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got this summary of the ayub case if helful -
NATIONAL HEALTH AND SOCIAL SECURITY - HOUSING BENEFIT – PAYMENT – EXTENT OF LOCAL AUTHORITY'S DUTY TO MAKE PAYMENTS OF RENT ALLOWANCE ON ACCOUNT – EXTENT OF LOCAL AUTHORITY'S DUTY TO MAKE PAYMENTS OF RENT ALLOWANCE TO LANDLORDS DIRECTLY – WHETHER AUTHORITY ENTITLED TO SET-OFF ANY LIABILITY OF LANDLORD AGAINST ANY BENEFITS AUTHORITY OBLIGED TO PAY LANDLORD – HOUSING BENEFIT (GENERAL) REGULATIONS 1987, REGS 76, 79(2), 91(1), 93, 102.
The Applicant was one of the largest private landlords in the Respondent authority’s area. He was in receipt, either directly or indirectly, of very substantial sums of rent allowance from the authority. The authority sought to recover from the Applicant an overpayment made to him in relation to one of his tenants by deducting that overpayment from the totality of the rent allowance that the authority was obliged to pay in relation to his other tenants. He brought proceedings by way of judicial review to recover allowances that he contended were owed to him by the authority and had not been paid.
Although much of the allowances contended for had been paid over, the parties sought a ruling from the court as to the proper construction of the Housing Benefit (General) Regulations 1987 in relation, inter alia, to (i) the extent of the duty to make a payment on account to the tenant and the landlord; (ii) the extent of the duty to pay rent allowance, or a payment on account, to the landlord when the tenant was in arrears; and (iii) whether it was open to the authority to recover overpayments in the manner that it had. Regulation 76 provided for the determination of claims and regs 79(2) and 81 provided for consecutive reviews of a determination. Regulation 91(1) of the 1987 Regulations provided that ‘where it is impracticable for the appropriate authority to determine a claim for rent allowance within 14 days of the claim for it having been made and that impracticality does not arise out of the failure of the claimant. . .the authority shall make a payment on account of any entitlement to a rent allowance. . .’ Regulation 93 provided that ‘a payment of rent allowance shall be made to a landlord. . .(b) where. . .the person is in arrears of an amount equivalent to eight weeks or more of the amount he is liable to pay his landlord as rent.’ Regulation 102 stated that ‘without prejudice to any other method of recovery, an authority may recover any recoverable overpayment. . .by deduction from any housing benefit to which that person is entitled...’
Held – (1) A claim for rent allowance was in substance a claim for the payment of such an allowance within 14 days, or, in the alternative, a payment on account. A claimant did not have to expressly apply for a payment on account. In relation to landlords, the duty under reg 93 to make payment of rent allowance to landlords was limited to rent allowance and did not extend to payments on account of rent allowance. However, a payment could be made to a landlord on account of a tenant’s entitlement to rent allowance where the tenant is both eight weeks in arrears and the conditions in reg 91 of the 1987 Regulations were satisfied. Absent a request from the landlord, the authority was under no duty to determine whether the circumstances were such so as to oblige them to make payments on account to the landlord.
(2) Where there was a dispute as to whether a tenant was eight weeks in arrears, then the landlord could ask the authority to determine that dispute under reg 76, with the possibility of two reviews under reg 79(2) and reg 81. The authority could, however, withhold payment of rent allowance, or a payment on account of the tenant’s rent allowance, pending the determination of that question.
(3) Regulation 102 did not sanction the recovery of an overpayment of rent allowance from a landlord in relation to one tenant, by deducting the overpayments from the totality of the housing benefit to be paid to that landlord in relation to other tenants. Further, the authority could not set-off against anything it was obliged to pay the landlord by virtue of reg 93 anything that the landlord was obliged to pay the authority. When an authority made a payment of rent allowance to a landlord in respect of tenants, it was acting as an agent for those tenants and, upon such a payment being made, the tenant’s liability to the landlord was pro tanto extinguished. Therefore, to use a tenant’s rent allowance to extinguish any liability of the landlord to the authority was to use the rent allowance for a purpose that Parliament had not authorised. Accordingly, the manner in which the authority had proceeded was unlawful.
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