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Contrived and Commerciality
Once the LA make a decision on a tenancy being contrived/non-commercial is this decision an indefinite decision which make later claims impossible?
I ask as a client has made several claims for HB and the first ever decision was refused and the client did not appeal. Ever since the LA have refused all other claims despite material changes in circumstances.
The latest appeal which I am involved in would appear none contrived and commercial.
However, LA insist it was contrived and non-commercial from the outset based partly on fact it was never appealed.
One of my arguments aside from the conventional Reg 8 and Reg 9 grounds is that the LA cannot adopt an indefinite stance. I’ve been stumped to find caselaw though.
Any help/advice/guidance would be much welcomed
Sorry, I’m a little confused by this…
(i) Is it the case that the LA are refusing to even determine the new claim(s) on the basis that that past contrived tenancy/non-commerciality decison was not appealed?
(ii) Or is that it is determining the claim whilst citing the past decision as the sole basis for its continuing to take the view that the tenancy remains contrived/non-commercial? - i.e. without any further examination of the evidence.
Either approach is clearly wrong. There are any number of reasons why a claimant might not, at the time, have appealed a decision that was clearly wrong - and whilst that might mean that any right of appeal has now been lost due to the time limit having long passed, it certainly doesn’t mean that any right to a new claim (and consequent appeal rights) cannot be exercised.
I’d simply threaten JR in (i) and would appeal in (ii).
Hi
Apologies for the confusion;
(I) In response to (i) the LA will allow a claim(s) to be made, each of which will have appeal rights.
The issue is not only the previous failure to appeal but a wealth of other reasons they rely upon (family relationship/mistakes in form and on tenancy agreement etc).
(ii) They have in each claim considered the new evidence - but still hold view it was non-comm from the beginning and contrived.
I am appealing the most recent decision, citing a wealth of case law to prove there is legal tenancy, liable rent for HB and it is commercial and non-contrived.
I was wondering if there was any case law which essentially says that the LA cannot adopt an indefinite stance in relation to Reg 9 (L).
In this situation the LA have decided its non-commercial and contrived and therefore they believe they can rely on that forever irrespective of material changes, claimant’s disability etc.
Actually there was something about this in the commentary to the reg I remember reading many years ago. Unfortunately, I can’t refer to it as we have not got this year’s version yet and one of my colleague accidently chucked last year’s out.
I see.
CH/403/2013 (currently showing up on the second page of UT decisons - sorry, I am rubbish at linking) may be of use, even though it does not directly address the point;
37. Insofar as the tenancy agreement was backdated and created a retrospective liability, I am satisfied that it was either a sham (in the sense of not being intended to create a real liability for rent) or the liability was intended to be a means of taking advantage of the housing benefit scheme (in the form of a retrospective payment of housing benefit in respect of a period when there had not previously been any liability for rent) so that regulation 9(1)(e) applied. Either way, the claimant is not entitled to housing benefit in respect of the period of retrospection, even if he could otherwise show grounds for backdating the claim.
38. However, insofar as the agreement was prospective, I am satisfied that it was not a sham and to that extent I agree with the First-tier Tribunal. There were sound reasons for creating a genuine prospective liability. It would not be to the disadvantage of the claimant if he could claim housing benefit and it would be to the advantage of the company because it would give it an income which could be used to carry out further work on the building. I am not persuaded that the fact that no rent was paid while the claim for housing benefit was pending is significant. It is perfectly reasonable to await the outcome of the claim and subsequent appellate proceedings and, anyway, one cannot expect a landlord and tenant who are closely related to behave in the same way as a landlord and tenant who have no connection other than a contract. It would be surprising if the landlord in this case were to evict the claimant while the claim was being considered but, if the claim were ultimately to fail, I would not be surprised if the company and the claimant decided that the claimant should move and claim housing benefit elsewhere so that the company could let the flat to someone else and use the money to continue work on the building. That would be perfectly legitimate. Like the claimant, I find it impossible to understand why it should be of any relevance that the claimant, who was in control of the company, should have fixed the amount of rent on the basis of advice from a knowledgeable friend as to what a reasonable rent might be.
I’d say that he clear implication of the above is that a tenancy that may (I know you are disputing ity ever was) initially have been contrived/non-commercial is capable of later becoming commercial…
thanks for the replies - will take a gander at the case.
It’s good that the Council understands the claimant is able to make the claim and that it is a new decisoin with new appeal rights.
Looking at it from the Council’s viewpoint, if it believes a tenancy was created to take advantage of the scheme it will probably stand by that view for the remainder of that tenancy: something that happened at the outset cannot “unhappen” subsequently.
However, that is not to say that any subsequent claim in respect of that tenancy is doomed to fail. It is open to the tenant to argue in support of claim number 2 that the decision on claim 1 was incorrect and the tenancy was not in fact created to take advantage of the scheme. The res judicata principle is displaced by the statutory provisions on finality in HB decision-making which means that an unappealed final decision is only final in respect of that claim.
What I don’t think the claimant can logically say is “I accept my tenancy was created to take advantage of the scheme originally, but it isn’t any more”. Either it was or it wasn’t.
The appeal will involve the claimant saying that decision 1 was wrong and has no bearing on claim 2, and the Council saying decision 1 was correct, we see no reason to change our opinion about that. The Tribunal will decide who is right. I don’t think there is any reason in principle why the Council cannot argue that way, but they should not ignore powerful new evidence.
Commerciality is another matter - it can change over time (see CH/3008/2002): what was once on a commercial basis can cease to be and what was once not on a commercial basis can become commercial.
Don’t forget that once the original tenancy ended, any subsequent statutory or contractual tenancy was “created” on a different date (for example upon expiry of a contractual shorthold tenancy a statutory tenancy comes into existence), so the contrivance arguments around the original tenancy would not necessarily be relevant anyway. See also CH/3008/2002, a nice little case.
Thanks HB,
Your points are well made out and make perfect sense.
I am arguing the inception of the tenancy was legitimate and failure to appeal initially had no bearing.
Your concluding point was very helpful. I feel this gives me a separate bite (separate from the ongoing appeal) given that the original AST tenancy effectively ended in April 2014 and since that date the tenancy became a periodic tenancy and shouldn’t prevent a new claim.
Thanks again.