dwellings as his home only ‑
(c) in the case where a person has moved into a new dwelling occupied as the home, . . . for a period not exceeding four benefit weeks if his liability to make payments in respect of two dwellings is unavoidable.” 
8.	The tribunal found that the retention of Partridge Close had not been unavoidable; that the applicant had made a deliberate decision to retain it for letting; and that he had not even placed it on the market for sale until after the completion of his purchase of Selby Close. So it held that there was no entitlement to housing costs, even for the first four weeks, in respect of Partridge Close. In that respect the commissioner upheld the tribunal's decision.
9.	The applicant would wish to argue that, in deciding whether his liability to pay a mortgage on Partridge Close was “unavoidable”, one must focus on the date of his claim, namely 14 March 1994. He contends that, from that date onwards, for the next four weeks his liability was indeed unavoidable. His point is best expressed in the letter which he wrote to the commissioner dated 11 February 2001, seeking permission to appeal:
“The question of avoidability relates to the state of affairs at the date of the claim; it does not relate to some previous state of affairs. The commissioner is not entitled to use hindsight in his argument the way that he does. For there to be any reference to hindsight the legislation would have to be phrased in the past tense; the legislation is entirely phrased in the present tense; it does not say '... if his liability to make payments in respect of two dwellings was unavoidable'. . . Given that the state of affairs in my case is that at the date of my claim there were two properties, it is pointless for the commissioner to envisage a state of affairs where there is only one property. I am not a time traveller and cannot go back in time to change events.”
10.	I am afraid that I regard the result of the applicant's argument as absurd and consider that the words of the regulation in no way compel a construction productive of such a result. In my view the words “is unavoidable” mean “is not able to be or to have been avoided”.
11.	The second part of this proposed appeal relates to the fact that the applicant has contended that the payment by the Benefits Agency in November 1996 of £2,829 to the Halifax was invalid; that the payment should have been made to him directly; and that an equivalent sum should now be paid to him. According to its written reasons the tribunal hesitated before accepting jurisdiction and accepted that “how benefit is paid is ordinarily a matter for the Secretary of State”. But the tribunal decided to determine whether the Secretary of State was entitled to make the direct payment and, rejecting two arguments of the applicant, held that he was so entitled. The commissioner for his part held that the tribunal had no jurisdiction to determine the issue. He dismissed the applicant's appeal for that reason alone.
12.	Before us, the applicant would wish to challenge the commissioner's view about jurisdiction, and, if successful, he would press the two points of law which the tribunal rejected in order to secure a determination of his entitlement to a direct payment. The initial difficulty for the applicant is that, although under regulation 34A of the Social Security (Claims and Payments) Regulations 1987, there is in certain circumstances an obligation on the Secretary of State to pay mortgage interest direct to a lender, there is also a discretion given to him under regulation 34 to pay benefit to another person on the beneficiary's behalf, if such a direction as to payment appears to the Secretary of State to be necessary for protecting his interests, including obviously the preservation of a roof over his head. So there is that general point which seems, subject to judicial review, to sweep the issue away into the discretion of the Secretary of State. But, in fairness to the applicant, it is worthwhile for us to notice the two points which, if he was to surmount the jurisdictional problem, he pressed upon the tribunal and would wish to press in this court. They relate to the circumstances when the Secretary of State is obliged under regulation 34A to remit a payment to a mortgagee. His first point is based upon paragraph 2(1) of Schedule 9A to the regulations:
“The circumstances referred to in regulation 34A are that. . .
(b) the relevant benefits to which a relevant beneficiary is entitled are payable in respect of a period of seven days or a multiple of such period.”
13.	The applicant says that the payment in November 1996 was for 59 weeks and two days; and that, although 59 weeks is a multiple of one week, one could not say that two days was a multiple of a week. In my view that argument is demonstrably wrong. Two days is two‑sevenths of a week. The relevant multiple in that case is two‑sevenths.
14.	The applicant's second point is founded upon paragraph 6 of the same schedule:
“Payments to qualifying lenders under regulation 34A and this Schedule shall be made in arrears at intervals of 4 weeks.” 
15.	The applicant says that the payment here made in arrears, after a delay of between one and two years, does not qualify as a payment at an interval of four weeks for the purpose of paragraph 6, with the result that regulation 34A is not engaged. As the applicant may not realise, the courts construe regulations, schedules and paragraphs by their words but also in the light of their purpose; and they look at each paragraph in the context of the whole set of provisions. So if, after delay in processing a claim for income support, the Secretary of State turns out to have an obligation under regulation 34A to make part of a payment of benefits to a lender, he is not relieved of that obligation by a paragraph which in my view must be construed to provide that, when the benefit is up and running, he should make payment every 28 days. In other words, even without the jurisdictional problem, the applicant's two arguments for a second payment, this time being made directly to him, are demonstrably unsound.
16.	The next application of the applicant for permission to appeal which it is convenient to consider at this stage is numbered 1119/2001 in this court and relates to the appeal to the commissioner numbered before him 1526/1999. The tribunal declared that, subject to the proper treatment of his PEP, to which I will shortly turn, the applicant was also entitled to income support for the period following 3 May 1995, which was the terminal date of the benefit paid in November 1996. The issue here relates to the quantification of the applicant's housing costs in some subsequent years and specifically to the size of the mortgage held by the Halifax over Selby Close, by reference to which the housing costs should be calculated. The tribunal held that, with effect from the second anniversary of his initial claim, namely 14 March 1996, it should be the figure of approximately £46,000, to which the mortgage debt was reduced by the payment in November 1996, that should be thus taken. The commissioner held that the tribunal had in part erred. He held that, if the payment was in November 1996, it was the anniversary of the initial claim which followed that payment, namely 14 March 1997, which should be the date from which that figure of £46,000 should be taken.
17.	But the applicant is still gravely dissatisfied. His argument is that he should be taken, even from March 1997, as having a mortgage of about £47,000 rather than £46,000. First he says that the payment in November 1996 should not have been paid to the Halifax directly. I have suggested why that argument should be rejected. But, second, he says that, even if that payment was legitimate, the Halifax had no entitlement to apply it so as to reduce the capital owed by him from, in round terms, £47,000 to £46,000. The applicant cites regulation 34A itself:
“(1) In relation to cases to which section 51C(1) of the Social Security Act 1986 ... applies and in the circumstances specified in Schedule 9A, such part of any relevant benefits to which a relevant beneficiary is entitled as may be specified in that Schedule shall be paid by the Secretary of State directly to the qualifying lender and shall be applied by that lender towards the discharge of the liability in respect of that mortgage interest.” 
18.	The commissioner pointed that reference to interest and said in his decision:
“This is, however, not a matter for me but something that the claimant, if he wishes to do so, must take up elsewhere.” 
19.	He went on to deal with the applicant's point in this way:
“The claimant argued that the lower figure, [£46,000 rather than £47,000] was erroneous inasmuch it had only been arrived at by the fact of the payment made by the Secretary of State to the Halifax in 1996 and that that payment ought never to have been made. In my judgment housing costs are to be calculated by reference to the actual capital outstanding. There is no relevant provision in the legislation to admit for calculation in this case by reference to any other sum.” 
20.	In this regard the commissioner upheld the similar view taken by the tribunal. Paragraph 6(1)(a) of schedule 3 to the General Regulations requires the DSS to calculate benefit by reference to interest payable on “eligible capital for the time being owing in connection with a loan”. The tribunal and the commissioner both held that those words mean what they say; and it seems to me that, were the DSS obliged to conduct an enquiry into whether in any particular case a mortgagee had misapplied a credit, the administration of this part of the benefits system would grind almost to a halt. The fact is that from November 1996 the principal sum owing has been £46,000. If the applicant wants to argue that that is as a result of a misapplication, which he is entitled to cause to be rectified by some repayment to him or otherwise, he must take that up with the Halifax.
21.	The third application for permission to appeal is numbered 1118/2001 in this court and relates to the appeal to the commissioner numbered before him 1527/1999. It relates to the proper treatment of the applicant's PEP. The tribunal had held that the PEP was relevant capital in the applicant's hands within regulations 45 and 53 of the General Regulations and that, accordingly, income support should be reduced by reference to the statutory tariff from the date when the balance in the account exceeded £3,000 and entitlement should be eliminated when the balance exceeded £8,000. The tribunal found that the applicant may well have earmarked the PEP for repayment to the Halifax from its inception in 1995; indeed it went on to find that he had formerly charged it to the Halifax in April 1996. But the tribunal held that all that was irrelevant. The commissioner allowed the applicant's appeal in relation to the treatment of his PEP. The commissioner seems to have held that it was not clear whether there was evidence which entitled the tribunal to find that the PEP had been formerly charged to the Halifax in 1996. But he accepted that it was possible for a PEP to be charged. He was not clear whether the Halifax had given consideration for any charge made to it of the PEP; and he pointed out that, if the PEP had been charged and for valuable consideration, it was not clear as to whether it or the property at Selby Close itself was intended to be regarded as the primary security for the debt. He went on to observe that, even if the PEP was so intended, one would need to consider whether the applicant's creation of the charge might amount to his having deprived himself of capital within the meaning of regulation 51 of the General Regulations. He pointed out that there was no evidence as to what had happened to the PEP, whether it had been encashed and, if so, the destination of the proceeds, and that such evidence might provide valuable answers to the central question of whether the plan had been truly charged. He concluded his decision by saying:
“I accordingly allow the appeal against decision (G) and remit the questions in issue to a new tribunal to make appropriate findings as to the amounts paid into the PEP by the claimant, whether there was any charge over it made for valuable consideration, whether any question of deprivation of capital arises and, if so, in what amount, and, finally, if relevant, the value of the PEP at any material time.” 
22.	In the light of the fact that the whole question of the proper treatment of the PEP has been remitted for fresh consideration by another tribunal, it is surprising, to say the least, that the applicant wishes to appeal to this court about it. In such circumstances, where, I ask myself, is the applicant's point of law? In his grounds of appeal the applicant says:
“At paragraphs 14 to 19 of the commissioner's decision, the commissioner has nowhere addressed my arguments and legal references relating to notional income and capital. Justice cannot therefore be seen to be done. No evidence has been presented anywhere of any authority to open a PEP which did not belong to Halifax Plc. The commissioner is therefore wrong in law to act as if one did exist.” 
23.	Later, in explaining the orders which he would hope that this court would make, he seeks an order:
“that no reference should be made to a PEP which does not belong to Halifax Plc, because no evidence of any authority to open such a PEP belonging to the claimant has ever been produced.” 
24.	The applicant seems to want to block off any enquiry as to whether the PEP should be regarded as validly charged to the Halifax. In one of his presentations he suggests that there came a time when the PEP was converted to a life policy which was also formerly charged to the Halifax. If so, no doubt he will be able to establish that to the satisfaction of the tribunal at the further hearing. There is in this part of his presentation no point of law. It seems to me that arguably the applicant was fortunate to win a rehearing upon the proper treatment of the PEP. I observe in passing that it is vital that at that rehearing he should produce evidence from the Halifax itself as to its understanding and all its dealings in relation to the PEP and to any substituted asset, such as the policy to which I have referred.
25.	My view is that none of these three applications has any merit. None of Mr. Read's proposed appeals stand a real chance of success and I would dismiss his applications.
26.	LADY JUSTICE HALE: This is an application for permission to appeal from a decision of a Social Security Commissioner on appeal from a Social Security Appeal Tribunal. Thus, in reality, it is a second tier appeal. If it had taken place within the court structure, permission to appeal could only be granted if it raised an important point of principle or practice, or there was some other compelling reason for the Court of Appeal to hear it (see section 55(1) of the Access to Justice Act 1999).
27.	In the case of Cooke v Secretary of State for Social Security (25th April 2001), this court emphasised that, although appeals from the social security commissioners were not covered by that provision, in a highly specialized area such as this, the Court of Appeal should be appropriately cautious in considering whether an appeal would have a real prospect of success.
28.	Wilson J has nevertheless addressed the issues in this application in great detail and with great care, and for the reasons that he gives it is clear that an appeal would have no real prospect of success. I, too, would refuse permission to appeal.
Order: Applications refused; copy of judgment to be supplied to the applicant at public expense.