TU v Secretary of State for Work and Pensions
Appeal No. UA-2025-001640-UHC
RULE 14 Order: No person may publish or disclose the name of the Appellant, or anything likely to identify the Appellant, without permission of the Upper Tribunal. Failure to comply with this order may be treated as a contempt of court.
IN THE UPPER TRIBUNAL
ADMINISTRATIVE APPEALS CHAMBER
Between:
TU
Appellant
- v -
SECRETARY OF STATE FOR WORK AND PENSIONS
Respondent
Before:
Decided on consideration of the papers
Representation:
Appellant:
Joshua Lake, Southern England Law CentreRespondent:
Uroosa Ali, DMA LeedsOn appeal from:
Tribunal:
First-tier Tribunal (Social Entitlement Chamber)Judge/Panel:
Judge C TwydellTribunal Case No:
1705669337873408Tribunal Venue:
SouthendDecision Date:
12 March 2025The decision of the Upper Tribunal is to allow the appeal. The decision of the First-tier Tribunal involved errors of law. Under section 12(2)(a) and (b)(i) of the Tribunals, Courts and Enforcement Act 2007, I set that decision aside and remit the case to be reconsidered by a fresh tribunal in accordance with the following directions.
DIRECTIONS
This case is remitted to the First-tier Tribunal for reconsideration at an oral hearing.
The new First-tier Tribunal should not involve the tribunal judge who previously determined the appeal.
This decision, and the parties’ submissions in relation to this appeal, must be placed before the new First-tier Tribunal.
The new First-tier Tribunal is not bound in any way by the decision of the previous tribunal. Depending on the findings of fact it makes, the new tribunal may reach the same or a different outcome to the previous tribunal.
These Directions may be supplemented by later directions by a Tribunal Caseworker, Tribunal Registrar or Judge in the Social Entitlement Chamber of the First-tier Tribunal.
REASONS FOR DECISION
Introduction
The appellant appeals against the First-tier Tribunal’s decision of 12 March 2025 refusing the appellant’s appeal against the decision of the Secretary of State of 8 January 2024 that the appellant was not entitled to the Housing Cost Element (HCE) of Universal Credit (UC) under Part 1 of the Welfare Reform Act 2012 (WRA 2012) and regulation 25 of The Universal Credit Regulations 2013 (SI 2013/376) (the UC Regulations).
The appeal was made late, but I extended time for admitting the appeal and granted permission to appeal in a notice sent to the parties on 16 January 2026.
The Secretary of State has responded to the appeal. He supports the appeal. Both parties invite me to make a decision on the papers and I am satisfied that it is appropriate to do so, given the nature of the appeal and the parties’ agreement to that course.
Legal framework
By section 11 of the Welfare Reform Act 2012 (the 2012 Act), the HCE element of UC is “an amount in respect of any liability of a claimant to make payments in respect of the accommodation they occupy as their home”. What is meant by this is defined in regulation 25 of The Universal Credit Regulations 2013/376: the payment condition (reg 25(2)), the liability condition (reg 25(3)) and the occupation condition (reg 25(4)). The liability condition stipulates that the claimant must have a liability to make the payments on a commercial basis (reg 25(3)(a)(i)), further provision in respect of which is made by Schedule 2.
Under section 12 of the Tribunals, Courts and Enforcement Act 2007 (TCEA 2007), the Upper Tribunal may only allow an appeal if the decision of the First-tier Tribunal involved the making of a material error on a point of law. Errors of law include misunderstanding or misapplying the law, taking into account irrelevant factors or failing to take into account relevant factors, committing or permitting a procedural or other irregularity capable of making a material difference to the outcome or the fairness of the proceedings or failing to give adequate reasons for a decision. An error of fact is not an error of law unless the First-tier Tribunal’s conclusion on the facts is perverse. That is a high threshold: it means that the conclusion must be irrational or wholly unsupported by the evidence. An appeal to the Upper Tribunal is not an opportunity to re-argue the case on its merits. These principles are set out in many cases, including R (Iran) v SSHD [2005] EWCA Civ 982 (Iran) at [9]-[13].
Background and the First-tier Tribunal’s decision
The appellant has a brain injury as a result of a traumatic accident in 2020, which affects his cognitive processing.
The appellant’s application for HCE was refused by the Secretary of State on 8 January 2024, essentially because the appellant does not have a written tenancy agreement so the Secretary of State considered the agreement was not commercial. That decision was upheld on mandatory reconsideration.
The First-tier Tribunal heard the appellant’s appeal on 12 March 2025. This was the second hearing, the previous one having been adjourned because the First-tier Tribunal considered the appellant had not understood that he needed to bring additional evidence to the hearing, and because the First-tier Tribunal considered a Presenting Officer for the Secretary of State should have attended.
At the hearing on 12 March 2025, the appellant brought additional evidence including bank statements, but no Presenting Officer attended from the Secretary of State.
The First-tier Tribunal refused his appeal, providing the appellant with a decision notice as follows:
The appeal is refused.
The decision made by the Secretary of State on 08/01/2024 is confirmed.
The appellant has not provided sufficient evidence to meet all three of the conditions that would allow him the Housing Cost Element of Universal Credit.
The appellant has not satisfied the legal criteria for an award of the Housing Cost Element of Universal Credit.
This has been a remote hearing in the form of a video hearing. … the appellant attended and the Tribunal considered the appeal bundle to page V208. First Tier Agency representative did not attend.
The appellant did not request a statement of reasons until after the three-month time limit for such a request had expired and the request was refused. The First-tier Tribunal also refused permission to appeal (before any application had been made by the appellant).
The appeal to the Upper Tribunal
Following the refusal of his request for a statement of reasons, the appellant obtained help from his current representative, who requested a record of the hearing and, following receipt of that, made a (late) application to the Upper Tribunal for permission to appeal. There are three grounds of appeal, which I summarise as follows:
Ground 1 – The Tribunal erred in regarding the absence of a written tenancy agreement as determinative of the appeal;
Ground 2 – The Tribunal failed to make sufficient adjustments during the hearing for the effects of the appellant’s brain injury;
Ground 3 – The First-tier Tribunal erred in refusing to provide a statement of reasons.
In granting permission to appeal, I observed as follows:
The lack of a statement of reasons in this case evidently makes it difficult to assess the merits of the appeal. I have considered whether to order the Tribunal to produce written reasons late, but my provisional view is that there would be a significant risk, given the delay, that the Tribunal’s reasons would constitute post-hoc justification rather than representing the Tribunal’s actual thinking at the time it took the decision. It may, however, be necessary for me to give such a direction before the appeal can be finally determined. The parties’ representations on that are invited.
I am, however, satisfied on the basis of the representative’s submissions, and the account of the hearing, that it is arguable that the Tribunal erred in the respects set out in the grounds, in particular that it is arguable that the hearing was not fairly conducted or that the Tribunal erroneously regarded the absence of a written tenancy agreement as being fatal to the claim for HCE.
In responding to the appeal, the Secretary of State agreed that there was no point in directing a statement of reasons in this case, and submitted that the Upper Tribunal could be satisfied on the basis of the material before it that the First-tier Tribunal had erred in law as alleged in grounds 1 and 2.
Why I am allowing the appeal
Ground 1
There is no requirement in law for a tenancy agreement to be in writing, a tenancy agreement may be oral: see, for example, SG v Epping Forest DC (HB) [2011] UKUT 41 (AAC), at paragraphs 47-54. If there is an oral agreement, then whether the agreement is commercial needs to be assessed applying the guidance in R(H) 1/03, at paragraphs 15-21. In particular:
‘21. Whether or not an arrangement is on a commercial basis is,
in the useful phrase of Jessel MR in Erichsen v. Last (1881) 8
Queen’s Bench Division 414 at page 416, ‘a compound fact
made up of a variety of things.’ The proper approach to that type
of fact is to begin by finding the constituent facts. The tribunal
must begin with an investigation into all aspects of the
arrangement on which the claim is based. The authorities
indicate in general terms the subject matter for the inquiry. They
also give some more detailed suggestions that may be relevant
in particular types of case. Having made its inquiry, the tribunal
must make and record findings of constituent fact on all relevant
matters. Those findings provide the foundation for a finding on
the compound fact: was the arrangement on a commercial
basis?’
Because there is no statement of reasons in this case, I have to assess whether there has been an error of law on the basis of the decision notice and the record of the hearing.
The decision notice contains insufficient by way of reasons to explain why the appeal was dismissed. That is not a criticism of the decision notice because it is not the function of a decision notice to contain the reasons for the decision, but it does mean that there is nothing in the decision notice that can be relied on to show that the First-tier Tribunal did not make an error of law.
I proceed on the general assumption that the requirements for the HCE of UC are requirements with which First-tier Tribunal judges are very familiar and that in the ordinary course I can expect the judge to have properly directed themselves. However, I also recognise that it is perhaps not well known that a tenancy agreement may be oral, and the Secretary of State’s decision in this case was based on the absence of a written tenancy agreement without acknowledgement that there could be an oral agreement.
It is therefore appropriate to look to the record of the hearing in order to assess whether the judge was conscious of the need to make careful findings of fact about the nature of the agreement between the appellant and his landlord. The appellant relies on a passage at 35 minutes into the hearing where the judge said that: “Because, if you think about it Mr [TU], which I’m sure you have, if you were in arrears with your rent, there’s two options the landlords got, either he just accepts that in which case it wouldn’t be a commercial rent or commercial arrangement, if he didn’t accept it and wanted to take you to court for non-payment, he wouldn’t- he would have difficulty because there’s no proper legal arrangement in place between you”.
I agree with the parties that this passage suggests that the judge considered that the fact that a landlord does not seek to evict in response to rent arrears, or that there is not a written agreement, inevitably means that any agreement is not commercial. These are evidently factors that point towards the agreement not being commercial, but they are not determinative. They were factors to be considered in combination with findings of fact about the arrangements and relationship between the appellant and his landlord. There are no such findings in this case.
Applying the balance of probabilities, I am satisfied that the First-tier Tribunal did err in law in this case as alleged in Ground 1.
Ground 2
I am further satisfied that the First-tier Tribunal did not make sufficient allowance for the appellant’s cognitive difficulties in this case. It is apparent from the record of the hearing that the appellant did not have the same bundle as the judge. The judge had a digital bundle, while the appellant had loose papers, which he dropped on the floor during the hearing and was struggling to organise. The appellant also said on at least four occasions during the hearing that he did not understand the process or was not prepared for the hearing.
The judge did make some effort to address these matters, but my impression is that the judge did not consider the bundle or the matters about which the appellant was confused were going to make a difference to the outcome. This seems to me to be principally because of the error I have identified under Ground 1.
Again, applying the balance of probabilities, I am satisfied that there was a failure to make sufficient adjustments for the appellant and this failure was material as it contributed to the failure identified under Ground 1.
Conclusion
I am therefore satisfied that the decision of the First-tier Tribunal involved errors of law and I set that decision aside and remit the case for a fresh hearing. It will be important that this decision, and the parties’ submissions in relation to this appeal, should be put before the new First-tier Tribunal at the hearing.
The appellant should also note that, although this appeal has succeeded, in future he must make a request for a statement of reasons in time, and adhere to time limits for appealing if necessary. The Upper Tribunal will not always grant extensions of time to admit appeals in circumstances such as arose in this case.
Rule 14
The Upper Tribunal’s practice of using an appellant’s initials rather than their names on published final decisions has recently ceased: see
Authorised by the Judge for issue on 29 April 2026