KM-v-Department for Social Development (IS) [2011] NICom 230

Decision No:  C5/11-12(IS)

 

 

 

 

SOCIAL SECURITY ADMINISTRATION (NORTHERN IRELAND) ACT 1992

 

SOCIAL SECURITY (NORTHERN IRELAND) ORDER 1998

 

 

INCOME SUPPORT

 

 

Application by the claimant for leave to appeal

and appeal to a Social Security Commissioner

on a question of law from a Tribunal’s decision

dated 30 July 2007

 

 

DECISION OF THE SOCIAL SECURITY COMMISSIONER

 

 

1.    I grant leave to appeal and proceed to determine all questions arising thereon as though they arose on appeal.  The decision of the appeal tribunal dated 30 July 2007 is in error of law.  The error of law identified will be explained in more detail below.  Pursuant to the powers conferred on me by Article 15(8) of the Social Security (Northern Ireland) Order 1998, I set aside the decision appealed against.

 

2.    For further reasons set out below, I am unable to exercise the power conferred on me by Article 15(8)(a) of the Social Security (Northern Ireland) Order 1998 to give the decision which the appeal tribunal should have given.  This is because there is detailed evidence relevant to the issues arising in the appeal, including the oral evidence of the appellant, to which I have not had access.  Further, there may be further findings of fact which require to be made and I do not consider it expedient to make such findings, at this stage of the proceedings.  Accordingly, I refer the case to a differently constituted appeal tribunal for re-determination.  In referring the case to a differently constituted appeal tribunal for re-determination, I direct that the appeal tribunal takes into account the guidance set out below.

 

       Background

 

3.    This application has a detailed and complicated background.  The application has been the subject of a ‘staying’ direction while proceedings progressed in another appeal before the Social Security Commissioners, which, in turn, was the subject of an onward appeal to the Court of Appeal.  This has, inevitably, led to a considerable delay in the promulgation of this decision.  Throughout the lengthy proceedings before the appeal tribunal and the Social Security Commissioners the appellant has expressed an understandable frustration and aggravation with protracted nature of the resolution of issues which are of importance to him.  It is necessary to empathise with the appellant in connection with his reasonable irritation and apologise for the time which it has taken for proceedings to get this far.

 

4.    The appellant had been in receipt of income support (IS) for a number of years up to 2005.  On 11 September 2005 evidence was obtained by Benefit Investigation Services (BIS) concerning details of various bank accounts which were submitted to be held by the appellant.  The appellant had been requested to attend for an interview with BIS.  The appellant’s general practitioner (GP), through correspondence dated 13 June 2005, stated that the appellant was medically unfit to attend such an interview.

 

5.    On 20 December 2005 a decision-maker of the Department made a decision.  A copy of that decision is attached to the original appeal submission as Tab No 8.  The precise status of that decision will be explored in more detail below.

 

6.    On 8 February 2006 another decision-maker of the Department made a further decision.  A copy of that decision is attached to the original appeal submission as Tab No 9.  In this decision, the decision-maker stated, inter alia, that:

 

‘As a result of the decision dated 20 December 2005, an overpayment of Income Support has been made from 28 March 2000 to 28 November 2005 (both dates included) amounting to £20553.25 as shown on the schedule.

 

On 03 April 2000 (the claimant) misrepresented the material fact that he was entitled to the amount stated on the foil in his order book and on all subsequent methods of payment up to and including 28/11/05.  (The claimant) had capital in excess of the prescribed amount.

 

As a consequence, Income Support amounting to £20553.25 from 28 March 2000 to 28 November 2005 (both dates included), as detailed on the schedule, was paid which would not have been paid but for the misrepresentation.

 

Accordingly, the amount is recoverable from (the claimant)’

 

7.    The legal effect of the decision dated 8 February 2006, and the circumstances surrounding notification of that decision to the appellant are further examined below.

 

8.    I would pause at this stage to note that attached as Tab No.10 of the original appeal submission is a copy of a memorandum from the Debt Management Unit to the Appeals Service (TAS) in Omagh.  In this memorandum, an officer from the Debt Management Unit, notifies TAS that ‘… overpayment recovery action is suspended …’ The significance of the involvement of the Debt Management Unit is explored in more detail below.

 

9.    On 6 March 2006 a form of appeal was received in the Department from the appellant.  In that form of appeal, the appellant does not make any reference to a specific decision of the Department against which he wishes to appeal but makes general references to (i) letters which he states were sent to him indicating that his receipt of disability living allowance (DLA) did not count towards his entitlement to IS, (ii) any savings which he had were accumulated from his DLA entitlement, (iii) he had done nothing wrong, (iv) he wished his entitlement to IS to be reinstated and (v) someone should come to his home to see the letters which he was talking about.  I would note here that the arguments set out in the form of appeal have been repeated by the appellant throughout the appeal process before the appeal tribunal and the Social Security Commissioners.

 

10.   In the original appeal submission, the appeals writer submits that further correspondence was received from the appellant on 7 March 2006 which repeated the arguments which had been presented in the first form of appeal.  Unfortunately a copy of the correspondence dated 7 March 2006 was not included in the original appeal submission.

 

11.   On 13 March 2006 yet another decision was made by a decision-maker of the Department.  A copy of that decision was attached to the original appeal submission as Tab No 13.  The decision at Tab No 13 is described as a ‘Reconsideration’.  The outcome of that reconsideration, however, is stated to be that there was to be no change to the decision dated 8 February 2006.

 

12.   Another decision was made on 4 May 2006.  A copy of that decision is attached to the original appeal submission as Tab No 14.  That decision is described as a ‘Revised Decision’.  The decision-maker stated that the decision dated 8 February 2006 was

 

‘… erroneous in that misrepresentation did not occur for the period 14/12/04 to 18/7/05 – (the claimant’s) Income Support was paid by Automated Credit Transfer.’

 

13.   The decision-maker made a revised decision, as follows:

 

‘Misrepresentation occurred from 28/3/00 to 13/12/04 – that he was entitled to the amount stated on the foils in his order book and subsequent methods of payments.

 

Failure to disclose occurred from 14/12/04 to 18/7/05 – he failed to disclose that he had capital in excess of the prescribed amount.

 

Misrepresentation occurred from 19/7/05 to 28/11/05 when he completed form A2 dated 20/7/05.

 

As a result of the above, (the claimant) was overpaid Income Support of £20553.25 from 28/3/00 to 28/11/05 and that amount is recoverable from him’

 

14.   On 4 May 2006 another decision was made by a decision-maker of the Department.  A copy of that decision is attached to the original appeal submission as Tab No 17.  It is described as a ‘Reconsideration’.  Its effect was stated to be that the earlier decision dated 4 May 2006 was not changed.

 

15.   Also attached to the appeal submission, as Tab No 17, is a copy of a decision notice of an appeal tribunal hearing which took place on 4 August 2006.  The appeal tribunal hearing concerned the appellant but it would appear that he was not present at the oral hearing of the appeal.  The decision notice reads as follows:

 

‘Appeal disallowed.

 

Appellant had capital of £3616.06 as at 25.11.97 and this attracts a tariff income from that date until 30.12.98.  He is not entitled to Income Support from 30.12.98 because his capital exceeds £8000.’

 

16.   In the original appeal submissions the narrative for the document at Tab No. 17 is described as follows:

 

‘On 04/08/06 a Tribunal decided to disallow (the claimant’s) appeal of 06/03/06 against the decision of 20/12/05.’

 

17.   There are no further details of the appeal tribunal hearing which took place on 4 August 2006.  In a reply to a request to TAS for a copy of the file relating to that hearing, TAS confirmed that the relevant file had been destroyed.

 

18.   The appeal was first listed for oral hearing on 24 October 2006.  The appeal was adjourned as the appeal tribunal was concerned as to whether the appellant had been accorded appeal rights against the decision dated 4 May 2006.  The legally qualified panel member (LQPM) of the appeal tribunal issued a direction to the Department consequent on the adjournment.

 

19.   On 13 December 2006 an addendum to the original appeal submission was prepared by the appeals writer.  In this addendum, the appeals writer indicated that the appellant had tendered a letter of appeal in response to correspondence which had been forwarded to him on 10 November 2006 and in which he was afforded appeal rights against the decision dated 4 May 2006.  The appeals writer also submitted that the decision dated 4 May 2006 was reconsidered on 11 December 2006 but was not changed.

 

20.   The substantive oral hearing of the appeal took place on 30 July 2007.  The appellant was not present nor was a Departmental presenting officer.  In the record of proceedings for the appeal tribunal hearing, the appeal tribunal noted that the appellant had requested that the appeal tribunal hearing should proceed in his absence.  The appeal tribunal disallowed the appeal and issued the following decision notice:

 

‘Appeal disallowed

 

An overpayment of Income Support amounting to £20,553.25 received by the Appellant in respect of the period 28.3.00 to 28.11.05 is recoverable from him.’

 

21.   The statement of reasons for the appeal tribunal’s decision reads as follows:

 

The Tribunal’s decision is that the sum of £20,553.25 is recoverable from the appellant.  It is clear from a perusal of the papers that since 28.3.00 the appellant has had capital in excess of the maximum prescribed amount of £8,000.00.  He did not make the Department aware of the true position in relation to his capital.  Accordingly the Tribunal is satisfied as follows:-

 

1.     That on 28.3.00 he misrepresented the material fact he was entitled to Income Support up to and including 13.12.04 because he had capital in excess of £8,000.00.

 

2.     In respect of the period 14.12.04 to 18.7.05 he failed to disclose his capital as above.

 

3.     From 19.7.05 he misrepresented the true position when completing Form A2.’

 

22.   On 2 October 2007 an application for leave to appeal to the Social Security Commissioner was received in TAS.  On 5 October 2007 the application for leave to appeal was refused by the LQPM.

 

       Proceedings before the Social Security Commissioner

 

23.   On 16 October 2007 a further application for leave to appeal was received in the Office of the Social Security Commissioners.  On 7 November 2007 written observations on the application were sought from Decision Making Services (DMS) and these were received on 6 December 2007.  In these initial observations, Mr McGrath, for DMS, while conceding that the Department had not provided all of the relevant order book notes or order book foils for the claimant or the appeal tribunal, opposed the application on the grounds cited by the appellant.  The initial written observations were shared with the appellant on 20 December 2007.

 

24.   On 11 February 2008 the Chief Commissioner decided that an oral hearing of the application was not required but invited further submissions on the application from the appellant.  On 18 February 2008 correspondence was received from the appellant in which he repeated his argument that he was sent letters informing him that payments of DLA did not count as savings.

 

25.   On 1 May 2008 the legal officer requested Mr McGrath to confirm, and provide any available documentary proof, that the appellant was notified of the revision decision of 20 December 2005 and informed of his appeal rights against that decision.  On 15 May 2008 a further submission was received from Mr McGrath, the significance of which will be discussed in greater detail below.  For the moment, though, it is important to note that Mr McGrath referred to two other cases which were before the Social Security Commissioners which were dealing with similar issues which arose in the present case.  The further submission was shared with the appellant on 27 May 2008 who replied to it on 2 July 2008.  Following further consideration, it was decided to stay the proceedings in the present case pending the promulgation of the decision in one of the other two cases which were before the Commissioners.

 

26.   On 25 March 2009 the legal officer requested Mr McGrath to comment on whether the decision of the Deputy Commissioner in C10/07-08(IS), (the case referred to in the previous paragraph as forming the basis for the stay) had a bearing on the issues arising in the instant appeal.  A submission on that issue was received on 6 April 2009 and was shared with the appellant on 7 April 2009.  On 21 April 2009 further correspondence was received from the appellant. In this correspondence the appellant stated:

 

‘I am disabled and cannot take all the stress of these appeals so I paid the Social Security Agency £20553.25 last summer.  It was a big loss and reading your letter I wonder if you could get it back for me.  As I always said it was all DLA money which I was told I was allowed to keep.  I have nothing now so if my appeal has been successful I would like my £20553.25 back please.’

 

27.   The significance of the evidence that the appellant had re-paid money to the Department will be discussed in more detail below.

 

28.   On 15 June 2009 I directed an oral hearing of the appeal.  The oral hearing of the appeal took place on 29 October 2009.  The appellant was not present but the Department was represented by Mr McGrath.  I am grateful to Mr McGrath for his detailed and constructive observations, comments and suggestions.

 

29.   Immediately following the oral hearing of the application it became clear that permission had been granted to appeal to the Court of Appeal against the decision of the Deputy Commissioner in C10/07-08(IS).  Accordingly, a decision was made, with the agreement of Mr McGrath, to further stay the proceedings in the instant case until the outcome of the proceedings before the Court of Appeal was known.

 

30.   On 10 February 2011, and following a request to that effect, Mr McGrath provided a further submission on the effect of the decision of the Court of Appeal in Hamilton v Department for Social Development ([2010] NICA 46) (hereafter referred to as Hamilton), the decision of the court on appeal from the decision of the Deputy Commissioner in C10/07/08(IS).  This further submission was shared with the appellant on 15 February 2011 but there has been no reply from him.

 

31.   I then became aware that the issues raised in Hamilton were due to be considered by a Judge of the Upper Tribunal (Administrative Appeals Chamber) in Great Britain.  The decision of Upper Tribunal Judge Ward in Secretary of State for Work and Pensions v AD ([2011] UKUT 184 (AAC)) was promulgated on 10 May 2011.

 

       Errors of law

 

32.   A decision of an appeal tribunal may only be set aside by a Social Security Commissioner on the basis that it is in error of law.

 

33.   In R(I) 2/06 and CSDLA/500/2007, Tribunals of Commissioners in Great Britain have referred to the judgment of the Court of Appeal for England and Wales in R(Iran) v Secretary of State for the Home Department ([2005] EWCA Civ 982), outlining examples of commonly encountered errors of law in terms that can apply equally to appellate legal tribunals.  As set out at paragraph 30 of R(I) 2/06 these are:

 

“(i)      making perverse or irrational findings on a matter or matters that were material to the outcome (‘material matters’);

(ii)      failing to give reasons or any adequate reasons for findings on material matters;

(iii)      failing to take into account and/or resolve conflicts of fact or opinion on material matters;

(iv)      giving weight to immaterial matters;

(v)      making a material misdirection of law on any material matter;

(vi)      committing or permitting a procedural or other irregularity capable of making a material difference to the outcome or the fairness of proceedings; …

 

Each of these grounds for detecting any error of law contains the word ‘material’ (or ‘immaterial’).  Errors of law of which it can be said that they would have made no difference to the outcome do not matter.”

 

       Why was the decision of the appeal tribunal in the instant case in error of law?

 

       Section 69(5A) of the Social Security Administration (Northern Ireland) Act 1992

 

34.   Section 69(5A) of the Act provides that:

 

‘(5A) Except where regulations otherwise provide, an amount shall not be recoverable under subsection (1) above or under regulations under subsection (4) above unless the determination in pursuance of which it was paid has been reversed or varied on an appeal or has been revised under Article 10 or superseded under Article 11 of the Social Security (Northern Ireland) Order 1998’

 

35.   In summary, this paragraph says that there can be no recoverable overpayment of social security benefit, unless the original decision which gave rise to the award of benefit, now deemed to have been overpaid, is revised or superseded.  Without an alteration or change in the decision giving rise to the entitlement to the particular benefit, there can be no recovery of it.

 

36.   The importance of the proper identification of a section 69(5A) decision was emphasised by Deputy Commissioner Powell in C10/07-08(IS).  At paragraph 4 he stated:

 

‘ … the relevant statutory provision, which is section 69(5A) of the Social Security Administration (NI) Act 1992, expressly provides that a decision which seeks to recover an amount of overpaid benefit cannot be made unless the determination in pursuance of which the amount was overpaid has been revised or superseded by a separate decision.  In other words, the decision which awarded benefit must be abrogated or corrected in one of the ways permitted by the legislation before a decision can be made as to how much has been overpaid and what is now recoverable.  Put like that, the sequence of decisions is logical.  The two decisions can be contained in a single document provided that the sequence is apparent.  Section 69(5A) is an important safeguard.  Tribunals, rightly, are alert to see that it has been complied with.  Nothing I am going to say casts doubt on their vigilance.  A tribunal must allow an appeal against a decision seeking to recover overpaid benefit once it becomes clear that the decision which awarded benefit has not been revised or superseded in the appropriate manner.  Further, a tribunal should also allow an appeal where not only is there no copy of the revision or supersession decision before it but such evidence as is relied upon leaves the tribunal uncertain as to whether the necessary decision was taken.’

 

37.   In essence, the appeal tribunal will have to identify two decisions.  The first is a decision which alters previous decision(s) awarding entitlement to benefit – that can be described as the entitlement or section 69(5A) decision.  The second is a decision that overpaid benefit is recoverable – that can be described as the recovery or section 69(1) decision.  At paragraph 10 of C10/07-08(IS), Deputy Commissioner Powell stated:

 

‘It is now settled law, and section 69(5A) so provides, that the recovery of an overpayment of benefit requires two distinct decisions which are often called the “entitlement decision”, which changes the entitlement to benefit for a past period through the process of revision or supersession, and the “recoverability decision”.  The latter being based on the former.  I use the word “distinct” deliberately.  Since the recoverability decision is based on the entitlement decision it must be proceeded by it.  Subject to that, the two decisions can be given on the same date or even in the same document – provided that they are distinct and that it is clear that the entitlement decision comes first.’

 

38.   The decision of the Court of Appeal in Hamilton, on appeal from the decision of Deputy Commissioner Powell, turns on the issue of the proper notification of Departmental decisions to claimants and does not, in my view, affect the principles set out by Deputy Commissioner Powell, in the passages set out above, concerning the requirement on an appeal tribunal to be vigilant to ensure that the ‘important safeguard’ of section 69(5A) has been complied with.

 

39.   How did the appeal tribunal approach the issue of the identification and ratification of a section 69(5A) decision in the instant case?  The full statement of reasons for the appeal tribunal’s decision is set out above.  The statement of reasons makes no reference to section 69(5A).  That would not be an error in itself, but, more significantly, there is no reference to an entitlement decision underpinning the recovery decision.  In my view, the failure of the appeal tribunal to consider, identify and ratify a section 69(5A) decision renders its own decision as being in error of law.

 

40.   There is one possible explanation why the appeal tribunal did not consider it necessary to address the section 69(5A) issue.  As was noted above, an appeal tribunal hearing in connection with the appellant’s entitlement to social security benefits took place on 4 August 2006.  The only paperwork which remains in existence in connection with that appeal tribunal hearing is the copy of the decision notice attached to the original appeal submission as Tab No. 17.  Accordingly I cannot be sure of the precise decision which was under appeal to the appeal tribunal and which issues were raised in connection with that decision.  It would appear, however, that the appeal tribunal was considering an appeal against a decision of the Department dated 20 December 2005 and, which, as was also noted above, was an ‘entitlement’ decision made following the undertaking of the investigation of the appellant’s capital resources.  The LQPM who heard and determined the appeal on 4 August 2006 was the same LQPM who heard and determined the appeal in the instant case.  It may be that the LQPM had decided, based on his prior involvement with the appellant that the section 69(5A) issue was somehow settled and did not be revisited as part of the appeal tribunal hearing in the instant case which was concerned with the ‘recovery’ decision.

 

41.   In any event, Mr McGrath, in keeping with his role as amicus curiae, has submitted that there were, in fact, two decisions made on 20 December 2005.  In his further submission, dated 2 April 2009, Mr McGrath submitted that:

 

‘Although a notification letter was issued to (the claimant) on 22-12-05 the computer decision dated 20-12-05, which generated this notification, only disallowed the award of Income Support from 6-12-05.

 

However the decision maker also made an off line decision on 20-12-05 which disallowed Income Support from 31-12-98 …

 

This decision was enclosed as Tab 8 of the appeal papers which were issued to (the claimant) before the adjourned tribunal hearing of 24-10-06.’

 

42.   Accordingly, it is now clear that on 20 December 2005 both an ‘on-line’ decision (described as ‘the computer decision’ above) and an ‘off-line’ decision were made.  Although I cannot be certain, the appeal tribunal, in its decision dated 4 August 2006, appeared to be confirming the ‘off-line’ decision alone.  The wording of the relevant decision notice is suggestive of that.

 

43.   In his submission dated 15 May 2008, Mr McGrath had set out the reasons why a further ‘off-line’ decision was necessary; confirmed that the appellant had been notified of the first ‘on-line’ decision dated 20 December 2005, and his right of appeal against that decision:

 

‘A copy of the computer printout, (appendix 1) entitled “Notifications/Notes” shows that on 22-12-05 (the claimant) was issued with a letter explaining that there had been a change in his circumstances and that his claim had ended.  Along with this letter information leaflets INF1, 2 and 4 were issued.

 

An INF1 advises the claimant how to appeal against a decision.  While an INF2 details what other help the claimant may be entitled to.  An INF4 advises the changes that the claimant must report.

 

In the case papers there is also a record of a telephone call (Appendix 2) made by (the claimant) to Omagh Jobs and Benefits Office on 6^th January 2006.

 

In this it is recorded that (the claimant) has requested a return call regarding the decision to disallow his Income Support claim because his capital exceeded the limit.  (The claimant) stated that his capital was approximately £5000.00.

 

Unfortunately a copy of the letter that was issued to (the claimant) has not been retained but a specimen copy (…) has been enclosed.

 

This letter is computer generated and contains variable paragraphs that are selected or omitted depending on the exclusion code that is input by the decision maker.

 

Appendix 4 is a copy of the computer print out that confirms that the exclusion code used was 06 and the explanation of this code is recorded as “ Customer’s and partner’s capital exceeds £8000”.

 

Therefore I would submit that for the reasons above that (the claimant) was notified of a decision disallowing income support, the reasons for this decision were included in the notification and he was also informed of his appeal rights.

 

However it is also apparent from additional computer printouts (…) that while the computer recorded a date of change from 22-10-04 it only adjudicated from 6-12-05.  This being the case then the claimant was only notified of the disallowance for the period commencing 6-12-05.

 

This is incorrect as the proper disallowance date is 28-3-00.’

 

44.   Further questions arise, therefore, as to whether there has been proper notification of both the ‘on-line’ and ‘off-line’ decisions and, more significantly, notice of a right of appeal against those decisions.  Those were issues which were relevant in C10/07-08(IS) and in the subsequent appeal in Hamilton. Mr McGrath’s initial view, based on the stand-alone decision in C10/07-08(IS) was that while the appellant had been made aware of the existence of the ‘off-line’ decision, through its inclusion in the appeal submission, he had been disadvantaged in not being informed of his specific right of appeal against that decision.  By the time that the decision of the Court of Appeal in Hamilton had been promulgated, Mr McGrath was submitting that:

 

‘In the instant case, (the claimant) had initially only been made aware that the Department had removed his entitlement to income support from 6-12-05 when he received notification of the on-line entitlement decision dated 20-12-05.  This notification also advised (the claimant) of his appeal rights against that decision.

 

The off-line entitlement decision dated 20-12-05, which took effect from 31-12-98 was not notified to (the claimant) at that time.  However, as in the Hamilton case, I submit that (the claimant) would have made aware that the Department had removed entitlement to income support and that an overpayment had occurred for which he was responsible, when notified of the overpayment decision on 8-2-06.  In view of the findings of the Court of appeal I submit that this letter brought to (the claimant’s) attention the effect of the off-line decision and notified him of his right of appeal thus satisfying the requirements of Regulation 28 of the Social Security and Child Support (Decisions and Appeals) Regulations (NI) 1999’

 

45.   Whether or not there has been proper notification of the ‘off-line’ decision will have to be investigated by the appeal tribunal to which this appeal has been remitted.  The directions which follow the disposal of this appeal will require the Department to make specific submissions on that issue.  With respect, however, to Mr McGrath’s submission on the effect and applicability of the decision of the Court of Appeal in Hamilton, I would add the following comments.

 

46.   It is important not to extrapolate too broad a principle of law from the decision in Hamilton.  In many ways that case turned on its own particular facts.  The decision in Hamilton  was the subject of analysis by Upper Tribunal Judge Ward in Secretary of State for Work and Pensions v AD ([2011] UKUT 184 (AAC)).  After a close scrutiny of the background to the case, and the precedential weight to be attached by the Upper Tribunal in Great Britain to a decision of the Court of Appeal in Northern Ireland, Judge Ward concluded, at paragraph 17:

 

‘17. It does respectfully seem to me that Hamilton may give rise to difficult questions of the interaction between the taking of a decision, the communication of a decision and the rule referred to in the second of the questions posed by the Commissioner in the case stated.’

 

47.   In the view of Judge Ward the decision in Hamilton would have a limited binding effect only to parallel fact-analogous situations.  In this regard he stated, at paragraph 16:

 

‘16. If, therefore, the present case were one where the notification of the recoverability decision was sufficient also to encompass a notification of the entitlement decision on supersession, it might be that I would be constrained to follow the decision in Hamilton.’

 

48.   On the factual situation which was before Judge Ward in the Upper Tribunal, the Secretary of State conceded that the letter which was sent to the claimant notifying him of an overpayment should not be construed as notification of a prior entitlement (supersession) decision.  One factor which negated the construal of the overpayment decision as not encompassing effective notification of the entitlement decision was that:

 

‘20. The letter consistently uses the singular “decision”.  The information sheet with answers to questions is about, specifically, the “overpayment decision”.  To say that “your entitlement to a premium has stopped” was not a fair summary of the supersession decision, which was not merely about the claimant having been overpaid because entitlement had stopped, but about apparent entitlement for a past period having been removed.’

 

49.   The Secretary of State also conceded that it was not the intention of the letter to notify the entitlement decision as well:

 

’21. … for the Debt Centre, who sent the letter, does not deal with entitlement decisions beyond being required to satisfy itself that there is one, sufficient to satisfy section 71(5A) of the 1992 Act, and would not be equipped to answer questions posed in response to the letter about any entitlement decision.

 

22. While the DWP’s internal working practices could not be determinative of the legal effect of the letter, it is entirely unsurprising that the phrasing of the letter in the respects set out in [20] is consistent with how the DWP does in fact deal with such matters.’

 

50.   Accordingly, at paragraph 23, Judge Ward accepted as properly made the concession by the Secretary of State that:

 

“In view of the foregoing, any reasonable person receiving the letter would not have known that there existed a separate supersession decision against which he could appeal.  The notification simply does not say that, whether expressly or by reasonably clear implication.  This would seem a little too close for comfort to the “hole in the corner decisions” deprecated by Lord Steyn in paragraph 28 of Anufrijeva.  To borrow another phrase from his Lordship, if this is the Secretary of State’s way of notifying supersession decisions that produce an overpayment, “transparency is not its hallmark” (Anufrijeva, paragraph 24).”

 

51.   It is clear, therefore, in a factual situation such as exists in the instant case, that there has to be close scrutiny of a document which is notification of an overpayment or recovery decision to determine whether it could be construed as encompassing an effective notification of prior entitlement decision which had not, in fact, been notified.  I agree that it has to be clear to any reasonable person receiving the letter of notification of the overpayment decision that there existed a separate entitlement decision, such as a supersession, against which he could appeal.  There would have to be an express statement to that effect or it would have to be by reasonably clear implication.

 

52.   In Hamilton, for the Court of Appeal, scrutiny of the letter which amounted to notification of the overpayment or recovery decision led to a conclusion that it was sufficient also to encompass a notification of an entitlement decision on supersession, which had not previously been notified.  That need not always be the case, and it is important for decision-making authorities to be vigilant about the background and contents of the letter of notification of a recovery decision to determine whether it can be construed as having a broader notification effect.

 

53.   In the instant case, there is no copy of the letter of notification of the overpayment decision dated 8 February 2006.  What is in the papers before me, at Tab No 10 of the original appeal submission, is a copy of a memorandum from the Debt Management Unit to TAS in Omagh.  In this memorandum, an Officer from the Debt Management Unit notifies TAS that ‘… overpayment recovery action is suspended …’ Although I cannot be certain, this is indicative that the Debt Management Unit was involved in the making and/or notification of the relevant recovery decision.  Accordingly the factual background may be analogous to that in Secretary of State for Work and Pensions v AD ([2011] UKUT 184 (AAC)).  It is important to note, however, the comments of Judge Ward, at paragraph 22 of that decision, that internal working practices alone cannot be determinative of the legal effect of a letter.

 

54.   For the sake of completeness, Judge Ward also found certain other aspects of the reasoning of the Court of Appeal in Hamilton to be problematic – see his comments at paragraph 15.  Further he thought that the decision did not take account, probably because the authorities had not been cited, relevant authorities of the Social Security Commissioners/Upper Tribunal on the requirement for there to be ‘proper decisions altering entitlement for all parts of the period of the alleged overpayment, at the date on which the overpayment recoverability decision is made.’

 

       Failure to disclose/misrepresentation

 

55.   In DJ-v-Department for Social Development (IB)[2010] NICom 100 (C17/10-11(IB)), I took the opportunity to remind decision-makers and appeal tribunals of the current state of the law in relation to aspects of failure to disclose.  I set out the current appellate authority on the legislative source of the duty to disclose and the current appellate authority on clarity of instructions.  In a number of additional decisions, and based on my repetition of the relevant legal principles, I have exhorted appeal tribunals to address the legal and evidential source of the duty on the claimant to disclose a material fact or a change of circumstances.  I have also made similar comments in cases where recovery of overpaid benefit is sought on the basis of a misrepresentation of a material fact.

 

56.   In the instant case, the basis upon which the Department decided that there had been a recoverable overpayment of IS was both a failure to disclose and misrepresentation.  Having looked at the statement of reasons for the appeal tribunal’s decision, it is clear to me that the appeal tribunal has not addressed either the legal or evidential basis upon which it has decided that the appellant was under a duty to disclose or misrepresented a material fact permitting the Department to recover an overpayment of a social security benefit for a particular period.  In addition, the wording of the paragraph number ‘1’ in the statement of reasons is perplexing.  It reads as follows:

 

‘1.       That on 28.3.00 he misrepresented the material fact he was entitled to Income Support up to and including 13.12.04 because he had capital in excess of £8,000.00.’

 

57.   I am unclear as to whether the appeal tribunal means that there was a misrepresentation of a material fact on 28 March 2000 and that such misrepresentation continued until 13 December 2004.  In any event, there is no analysis as to how the misrepresentation occurred.

 

58.   It seems to me that where an appeal tribunal is confirming a decision of the Department, whereby the Department seeks to recover a significant sum of an overpaid social security benefit, the appellant is entitled to be informed of the legal and evidential basis upon which the appeal tribunal has determined that the basis for recovery – in this case both failure to disclose and misrepresentation of a material fact – has been established.  The decision of the appeal tribunal is also in error of law on the basis of the failure to address, in an adequate manner, this significant issue.

 

       Template submissions in overpayment appeals

 

59.   In previous decisions I have commented on the use of ‘template’ submissions in appeals which are against overpayment decisions.  At paragraph 57 of DJ-v-Department for Social Development, I stated:

 

‘57.   The general appeal submission is drafted in a standard template format which the Department has been utilising for overpayment appeals for some time.  In my view, that format requires revising to take into account the significant developments which have taken place, at Social Security Commissioner and appellate court level, in connection with the scope of the ‘failure to disclose’ test, as set out in section 69 of the Social Security Administration (Northern Ireland) Act 1992, and the equivalent section 71 of the Social Security Administration Act 1992.  Some of the relevant case-law has been set out above.  Other important cases include Hinchy v Secretary of State for Work & Pensions ([2005] UKHL 16) and Hooper v Secretary of State for Work & Pensions ([2007] EWCA Civ 495).  All of those decisions set out important principles with respect to ‘failure to disclose’, identify relevant issues associated with the legislative test, and impose requirements on adjudicating authorities including decision-makers of the Department and appeal tribunals.  It is essential that appeal submissions reflect the currency of the legal developments with respect to particular issues arising in the appeal.  In this respect, the current standard template utilised for overpayment appeals requires to be amended.’

 

60.   I repeated those comments in paragraph 22 of AS-v-Department for Social Development (DLA) [2011] NICom 224 (C27/11-12(DLA)).  The submission which was prepared for the appeal tribunal in the instant case is also in the common standard ‘template’ format and does not address the currency of the legal developments with respect to the particular issues arising in the appeal.  It is essential that appeal submissions are coherent and accurate and properly reflect the current status of the legal principles governing the issues which arise in the appeal.  It is essential that those responsible for the preparation of appeal submissions in cases involving overpayment decisions address the current failure of those submissions to properly reflect the correct legal principles.

 

       The repayment of the overpaid IS

 

61.   As was noted above, in correspondence to the Office of the Social Security Commissioners, dated 21 April 2009, the appellant indicated that he had decided to pay back the full sum of the IS which the Department had submitted had been overpaid to him.  At the oral hearing of the application for leave to appeal Mr McGrath confirmed that the full amount of the submitted overpaid benefit had been re-paid by the appellant, in two separate tranches.

 

62.   I cannot be certain as to the reasons why the appellant decided to re-pay benefit to the Department.  It may be the case that the appellant decided that the Department’s decision was correct, that he had been over-paid and that the complete sum was recoverable from him.  The tenor of the correspondence in which the appellant confirmed the re-payment suggests, however, that there was an alternative reason for the re-payment.  The proceedings within the Department, before the appeal tribunal, and, now, before the Social Security Commissioners have been protracted.  As was noted above, I empathise with the appellant’s frustration and aggravation with protracted nature of the resolution of issues which are of importance to him.  His correspondence dated 21 April 2009 suggests that the re-payment was the culmination of his aggravation with the lengthy proceedings and a means of bringing his frustration to an end.  I am mindful that within the papers which are before me is correspondence from the appellant’s GP which confirms the appellant’s physical and mental disabilities.

 

63.   In previous applications and appeals involving decisions seeking recovery of over-paid social security benefits, I have commented on the relationship between further appellate proceedings before the Social Security Commissioners and ongoing action by the Debt Management Unit to seek actual re-payment of sums which are submitted to be owed to the Department.  In those previous applications and appeals, I expressed the view that I did not understand why there is not a suspension of overpayment recovery during the period when the validity of a decision giving rise to an overpayment is challenged before the appellate authorities.  There appears to be such a suspension when a recovery decision is challenged before an appeal tribunal.  The memorandum at Tab No 10 is evidence that such a policy operates successfully.  It is important, in my view that this suspension policy is extended, when there is further appellate proceedings before the Social Security Commissioners.  I would emphasise, however, that in the instant case, there is no evidence whatsoever that the appellant was placed under pressure by the Debt Management Unit to re-pay the submitted over-paid benefit.

 

64.   In the correspondence dated 21 April 2009 the appellant has expressed regret at his decision to re-pay a significant sum of money to the Department.  My decision is that his appeal to the Social Security Commissioners is allowed but that his case is remitted to a differently constituted appeal tribunal for re-determination.  This will afford the appellant an opportunity to make submissions as to why the decision that there is an overpayment of IS, for a particular period, which is recoverable from him is wrong.  The appellant should avail of the opportunity to attend the next oral hearing of the appeal.  I encourage him to take the opportunity to obtain representation, and to attend the next oral hearing with a representative to argue his case.

 

       Disposal and directions

 

65.   The decision of the appeal tribunal dated 30 July 2007 is in error of law.  Pursuant to the powers conferred on me by Article 15(8) of the Social Security (Northern Ireland) Order 1998, I set aside the decision appealed against.

 

66.   I direct that the parties to the proceedings and the newly constituted appeal tribunal take into account the following:

 

(i)          the decision under appeal is a decision of the Department, dated 4 May 2006, which had revised an earlier decision of the Department dated 8 February 2006 and which decided that an overpayment of IS for the period from 28 March 2000 to 28 November 2005 had occurred which was recoverable from the appellant;

 

(ii)         the Department is directed to produce a further submission for the appeal tribunal hearing which addresses the following issues –

 

(a)    whether there is/are in place a decision/decisions which satisfies section 69(5A) of the Social Security Administration (Northern Ireland) Act 1992, as amended;

 

(b)    whether there has been effective notification of both of the decisions made by the Department on 20 December 2005 and the effect of that question on the issues arising in the appeal;

 

(c)    the legal and evidential basis upon which the Department submits that there has been a failure to disclose/misrepresentation on the part of the appellant giving rise to a decision which satisfies section 69(1) of the Social Security Administration (Northern Ireland) Act 1992, as amended.

 

(iii)       the appellant is encouraged to seek representation in connection with the further appeal proceedings before the differently constituted appeal tribunal.  The appellant should be advised by an officer from TAS as to the availability of advice and support from local advice organisations and be informed that such advice and support is usually available without charge.  The appellant is encouraged to attend the further oral hearing of the appeal and make submissions on issues which are of significance to him.

 

(iv)       it will be for the appeal tribunal to consider the submissions made by the parties to the proceedings on these issues, and any evidence adduced in support of them, and then to make its determination, in light of all that is before it.

 

 

(signed):  K Mullan

 

Chief Commissioner

 

 

 

15 November 2011