Northern Ireland - Social Security and Child Support Commissioners' Decisions

FMcC-v-Department for Social Development (IB) [2010] NICom 38

 

                                    Decision No: C6/10-11(IB)

 

 

 

 

SOCIAL SECURITY ADMINISTRATION (NORTHERN IRELAND) ACT 1992

 

SOCIAL SECURITY (NORTHERN IRELAND) ORDER 1998

 

 

INCAPACITY BENEFIT

 

 

 

Application by the above named claimant for leave to appeal, and 

appeal, to a Social Security Commissioner

 on a question of law from a tribunal’s decision

 dated 2 February 2009

 

DECISION OF THE SOCIAL SECURITY COMMISSIONER

 

1.         I grant leave with respect to an application by the claimant to appeal against a decision of a tribunal sitting in Belfast on 2 February 2009 (the tribunal), which concerns an incapacity benefit (IB) appeal under tribunal reference BE/1314/06/52/P covering the entitlement period from 8 April 2002 to 24 October 2005. 

 

2.         Both parties have consented to the application being treated as an appeal and, having regard to the very full comments from each side on the issues arising, I consider it appropriate for me to so treat the application.  In the original application, an oral hearing was requested but I am wholly satisfied, having regard to all the points already comprehensively made, that the proceedings can properly be determined without a hearing.  I therefore move to determine the ensuing appeal.

 

3.         I set aside the tribunal’s decision which I determine is wrong in law in a material way.  I return the appeal to a new tribunal for a fresh hearing. 

 

Background

 

4.         I set out the relevant facts only insofar as is necessary for the purposes of an 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 its hearing. 

 

5.         He claimant became unfit for work by reason of irritable bowel syndrome and myalgic encephalopathy on 2 September 1993 and since then has been paid statutory sick pay, sickness benefit and finally invalidity benefit which then became a transitional award of long-term IB.  However, information was received by the Department of the claimant’s involvement in property interests.  On an internet application for an account with Capital One Bank PLC dated 2 October 2003, the claimant described herself as “self employed” as a “rental agent”.  She has owned up to fifty properties.  All of them are rented out, usually on twelve month tenancies.  There are profit and loss accounts in her name.

 

6.         On 18 November 2005 supersessions were carried out on the ground of a relevant change of circumstance, namely that the claimant worked, which work was neither permitted work nor in an exempt category; the revised decisions were that the claimant was not entitled to invalidity benefit from 6 April 1994 to 12 April 1995 nor to IB from 13 April 1995 to 7 April 2002 (the first decision) and not entitled to IB from 8 April 2002 to 24 October 2005 (the second decision).  The claimant appealed both decisions to a tribunal.  The first decision was given reference BE/407/06/52/P on such appeal; the second decision was given tribunal reference BE/1314/06/52/P. 

 

7.         It seems there were also two more IB appeals, one against a decision that the claimant was not entitled to IB from and including 25 October 2005 on the basis of insufficient national insurance contributions and the other from a decision that she was not incapable of work in accordance with the personal capability assessment (PCA) from and including 16 August 2006; and that at and around the same time the Appeals Service was processing several appeals from the claimant, including disability living allowance and income support appeals.

 

8.         The tribunal reference numbers for any appeals except those relating to the first and second decisions are unknown to me.  However, in a decision dated 4 April 2007, giving the claimant’s name but with a reference number simply identified as: “Incapacity Benefit Appeals”, the President of Appeal Tribunals directed as follows:

 

“I direct that the constitution of the tribunal in Incapacity Benefit appeals for [the claimant] shall be a legally qualified member, a medically qualified member and as there are issues of financial complexity a financially qualified member.  Regulation 36(4) of the Social Security and Child Support (Decisions and Appeals Regulations (NI) 1999 as amended”.

 

By direction of the same date, under the reference number: “Income Support”,  it was directed that a financially qualified member was also required for that category too. 

 

9.         On 27 April 2007 a legally qualified panel member (LQPM) gave lengthy case management directions relating to seven appeals, two of them being the first and second decisions.  A heading was given combining their two references with one other reference, which three appeals were specifically directed:

 

“ … to be listed for oral hearing together before … [a] LQPM, sitting together with a Medically Qualified Panel Member (MQPM), and a Financially Qualified Panel Member (FQPM).   The President of Appeal Tribunals has directed that a Financially Qualified Panel Member is required as there are issues of financial complexity arising in these appeals”.

 

10.       The documentation before me is far from clear but it appears that a third IB appeal was listed to be heard on 2 February 2009 (along with the appeals from the first and second decisions) and that this was against the decision that the claimant was capable of work in accordance with the PCA rather than from the adverse decision based on insufficient National Insurance contributions.  It also seems that an IS appeal was listed on the same date but that, in the event, only the appeals against the first and second decisions went forward that day for a full tribunal hearing.  There was a common appeal record of proceedings in respect of the first decision (BE/407/06/52/P) and the second decision (BE/1314/06/52/P).  An MQPM and an FQPM (with an LQPM) were members of the tribunal sitting on each of those appeals; they are named on the record as members and it is narrated that each asked questions during the common hearing. 

 

11.       It was the unanimous decision of the tribunal that the appeal against the first decision was successful for part of the period under consideration but that the appeal against the second decision, covering the period 8 April 2002 to 24 October 2005, wholly failed.  In due course, a common statement of reasons was issued relating to both appeals.  It had not been the claimant’s case that she was engaged in permitted or exempt work but rather that any work done was so negligible it could be ignored.  However, based on the profit and loss accounts which the tribunal considered:

 

“ … reveal a profitable business which would require a significant contribution of work to be done”,

 

the tribunal rejected this argument (except for the period prior to April 1996 for which there was no specific profit and loss account).

 

12.       Citing only tribunal reference: BE/1314/06/52/P, the claimant’s then representative (she is now represented by a different firm of solicitors) applied for leave to appeal to the Commissioner.  A response from the Appeals Service clearly pointed out that such a reference number dealt only with the dismissal of the appeal from the second decision i.e. in relation to the period 8 April 2002 to 24 October 2005; but there has been no application at any stage in relation to the appeal against the first decision (under reference number BE/407/06/52/P) which was, of course, in part successful.   The tribunal chairman refused to set aside his decision under BE/1314/06/52/P but I have granted the application as narrated above.  What therefore is returned to the new appeal hearing is an appeal against the second decision only.

 

Statutory Provisions

 

13.       These, so far as relevant, are as follows:

 

SOCIAL SECURITY AND CHILD SUPPORT

(DECISIONS AND APPEALS) REGULATIONS (NI) 1999 (No. 162)

 

         “36.- (1) Subject to the following provisions of this regulation, an appeal tribunal shall consist of a legally qualified panel member.

 

   (2)    Subject to paragraphs (3) to (5) …  an appeal tribunal shall consist of a legally qualified panel member and -

 

                     (a)          a medically qualified panel member where -

                       

                        (i)         the appeal involves the personal capability                                               assessment …

                                    …

 

(3)    An appeal tribunal shall consist of a financially qualified panel member and a legally qualified panel member where -

        

                  (a)       the issue, or one of the issues, raised on the appeal … relates to child support or a relevant benefit; and

 

                  (b)       the appeal … may require consideration by members of the appeal tribunal of issues which are, in the opinion of the President, difficult and which relate to -

 

         (i)   profit and loss accounts, revenue accounts or balance sheets relating to any enterprise;

               …

 

(4)         where the composition of an appeal tribunal would fall to be prescribed under both paragraphs (2) and (3), it shall consist of a medically qualified panel member, a financially qualified panel member and a legally qualified panel member. 

 

(5)         where the composition of an appeal tribunal is prescribed under paragraph (1), (2)(a) or (3), the President may determine that the appeal tribunal shall include such an additional member drawn from the panel as he considers appropriate for the purposes of providing further experience for that additional member or for assisting the President in the monitoring of standards of decision-making by panel members.

         …

 

(7)    In paragraph (2)(a)(i) -

                     …

      “personal capability assessment” has the same meaning            as in regulation 2(1) of the Incapacity for Work Regulations”.

 

 

SOCIAL SECURITY (INCAPACITY FOR WORK) (GENERAL)

REGULATIONS (NI) 1995 (No. 41)

 

         “2.- (1)    In these Regulations -

                        …

         “personal capability assessment” means the assessment  defined in Part III;

                        …

         16.- (1)   … a person shall be treated as capable of work on each day of  any week commencing on Sunday during which he does work …”

        

SOCIAL SECURITY (NORTHERN IRELAND) ORDER 1998

 

         “9.-   …

 

         (3) … “relevant benefit” means any of the following, namely -

 

(a)    benefit under Parts II to V of the Contributions and          Benefits Act;

(b)    a jobseeker’s allowance

   …

                              (bb)  state pension credit

                            (c)        income support

…

(f)         a social fund payment …

(g)       child benefit

(h)       such other benefit as may be prescribed

    …

 

         “39.- (1) In this Chapter - [i.e. Chapter II concerning Social Security decisions and appeals] -

                        …

        

                        “relevant benefit” has the meaning given by Article 9(3) ;

                        …”

 

 

 

 

Appeal to the Commissioner

 

14.       On behalf of the appellant, five errors of law are suggested.  I do not accept that the tribunal went wrong in law in any of these ways and agree with the submissions of the Department to this effect; nevertheless, I have identified a point which is a material error of law necessitating a set aside of the tribunal’s decision despite the obvious care the tribunal took.  As already noted, the issue which the tribunal had to determine was whether the claimant’s involvement in the running of the rental business, which she says was being managed by others, was work which counted for the purposes of regulation 16 of the Incapacity for Work Regulations or, alternatively, was activity of such a trivial or insignificant nature that it falls under the common law maxim de minimis non curat lex (“the law does not concern itself with trifling matters”). 

 

Failure to make adequate findings of fact

 

15.       It must therefore be shown on a balance of probabilities that a claimant is doing more than minimal work in each week in order for her to be disentitled in any particular week.  The appellant submits that too broad brush an approach to fact finding has been taken and that the tribunal failed to concentrate on individual weeks.  However, what is required in the necessary inquiry depends upon the evidence and context.  If a claimant carries out a discrete and relatively lowly paid job such as domestic cleaning, it may well be the case that she is not so involved in every single week so that the tribunal’s fact-finding exercise must look more closely at the temporal pattern of work undertaken; but the tribunal found (and on the evidence it was entitled so to find) that the nature of what the present appellant did was very much more wide ranging:

 

                        “ … she was likely to have been involved in many aspects of the business including viewing properties, visiting estate agents, consulting solicitors, negotiating with financial providers, completing mortgage applications, setting rents and arranging collection and organising the repairs and maintenance of properties, along with the administration and supervisory work which would accompany such an extensive business”.

 

From the above it is a reasonable, albeit not inevitable, inference that the appellant was so engaged in such work throughout the entire period in issue.  She was free to raise evidence, which is entirely within her own compass, that there were weeks in which this did not happen. 

 

16.       She complains she was not questioned about expenses.  However, information about the appellant’s expenses was available in the profit and loss accounts and is capable of justifying the crucial deduction of the tribunal:

 

            “If the appellant was engaged in negligible work or work of such a trivial nature no reasonable explanation is forthcoming to justify the significant amount of expenses claimed and which are documented in the accounts”.

 

Having, therefore, concluded that the appellant must have been making a significant material contribution to a business which it found had accumulated properties “ … with a value above £2 million in 2003” and, further, that in any self-employed business “ … there can be busy periods and not so busy periods in each particular year”,  then without any evidence to the contrary from the appellant as to specific weeks in which her level of activity fell to minimal, the tribunal’s decision that she was participating to a sufficient degree throughout the entire period is sustainable on the facts found.

 

Taking irrelevant matters into account

 

17.             The appellant argues that prejudicial evidence was before the tribunal, for example a press release from the Assets Recovery Agency which claimed that she had:

 

“ … over sixty bank and building society accounts stretching back over twelve years”.

 

However, a tribunal is able to admit and consider any evidence whatsoever and then assess what weight to give it.  The more irrelevant is a matter, or the greater the doubt about the accuracy of an item of evidence, the less weight it will be accorded.  The tribunal’s assessment of the evidence makes apparent that it relied only on factors which were, firstly, relevant and, secondly, it considered were proved correct on a balance of probabilities.

 

18.             Furthermore, I do not agree that a portfolio’s market value is an   irrelevant consideration to the issue of how much “work” was performed by her over many years, as the appellant argues.  A high value suggests effort in planning that portfolio, for example, in noting and following up the “burgeoning property market over the relevant period”, (which the appellant now says was a point put to the tribunal as the primary factor in the valuation of the portfolio); bad investments may be due to ill luck but can also arise from lack of application when choosing them.  The tribunal could consider that hard work underpinned this portfolio if it so wished although it was not bound to do so.  In any event, what is more important in the present case, as submitted on behalf of the Department:

 

            “ … is not the value of [the claimant’s] portfolio but whether the activity she engaged in while acquiring and maintaining that portfolio amounts to work and, if so, whether the performance [of] such work disentitles her to incapacity benefit”.

 

The burden of proof

 

19.    The onus lies on the Department to demonstrate that the claimant was working in each particular week so that there were grounds to supersede the award of benefit on the basis of a relevant change of circumstances.  Moreover, I do not accept the submission made on behalf of the Department that on appeal the onus shifts to the appellant.  As I said at paragraph 21 of C24/07-08 (DLA):

 

            “A legal burden of proof can never shift during the course of the appeal, although it may be on different parties for different issues, (for example, insofar as an applicant for supersession seeks a more favourable outcome, the onus lies on the claimant but insofar as the Department seeks to remove any element of an award through supersession, the burden lies on the Department).”

 

20.       Where lies the evidential burden, however, is a different matter; and who has an obligation to go forward with evidence or otherwise bear the risk of not having made out his or her case, depends entirely on the circumstances. In the present case, the appellant did not comply with the LQPM’s direction to call specific witness evidence.   She identified in her oral evidence at the hearing a large number of persons who, she says, manage the business on her behalf.  Notwithstanding, as the tribunal opined, it:

 

            “ … has heard no evidence from any of these potential witnesses, who, if the appellant is to be believed, are likely to be in a position to support the appellant’s claims of minimal involvement. Nor has the Panel seen any documentation in the form of payments made to any of these individuals for the work done by them on the appellant’s behalf, as claimed”.

 

21.       The witness evidence was evidence which it was much easier for the claimant to identify and obtain than for anyone else to do so and which, having regard to the strength of the documentary evidence suggesting that she was working, it would be sensible to produce in order to rebut a case against her which might well satisfy the necessary balance of probabilities.  In a situation where an adjudicating authority may expect a prudent claimant to come forward with evidence, available to her, which supports her contentions, then adverse inferences may legitimately be drawn if she does not do so and without explanation. 

 

Assessment of credibility

 

22.       The appellant submits that the tribunal unfairly relied on her inability to remember all the details of transactions in the past.  Matters of credibility are, however, exclusively for a tribunal and provided it indicates briefly the basis for its approach, that is sufficient.  The tribunal assessed the appellant’s evidence as   “ … inconsistent, contradictory, unreliable and at times untruthful …” and explained why it considered it to be so.   For example, the tribunal evaluated the following oral evidence of the appellant as implausible:

 

            “She goes as far as to claim that she bought many of the properties on the advice of others and many were bought without her actually viewing or visiting the sites.  We do not believe this evidence”.

 

            There is nothing irrational or unfair in a tribunal relying on such factors in order to conclude that the evidence given to it is unreliable; so that a Commissioner cannot, for that reason, interfere.  Nor can a party complain about a robust analysis whether the result is for or against them.  Such an analysis is part of the judicial function and essential in order that a party knows where they stand.

 

The tribunal is improperly constituted

 

(a)       by the inclusion of a financially qualified panel member

 

23.       It is argued on behalf of the appellant that the inclusion of an FQPM:

 

      “ … led to a clear bias towards a purely financial and analytical assessment of profit and loss accounts and their interpretation, rather than a broader and more balanced overview of all the other evidence in the case.”

 

She accepts that her income support appeal may involve financial complexity justifying use of an FQPM but submits that it was inappropriate for such a member to sit on her IB appeals.  This argument had, in fact, been put in advance to the tribunal and was considered by it on the day.  At that stage the appellant’s representative did not press his objection and the hearing continued with the tribunal as constituted.  However, if inclusion of an FQPM on the tribunal is not authorised by the regulations, consent is irrelevant.

 

24.       Nevertheless, I reject the submission; the tribunal composition was correctly constituted insofar as it contained an FQPM.  Regulation 36(3)(a) of the Social Security and Child Support (Decisions and Appeals) Regulations (NI) 1999 (the Decisions and Appeals Regulations) permits the inclusion of an FQPM at the hearing of  either child support or of any  “relevant benefit”.  Art.9 (3) of the Social Security (Northern Ireland) Order 1998 (as applied by Art.39 (1)) sets out the large range of benefits thereby included.  Parts II to V of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 alone account for some seventeen benefits, of which IB is one.  

 

25.       Having regard to the breadth of what falls within regulation 36(3)(a), there would be no purpose in restricting the ambit of the additional criteria under regulation 36(3)(b) to subject matter of a type which necessarily involves financial complexity.  So long as the opinion of the President is rational that in a particular appeal there are difficult issues, and it is likewise rational to consider that, for example, as in the present case, perusal of profit and loss accounts would be helpful to a tribunal in weighing the evidence on the matters legitimately in front of it, then that exercise by the President of a statutory discretion may not be interfered with.  In the instant appeal, consideration of the accounts is plainly relevant in assessing the probable nature and scope of the work, if any, that the claimant is doing, which is the crux of her appeal.  It is essential with respect to the optimal use of financially qualified panel members that the exercise of the President’s broad discretion is not curtailed unless there is impropriety or irrationality, a circumstance which is, of course, highly unlikely and has in no way been shown in the present case. 

 

The tribunal is improperly constituted

 

            (b)       by the inclusion of a medically qualified panel member

 

26.       Although not raised by either of the parties, I judge that inclusion on the panel of an MQPM at this appeal hearing was impermissible.  When the President of the Appeal Tribunals directed, on 4 April 2007, that “ … the constitution of the tribunal in Incapacity Benefit appeals for [the claimant] shall be a legally qualified member, a medically qualified panel member and … a financially qualified member”, he expressly relied on regulation 36(4) of the Decisions and Appeals Regulations.  That requires, with respect to the inclusion of an MQPM, that para (2) of regulation 36 applies; in the present appeal that could only be so if one of the issues raised is whether the PCA is satisfied, and this is not the case. 

 

27.       Under regulation 36(7) of the Decisions and Appeals Regulations, ‘personal capability assessment’ has the same meaning as in regulation 2(1) of the Social Security (Incapacity for Work) (General) Regulations (Northern Ireland) 1995, which is the assessment defined in Part III of those latter regulations.  Part III does not include regulations 16 and 17.  It was therefore mistaken of the President to include an MQPM on the panel of the present appeal; that such an inclusion was deliberate (and not limited to an appeal, possibly listed the same day, which did concern the PCA), is endorsed by the further direction of the LQPM on 27 April 2007 which specifically associated BE1314/06/S in an oral hearing containing one each of the three categories of membership. 

 

28.             On behalf of the Department, it is suggested that regulation 36(5) could justify the President of the Appeals Tribunals appointing to the tribunal an additional panel member who is also an MQPM.  However, this is not so in the present case, because regulation 36(5) only applies “where the composition of an appeal tribunal is prescribed under paragraphs (1), (2)(a) or (3)”.  From what has been already said, the composition of the tribunal could not be properly prescribed under regulation 36(2)(a) although it could be so prescribed under paragraphs (1) and (3).  The latter scenario, however, does not permit an additional medical  member. 

 

29.             The words: “for the purposes of providing further experience for that additional member or assisting the President in the monitoring of decision-making by panel members” must be read in the context in which they are used.  A medical member does not require experience with a type of appeal on which he or she will never sit nor could a medical member usefully monitor either legally or financially qualified panel members.  Therefore, although the drafting is misleading and ambiguous (expressed so widely, presumably, to allow a legally qualified panel member to monitor panel members of other descriptions), the wording could not permit either an MQPM or FQPM to sit as an additional member where there is not already a like qualified member on the panel.  (There was, of course, no suggestion in the President’s direction that the MQPM was in fact being used in the present appeal because regulation 36(5) applied).

 

Summary

 

30.       Because of the inclusion of a medically qualified panel member, the tribunal was improperly constituted and therefore its decision concerning the claimant’s IB for the period 8 April 2002 to 24 October 2005 must be set aside.  The appeal is remitted to a new tribunal to begin again.  The new tribunal will not include a medically qualified panel member.  If there is to be a financially qualified panel member, the President of Appeal Tribunals will require to issue a fresh direction in this respect, because the previous direction relating to the appellant’s IB appeals was invalid insofar as it applied to the hearing of the present appeal.

 

31.       It is emphasised that there will be a complete rehearing on the basis of the evidence and arguments available to the new tribunal and the determination of the claimant’s case on the merits is entirely for them.   Although the claimant has been successful in her appeal limited to issues of law, the decision on the facts of her case remains open.  The tribunal did not accept that what the claimant did could be categorised as other than work and I have found no error of law in the tribunal’s approach to that issue, having regard to its findings and on the material in front of it; however, it is for the new tribunal to consider on a fresh basis whether the claimant’s activities amounted to work, having regard to the evidence produced to it at the new hearing.  I considered using my power to substitute my own decision but judge it is inappropriate to do so when I would have to rely on findings made by, or alternatively in part on evidence given to, a tribunal whose composition was not authorised by the legislation.

 

 

            (Signed):  L T Parker

 

            NI Deputy Commissioner

 

 

 

            5 May 2010