R(IS) 26/95
(Chief Adjudication Officer and Anor. v. Palfrey, Dowell (deceased), 
McDonnell and Others)

Judge K. Machin QC, Mr. V. G. H. Hallett, and	CIS/391/1992
Mr. J. G. Mitchell QC	CIS/417/1992
20.5.93	CIS/85/1992

CA (Nourse and Hobhouse LJJ and Sir Ralph Gibson)
8.2.95

Capital - jointly owned asset - whether claimant is to be treated as possessing an equal share 
Capital - freehold interest in property subject to a lease or tenancy - whether a “reversionary interest” 
Three appeals, concerning the valuation provisions and the validity of regulation 52 of the Income Support (General) Regulations 1987, were heard by a tribunal of Commissioners. In all three cases, social security appeal tribunals had decided that income support was not payable because the claimant’s capital exceeded the prescribed amount (£8,000) on account of the tribunal’s valuation of the claimant’s interest in property. CIS/85/1992 also raised a question as to the construction of paragraph 5 of Schedule 10 to the Income Support (General) Regulations 1987.
CIS/391/1992 (Palfrey) concerned an elderly widower on income support who had been forced by increasing disability to leave the family home and go into residential care. His daughter, who had paid for the house, held it as beneficial joint tenant with her father and was accordingly entitled to the whole property if she survived him. He was in his eighties. She was unwilling to move or to join in any sale of the house. She had no intention of purchasing her father’s interest, which in the normal course of events would accrue to her by survivorship. The claimant’s interest in the house was her only asset. 
CIS/417/1992 (Dowell) concerned a claimant who, with her daughter and son-in-law had purchased a freehold property as a family home. At the time of the decisions of the adjudication officer and the appeal tribunal it was thought that she had a 1/4 share, although it subsequently transpired that she had a 1/3 share. They all lived in the property. Later, the claimant went into a residential home and claimed income support. 
CIS/85/1992 (McDonnell) concerned a claimant who was separated from her husband and was taking proceedings for divorce. She was in receipt of rents from a tenanted property, the beneficial ownership of which was in dispute. Her solicitors anticipated that her husband (who had made the only cash contribution other than that provided on the mortgage) would claim the entire beneficial interest in the property. The claimant contested his claim. An estate agent advised that while divorce proceedings were going on, and ownership was in dispute, the property was not marketable. The claimant claimed income support. 
Held, by the tribunal of Commissioners, that:
CIS/391/1992
1.	regulation 52 treats a claimant, who is one of two beneficial joint tenants, as possessed of an equal one half share of the relevant capital asset and it is that share of the beneficial interest that is to be valued when calculating the claimant’s capital for income support purposes (paras. 38 to 43);
2.	it is the market value of the deemed share that is to be ascertained (para. 38);
3.	the Commissioners have jurisdiction to determine whether a regulation is ultra vires on the ground of irrationality if this is necessary for the determination of the issue which arises before them. Such an issue is only likely to arise on rare occasions but when it does the Commissioner has a positive duty to rule on ultra vires (para. 45);
4.	regulation 52 is not irrational and is valid (para. 46);
CIS/417/1992
5.	where a claimant is entitled to an actual equal beneficial share of a capital asset, it makes no difference whether or not regulation 52 applies: for a deemed equal share falls to be valued as if it were actual capital and at current market value (paras. 23 to 24);
CIS/85/1992
6.	a freehold interest in property subject to a lease or tenancy is a “reversionary interest” within the meaning of paragraph 5 of Schedule 10 to the Income Support (General) Regulations 1987 and accordingly is exempt from valuation as capital (paras. 26 to 33 and 36) (R(SB) 3/86 not followed);
7.	the capital value of any right to receive rent must be disregarded by virtue of paragraph 24 of Schedule 10, and the rents themselves must be treated as the claimant’s capital, and not income, when received by virtue of regulation 48(4) and paragraph 22(1) of Schedule 9 (para. 36).
The Chief Adjudication Officer and the Secretary of State appealed to the Court of Appeal against the decisions of the tribunal of Commissioners and in two other appeals raising similar issues, contending that the correct construction of regulation 52 required that the whole beneficial interest in the asset must be valued and then divided into the same number of equal shares as there are persons entitled to the beneficial interest in possession, the claimant being debited with his share of that value. They also argued that a freehold interest in property subject to a lease or tenancy is not a “reversionary interest” within the meaning of paragraph 5 of Schedule 10.
Held, by the Court of Appeal, unanimously dismissing the appeals, that: 
1.	in the case of a freehold or leasehold property the persons beneficially entitled in possession are to be treated as if each of them are tenants in common holding equal shares and regulation 52 requires the claimant’s deemed (or actual) beneficial interest in an equal share to be taken into account (per Nourse and Hobhouse LJJ);
2.	regulation 52 provides that the preceding provisions of Chapter VI, in these cases regulation 49(a), shall apply for the purposes of calculating the amount of capital which the claimant is treated as possessing. That means his interest must be valued at the current market value (per Nourse LJ);
3.	there is no limitation on the words “any capital asset”: they include, but are not limited to, real property such as a dwelling house. The words apply to money, to shares in a company, and to an enforceable claim (per Sir Ralph Gibson);
4.	regulation 52 does not expressly provide that the division into equal shares shall follow upon the presumption of equality and after valuation of the capital asset and in the context of this legislation it is safer to proceed upon the basis that clear language would be used to express that intention. To the extent that the wording of the provision is consistent with an applicant being treated as possessing a capital asset having the real value of that asset at the material time rather than a larger value, which in his hands it does not have, to that extent the provision should be construed as requiring or permitting the applicant to be treated in accordance with the true facts (per Sir Ralph Gibson);
5.	a freehold interest in property subject to a lease or tenancy is a “reversionary interest” for the purposes of paragraph 5 of Schedule 10 to the Income Support (General) Regulations 1987.
[Note: The effect of the decision of the Court of Appeal was reversed by regulation 6(6) and (10) of the Income-related Benefits Schemes and Social Security (Claims and Payments) (Miscellaneous Amendments) Regulations 1995, SI 1995 No. 2303, which amended the relevant provisions in the Income Support (General) Regulations 1987 with effect from 2 October 1995]

decision of the tribunal of commissioners in cis/391/1992
Arrangement of paragraphs in this decision	Paragraph
Decision . . . . . . . . . . . . . . . . . . . .  . . .  . .  .  .  .  . .  .  . . . . . . . . . . . . . 	1
Representation . . . . . . . . . . . . . . . . . . . .  . . .  . .  .  .  .  . .  .  . . . . . . . .	2
Nature of the appeals  . . . . . . . . . . . . . . . . . . .  . . .  . .  .  .  .  . .  .  . . . .  	3 - 9 
The period in issue. . . . . . . . . . . . . . . . . . . .  . . .  . .  .  .  .  . .  .  . . . . . .   	10	
The relevant law. . . . . . . . . . . . . . . . . . . .  . . .  . .  .  .  .  . .  .  . . . . . . . .     	11
The adjudication officer’s decision. . . . . . . . . . . . . . . . . . . .  . . .  . .  . .    	12 ‑ 14
The appeal tribunal’s decision.  . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . 	15 ‑ 17
Subsequent proceedings . . . . . . . . . . . . . . . . . . . .  . . . . . . . . . . . . . . . .  	18 - 23
The arguments on appeal:
(1)	Valuation under regulation 52
(a) 	The adjudication officer’s submission . . . . . . . .	24 - 26
(b) 	The claimant’s submission . . . . . . . . . . . . . . . . .  	27	
(c) 	Submission of the amicus curiae . . . . . . . . . . . . .	28, 29
(2)	On the validity of regulation 52: irrationality
(a) 	The adjudication officer’s submission . . . . . . . . . 	30
(b) 	The claimant’s submission . . . . . . . . . . . . . . . . . .	31
(c) 	The submission of the amicus curiae . . . . . . . . . . 	32
Was the appeal tribunal’s decision erroneous in law? . . . . . . . . . . . . . . . 	33 ‑ 37
Valuation under regulation 52 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	38 ‑ 43
Is regulation 52 valid? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	44 ‑ 46
Directions to the new tribunal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	47 ‑ 56
The first appendix: extract from Memorandum of Guidance for Adjudication officers issued on 1 December 1990
The second appendix: the relevant law

Decision
1.	Our decision is that the decision of the social security appeal tribunal dated 29 July 1991 is erroneous in law. We set it aside and refer the case to another social security appeal tribunal for determination in accordance with our directions.
Representation
2.	(1)	We held oral hearings of this, and two associated appeals, on 15, 16 and 17 March 1993. The present appeal, the reference to which on Commissioner’s file is CIS/391/1992, and to which we shall refer in the other appeals as Palfrey was heard first. The second appeal to be heard was that the reference to which on Commissioner’s file is CIS/417/1992. We shall refer to this as “Dowell”. The third appeal to be heard was that the reference to which on Commissioner’s file is CIS/85/1992. We shall refer to this as “McDonnell’.
	(2)	In all three appeals, the adjudication officer was represented (except on ultra vires) by Mr. S.M. Cooper of the Solicitor’s Office, Departments of Health and Social Security.
	(3)	On ultra vires the adjudication officer was represented by Mr. J. M. McManus of Counsel, instructed by the Solicitor’s Office.
	(4)	The claimant in the present appeal did not appear. He was unrepresented at the oral hearings before us.
	(5)	The Secretary of State was invited, but declined to be represented or to make submissions in any of the appeals.
	(6)	Mr. R. Drabble, of Counsel, instructed by the Treasury Solicitor, appeared as amicus curiae in all three appeals. His assistance has been invaluable.
Nature of the appeals
3.	All three appeals raise questions relating to (1) the valuation provisions and (2) the validity, of regulation 52 of the Income Support (General) Regulations 1987 (which we shall call “the General Regulations”). The third appeal (McDonnell) raises a third, and in that appeal crucial, question (3) relating to the construction of paragraph 5 of Schedule 10 to the General Regulations.
4.	Questions (1) and (2) are considered in the present adjudication officer’s appeal. In Dowell we hold that regulation 52, if it applies at all to an asset held in trust for persons in equal shares, has no practical effect. Question (3) is considered in McDonnell, where we hold that a freehold interest in property which is subject to a lease or tenancy is a “reversionary interest” in terms of paragraph 5 of Schedule 10 and exempt from valuation as capital. Regulation 52 accordingly has no application.
5.	We turn first to the consideration of question (1). A claimant is not entitled to income support if his capital, calculated in accordance with the General Regulations, exceeds a prescribed limit (at present £8,000). Regulation 52 concerns the calculation of a claimant’s capital which is jointly held with others.
6.	The present appeal concerns an elderly widower on income support who has been forced by increasing disability to leave the house which is the family home and go into residential care. His daughter, who paid for the house, holds it as beneficial joint tenant with her father and is accordingly entitled to the whole property if she survives him. He is in his 80’s. She is unwilling to move or to join in any sale of the house. She has no intention of purchasing her father’s interest, which in the normal course of events will accrue to her by survivorship. The claimant’s interest in the house is his only capital asset. How should it be valued?
7.	In cases where regulation 52 applies, a claimant for income support who has a beneficial interest in possession in a capital asset is treated as having (i.e. deemed to have) an equal share in that asset with each other person who has such an interest.
8.	It is the adjudication officer’s case that regulation 52, on its true construction, directs that the capital value of the deemed one half share of the claimant in the capital asset (a house known as 17 Bowling Green) be calculated by determining the market value of the house and then, after deducting a mortgage debt, and allowing for expenses of sale, dividing by two. It is the claimant’s case, on the contrary, that regulation 52 directs his notional share to be calculated by ascertaining its current market value in the real world, as though it were actual capital.
9. 	(1) 	In the present case, the District Valuer estimated the market value of 17 Bowling Green to be £40,000 and, adopting the construction now favoured by the adjudication officer, deducted 10% (£4,000) for the expenses of sale, £4,107 for the outstanding mortgage debt and divided the resulting net value of £31,892.91 of 17 Bowling Green by two, so as to arrive at a value of £15,946.45 for the claimant’s notional half share.
	(2)	If the construction favoured by the claimant is correct, and the actual current market value of the claimant’s deemed or notional half share were to be estimated as though it were actual capital, that value would most probably be nil, for the reasons given in paragraph 18 of the “Guidance for Adjudication Officers - Income support” issued by the Chief Adjudication Officer, in December 1990, which is set out in the first appendix to this decision (a copy of the complete memorandum, AOG Vol 3 1986, is in the case papers).
The period in issue
10.	The period in issue in this appeal runs from 15 March 1991 down to the date when the issues in this case are finally decided.
The relevant law
11.	The relevant statutory law affecting the present appeal is set out in the second appendix. It comprises:
	(1)	Sections 20(9) and 22(5) to (9) and part of section 20(11) (definitions of “family”, “married couple” and “unmarried couple”) of the Social Security Act 1986.
Note:	As from 1 July 1992, these provisions were replaced by identical provisions in sections 134(2), 136 and 137(1) of the Social Security Contributions and Benefits Act 1992. We shall refer to that Act as “SSCBA”.
	(2)	Part of regulation 2 (definitions) of “claimant” and “partner” and the whole of regulations 23(1), 45, 46, 48(4), 49, 50, 51(1), (6) and (7), 52, paragraph 22 of Schedule 9 (sums to be disregarded in the calculation of income other than earnings) and paragraphs 1, 2, 5, 6, 13, 24, 25 and 26 of Schedule 10 (capital to be disregarded) of the General Regulations.
The adjudication officer’s decision
12.	On 29 April 1991, an adjudication officer issued the following decision:
“Income support is not payable to Mr. Clifford Frank Palfrey from and including 15 March 1991 as his capital exceeds the prescribed limit of £8,000.”
13.	The claimant appealed against this decision. His letter appealing states:
“I have no savings at all. Although it is alleged that I have notional capital of £15,946.50, this is not in all the circumstances and in reality correct ... The house at 17 Bowling Green is owned by Janet and myself as joint tenants which means that I have no divided share in the property. On my death the whole of my interest in the property will pass to Janet. This is what I have always intended as it is Janet and Janet alone who has provided the necessary money to purchase the property. My daughter is not in a position to remortgage the property nor can she sell the property as she still needs somewhere to live being in full-time employment.”
14.	In his written submission on the appeal, the adjudication officer stated that the claimant, a widower aged 81 years, had on 18 February 1991 advised the local office of a change of address to Milton House, Bridgwater. He had previously lived in his own property (17 Bowling Green, Cannington) which he owned jointly with his daughter, the mortgage being in joint names although he said he had no divided share in the property. The daughter continued to live in the property which was not up for sale, the daughter was not over 60 or incapacitated and was in full-time employment. It was the adjudication officer’s submission that the claimant’s share of 17 Bowling Green did not fall to be disregarded under any of the provisions of Schedule 10 of the General Regulations. Its value calculated in accordance with regulation 49 was £15,946.45 (see para. 9(1) above).
The appeal tribunal’s decision
15.	The appeal tribunal’s unanimous decision was:
“The claimant’s appeal from the decision of the adjudication officer issued on 29 April 1991, that income support was not payable to him from and including 15 March 1991, because his capital exceeded the prescribed limit of £8,000, is ALLOWED.”
16.	Their recorded findings of fact were:
“(1) The claimant, an 81 year old widower, had lived with his 52 year old daughter, who was single, at 17 Bowling Green, Cannington, a local authority property. On 17 February 1991 the claimant had been admitted to Milton House, West Street, Bridgwater, a residential care home, the weekly fee at [sic] which was £190 and on 4 March 1991 it was decided that the claimant should become a permanent resident in the home. He had been in receipt of income support up to and including 14 March 1991.
	(2)	The claimant had been the tenant of 17 Bowling Green since the early 1950s and had lived there with his wife and two daughters, one of whom had left home. The claimant had been widowed in 1970 and the claimant had retired in 1972. He had several disabilities, including arthritis, and had been cared for throughout by *****
	(3)	In 1982 it was decided that ***** should purchase the freehold of 17 Bowling Green from the local authority. The only person who could exercise the right of purchase was the claimant but he could not afford to do so. Accordingly he and ***** purchased the property as joint tenants, she intending to keep the beneficial interest for herself. ***** paid £1,500 and on the strength of the earnings in her employment, she obtained a mortgage for the balance of the purchase price of £8,000 from the local authority. No purchase money was provided by the claimant. All mortgage repayments and interest together with all outgoings of the property had been paid by *****, as the claimant could only afford his own personal expenditure. The amount outstanding on the mortgage was £4,107.09.
(4)	Based on an external survey only, the DV estimated the market value of 17 Bowling Green on 28 March 1991 at £40,000. ***** believed it to be worth between £35,000 and £40,000.
(5)	17 Bowling Green was not for sale and ***** had no intention of purchasing the claimant’s interest in the property.”
17.	Their recorded reasons for their decision were:
“The relevant legislation in this case was summarised in the AO’s submission.
It was not disputed that as joint tenants, the claimant had an equal and undivided interest with his daughter, ***** in the legal estate in 17 Bowling Green. As the secure tenant of the property, which had formerly belonged to the local authority, the claimant was the only person who could exercise the right of purchase, so it was essential that he joined in the purchase. The other advantage of the joint tenancy was the right of survivorship enjoyed by *****, so that her sister did not inherit an interest in the property. This was only equitable, as the down payment on the house had been provided exclusively by ***** and the mortgage, granted on the strength of her employment and all other outgoings, had been and would continue to be paid by her. Without her the claimant could never have acquired any interest in the freehold. The clear intention of ***** in purchasing the freehold had been to keep the beneficial interest for herself and in accordance with the principle of Dyer v. Dyer [1788] 2 Cox 92,93, there was a resulting trust in favour of *****. In these circumstances, the claimant’s interest in the property would not be freely realisable and so should be disregarded.”
Subsequent proceedings
18.	The adjudication officer applied to the appeal tribunal chairman for leave to appeal on the ground that the tribunal had failed to say why Dyer v. Dyer [1788] was applicable to the case. They also failed to have regard to the value of the discount given by the local authority and brought to the purchase by the claimant as tenant and therefore the sole person entitled to buy it at a discount. Findings of fact and reasons were also inadequate. The chairman refused leave.
19.	The adjudication officer then applied to the Commissioner for leave to appeal. He submitted that in his grounds of appeal the claimant stated that “the house is owned by ***** and myself as joint tenants which means I have no divided share in the property” and further “on my death the whole of my interest in the property will pass to *****”. On this evidence the tribunal should have made a finding that the claimant at law and in equity, in other words he was a beneficial joint tenant, and therefore did have a beneficial property, for the purposes of regulation 52. Alternatively, the tribunal’s reasons were insufficient. The tribunal failed to explain why there was a resulting trust for the daughter alone and in arriving at a conclusion should have considered whether there was a declaration of trust in the deeds.
20.	A Commissioner granted leave to appeal to the adjudication officer and directed an oral hearing. Later, a Commissioner directed that the two associated appeals (Dowell and McDonnell), which raised regulation 52 questions, should be heard with Palfrey. All three appeals were heard on 9 and 10 December 1992.
21.	After the hearing, but before he had given any decision in respect of these appeals, the Commissioner discovered that a tribunal of Commissioners in Northern Ireland had, on 7 May 1992, when considering an identically worded regulation, decided that the freehold interest of a claimant in property let to tenants was a “reversionary interest” in terms of paragraph 5 of Schedule 10 of their General Regulations and was accordingly exempt from valuation as capital of the claimant. In this decision which had not been cited to the Commissioner and was, at the time of his hearing, unknown to him, the tribunal of Commissioners in Northern Ireland declined to follow decision R(SB) 3/86 (which is that of a single Commissioner in England). If their decision is correct, it entirely destroys the argument based on regulation 52 which was put to the Commissioner by Mr. Cooper on behalf of the adjudication officer in respect of the appeal in McDonnell. For the property in issue in that case was let to tenants. If the claimant’s interest in it was a reversionary interest it was exempt from valuation as capital and regulation 52 was not in point at all.
22.	Accordingly, on 21 January 1993 the Commissioner directed a further oral hearing of the appeal in McDonnell on 8 March 1993. But on 28 February 1993, before this further hearing could take place, the House of Lords delivered judgment in the case of Foster (A.P.) v. Chief Adjudication Officer and Another (now reported in [1993] 2 WLR 292) [and also at R(IS) 22/93]. The decision in that case raised the question whether the Commissioner should consider whether regulation 52 was ultra vires on the ground of irrationality. At the oral hearing before the Commissioner, when the question of ultra vires was raised by the Commissioner, Mr. Drabble informed him that the House of Lords had indicated, in argument, that the question of the jurisdiction of the Commissioners in respect of ultra vires questions was academic, so that they were unlikely to deal with it in their opinions and that there was a decision of a tribunal of Commissioners that the statutory authorities (who include the Commissioner) did not have jurisdiction to consider whether a regulation was ultra vires on the ground of unreasonableness (decision R(SB) 15/89 refers). When, however, the decision in Foster’s case was given, Lord Bridge of Harwich, in delivering an opinion, with which all the other four Lords of Appeal agreed, said that the Commissioners’ jurisdiction:
“must, at least theoretically, embrace a challenge on the ground of irrationality as well as illegality”
See page 299, letter F.
23.	In the light of these new points, which had arisen since the Commissioner’s oral hearing on 9 and 10 December 1992, and which raised questions of special difficulty, the Chief Commissioner appointed a tribunal of Commissioners, pursuant to section 57 of the Social Security Administration Act 1992 to conduct a complete rehearing of the three appeals, as occurred for example in R(SB) 12/88 (reported): see, in particular, paragraphs 16 and 18 of that decision.
The arguments on appeal
(1) Valuation under regulation 52
(a) The adjudication officer’s submission
24.	After submitting that the appeal tribunal’s decision was erroneous in law, Mr. Cooper turned to regulation 52.
25.	Income support, Mr. Cooper submitted, was concerned with beneficial ownership, not just legal ownership. The claimant and his daughter were beneficial joint owners and regulation 52 accordingly applied. The purpose of regulation 52 was to enable an adjudication officer to arrive by simple means at the claimant’s beneficial ownership of capital without undue delay and expense.
26.	Turning to the construction of regulation 52, Mr. Cooper adopted his skeleton argument, which, so far as relevant, is in these terms:
“Assuming that regulation 52 does apply, the case will turn on the correct interpretation of that regulation “... where a claimant and one or more persons are beneficially entitled in possession to any capital asset they shall be treated as if each of them were entitled in possession to the whole beneficial interest therein in an equal share [and the foregoing provisions of this Chapter shall apply for the purposes of calculating the amount of capital which the claimant is treated as possessing as if it were actual capital which the claimant does possess]”.
Regulation 52 was new to income support; there was no equivalent in supplementary benefit. The regulation as originally introduced on 11 April 1988 did not contain the words in square brackets, which were added on 12 September 1988, by the Income Support (General) Amendment No. 4 Regulations 1988.
There is no dispute about one effect of the regulation, which is that for income support purposes the AO must treat the claimant as if he has an equal share in capital. It is likely that in fact the claimant and his daughter were joint tenants at law and in equity, therefore there were no distinct “shares”, but regulation 52 clearly means that he is to be treated as if he had a half, because there are two beneficial co-owners.
The dispute concerns the correct method of valuation. The AO submits that the correct approach is to value 17 Bowling Green, deduct 10% for the expenses of sale, deduct the mortgage and treat the claimant as if he has one half of the remainder.
The reasons for this view are:
(1)	Regulation 52 uses the words “capital asset”. The capital asset in the present case is 17 Bowling Green, since this is what the claimant and his daughter are jointly entitled to.
(2)	Given that 17 Bowling Green is the capital asset, the regulation directs the AO to treat each co-owner as entitled in possession to “the whole of the beneficial interest therein in an equal share” (not “an equal share of the beneficial interest”). This means that the AO should treat the claimant as if he is the sole owner of the capital asset, and then divide the figure which results by the number of persons who are jointly entitled to that capital asset.
(3)	The words added to the regulation on 12 September 1988 were put there for a purpose and must be given meaning. They confirm that regulations 45 to 51 apply. This means that 17 Bowling Green must be valued at market value reduced by 10% (reg. 49) and that the amount of the incumbrance secured on it must be deducted (reg. 49), and that the claimant would be entitled to the benefit of any disregard (reg. 46(2) and Sch. 10). These provisions are easy to understand and apply if it is 17 Bowling Green which is under consideration. It is not clear how they would operate if it was the beneficial interest which had to be looked at. In particular, a number of the disregards in Schedule 10 refer to “premises”.
(4)	If it were the beneficial interest which had to be valued:
(i)	there would be a difference between the method of valuation to be applied where the claimant was a sole owner and where he or she was a co-owner;
(ii)	it would mean that the AO would have to obtain an expert valuation;
(iii)	the expert valuer’s task would be a difficult one. There would be at least some degree of uncertainty as to what the correct figure should be (see paras. 15 to 18 below).
It cannot have been the purpose of regulation 52 to import these difficulties, delays and uncertainties into the income support legislation. “If very serious consequences to the beneficial and reasonable operation of the Act necessarily follow from one construction, I apprehend that, unless the words imperatively require it, it is the duty of the court to prefer such a construction that res majis [sic] valeat, quam pereat” [Mann v. Malcolmson, The Beta [1865] 3 Moo PCCNS 23, cited in Bennion on Statute Law 3rd edition p. 118, and Bennion, Statutory Interpretation 1984 pp. 270, 335].
(5)	It cannot have been intended to introduce a method of valuation which would (on one view of the question) commonly result in a nil valuation, since that objective could easily have been achieved by inserting a specific disregard in Schedule 10, for beneficial interests in jointly held property.
If the above view is wrong and it is the claimant’s beneficial interest in 17 Bowling Green which must be valued, it does not follow that the value of that interest is nil (in this context, supplementary benefit decisions are relevant):
(1)	It has a value to the co-owner. Reg 49 assumes a willing seller and a willing buyer. It is not enough for the co-owner to say that she is unwilling to buy the claimant’s interest.
(2)	It could be charged to a bank [R(SB) 18/83 para. 15].
(3)	“The market value of property is the price that it would fetch in the market. It might seem at first sight that no one would pay much to purchase an interest in property in common with a total stranger. But that is not the true test of the market value if the vendor is in a position to procure or has a good prospect of procuring that the underlying property is itself sold so that the proceeds of sale can be divided and can pass on such rights or prospects to a purchaser directly or indirectly” [R(SB) 14/86 para. 6]”.
On the view outlined in 15(3) above the value of the claimant’s beneficial interest depends upon his ability to procure a sale of 17 Bowling Green. He could do this relatively easily because it is held on trust for sale. This may be an express trust (the original conveyance has not been produced), but is in any event implied by statute because there is a tenancy [Emmet on Title 19th edition 10.134, citing ss. 34 to 36 Law of Property Act 1925].
Where there is a trust for sale and one of the co-owners refuses to sell, the other can apply to the court under s. 30 of the Law of Property Act 1925. Since 1 July 1991 application can be made to the county court, regardless of the value of the property [The High Court and County Court Jurisdiction Order 1991, noted in County Court Practice 1992 p. 18].
Prima facie the county court will make an order for sale, in pursuance of “the simple and fundamental principle that in a trust for sale there is a duty to sell and a power to postpone and accordingly, one trustee may call upon the others to perform the duty, but all must be agreed if they are to exercise the power” [Jones v. Challenger [1961] 1 QB 176 CA at p. 181]. This principle can be displaced where there is a “secondary or collateral object besides that of sale”, for example if the property were required as a home for the claimant’s daughter, but there must be clear evidence that the property is still needed for the purpose for which it was originally bought. The court would ask whether the house was bought to provide a home for the claimant and his daughter to live in together, or to provide a home for each of them to live in singly, as long as they each should live. If it is the former, that purpose has now come to an end and the house should be sold (see Bernard v. Josephs [1982] 2 WLR 1052 CA p. 1064). It is unlikely to be the latter, “The conversion of the property into a form in which both parties can enjoy their rights equally is the prime object of the trust, the preservation of the house as a home for one of them singly is not an object at all” Jones v. Challenger p. 183. Even if the court held that 17 Bowling Green should not be sold immediately, it might do no more than postpone sale on terms which would allow the claimant to realise his interest e.g. postpone sale until the co-owner found alternative accommodation, or order that she buy out the claimant [Emmet on Title 19th edition 23.029 - 23.030].
(b)	The claimant’s submission
27.	The claimant was unable to afford representation before the present tribunal of Commissioners. But in a letter dated 12 March 1993, solicitors instructed by his daughter reaffirmed their submission at the original hearing before the Commissioner that the decision of Commissioner Sanders reference CIS/24/1990 was on all fours with the present cases. He decided that the beneficial interest of the claimant had a limited or nil value. Any other decision would cause grave hardship. It could never have been the intention of the legislature and of the regulations made thereunder.
(c)	Submission of the amicus curiae
28.	Mr. Drabble, as amicus curiae, made his submissions on the construction of regulation 52 after argument had been heard in all three appeals. Since we are giving our decision on that regulation in this appeal, which Mr. Cooper has opened with full and elaborate argument, it is appropriate to set out his submissions on this point here.
29.	Mr. Drabble said that if the meaning of regulation 52 which the adjudication officer submitted was correct it deemed two things:
	(1)	the claimant’s share of the beneficial interest - a claimant who did not have an equal share in property but was one of two or more persons with beneficial interests in that property was deemed to have an equal share, and
	(2)	that the whole beneficial asset be valued first and the result was divided equally between the persons deemed to be beneficially entitled.
So one ignored the difficulties of realisation and difficulties of valuation arising from an asset being shared. The adjudication officer was right on (1). The first deeming was an effect of the regulation. But the adjudication officer is wrong on (2). This deeming does not follow from regulation 52 and is based on a misconception. The adjudication officer originally took the same view and Mr. Cooper himself for a substantial period of time took the stance that one valued the share itself.
Mr. Cooper now submitted that regulation 52 treats the claimant as entitled to the whole in an equal share. Consequently the adjudication officer treats the claimant as sole owner and then divides by the number of shares. One assumes a willing buyer and values on that basis and then divides the whole among the shares. The competing construction is that the valuation has to assume that it is a shared asset and that one always values the share. The competing construction is correct.
Regulation 52 refers to “the foregoing provisions”. Regulation 49 deals with “current market value”. So one looks for the current market value of the capital that the claimant is treated as possessing. What is the capital which he is treated as possessing? Mr. Cooper must say that he is treated as possessing the whole asset divided by two. That is irreconcilable with the wording in regulation 52 which is “whole beneficial interest therein in an equal share” i.e. a deemed tenancy in common. If that is right it follows one must try to discover the current market value not of the whole asset but of the deemed share under regulation 52. In order to discover current market value one is forced to look at the real world. One values on the assumption that the claimant has a deemed share in the real world. So the only effect of the regulation is to deem the share. You are not told to discover current market value of the whole asset but of the share. The regulation tells one nothing about the willingness of other parties to buy that share.
As to whether the Court would order possession of the house against the daughter, reference may be made to the case of Stott v. Radcliffe [1982] 126 SJ 310 (CA) where the Court of Appeal refused consent to the application for sale.
The Commissioners should not come to a concluded view on what the Court would actually do on an application under section 30 but on the facts in the residential home cases (Palfrey and Dowell) a strong case could be made for the Court’s withholding its consent to an application for sale. See Emmet on Title at paragraph B94.
Turning to other points made in argument, Mr. Cooper submitted that the wording of the disregards in paragraphs 1 and 2 of Schedule 10 illuminates regulation 52. In Mr. Drabble’s submission these paragraphs did not assist one way or the other. The claimant’s actual interest in the home or premises was to be disregarded.
Mr. Drabble referred to regulation 23 which brings in the capital of members of the family. One would expect the whole capital value to come in e.g. joint ownership in a husband and wife case. If applied to a partner in regulation 52 one would value two shares. Mr. Drabble accepted that if those shares were sold together the result would probably be the same.
Mr. Drabble accepted that there would be considerable valuation difficulties for the adjudication officer on his construction but on the construction put forward by Mr. Cooper claimants were treated as possessing assets which they could not realise. Valuation difficulties cannot outweigh the clear words of the regulation.
As regards the existing decisions of the Commissioner Mr. Drabble referred to decision CIS/24/1990. At paragraph 3, the adjudication officer made a submission with which he agreed. In decision CIS/357/1990 Mr. Cooper had submitted that it was the beneficial share which was to be valued.
In the two residential care homes cases (Palfrey and Dowell) the issue on valuation is what is the market value of the share which the claimant is deemed to have under regulation 52. That valuation must be made on the assumption that that share needs to be sold in the situation in which the vendor actually finds himself. One has to ask the question what is the current market value of that deemed share? In ordinary circumstances one would need expert evidence on that. The valuation would have to reflect the uncertainty of obtaining any order for sale under regulation 30. It is fairly plain that the uncertainties may be such that the deemed share of the claimant in question has a nil value in the market.
At present there is insufficient material for a decision. There must be a valuation. In a case of a claimant who can produce an estate agent to say that there is no market for the claimant’s deemed share there would be material for a decision.
In valuing a claimant’s deemed share, the existence of a dispute between the parties is material to the valuation. This point is not answered by a reference to paragraph 25 of Schedule 10. That paragraph sheds no light, it does not necessarily refer either to disputes or to joint ownership cases.
This concluded Mr. Drabble’s submission on valuation.
(2)	On the validity of regulation 52: irrationality
(a)	The adjudication officer’s submission
30.	Mr. McManus addressed the tribunal on ultra vires. Foster’s case did not indicate that the Commissioners’ previous practice of not dealing with irrationality should be disturbed. The expertise of the Commissioners was in social security law. An “irrational” challenge goes beyond common matters of Commissioners’ expertise. It was a point of difficulty in any court. Lord Bridge had approved decision R(SB)15/89. The test of whether to entertain a challenge of irrationality against a regulation would be the same as the courts would have to apply, but that did not advance the argument on whether Commissioners have the same jurisdiction. Foster’s case had not changed the practice of the Commissioners’ entertaining a challenge to vires on the grounds of illegality but not irrationality. There was a long line of Commissioners’ cases to that effect culminating in decision R(SB)15/89. Section 22(6) of the Social Security Act 1986 gave the jurisdiction for the Secretary of State to make regulation 52. The Secretary of State was entitled to state the basis upon which the adjudication officer should proceed. It was designed to cut through difficulty and avoid delay. Foster’s case did not confer irrationality jurisdiction on the Commissioners, but even if it did, regulation 52 was not irrational.
(b)	The claimant’s submission
31.	(1) 	The claimant adopted the arguments put forward by Mr. Wright on behalf of the claimant in McDonnell. Mr. Wright submitted that the Commissioners did have jurisdiction on whether a regulation was intra vires and that regulation 52 was unreasonable. He relied on the decision in Foster’s case as including jurisdiction on irrationality as being beyond the scope of the statutory enabling provision. He accepted that this only applies in extreme cases. But regulation 52 was so absurd as to be irrational. One example of a regulation being held to be ultra vires on this ground was the case of Begum [1986] Im. AR 385. It is clear from Hansard that detailed consideration was not given to every provision of the General Regulations and the question raised by regulation 52 was not answered. The Adjudication Officer’s Guide showed that the consequences were not clear to the Department. The first guidance that came out did not agree with Mr. Cooper’s view. Manifest injustice should be equated to irrationality.
	(2)	Mr. Willson, on behalf of the claimant in Dowell, submitted that if the claimant possessed an equal share of the property the regulation made no sense. If the claimant’s share was larger or smaller than an equal share, the regulation imposed a requirement to attach a market value to something that did not exist and could not be realised. This was irrational.
(c)	The submission of the amicus curiae
32.	Mr. Drabble submitted that:
	(1)	An inescapable result of the decision of the House of Lords in Foster’s case was that the Commissioners have the same power to consider an allegation of Wednesbury (Associated Provincial Picture Houses Ltd v. Wednesbury Corporation [1948] 1 KB 223) unreasonableness if it is necessary to do so to decide the individual case in the front of them;
	(2)	The test is that of Lord Scarman in the Nottinghamshire case (Reg. v. Secretary of State for the Environment Ex parte Nottinghamshire County Council [1986] AC 237) which is that such an attack is possible in extreme cases (see Lord Bridges opinion in Foster’s case at page 30OD);
(3)	Regulation 52 is intra vires on any construction though the challenge on the ground of irrationality is stronger if the adjudication officer’s construction of regulation 52 is correct. In Mr. Drabble’s submission, the only deeming authorised in regulation 52 is the deeming of the claimant’s share which is clearly authorised by section 22(9) of the Social Security Act 1986 [now section 136(5) SSCBA]. It is not enough to show extreme or unjust result to establish irrationality.
The law as understood by the Commissioners before Foster’s case is set out in decisions R(SB) 15/89 at paragraph 10 and R(SB) 10/88 paragraph 16, that there is a positive duty to determine an ultra vires question if the question of entitlement to benefit can only be answered by ruling on the validity of a regulation.
The Court of Appeal and the House of Lords in Foster both rejected any distinction between questions of “existence” and questions of “reasonableness”. It follows from Foster pages 298H to 299F, that the Commissioners must have jurisdiction to rule on irrationality and, Mr. Drabble submitted, that they have a positive duty to rule on vires when it is necessary to decide the case and a Commissioner confronted with a serious case on Wednesbury unreasonableness is obliged to investigate it and rule on it. The passage in Lord Bridge’s opinion at page 300D of the report that Lord Bridge had “no doubt that the social security Commissioners have good pragmatic reasons not to take it upon themselves to identify any such exceptional case” meant that the Commissioners should not be astute to find secondary legislation subject to Parliamentary scrutiny to be irrational.
On Mr. Drabble’s construction of regulation 52 the question of irrationality simply did not get off the ground. Section 22(9) of the 1986 Act (now section 136(5) SSCBA) provides that circumstances may be prescribed in which a “person is treated as possessing capital or income which he does not possess”. On the adjudication officer’s construction of the regulation there is a second piece of “deeming” which would be capable of producing results of very considerable unfairness. But that is no basis for an allegation that the exercise of the power by regulation 52 was wholly outside the intention of Parliament and that the Secretary of State had taken leave of his senses. Whichever construction was adopted, regulation 52 was intra vires.
Was the appeal tribunal’s decision erroneous in law?
33.	Yes it was, for the reasons set out below.
34.	There are two errors of law ex facie (i.e. on the face of the record). The appeal tribunal held that:
“as joint tenants, the claimant had an equal and undivided interest with his daughter ***** in the legal estate in 17 Bowling Green.”
But:
(1)	Since 1925, it has been legally impossible under English law to have “an equal and undivided interest” in the legal estate: see section 1(6) of the Law of Property Act 1925,
and:
(2)	As joint tenants, each joint tenant has an identical interest in the whole and every part of it. The title of each arises by the same act. The interest of each is the same in extent, nature and duration. Until severance (which is only possible in respect of the beneficial interest) each has the whole: see Goodman v. Gallant [1986] Fam 106 at page 119. There has been no severance in this case.
35.	The appeal tribunal’s decision contradicted the claimant’s own evidence to the effect that he and his daughter were beneficial joint tenants; see his grounds of appeal to the tribunal which are set out in paragraph 13 above. His representative, on the other hand, argued before the tribunal that there was an implied trust in favour of the daughter. So the beneficial ownership of the house was in doubt. In such circumstances the tribunal should have exercised their inquisitorial jurisdiction, which is well settled; see R. v. Medical Appeal Tribunal ex parte Hubble [1958] 2 QE 228 at page 240; R. v. Deputy Industrial Injuries Commissioner ex parte Moore [1965] 1 QB 456 at pages 486-7 and the further authorities cited in decision CIS/390/1991. They should have asked for the production of the document (or documents) by virtue of which the property was acquired together with any other document declaring the beneficial ownership. The relevant document was, in fact, a conveyance dated 17 September 1982. A photocopy of this was produced by the claimant’s representative at the original hearing before a single Commissioner and is in the case papers. By that conveyance, Sedgemoor District Council (the Vendor) in consideration of the sum of £8000 paid by the claimant and his daughter (defined as “the Purchasers”) conveyed “unto the Purchasers” 17 Bowling Green “TO HOLD the same unto the Purchasers in fee simple as Beneficial Joint Tenants”.
36.	The appeal tribunal’s decision that the daughter was the sole beneficial owner of 17 Bowling Green was accordingly wrong. The above mentioned conveyance was executed by both the claimant and his daughter. Their signed declaration of a beneficial joint tenancy is (in the absence of fraud or mistake of which there is no shred of evidence in this case) conclusive as to the beneficial title as between the claimant and his daughter; see Pettitt v. Pettitt [1970] AC 777 at page 813 letter E and Goodman v. Gallant [1986] Fam. 106 at pages 115-119.
Note:	This conclusion corresponds with the claimant’s own grounds of appeal to the tribunal, which were signed on his behalf by the solicitors to the claimant and his daughter, and it is further confirmed by the fact that on registration of their title, which was effected on 4 November 1982, no “joint proprietorship restriction” was entered. The effect of the absence of such restriction is that the survivor of the registered proprietors (the claimant and his daughter) can give a good receipt for capital moneys arising on a sale and is thus a further confirmation of a beneficial joint tenancy under which the property belongs to the survivor.
37.	There was a review question for the tribunal to decide. The claimant had been in receipt of income support up to 14 March 1991. So there must have been an award in his favour. Awards are usually open ended (see regulation 17(1) of the Social Security (Claims and Payments) Regulations 1987). It was for the tribunal to satisfy themselves that there were grounds for review of the award (see regulation 17(4)). They never considered this question at all.
Valuation under regulation 52
38.	We are all in agreement that, for the reasons given by Mr. Drabble, whenever regulation 52 applies and a claimant is deemed to have an equal share of a capital asset by virtue of that regulation, it is that deemed share which falls to be treated as the claimant’s actual capital and it is the current market value of that share which requires to be calculated. The wording of the regulation as amended makes this quite clear. It contains nothing to justify the construction now put forward by the adjudication officer which involves attributing to the deemed share a notional, instead of the current, market value.
39.	For regulation 52 to apply, there must be:
(1)	“a claimant” meaning “a person claiming income support’ (regulation 2(1)). The difficulties posed by the inclusion of a “partner” etc. in the definition (as to which see regulation 23) do not require consideration here. Mr. Palfrey has no partner;
(2)	“one or more [other] persons”. The daughter is such a person;
(3)	“beneficially entitled in possession”. The words “in possession” should have their ordinary natural meaning of “a present right of present enjoyment”, see Pearson v. I.R.C. [1981] AC 775 letter E, per Lord Dilhorne. “Interest in possession” means “that your interest enables you to claim now whatever may be the subject of your interest”, see Gartside v. I.R.C. [1968] AC 553 at page 607 per Lord Reid. “Entitled in possession” has a similar meaning. “Beneficially” refers to enjoyment for one’s own use and benefit as opposed to the use and benefit of someone else as agent or trustee.
(4)	“capital asset”. That means the capital asset of which the claimant and one or more persons are beneficially entitled in possession. That asset, in the present case, is the equity of redemption in respect of 17 Bowling Green, to which the claimant and his daughter are together entitled as beneficial joint tenants behind a statutory trust for sale. The mortgagee (Sedgemoor District Council) accordingly does not enter into the picture in calculating the number of shares into which the capital asset is deemed, by regulation 52, to be divided.
40.	(1)	Subject to the existing mortgage, Mr. Palfrey and his daughter hold the freehold of 17 Bowling Green on a beneficial joint tenancy. They are beneficial joint tenants behind a statutory trust for sale under which they hold the legal estate (a fee simple absolute in possession) as legal joint tenants.
(2)	The existence of a beneficial joint tenancy makes it quite clear that regulation 52 must apply in the present case.
41.	Every joint tenant has an identical interest in the whole land and every part of it. The interest of each is the same in extent, nature and duration. In the case of freeholds the seisin and in the case of leaseholds the possession is vested in all, no one holds any part to the exclusion of others; Halsbury Vol 39 para. 529. On the death of a joint tenant the interest of the deceased joint tenant is extinguished and the survivor is then possessed of the whole; Halsbury Vol 39 para. 531. After 1925, the statutory trusts, which include a trust for sale, apply in the case of joint tenancies and property conveyed to beneficial joint tenants is held by them as trustees as joint tenants upon the statutory trusts but not so as to sever their joint tenancy in equity: see sections 36, 34 and 35 of the Law of Property Act 1925 (in that order.). The legal estate (in the present case a fee simple absolute) is held by the claimant and his daughter as legal joint tenants holding as trustees on the statutory trusts subject to the mortgage. The proceeds of sale and net rents and profits until sale belong to them as beneficial joint tenants in equity.
42.	Beneficial joint tenants of land in England or Wales (i.e. beneficial joint tenants in equity) do not have a share in the land, or in the proceeds of sale, at all. Each has, as explained above, the whole. If severance of the beneficial joint tenancy is effected the beneficial joint tenancy becomes a beneficial tenancy in common and each of them has a beneficial share in the proceeds of sale. In the absence of express agreement to the contrary the share is an equal share; see Goodman v. Gallant [1986] Fam 107 (CA) at pages 117-119. The legal joint tenancy is incapable of severance; see Law of Property Act 1925 section 1(6).
43.	Regulation 52 clearly covers a case such as the beneficial joint tenancy in the registered freehold of 17 Bowling Green. Both beneficial joint tenants have interests which are clearly in possession, not in reversion. Miss Palfrey is in occupation and the claimant could occupy it if he wished. There is no lease or tenancy other than a demise by the claimant and his daughter for a term of years to Sedgemoor District Council as security for a mortgage loan made to them at the time of their purchase. The mortgagee has not entered into possession, so both have the right to immediate enjoyment. Accordingly, the requirements for the application of regulation 52 are fulfilled. The claimant and another person are beneficially entitled in possession to the whole of the capital asset, namely the equity of redemption of 17 Bowling Green,  as beneficial joint tenants behind a statutory trust for sale. Regulation 52 treats the claimant as having a one half share of that capital asset. It is the current market value of that half share that requires to be valued in order to ascertain the claimant’s capital.
Note:	The demise does not give rise to exemption from valuation of the claimant’s share. That share has no element of futurity and is not a reversionary interest in terms of paragraph 5 of Schedule 10 of the General Regulations; see our decision in McDonnell at paragraph 33.
Is regulation 52 valid?
44.	There is no doubt that the regulation is not invalid on the ground of illegality. It is clearly within the terms of the enabling power, which provides for the prescription of circumstances in which a “person is treated as possessing capital or income which he does not possess”; see section 22(9) of the 1986 Act now re-enacted in section 136(5) SSCBA. If invalid, it can only be on the ground of irrationality.
45.	Foster’s case states, in our view, in clear terms that the Commissioners do have jurisdiction to consider whether a regulation made by the Secretary of State and approved by Parliament is invalid on the ground of irrationality; see page 299 letters D, E and F. But that is a jurisdiction that they ought to exercise only if a serious issue of irrationality arises and the question whether a regulation is invalid on that ground must be necessary for the determination of the issue which arises before them; see page 298 letter H and 299 letters A and B of the report. Such an issue is likely to arise on rare occasions. Where it does arise, they have a positive duty to rule on vires.
46.	In the instant case, it is necessary to know whether regulation 52 is valid and applies to the claimant’s case, since the effect of that regulation is to sever the claimant’s joint tenancy and deem the claimant to have an equal share. (It is, apparently, possible to provide that on severance of a joint tenancy the former joint tenants should take in unequal shares; see Goodman v. Gallant [1986] Fam. 106 at page 119). In the light of our decision on valuation, the only remaining argument in favour of the irrationality is that, on one construction of the regulation, a claimant might be deemed to possess a greater or less share than one which he in fact possesses. But a provision deeming this was expressly contemplated by and authorised by Parliament; see paragraph 44 above. It cannot conceivably be said that such a provision, if indeed that is what the regulation provides, is wholly outside the intention of Parliament and that the Secretary of State has taken leave of his senses, which is what would be required if regulation 52 were to be adjudged invalid on the ground of irrationality. In our judgment, regulation 52 is valid.

Directions to the new tribunal
47.	(1)	We set aside the decision of the appeal tribunal as erroneous in law for the reasons set out in paragraphs 33 to 37 and refer the case to another appeal tribunal which should be entirely differently constituted.
	(2)	The issue before the tribunal is whether the adjudication officer has shown (and the onus is on him) that from and including 15 March 1991 the claimant no longer satisfied the conditions for entitlement to the open ended award of income support that he had previously been enjoying. If this is shown, the decision of the adjudication officer given on 29 April 1991 should be affirmed; see regulation 17(4) of the Social Security (Claims and Payments) Regulations 1987. If it is not, the tribunal should allow the claimant’s appeal and decide that the award is not to be reviewed.
48.	The tribunal should accept that the claimant and his daughter, by virtue of the conveyance to them from Sedgemoor District Council, hold 17 Bowling Green as trustees upon the statutory trusts which, after 1925, include a trust for sale. Those trusts apply in the case of joint tenancies. Property conveyed to beneficial joint tenants is held by them as joint tenants upon the statutory trusts but not so as to sever their joint tenancy in equity; see sections 36, 34 and 35 of the Law of Property Act 1925 (in that order). The legal estate (in the present case a fee absolute) is held, accordingly, by the claimant and his daughter as trustees upon the statutory trusts and (after paying off the mortgage) the proceeds of sale and net rents and profits until sale belong to them as beneficial joint tenants in equity. Each joint tenant has an identical interest in the equity of redemption and every part of it. The interest of each is the same in extent, nature and duration. Neither holds any part of the property to the exclusion of others; see Halsbury’s Laws of England 4th Edition Volume 39, paragraph 529. On the death of a joint tenant, the interest of the deceased joint tenant is extinguished and the survivor of them is possessed of the whole; Halsbury’s Volume 39, paragraph 531.
49.	The tribunal must then assume that the beneficial joint tenancy has been severed by the operation of regulation 52 and that the claimant now has an equal undivided share as beneficial tenant in common in the proceeds of sale and net rents and profits until sale of the equity of redemption of the 17 Bowling Green (which is in mortgage to Sedgemoor District Council).
50.	(1) 	The adjudication officer contends that that beneficial undivided share is worth more than £8,000. Since the claimant had an existing award of income support in his favour until the change of circumstances when he left his home in 17 Bowling Green the onus is on the adjudication officer to prove that the claimant, since 14 March 1991 no longer satisfies the conditions for entitlement to income support; see regulation 17(4) of the Social Security (Claims and Payments) Regulation 1987.
(2)	In the advice given to the adjudication officer set out in the first appendix it was considered that where a relative was left in property and did not wish to vacate it the value of the absent claimant’s share was probably nil. But the adjudication officer no longer accepts this.
51.	The existing “valuation” by the District Valuer should be treated as worthless in this connection because that valuation was of the market value of the entire property (17 Bowling Green) and not of the market value of the half share of the proceeds of sale of the equity of redemption.
52.	Unless a proper valuation is produced to the effect that the claimant’s notional undivided share was, on 15 March 1991, or some later date, worth more than £8,000 the appeal against the decision of the adjudication officer should be allowed and the award of benefit should not be reviewed but should be continued.
53.	A proper valuation can only be made on adequate instructions which should be put in evidence. Those instructions should include the following points:
(1)	The claimant must be assumed to be a willing vendor of his one half share;
(2)	The half share is in the proceeds of sale of the equity of redemption of 17 Bowling Green (which is held in fee simple subject to a mortgage);
(3)	The claimant’s daughter, who is resident in 17 Bowling Green must be treated as unwilling to vacate the property unless forced to do so by order of the Court under section 30 of the Law of Property Act 1925;
(4)	The valuer, should be instructed to look at the factual situation when finding the current market value (if any) of the undivided share of the claimant in the hypothetical beneficial tenancy in common. There is a powerful argument to resist an application for sale under section 30 on the facts, on the ground that the underlying purpose of the trust was to provide for parent and child together followed by the child alone or alternatively that the underlying purpose subsists while it remains a family home: see Emmet on Title at 23.029-23.030 and Stott v. Radcliffe [1982] 126 SJ 310 (CA). The fact that the claimant’s daughter provided the purchase money (except that loaned on mortgage in respect of which she pays the interest) and that she has lived in 17 Bowling Green as the family home for her entire life will also be relevant if application is made to the Court.
(5)	The application for sale would have to be made by the hypothetical purchaser who would have to estimate the risk that he might have to wait until the death of the daughter before obtaining possession and, if his application to the Court were to fail, he would be liable in the ordinary course to pay his own and the daughter’s costs. Account would also have to be taken by any hypothetical purchaser of his liability to indemnify the vendor in respect of his obligations (including that relating to payment of principal and interest) under the mortgage; see Halsbury’s Laws of England, 4th Edition Volume 32, paragraph 817.
54.	The valuer should be instructed to express a view as to whether there was on the facts of this case, any market, as at 15 March 1991 or later up to the date of his advice, for the hypothetical share. If advised that there was he should indicate where he says that market lay and why. If he attributes a value to the share he should indicate how that value has been calculated. He should state whether he has any experience, or knowledge, of the sale of an undivided share in these circumstances. Valuations of market value are usually based on comparables. With houses, one looks to see the prices that similar houses in the area are fetching. The valuer should indicate the comparable on which he has relied. If there are none, he should explain how he has arrived at his valuation.
55.	The claimant should be afforded the opportunity of putting in evidence in reply. Since he is without any resources, and his daughter cannot afford legal advice, she may, on his behalf wish to approach a suitable organisation to see whether they would be willing to represent him.
56.	Our decision is set out in paragraph 1.

Date: 20 May 1993	(signed) Judge K. Machin QC 
Chief Commissioner
(signed) Mr. V. G. H. Hallett
Commissioner
(signed) Mr. J. G. Mitchell QC
Commissioner

THE FIRST APPENDIX TO CIS/391/1992
(see para. 9(2))

“18.	Where an interest in a property is beneficially shared between relatives, the value of the claimant’s interest will be heavily influenced by the possibility of a market amongst his fellow beneficiaries. If no other relative is willing to buy the claimant’s interest, it is highly unlikely that any “outsider” would be willing to buy into the property unless the financial advantages far outweighed the risks and limitations involved. So unless the evidence suggests the likelihood of an outside buyer or that there is a willing buyer amongst the relatives involved, the value of a claimant’s beneficial interest shared amongst relatives will be most probably nil.”

THE SECOND APPENDIX TO CIS/391/1992
(see para. 11)

Social Security Act 1986
“20 (9) Except in prescribed circumstances the entitlement of one member of a family to any one income‑related benefit excludes entitlement to that benefit for any other member for that same period.
...   
22  	(5) Where a person claiming an income‑related benefit is a member of a family, the income and capital of any member of that family shall, except in prescribed circumstances, be treated as the income and capital of that person.
(6)	No person shall be entitled to an income‑related benefit if his capital or a prescribed part of it exceeds the prescribed amount.
(7) 	Regulations may provide that capital not exceeding the amount prescribed under subsection (6) above but exceeding a prescribed lower amount shall be treated, to a prescribed extent, as if it were income of a prescribed amount.
(8) 	Income and capital shall be calculated or estimated in such manner as may be prescribed.
[(8A)	A person’s income in respect of a week shall be calculated in accordance with prescribed rules; and the rules may provide for the calculation to be made by reference to an average over a period (which need not include the week concerned).]
(9)	Circumstances may be prescribed in which-
(a)	a person is treated as possessing capital or income which he does not possess;
(b)	capital or income which a person does possess is to be disregarded;
(c)	income is to be treated as capital;
(d)	capital is to be treated as income.”
Definitions from section 20(11) of the Social Security Act 1986
““family” means-
(a)	a married or unmarried couple;
(b)	a married or unmarried couple and a member of the same household for whom one of them is or both are responsible and who is a child or a person of a prescribed description;
(c)	except in prescribed circumstances, a person who is not a member of a married or unmarried couple and a member of the same household for whom that person is responsible and who is a child or a person of a prescribed description;
“married couple” means a man and woman who are married to each other and are members of the same household;
“unmarried couple” means a man and woman who are not married to each other but are living together as husband and wife otherwise than in prescribed circumstances;.”
General Regulations 1987 definitions from regulation 2
““claimant” means a person claiming income support.
“partner” means where a claimant-
(a)	is a member of a married or an unmarried couple, the other member of that couple;
(b)	is married polygamously to two or more members of his household, any such member;.”
... 
23.(1) [Subject to paragraphs (2) and (4) and to regulation 44 (modifications in respect of children and young persons), the income and capital of a claimant’s partner and] the income of a child or young person which by virtue of Section 22(5) of the Act is to be treated as income and capital of the claimant, shall be calculated in accordance with the following provisions of this Part in like manner as for the claimant; and any reference to the “claimant” shall, except where the context otherwise requires, be construed, for the purposes of this Part, as if it were a reference to his partner or that child or young person.
...
45. 	For the purposes of section 22(6) of the Act as it applies to income support (no entitlement to benefit if capital exceeds prescribed amount), the prescribed amount is [£8,000].
46.‑(1) For the purposes of Part II of the Act as it applies to income support, the capital of a claimant to be taken into account shall, subject to paragraph (2), be the whole of his capital calculated in accordance with this Part and any income treated as capital under [regulation 48 (income treated as capital)].
(2)	There shall be disregarded from the calculation of a claimant’s capital under paragraph (1) any capital, where applicable, specified in Schedule 10.
....
48. (4) Except any income derived from capital disregarded under paragraph 1, 2, 4, [12 or 25 to 28] of Schedule 10, any income derived from capital shall be treated as capital but only from the date it is normally due to be credited to the claimant’s account.
49.	Capital which a claimant possesses in the United Kingdom shall be calculated-
(a)	except in a case to which sub‑paragraph (b) applies, at its current market or surrender value, less
(i)	where there would be expenses attributable to sale, 10 per cent; and
(ii)	the amount of any incumbrance secured on it;
(b)	in the case of a National Savings Certificate-
(i)	if purchased from an issue the sale of which ceased before 1 July last preceding the first day on which income support is payable or the date of the determination of the claim, whichever is the earlier, or in the case of a review, the date of any subsequent review, at the price which it would have realised on that 1 July had it been purchased on the last day of that issue;
(ii)	in any other case, at its purchase price.
50.	Capital which a claimant possesses in a country outside the United Kingdom shall be calculated-
(a)	in a case in which there is no prohibition in that country against the transfer to the United Kingdom of an amount equal to its current market or surrender value in that country, at that value;
(b)	in case where there is such a prohibition, at the price which it would realise if sold in the United Kingdom to a willing buyer,
less where there would be expenses attributable to sale, 10 per cent and amount of any incumbrance secured on it.
51.‑ (1) A claimant shall be treated as possessing capital of which he has deprived himself for the purpose of securing entitlement to income support or increasing the amount of that benefit [except-
(a)	where that capital is derived from a payment made in consequence of any personal injury and is placed on trust for the benefit of the claimant; or
(b)	to the extent that the capital which he is treated as possessing is reduced in accordance with regulation 51A (diminishing notional capital rule).]
...
(6)	Where a claimant is treated as possessing capital under any of paragraphs (1) to (4), the foregoing provisions of this Chapter shall apply for the purposes of calculating its amount as if it were actual capital of which he does possess.
[(7) 	For the avoidance of doubt a claimant is to be treated as possessing capital under paragraph (1) only if the capital of which he has deprived himself is actual capital.]
52.	Except where a claimant possesses capital which is disregarded under regulation 5(4) (notional capital), where a claimant and one or more persons are beneficially entitled in possession to any capital asset they shall be treated as if each of them were entitled in possession to the whole beneficial interest therein in an equal share [and the foregoing provisions of this Chapter shall apply for the purposes of calculating the amount of capital which the claimant is treated as possessing as if it were actual capital which the claimant does possess.]”
Schedule 9 of the General Regulations
“22.‑(1) Any income derived from capital to which the claimant is or is treated under 52 (capital jointly held) as beneficially entitled but, subject to sub‑paragraph (2), not income derived from capital disregarded under paragraph 1, 2, 4, 6 [12 or 25 to 28) of Schedule 10.
(2)	Income derived from capital disregarded under paragraph 2 [4 or 25 to 28] of Schedule 10 but only to the extent of any mortgage repayments and payment of rates made in respect of the dwelling or premises in the period during which that income accrued.”
Schedule 10 of the General Regulations
“l.	The dwelling occupied as the home but, notwithstanding regulation 23 (calculation of income and capital of members of claimant’s family and of a polygamous marriage), only one dwelling shall be disregarded under this paragraph.
2.	Any premises acquired for occupation by the claimant which he intends to occupy [as his home] within 26 weeks of the date of acquisition or such longer period as is reasonable in the circumstances to enable the claimant to obtain possession and commence occupation of the premises.
...
5.	 Any reversionary interest.
6.‑[(1)]	 The assets of any business owned in whole or in part by the claimant and for the purposes of which he is engaged as a self‑employed earner or, if he has ceased to be so engaged, for such period as may be reasonable in the circumstances to allow for disposal of any such asset.
[(2)	The assets of any business owned in whole or in part by the claimant where-
(a)	he is not engaged as a self‑employed earner in that business by reason of some disease or bodily or mental disablement; but
(b)	he intends to become engaged (or, as the case may be, re‑engaged) as a self‑employed earner in that business as soon as he recovers or is able to become engaged, or re‑engaged, in that business;
for a period of 26 weeks from the date on which the claim for income support is made, or is treated as made, or, if it is unreasonable to expect him to become engaged or re-engaged in that business within that period for such longer period as is reasonable in the circumstances to enable him to become so engaged or re‑engaged.]
...  
13.	The value of the right to receive any income under a life interest or a life rent.
...
24.	The value of the right to receive any rent.
25. 	Where a claimant has ceased to occupy what was formerly the dwelling occupied as the home following his estrangement or divorce from his former partner, that dwelling for a period of 26 weeks from the date on which he ceased to occupy that dwelling.
26. 	Any premises where the claimant is taking reasonable steps to dispose of those premises for a period of 26 weeks from the date on which he first took such steps, or such longer period as is reasonable in the circumstances to enable him to dispose of those premises.”

DECISION OF THE TRIBUNAL OF  COMMISSIONERS IN 
CIS/417/1992
1.	Our decision is that the decision of the social security appeal tribunal dated 4 November 1991 is erroneous in law. We set it aside and refer the case to another social security appeal tribunal for determination in accordance with our directions.
Representation
2.	The claimant in the present appeal did not appear. She was represented by Mr. V. Willson, Welfare Rights Officer. The rest of the representation in this appeal was the same as in the associated appeal the reference to which on Commissioners’ file is CIS/391/1992 (Palfrey). The definitions in Palfrey are adopted.
Nature of the appeal
3.	This is the second of the three appeals referred to in Palfrey and is the second appeal where a claimant has left the family home and gone into residential care. We have decided in Palfrey that, where regulation 52 applies, the deemed equal share of a claimant is to be calculated by ascertaining its current market value in the real world, as though it were actual capital and that the regulation is valid and intra vires.
4.	The present appeal concerns a claimant who, with her daughter and son‑in‑law had purchased a freehold property (known as “Treadings”) as a family home. At the time of the decisions of the adjudication officer and of the appeal tribunal it was thought that she had a ¼ share. They all lived in the property. Later, the claimant went into a residential home and claimed income support. An adjudication officer and the appeal tribunal rejected the claim on the basis that the claimant’s interest in her former home was worth more than £8,000 (the prescribed capital limit). She appealed to the Commissioner and at that stage it was contended that regulation 52 applied.
The period in issue
5.	(1)	This commences with the date of receipt of the claim in the appropriate office; see regulation 6 of the Social Security (Claims and Payments) Regulations 1987. That is the date when entitlement to income support, as a general rule commences; see paragraph 6(1) of Schedule 7 to those regulations. 
(2)	That date was either 10 or 11 April 1991. The claim form was signed on 10 April and a letter from the local office refers to “your recent claim” is dated 11 April 1991. The only legible date stamp on the claim form states that the form was received on 28 March 1991.
(3)	The claim is for an indefinite period, see regulation 17(1) of the Claims and Payments Regulations.
(4)	So the period in issue runs from 10 or 11 April 1991 and will continue (subject to regulation 17(4)) down to the date of a final decision on the claim.
The relevant law
6.	The relevant statutory provisions are set out in the second appendix to Palfrey. 
The adjudication officer’s decision
7.	On 8 May 1991, the adjudication officer issued the following decision:
“Mrs. Dowell is not entitled to income support because she is deemed to have capital in excess of £8,000.”
8.	The claimant appealed against this decision. Her representative stated that the claimant had a legal ¼ share in the home of her daughter and her husband. She was senile and suffered from diabetes. Her son‑in‑law and daughter were not in a position to pay £202 a week residential fees and without the benefit of income support the claimant would have to return to their home. The daughter had health problems and her doctor (letter enclosed) stated she would not be able to stand the strain of looking after her mother.
9.	In his written submission on the appeal, the adjudication officer stated that Mrs. Dowell was an 80 year old widow who currently resided in a residential care home in Chard. On 10 April 1991 she completed a claim form, having been admitted to the care home on 15 March 1991 and this being a permanent arrangement. She stated that she owned property (“Treading”) and on enquiry her reply was that she had a quarter share in the property. There was no mortgage. There was no disregard under Schedule 10 of the regulations. The value of the property was £75,000. Allowing 10% for selling costs gave a value of £67,500 and ¼ of this would be £16,875 so that the claimant had a capital asset in excess of the prescribed limit of £8,000 and so was not entitled to income support.
The appeal tribunal’s decision
10.	The appeal tribunal’s unanimous decision was:
“The claimant’s appeal from the decision of the adjudication officer issued on 8 May 1991, that she was not entitled to income support because she was deemed to have capital in excess of £8,000, is DISALLOWED.”
11.	Their recorded findings of fact were:
“(1)	The claimant, an 80 year old widow, was permanently resident at Sunnymeade, a residential care home in Chard, to which she had been admitted on 15 March 1991. On 10 April 1991 she made a claim for income support.
(2)	The claimant stated in her SP1 that she had savings of £1,200, a retirement pension of £72.20 per week and an annuity of £98.87 per quarter.
(3)	The claimant owned a quarter share of the freehold of Treadings, Crimchard, which she had purchased jointly with her daughter and son‑in‑law, *****. There was no mortgage on the house, the value of which was £75,000. ***** lived in the house; there was no intention to sell the house or to buy the claimant’s interest therein.
(4)	***** was born on 8 September 1933; she suffered from thyroid trouble and hypertension, for which she received medication. She received no social security benefits, had a part‑time job driving children to school. Her husband was employed full‑time. She was not incapacitated.
(5)	The claimant owned a capital asset, the value of which exceeded £8,000 and which could not be disregarded.”
12.	Their recorded reasons for their decision were:
“The relevant legislation in this case was summarised in the AO’s submission.
The claimant had a quarter share in the freehold of Treadings, Crimchard, Chard, as she had been admitted to Sunnymeade on a permanent basis on      15 March 1991, Treadings could no longer be regarded as her home. The claimant’s daughter, ***** and her husband, *****, were beneficially entitled to the remaining interest in ‘Treadings’, on which there was no mortgage and which was valued at £75,000. After deduction of 10% for the expenses of sale, its net value was £67,500. There was no intention to sell the property, nor was it proposed to buy out the claimant’s interest. ***** was under 60 years of age and although receiving medication for her thyroid and blood pressure problems, she had a part time job and was not incapacitated. Her husband was employed full-time. The value of the claimant’s interest could not therefore be disregarded under any of the provisions of Schedule 10 and as its value was not therefore to be disregarded under any of the provisions of Schedule 10 and as its value was £16,875, well in excess of the capital limit of £8,000, income support was not payable.”
Subsequent proceedings
13.	The claimant appealed against this decision submitting that the tribunal erred in law in their approach to the valuation of the property. Regulation 52 applied. The claimant should be considered as having a third share and that share should have been valued. Enquiry of local estate agents had been unable to find one who said that this share had any value at all if the other persons with a share did not wish to buy out her third share.
14.	Later, in response to a nominated officer’s direction, it was stated that the property was not registered land. A photocopy of the conveyance to the claimant, her son‑in‑law and her daughter was produced. A recital in that conveyance states that the son‑in‑law provided £25, 000, the daughter £25,000 and the claimant £25,000 of the purchase price of £75,000. In the operative part of the conveyance, in consideration of £75,000 paid to the vendors, the vendors conveyed the property to the purchasers (the son‑in‑law, daughter and the claimant) “TO HOLD unto the Purchasers in fee simple as beneficial tenants in common in shares proportionate to their respective contributions to the purchase price aforesaid”. It was declared that the Purchasers or other Trustees for the time being should have the power of an absolute owner.
15.	As explained in Palfrey, all three appeals were heard by a single Commissioner in the first instance but, for the reasons set out in Palfrey (paras. 21‑23) it has proved necessary to have a complete re‑hearing of all three appeals before a tribunal of Commissioners.
Was the appeal tribunal’s decision erroneous in law?
16.	Yes, it was. There was in evidence before the tribunal a doctor’s letter that the claimant was quite senile and that her daughter was physically and mentally unable to stand the strain of looking after her, and a letter signed by them both saying the property was valued at £75,000, that the claimant had a ¼ share and that there was no intention of selling the property or buying the claimant’s ¼ share.
17.	The tribunal accepted this “valuation” and the statement of the shares in which that property was said to be held and, after deducting 10% for the expenses of sale divided the result by four and found that to be the value of the claimant’s share. But what the tribunal were required to do by regulation 49 of the General Regulations was to ascertain the current market value of the capital possessed by the claimant. Her share, if the letter was accepted, was ¼ and the daughter and her husband had no intention of selling the property or buying the claimant’s share. It was incumbent on the tribunal to explain how, in the light of this evidence, they concluded that the ¼ share had the value that they attributed to it. There was no professional valuation of the share. No account was taken of the fact that the daughter and son‑in‑law did not wish to sell the property.
18.	Neither the “valuation” nor the stated shares should have been accepted without further enquiry. The signatories of the letter were not qualified valuers and there is no indication as to how they arrived at the valuation that they did. The statement of the shares in which the property was held should have been verified by asking for the document or documents under which the property was acquired. It was most unlikely that such a document would simply state that a ¾ share belonged to the daughter and her husband without specifying the terms on which such share should be held (e.g. equally as tenants in common, or as joint tenants, or as to 3/8ths each). If the tribunal, which has, as pointed out in Palfrey, inquisitorial or investigatory duties, had asked for the conveyance, which is now in evidence, they would have found that the husband of the daughter, the daughter and the claimant each paid £25,000 of the £75,000 purchase price on 15 April 1988 and the property was conveyed to them “in fee simple as beneficial tenants in common in shares proportionate to their respective contributions to the purchase price” (i.e. in equal one third‑shares as tenants in common). That declaration was (in the absence of fraud or mistake, which is not suggested) conclusive as to the beneficial ownership: see the decision of the House of Lords in Pettitt v. Pettitt [1970] AC 777 at page 813 letter E and paragraph 27.
19.	Regulation 52 was never considered, or if it was considered, referred to in the record of the tribunal’s decision, at all. If the share of the claimant was, as the tribunal held (wrongly) ¼, and regulation 52 applied, the claimant had a deemed share of one third.
The arguments on appeal
(1) Regulation 52
20.	Mr. Willson submitted that regulation 52 was a two part regulation, the first part of which directed the claimant to have a deemed equal share and the second the means by which capital was to be calculated. The market value of the deemed share had to be ascertained by applying regulation 49. Where the claimant has in fact an equal share, regulation 52 has no effect. The result is the same whether it applies or not (it probably applies). The irrationality of regulation 52 is that where the shares are equal it makes no sense and where the claimant’s share is larger or smaller a requirement to attach a market value to something which does not exist and which cannot be realised is irrational.
21.	Mr. Cooper submitted that it was now clear that the claimant and his daughter and son‑in‑law were beneficial tenants in common on one third shares. A valuation by the district valuer after the tribunal hearing gave the property a value of £70,000. He submitted that regulation 52 applied even when one third shares were specified in the deed. In other respects, his submissions were the same as in Palfrey.
22.	Mr. Drabble’s submissions on regulation 52 are set out in Palfrey.
Application of regulation 52
23.	The parameters (or boundaries) of regulation 52 have not been argued before us. The regulation clearly applies in Palfrey’s case for the reasons given in paragraphs 38 to 43 of that decision. In the present case, the claimant has an actual 1/3 share or, if regulation 52 applies, a deemed 1/3 share. We have held that any deemed share falls to be valued as if it were actual capital and at current market value. So it makes no difference whether or not regulation 52 applies.
24.	It is unnecessary, for the purpose of the appeals in Palfrey and the present case to decide whether regulation 52 has any wider application and accordingly we express no opinion on whether that regulation applies so as to deem actual unequal shares to be treated as equal shares. That is a question that can be decided when it is raised.
Directions to the new tribunal
25.	We set aside the decision of the appeal tribunal as erroneous in law for the reasons set out in paragraphs 16 to 19 above and refer the case to another appeal tribunal which should be entirely differently constituted. The issue before the fresh tribunal will be whether the claimant has shown that he is entitled to income support during the period in issue (see para. 5 above). This turns on whether the current market value of his actual (or deemed) share of the proceeds of sale and net rents and profits until sale of the freehold (i.e. the fee simple) of the property known as “the Treading” does not exceed £8,000.
26. The claimant has discharged the onus of proving this, in the first instance by producing evidence (now at page T41 of the case papers) that the manager of the Elderly Persons Home had:
“attempted via local estate agents, and so far have not been able to find one that would show that this share has any value at all if the other persons with a share do not wish to buy out her share. Their comments have been it would not be possible to sell Mrs. Dowell’s share and so it would have no value”
27.	There is a District Valuer’s valuation of that share dated 29 September 1992 which values it at £23,250 on the assumption that the Court would order a sale and at £19,750 on the assumption that it would not. The whole property is valued at £70,000. There is no explanation at all as to why the District Valuer considered (1) that a one third share of property worth £70,000 was worth £23,250 on the assumption that the Court would order a sale and (2) a value of £19,250 if it would refuse to order a sale. The hypothetical purchaser at the date of claim would have to estimate the value at the time of purchase, the risk that he might not get an order for sale and that he might have to wait until the claimant’s daughter and son‑in‑law were dead before the property could be sold with vacant possession. He would also have to take into account the fact that, if his application for sale forthwith were to fail he would be liable in the ordinary course to pay his own and the defendants’ costs. He would have to bear in mind the powerful argument that an order for sale would not be made: see paragraph 53(4) of Palfrey a copy of which should be before the tribunal. This valuation should not be relied on as an estimate of the value of the claimant’s share.
28.	If the adjudication officer still considers that there was, at the date of claim or subsequently, a market for the claimant’s equal one third share as tenant in common in the proceeds of sale and net rents and profits until sale of “the Treading” notwithstanding the local estate agents evidence that it is unsalable and has no value, the onus is on the adjudication officer to show that the estate agents are wrong, that there is market for such a share and to show what that value is, based on comparables (if any) or other acceptable evidence. The procedure for valuation should follow that set out in paragraphs 46 to 48 of Palfrey. Failing acceptable evidence contravening the views of the local estate agents, the claim for benefit should be allowed and the appeal must succeed.
29.	Our decision is set out in paragraph 1.

Date: 20 May 1993	(signed) Judge K. Machin QC
Chief Commissioner
(signed) Mr. V. G. H. Hallett
Commissioner
(signed) Mr. J.G. Mitchell QC
Commissioner

DECISION OF THE TRIBUNAL OF COMMISSIONERS IN CIS/85/1992
1.	Our decision is that the decision of the social security appeal tribunal dated 11 July 1991 is erroneous in law. We set it aside and refer the case to another social security appeal tribunal for determination in accordance with our directions.
Representation
2.	The claimant in the present appeal did not appear. She was represented by Mr. Stewart Wright of Hounslow Law Centre. The rest of the representation in this appeal is the same as in the associated appeal the reference to which on Commissioner’s file is CIS/391/1992 (Palfrey). The definitions in Palfrey are adopted.
Nature of the appeal
3.	This is the third of three appeals. The main question in this case is, as explained in paragraph 4 and 21 of Palfrey, whether a freehold interest in property which is subject to a lease or tenancy is a “reversionary interest” in terms of paragraph 5 of Schedule 10 of the General Regulations and thus exempt from valuation as capital of the claimant.
4.	The claimant is separated from her husband and is taking proceedings for divorce. She is in receipt of rents from a tenanted property the beneficial ownership of which is in dispute. Her solicitors have anticipated that her husband (who made the only cash contribution other than that provided on mortgage) will claim the entire beneficial interest in the property. The claimant contests his claim. An estate agent has advised that while divorce proceedings are going on, and ownership is in dispute, the property is not marketable. The claimant claimed income support on 19 February 1991 (according to form AT2 1990, an obvious clerical error) and this was backdated to  25 October 1990.
The relevant law
5.	The relevant statutory provisions are set out in the second appendix to Palfrey.
The period in issue
6.	This begins on 25 October 1990. The termination of the period is in dispute and will require to be decided by the fresh tribunal. The necessary documents were not all in evidence before us and further written submissions will be required when they are available.
The adjudication officer’s decision
7.	On 22 January 1991 an adjudication officer issued the following decision:
“Mrs. McDonnell is entitled to income support at the weekly rate of £3.12 from 25 October 1990.”
8.	The claimant appealed against this decision because it was based on a calculation of her income from property let to tenants. Her appeal states:
“The tenanted property is in dispute between myself and my ex‑husband. A divorce is in progress and I cannot therefore sell the property at the present time. Following various irresponsible actions by my ex‑husband over management of the property, I was forced to assume control until the matter goes to court. Such has been accepted on a temporary basis by my ex‑husband as per enclosed letter: provided that rents are collected, bills are paid and the property is maintained.
The property runs itself but does not produce a profit which means that there is no money left over after bills are paid. I will therefore be required to account for all monies in order to meet the bills on the property and will be held responsible for any bills that are not paid. I cannot therefore use this money for any other purpose. I am merely acting as intermediary agent between the tenants and the running of the property until the matter is settled in court.”
The property in question is known as 26 Finch Drive.
9.	In his written submission to the appeal tribunal, the adjudication officer wrote that on receipt of the appeal he reconsidered his original decision and decided that it was erroneous in law. The claimant’s capital exceeded the prescribed amount of £8000. She had savings of £5,110.73 in the Anglia Building Account, none of her capital fell to be disregarded under any provisions of the General Regulations and the claimant’s capital in respect of 26 Finch Drive calculated in accordance with the General Regulations was:
“Net valuation estimated by Mrs. McDonnell:
	£70,000	‑	50%	=	£35,000
	£35,000
	£  3,500	less 10%
	£31,500”
10.	A letter dated 22 March 1991 in support of the claimant’s appeal states:
“We confirm that our client is the joint owner of both the matrimonial home at 74 Carlton Avenue, Feltham where she lives with her two children and also 26 Finch Drive, Feltham. This latter property is owned jointly by our client and her husband, *****. The property is let to tenants but is subject to a mortgage with National Home Loans in the principal sum of £47,000.
Our client collects the rent from the tenants in order to pay the mortgage, the monthly repayments being £537 approximately each month.
Our client has now issued her application for ancillary relief in divorce and  26 Finch Drive, Feltham forms part of the property in dispute in those proceedings. Our client has filed with the court her affidavit in support of her application and which, subject to our client’s consent, we are prepared to disclose to you. We are still awaiting ***** affidavit in reply.
Although the property was purchased jointly by the parties in August 1987 for approximately £64,000, the purchase monies were provided by way of mortgage of £47,000 and a cash deposit provided by the respondent of £17,000 which he had inherited from his father’s estate. Therefore although the property is in the joint names of the parties, it is true to say that Mrs. McDonnell has made no cash contribution towards purchase of the same. We have no doubt that ***** will argue that she is therefore not entitled to any share of the property and that this should be transferred to him outright. We note that under regulation 46 of the Income Support (General) Regulations 1987, capital of a claimant for income support to be taken into account includes the share in any property owned by the claimant. However, since the property is in joint names and the subject of financial proceedings in divorce, our client could take no steps at all to realise any money from the property either by sale of the property or obtaining a further secured loan on it, without existing proceedings of which 26 Finch Drive is subject. ***** is unlikely to give his consent at this stage. Therefore the capital would not be available to our client, even if she applied for it since she cannot raise any loan on the property or sell it without ***** consent.”
11.	On 6 April 1991 the firm of Forest, local estate agents, wrote to the claimant:
“Re:‑ 26 FINCH DRIVE. FELTHAM. MIDDLESEX
Following our recent visit to 26 Finch Drive to assess the current market value, we are of the opinion that should you require a quick sale a figure of £65,000 would be realistic, with an upper marketing price of £68,000.
We would add, that at this stage with the matrimonial situation you have outlined there would be little point in us marketing the property. As soon as you have permission to market the property we would be pleased to receive your instruction.”
12.	Both the above mentioned letters were before the appeal tribunal.
The appeal tribunal’s decision
13.	The appeal tribunal heard the appeal on 11 July 1991. Their decision was:
“Appeal is not allowed. The claimant is not entitled to income support as she has capital resources exceeding in value the prescribed amount of £8,000.”
14.	Their recorded findings of fact were:
“1.	The claimant is joint owner with her husband of a property at 26 Finch Drive, Feltham which is not her residence. The property has been valued at £65,000 but its disposal is subject to judicial decision under divorce proceedings.
2.	The claimant, who has claimed income support, has assisted in managing the property at Finch Drive.”
15.	Their recorded reasons for their decision were:
“1.	The tribunal makes no findings on the issue of the claimant’s income, discussed at length in form AT2 as we have decided on the application of the Income Support (General) Regulations 1987 as to capital, and as to the question of a business partnership.
2.	The claimant’s representative has submitted a thoughtful argument that 26 Finch Drive, which was not the matrimonial home, has no value since no prospective purchaser would be prepared to submit an offer. Briefly the mortgage debt on that property is being serviced from rents and the claimant, after some discussion, is maintaining the necessary accounts.
3.	The prime evidence lay in the letter from Forest Estate Agents dated   6 April 1991, which after valuing the property at £65,000 went on to state: 
“We would add, that at this stage with the matrimonial situation you have outlined there would be little point in us marketing the property”. 
Nevertheless we decide that the effective consequence of the regulations is to fix a claimant with capital assets to which his legal entitlement is unsure let alone the situation that the asset cannot be realised immediately. Regulation 52 on “capital jointly held” leads to this conclusion and operates to affix the claimant with capital of £32,500, less any adjustments for costs pertaining to a disposal.
4.	The next stage in examining the facts is to examine Schedule 10 to the General Regulations for any means whereby capital can be disregarded. Paragraph 6 has been quoted by the claimant’s representative. This relates to the assets of a business but we have no evidence that the claimant and her husband were a business partnership. There was a property business, ancillary to ***** employment but the basis for this was his father’s estate and with the aid of his brother’s accounting background the taxation and other problems were handled. There is no evidence of separate business accounts. The claimant’s own role in these affairs was to assist in the documentation and after the marriage break up to collect the rent and deal with the outgoings of 26 Finch Drive. We find as a fact that on the evidence before us there was no business partnership and since the claimant had dealt with any of the properties it was in the capacity of agent for her husband.
5.	There is no other paragraph in Schedule 10 which would provide a heading for disregard and therefore under Section 22(b) of the Social Security Act 1986 the claimant has no entitlement to income support.”
Subsequent proceedings
16.	The claimant applied for leave to appeal against this decision on the ground that the appeal tribunal erred in law in that they gave insufficient weight to the estate agent’s evidence that there would be little point in marketing the property, they failed to take account of the existence of a mortgage secured on the property and that they failed to give adequate reasons for their decision that paragraph 6 of Schedule 10 did not apply to the claimant’s circumstances. She was engaged in business as a self‑employed earner and the property was an asset of her business and was properly disregarded. In the claimant’s written submission on the appeal it was further contended that the rent from tenants should be disregarded under paragraph 22 of Schedule 9 of the General Regulations and that if the tribunal had not erred in its approach to assessing the market value of the claimant’s share of the property, they would clearly have found it to be nil. Reliance was placed on the decision in CIS/24/1990.
17.	In the adjudication officer’s submission on the appeal made on 26 May 1992, the adjudication officer accepted that the decision of the appeal tribunal was erroneous in law on the ground that the tribunal had incorrectly treated the evidence before them arising from divorce proceedings as to ownership of 26 Finch Drive as having no effect on the market value of the property and that the possible effect of tenants on that market value had, at the least, not been fully investigated by the tribunal. But he defended the tribunal’s general approach to regulation 52.
18.	In his skeleton argument, Mr. Cooper submits that the tribunal erred in law because it relied on the estate agent’s valuation which appeared to ignore the fact that 26 Finch Drive was tenanted and it ignored the mortgage of 26 Finch Drive. His submission repeated his construction of regulation 52 which has been set out in Palfrey at paragraphs 24, 25 and 26. As regards the share of the claimant, he submits, in paragraph 9, as follows:
“9	There is no dispute about one effect of the regulation, which is that for income support purposes the AO must treat the claimant as if she has an equal share in capital. Even if there were no express declaration that the claimant and her husband were joint tenants in equity (and therefore there were no distinct “shares”), or if there were an express declaration that they were tenants in common as to 75% and 25%, regulation 52 means that she is to be treated as if she has a half share.”
As regards disregards, Mr. Cooper submitted:
“There is no relevant disregard, because 26 Finch Drive:
‑	is not the home [Schedule 10, para. 1]
‑	is not occupied by a partner or relative [para. 4]
-	is probably not a business asset [para. 6] [CFC/15/1990]
-	was never the home [para. 25]
‑	is not to be sold [para. 26]”
As regards rental income, Mr. Cooper submits:
“ 21	Rental income
(A)	If 26 Finch Drive is an investment, rather than a business asset, it cannot be disregarded as capital under Schedule 10, paragraph 6 and the rent from it must be treated as capital, because:
(1)	regulations 46 and in particular 48(4) apply, since the rent is not “income derived from capital disregarded under paragraphs 1, 2, 4, 6, 12, or 25 to 28”, and therefore does not fall within the exception to regulation 48(4); 
(2) 	regulations 40(2) and Schedule 9, paragraph 22(1) mean that the rent is disregarded, but only as income, which is consistent with the conclusion that it is treated as capital. The above provisions do not mean that the rent is disregarded altogether, as the claimant seems to think [T 120].
(B) If 26 Finch Drive is a business asset, it must be disregarded as capital under Schedule 10, paragraph 6, and the rent from it must be taken into account as income, because:
(3)	it would fall within one of the exceptions to regulation 48(4), so it would not be treated as capital:
(4)	it would not fall to be disregarded as income, under regulation 40(2) and Schedule 9, paragraph 22(1), because that disregard does not apply to “income derived from capital disregarded under paragraph 1, 2, 4, 6, 12 or 25 to 28 of Schedule 10”.”
19.	As explained in Palfrey, all three appeals (Palfrey, Dowell, McDonnell) were heard on 9 and 10 December 1992. The Commissioner who heard the appeals (Mr. V.G.H. Hallett) issued, on 21 January 1993, a further direction in the light of the circumstances set out in paragraphs 21 and 22 of Palfrey. The direction states:
“3.	26 Finch Drive was bought for letting in apartments. My understanding is that at all material times during the period in issue, the property was let on assured shorthold tenancies i.e. for six months at a time, rent payable weekly. A copy of the form of Agreement used was produced at the hearing.
4.	Paragraph 5 of Schedule 10 of the regulations provides for a capital disregard of “Any reversionary interest”. Mr. Commissioner Edwards‑Jones in decision R(SB) 3/86 decided that the interest of a freeholder owning property of which he has granted a lease or tenancy is not a reversionary interest, distinguishing a decision of Commissioner Reid (on identically worded legislation) that when the owner of land makes a lease of it the lease usually carried with it to the lessee the present right to possession and what remains in the hands of the lessor is called “a reversion”. The reason was that the present right to possession of the land will normally “revert” to the owner of the land when the lease comes to an end. These principles of law will be found explained in the definition of “reversion” given in Stroud’s Judicial Dictionary. The reasons given for distinguishing this decision was that since   1 January 1926 there has been a major overhaul of real property law given effect by the English Law of Property Act 1925 and associated Acts.
5.	This reasoning seems unconvincing because:
	(1)	paragraph 5 of Schedule 10 also applies to Scotland, where English real property is not in force, 
	(2)	a reversionary interest is not confined to an interest in real property or other interests in land (leases). Many reversions consist entirely of interests in other property.
6.	Since the oral hearing, I have ascertained that a tribunal of Commissioners in Northern Ireland has decided that decision R(SB) 3/86 should not be followed, that the expression “reversionary interest” in paragraph 5 of Schedule 10 has the meaning given in the earlier Northern Ireland decisions and that the capital value of the claimant’s leased property (seven let to tenants at £1190 per month and one let for six months at £433 per month) was to be disregarded under the provisions of paragraph 5 of Schedule 10.
7.	A copy of that decision (the case of Mr. Dwarka Datt Sharma reference C71/1991 (IS), dated 7 May 1992) is enclosed.
8.	Should I follow the decision of the Northern Irish tribunal of Commissioners in the present case? If I should, the claimant’s appeal should succeed in respect of the period in issue and I will be in a position to award benefit forthwith.”
The Commissioner directed further written submissions and a further oral hearing for legal argument on these points, but before the hearing could take place judgment was given to by the House of Lords in Foster’s case and, in the light of the reversionary interest point raised by the Commissioner’s direction and the ultra vires point raised by Foster’s case (see Palfrey paras. 22 and 23) the Chief Commissioner appointed a tribunal of Commissioners to re‑hear all three appeals.

The arguments on appeal
20.	Mr. Wright on behalf of the claimant made submissions on six points:
(1)	the effect of a later reviewing decision;
(2)	reversionary interest;
(3)	business asset;
(4)	unreasonableness of regulation 52;
(5)	the valuation question under regulation 52;
(6)	income derived from capital.
Each of these points is considered later in our decision.
21.	The claimant’s arguments on point (2) on which this appeal mainly turns, is conveniently summarised in Mr. Wright’s written submission of 11 February 1993, which it states:
“It is further submitted that the decision of the Northern Ireland tribunal of Commissioners in C71/91 (IS) is to be preferred to that of the Commissioner in R(SB) 3/86 and the former should therefore be followed by the Commissioner in the present case. The reasons for this submission are as follows:
(a)	The income support scheme is concerned with practicalities of assisting people who have either a limited or no other form of financial support and it is submitted that the provisions of the scheme should be interpreted with this in mind. Although there is case law which gives a restricted and technical meaning to the term “reversionary interest” and holds that it should not be extended to include a freehold interest subject to a lease, it is submitted that such a technical and restricted meaning should not be attached to the words as they appear in the income support regulations. It is submitted that for all practical purposes the meaning attached today to the term “reversionary interest” includes a freehold interest subject to a lease.
Support for this interpretation can be found in Megarry and Wade’s Law of Real Property (5th Edition) where the learned authors state at page 237 that:
“According to feudal principles, moreover, a freehold reversioner on a term of years has no estate which is vested not only in interest but also in possession, for the grant of a lease does not deprive a grantor of seisin, and he therefore has what is properly called a freehold in possession subject to the term. From this point of view a reversion on a lease is not a reversion or, indeed, a future interest at all. This technicality is a relic of the ancient doctrine that leases were not even estates and were to be disregarded for feudal purposes. But, as has been seen, leases have long since achieved the status of estates, and it is therefore common and correct to speak of a landlord’s reversion.” (emphasis added)
This interpretation accords with the view of the Northern Ireland tribunal of Commissioners in C71/91 (IS) where at paragraph 9, when referring to the term “reversionary interest”, they state that:
“... we take the view that, in the context of Schedule 10, its well recognised legal meaning is to be preferred.”
It is also the same interpretation which the Northern Ireland Commissioner in appeal No. R4/82 (SUPP BEN) placed on the words, drawing on the definition of “reversion” found in Stroud’s Judicial Dictionary.
Furthermore, it is submitted that the decisions of the Northern Ireland Commissioners cannot validly be distinguished by way of reference to the (English) Law of Property Act 1925, as the learned Commissioner sought to do in R(SB) 3/86 (cf. paras. 26 and 27). The passage from Megarry and Wade was written taking account of the changes wrought by the Law of Property Act 1925 and the case law referred to above which gives a restricted and technical meaning to the words “reversionary interest” was arrived at prior to the said Act coming into effect. (e.g.  Att. Gen. of Ontario v. Mercer [1883] 8 App. Cas. 767 and Wakefield and Barnsley Union Bank Limited v. Yates [1916] 1 Ch. 452)
(b)	Alternatively, it is submitted that the decision of the Commissioner in R(SB) 3/86 can be distinguished in that it was concerned with the capital disregards found in the supplementary benefit scheme. Most of these disregards have been repeated in the income support scheme but they have also been added to considerably. These additions include, at paragraphs 23 and 24 of Schedule 10 to the income support regulations, the value of the right to receive an occupational or personal pension and the value of the right to receive any rent, disregards which the learned authors of Ogus and Barendt’s Law of Social Security (3rd Edition) have characterised at page 449 as intending “to encourage thrift”.
It is submitted that, looking at the income support scheme of capital disregards as a whole, it was the intention of the draughtsperson to exclude from capital calculations capital which related to tenanted properties. In particular, it is submitted that the overall intention of the capital disregards is to exclude from income support capital calculations any property (other than the claimant’s actual home), which is not immediately free for occupation and possession (e.g. paragraph 27 of Schedule 10).
As the Northern Ireland tribunal of Commissioners state at paragraph 9 of decision C71/91 (IS):
“Looking at Schedule 10 as a whole we are unable to discern any overall pattern or principle which would suggest that the term “reversionary interest” was not intended to include leased property ... the range of property, the capital value of which is to be disregarded, is very wide indeed, extending in paragraph 24 to “the value of the right to receive any rent”.”
(c)	Furthermore, or alternatively, it is submitted that, if the Commissioner is unable to distinguish R(SB) 3/86 and it therefore directly conflicts with C71/91 (IS), then he should follow the decision of the Northern Ireland tribunal of Commissioners as a tribunal decision (in accordance with R(I)12/75), in an extension of the principles set down by the tribunal of Commissioners in R(SB) 1/90 at paragraph 15 where the Commissioners said:
“Although the social security legislation governing Northern Ireland is not contained in the same Act as applies to Great Britain ... we nevertheless consider that, where the relevant provisions are identical (as they are in this case), the same judicial approach should equally be adopted. At the end of the day, the legislative fount of the enactments found both in Great Britain and the province of Northern Ireland is the same, namely Parliament at Westminster.””
On point (6), income derived from capital, Mr. Wright said that Mr. Cooper did not now dispute that rent was “income derived from capital”. Rental income is to be disregarded as income (Schedule 9, paragraph 22) and taken into account as capital (regulation 48(4)). The value of the right to receive rent was to be disregarded as an item of capital. 26 Finch Drive involved three possible resources:
(1)	its capital value;
(2)	rent:
(3)	the value of the right to receive the rent.
(3)	(Para. 24 of Schedule 10) was introduced by amendment. Mr. Wright made no submission as to whether regulation 24 applied to rent from rent charges.
If the capital value of 26 Finch Drive was disregarded under paragraphs 5 or 24 of Schedule 10 the only resource brought into account was income treated as capital and if that did not exceed £8,000 nothing was brought into account.
Mr. Cooper’s submissions
22.	On point (2) of Mr. Wright’s submission (meaning of “reversionary interest”), Mr. Cooper submitted as follows:
“I. Precedent
1.	There has been a difference in the way in which British and Northern Irish Commissioners have interpreted the meaning of “any reversionary interest”. R(SB) 3/86 (which holds that property subject to a tenancy is not reversionary for supplementary benefit purposes) is a decision of a single GB Commissioner. C71/91 (IS) (which holds the contrary for income support) is a decision of a tribunal of Northern Irish Commissioners. It is not possible to explain this by reference to the difference between English and Irish law.
2.	The decisions of Northern Irish Commissioners do not formally bind GB Commissioners. (see para. 23 of R(I) 14/63. See also comment in R(SB) 1/90). This is not altered by the fact that C71/91 (IS) was a decision of a tribunal of Commissioners, rather than a single Commissioner.
3.	It is submitted that the Commissioner should follow R(SB) 3/86:
“A single Commissioner in the interests of comity and to secure certainty and avoid confusion on questions of legal principle normally follows the decisions of other single Commissioners” (see para. 21 of R(I) 12/75).
4.	It is noted that:
(a)	R(SB) 3/86 is a reported case. The report is a long one, and the decision is fully reasoned, and considers all the arguments exhaustively. It was promulgated on 18 October 1985 and has been followed in GB (though not Northern Ireland) ever since. The very fact of its being reported means that it commands the assent of at least a majority of Commissioners, see Practice Directions of the Chief Commissioner dated 28 October 1982 and 31 March 1987. Prima facie it carried more weight than an unreported case (R(I) 12/75 para. 20).
(b)	In Presho v. the Insurance Officer [1984] AC 310, reported in R(U)1/84 appendix 2, Lord Brandon stated, in approving an earlier decision of the Court of Appeal in a different case, that “where there has been a consistent line of decisions in the field of National Insurance by specialist tribunals over a large number of years, a court should be slow to depart from them.” R(SB) 3/86 must have been followed by English and Scots AOs and tribunals since 1985. It was cited with approval e.g. by Mr. Morcom in CIS/54/1991 and CWSB/47/1986.
5.	R(SB) 3/86 was promulgated on 18 October 1985. The Income Support Regulations were made on 20 November 1987. The draughtsman of those regulations used the words “reversionary interest” which were identical to the words used in the equivalent supplementary benefits regulation. It is submitted that he used those words in the sense given to them by the Commissioner in R(SB) 3/86:
“Where an Act uses a term with a previous legal history it may be inferred that Parliament intended to use it in the sense given by the earlier history, and the court is entitled to inform itself about this” (e.g. Welham v. DPP [1961] AC page 123). “Where Parliament has continued to use words of which the meaning has been settled by decisions of the court, it is to be presumed that Parliament intends the words to continue to have that meaning”, see the case of Truman Hanbury Buxton and Co Limited v. Kerslake [1955] AC page 361.
II	Is R(SB) 3/86 correct in its interpretation of reversionary interest.
6.	There is no definition of reversionary interest in supplementary benefit or income support legislation. It has more than one technical meaning and more than one non‑technical meaning. R(SB) 3/86 was right to say         (para. 13) that in a general statute words should be understood in their popular or non‑technical sense. One powerful argument for this view was set out at paragraph 15, namely that the supplementary benefit legislation applied equally to England and Scotland and to real property and personal property. Therefore, it cannot have been intended that the phrase should be used in a technical sense (e.g. a technical sense related to its meaning in the context of English real property).
7.	Even in its popular sense “reversionary interest” has more than one meaning. R(SB) 3/86 recognises that the ownership of property subject to a tenancy does have a reversionary element. People do refer to “freehold reversions” in this context and if one focuses upon the idea of possession, possession of the property may be said to “revert” to the landlord upon the termination of the tenancy (see paras. 19 and 22). Because of this the Commissioner specifically considered what the meaning of reversionary interest was in the context of the supplementary benefit legislation. The answer he gave was “something which does not afford any present enjoyment but carries a vested or contingent right to enjoyment in the future” (paras. 19 and 21). The Commissioner was right to conclude that this was the meaning of the phrase for supplementary benefit purposes. Because the landlord’s interest is not purely reversionary, it does not qualify for the disregard. That is the ratio decidendi of R(SB) 3/86 (para. 21). This is equally applicable to income support.
8.	As a matter of commonsense it cannot be right to give a meaning to the words “any reversionary interest” which gives the benefit of the disregard to someone who clearly has a valuable asset which they are enjoying now. As the Commissioner said in paragraph 8 “the investment of savings in a freehold house subject to leave or tenancy was a widespread traditional form of savings by persons in quite modest financial circumstances (no less than the heart of many a property empire) and normally a freely marketable and realisable asset .... the legislature should not be inferred to have contemplated any such position as would result from acceptance of Mr. Powell’s contentions”. See also paragraph 20. “There is clearly no special feature of that character which would warrant disregard of the value of the freehold interest in property subject to a tenancy, since normally such an asset is readily marketable without imprudence and, in that respect, indistinguishable from a wide range of other investment assets which are clearly recognisable.”
9.	In paragraphs 4 and 5 of the direction dated 21 January 1993 Mr. Hallett refers to the fact that R(SB) 3/86, in giving reasons for distinguishing an earlier Northern Irish decision, discussed the overhaul of real property law in England in 1925. Mr. Hallett goes on to cast doubt upon the Commissioner’s reasoning in R(SB) 3/86, pointing out that paragraph 5 of Schedule 10 applies to Scotland as well as England and that it can exist in other types of property apart from real property. But this criticism is directed not at the ratio decidendi of R(SB) 3/86 but at the reasons which the Commissioner gave in that case for not following an earlier Northern Irish decision. But the Commissioner in R(SB) 3/86 was not obliged to follow the earlier Northern Irish decision. It was not binding on him.
10.	The legislation in Northern Ireland (but not on the mainland) has been changed, with effect from 9 November 1992. Paragraph 5 of Schedule 10 to the Income Support (General) Regulations (Northern Ireland) 1987 now reads “any future interest in property of any kind, other than premises or land let or leased by the claimant”.”
23.	On point (6) of Mr. Wright’s submission (rental income), Mr. Cooper’s submission is set out in paragraph 18 above.

Mr. Drabble’s submission
24.	Mr. Drabble said one must be aware of the surprising result of an asset comprising a freehold reversion falling outside the capital rule and income being disregarded as such with rent only coming in as capital. It is that situation which has created the difficulty. That was the consideration which constrained Mr. Commissioner Edwards‑Jones to reach his decision in R(SB) 3/86. He stressed that his decision was incompatible with legal or commercial language. Most people would say “Yes” to the question “is a freehold reversion a reversionary interest?”
As regards the right approach, this tribunal should decide the issue simply on its merits. On the one hand there was a reported decision R(SB) 3/86 which had been followed. On the other hand, there was a decision of a tribunal of Commissioners in Northern Ireland which, though not formally binding, was entitled to weight and which adopted a different approach.
On the merits, the expression “reversionary interest” was not used in a technical sense in contradiction to a remainder. The expression was defined in Jowett’s Dictionary of English Law, 2nd Edition (1977) Volume 2 page 1576 as meaning “Any right in property the enjoyment of which is deferred”. There was no conceivable reason why it should include a reversion and exclude remainders. The ordinary legal meaning includes a freehold reversion unless there is something special about the context; see Megarry and Wade’s Law of Real Property at page 237 (this is set out in paragraph 21 above). See also Challis’s Law of Real Property Chiefly in Relation to Conveyancing, 3rd edition (1911) at page 30.
The technical sense of “in possession” for the purpose of estates casts no light on the problem. See paragraph 28(2) of the Commissioner’s decision. In paragraph 29, he in terms says that the Commissioner’s decision has nothing to do with the definition of possession in the Law of Property Act 1925 (section 205(1)(xix))
As regards Scotland, a point can be articulated in favour of Mr. Cooper if the expression is not ordinarily applicable in Scotland but if so one would expect an exclusion for England if a freehold reversion subject to a lease was not intended to be covered there.
Jowett (page 1575) indicates that the word (reversion) “is also used to mean the freehold or leasehold reversion to a lease or term of years absolute in which case there is an estate in possession of the rents and profits as well as in the freehold or leasehold reversion, which together may form an interest in the legal estate subject to the term”. 
The commercial meaning of reversionary interest includes a freehold reversion on a lease. The evidence in that respect in the case papers is uncontradicted.
Should a special or restricted meaning be given to the expression “reversionary interest” in the income support scheme? It is possibly surprising that the landlord’s interest should be excluded. But there are other examples, such as a life interest. 
Paragraphs 21 and 22 of the appendix to decision R(SB) 3/86 provided no support for a special meaning for “reversionary interest” in the case of supplementary benefit. The position is clearer under the income support regulations. For the special feature of a freehold reversion expectant on a lease or tenancy of the right to receive rents is excluded from treatment as capital by paragraph 24 of Schedule 10.
If such a freehold reversion is a reversionary interest under paragraph 5 of Schedule 10, the income falls to be treated as capital under regulation 48(4). This is so in whatever form it is received. The word “account” in that regulation does not of itself illuminate the question where it is attached. The word is just the same as “credit”.
It is possible to assign the right to receive rent. That right would be disregarded as capital under paragraph 24 of Schedule 10. If you had to instruct a valuer of the freehold to disregard the value of the right to receive rent there would be a valuation problem. Where the freehold is subject to a long lease one is buying the rental stream. There is nothing else to buy. 
The definition in Jowett of “reversionary interest” is not one of keeping with Scots Law, even if that expression is not customarily applied for there is a reversionary interest in the return of possession.
Was the appeal tribunal’s decision erroneous in law?
25.	Yes, it was:
(1)	The market value of the claimant’s deemed share of 26 Finch Drive was treated as irrelevant. This misconstrues regulation 52 of the General Regulations; see our decision in Palfrey
(2)	The two crucial disregards in Schedule 10 of those regulations were not considered at all. They were regulation 5 (reversionary interest exclusion) and regulation 24 (value of the right to receive rent exclusion). Neither of these paragraphs was considered although the tribunals’s reasons for decision show that the tribunal, who referred to the collection of rent, knew that 26 Finch Drive was let.
The construction of the expression “reversionary interest” in regulation 5 of Schedule 10 of the General Regulations
26.	Mr. Cooper’s case is that an interest in a freehold which is subject to a lease or tenancy is not a reversionary interest. That case rests entirely on decision R(SB) 3/86, where Mr. Commissioner Edwards‑Jones framed his own criterion or “touchstone” for ascertaining the meaning of reversionary interest for the purposes of regulation 6(1)(a) of the Supplementary Benefit (Resources) Regulations. The ratio decidendi of his decision is in paragraph 21 of its appendix. Paragraph 21 is in these terms:
“21.	The touchstone in my judgment lies in the concept of a “reversionary” interest as something which does not afford any present enjoyment but carries a vested or contingent right to enjoyment in the future. It is a clear concept, and though there may be characters of property which present problems as to which side of the dividing line they fall, by reason of their characteristics, it is in general simple enough to apply. It does not, of course, provide an entirely logical outcome in all cases; it may well in a given case be practicable to turn a purely reversionary asset to a substantial account by sale notwithstanding any possible imprudence of selling it, and there is no essential logic which I can detect in a situation where £1,000 in the bank is clearly reckonable and £10,000 potential net proceeds of sale of a reversionary interest to be disregarded per se. But that should not, in my judgment, deflect me from giving effect to what I am satisfied is the intended scope of the provision.”
27.	Mr. Edwards‑Jones’s reasons for this conclusion were:
“First, that it is “normally a freely marketable asset” (para. 8) which is “readily marketable” (para. 20). Secondly, that there is “entitlement to receive the rents and profits eligible under the terms of lease or tenancy when such were payable, and until they were, to have the outgoings borne by the tenants” (para. 19)”.
In the case before him, applying the criterion that he had indicated in paragraph 21 of the appendix to his decision Mr. Edwards‑Jones concluded that the claimant’s interest was reckonable. It:
“was not purely reversionary at any time, it was an asset of a character which in general is readily realisable without imprudence and though it contained a reversionary element of a technical character, it yielded a present enjoyment to her [the claimant] by way of indemnity against outgoings for which she would otherwise be liable even when no money rent was exigible, and the more so from and after the time when it was. I have considered also whether the co‑existence of present enjoyment and also of a future right to physical possession might be taken to warrant an apportionment of her interest for the purpose of regulation 6(1)(a)(vi), the latter alone falling for disregard. But I have come to a negative conclusion as to that. It would give rise to refined and continuing problems of valuation ...” (para. 22).
28.	So Mr. Edward‑Jones’s test of what constitutes a reversionary interest for supplementary benefit capital disregard is that it must be:
“something which does not afford any present enjoyment but carries a vested or contingent right to enjoyment in the future”.
Mr. Cooper submits and accepts that this was the meaning of the phrase for supplementary benefit purposes and that it was equally applicable to income support (para. 7, submission of 24 February 1993):
	“Because the landlord’s interest is not purely reversionary”
He continues (para. 9):
“As a matter of commonsense it cannot be right to give a meaning to the words “any reversionary interest” which gives the benefit of the disregard to someone who clearly has a valuable asset which they are enjoying now”.
29.		(1)	We all reject this submission and agree with the contrary submission of Mr. Drabble and with his reasoning.
		(2)	So far as regards income support, the capital value of the element of possession involved in a tenanted freehold is expressly excluded from valuation by regulation 24 of Schedule 10 which exempts the value of the right to receive any rent. (There was no comparable provision in supplementary benefit). The only capital value left in the tenanted freehold is purely reversionary.
(3)	The benefit of a capital disregard to persons who have a valuable asset which they are enjoying now has been granted by paragraph 13 of Schedule 10 to life interests, which as explained in decision R(SB) 43/84 are freely marketable. A similar capital disregard applies to annuities: see paragraph 11. These also are valuable and freely marketable.
	(4)	In our judgment, there are no grounds for attributing a special or restricted meaning to the expression “reversionary interest” in paragraph 5 of Schedule 10 and so far, at least, as regards income support decision R(SB) 3/86 should not be followed.
30.	There is no doubt at all that a freehold let to tenants is a reversion in the common and correct legal sense of the word; see Megarry and Wade’s Law of Real Property (5th Edition page 237). Nor is there any doubt that such a freehold is described as a reversion or reversionary interest for commercial purposes. The evidence for this at pages B333‑337 of the separate bundle in the case papers has not been contested. (see also para. 15 of the appendix to decision R(SB) 3/86). Whether the expression is construed in a similar way to the expression “in possession” in regulation 52 (as to which see our decision in Palfrey namely in its popular or natural sense or in its commercial sense or in its legal sense, we are satisfied that it includes tenanted freeholds.
31.	Although the foregoing observations have been made in relation to property in England we recognise that the exclusion of reversionary interests is expressed to apply without distinction to property both in England and in Scotland. We agree with Mr. Drabble’s submission, made with understandable diffidence, that the term “reversionary interest” is not out of keeping as applied to the interest of a landlord in property in Scotland subject to a lease. His interest might not commonly be so described in that jurisdiction,  see the insertion of a specific definition to that effect in the Capital Allowances Act 1968, section 88. However it comes within the general definition of “reversionary interest” contained in the introductory glossary to the Stair Memorial Encyclopedia of the Laws of Scotland, which is:
“The interest in heritage of the person entitled to exercise a reversion.”
It is stated in McAllister, Scottish Law of Leases, page 2 (page 249 of the appeal bundle):
“(4) A lease usually confers only a temporary right of occupation upon the tenant. The right of ownership remains with the landlord and possession reverts to him at the expiry of the lease.”
The expression “reversionary interest” becomes the more appropriate to describe the interest of the landlord in Scotland in the context of the present income support legislation in which the value of the right to receive rent is directed to be disregarded.
32.	The one point that is perhaps surprising is the treatment of the income of a reversionary interest. This is treated as capital as and when it is credited to the claimant’s account; see regulation 48(4). It is not treated as income; see paragraph 22 of Schedule 9. As the Commissioners in Northern Ireland pointed out in their decision if there is an absurdity in the scheme it lies in this treatment of the rent of a tenanted freehold.
33.	We agree with the Commissioners in Northern Ireland. Any interest in a freehold which is subject to a lease or tenancy is, in our judgment, a “reversionary interest” in terms of paragraph 5 of Schedule 10.
Note: A demise by way of security for a mortgage under English law (as in Palfrey) is not a lease in this sense and it was not suggested before us that it was. The interest of a freeholder subject to such a mortgage is not, as such, a reversionary interest in terms of paragraph 5.
Directions to the new tribunal
34.	As appears from our directions, there are several issues in this appeal, which we are not in a position to determine now. Accordingly, we refer the case to another tribunal which should be entirely differently constituted.
35.	(1)	The first question before the tribunal is what is the period in issue before them.
	(2)	It is not in dispute that the claim for income support made on             20 December 1990 was properly backdated to 25 October 1990. At the oral hearing before us, Mr. Wright initially submitted as head (1) of his argument (effect of review decision) that the whole period down to the date of the decision of the Commissioners or remitted tribunal was at large; see his written submission of 11 February 1993 (page 189 case papers). Mr. Cooper, representing the adjudication officer, submitted that the last day in issue in the appeal before us (and accordingly now before the fresh tribunal) is            7 March 1991. This submission was made on the basis that subsequent to that date the claimant had been awarded income support; see his written submission dated 10 March 1993 at page 430 and the “Sequence of Events” at pages 431‑2 of the case papers.
	(3)	After the hearing, Mr. Wright, the claimant’s representative examined the DSS file and on 7 April 1993 he made a further written submission, which was received in the Office of the Commissioners on 13 April 1993, in which he now submits that the period in issue should extend, at least, up to 6 November 1991, though it was recognised that it might be necessary to refer part of this period back to an SSAT for certain findings of fact to be made.
	(4)	The fresh tribunal should have before them, Mr. Cooper’s above mentioned submission and schedule of events, copies of the documents referred to in that schedule, a copy of Mr. Wright’s submission, which has not yet been sent to the parties, and a written submission in reply from Mr. Cooper on behalf of the adjudication officer.
	(5)	One way of resolving the procedural muddle would be to ensure that every decision of the adjudication officer covering any part of the period from 20 December 1990 down to the date of the fresh tribunal’s hearing is the subject of an appeal to the tribunal, whether that decision was made on the original claim or a later claim. Leave could be given by the tribunal chairman out of time for appeals that have not been brought so that the entire period could be considered by the fresh tribunal. The further submission of the adjudication officer should consider whether this procedure, which has been adopted successfully in other cases, is practicable in the present case. If this method is not practicable, other suggestions for resolving the issues should be made. The claimant’s representative should have the opportunity of replying in writing before the tribunal hearing.
36.	The claimant has said she has a joint beneficial interest together with her separated husband, in 26 Finch Drive. She has given evidence by affidavit dated      11 February 1993 that “at all material times each apartment in the property has been let on an assured shorthold tenancy” (para. 4, page 194 case papers). Before us, this fact was not in dispute. Accordingly, we direct the fresh tribunal that the value of 26 Finch Drive is to be disregarded when calculating the claimant’s capital for income support at all material times, because it is a reversionary interest in terms of paragraph 5 of Schedule 10 of the General Regulations. The capital value of any right to receive rent that the husband may have assigned to her must also be disregarded by virtue of paragraph 24 of Schedule 10. The rents themselves must be treated as the claimant’s capital from time to time as at the date of receipt by the claimant; see regulation 48(4). They must not be treated as actual income; see paragraph 22(1) of Schedule 9. But if, in any week, they form part of the claimant’s capital and that capital is in excess of £3000 the excess will be tariff income; see regulation 53.
37.	According to the original adjudication officer’s submission to the appeal tribunal, the claimant had rents of £180 per week from tenants of which £70 a week was treated by the adjudication officer as income. She had £5,110.73 capital. Presumably the adjudication officer would accept that, on these figures, the amount to be treated as the claimant’s capital when received would be £70 and not £180 per week. If it is intended to argue the contrary before the appeal tribunal, there should be a written submission by the adjudication officer, after taking legal advice, as to why the sum of rent to be included in the calculation is gross instead of, as accepted when treated as actual income, net.
38.	In view of our directions that the capital value of 26 Finch Drive is to be disregarded, the question of whether it is a business asset, or falls within regulation 52 does not arise.
39.	If, as seems probable, the claimant’s capital has at no material time exceeded £8,000, the task of the tribunal will be to consider, week by week during the period in issue (see decision R(SB) 4/85, para. 13 and CIS/255/1989 para. 29(8)(a)) whether the claimant’s income reduced, or disentitled her, to benefit at the maximum rate.
40.	The tribunal should make findings on the points in our directions in this decision and on all other relevant points raised by or on behalf of the claimant or the adjudication officer. The record of their decision should comply with regulation 25(2)(b) of the Social Security (Adjudication) Regulations 1986.

Date: 20 May 1993	(signed) Judge K. Machin QC
Chief Commissioner
(signed) Mr. V.G. H. Hallett
Commissioner
(signed) Mr. J. G. Mitchell QC
Commissioner

The Chief Adjudication Officer and Secretary of State appealed to the Court of Appeal . The decision of the Court of Appeal follows.

Decision of the court of appeal
The Hon. M. J.  Beloff QC and Mr. J. R. McManus (instructed by the Solicitor to the Department of Social Security, London WC2) appeared on  behalf of the Appellants.
Mr. J. Howell QC and Miss N. Lieven (instructed by Messrs. Sinclair Taylor and Martin, London W10) appeared on behalf of the Respondents Palfrey, Dowell and McDonnell
Mr. J. M. Burton (instructed by Messrs. Maurice Hackenbroch and Co., London W1) appeared on behalf of the Respondent Pelter.
The Respondent McNamara appeared in person.
Mr. R. Drabble appeared as Amicus Curiae, instructed by the Treasury Solicitor.

LORD JUSTICE NOURSE: These are five appeals by the Chief Adjudication Officer and the Secretary of State for social security against decisions of social security Commissioners in favour of the respective claimants on two short questions of construction arising out of separate provisions of the Income Support (General) Regulations 1987 (“the General Regulations”). The decisions in the cases of Palfrey, Dowell and McDonnell were given on 20 May 1993 by a tribunal consisting of three Commissioners (His Honour Judge Machin, Chief Commissioner, Mr. V.G.H. Hallett and Mr. J.G. Mitchell QC). The decision in the case of Pelter was given on         25 August 1993 by Mr. M. H. Johnson. The decision in the case of McNamara was given on 3 November 1993 by Mr J. Mesher.

Income support is a means tested benefit which was introduced into the social security system as a replacement for supplementary benefit by the Social Security Act 1986. In order to obtain the benefit a claimant must either have no income or income which does not exceed “the applicable amount”, as prescribed from time to time by regulations. Even if his income does not exceed that amount, a claimant is not entitled to the benefit if his capital, calculated in accordance with the regulations, exceeds a prescribed limit (at present £8,000). Each of these five cases is concerned with the question whether the claimant’s capital exceeds that limit.

The facts of each case are stated in the relevant decision. The questions with which we are concerned being questions of law, they need not be extensively restated. As an example, it is convenient to give a brief account of the facts in Palfrey. In 1982 Mr. Palfrey, a widower now in his eighties, and his unmarred daughter, now in her fifties, acquired, as beneficial joint tenants, the freehold of the house which had been the family home since the early 1950s. The deposit on the purchase and all the mortgage instalments were paid and continue to be paid by Miss Palfrey. In 1991 Mr. Palfrey was forced by increasing disabilities to leave home and go into residential care. Before that he had been in receipt of income support, his interest in the house being left out of account in the calculation of his capital. But once he ceased to occupy the house his interest came into the reckoning. He accepts that that is so, but there is a fundamental difference of opinion between him and the Chief Adjudication Officer as to how the calculation should be made.

The same question arises in Dowell, McDonnell and McNamara. It does not arise in Pelter. The provision on which its outcome depends is regulation 52 of the General Regulations which, so far as material, provides:
“where a claimant and one or more persons are beneficially entitled in possession  to any capital asset they shall be treated as if each of them were entitled in possession to the whole beneficial interest therein in an equal share and the foregoing provisions of this Chapter shall apply for the purposes of calculating the amount of capital which the claimant is treated as possessing as if it were actual capital which the claimant does possess.”
The rival submissions as to the true construction of that provision are these. The appellants submit that the whole beneficial interest in the asset must be valued and then divided into the same number of equal shares as there are persons entitled to the beneficial interest in possession, the claimant being debited with his share of that value. The claimants submit that what has to be brought into account is the claimant’s interest in the asset which, pursuant to regulation 49 (a) (see below), must be valued at its current market value.

The striking difference in effect between these submissions is illustrated by the facts in Palfrey, where the District Valuer estimated the market value of the house to be £40,000 and, having deducted ten per cent for the expenses of sale and £4,107.09 for the outstanding mortgage debt, arrived at a figure of £31,892.91 as the value of the whole beneficial interest in the house, Mr. Palfrey being debited with £15,946.45, an amount well in excess of the prescribed limit. But if the claimants’ submission is correct, the position is very different. It is evident that there would be no market for Mr. Palfrey’s interest. Miss Palfrey, being no doubt content	to rely on her right of survivorship under the joint tenancy, has made it clear that she has no intention of buying it. Equally, no outsider would be willing to buy into a house whose occupation would have to be snared with her. Accordingly, Mr Palfrey’s interest would in all probability have to be brought into account at a nil value.

Before the wording of regulation 52 is considered it is necessary to refer to some provisions of the primary legislation and to other provisions of the General Regulations. Although the 1986 Act has been replaced by the Social Security Contributions and Benefits Act 1992, a consolidating statute, it is convenient to refer to the provisions of the earlier Act as if it were still in force. Section 22(1) provides that the applicable amount shall be such amount or the aggregate of such amounts as may be prescribed. Section 22(6) provides that no person shall be entitled to income support (or other income‑related benefits) if his capital or a prescribed part of it exceeds the prescribed amount. Subsections (8) and (9) of section 22 provide:
“(8)	Income and capital shall be calculated or estimated in such manner as may be prescribed.
(9)	Circumstances may be prescribed in which-
(a)	a person is treated as possessing capital or income which he does not possess;
(b)	capital or income which a person does possess is to be disregarded;
(c)	income is to be treated as capital;
(d)	capital is to be treated as income.”

Chapter VI of the General Regulations is headed “Capital”. At this stage I will refer only to such or its provisions as bear on the first question. Regulation 45 provides that for the purposes of section 22(6) of the 1986 Act, as it applies to income support, the prescribed amount is £8,000. Regulation 46 provides:
“(1)	For the purposes of Part II of the Act as it applies to income support, the capital of a claimant to be taken into account shall, subject to paragraph (2), be the whole of his capital calculated in accordance with this Part and any income treated as capital under regulation 48 (income treated as capital).
(2)	There shall be disregarded from the calculation of a claimant’s capital under paragraph (1) any capital, where applicable, specified in Schedule 10.”
Paragraph 1 of Schedule 10 provides that the dwelling occupied as the home (but only one dwelling) shall be disregarded.  Regulation 49 provides:
“Capital which a claimant possesses in the United Kingdom shall be calculated-
(a) 	except in the case to which sub‑paragraph (b) applies, at its current market or surrender value, less-
(i) 	where there would be expenses attributable to sale, ten per cent; and 
(ii) 	the amount of any income secured on it; 
(b) 	[National Savings Certificates].”

I turn to the wording of regulation 52. The condition of its application is that the claimant and one or more other persons are beneficially entitled in possession to a capital asset. The asset will usually, although not necessarily, be a freehold or leasehold property. In such a case the beneficial entitlement in possession may be either as joint tenants or as tenants in common and, in the latter case, in equal or unequal shares. The first effect of the regulation appears to be that a joint beneficial interest or a beneficial interest in an unequal share is to be treated as if it were a beneficial interest in an equal share. Although that might well work to the detriment of a claimant who was a tenant in common with less than an equal share, none of the claimants here is in that position and no argument has been advanced against the apparent effect of the regulation in that respect.

To return to Mr. Palfrey, the effect of regulation 52 thus far is to treat his joint beneficial interest in the house as a beneficial interest in a half share of the house. By reason of the severability of a joint tenancy that in itself is no detriment to 
Mr. Palfrey; likewise in the case of any other claimant with a joint beneficial interest. But that does not tell us how the interest is to be brought into account in the calculation of a claimant’s capital. In order to answer that question we must examine the crucial words:
“they shall be treated as if each of them were entitled in possession to the whole beneficial interest therein in an equal share.”
“Therein” means “in the capital asset”. So in the case of a freehold or leasehold property the persons beneficially entitled in possession are to be treated as if each of them (including the claimant) were (a) entitled in possession to the whole beneficial interest in the property (b) in an equal share.

What is the effect of this provision? The only entitlement known to the law where (a) and (b) above can coexist is a tenancy in common in equal shares, each tenant, while the property is undivided, being entitled to the whole in common with the other or others and, on its division, to an equal share. So it is clear that what regulation 52 requires to be brought into account is the claimant’s deemed (or actual) beneficial interest in an equal share. The regulation then provides that the preceding provisions of Chapter VI, in these cases regulation 49 (a), shall apply for the purposes of calculating the amount of capital claimant is treated as possessing. That means that his interest must be valued at its current market value, with the probable result that it will be given a nil value.

The appellants’ construction of regulation 52 requires the crucial words to be rewritten as follows:
“they shall be treated as if each of them were entitled in possession to an equal share of the value of the whole beneficial interest therein.”
But the crucial words as drawn have no concern for the beneficial interest as a whole, far less for its value. They are concerned only with the beneficial interest of each of the persons entitled. The appellants’ construction is quite simply not open to them on the wording.

For these reasons I would decide the first question in favour of the claimants. The second question is even shorter than the first. It arises only in the cases of McDonnell and Pelter, in each of which the claimant is, or is assumed to be, the owner of a property which is subject to a tenancy in favour of another. The question arises under regulation 46(2) and paragraph 5 of Schedule 10, which together provide that there shall be disregarded from the calculation of a claimant’s capital under regulation 46(1) “Any reversionary interest”. Mrs. McDonnell and Mr. Pelter contend, and the Commissioners who decided their cases have held, that their respective interests in the tenanted properties are reversionary interests and must be disregarded accordingly.

The following further provisions of the General Regulations are material to a decision of the second question. Regulation 48(4) provides:
“Except any income derived from capital disregarded under paragraph 1, 2, 4, 6, 12 or 25 to 28 of Schedule 10, any income derived from capital shall be treated as capital but only from the date it is normally due to be credited to the claimant’s account.”
By regulation 46(2) and the following further paragraphs of Schedule 10, there are also to be disregarded from the calculation of a claimant’s capital:
“11.	The value of the right to receive any income under an annuity and the surrender value (if any) of such an annuity.
...
13.	The value of the right to receive any income under a life interest or from a liferent.
...
24.	The value of the right to receive any rent.”

On this question it is helpful to refer at once to the decision of the tribunal of commissioners in McDonnell. They were faced with a decision of Mr. Commissioner Edwards‑Jones QC given on 18 October 1985, R(SB) 3/86, in which it had been held that a “reversionary interest” for the purposes of the comparable provision in the Supplementary Benefit (Resources) Regulations 1981 was “something which does not afford any present enjoyment but carries a vested or contingent right to enjoyment in the future”, a concept which did not include a reversionary interest tenanted property. That decision had been consistently followed by the social security Commissioners in England.	However, a Northern Ireland tribunal of two Commissioners in C71/91 (IS) had preferred to follow earlier decisions in that jurisdiction and had held that a reversionary	interest in tenanted property was a “reversionary interest” for the purposes of the identical provision in the Northern Ireland income support regulations.

In rejecting the submission of the appellants based on the decision in R(SB) 3/86, the Commissioners in McDonnell, said:
“So far as regards income support the capital value of the element of possession involved in a tenanted freehold is expressly excluded from valuation by regulation 24 of Schedule 10 which exempts the value of the right to receive any rent. (There was no comparable provision in supplementary benefit). The only capital value left in the tenanted freehold is purely reversionary.
The benefit of a capital disregard to persons who have a valuable asset which they are enjoying now has been granted by paragraph 13 of Schedule 10 to life interests, which as explained in decision R(SB) 43/84 are freely marketable. A similar capital disregard applies to annuities: see paragraph 11. These also are valuable and freely marketable.
In our judgment, there are no grounds for attributing a special or restricted meaning to the expression ‘reversionary interest’ in paragraph 5 of Schedule 10 and so far, at least, as regards income support decision R(SB) 3/86 should not be followed.”
Having said that there was no doubt at all that a freehold let to tenants was a reversion in the common and correct legal sense of the word and that there was no doubt that such a freehold was described as a reversion or reversionary interest for commercial purposes, the tribunal continued:
“The one point that is perhaps surprising is the treatment of the income of a reversionary interest. This is treated as capital as and when it is credited to the claimant’s account: see regulation 48(4). It is not treated as income: see paragraph 22 of Schedule 9. As the Commissioners in Northern Ireland pointed out in their decision if there is an absurdity in the scheme it lies in this treatment of the rent of a tenanted freehold.
We agree with the Commissioners in Northern Ireland. Any interest in a freehold which is subject to a lease or tenancy is, in our judgment, a “reversionary interest” in terms of paragraph 5 of Schedule 10.”

In argument in this court, Mr. Beloff QC, for the appellants, again relied on the decision in R(SB) 3/86. Having carefully considered that decision and Mr. Beloff’s other arguments, I am in full agreement with the commissioners in McDonnell that there are no grounds for attributing a special or restricted meaning to the expression “reversionary interest” in paragraph 5 of Schedule 10 to the General Regulations. Admittedly there is still the oddity of regulation 48 (4). But that is not a safe ground on which to proceed. The words of paragraph 5 are clear and further speculation is unhelpful.

For these reasons I would decide the second question, like the first, in favour of the claimants. The Commissioners came to a correct decision in each of the five cases.  I would therefore dismiss these appeals.

LORD JUSTICE HOBHOUSE: These appeals raise two questions of the construction of the Income Support (General) Regulations 1987. Like Lord Justice Nourse, I have not been persuaded by the arguments of the Appellants. Both questions concern the treatment of an applicant’s capital in the regulations. The power to make regulations is expressed in the widest terms both in the Social Security Act 1986 and in the consolidating Act, the Social Security Contributions and Benefits Act 1992. It suffices for the purposes of this Judgment to refer to the 1986 Act.

Section 20 provides for the making of prescribed schemes for three categories of income‑related benefits of which one is income support. Among the criteria for entitlement to income support is either that the person has no income or that any income which he does have does not exceed the applicable amount; where he has some income the amount of income support to which he is entitled is to be the difference between his income and the applicable amount.	Section 22(1), against the side‑heading “Calculation” provides:
“The applicable amount shall be such amount or the aggregate of such amounts as may be prescribed”.
Section 22 also provides:
“(5)	Where a person claiming an income related benefit is a member of a family, the income and capital of any member of that family shall, except in prescribed circumstances, be treated as the income and capital of that person.
(6)	No person shall be entitled to an income related benefit if his capital or a prescribed part of it exceeds the prescribed amount.
(7)	Regulations may provide that capital not exceeding the amount prescribed under subsection (6) above but exceeding a prescribed lower amount shall be treated, to a prescribed extent, as if it were income of a prescribed amount.
(8)	Income and capital shall be calculated or estimated in such a manner as may be prescribed.
(9)	Circumstances may be prescribed in which-
(a)	a person is treated as possessing capital or income which he does not possess;
(b)	capital or income which a person does possess is to be disregarded;
(c)	income is to be treated as capital;
(d)	capital is to be treated as income.”
From these provisions it is clear that the maker of regulations has a remarkable latitude. It is no doubt partly on account of this that the statute also laid down a consultation procedure that had to be followed before any subordinated legislation was introduced. The relevance of the possession or capital is that it may disqualify a person from eligibility for an income related benefit (s.22(6)) or that it may fall to be treated as income. Further, regulations may provide for the application of wholly artificial criteria. Situations which do not exist are liable to be treated as if they did; those which do exist are liable to be treated as if they did not. A person may be treated as if he possessed capital which he does not possess and vice versa.

Against this statutory background it is very difficult for a court to approach any question of the construction of the regulations on the basis that there is any intention that the regulations shall have, in their application, a relationship to reality or any identifiable statutory policy of justice. There is, therefore, in my judgment no escape from adopting a construction of the regulations which derives little, if any, assistance from anything other than the literal meaning of the actual language used. The detailed policy of the regulations is in many respects obscure and equivocal. The arguments which have been addressed to this Court have not enabled me to discern any clear principle which guides the drafting of the two provisions in the regulations which have given rise to the dispute before us. However I have been prepared to assume that there is an overall intention that income support should be paid, and only paid, to those who have inadequate financial means to support themselves; that ease of  administration of the scheme and the avoidance of complication are considerations which may have motivated those responsible for drafting the regulations; and that	the creation of artificial situations by means of deeming	provisions has not been adopted as an end in itself.

With this introduction I turn to the two questions which are	before this Court.

The first question: regulation 52.
Regulation 52 forms part of Chapter VI of the regulations “Capital”. Regulation 45 prescribes £8,000 as the limit to the amount of capital which an applicant can have. The following regulations deal with the calculation of the amount of capital possessed by an applicant including what is to be disregarded in that calculation, what income is to be treated as capital, and what “notional” capital a person is to be treated as possessing even though he does not possess it. The calculation of capital is primarily dealt with in regulation 49. (The calculation of capital outside the United Kingdom is dealt with in regulation 50.
“49. Capital which a claimant possesses in the United Kingdom shall be calculated-
(a)	except in a case to which sub‑paragraph (b) applies [National Savings Certificates] , at its current market or surrender value, less-
(i)	where there would be expenses attributable to sale, 10%; and
(ii)	the amount of any incumbrance secured on it.
...”
It can be observed from this (and indeed from the Act itself) that capital is being treated as something which the applicant “possesses” and the “amount” of which has to be “calculated”. The scheme of the drafting appears to be one of identifying what might be described as corporeal assets which are possessed by the applicant and can be quantified.

Regulation 52 has the sideheading “Capital jointly held”. It provides:
“Except where a claimant possesses capital which is disregarded under regulation 51(4) (notional capital), where a claimant and one or more persons are beneficially entitled in possession to any capital asset they shall be treated as if each of them were entitled in possession to the whole beneficial interest therein in an equal share and the foregoing provisions of this Chapter shall apply for the purpose of calculating the amount of capital which the claimant is treated as possessing as if it were actual capital which the claimant does possess.”
The reference to regulation 51(4) and the treatment of the assets of a company which is owned by the applicant either as sole proprietor or as a partner does not assist on the question with which we are concerned. Similarly, in my judgment, the concluding part of regulation 52 which contains a reference back to the “foregoing provisions of this Chapter” likewise does not assist. The question which we have to consider arises upon the attribution of capital contained in the central part of the regulation. The calculation of the amount of the attributed capital follows from the determination of what has to be attributed to the applicant.

The tenor of regulation 52 is that it is creating an artificial formula to govern the situation where a claimant and one or more other persons are beneficially entitled in possession to some capital asset. The use of the phrase “shall be treated as if” in two places in the regulation shows that it is deeming some situation to exist which does not in truth exist. It is also a reasonable inference that this is being done for the sake of simplicity of calculation. No other motivation has been suggested. The regulation potentially deals with a wide range of situations where some capital asset may be jointly held. The joint holders may be relations or may be friends or may be business associates. The assets involved may be chattels or real property or choses in action. The interest may be as owner or it may be some lesser possessory interest. The language used however, as I will point out, appears to be strongly influenced by the English law of real property and the problem addressed would seem only to exist in relation to some indivisible asset of which the most likely example would be real property.

The arguments on each side can be simply and attractively stated. For the Appellants it is said that the purpose is to provide a simple formula whereby potentially complicated investigations and contentious evaluation issues can be avoided and that with this intent the regulation provides that the applicant is to be deemed to have an equal share in the asset along with the other joint holders so that his share can be simply valued as a fraction of the value of the whole asset. The Appellants argue that the language is apt and appropriate to produce this result. For the Respondents it is said that the purpose is simplicity but not at the cost of making unrealistic assumptions that would treat the Applicant as possessing an amount of capital which he did not himself possess. The Respondents submit	that the language is directed to treating joint holders as if they were in every case tenants in common having	equal shares in the undivided whole so that the value of the deemed equal share of the applicant can be calculated on that simplified basis.

I consider that both arguments are plausible and must confess that, on this question, my mind has shifted. I do not accept the argument of the Respondents that the language used is inappropriate to achieve the result contended for by the Appellants. Also, once one assumes, as one must, that the draftsman of the regulation intends to create an artificial situation which does not necessarily conform to the true facts, there is no rational objection to concluding that the intention of the draftsman was as contended for by the Appellants.

However what has in the outcome caused me to arrive at the contrary conclusion and reject the Appellants’ construction is that the draftsman has chosen language which, it seems to me, must have been specifically directed to the creation of a deemed tenancy in common. The language used in this regulation, as in other parts of the regulations, appears to me to be strongly influenced by the English law of real property. The relevant words are:
“They shall be treated as if each of them were entitled in possession to the whole beneficial interest therein in an equal share”.
The inclusion of the word “whole” connotes that the shares are to be undivided; it is a single property which has not yet been divided among them. The phrase “in an equal share” is one of the well established phrases which have been held to be apt to create a tenancy in common. Similarly, the inclusion of the words “each of them” would seem to be directed to ensuring that all the owners are to be assumed to be tenants in common. If this is the intent of the language which has been used it results in joint interests which are deemed to be severed and to be equal to one another but still to be interests in an undivided whole. This conclusion gives full effect to the language used and arrives at a conclusion which is less extreme in its artificiality than that contended for by the Appellants. In my judgment the Respondents’ construction is the one which is to be preferred on the language	used.

I am confirmed in this conclusion by a consideration of the situations likely to be affected. Where the asset is easily divisible as, for example, the credit balance in a joint bank account or a joint shareholding there is no difficulty in applying the regulation and no practical difference between the construction contended for by either side. The only puzzle in such a situation is why the shares should be deemed to be equal and the true entitlement not used. The problem only arises, and the arguments only produce different results, where the asset is indivisible. It is in this context, and having regard to the act that the most likely asset in this category will be real property, that the construction contended for by the Respondents becomes compelling.

Where the property is a dwelling house, the resultant situation will be as described by Denning LJ in Bull v. Bull [1955] 1 QB 234 at 237. In that case a mother and her married son had purchased a house in which the mother and the son and his	wife were to live. The house was conveyed into the name of the son alone. After a while the mother and her daughter‑in‑law quarrelled and the son sought to evict his mother from the house. Denning LJ said:
“The son is, of course, the legal owner of the house; but the mother and son are, I think, equitable tenants in common. Each is entitled in equity to an undivided share in the house, the share of each being in proportion to his or her respective contribution. The rights of equitable tenants in common as between themselves have never, so far as I know, been defined; but there is plenty of authority about the rights of legal owners in common. Each of them is entitled to the possession of the land and to the use and enjoyment of it in a proper manner. Neither can turn out the other; but if one of them should take more than his proper share the injured party can bring an action for an account. If one of them should go so far as to oust the other he is guilty of a trespass: See Jacobs v. Seward [1872] LR 5 HL 464. Such being the rights	of legal tenants in common, I think that the rights of equitable owners in common are the same, save for any such differences as are necessarily consequent on the interests being equitable and not legal.
...
My conclusion, therefore, is that when there are two equitable tenants in common, then, until the place is sold, each of them is entitled concurrently with the other to the possession of the land and to the use and enjoyment of it in a proper manner; and that neither of them is entitled to turn out the other.
...
In this situation if the [statutory] trustees wished to sell with vacant possession the only thing they could do would be to apply to the Court under section	30 of the Law of Property Act 1925 on the ground that the mothers consent could not be obtained.”
How the Court should exercise its discretion under section 30 was considered in Jones v. Challenger [1961] 1 QB 176 where Devlin LJ said:
“... in a trust for sale there is a duty to sell and a power to postpone; and, accordingly, one trustee may call upon the others to perform the duty, but all must be agreed if they are to exercise the power. But this simple principle cannot prevail where the trust itself or the circumstances in which it was made show that there was a secondary or collateral object besides that of sale.”
Devlin LJ treated the case of Bull v. Bull as illustrating this principle:
“The house was bought for the purpose of providing a home for mother and son and that, as the mother was still residing there, that purpose had not been brought to an end.” (p.182)
By contrast where the purpose has been superseded or the purpose  was simply profit, then, in principle, no obstacle to ordering a sale exists. 

I have made these citations to illustrate that in many cases no problem will arise in the identification and quantification of the deemed asset of the applicant and, in cases where further investigation is required, there are, in English law, established reference points against which the quantification exercise can be carried out. The Appellants were not right to argue that it was impossible or even disproportionately difficult to calculate the amount of the capital which the claimant is deemed to possess as a tenant in common. Where the capital asset is a jointly owned dwelling house held for the purpose of accommodating the joint owners and that purpose is still subsisting, there is nothing obscure or abstruse in the conclusion that the amount of capital which the applicant’s joint possession of that dwelling house represents may fall, for the time being, to be quantified in a nominal amount.

For these reasons I would answer the first question in the sense contended for by the Respondents. Accordingly it is not necessary for me to express any view about the alternative ultra vires argument relied upon by the Respondents.

The second question: Schedule 10, paragraph 5.
This is a short point of statutory construction upon which there is little that I wish to add to what has already been said by Lord Justice Nourse. The language is plain “Any reversionary interest”. The argument of the Appellants inevitably involves ignoring the actual words used and substituting for them different words such as “any future interest” or “any contingent interest”. In my judgment, however preferable one might think that the words suggested by the Appellants might be, it is not the function of this Court, nor is it the function of the social security Commissioners, to revise or redraft the regulations. That is the function of the Legislature and those to whom the task of making to subordinate legislation has been delegated.

It has not been argued by either side before us that importance should be attached to the use of the word “interest” as opposed to the phrase “estate or interest”. The argument has focused upon the word “reversionary”. Once one treats the word interest as wide enough to embrace an estate in land, the archetypical example of a reversionary interest or estate is that of a free‑holder in reversion. In the context of this legislation which places an emphasis on the possession of the capital asset, a tenancy is again one of the clearest examples where the possession of the asset has for the duration of the term been transferred to another. The hallmark of a tenancy is that the tenant has been granted the exclusive possession of the demised property. Further, as was helpfully pointed out by Mr. Drabble, the interests of a landlord can be categorised as the right to receive rent during the currency of the term and the right to recover the possession of the property at the conclusion of the term. The latter right would appear to be covered by paragraph 5 and the former by paragraph 24 of the Schedule “The value of the right to receive any rent”. The effect of these two paragraphs in conjunction with regulations 46 and 48 is that the capital asset itself is to be disregarded but the income derived from the capital asset shall be treated as capital. This strongly confirms the natural and obvious meaning of paragraph 5 of the Schedule. In my judgment the Appellants’ arguments on the second question must be rejected.

Conclusion:  The appeals should be dismissed.

SIR RALPH GIBSON:  I agree that	these appeals should be dismissed.

Regulation 52
The context in which regulation 52 appears in the Income Support (General) Regulations 1987, which were made under the Social Security Act 1986, has been set out in the judgments of Nourse LJ and Hobhouse LJ.

It was submitted for the appellants by Mr. Beloff that the correct construction of regulation 52 requires, first, that the valuation of the whole beneficial interest in the capital asset be carried out, and that, then, that value be divided in equal parts so that the claimant is treated as if he were entitled in possession to one of those parts. That construction was contrasted by Mr. Beloff with the alternative but wrong construction, accepted by the Commissioners, namely that which would require valuation of an equal undivided share in the asset.

The main reasons advanced in support of that submission included:
(1)  	Regulation 52 expressly provides that each of the entitled persons shall be treated as though they were entitled to the whole beneficial interest; and therefore, consistently with regulation 49, division is something which follows upon that assumption.
(2) 	If division should precede valuation, it would be “almost impossible” to value the beneficial interest. If it had been intended that division should precede valuation, detailed machinery for carrying out the valuation would have been provided in the legislation.
(3)	It should be assumed in this legislation that Parliament legislated for simplicity rather than complexity; reference was made to Shah [1982] QB 688, 1983 AC 347.

I have found this issue of construction. to be difficult. The wording of the  regulation is consistent with the meaning for which	the appellants have contended, but it is also consistent with the meaning given to it by the decision of the Commissioners. The issue must be decided by reference to the legislative context in which the regulation appears.

I am not convinced by the contention that assistance can be derived from the idea that the wording of regulation 52 as a whole is particularly directed at treating joint tenants as tenants in common. The regulation applies “where a claimant and one or more persons are beneficially entitled in possession to any capital asset”. There is no limitation upon the meaning of the words “any capital asset”, they include, but are not limited to, real property such as a dwelling house. The words apply to money, to shares in a company, and to an enforceable claim. The wording was presumably devised to apply aptly to all the forms of “capital asset” to which persons may be beneficially entitled.

Nor am I convinced by the contention that there would be anything	surprising or extreme in the enactment of a provision having the effect contended for by the appellants. Possession of capital of which the value	exceeds the prescribed amount  deprives the claimant of any right to any income related benefit: section 22(6). Express power is given by section 22(9) by regulations to prescribe circumstances in which inter alia a person is treated as possessing capital or income which he does not possess. The reasons for the creation of such a power must include the perceived need for simplifying the factual issues required to be decided by those engaged in administration of the scheme. Parliament provided by regulation 52 that the adjudication officer should not be required to determine the actual amount of the beneficial entitlement in any capital asset of a claimant where the claimant owns that asset with one or more other persons. He is to treat the claimant and the other owner or owners as if each is entitled to an equal share. No doubt it was thought that in most cases such presumption of equality would work no or little unfairness and would preclude self serving oral evidence designed to diminish a claimant’s share. For similar reasons, Parliament might well reasonably accept the need, in the interest of simplification, for providing that the claimant’s interest in the capital asset be treated as an equal share in the market value of the whole asset, without regard to whether or not one or more other persons would, or effectively could, object to or prevent the realisation of the capital asset.

Nevertheless, in the end I have reached the conclusion that the appellants’ case on the meaning of regulation 52 should be rejected. Regulation 52 does not expressly provide that the division into equal shares shall follow upon the presumption of equality and after valuation of the capital asset. The wording of regulation 52 could have dealt thus with valuation, and with the basis upon which the valuation is to be conducted, as clearly as the wording deals with the presumption of equality. It is safer, in my judgment, in the context of this legislation to proceed upon the basis that, where Parliament intends that an applicant shall be excluded from benefit because he is to be treated as possessing capital, or capital of a particular value, which he does not or may not in fact possess, clear language will be used to express that intention. To the extent that the wording of the provision is consistent with an applicant being treated as possessing what he does possess, or with the applicant being treated as possessing a capital asset having the real value of that asset at the material time rather than a larger value which in his hands it does not have, to that extent the provision should be construed as requiring or permitting the applicant to be treated in accordance with the true facts.

If such a construction is seen to impose unacceptable burdens upon the administration of the scheme, or to increase unacceptably the burden upon the taxpayer, Parliament may be invited to approve such amendment of the scheme as may be thought to be necessary.

Paragraph 5 of Schedule 10.
The wording of this provision and the context in which it appears have been set out by my Lords. 

The main submissions for the appellants as advanced by Mr. Beloff on this part of the case were as follows:
(1)	The decision of the Commissioners in R(SB) 3/86 was correct i.e. that the term “reversionary interest” as used in the schedule has an everyday meaning which is to be found in the Shorter Oxford English Dictionary, namely “the right of succeeding to the possession of something after another is done with it, or simply of obtaining it at some future time; a thing or possession which one expects to obtain”; that the key to the true meaning of the words “in the context” is in “the concept of a reversionary interest as something which does not afford any present enjoyment but carries a vested or contingent right to enjoyment in the future”; and that the interest of the landlord in a freehold	property let on a tenancy is not or is not merely such an interest.
(2)	The decision of the Commissioners under appeal involves giving the benefit of a “disregard” to someone who has a valuable asset which they are presently enjoying and can sell. 

In general, under this statutory scheme, if a claimant has a capital asset of a value in excess of the prescribed limit, which is not disregarded, he is excluded from income support. He is expected to sell it, or to raise money upon it, in order to get money on which to live. Many of the capital assets which are expressly disregarded are of such a nature that it is obvious what reasons of policy caused such asset to be disregarded: for example, paragraph 1 of the Schedule refers to “the dwelling occupied as the home” but only one dwelling may be disregarded under that paragraph. Similarly, premises acquired for occupation as a home will be disregarded for such period as is reasonable to enable the claimant to obtain possession and commence occupation. It has been suggested that a discernible policy upon which some capital assets are disregarded is the encouragement of thrift.

The main difficulty which I have felt in accepting that paragraph 5 was intended to cause to be disregarded any premises let on tenancy is, as submitted by Mr. Beloff, that it is impossible to perceive any reason why possession of a property, worth £50,000 in the market, which is not to be disregarded because occupied as a home, should exclude a claimant from benefit as a capital asset, but should be entirely disregarded as a capital asset when let on a tenancy. From what might have been expected to be the policy of Parliament, having regard to the general provisions of the scheme as enacted, it seemed more probable to me that the intention would have been by the words of paragraph 5 of Schedule 10 to disregard not all premises let on a tenancy but only an interest which the claimant does not yet possess and which he will or may possess at some future date.

That difficulty, as it seemed to me, was increased by the wording of the provision that income derived from capital shall be treated not as income but as capital. A freehold property, not occupied as home, but let at a rent, is, if the decision of the Commissioners is right, to be disregarded as capital although capable of sale and the rent reserved is treated not as income but as capital by reason of regulation 48(4). But that provision is itself disapplied in the case of those sorts of capital asset which are disregarded under paragraphs 1, 2, 4, 6, 12 and 25 to 28 of Schedule 10.

For example, by paragraph 26 where a claimant has premises which he is taking reasonable steps to dispose of, such premises are disregarded as a capital asset for a period of 26 weeks, or for such longer period as is reasonable in the circumstances to enable him to dispose of them. If such a claimant happens to let those premises during that time, the rent is “income derived from capital” and would itself be treated as capital under regulation 48(4). The specific disapplication, however, means that while the asset is disregarded under regulation 26 the rent would be treated as income, but would, apparently, be treated as capital when the provisions of paragraph 26 cease to apply.

Mr. Beloff, however, did not argue that any clear policy for the disregarding of capital assets could be seen from the terms of the schedule as a whole with which it would be inconsistent to disregard a landlord’s interest in the freehold property let on a tenancy. In particular, it was not argued by Mr. Beloff that to include such an interest within the meaning of “any reversionary interest” would cause clear conflict with any other express provision in the regulations or in the Schedule; nor was it argued that any other such provision clearly showed that the draftsman had apparently not supposed that “any reversionary interest” included any freehold let on tenancy. In my judgment, Mr. Beloff was right because no such arguments would be sustained.

For my part, I have found it impossible to perceive any consistent policy for the disregarding of capital assets set out in the 43 paragraphs of Schedule 10 by reference to which any clear assistance can be derived upon the meaning of paragraph 5. It is apparent from the print of the regulations provided to us that the relevant form of the Schedule is the result of amendments, by deletion and addition, made by some 19 separate Statutory Instruments in the years 1988 to 1993. The nature of the subject matter of the regulations, and of this Schedule in particular, no doubt gives rise to serious difficulties in achieving a just uniformity of decision throughout the administration of income related benefits and, no doubt, such difficulties are most speedily solved by additional specific provisions. It has not been argued that any assistance can be derived from consideration of the original unamended form of the Schedule or in the sequence of amendments to it.

I am not confident that I have correctly understood what the intention of Parliament was in the enactment of paragraph 5 of the 10th Schedule. I have reached the conclusion that the words are apparently apt to apply to freehold premises let on tenancy and there is no sufficient reason to be found in the statutory context for holding that the words do not extend to that meaning.

Order: appeals dismissed with costs; legal aid taxation; leave to appeal to the House of  Lords refused.