IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE SOCIAL SECURITY COMMISSIONERS
(COMMISSIONER EDWARD JACOBS)
Royal Courts of Justice
Strand, London WC2A 2LL
B e f o r e :
LORD JUSTICE SEDLEY
MR JUSTICE RICHARDS
| STEPHANIE MORRELL||Appellant|
|- and -|
|THE SECRETARY OF STATE |
FOR WORK AND PENSIONS
MISS ELISABETH LAING (instructed by Department of Work & Pensions Legal Services) appeared for the respondent.
Hearing date: Monday 31 March 2003
Crown Copyright ©
"1. Having considered all the evidence in the papers, together with [Commissioners' decisions] R(SB) 9/85 and R(SB) 3/90. The Tribunal accepts that the Appellant misrepresented the material fact that she was receiving an income from a third party when completing review forms on 14.9.95, 24.10.95, 27.4.98, and 6.1.99.
2. The Tribunal does not accept that it was reasonable for Ms Morrell to believe that 'no' was the correct answer to the question asking if anyone paid money to someone else on her behalf. Clearly the Appellant's mother was paying the full amount of her rent. The Tribunal find that this positive and deliberate action (R(SB) 9/85) resulted in Income Support being paid which would not have been paid but for the misrepresentation.
3. The Tribunal also find that there was a period during which official error caused overpayment to be made but this was followed by a further period of misrepresentation notwithstanding the earlier disclosure (R(SB) 3/90).
4. The Tribunal to the issue before it accepted the provisions of various Acts and Regulations referred to by the Adjudication Officer in his submissions as relevant."
"7. The tribunal found that the loans made by the claimant's mother were income. It was entitled to make that finding.
8. A loan is not necessarily income. It may be no more than a one off payment or one of a few instalments. That explains why a student's loan has to be treated as income in the legislation and why paragraph 30 of Schedule 9 to the Income Support (General) Regulations 1987 uses the word 'payment'.
9. Whether the claimant is receiving income has to be judged by reference to the normal meaning of that word.
9.1 It obviously means money, or the equivalent, that is coming to the claimant. It need not come directly to the claimant. It is sufficient if it is paid to someone else on her behalf. So, it does not matter whether her mother paid the money to her or paid it for convenience to the landlord.
9.2 A further requirement is that it must be recurring. In this case it was paid regularly each month for a number of years.
9.3 Also in this case, its payment was predictable and the amount was known or ascertainable in advance. Those are not, perhaps, essential features of income. But they reinforce the classification of the mother's payments as such.
10. There is authority that money that a claimant is liable to repay does not count as income: see the Court of Appeal decision in Leeves v Chief Adjudication Officer reported as R(IS) 5/99. However, the principle laid down by that case only covers money which is subject to an immediate obligation to repay. The money was not immediately repayable in this case. I have no doubt that the mother was accurately recording what was agreed when she wrote: 'I expect to be reimbursed gradually as her problems decrease'."
"14. I reject that argument. The flaw in it is obvious. The failure by the Department to act on the information in 1997 was a mistake. It broke the chain of causation when it was received, but when the claimant repeated her misrepresentation on later review forms, she again became one of the causes of the overpayment.
15. In holding that the claimant was one of the causes of the overpayment for 1998 to 1999, the tribunal relied on the decision of Mr Commissioner Goodman in R(SB) 3/90. The Secretary of State submits that the decision does not apply, because it only decided that disclosure on an earlier claim form is irrelevant if the claimant repeats a misrepresentation on a later claim. The Secretary of State then argues that the overpayment for 1998 to 1999 was not recoverable, because the review forms were all completed on the same claim.
16. The Secretary of State's submission correctly identifies the facts of R(SB) 3/90. But I do not accept that the principle is limited as the Secretary of State submits. The claimant was required to complete a review form in order to provide an up-to-date and accurate statement of her circumstances. When it was received, the Department was entitled to rely on it as precisely that. In so far as it reported something different from what the Department had previously been told, the Department was entitled to rely on it as being the most recent statement. Even if Mr Commissioner Goodman's decision is not authority for that proposition, it can nonetheless be derived from basic principle. It is, after all, not necessary that the claimant should be the sole cause of the overpayment: see the decision of the Court of Appeal in Duggan v Chief Adjudication Officer, reported with R(SB) 13/89.
17. So, I reject the Secretary of State's arguments (a) that the tribunal went wrong in law on the second period of overpayment and (b) that that overpayment is not recoverable."
"18. The tribunal's reasons for decision were very short given the detailed arguments put by the claimant's legal representative. The claimant was entitled to better reasons. The issue for me is: are the reasons adequate? The answer is: yes, but only just. Even if they were inadequate, the tribunal came to the correct decision in law. If I had found its decision wrong in law for containing adequate reasons, I would nonetheless have substituted my own decision in the same terms."
(1) Whether the loans were income
"(1) Capital which is payable by instalments which are outstanding on
(a) the first day in respect of which income support is payable or the date of the determination of the claim, whichever is earlier; or
(b) in the case of a supersession the date of that supersession,
shall be treated as income if the aggregate of the instalments outstanding and the amount of the claimant's capital otherwise calculated in accordance with Chapter VI of this Part exceeds £8,000
(2) Any payment received under an annuity shall be treated as income ."
" Thus, the question of whether, as at the date of their notional payment, the weekly sums are income in the hands of the claimant, falls to be decided on the basis of ordinary notions as to the nature of income.
In that respect I consider that, in the absence of statutory definition to the contrary, or some compelling contrary indication arising from the scheme of the Act, (a) moneys received by way of grant towards maintenance which are not repayable are plainly in the nature of income (other than earnings) whereas (b) moneys accruing, or required to be treated as received or accruing, under a certain obligation of immediate repayment (i.e. an equivalent debt) do not amount to income . Thus, the question to be determined is whether, at the time of the original adjudication, the claimant was under a certain and immediate liability to repay in respect of the notional weekly payments to be taken into account" (page 98B-D).
"In my view, it can properly be said that, when the payment was made on 15 November, it was a resource for each of the next four weeks, that is until the next payment was made on 15 December. It remained income, albeit that there was an obligation to repay at some future date when the strike was over. It remained as a resource for each of the next four weeks. It started as a resource for each of those four weeks, and the fact of a strike with a consequential obligation to repay at some future date did not alter the fact that it was a resource for each of the four weeks."
"I consider that, on the position as it stood prior to 24 May 1995, the adjudication officer was correct in deciding that the grant fell to be treated as income of the claimant. Such potential obligation to repay as existed following abandonment did not give rise to an immediate liability. The power of the Hampshire County Council [to require repayment] under reg. 15 of the 1993 regulations could not be exercised before consultation with the education authority and in any event was framed in discretionary terms. While in this case there was no substantial reason to doubt that the discretion to call for repayment would be exercised, it was not clear how long it would be before the claimant was called on to repay, nor was it certain precisely what sum or over what period he would be required to pay. The wording of the undertaking appears to have been framed to reflect that position ('such sum as may be determined by the County Treasurer to have been paid') and did not in my view itself create a certain and immediate (i.e. crystallised) obligation of payment of the kind which [counsel for the claimant] concedes he must demonstrate.
On the other hand, it seems plain to me that, following demand made by the Hampshire County Council in its letter of 24 May 1995, at which point the claimant became under an obligation of immediate repayment in respect of his grant, that part of the claimant's grant required to be taken into account over the weeks which followed under reg. 29 thereby lost its character of 'income' on any ordinary understanding of the word" (page 100D-G).
"We believe that all the draftsman of the regulations was concerned to secure was that receipts which would in a colloquial sense, be regarded as part of a person's income, should not escape from consideration in the assessment of legal aid entitlement by reason only that they were receivable qua 'benefits and privileges' and not by legal right. An example which springs to mind is a periodic allowance made by a parent to an adult son, other than under covenant, to provide for or assist in the son's maintenance.
The essential feature, in our judgment, of receipts by way of income is that they display an element of periodic recurrence. Income cannot include ad hoc receipts .
Beyond stating this general principle of discrimination it is unnecessary and probably undesirable for the court to go further in considering the broad categories of gifts and loans. Some gifts are clearly capable of forming part of a person's income. It is difficult to visualise a basis for the periodically recurrent receipt of loans to qualify as income, which is likely to be encountered in practice, but it is certainly unnecessary to decide in the present case that loans per se cannot in any circumstances be received as income" (page 717).
(2) Whether overpayments were made in consequence of misrepresentations
"Where it is determined that, whether fraudulently or otherwise, any person has misrepresented, or failed to disclose, any material fact and in consequence of the misrepresentation or failure
(a) a payment has been made in respect of a benefit to which this section applies
the Secretary of State shall be entitled to recover the amount of any payment which he would not have made but for the misrepresentation or failure to disclose."
"The wrong assumption by the Adjudication Officer may in certain circumstances have been a cause of the overpayment, but it does not follow that it was the sole cause. As a matter of common-sense, which questions of causation always are, if one poses the question: did the failure of the claimant to disclose the fact that his wife was in receipt of unemployment benefit have as at least one of its consequences the overpayment of the supplementary benefit?, the only reasonable answer that one can give is 'yes' . It may be, as I have said, that there were two causes of the consequence at the time I have outlined, but certainly one of the causes was the failure of the claimant to disclose a material fact."
(3) The adequacy of the appeal tribunal's reasons