UK Social Security and Child Support Commissioners' Decisions

[1995] UKSSCSC CIS_767_1993 (25 April 1995)

 


R(IS) 3/96


Mr. J. Mesher CIS/767/1993
25.4.95

Capital - farm - whether farmland part of "premises" occupied by the claimant's husband

The claimant had lived on a farm of which she was the joint owner with her husband. On 2 July 1992 she went to live in a residential care home on a permanent basis. Her husband continued to live in the farmhouse. Income support was awarded from 2 July 1992. It was later established that the value of the farmland was about £35,000. The land was farmed by a partnership of the claimant's husband and son; it was accepted that the land, which had its own access, could be sold separately from the farmhouse. The adjudication officer reviewed the decision awarding income support, deciding that although the value of the farmhouse could be disregarded under paragraph 4(b) of Schedule 10 to the Income Support (General) Regulations, the value of the farmland could not. The claimant was therefore not entitled to income support because her capital exceeded the prescribed limit of £8,000. The tribunal allowed the claimant's appeal holding that the value of the claimant's interest in the farm was nil as she would be unlikely to find a willing purchaser without her husband's agreement to a sale. The adjudication officer appealed to the Commissioner.

Held that:

"premises" in paragraph 4 of Schedule 10 to the Income Support (General) Regulations was to be interpreted in line with the definition of "dwelling occupied as the home" in regulation 2(1). The first four paragraphs of Schedule 10 were all concerned with disregarding the claimant's home or what would be the home if the claimant was in actual occupation, and thus it was entirely consistent for "premises" in paragraphs 2, 3 and 4 to be given a similar interpretation. The tribunal had therefore not erred in law by failing to apply paragraph 4 of Schedule 10 to the whole of the farm (paras. 17 and 18);

however the tribunal had erred in law by not considering regulation 52 of the Income Support (General) Regulations. The effect of regulation 52 was to deem the claimant to have an equal undivided share as beneficial tenant in common of the farm (see Chief Adjudication Officer v. Palfrey and para. 49 of CIS/391/1992[R(IS) 26/95]) (paras. 19 and 20);

although there were grounds for review of the decision to award income support because it was given in ignorance of the facts relating to the claimant's beneficial interest in the farm, the adjudication officer had not shown that the decision to award the claimant income support should be revised (para. 29). The District Valuer's valuation of the claimant's interest seemed to have been based on the revenue approach which was inconsistent with the approach required by paragraphs 53 and 54 of CIS/391/1992 [R(IS) 26/95]. Moreover it was based on an assumption that an order for sale of the farm was likely to be granted but this seemed doubtful in the circumstances. Accordingly the adjudication officer had not shown that the claimant's notional share of the farm had a market value which was sufficient to affect her entitlement to income support;

the claimant was therefore entitled to income support until her death on 2 February 1994.


DECISION OF THE SOCIAL SECURITY COMMISSIONER


1. The adjudication officer's appeal is allowed in a technical sense. The decision of the Plymouth SSAT 15 July 1993 is erroneous in point of law, for the reasons given below, and I set it aside. I consider it expedient to make the necessary findings of fact and to give the decision on the appeal (Social Security Administration Act 1992, section 23(7)(a)(ii)). That decision, which has the same practical effect as that of the appeal tribunal, is set out in paragraph 2 below.
2. My decision is that the adjudication officer's decision awarding the claimant income support from and including 2 July 1992 for an indefinite period falls to be reviewed on the ground that it was given in ignorance of material facts (Social Security Administration Act 1992, section 25(1)(a)). However, the adjudication officer has not proved that on review the decision awarding income support should be revised from any date down to the date of the claimant's death.

The background

3. The claimant was born on 15 October 1911 and her husband was born on 2 September 1906. She entered a residential care home on a permanent basis on 2 July 1992. An income support claim form was signed by her husband on 10 July 1992. The Secretary of State treated the claim as having been made on 2 July 1992. On that form the claimant's address was given as the farm where she had previously lived with her husband and her husband continued to live. Savings of her and her partner of £2,500 were declared and it was said that no land or property was owned apart from the place where she lived. Income support was awarded from 2 July 1992.
4. On 9 September 1992 an officer of the Department of Social Security visited the claimant in the presence of her son and daughter-in-law. The claimant's son was made her appointee and he signed a new claim form. On that form, on which it was indicated that the claimant did not have a partner living with her, savings of £1500 were declared and it was stated that the claimant and her husband jointly owned the farm. On a later visit it was established that the claimant and her husband held the freehold of the farm jointly and that the claimant's son estimated the value of the farm land, excluding the farmhouse, at around £35,000 to £40,000.
5. The adjudication officer then on 16 October 1992, according to the transcription on page 1 of form AT2, issued the decision that "the claimant is not entitled to income support because her capital exceeds the prescribed level". No date appears to have been given for the operation of that decision, but income support was paid up to 28 October 1992 and not beyond.
6. The claimant's son appealed on her behalf. On the form AT2 the adjudication officer submitted that the claimant was the joint owner of the farm, which was no longer her home. The value of the farmhouse occupied by her husband as his home could be disregarded under paragraph 4(b) of Schedule 10 to the Income Support (General) Regulations 1987 ("the Income Support Regulations"), but not the value of the 42 acres of farm land, which was unmortgaged. The adjudication officer took the lower value given by the claimant's son, £35,000, deducted 10% for the expenses of sale to give £31,500, and calculated the claimant's half share at £15,750. It was submitted that the new found facts justified review and that the claimant was not entitled to income support.
7. There were a couple of adjourned hearings, following which a further submission was made by the adjudication officer. A valuation by the District Valuer was produced, which estimated the value of the claimant's share of the farm land at £15,000. A copy of that valuation, as at 18 February 1993, is now at pages 80 to 82 of the papers before me. The adjudication officer submitted, on the basis of information obtained over the telephone from the District Valuer, that the land could be sold separately from the farmhouse and had its own access. The claimant's son also provided further information that the land was farmed by a partnership of himself and his father, and had been since 1959. There was no financial arrangement between the partnership and the owners of the farm such as for the payment of rent.

The appeal tribunal's decision

8. The appeal was determined at the hearing on 15 July 1993. Neither the claimant nor her son attended. The appeal tribunal decided that the claimant was entitled to income support because her capital did not exceed the prescribed level. Its findings of fact were as follows:

"[The claimant] is a married woman aged 81 who entered residential accommodation on a permanent basis on 2 July 1992. Her husband Walter, aged 86, remained in their home, Venn Park, ....

Venn Park is a farm consisting of a farmhouse plus 42 acres of land, 34 in good heart and eight in woodland. The farm is jointly owned by [the claimant] and [her husband]. The land is farmed in partnership by [her husband] and his son ... and has been so since 1959. No financial arrangements have been made as regards to rent."

Its reasons for decision were as follows:

"Regulation 49 of the Income Support (General) Regulations 1987 provides that capital which a claimant possesses in the United Kingdom shall be calculated at its current market value. The tribunal was therefore interested in the current market value of [the claimant's] interest in Venn Park.

There is no dispute that [the claimant] jointly owns the farm with her husband. The value for [the claimant's] interest has been put forward by the adjudication officer on the assumption that either [the claimant] could sell her half share separately from her husband or that he would be agreeable to a sale of the whole.

As regards the first contention the tribunal considered that [the claimant] would be unlikely to find either a purchaser or a mortgagor who would be prepared to expend money either in purchase or on loan without [her husband's] agreement. She would be unable to force [her husband] to agree to a sale without a Court Order and he is unlikely to agree to a sale as he is still at least nominally in a farming partnership with his son and he, his son and family live on the farm.

Bearing all these factors in mind and the fact in Commissioner's decision R(SB) 6/84 the test was said to be the price that would be commanded between a willing buyer and a willing seller the tribunal considered that [the claimant's] interest was such that no willing buyer would be prepared to pay and that in these circumstances the current market value of her interest in Venn Park is nil."

Subsequent proceedings

9. The adjudication officer applied for leave to appeal to the Commissioners, which was granted by a Commissioner on 20 December 1993. The grounds were that the appeal tribunal erred in not correctly applying the provisions of regulation 52 of the Income Support Regulations by valuing the whole asset and then dividing the value by the claimant's deemed share. The decision of the tribunal of Commissioners to the contrary in CIS/391/1992 [R(IS) 26/95] was under appeal to the Court of Appeal. Alternatively, it was submitted that if the appeal tribunal did not err in that respect, it erred in failing to obtain a proper valuation of the claimant's share of the land, as required in paragraphs 53 to 55 of CIS/391/1992. In the written submission dated 8 June 1994 the adjudication officer then concerned with the case concentrated on that alternative ground, but suggested that a decision in the case be deferred until after the Court of Appeal had decided the appeal in CIS/391/1992 (Palfrey) [R(IS) 26/95].
10. Sadly, the claimant died on 2 February 1994. Such was the delay in the simple process of the Secretary of State's appointing the claimant's son to proceed with her claim, which was not in fact made until 20 March 1995, that the case was not ready to proceed until after the Court of Appeal had made its decision in Chief Adjudication Officer v. Palfrey on 8 February 1995, in which the approach of the tribunal of Commissioners was upheld. The adjudication officer, in the written submission dated 6 April 1995, noted that the Court of Appeal did not set out in any detail the requirements for the valuation of a deemed interest under regulation 52 and continued:

"In my submission it is implicit in paragraphs 53 and 54 of CIS/391/1992 that a decision as to the value of jointly held property should be determined in the light of an opinion of a person expert in the valuation of such assets. That being so, it is my submission that by deciding so arcane a question as the value of a part interest in agricultural land on the basis of what appears to be nothing more than unaided common sense and everyday experience, the tribunal in the instant case have departed from the approach enjoined in CIS/391/1992. The tribunal should at least have tried to procure a professional valuation before deciding the question before them."

11. An oral hearing of the appeal was directed, which took place on 17 May 1995. The claimant's son had replied that he would not be attending. The adjudication officer was represented by Mrs. Ruth Aldred of the Office of the Solicitor to the Department of Social Security. I am grateful to her for helpful and objective submissions.

Was the appeal tribunal's decision erroneous in point of law?

12. Mrs. Aldred submitted, as she had given notice a few days before the oral hearing, that the appeal tribunal erred in law on a matter unconnected with the valuation of the claimant's interest in the farm land. She submitted that in the accepted circumstances not just the farmhouse, but the whole of Venn Park Farm, should be disregarded under paragraph 4(b) of Schedule 10 to the Income Support Regulations. Paragraph 4 provides for the disregard as capital of:

"Any premises occupied in whole or in part by-

(a) a partner or relative of a single claimant or any member of the family as his home where that person is aged 60 or over or is incapacitated;

(b) the former partner of a claimant as his home; but this provision shall not apply where the former partner is a person from whom the claimant is estranged or divorced."

Mrs Aldred pointed to the opening words of paragraph 4, which are not restricted in the way in which the definition of "dwelling occupied as the home" is in regulation 2(1), but apply to any premises. She submitted that those words should be given their ordinary wide meaning so as to include in this case the entire farm which was occupied as one unit. Then the occupation of part of those premises (the farmhouse) as the claimant's husband's home led to the disregard of the whole premises. She submitted that the draftsman could have used some term related to the definition of "dwelling occupied as the home" but chose to use the wide term "premises" and that effect should be given to that choice.

13. Mrs. Aldred referred me to a Commissioner's decision on supplementary benefit in support of the proposition that the natural meaning of the word "premises" is a wide one. That was CSB/222/1986, where the Commissioner held that the value of an unbuilt-on plot of land which was up for sale could be disregarded under regulation 6(1)(a)(iii) of the Supplementary Benefit (Resources) Regulations 1981 ("the Resources Regulations") as premises which were for sale. Regulation 6(1)(a) provided:

"In calculating a claimant's capital resources the following shall be disregarded:-

(a) the value of-

(i) the home,

(ii) the premises which have been acquired and not yet occupied by the assessment unit but which it is intended will be the home within 6 months of the date of acquisition or such longer period as is reasonable in the circumstances,

(iii) any premises which are for sale and the value of which would be reasonable in the circumstances to disregard for such period as the benefit officer may estimate as that during which the sale may be completed,

(iv) any premises of which the whole or part is occupied by an aged or incapacitated relative of any member of the assessment unit, or by the spouse of a claimant who, by virtue only of paragraph 3(a) or (b) of regulation 2 of the Aggregation Regulations (one member of a married couple in residential accommodation or in hospital) is not to be treated as being a member of the same household as that spouse,

(v) the assets of any business which is owned, in whole or in part by a member of the assessment unit, for such period as in the opinion of the benefit officer it would be reasonable to disregard them,

(vi) any reversionary interest,

except in relation to any part of premises which, having regard to all the circumstances, it would be practicable and reasonable to regard as a property which could be realised separately;"

The first appendix to the Commissioner's decision cited cases in which in other contexts "premises" had been held to go beyond land with buildings or a residence on it and held that in regulation 6(1)(a)(iii) there was no reason to restrict "premises" to property occupied as a residence or a home. Mrs. Aldred also referred to Commissioner's decision CIS/673/1993 in which the Commissioner held that the value of unbuilt-on land could not be disregarded under paragraph 26 of Schedule 10 to the Income Support Regulations, as it was not "premises". She suggested that CSB/222/1986 was to be preferred.

14. I put two particular points to Mrs. Aldred. The first was that there are also cases taking a narrower view of the ordinary meaning of the word "premises", such as Maunsell v. Olins [1975] AC 373, in which it was held not to cover farm land, but to be restricted to residential premises. Her reply was that everything depends on the context and that the word "premises" is capable of a wide or a narrow meaning. The second was that the form of regulation 6(1)(a) of the Resources Regulations was different from that of paragraph 4 of Schedule 10 to the Income Support Regulations, in that the exclusion of any part of premises which it would be practicable and reasonable to sell separately applied to all of heads (i) to (vi) , including head (iii). By contrast, no such exclusion is applied to any provision of Schedule 10 to the Income Support Regulations. But the definition of "dwelling occupied as the home" in regulation 2(1) is as follows:

"the dwelling together with any garage, garden and outbuildings, normally occupied by the claimant as his home including any premises not so occupied which it is impracticable or unreasonable to sell separately, in particular, in Scotland, any croft land on which the dwelling is situated;"

"Dwelling" is defined in section 137(1) of the Social Security Contributions and Benefits Act 1992 in terms of residential accommodation. It might be argued that the absence from paragraph 4 of Schedule 10 of the exclusion of any part of premises which could be sold separately was an indication that the word "premises" should not be given a wide meaning. Mrs. Aldred replied that it might equally be argued that the draftsman's deliberate decision in the Income Support Regulations to incorporate the exclusion only into the definition of "dwelling occupied as the home", in contrast to the structure of the immediately preceding supplementary benefit provisions, was an indication that a different result was intended.

15. I have considered those persuasive submissions with great care, especially as no doubt they would have been adopted on behalf of the claimant and would produce a simple result in her favour. However, I am unable to accept them. I do not consider that the decision in CSB/222/1986 is of assistance. That decision related to head (iii) of regulation 6(1)(a) of the Resources Regulations, not to head (iv), which was the equivalent provision to paragraph 4 of Schedule 10 to the Income Support Regulations. The Commissioner was careful to confine his remarks to head (iii). There are powerful arguments, where the value of property of any kind can count as part of a claimant's capital, for giving a wide meaning to the disregard of premises which are for sale. The context of paragraph 4 is different and I must concentrate on that. I also take the view that little if anything is to be gained from looking at decisions on the use of the word "premises" in other contexts.
16. I note first that paragraph 4 of Schedule 10 to the Income Support Regulations comes after three paragraphs to do with the claimant's home. Paragraph 1 provides for the disregard of the dwelling occupied as the claimant's home. Paragraph 2 provides for the disregard of "any premises acquired for occupation by the claimant which he intends to occupy [as his home]" within 26 weeks or some longer period. The words in square brackets were added five months after the regulations as a whole came into force. Paragraph 3 provides for the disregard of the proceeds of sale of "any premises formerly occupied by the claimant as his home which is to be used for the purchase of other premises intended for such occupation". In paragraphs 2 and 3 the word "premises" seems to be used so as to mean what would become or what had been "the dwelling occupied as the home" but what is not within that definition because it is not currently occupied by the claimant, although it could be said that that is so only because of the express references to occupation as the home. But what is significant is the use of the word "premises" rather than the word "dwelling". That seems to me to be in recognition that the definition in regulation 2(1) of "the dwelling occupied as the home" can extend beyond the dwelling actually occupied as the home (plus any garden, garage or outbuildings) to other premises which cannot reasonably or practicably be sold separately.
17. I consider that the first four paragraphs of Schedule 10 deal with the disregard of the dwelling occupied as the claimant's home and "extensions" of the essence of that disregard to situations where the claimant is not in actual occupation. It would therefore be entirely consistent in the context for the word "premises" in paragraph 4 to have a similar meaning to that in paragraphs 2 and 3, of what would be a "dwelling occupied as the home", as defined in regulation 2(1) if occupied by a claimant, instead of by the person actually in occupation. That construction avoids what would otherwise be a bizarre result. In the circumstances of the present case, if the claim had been made while the claimant was still living at Venn Park Farm as her home, in considering what could be disregarded under paragraph 1 of Schedule 10 the question of whether it was practicable and reasonable to sell the farm land and buildings separately from the farmhouse would have had to be addressed. It would be bizarre if, when paragraph 4 had to be considered because the claimant was no longer normally occupying Venn Park Farm, that question did not have to be addressed. I conclude that paragraph 4 applies to a dwelling (plus any garden, garage and outbuildings) occupied as the home by the person concerned, including any premises not so occupied which it is impracticable or unreasonable to sell separately. Then the reference in paragraph 4 to occupation in whole or in part does no more than confirm that the disregard may apply although the premises are also occupied by someone other a person specified in sub-paragraphs (a) and (b).
18. The appeal tribunal therefore did not err in law by failing to apply paragraph 4 of Schedule 10 to the Income Support Regulations to the whole of Venn Park Farm. It might have been better if the appeal tribunal had made an express finding of fact that it was not impracticable and unreasonable to sell the farm land separately from the farmhouse, but on the view which it took on valuation that was not necessary to its decision.
19. However, I conclude that the appeal tribunal did err in law in its approach to valuation, almost, although not quite, as submitted in the adjudication officer's written submission dated 6 April 1995. It did not consider at all the effect of regulation 52 of the Income Support Regulations, as explained in CIS/391/1992. That decision had in fact been given at the date of the appeal tribunal's decision, but was not brought to its attention. What the appeal tribunal attempted to value was the claimant's actual beneficial interest in the farm land and buildings (without having found, rather than assumed, the exact nature of that interest). Regulation 52 provides:

"Except where a claimant possesses capital which is disregarded under regulation 51(4) (notional capital), where a claimant and one or more persons are beneficially entitled in possession to any capital asset they shall be treated as if each of them were entitled in possession to the whole beneficial interest in an equal share and the foregoing provisions of this Chapter shall apply for the purposes of calculating the amount of capital which the claimant is treated as possessing as if it were actual capital which the claimant does possess."

20. As is made clear in paragraph 49 of CIS/391/1992 and in the judgments of the Court of Appeal in Chief Adjudication Officer v. Palfrey, [R(IS) 26/95] when regulation 52 applies it has the effect that the claimant is deemed to have an equal undivided share as beneficial tenant in common of whatever property is concerned. It is that deemed interest which has to be valued under regulation 49. It might be argued that any error of law in failing expressly to consider regulation 52 was not material to the appeal tribunal's decision, because its conclusion that no willing buyer would be prepared to pay for the claimant's actual interest would have been the same if it had been considering a deemed interest under regulation 52. I do not need to decide that point, because I am satisfied that, having determined that the proper valuation was not on the basis of valuing the whole and dividing by half, as had been submitted by the adjudication officer on form AT2, it should, before making a final decision, have given the adjudication officer and the claimant the opportunity of obtaining a professional opinion as to whether there was a market for the claimant's interest and, if so, what its value was. Although the onus was on the adjudication officer to come forward with evidence to support the review and revision of an existing award of income support, I consider that in the circumstances fairness demanded that the adjudication officer should be given the opportunity to produce evidence on the basis of a different view of the law to that previously taken in the case. The basis of the District Valuer's report dated 16 March 1993 was not clear.
21. For that reason, the appeal tribunal's decision dated 15 July 1993 must be set aside as erroneous in point of law. Mrs. Aldred submitted that in those circumstances there would be no point in referring the appeal to another appeal tribunal. Although the claimant's representative had not produced the copies of the conveyance of Venn Park Farm or of any partnership agreement relating to the farm, requested in a nominated officer's direction dated 7 January 1994, there was little prospect of such documents or further oral evidence being produced at another hearing. A further valuation, dated 24 April 1995, of the claimant's deemed interest by the District Valuer had been obtained by the adjudication officer. Mrs. Aldred submitted that, although not complying with every detail of the requirements in paragraphs 53 and 54, the further valuation was good enough to be relied on in substance. She also said that attempts to get further clarification from the District Valuer had not been successful and that in her opinion would continue to be unsuccessful. In those circumstances, I am quite satisfied that I am in as good a position as any new appeal tribunal is likely to be in to make the final decision in the case. I consider it expedient to make the necessary findings of fact and to give my decision in place of the appeal tribunal's decision.

The Commissioner's decision on the appeal

22. The essential factual background, as described in paragraphs 3 and 4, is not in dispute. There is no difficulty in concluding that the adjudication officer has proved a ground of review of the initial adjudication officer's decision awarding the claimant income support from and including 2 July 1992. That decision was given in ignorance of the facts relating to the claimant's beneficial interest in Venn Park Farm. Those facts were material, in that knowledge of them might have altered the decision. A ground of review under section 25(1)(a) of the Social Security Administration Act 1992 has been made out with effect from 2 July 1992.
23. I must then consider whether the adjudication officer has proved that the decision awarding income support should be revised from any date. For the reasons given in paragraphs 15 to 17 above I am satisfied that the whole of Venn Park Farm cannot be disregarded as capital under paragraph 4(b) of Schedule 10 to the Income Support Regulations by virtue of the continued occupation of the farmhouse by the claimant's husband as his home. The map attached to the District Valuer's reports makes it clear that it would not have been impracticable to sell the farm land and buildings separately from the farmhouse. There is no evidence specifically directed to the question of whether it would have been unreasonable to do so, but I do not need to go into the possible difficulties because of my conclusion below on valuation. No other provision of Schedule 10 applies. In particular, it was clear that once the claimant went into residential care she would not be able to return to live at the farm and she immediately ceased normal occupation of it as her home.
24. On that basis, it must be considered whether the adjudication officer has proved that the claimant's capital exceeded the prescribed level of £8,000, or the lower level of £3,000 at which some tariff income would be assumed to be received from it. It is agreed that whatever the exact nature of the claimant's beneficial interest, regulation 52 applied, so that she would be deemed to be an equitable tenant in common in equal shares with her husband. That interest must be valued in accordance with the guidance given in paragraphs 53 and 54 of CIS/391/1992, having taken into account the relevance of the particular facts being considered in that case. In CIS/391/1992 the property in question was a former council house conveyed to a father (the sitting tenant) and a daughter as legal and beneficial joint tenants, apparently with the intention of providing a joint home for the two of them. The daughter provided the capital sum necessary for the purchase and paid the mortgage instalments.
25. In the present case, the District Valuer's report dated 24 April 1995 was made on the basis that the 44.3 acres of pasture land and scrub woodland (amounting to about 9.5 acres) was farmed by a trading partnership of the claimant's husband and son, without there being any tenancy. A wholesale milk quota of 58,000 litres was divided for valuation purposes as to 20% to the freehold interest and 80% to the partnership, because farm buildings had been upgraded for dairying at the expense of the partnership. On the value of the claimant's interest the report states:

"I am of the opinion that the value of the claimant's 50% share interest is £15,000, both at 17 July 1992 and at 20 October 1992, including milk quota and allowing for the trading partnership and share.

I am not aware of any sales of similar interests in the open market, but my opinion of value is based on experience in dealing with such interests in revenue and acquisition cases. I am of the opinion that, in the absence of any desire from the other co-owner to merge the interest, there would be a demand in the open market as an investment.

The claimant's interest has been valued on the basis of current market value. I have assumed that an order for sale of the entirety would be likely to be granted. I have therefore had regard to the open market value of the whole property, but I have made a deduction for the appropriate arithmetical share of that value to reflect the disadvantages of ownership of the claimant's interest in the property, including any possible delay which might arise in arranging the disposal of the entirety.

ENTIRETY VALUE:

£40,000 (forty thousand pounds) with vacant possession, both at 17 July 1992 and 20 October 1992, including milk quota.

£36,000 (thirty six thousand pounds) subject to the trading partnership at the above dates, including milk quota."

26. That is a valiant attempt to justify on the Palfrey basis the original valuation of £15,000 in the report dated 16 March 1993. However, in my view there are two significant flaws in the approach taken. First, the District Valuer says that his opinion is based on experience in dealing with similar interests in revenue and acquisition cases. He was not aware of any sales in the open market, but considered that there would be a demand in the open market as an investment. In paragraph 54 of CIS/391/1992, the tribunal of Commissioners said:

"The valuer should be instructed to express a view as to whether there was on the facts of this case, any market, as at 15 March 1991 or later up to the date of his advice, for the hypothetical share. If advised that there was he should indicate where he says the market lay and why. If he attributes a value to the share he should indicate how that value has been calculated. He should state whether he has any experience, or knowledge of the sale of an undivided share in these circumstances. Valuations of market value are usually based on comparables. With houses, one looks to see the prices that similar houses are fetching. The valuer should indicate the comparable on which he has relied. If there are none, he should explain how he has arrived at his valuation."

27. Here I think that the District Valuer has given the explanations of the basis of his opinion required by that direction. The difficulty lies in his adoption of his experience in dealing with revenue and acquisition cases, in the absence of personal knowledge or experience of actual sales of undivided shares in the open market. In revenue cases to do with what is now inheritance tax the statute requires valuation to be carried out on the assumption of a sale on the open market even if such a sale is in fact legally impossible. I shall not attempt to summarise the complex principles involved. In relation to shared interests, the rule applied is succinctly set out in paragraph 623 of Volume 24 of Halsbury's Laws of England (4th edition) as follows:

"The value of a half share of land owned by tenants in common is half the value of the property with vacant possession subject to a discount to reflect the restricted demand for such an interest."

The revenue approach is inconsistent with that required by CIS/391/1992 and implicitly approved by the Court of Appeal in Palfrey v. Chief Adjudication Officer [R(IS) 26/95], in application of the requirement in regulation 49(a) of the Income Support Regulations of valuation at "current market value". One must ask what could actually be obtained for the asset in question in the current market. Although the District Valuer did not in so many words say that he had applied the revenue approach in taking half of the open market value of the whole property subject to a discount, only that his opinion was based on his experience in dealing with revenue cases, there is at the very least significant doubt whether the District Valuer's opinion was based on the correct approach.

28. The second flaw is in the District Valuer's assumption that an order for sale of the whole of Venn Park Farm would be likely to be granted. In paragraph 53(4) of CIS/391/1992 the tribunal of Commissioners referred to the powerful argument which could be made on the facts of that case to resist an application for sale under section 30 of the Law of Property Act 1925, on the ground that the underlying purpose of the trust for sale was to provide a home for the parent and child together followed by the child alone. It is sometimes said that such a "secondary or collateral object besides that of sale" (Devlin LJ in Jones v. Challenger [1961] 1 QB 176, 181) might lead a court not to order sale in cases concerned with the occupation of dwellings as a home, but would not do so in cases where the purpose of the trust was investment or something beyond occupation of a dwelling as a home. But the statement of the principle by Devlin LJ is in general terms, and one of the cases on which he relied was Re Buchanan-Wollaston's Conveyance [1939] Ch 738. There four persons bought property in order to preserve the views from their houses and a sale was not ordered where that would defeat the object of the trust. The question in all cases must be how far sale would defeat the purpose of the trust for sale. In the present case, the conveyance of the farm to the claimant and her husband has not been produced and there is no direct evidence of the purposes for which the freehold of the farm was acquired. However, the statement of the claimant's son that the land has been farmed by the partnership of himself and his father since 1959 has not been challenged, and according to the letter of appeal to the appeal tribunal other members of the son's family are involved in the farm work. It seems to me that, whatever the final legal outcome might have been if an application for sale had been made by a purchaser of the claimant's deemed interest, an arguable case could be made that the purpose of the acquisition of the freehold jointly (resulting in the statutory trust for sale) was to provide both a home for the claimant, her husband and their family and a source of livelihood and work for the family as a whole through the land which was to be farmed, and that a sale of the farm land and buildings would defeat that purpose. That would be so, even though the claimant could no longer occupy the farm and take part in the work of the farm. The weight of that argument is enough at least to undermine the District Valuer's assumption that an order for sale would be likely to be granted.
29. For those reasons I conclude that the District Valuer's valuation dated 24 April 1995 is not one that can be relied on for present purposes. In paragraph 51 of CIS/391/1992, the tribunal of Commissioners directed the new appeal tribunal which was to rehear the appeal as follows:

"Unless a proper valuation is produced to the effect that the claimant's notional undivided share was, on 15 March 1991, or some later date, worth more than £8,000 the appeal against the decision of the adjudication officer should be allowed and the award of benefit should not be reviewed but should be continued."

In the present case, the adjudication officer has had ample time to obtain a proper valuation of the claimant's notional undivided share in the beneficial interest in the farm land and buildings, but has not done so. In those circumstances I would be very reluctant to give the adjudication officer any further opportunity to obtain such a valuation. In view of the unlikelihood of obtaining any further opinion from the District Valuer I have no hesitation in coming to a final decision on the evidence currently available. That decision must therefore be that the adjudication officer has failed to prove, on the balance of probabilities, that the decision awarding income support to the claimant should be revised to her detriment. Since at least at the beginning of the period in issue the claimant had savings of around £1,500, I have considered whether the evidence shows that the claimant's notional undivided share must have had some market value of an amount which, even if substantially below £15,000, was sufficient to affect her entitlement to income support. I have concluded that, in view of the reasons for rejecting the District Valuer's opinion dated 24 April 1995, the evidence does not support even such a limited conclusion.

30. The result therefore is that the award of income support to the claimant from and including 2 July 1992 is not to be revised, on the ground of the amount of the claimant's capital, down to the date of her death and continues in effect for that period. There is no evidence before me to suggest that any other factor might lead to non-entitlement or a reduced entitlement to income support in that period, but my decision is of course subject to review if it is made in ignorance of or under a mistake as to any material fact.
31. I have dealt with review under section 25 of the Social Security Administration Act 1992, since that was the legislative provision mentioned in the adjudication officer's submission to the appeal tribunal on form AT2. The result would be exactly the same if review under regulation 17(4) of the Social Security (Claims and Payments) Regulations 1987 were relied on. The adjudication officer has not proved that the requirements for entitlement are not met at any date subsequent to the date of claim on the ground of exceeding the capital limit.
32. My decision giving effect to the reasoning above is set out in paragraph 2.

Date: 25 April 1995 (signed) Mr. J. Mesher Commissioner