IN THE COUNTY COURT AT CENTRAL LONDON  Case No: C00CR446

Thomas More Building,

Royal Courts of Justice

 Strand

London

WC2A 2LL

Date:  XX October 2017

Hearing date:  11 July 2017

BEFORE:

HIS HONOUR JUDGE LUBA QC

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BETWEEN:

LONDON BOROUGH OF CROYDON

Claimant

- and -

ANGELLA DIANNE BROWN

Defendant

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MR ANDREW LANE (of Counsel) appeared on behalf of the Claimant

MR da ROCHA-AFODU (a Solicitor) appeared on behalf of the Defendant

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JUDGMENT

(Draft)

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INTRODUCTION

1. By its claim in these proceedings, the Croydon London Borough Council (‘the Council’) sought to recover sums of housing benefit said to have been overpaid, by it, to Ms Angella Dianne Brown (‘Ms Brown’). The overpayments were said to have arisen during two separate periods of housing benefit payment, namely (1) 20 July 1999 to 8 October 2000 and (2) 8 August 2005 to 2 August 2009. The Council made determinations in June 2011 that those payments that it had earlier made were overpayments, that they were recoverable, and that they should be recovered from Ms Brown.
2. By an Application Notice in Form 322A dated 15 January 2016 and issued in the County Court at Croydon, the Council sought to achieve recovery from Ms Brown of the monies overpaid, pursuant to its determinations, in the sum of £26,390.61. It also sought interest and the total claimed, including the court fee, was £36,034.16.
3. After a series of case management orders, and after the filing of evidence for the Council and Ms Brown respectively, the application came on for hearing before Deputy District Judge Rowland (‘the Judge’) at the County Court at Croydon on 16 February 2017. At the conclusion of the hearing, he dismissed the Council’s application with costs.

    

4. This is the Council’s appeal from that Order. The Judge refused permission to appeal but the appeal proceeds pursuant to the grant of permission by me on a consideration of the papers.
5. The appeal was listed for a two hour hearing at 2pm on 11 July 2017. The Appeal Bundle exceeded 225 pages. I heard detailed oral argument in support of Skeleton Arguments filed for both sides. I was referred to three sets of statutory provisions and to four authorities in some detail. At the conclusion of the hearing at 4.45pm there was, unsurprisingly in those circumstances, no time remaining for judicial reflection and the delivery of an immediate judgment. It is a matter of regret that, due to the pressure of the lists at this Court, it has not been possible to find an earlier opportunity to prepare and deliver this reserved judgment.

   THE JUDGMENT BELOW

6. In short, the Judge found that the applicable statutory provisions required service on Ms Brown of a formal notification of the Council’s determinations as an essential precedent to enforcement. Further, that such notification had to appropriately advise the recipient of his or her rights of appeal.
7. He found as a fact that such notifications, explaining appeal rights, had been addressed and sent to Ms Brown but had been directed to an address which was not her address and which the Council should have known was not her address. There is no appeal from that finding.
8. The Judge further found that, on being informed that the notifications had been sent to the wrong address, the Council had not prepared and sent out fresh, re-drawn and correctly addressed notifications. Instead, it had sent copies of the earlier and incorrectly addressed notifications to Ms Brown under cover of a further letter.

1. The Judge then had to consider the effect of sending out copies of the original notifications under cover of a new letter which did not itself alter or update what the earlier notifications had said about rights of appeal. In summary, he found that there was an important distinction between notification of an original decision and provision of a copy of the original decision, where the information as to rights of appeal given by the earlier notifications was no longer correct.
2. He asked himself the question “…has the Claimant complied with the regulatory requirement to explain the manner and time in which she can appeal?” (Transcript of Judgment at [16]).
3. His answer was: “It does not strike me that they have done that. They have sent a copy of an earlier letter which did that, but of course the information in that earlier letter is now wrong because it says “within one month of the date of this letter” and that is referring back to the original decision letter…It is not referring to the date of the covering letter saying “Here is a copy”. So they have not given her the information that they were required to do.”  (Transcript at [16]).

1. In those circumstances, he found that the statutory requirements as to matters to be included in a decision notification were not satisfied and the sums claimed were not recoverable.

THE STATUTORY PROVISIONS

1. Housing benefit is claimed from and paid by local authorities. The Social Security Administration Act 1992 section 75 is headed “Overpayments of Housing Benefit” and provides that:

“(1)  Except where regulations otherwise provide, any amount of housing benefit determined in accordance with regulations to have been paid in excess of entitlement may be recovered …by the authority which paid the benefit.”

1. The relevant regulations are the Housing Benefit Regulations 2006 SI No 213. Among other matters, they direct how a person is to be informed of a decision relating to housing benefit. Regulation 90 is headed “Notification of Decisions” and provides that:

              “(1)   An authority shall notify in writing any person affected by a decision made by it under these Regulations—

   (a) in the case of a decision on a claim, forthwith or as soon as reasonably practicable thereafter;

   (b) in any other case, within 14 days of that decision or as soon as reasonably practicable thereafter,

   and every notification shall include a statement as to the matters set out in Schedule 9.”

1. The requirements of Schedule 9 of the 2006 Regulations are detailed and specific. The Schedule is entitled “Matters to be included in decision notice”.  Paragraph 3 states:

“Every decision notice shall include a statement as to the right of any person affected by that decision … to appeal against that decision and the manner and time in which to do so.”

1. In addition, Housing Benefit and Council Tax Benefit (Decisions and Appeals) Regulations 2001 SI No.1002 regulation 10 provides:

“10. Notice of a decision against which an appeal lies

(1) A person affected who has a right of appeal against a relevant decision shall be given written notice—

(a) of the decision against which the appeal lies;

…;and

(c) of his right of appeal against that decision.”

THE AUTHORITIES

1. It is long settled that, in order to secure enforcement in the County Court, a housing benefit authority must be able to demonstrate compliance with the procedural requirements of the statutory provisions as to decision-making and notification. In Warwick District Council v Freeman (1995) 27 H.L.R. 616 there had been a wholesale want of compliance by the plaintiff council. Hale J (as she then was said):

“[U]nder the facts of this particular case, the problem facing the plaintiff local authority is that they did not, and it is agreed that they did not, follow that procedure. They did not make anything which they described as a determination and including the required information. They did not inform the defendant landlord of his entitlement to a review, although when the matter was taken up on his behalf by a solicitor they apparently conducted an internal review. At no point did they inform either the defendant landlord or his solicitor of the right to seek a review by the Review Board, so that they have not followed the procedure for determining such a request. Indeed, they did the reverse by stating that in their view that procedure did not apply at all to the landlord as opposed to the claimant. That is clearly misconceived, as is conceded in this court, because Part XI applies to any person affected and clearly a person from whom an overpayment is to be recovered is a “person affected” by a determination. That being the case, the local authority have not got their claim for repayment off the ground.” [Emphasis added]

and

“The consequence of all of this is that, in terms of the substance of the claim, the local authority may, indeed, have been able to decide that the overpayment was recoverable and recoverable from the defendant landlord, but they did not go through the proper process for so doing so as to entitle them to take action in the county court.” [Emphasis added]

1. That judgment was cited in Haringey London Borough Council v Cotter (1997) 29 H.L.R. 682 in which Mummery LJ summarised it in this way:

“…(cf. Warwick D.C. v. Freeman (1994) 27 H.L.R. 616 at 619, 620, where, in respect of a county court claim for an overpayment, a defence was successfully raised that the local authority had failed to follow the statutory procedure for the determination of the recoverable overpayment under Part XI)

1. The authorities do not suggest that a trifling or insignificant departure from the procedural requirements will be a bar to a successful claim to enforce an overpayment determination. In Haringey London Borough Council  v Awaritefe (2000) 32 H.L.R. 517 an appellate judge dismissed a claim on the ground that the authority's notification letters failed to include the information required by the Regulations (relating to the landlord's right to request a written statement of reasons and her right to request a review by the housing benefit review board). The Court of Appeal allowed a further appeal. In doing so it restated that:

“Warwick District Council v. Freeman (1995) 27 H.L.R. 616 is authority that it is open to a person affected by a determination of a local authority with regard to housing benefit to challenge the validity of the determination, or perhaps more precisely the validity of the notification of the determination, on the ground of procedural irregularity, as a defence to an action by the local authority in the county court to recover the sum which the local authority has determined is a recoverable overpayment.”

            and recorded the concession that:

                        “Counsel for the Local Authority and Counsel for the Secretary of State accept that before the local authority can bring proceedings in the county court to recover an overpayment, there must have been a valid notification of the local authority's decision to recover the overpayment sent to the person from whom the overpayment is to be recovered, i.e. the defendant in the county court proceedings.”

1. The Court went on to hold that notwithstanding certain departures from the strict notification requirements in the case before it, recovery should have been permitted. Agreeing with the other members of the Court, Otton LJ stated:

“I agree that even if there were technical breaches … the Learned Judge was wrong to conclude that such breaches were fatal to the appellant's claim. He should have held that the requirements … were not mandatory but directory, that none of the breaches had occasioned any significant prejudice to the respondent and that accordingly there had been “substantial compliance” with the Schedule (see London and Clydeside Estates v. Aberdeen D.C. [1980] 1 W.L.R. 182 and R. v. Tower Hamlets L.B.C., ex p. Tower Hamlets combined Trader's Association [1994] C.O.D. 325).

1. In some cases decided after Awaritefe the courts have held that departures by local authorities from the procedural requirements in relation to housing benefit have been ‘substantial’: see, for example, Waveney District Council v Jones (2001) 33 HLR 3.

THE INSTANT CASE

1. In the present case, the notification-of-overpayment letters sent by the Council to Ms Brown at the wrong address on 29 June 2011 and 30 June 2011 each concluded with the words:

“It is essential that you read the important information enclosed with this letter, so you can be sure that you have all the information you need”

1. The enclosure was in each case a sheet headed with the words

“It is essential that you read the important information below, so you can be sure that you have all the information you need”

1. The sheet contained eight separate boxes of information. The second box contained this:

“If you disagree with our decision. Within one month from the date of this letter, write to the Benefits Department at……..Tell us why you disagree with our decision. We will consider your appeal and if we are unable to revise our decision then we will pass your appeal to the tribunal service”

1. The Judge found that this formulation, set out in this pro-forma typescript sheet, discharged the Council’s duty to notify rights of appeal (Transcript at [12]).
2. He further found that the sheet had been attached to each of the copies of the notification letters when they were forwarded to Ms Brown as enclosures to the letter sent on 26 July 2011 to her at her correct address (Transcript at [11]).
3. That letter pf 26 July 2011 had set out the total sum claimed, broken it down by reference to earlier invoices and continued:

“Please find enclosed copies of all the original overpayment letters for each of the invoices listed above…If you have any issues relating to this matter, please contact the Benefit Services using the contact details at the top of this letter”

1. The letter of 26 July 2011 made no reference to rights of appeal, to the method by which to initiate an appeal or the time within which to do so.
2. The point taken by Ms Brown in relation to the Council’s notification obligations was that she had not been correctly informed of her right to appeal (Transcript at [3]). That was the point on which the Judge found in her favour, as I have explained.

THE APPEAL

1. The appeal proceeds on two grounds.
2. By Ground One it is said that:

    

    “The learned deputy district judge wrongly determined that there had been non-compliance (or alternatively, [no] substantial compliance) with Schedule 9, and in particular that the Council did not give her the information they were required to do so under Schedule 9 of the Housing Benefit Regulations 2006, and in any event failed to consider the question of substantial compliance.

    

1. That Ground wraps together a good number of points but the thrust is that the Judge was wrong to have found that there had not been substantive compliance.
2. Mr Lane submitted that, as I have explained above, Ms Brown had in due course received copies of the notifications in respect of the claimed overpayment, and they were accompanied by the Schedule 9 information as to rights of revision and appeal set out in the attached sheets. Nothing was omitted, and nothing further was required. He submitted that she knew from these documents that she had a right to contact the Council if she disagreed with the decisions, and ultimately an appeal may be held if the Council did not uphold her objections.
3. Mr da Rocha-Afodu expressly accepted in argument that nothing turned on whether the information received had been received in original form or by way of copy. His short point was, as it had been before the Judge, that the Council had failed to get the documents to Ms Brown - at her correct address - before the expiry of the “one month from the date of this letter” appeal time limit referred-to in the attachments to the original letters. The covering letter it had sent on 26 July 2011, enclosing the copies, had not suggested that the one month period ran from its date or the date of its receipt. Nor that, if the time limit notified by the earlier dated letters had expired, the time for appeal could be extended. In those circumstances, he submitted that the Judge had been right to find Ms Brown had not accurately been informed of her “right to appeal” or “the manner and time in which to do so” as the regulations required.
4. This is a short point. Of course, it ought not to have arisen, and would not have arisen, if the Council had generated fresh decision notification letters in July 2011, accompanied by the appropriate information sheets, instead of sending out copies of incorrectly addressed notifications dating from June 2011.
5. But the simple question is whether there was compliance. Was Ms Brown told of her right to appeal the decisions notified, how to do so and of the time limits? Or, to adapt the language of Awaritefe, was there ‘substantial’ compliance with that obligation.
6. I am satisfied that there was and that the Judge was wrong to hold the contrary. The information sheets, that the Judge found that Ms Brown had received, told her that she had a right of appeal and that she what she had to do to exercise it. They told her that the time limit was “one month”. They told her that the one month ran “from the date of this letter”, being the letter to which each one was attached. That is substantive compliance even if, as in this case, the recipient might have been puzzled as to whether the month ran from the date of the covering letter or from the various dates of the enclosed copy letters.
7. The substance of the information-notification-obligation is that it ensures recipients know that they have a right of challenge and how to go about exercising it and that there is a time limit of a month. That was all achieved here on the Judge’s findings. I do not consider that any lack of clarity as to the precise date from which the ‘month’ was to be calculated represented a substantive failure to comply with the notification obligations.
8. It is proper that claims for enforcement should be defeated by non-compliance in cases, such as Freeman and Jones, of wholesale or substantial failure by a local authority to comply with its obligations. Those cases are wholly different and distinguishable from the instant case.
9. Accordingly, I would allow the appeal on the first ground. The second ground having been fully argued, it is right that I should also address it.
10. Ground Two is in these terms:

“In the alternative, if the learned deputy district judge‘s finding on breach was right, he failed thereafter to consider whether the Respondent had suffered substantial harm as a result.”

1. Mr Lane submitted that the judgment in Awaritefe demonstrates that the Judge was obliged to have considered the impact of any breach of (or departure from) the strictures of the notification requirements. He contends that not only was this exercise not undertaken but that had it been undertaken then, on any view, the conclusion would have been that there was no prejudice.
2. Mr da Rocha-Afodu submitted that Ms Brown had been “extremely prejudiced” (Skeleton Argument at [17]) by the Council’s non-compliance and that she had “lost a chance to appeal an incorrect and erroneous overpayment assessment” (ibid at [20]).
3. The simple fact is that the Judge did not consider ‘prejudice’ at all. I strongly suspect that that was because his attention was not taken to the need to do so. Accordingly, the appeal must succeed on this ground unless it is plain that there was substantial prejudice.
4. Certainly, the Witness Statements of Ms Brown asserted that had she known of her appeal rights she would have exercised them. But that point ran into the sand on the Judge’s finding of fact that the 26 July 2011 letter had enclosed copies of the information sheets.
5. If there was any ‘prejudice’ caused by a muddle as to the date from which the right of appeal ran (and there was no factual evidence of any such muddle or confusion on her part) it could have been swiftly and cheaply resolved by an enquiry of the Council, the Tribunal Service or an advice centre. It was not ‘substantial’ prejudice.
6. It follows that, even if I am wrong on Ground 1, Ground 2 must succeed.
7. Success on that Ground does not require remission for a determination of ‘prejudice’ because no ‘prejudice’ was in evidence as having resulted from the matter as to the date from which appeal rights ran.

OUTCOME

1. For the reasons given above, this appeal succeeds. The Order of 20 February 2017 is set aside. To save costs, I shall hand down this Judgment in the absence of the parties on the basis that I will be provided with an agreed draft order disposing of the appeal and the proceedings. If the parties cannot agree, I shall hear them briefly on the occasion of handing down this judgment.

Judge Luba QC

October 2017