Case No: A1/2000/2809
Neutral Citation Number: [2001] EWCA Civ 270
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE SOCIAL SECURITY
COMMISSIONER (Mr Commissioner H. Levenson)
Royal Courts of Justice
Strand, 
London, WC2A 2LL

Tuesday 13 February 2001
B e f o r e :

LORD JUSTICE JUDGE

LORD JUSTICE MANCE
and
SIR ANTHONY EVANS
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	ANNE EWENS	
Appellant	
	
- and -		
	
THE SECRETARY OF STATE FOR SOCIAL 

SECURITY	

Respondent	
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(Transcript of the Handed Down Judgment of
Smith Bernal Reporting Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040,  Fax No:  020 7831 8838
Official Shorthand Writers to the Court)
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Richard Drabble QC & Ranjiv Khubber (instructed by Brighton Housing Trust (Housing Aid and Legal Centre) for the Appellant)
James Maurici (instructed by the DHSS Legal Dept. for the Respondent)
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Judgment
Lord Justice Mance:
1.	This appeal from a decision of Mr Commissioner H. Levenson dated 8th December 1999 raises short points on the interpretation of paragraph 7(7) of Schedule 3 to The Income Support (General) Regulations 1987 (which, although no longer generally in force, is we understand preserved in relation to this case by transitional provisions). The Appellant, Mrs Ewens, married Mr Ewens in 1983 and they lived until the end of September 1987 at No. 4, Knepp Close, Brighton. They then moved to run the Black Horse public house, retaining and renting out No. 4. On 14th July 1990, they separated and Mrs Ewens moved back into No. 4.
2.	Prior to their move to the Black Horse, the Ewens arranged with Lloyds Bank, first, a business account with overdraft facility for trading purposes and, secondly, a business loan of £20,000 for the purchase of stock and working capital. It was presumably at this time that they both also executed an “all monies mortgage” of No. 4 in favour of Lloyds Bank, securing all present and future liabilities that they might incur to the bank. After the move, in April 1988, they arranged a third facility, a further small business loan in the sum of £4010. Fourthly, they operated a current account, which they seem to have opened as early as some time in 1987, and which was in credit in 1990 but by March 1993 some £2222 overdrawn. The liabilities on all these facilities were secured on No. 4 by the previously executed all monies mortgage.
3.	On 17th July 1990 Mrs Ewens made a claim for income support. She claims to have met on that basis such interest as arises from time to time on any of the above facilities. Although no significance attaches to this, in 1994 she took the doubtless sensible step of consolidating the overdrafts and loans and making them subject to a fresh mortgage.
4.	The statutory basis of the relevant Regulations consisted in ss. 123-4 of the Social Security Contributions and Benefits Act 1992. Under s.123(1):
“Prescribed schemes shall provide for the following benefits (in this Act referred to as income-related benefits”)-
(a)	income support;
		….
(d)	housing benefit; …”
5.	Under s.124:
“(1) A person …. is entitled to income support if-
	(a) he is of or over the age of 18 …
	(b) he has no income or his income does not exceed the applicable amount;
	(c) he is not engaged in remunerative work ….
(d) except in such circumstances as may be prescribed-
(i) he is available for, and actively seeking, employment;
(ii) he is not receiving relevant education.
….
(5) Where a person is entitled to income support for a period to which this subsection applies, the amount payable for that period shall be calculated in such manner as may be prescribed.
(6) Subsection (5) applies-
(a) 	to a period of less than a week which is the whole period for which income support is payable; and
(b)	to any other period of less than a week for which it is payable.”
6.	The Regulations as they were in force at the relevant times provide:
“Interpretation
2(1) In these Regulations, unless the context otherwise requires
.…
“dwelling occupied as the home” means the dwelling together with any garage, garden and outbuildings, normally occupied by the claimant as his home ….
….

Applicable amounts
17. Subject to ….., a claimant’s weekly applicable amount shall be the aggregate of such of the following amounts as may apply in his case:
….
(e) any amounts determined in accordance with Schedule 3 (housing costs) which may be applicable to him in respect of mortgage interest payments or such other housing costs as are prescribed in that Schedule.
….”
7.	Schedule 3 provides:
“Eligible Housing Costs
1. Subject to the following provisions of this Schedule, the amounts which may be applicable to a person in respect of mortgage interest payments or other prescribed housing costs under regulation 17(1)(e) …. Are-
a)	mortgage interest payments;
…

Basic condition of entitlement to housing costs
2. Subject to the following provisions of this Schedule, the housing costs referred to in paragraph 1 shall be met when the claimant … is treated as responsible for the expenditure to which that cost relates in respect of the dwelling occupied as the honme which he or any member of his family is treated as occupying.

Circumstances in which a person is to be treated as responsible for housing costs
3(1) A person is to be treated as responsible for the expenditure which relates to housing costs where-
(a) he or his partner is liable to meet those costs other than to a member of the same household;
(b) because the person liable to meet those costs is not doing so, he has to meet those costs in order to continue to live in the dwelling occupied as the home and either he was formerly the partner of the person liable, or he is some other person whom it is reasonable to treat as liable to meet the cost; …

Interest on loans to acquire an interest in the dwelling occupied as the home
7. 
.…
(3) Subject to sub-paragraphs (3A) to (6B) and paragraphs 7A and 7B, in this paragraph “eligible interest” means the amount of interest on a loan, whether or not secured by a mortgage …., taken out to defray money applied for the purpose of-
(a) acquiring an interest in the dwelling occupied as the home;
(b) paying off another loan but only to the extent that interest on that other loan would have been eligible interest had the loan not been paid off.
.…
(7) Where a person who was formerly one of a couple or a polygamous marriage-
(a) has taken out, either solely or jointly with his former partner, a loan secured on the dwelling occupied as the home for a purpose other than one specified in sub-paragraphs (3) and (3A); and
(b) has left that dwelling and either cannot or will not pay the interest on the loan, or has died,
and, if that person’s former partner has to pay the interest on the loan in order to continue to live in the dwelling occupied as the home, there shall be met in respect of the former partner under this paragraph the amount of interest on the loan calculated as if it were a loan taken out for a purpose specified in sub-paragraphs (3) and (3A).”
8.	The Social Security Commissioner held that Mrs Ewens could not claim any part of the interest. It was or is common ground that the interest relating to all four facilities was on loans within the meaning of paragraph 7, and that such loans were all secured on a dwelling (No. 4) normally occupied by her as her home during the weekly periods in respect of which she was claiming. But the Commissioner considered, firstly, that paragraph 7(7) required any relevant loan to have been first secured on that dwelling at a time when she was occupying that dwelling as her home. That would alone exclude interest attributable to the third and probably fourth loans. Secondly, he considered that paragraph 7(7) required “continuity of occupation” by which he meant a situation where the claiming partner had remained on a continuous basis in that dwelling as her (or his) home after and from the time when the other partner had left. That was not the case, where (as here) both partners had left the home in 1987, lived in another home (the public house) until 1990, and finally separated, with the claiming partner only then returning to the original home. On that footing none of the four loans could qualify.
9.	Mr Drabble QC submits that the Social Security Commissioner’s reasoning fails to pay due regard to the scheme according to which income benefits are payable and the definition in Regulation 2 of the phrase “the dwelling occupied as the home”. Reading that definition in, paragraph 7(7) would provide:
“Where a person who was formerly one of a couple ….
(a) has taken out, either solely or with his former partner, a loan secured on the dwelling occupied by the claimant [the former partner] as her home; and
(b) has left that dwelling
and, if that person’s former partner has to pay the interest on the loan in order to continue to live in the dwelling occupied by [her as] the claimant as her home, there shall be met in respect of the former partner under this paragraph the amount of interest on the loan calculated as if it were a loan taken out for a purpose specified in sub-paragraphs (3) and (3A).”
10.	This reading would on any view suggest that there is no necessary connection between the time of any joint occupation of the home and the taking out of the loan. That was also held by Mr Commissioner Sanders in a decision dated 17th November 1993 in Case CIS/450/93. There the couple ran a business in which the wife had 20% and the husband 80% of the shares. They separated, with the husband leaving the home. After the separation they increased the mortgage on the former joint home by £40,000 in order to fund their continuing business. Still later the business collapsed and the wife sought income support for inter alia the interest on the increased loan. She succeeded on the basis that there was no temporal connotation in the order in which sub-paragraphs 7(7)(a) and (b) appear. Mr Maurici for the Crown did not, ostensibly, challenge the correctness of Mr Commissioner Sanders’ decision. But, if it is correct, it follows that there is no need for any loan to have been taken out or secured on the home while the home was a joint home. If it is not correct, there could also be odd results in other cases. Take that of a couple running a public house who buy a second house with a view to their retirement and secure upon it loans to raise money for their public house business. Later, they duly move into the second home, putting a manager into the public house. They then separate, with the husband leaving, and the wife claims income support in relation to unpaid interest on the loans. If Mr Maurici’s submission were accepted, this claim would again have to be refused.
11.	Mr Maurici points out, correctly, that paragraph 7(7) must be read as a whole. So read, he submits, sub-paragraphs (a) and (b) contemplate naturally a joint occupation of a matrimonial home, terminating in the leaving of that dwelling by the non-claiming partner referred to in sub-paragraph (b). Sub-paragraph (b) certainly contemplates that the non-claiming partner will have been in and have left the dwelling at some point. The words “or has died” were added at its end, following a difference between Social Security Commissioners as to whether a partner who died could be said to have “left the dwelling” within sub-paragraph (b). Their addition did not however specify, at least expressly, that the partner’s death must itself have determined any joint occupation of the dwelling. There is nevertheless some attraction in Mr Maurici’s reading if one takes sub-paragraphs 7(7)(a) and (b) in isolation.
12.	Mr Maurici seeks to buttress his reading with the argument that appealed to Mr Commissioner Levinson -  namely that the next phrase “has to pay interest on the loan in order to continue to live in the dwelling” confirms that there must be “continuity of occupation” by the claimant wife from the time when the husband has left until the time she makes her claim. 
13.	A major difficulty facing Mr Maurici’s submissions is they involve reading the two phrases “the dwelling occupied as the home” in paragraph 7(7) inconsistently with each other and, where the phrase is first used, inconsistently with the definition in Regulation 2. It is true that that definition only applies unless the context otherwise requires. But it is still a strong thing to treat the draftsman as having changed horses in mid-paragraph. Nowhere else in the relevant provisions was Mr Maurici able to find support for a suggestion that “the dwelling occupied as the home” referred to any period of joint occupation of the home as a matrimonial home. In the basic provision of paragraph 7(3), dealing with the standard case of a loan to acquire an interest in the dwelling occupied by the claimant as a home, the phrase is clearly used in its defined sense. In such a case, it is also worth noting there could be no requirement of joint occupation at any time. If a couple living in a public house acquired a potential retirement home, taking out a loan secured upon the retirement house in order to acquire it, and if after separation the wife moved into the retirement house and was occupying it as her home, she could claim income support in relation to the interest cost of the loan without the husband ever having lived there. 
14.	Mr Drabble’s contention that the phrase “the dwelling occupied as the home” has its defined meaning in each place where it appears in paragraph 7(7) is consistent with the general scheme of the Regulations – which looks to the position as it is in any week in respect of which benefit is claimed. This is emphasised by a reading of paragraphs 2 and 3 of Schedule 3 set out above. Paragraph 3 forms the background to and assists to clarify the reference in paragraph 7(7) to having to pay interest on the loan “in order to continue to live in the dwelling occupied as the home”. What justifies a claim for income support is responsibility for the relevant expenditure, which in turn exists where the claimant, because of a former partner’s failure to meet relevant costs, “has to meet those costs in order to continue to live in the dwelling occupied as the home” This demonstrates that the general scheme is concerned not with past continuity of occupation, but rather with the claimant’s ability from week to week of claim to continue to live in the dwelling which she is then occupying and on which the interest costs which she claims are secured.
15.	In these circumstances, I prefer without hesitation Mr Drabble’s analysis, according to which there is no need for the relevant loan to have been obtained during any past period of joint occupation of the dwelling in which the claimant is at the time of her claim living as her home.
16.	Is there then any provision or inference that the claimant must have been living in the dwelling when her former partner left and/or have continued to live there thereafter, up to the time of any claim? For reasons that I have already given, I do not think that the phrase “in order to continue to live in the dwelling occupied as the home” assists Mr Maurici’s argument on this point. On the face of paragraph 7(7), therefore, all that is necessary is that the former partner should have lived in that dwelling and left it at some time, or alternatively have died, and that the claimant should be living there during the relevant week of any claim.
17.	It may legitimately be asked, on this analysis, why paragraph 7(7) has any requirement that the other partner should have “left that dwelling” (or have died) at all. I accept that Mr Drabble’s analysis does not provide a wholly satisfactory answer of policy to this point. Suppose that Mr and Mrs Ewens had never lived together at No.4, but had acquired it as a potential retirement home and mortgaged it (as they did) to secure business indebtedness of their public house. When they separated and Mrs Ewens went (on this hypothesis for the first time) to live at No. 4, and sought to claim income support in respect of interest on the loan secured on No. 4, she would not have been able to show that Mr Ewens had “left that dwelling”. Possibly if he died, she might have been able to satisfy sub-paragraph (b), although it would be arguable that the phrase “or has died” was simply inserted to embrace a more final means of exit from the dwelling. It seems to me probable that, in sub-paragraph (b), the draftsman did restrict his attention to what must on any view be the most typical case, of one partner having left a joint home. Why he did so is another matter. It would on any view be most unlikely that income support should be payable, if the former partner were still residing in the dwelling occupied by the claimant at the time of claim. So some provision that they should be living apart was inevitable. It is certainly conceivable that the draftsman expressed himself more narrowly in this regard than he might have done, had he directed his mind explicitly to all the possible permutations. One amendment to sub-paragraph (b) (the addition of the last three words - themselves not wholly clear, as I have said) was on any view required in the light of experience. I am not persuaded that the possibility, even on Mr Drabble’s analysis, of apparently discrepant results (e.g. the inability to recover income support in the situation just postulated, where there was no period whatever of joint occupation at No. 4) should lead us to interpret sub-paragraph (b) as introducing some general requirement of “continuity of occupation” from the time of the partner leaving until the time of any claim. The effect of any such interpretation would simply be even greater restriction on the scope of income support without achieving any obvious purpose of policy or uniformity.
18.	It seems to me that we should take the requirements of paragraph 7(7) as we find them. They are satisfied in this case because (a) there were bank loans, to which Mr Ewens was party, taken out and secured on No. 4 – it being immaterial whether or not they were taken out while both or either of Mr and Mrs Ewens were living there, (b) Mr Ewens did once live in No. 4 (with Mrs Ewens, though I express no view as to any need for this), but had finally left No. 4 before Mrs Ewens made any claims for income support, (c) in the weeks to which Mrs Ewens’s claims related, interest on the loans secured on No. 4 was not being met by Mr Ewens and (d) Mrs Ewens had to meet such interest in order to continue living in No. 4 as her home.
19.	I would allow the appeal from the Social Security Commissioner and remit the issue of calculation of the income support to which Mrs Ewens was on this basis actually entitled to the Secretary of State. 
Sir Anthony Evans:     I agree.
Lord Justice Judge:     I also agree.
Ewens 2
Order:
1.	Appeal allowed with costs subject to detailed assessment
2.	Issue of calculation of appellant’s income support to be remitted to the Secretary of State.
3.	Legal Services Commission assessment of appellant’s costs.
(Order does not form part of the approved judgment)