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Neutral Citation Number:
Reported Number:	R(IS)4/03
File Number:	CIS 5906 1999
Appellant:	Secretary of State for Work and Pensions v. Hourigan
Respondent:
Judge/Commissioner:	Judge A. Lloyd-Davies
Date Of Decision:	19/12/2002
Date Added:	25/03/2002
Main Category:	Capital
Main Subcategory:	Joint holdings
Secondary Category:
Secondary Subcategory:
Notes:	Capital - tenants in common owning property in unequal shares - whether to be regarded as holding equal shares The claimant and her son bought her home (which in 1993 was worth £27,000) from the local authority, contributing one sixth and five sixths respectively to the total purchase price. In March 1993 the claimant moved to a residential home, and in June 1993 her income support was terminated on the grounds that she possessed capital in excess of £8000, as a result of her being deemed under regulation 52 of the Income Support (General) Regulations 1997 to be the beneficial owner of half of the house. That decision was appealed against. In August 1997 the claimant died, and her son, who at all material times was her appointee, continued the appeal. In June 1998 the social security appeal tribunal held that the deceased claimant had an equal half-share in the value of the house and therefore did not qualify for income support. In October 2001 the Commissioner allowed an appeal from that decision, substituting a determination that at all material times the value of her capital was less than £8000. The Secretary of State appealed to the Court of Appeal. Held, dismissing the appeal, that: 1. (per Brooke LJ) the critical words in regulation 52 for interpretation on the appeal are " ... where a claimant and one or more persons are beneficially entitled in possession to any capital asset ... "; the language of regulation 52 lends itself naturally to a situation in which two or more people are jointly entitled to the equitable interest in the same capital asset, in which case they do not each possess a separate share in the equitable interest, but are jointly vested with the whole of that interest; in that case, the natural reading of regulation 52 is therefore to treat that unity as severed and to treat the claimant as if he/she was entitled to an equal share (with the others) of the whole beneficial interest; the claimant is then treated as possessing capital which he or she does not in fact possess (such result being permitted by section 136(5)(b) of the Social Security Contributions and Benefits Act 1992) (paragraph 16); 2. however, with tenancies in common, there is no need to treat a claimant's unity of interest as if it had been severed for the purpose of computing fairly the capital he/she owns for the purposes of Part VII of the 1992 Act; a beneficial interest which a claimant owns as a tenant in common is an asset separately disposable by him or her in both English and Scots law (paragraph 17); 3. on the facts of the present case, the son's five sixths beneficial interest in his mother's house and his mother's one sixth interest represented separate capital assets of which each was free to dispose; it would therefore be misuse of language to say that the two of them were beneficially entitled to the house within the meaning of regulation 52: they were not (paragraph 18); 4. the interpretation of regulation 52 in CIS/3283/1997 where it was stated that the application of the regulation may inescapably result in a claimant being regarded as possessing a greater share than in fact he did, was not inevitable (paragraphs 22 and 23); 5. (per Sedley LJ) the current form of regulation 52 does not even meet the purpose of administrative convenience argued for by the Secretary of State (paragraph 27); 6. the Secretary of State's suggested construction of the regulation does, however, replace the true share with a crude calculation which can be both a source of real unfairness and an incentive to create multiple shares, perhaps spuriously, in order to drive up the divisor and so drive down the imputed value of the claimant's interest (paragraph 28); 7. in view of these considerations, the Secretary of State did not make out the breadth of meaning contended for and, the Court being left with the power granted by Parliament, that power would be read down (as the Commissioner had done) so as to protect the deceased claimant (paragraph 30); Auld LJ agreed with the judgements of Brooke and Sedley LJJ.
Decision(s) to Download:	R(IS) 4-03 final.doc