Northern Ireland - Social Security and Child Support Commissioners' Decisions

 


[2008] NISSCSC C5_07_08(IS) (26 June 2008)

Decision No: C5/07-08(IS)

SOCIAL SECURITY ADMINISTRATION (NORTHERN IRELAND) ACT 1992
SOCIAL SECURITY (NORTHERN IRELAND) ORDER 1998
INCOME SUPPORT
Appeal to a Social Security Commissioner by the Department on a question of law from a Tribunal's decision dated 28 June 2007
DECISION OF THE SOCIAL SECURITY COMMISSIONER
1. The decision of an appeal tribunal sitting in Downpatrick on 28 June 2007 (the tribunal) is wrong in law. I therefore set the tribunal's decision aside and return the appeal for a new hearing.
2. Leave to appeal to the Commissioner was given by the legally qualified panel member (LQPM) who constituted the tribunal. He accepted as an arguable point of law the following point made by the Department in its application to him:

"… the tribunal failed in its inquisitorial role by not giving consideration as to whether [the claimant] could have, with reasonable diligence on her part, discovered the existence of her partner's capital and disclosed it; or failing this, whether she innocently misrepresented the material fact that led to an overpayment of income support totally £29,377.05, which the Department is entitled to recover."

Background

3. I set out the relevant facts only insofar as is necessary for the purposes of explanation of this decision. The new tribunal is, however, in no way bound by the present summary of fact which is, of course, subject to further exploration at the hearing.
4. The claimant is a married woman in receipt of disability living allowance (DLA) and incapacity benefit, living with her husband who is also in receipt of DLA. She claimed income support (IS) from 25 May 2000. The Department no longer holds a copy of that claim form and, furthermore, evidence of IS paid from 25 May 2000 to 13 June 2001 also no longer exists. There are however computer held records verifying what IS was paid from 14 June 2001 to 1 September 2004.
5. On 8 January 2002 a review IS form was completed by the claimant; a copy of this was in the evidence provided for the tribunal by a decision-maker (DM) on behalf of the Department and is at TAB 3. To specific questions about "any money, saving and property" which a claimant or partner have, the claimant ticked "No" in every case except to a question relating to bank accounts, which she answered in the affirmative but said that the amount was nil. On a review IS form completed by the claimant on 23 January 2003, a copy of which is in the tribunal papers at TAB 4, the claimant again responded in the negative to similar questions, but this time also answering "No" with respect to a bank account.
6. Between January 2004 and September 2004 the Department carried out investigations concerning various items of capital now considered to belong to the claimant and, more particularly, her husband in the period between the original claim for IS and September 2004; at this latter date, the Department appear to have concluded their enquiries, although not all questions had yet been answered by either the claimant, her husband or their daughter on her behalf. On 1 March 2005, there was a revision of the award of IS dated 31 May 2000 on the basis that the claimant and her partner had capital in excess of the then limit of £8,000; on 18 March 2005, this was followed by a DM's overpayment decision to the effect that £29,377.05 was recoverable from the claimant because it was overpaid IS from the period 14 June 2001 to 1 September 2004 (both dates included) and that on 25 May 2000 or as soon as possible afterwards the claimant had failed to disclose the material fact that her partner had capital in excess of £8,000.
7. The claimant appealed. At the tribunal hearing, the claimant was present and represented by her solicitor (the solicitor). There was a presenting officer (PO) on behalf of the Department. The solicitor identified the issue for the tribunal as follows:

"Issue is whether she knew or ought to have known about this money. At no time was she aware of the money."

The immediate response from the PO was the following:

"Claimant is the responsible person to declare on behalf of whole household. Her responsibility is to find out. Updating forms and notes in Order Book would set out the responsibilities.

Not realistic that she did not know what was going on. There were a lot of transactions during the period."

8. The tribunal allowed the appeal. It accepted an overpayment of £29,377.05 but held that the overpayment was not recoverable:

"… as it did not arise from claimant's failure to disclose a material fact. Claimant had no knowledge of that fact and consequently could not have been expected to disclose it."

9. The tribunal's statement of reasons included the following findings in fact:

"There was medical evidence that her husband suffered from 'relapsing depression' and also had a long history of alcohol dependence syndrome which would have resulted in him being 'forgetful and inattentive' and 'very unreliable and incompetent' in filling in forms. … There was also medical evidence that claimant herself suffered from depression and alcohol dependence for the preceding six years and her General Practitioner stated that he had 'no doubt that this has affected her judgement at times'. The picture presented was of a rather unusual marriage where there was little communication between the spouses. Equally, when one of the daughters of the marriage attempted to obtain from her father information during the course of the investigation she had little success."

10. The tribunal concluded that it was crucial that a claimant had actual knowledge of the material fact in issue (in this case, that her husband had substantial capital in bank accounts) and that it was insufficient that she should have made appropriate enquiries when completing the form (my emphasis). Having found it more likely than not that the claimant did not know the material fact in question, it reasoned:

"… The principle that the claimant must have actual knowledge of the fact seems to be supported by paragraph 47 of the Decision of the Court of Appeal in the B case …"

11. The Department appeals to the Commissioner on the ground that the tribunal ought not to have considered actual knowledge as essential in a failure to disclose case. Rather, knowledge in this context encompasses knowledge which a person has the means of acquiring by making reasonable enquiries. Alternatively, it is submitted on behalf of the Department that the tribunal breached its inquisitorial role in not considering the question of misrepresentation albeit it was not expressly raised.

Oral hearing

12. The case came before me for an oral hearing on Tuesday, 24 June 2008. Skeleton arguments were submitted on behalf of the Department (in advance, as had been directed) by Mr Michael Donnan of Decision Making Services, who represented the Department at the hearing. The claimant was represented by Mr Sean Devine of Counsel. He had also prepared written submissions although, unfortunately, these were not available until the day of the hearing. I am extremely grateful to both Mr Donnan and Mr Devine for their very helpful contributions. I address their arguments in the course of my own conclusion and reasons.

Conclusion and reasons

Failure to disclose

13. In B v Secretary of State for Work and Pensions [2005] EWCA Civ 929 (reported at R(IS) 9/06), the Court of Appeal in England and Wales held that a duty to disclose arises under regulation 32 of the Social Security (Claims and Payments) Regulations 1987, which provides for, firstly, a duty to furnish information and evidence pursuant to any relevant requests from the Department and, secondly, a duty to notify the Department of any change of circumstances which a claimant might reasonably be expected to know might affect the right to benefit. It is against that background that paragraph 47, relied on by the tribunal, must be read. 'B' LJ said this:

"Read in isolation, the phrase "failed to disclose" might seem to be addressed to some sort of deliberate concealment, or conscious suppression, of a material fact. That might well be its application where the fact in issue is not one addressed by specific regulations, but is nonetheless determined to be "material". But that cannot be the expression's meaning or application where, as in our case, the fact in question is mandated for transmission to the Secretary of State by a specific regulation. Provided … Mrs B knew the fact and was able to communicate it to others, then the language of failure to disclose comfortably fits her case. It is nothing to that point that she did not understand the materiality of the fact. That issue is determined in respect of this fact by regulation 32(1)." (original emphasis)

14. It was not disputed in B that the claimant actually knew the relevant fact, which was that her children had been taken into care and removed from her home, and what was in issue was whether it was relevant that, because of her severe learning disabilities, she could not appreciate the importance of such a fact. The Court of Appeal was not, therefore, discussing what is required to constitute the necessary knowledge that a material fact exists and whether it must be actual knowledge, but rather whether an understanding of its materiality is essential.
15. The tribunal erred in law in considering that only actual knowledge suffices. I accept Mr Devine's submission that whether or not the claimant ought to have known about the capital was a live issue before the tribunal. However, I do not accept his further argument, that the tribunal then found as fact that the claimant neither knew nor ought to have known the material fact in question. The tribunal expressly concluded that actual knowledge was required, as a matter of law; therefore it did not move to consider whether, nonetheless, the circumstances were such that she ought to have known about the presence of various assets as this became unnecessary following its mistaken premise.
16. In R(SB) 28/83, the Commissioner held that it was only necessary to show that a claimant "… either knew or with reasonable diligence ought to have known that he possessed such assets" (paragraph 10). In this respect the Commissioner was following R(SB) 21/82.
17. The relevant factors were further explored by GB Deputy Commissioner (as he then was) Edward Jacobs in CF/14643/1996. I respectfully agree with his analysis of the three types of knowledge which suffice for the purposes of a recoverable overpayment based on failure to disclose. A copy of the case is with the papers and I refer the new tribunal to it; of possible relevance, if the new tribunal discounts actual knowledge, are either wilful blindness (see paragraph 17 and following paragraphs) and means of knowledge (see paragraph 21 and continuing).
18. It is suggested in the evidence that sums of money were spent during the relevant period on a daughter's wedding and on substantial home improvements. How far the claimant knowingly or unreasonably turned a blind eye to the source of the money is for the new tribunal to explore, having regard to the principles expounded by Deputy Commissioner Jacobs, and to the precise factual circumstances of the claimant's case as the new tribunal finds them to be, including her state of health, the state of her marriage and the difficulty of communicating with her husband.

A tribunal's inquisitorial duty

19. As was said by Baroness Hale of Richmond in Kerr v the Department for Social Development [2004] UKHL 23 (also reported as an appendix to R1/04(SF)), at paragraph 61:

"Ever since the decision of the Divisional Court in R v Medical Appeal Tribunal (North Midland Region), Ex p Hubble [1958] 2QB 228, it has been accepted that the process of benefits adjudication is inquisitorial rather than adversarial …"

20. Mr Devine suggests that this duty has been modified by Article 13 of the Social Security (Northern Ireland) Order 1998:

"(8) In deciding an appeal under this Article, an appeal tribunal –

(a) need not consider any issue that is not raised by the appeal; …"

21. It is undeniable that, prior to appeal to the Commissioner, it was at no stage suggested on behalf of the Department that there had been misrepresentation by the present claimant. However, the Court of Appeal in Northern Ireland, following similar jurisprudence in Great Britain, in Mongan v Department for Social Development [2005] NICA 16 (also reported as R3/05(DLA)) held that where an issue is clearly apparent from the evidence then it is raised by the appeal and must be considered. This was, moreover, after specific consideration of Article 13(8)(a):

" 14. The terms of article 13(8)(a) of the 1998 Order make it clear that issues not raised by an appeal need not be considered by an appeal tribunal. The use of the phrase "raised by the appeal" should be noted. The use of these words would tend to suggest that the tribunal would not be absolved of the duty to consider relevant issues simply because they have been neglected by the appellant or here legal representatives and that it has a role to identify what issues are at stake on the appeal even if they have not been clearly or expressly articulated by the appellant. Such an approach would chime well with the inquisitorial nature of the proceedings before the tribunal.

15. It is now well established that appeal tribunal proceedings are inquisitorial in nature – see, for example the recent Decision of a Tribunal of Social Security Commissioners CIB/4751/2002, CDLA 4753/2002, CDLA 4939/2002 and CDLA 514/2002. Mr McA relied on this decision, however, to support his contention that the tribunal was not required to consider matters that had not been raised by the parties to the proceedings. In that case it was held that 'raised by the appeal' should be interpreted to mean "actually raised at or before the hearing by one of the parties." In so far as the decision suggests that an appeal tribunal would not be competent to inquire into a matter that arose on an appeal simply because it was not expressly argued by one of the parties to the appeal, we could not agree with it. It appears to us that the plain meaning of the words of the statute, taken together with the inquisitorial nature of the appeal hearing, demand a more proactive approach. If, for instance, it appeared to the tribunal from the evidence presented to it that an appellant might be entitled to a lower level of benefit than that claimed, its inquisitorial role would require a proper investigation of that possible entitlement.

16. Mr McA suggested that even if the tribunal had a duty to consider issues not explicitly raised, this was a limited responsibility and he referred to an unreported decision (C5/03-04(IB) in which Commissioner Brown held that the tribunal was not required "to exhaustively trawl the evidence to see if there is any remote possibility of an issue being raised by it." We accept that there must be limits to the tribunal's responsibility to identify and examine issues that have not been expressly raised and we agree with the observation of Commissioner Brown. But as she said in a later passage in the same case, issues "clearly apparent from the evidence" must be considered.

17. Whether an issue is sufficiently apparent from the evidence will depend on the particular circumstances of each case. Likewise, the question of how far the tribunal must go in exploring such an issue will depend on the specific facts of the case. The more obviously relevant an issue, the greater will be the need to investigate it. An extensive inquiry into the issue will not invariably be required. Indeed, a perfunctory examination of the issue may often suffice. It appears to us, however, that where a higher rate of benefit is claimed and the facts presented to the tribunal suggest that an appellant might well be entitled to a lower rate, it will normally be necessary to examine that issue, whether or not it has been raised by the appellant or her legal representatives."

22. Having regard to the evidence in the present appeal, misrepresentation was an obviously relevant issue and this is so even though the Department itself missed the point. Clearly, natural justice issues therefore arose; a tribunal could not in its decision address misrepresentation without first notifying the claimant and her representative of this and providing them with an adequate opportunity of countering the point. But subject to that, the tribunal failed in its inquisitorial role with respect to possible misrepresentation, both on the original claim form and on the review forms. I accept the tribunal erred in law in that respect as, once it had made a determination that there was no failure to disclose, it should, on the evidence available to it, have then considered misrepresentation in the alternative.
23. C1/04-05(HB) was accordingly correct on the point for which it was cited, that a tribunal may breach its inquisitorial role in omitting to look at the question of misrepresentation when it was not specifically raised, but only failure to disclose. The Chief Commissioner did not suggest to the contrary in C2/06-07(HB) but rather that C1/04-05(HB) was wrong in considering that either misrepresentation or failure to disclose were ever relevant in housing benefit cases of overpayment, unlike in most social security cases such as the present one.

Misrepresentation

24. If a statement is made which is incorrect, it is a misrepresentation whether or not the claimant knows, or could know, that it is inaccurate. Knowledge of the material fact misrepresented is not crucial, as it is with failure to disclose.
25. However, it is extremely important to establish what precisely is being stated by a claimant so that one can therefore determine whether there is the necessary misrepresentation. This will depend on what is a reasonable interpretation of the meaning of the statement made. Where one is considering general declarations made at the foot of documents such as claim forms or order books, it may well be that the width of what the claimant is declaring are such that qualifying words should be read into the express declaration.
26. In Franklin v CAO, reported as R(IS) 16/96, the Court of Appeal in England and Wales considered whether signing a weekly declaration in an order book, "I declare that I have read and understood all the instructions in the order book, that I have correctly reported any facts which could affect the amount of any payment …", was a misrepresentation by a claimant when, unknown to her, the mortgage interest rate had reduced and had not been so reported. The Court held that, as it was difficult to understand how a person could sensibly say that a report had been made of all relevant facts, even those of which she had no knowledge, it construed the relevant declaration as one to the effect that the claimant had reported all material facts known to her.
27. The sample of an IS claim form for 1999, now submitted to the Commissioner, includes the following:

"I declare that the information I have given on this form is correct and complete."

28. I prefer to express no concluded view on whether such a categoric statement required of a claimant, expressed in these very broad and non-specific terms, should be construed likewise as having an implied additional qualification, "so far as known to me"; this is because I have not heard argument on the point and misrepresentation arises in any event in the present case from a much narrower focus. It is indubitable that where a claimant makes a specific assertion, for example that he or his partner have no savings, that this grounds recovery on the basis of misrepresentation of a material fact if it is untrue; moreover, knowledge of the fact which is expressly crystallized in the claimant's statement is not required, because such a limitation is not implied in the bald statement of a primary fact.
29. There was evidence before the tribunal of specific answers by the claimant saying that neither she nor her partner had various listed assets. Even if the claimant did not know of these assets (although it is more difficult to see how she did not know of the money in her own bank account, see TAB 11), the tribunal erred in not addressing the occurrence of a misrepresentation in the claim and review forms.

Missing documents

30. The Department is unable to produce a copy of the original claim form because, under its policy of "weeding" of files, the original claim form has now been destroyed. However, as there has been no suggestion that the form was deliberately destroyed with the intention of destroying evidence, as distinct from a pragmatic practice of pruning documents which appear no longer to have relevance to any current claim, that a document is not available in its original form does not prevent reliance on it.
31. However, the onus of proof lies on the Department to show that there was a misrepresentation in the original claim form. It should produce to the new tribunal a complete copy of the kind of claim form used in 1999 containing, in particular, what were the specific questions asked in relation to capital. If the questions were similar to those in the later review forms, then it is a reasonable, albeit not inevitable, inference from that circumstance and the additional point that the claimant was awarded IS on the strength of the claim, that the claimant's ticks on it were in a similar format to those on the subsequent review forms and that there was thus a relevant misrepresentation from the outset. Mr Devine suggests that the claimant may have added a qualification to the claim form. Clearly all the evidence will have to be weighed by the new tribunal, including the claimant's own version of events, in order to establish, on a balance of probabilities, what is likely to have been in the claim form and whether it founded a misrepresentation at its date. Inevitably, having erred in failing to address misrepresentation at all, the tribunal erred in failing to explore what might be appropriate inferences with respect to misrepresentation of a material fact on her original claim form.

Summary

32. The case is remitted to a new tribunal under the above considerations. The papers for the tribunal on behalf of the Department were poorly prepared. In addition to the lack of any copies of order book declarations, or of a copy claim form contemporaneous with the original claim form, the Department failed to address in its submission how the relevant duty to disclose arose under regulation 32(1) of the Claims and Payments Regulations. The Department needs to set out what is the information requested by the Department relating to capital on which the Department relies as imposing the relevant duty to disclose. This is most likely to be an explanatory leaflet about the receipt of IS which is routinely issued to claimants. It could arise from the terms of the original claim form or from order book instructions. The Department is now to produce copies of the relevant documents on which it relies for this purpose.
33. The submission by the Department to the tribunal was also deficient in that the overpayment covers a long period; yet the Department does not specify what amount of capital, actual or notional, it asserts was possessed at relevant dates within that period or how the figure of £40,538.27 was quantified as being capital possessed on 14 June 2001, as stated in the diminishing capital calculation. If sums of capital were spent during the relevant period, for example on a wedding, and this was not done for the purpose of obtaining or increasing IS, then that reduces the amount of capital. Insofar as a claimant is demonstrated to have actual capital at or around a particular date, the burden lies on her to show that she has subsequently disposed of it; insofar as she achieves that, but the Department then asserts that it converted into notional capital, the onus lies upon the Department to prove the appropriate purpose on disposal. The overpayment period extends over three years and greater specificity is required in relation to pin pointing what capital, actual or notional, is asserted by the Department as held at specific dates, then treated as reduced under regulation 14 of the Social Security (Payments on Account, etc) Regulations (Northern Ireland) 1988 or regulation 51A of the Income Support (General) Regulations (Northern Ireland) 1987; the important point is that it requires to be more clearly detailed how she had in excess of £8,000 at all relevant times.
34. Such a submission with attachments is to be produced by the Department to the tribunal service within eight weeks of the issue of this decision, subject always to further directions from a legally qualified panel member, or to a favourable revision of the adverse decision under appeal to a tribunal by a DM, so that the appeal lapses but fresh appeal rights arise. Whatsoever transpires, if there is a recoverable overpayment, whether to recover it is a matter for the Department.

(signed): L T Parker

NI Deputy Commissioner

26 June 2008