Northern Ireland - Social Security and Child Support Commissioners' Decisions

[2003] NISSCSC C16/02-03(IS) (8 August 2003)

 


Decision No: C16/02-03(IS)

SOCIAL SECURITY ADMINISTRATION (NORTHERN IRELAND) ACT 1992 SOCIAL SECURITY (NORTHERN IRELAND) ORDER 1998
INCOME SUPPORT
Appeal to a Social Security Commissioner on a question of law from a Tribunal's decision dated 2 January 2002 DECISION OF THE SOCIAL SECURITY COMMISSIONER
1. This is an appeal, leave having been granted by myself, by the claimant against a decision dated 2 January 2002 of an Appeal Tribunal sitting at Dungannon. That Tribunal had disallowed the claimant's appeal against a decision of the Department dated 12 April 2001 to the effect that the claimant was not entitled to income support (IS) from 18 December 2000 because he had capital in excess of £8,000 (the IS cut-off capital limit) on that date. This capital was said to consist of land which was not exempt for the purposes of IS. The claimant had been a farmer but had long since ceased to farm by the date of the decision on 12 April 2001.
2. Land which the claimant owns can be disregarded for IS purposes if it is land which falls within the definition of "dwelling occupied as the home". This is defined by regulation 2 of the Income Support (General) Regulations (Northern Ireland) 1987: -

"dwelling occupied as the home" means the dwelling including any garage, garden and outbuildings normally occupied by the claimant as his home, together with –

(a) any agricultural land adjoining that dwelling; and

(b) any land not adjoining that dwelling which it is impracticable or unreasonable to sell separately"

The provision allowing certain capital assets to be disregarded for Income Support purposes is Schedule 10 to the said Regulations which permits a disregard of "The dwelling occupied as the home".

3. The claimant appealed to the Tribunal and his grounds of appeal to the Tribunal were included on a form headed "Your appeal" and signed by the claimant on 24 April 2001. They were as follows: -

"In reply to your letter dated 13 April 01, to which I was turned down for Income Support, being I had land in my possession of that date (18 Dec.00).

I now wish to appeal this decision because I and my wife had authorised this land to be transferred into my son's name back in October 2000, because it was at this stage she was declared as terminally ill. This was her last wish that this be done. I have since learned it was not completed until February as my solicitor was short staffed. Letters can be sought as proof from my solicitor and our doctor. Both of these names you have on your files."

4. The Tribunal held two hearings in relation to the case. The first which was on the 10 October 2001 was attended by the claimant. The record of proceedings indicates that the claimant gave evidence as follows: -

"Previously made a claim for benefit in 1996 – declared that I owned the farm – the farm was valued – valued at £42000 for land adjoining – turned down – stopped farming in 1975.

- farm was subsequently transferred to my son – he wasn't farming either – wife wanted this to happen before she died. Farm was in both names – at that time all of the lands, including the house, were transferred to my son – due because of my wife's condition – at her request. I gave the title deeds to my solicitor in October – that was first contact with the solicitor – that was October 2000.

- I never requested a form – it was automatically sent from Newcastle as part of a "pensioner benefit – uptake".

- we never requested the forms".

5. At the hearing on 2 January 2002 the claimant again reiterated the circumstances under which he had sought to transfer the land to his son and said that in his view the deal was done, that he had made the agreement with his son and he couldn't go back on it. He stated that so far as he knew his son never went into the solicitor's office and that there was no money owed on the lands. There was no evidence given that there was any consideration for any transfer to the son. The Tribunal had before it letters from the claimant's solicitor. One of these letters stated that the solicitor had received the instructions from the claimant to transfer the lands at his home to his son and that the solicitor was in process of preparing the necessary deed to give effect to the instructions. This letter was dated 18 January 2001. The Tribunal also had before it maps of the land in question. The Tribunal also had a letter from the claimant's solicitor confirming that a deed of transfer was signed on 20 February 2001 passing land from the claimant and his wife to their son. The Tribunal found the claimant to be the owner of the land, it not having been transferred to the son at 18 December 2000 (the date when he claimed Income Support) and concluded that he was not entitled to Income Support (I.S.) from that date. The claimant appealed to me.
6. This is the second time that this particular claimant has appeared before me. The first occasion, which has some relevance to this present appeal, related to his appeal against a decision dated 5 May 1998 of an Appeal Tribunal. That Tribunal had disallowed his appeal against a decision dated 12 January 1998 of an adjudication officer (a Departmental officer then charged with making decisions in relation to Social Security Benefits). That decision related to what the Department contended to be a failure to disclose on the claimant's part the fact that he owned land which could be sold separately from his home. On the basis of this failure to disclose the adjudication officer decided that the Department was entitled to recover from the claimant overpaid IS. The Tribunal decided that the claimant had failed to disclose the material fact that he owned land which could be sold separately from his home and that an overpayment of £15,010.70 made as a result was recoverable. This overpayment related to a period from 20 June 1994 to 11 August 1996. I allowed the appeal on the basis that the Tribunal had not dealt adequately with the concept of failure to disclose as opposed to non-disclosure. At paragraphs 15 and 16 thereof I stated: -

"I do consider that there was an error in the Tribunal's proceedings in that it does not appear to have dealt with the concept of failure to disclose as opposed to non disclosure. The question in the Income Support application form in connection with property and land reads as follows: -

"Do you or anyone you are claiming for, own any property or land in this country or abroad?

If the property or land is on a mortgage or loan, still tick Yes.

Do not count the place where you live."

In response to this, Mr C… had ticked the box marked "No".

I have absolutely no doubt that Mr C… was aware of what land he owned and indeed in 1995 he transferred portions of it to his son. It does appear to me that even if the Tribunal was entitled to find that Mr C… had not disclosed all the land which he owned, the issue of whether or not this constituted a failure to disclose was one which had to be dealt with by further enquiry and such enquiry does not appear to have been made. The nature of the questions set out at paragraph 15 above at least raises the issue of whether or not it was reasonable to expect disclosure in the circumstances. It seems to me that the Tribunal had an issue squarely before it as to whether a reasonable person would have disclosed the lands in question as not being the place where he lived. The Tribunal did not deal with this issue and I think that it was in error in not so doing."

Essentially my decision was based on the somewhat ambiguous questions in the Department's claim form and whether a reasonable person would have disclosed (in answering those questions) the lands in question as not being the place where he lived.

7. At paragraph 17 thereof I stated: -

"I therefore set aside the Tribunal's decision and remit this matter for re-hearing by a differently constituted Tribunal. As Mrs McRory has stated, much of the calculation of the claimant's capital will depend on the construction which is given to the word "adjoining" as used in regulation 2 of the said Income Support (General) Regulations. This interprets what is meant by "dwelling occupied as the home" and of course by virtue of Schedule 10 to those Regulations, the dwelling occupied as the home is to be disregarded in the calculation of the claimant's capital.

Regulation 2 interprets the "dwelling occupied as the home" as

"the dwelling including any garage, garden, and outbuildings normally occupied by the claimant as his home, together with –

(a) any agricultural land adjoining that dwelling; and

(b) any land not adjoining that dwelling which it is impracticable or unreasonable to sell separately."

I have not been directly addressed on the construction of regulation 2 so the following views are somewhat tentative but are given to assist any future adjudication. The word "adjoining" is an ordinary English word and I can see no reason why it should not be given its ordinary meaning of "being next to". The dwelling occupied as the home can therefore include agricultural land next to the dwelling. It does not appear to me that land separated from the dwelling by a public road or by a laneway and boundary hedges could be said to be adjoining the dwelling.

The question then arises as to what can be taken into consideration in determining whether it would be impracticable or unreasonable to sell separately land not adjoining the dwelling. The statute does not limit the matters which can be considered but the standard of reasonableness is an objective one, it is what a reasonable man would consider would be impracticable or unreasonable to sell separately. It also appears to me that where it is shown that the claimant possesses land which is not part of the "dwelling" including any garage, garden and outbuildings normally occupied by the claimant as his home and is not agricultural land adjoining that dwelling, it is up to the claimant to show that it would be impracticable or unreasonable to sell it separately."

8. The subsequent Tribunal to which I remitted that appeal sat on 19 January 2000. In its reasons for decision the Tribunal began by addressing the question of the value of the land and whether it would have barred the claimant from receipt of IS. In that connection it dealt specifically with the question of whether or not the claimant owned land which did not adjoin the dwelling. It concluded that he did. It then proceeded to deal with the question of whether it was impracticable or unreasonable to sell all or part of the non-adjoining land separately. It concluded that it was not. It specifically concluded that it was neither unreasonable nor impracticable to sell the fields (other than a field numbered 1 on the maps) separately from the dwelling. I take it from that decision that it was considered that field number 1 was land adjoining the dwelling. The Tribunal was of the view that the value of the non-adjoining land would be in excess of the IS cut-off limit and that there was therefore no entitlement to IS. The Tribunal, however, decided to allow the appeal. Its decision was that the recoverable overpayment was to be reduced because for a considerable part of the alleged overpayment period there had been no failure to disclose due to the ambiguity of the questions (already mentioned) asked in the claim form. For the remaining period of time the Tribunal considered that there had been an overpayment due to a failure to disclose. It therefore considered that the recoverable overpayment was considerably less than had been decided by the Department. The claimant did not appeal this decision.
9. He claimed IS on 18 December 2000 and was awarded the benefit on 22 December 2000. On 9 January 2001 his wife made a claim to IS. It was discovered that IS was already in payment to the claimant for himself only, even though he and his wife were living together. An officer of the Department visited the claimant's home on 16 January 2001 and explained the position regarding claims for couples. His wife then withdrew her claim to IS and a new form was completed to include both the claimant and his wife. During this interview it was discovered that the claimant and his wife were in the process of transferring their house and land to their son. They were to retain the use of the dwelling house for their lifetime. On 18 January 2001 the claimant's order book was recalled for adjustment. There was then some correspondence and on 12 April 2001 the Department decided that the claimant was not entitled to IS from 18 December 2000. The claimant appealed to a Tribunal which, on 2 January 2002 disallowed his appeal. It was against that decision that the claimant appealed to me.
10. The claimant's appeal to the instant Tribunal did not relate to whether or not he owned land adjoining the dwelling or to whether it was impracticable or unreasonable to sell any non-adjoining land separately. The appeal was based on the claimant's contention that he no longer possessed the land as it was being transferred to his son. The Tribunal concluded that at 18 December 2000 the claimant was still in possession of the capital asset and had not transferred it. The claimant attended the hearings without his representative (there was an adjourned hearing on 10 October 2001) but a written submission was prepared on his behalf by a Mrs Lynn Morgan who described herself as his representative.
11. The grounds of appeal were set out in an OSSC1 form received in the Commissioner's office on 27 September 2002. The Department made observations thereon by letter dated 2 December 2002 from its Decision Making and Appeals Unit. I held a hearing of the appeal which the claimant attended and at which he was represented by Mr Morgan, Solicitor, of Messrs K J Morgan Solicitors. The Department was represented by Mr Gough. I am grateful to both gentlemen for their considerable assistance in the matter. Subsequent to the hearing I sought further observations as to whether the Tribunal had erred in law in not considering whether or not the farmlands could be disregarded under schedule 10 paragraph 1 to the Income Support (General) Regulations (Northern Ireland) 1987. The Department responded by letter dated 21 May 2003 and Mr Morgan by letter dated 2 July 2003.
12. In response to my request for further observations the Department submitted that Article 13(8)(a) of the Social Security (Northern Ireland) Order provided that when deciding an appeal under that Article (as the Tribunal was doing) the Tribunal need not consider any issue which was not raised by the appeal. The Department submitted that in this present case the land, being the fundamental issue, was an issue raised by the appeal and therefore the Tribunal had to consider the practicability or unreasonableness of selling the separate parts of the land. The Department further submitted that although the Tribunal had not specifically identified and mentioned that part of the farm separated by a road that did not automatically equate to the issue of this land not being raised. It referred to the fact that included in the Appendix to the decision maker's submission to the Tribunal was a copy of all the relevant legislation. This included Schedule 10(1). In addition, in the appeal dated 30 January 1998 which resulted in my decision C9/99(IS), reference was made to both regulation 2 of and schedule 10 to the said Regulations. Therefore, the Department submitted, given the totality of the evidence available to all parties to the appeal and the fact that the claimant knew or could reasonably have been expected to have known from his previous appeal on this subject what the issues were, the Tribunal did not err in law. All the documents which were submitted by the decision maker to the Appeals Service would have been copied to the claimant and his professional representatives, who were the same representatives for the purpose of the appeal which resulted in my decision C9/99(IS). Therefore, in the Department's submission all parties were aware of the critical issues in this present appeal.
13. By letter dated 2 July 2003 Mr Morgan submitted that the Tribunal had erred in law by failing to consider and make a finding as to whether parts of the farmlands did not adjoin the dwelling. He submitted that the Tribunal had to consider whether the capital value of the farmlands could be included in the capital of the claimant, not whether it could be excluded. In his submission it could only be included if the Tribunal made a finding that the agricultural lands did not adjoin the dwelling. In essence Mr Morgan reiterated this argument in his letter of 2 July 2003.
14. The grounds of appeal to me were, in essence as follows: -

(1) The Tribunal had misdirected itself as to the correct issue before it, the issue being not whether the claimant possessed a capital asset as at 18 December 2000 but whether or not the claimant possessed a non-exempt capital asset (this I take to mean one not listed in schedule 10). In the submission of the claimant's solicitors in the case of registered land (as this was) all the land including the land under buildings, under fences, under hedges, under the laneway and under the roadway belonged to the registered owners (the claimant and his wife) on 18 December 2000. In the submission of the claimant one part of a single parcel of land could not be said to be separate from or not adjoining any other part of that single entity. The Tribunal had erred in including in the claimant's capital, property which, under regulation 2, came within the definition of his home and was therefore exempt under Schedule 10.

(2) The Tribunal had failed to understand and misdirected itself as to the evidence, in the form of letters, before it.

(3) The Tribunal had made its decision on entitlement on an erroneous finding of fact, i.e. that there was no memorandum in writing confirming the claimant's oral agreement to transfer land to his son.

15. The Department opposed all of these grounds. Referring to my decision C9/99(IS), the Department submitted that the land at issue in this appeal (being separated by a lane and a roadway from the farmhouse) could not be said to be adjoining the claimant's dwelling. In that respect the Tribunal had not erred in law.
16. In respect of the second ground the Department submitted that the Tribunal did appear to have mis-recorded the sequence of letters. However, regardless of the sequence, none of the letters confirmed that the land had been transferred to the claimant's son at the time in question and the Department therefore submitted that the Tribunal had not erred in law.
17. As regards the third ground the Department submitted that the "memorandum" referred to did not do anything other than show that the claimant had instructed a solicitor to prepare his will and transfer land. It submitted that that evidence did not show that the claimant no longer possessed the land in question and that the Tribunal had not erred in that respect.
18. The Department did, however, submit that the Tribunal had erred in law in one respect, though the error did not vitiate the decision. The valuation on which the Tribunal relied, as had the Department, was one provided by the Valuation and Lands Agency on 21 May 1997, which valued the disputed lands at £42,000. However, regulation 49 of the Income Support (General) Regulations (Northern Ireland) 1987 required a current market value which was never obtained. The Department submitted that, although the Tribunal erred in law in not asking for a current valuation, this was not fatal to the decision as the current value would be in excess of £8,000 (this being the capital cut-off for Income Support).
19. I consider that there was an error but one of no consequence by the Tribunal in relation to the sequence of the letters. I agree with the Department that none of the letters confirm that the land had been transferred to the claimant's son on 14 October 2000. Any error is therefore inconsequential and does not vitiate the decision. I also agree with the Department that the document referred to as a "memorandum" was the note of instructions to the claimant's solicitor, not a memorandum of any agreement. It was not signed by any purported party and it did not have any set dates for transfer nor indicate any consideration for transfer. Indeed there was no evidence that the claimant's son attended the solicitor. It appears to be merely a note of instructions. That does not create any document on which a transfer could be enforced. In any event the transfer could not be said to have taken place so that the claimant still possessed the land in question. I consider that the Tribunal did not err in this respect.
20. As regards the first ground of appeal the majority of the argument addressed to me related to whether or not the land in fields 2 to 8 could be said to adjoin the claimant's dwelling. The layout of the lands appeared to be that the farmhouse was set in field 1 which was separated from the remaining fields partly by a lane and partly by a road. There is no doubt that the claimant owned land on both sides of both the road and the lane. The main issue before the Tribunal and one of the issues in this case is whether the fields 2 to 8 or part thereof could be exempt from consideration as capital under paragraph 1 of schedule 10 of the said Regulations. This enables capital to be disregarded which consists of the dwelling occupied as the home. It is therefore necessary to go to the regulation 2 definition of "dwelling occupied as the home.
21. Mr Morgan has sought to convince me that any land which is included in the same parcel of land as the farmhouse has to be considered as "adjoining" land. I reject his argument. The Department's argument that "adjoining" must be given its ordinary meaning of being next to the dwelling does seem to me to have much more substance. Mr. Morgan may well be correct in his submission that the land under the roadway which bisected his lands was owned by the claimant. I do not think that is conclusive. I stated in decision C9/99(IS) that my views on the construction of regulation 2 were somewhat tentative but I could see no reason why adjoining should not be given its ordinary meaning of being next to. I also stated that the dwelling occupied as the home could therefore include agricultural land next to the dwelling but it did not appear to me that land separated from the dwelling by a public road or by a laneway and boundary hedges could be said to be adjoining the dwelling. As I mentioned above these views were expressed tentatively and were not central to the decision. I now give my more concluded views. I consider that the word "adjoining" is used in its ordinary meaning. It is therefore simply to be applied by the Tribunal and unless such application is outside reasonable bounds, it will not be in error of law. Title is not determinative of whether a piece of land adjoins a dwelling. It would be ludicrous if it was. Very large expanses of land could be held under the one title and as one parcel of land. Quite obviously parts of that land would not adjoin the dwelling occupied as the home. The question of whether or not land is adjoining is to be determined by physical proximity not by ownership.
22. It should, perhaps, be remembered that what is being looked at here are assets for purposes of Income Support (a benefit designed to assist those with very inadequate financial resources). Had the claimant continued to farm the land the farmland could have of course have been excluded as being the assets of his business. That was not, however, the case and, a claim for Income Support having been made, it must be decided whether the claimant had capital which would exclude him from it. I can see no reason why, simply because land was all bought as one parcel or under one title the existence of areas of land should be excluded from capital to be taken into account. The law relating to Income Support makes no such provision. Had the legislature so wished it could easily have done so. It did not.
23. In this case of course I am not dealing with a huge farm but nonetheless the principle of title not being determinative of whether land is adjoining or not obviously applies. It appears to me that in considering whether or not land adjoins the dwelling the distance of that part of the land from the dwelling, the existence of physical boundaries such as roads, laneways, hedges, etc are all factors which may be taken into consideration. Depending on the positioning of the dwelling and other factors – width of land or road, boundary hedges, etc, they may be relevant to whether land does or does not adjoin the dwelling.
24. The Tribunal was not, however, in error in not dealing with this matter. It was not raised to the Tribunal either expressly or impliedly. The situation of fields 2-8 was not such as would make the issue a clearly apparent one. I do not consider that the Tribunal erred in failing to consider whether all the lands should be included in the definition of dwelling in regulation 2(a).
25. The claimant's solicitor has raised the issue of how the Tribunal should approach the question of exclusion from benefit for possession of excess capital. There is an exclusion from IS by reason of excess capital at Section 130 of the Social Security (Contributions and Benefits) (Northern Ireland) Act 1992. This is an exclusion, it is not part of the underlying conditions for entitlement to the benefit contained in Section 123 thereof. It is therefore for the Department to show that the claimant had capital in excess of the prescribed amount. The Department in its submissions, addressed this issue as did the Tribunal. The ground of appeal to the Tribunal which expressly dealt with ownership of capital was that the claimant had ceased to own the farm and all the agricultural land. The manner in which capital is to be calculated is set out in the Income Support (General) Regulations (Northern Ireland) 1987. These provide (regulation 46(1)) that the capital to be taken into account shall, subject to paragraph (2), be the whole of the claimant's capital calculated in accordance with that part. Regulation 46(2) provides for the disregarding of certain capital. The Department contended and the Tribunal found that the claimant possessed capital (the farmlands) valued in excess of the relevant capital cut off amount. No issue was raised that the value of the lands was less than the cut-off. In Mr Morgan's contention the Department had to show that it had considered the disregards even though none was specifically raised or indeed clearly apparent in the appeal. I do not agree. I consider that the possession of capital valued in excess of the cut-off having been shown, it was up to the claimant to show that that capital should be disregarded. In my view a Tribunal only had to deal with any possible category of capital disregarded if an issue in relation to same was raised expressly or was so clear from the evidence that it was an apparent issue.
26. In this case, therefore, should the Tribunal have considered a possible disregard under regulation 2(b) and Schedule 10, paragraph 1 with regard to agricultural land not adjoining the dwelling? This was not expressly raised on the appeal to the Tribunal. However, it was obviously raised by the size of the claimant's landholding. This was not enormous. It was situated in an agricultural area and there therefore appears to be an obvious issue as to whether it was reasonable to sell all or any part of the farmlands separately from the farmhouse. I consider that the Tribunal erred in law in not looking at this matter.
27. The Department has argued that this was effectively determined by the Tribunal on 19 January 2000 and that there was no real issue in relation to it. It certainly was determined as at that date. However, we are dealing here with a situation some 4 to 6 years after the date which that earlier Tribunal was considering (the relevant period of the overpayment which that Tribunal was considering was 20 June 1994 to 11 August 1996). The period being looked at in this decision was from 18 December 2000. There could very well have been considerable changes of circumstances during that time in terms of utilisation and sellability of agricultural land without farmhouses.
28. Secondly and most importantly the Tribunal's decision on 19 January 2000 related to overpayment. That decision is of course final unless overturned or revised or superseded. It does not appear that any of those happened so the decision stands. The earlier Tribunal's conclusion on whether it was unreasonable or impracticable to sell non-adjoining land separately is not, however, binding on a future Tribunal dealing with a different claim. If the issue raised itself in this instant appeal then, regardless of the previous Tribunal's views on the matter, this Tribunal had to deal with it. The earlier Tribunal's decision was final but its views on the reasonableness and practicability of selling were not binding on the instant Tribunal. In my view the Tribunal did not deal with the issue of whether or not it was reasonable to sell all or part of the land separately from the dwelling and this issue was so apparent that it should have been dealt with. I do not consider that the Tribunal dealt with the issue. It is not mentioned in the Tribunal's decision nor in the record of evidence.
29. I consider, as mentioned above, that omission to be an error of law and I set the Tribunal's decision aside for that reason. I remit the matter to a differently constituted Tribunal for rehearing and redetermination. I direct the new Tribunal to consider whether any part of the land, as at 18 December 2000 was within paragraph 1 of schedule 10. It will therefore have to consider regulation 2 and should consider initially whether there was any land not adjoining the dwelling occupied as the home (again the earlier Tribunal's conclusion on that is not binding in this case). If it concludes that there was, then the Tribunal will have to consider whether or not it was impracticable or unreasonable to sell that land separately from the dwelling as provided in regulation 2(b). Depending on the Tribunal's findings it may or may not be necessary to obtain a valuation of any non-adjoining land. That valuation would have to be as at 18 December 2000. It is a matter for the claimant if he wishes to obtain and produce such a valuation for the new Tribunal and for the Department if it wishes to do so. The appeal is allowed.

M F Brown

Commissioner

8 August 2003