UK Social Security and Child Support Commissioners' Decisions

CFC 2298/95 (*40/97) [1997] UKSSCSC 8 (9th April, 1997)

Commissioner's File: CFC 2298/95 (*40/97)
Mr Commissioner Mesher
9 April 1997

SOCIAL SECURITY CONTRIBUTIONS AND BENEFITS ACT 1992
SOCIAL SECURITY ADMINISTRATION ACT 1992
APPEAL FROM DECISION OF SOCIAL SECURITY APPEAL TRIBUNAL ON A QUESTION OF LAW

DECISION OF THE SOCIAL SECURITY COMMISSIONER

Claim for: Family Credit
Appeal Tribunal: Lincoln SSAT

[ORAL HEARING]

1. The claimant's appeal is allowed. The decision of the Lincoln social security appeal tribunal dated 3 November 1994 is erroneous in point of law, for the reasons given below, and I set it aside. It is expedient for me to substitute my decision without making any further findings of fact (Social Security Administration Act 1992, section 23(7)(a)(i)). My decision is that the adjudication officer's decision awarding the claimant family credit for the period from 31 December 1991 to 29 June 1992 falls to be reviewed on the ground that it was erroneous in point of law (Social Security Administration Act 1992, section 25(2)). The revised decision is that the claimant is entitled to family credit at the rate of £43.97 per week for that period.

2. The issue in this appeal is clearly identified in the decision of the appeal tribunal. Its findings of fact were recorded as follows:

"1. The appellant was awarded family credit at the rate of £12.23 for the period 31 December 1991 to 29 June 1992 inclusive. In calculating family credit for this period the gross receipts of [her husband's] business were included, including capital introduced by him of £3,165, following the Commissioner's decision CFC/004/91.

2. By virtue of the Court of Appeal decision on the 21 August 1992 it has been decided that capital receipts not generated by the business do not form part of the gross receipts of that business, thus an error in law occurred retrospectively in the calculation of [the claimant's] family credit entitlement. It occurred by virtue of that Court of Appeal decision dated 21 August 1992.

3. The appellant now appeals against adjudication officer's refusal to review the decision awarding her family credit at the rate of £12.23 for the period 31 December 1991 to 29 June 1992 inclusive and claims arrears of family credit for that period."

It was not in dispute that the claimant's request for review was made on 16 June 1994. The appeal tribunal's decision was that the adjudication officer's decision was to be reviewed for error of law, but that no arrears of family credit were payable for the period concerned as all the arrears occurred before the date of the relevant determination. Its reasons were recorded as follows:

"1. The tribunal found that the decision of the adjudication officer awarding the appellant family credit at the rate of £12.23 per week for the period 31 December 1991 to 29 June 1992 inclusive was based on an error in law by the adjudication officer. In the light of the Court of Appeal decision dated 21 August 1992 the tribunal found that the adjudication officer has the right to review and revise his initial decision and family credit is re-assessed correctly at £43.97 for the period.

2. Any arrears of family credit arising because of this re-assessment are not payable to the appellant by virtue of the conditions of sections 68 and 69 Social Security Administration Act 1992 as the new interpretation of the phrase "gross receipts" which led to the re-assessment of family credit for the appellant can only be applied from the date of the relevant determination, namely the Court of Appeal decision on the 21 August 1992. This date is after the period covered by the appellant's family credit assessment 31 December 1991 to 29 June 1992 inclusive. The appellant is not therefore entitled to any arrears of family credit arising because of this decision."

3. Thus what arises on the claimant's subsequent appeal to the Commissioner is a pure question of law: is the decision dated 21 August 1992, which is the consent order made in the case of Kostanczuk v Chief Adjudication Officer on appeal from Commissioner's decision CFC/4/1991, a "relevant determination" which causes section 69 of the Social Security Administration Act 1992 to bite in relation to periods before 21 August 1992? In written submissions the adjudication officer took the view that it is, but without discussing the precise nature and effects of the consent order made inKostanczuk or what was said about it in Commissioner's decision CFC/3/1992.

4. An oral hearing of the appeal was held. The claimant did not attend. The adjudication officer was represented by Mr Daniel Jones of counsel, instructed by the Office of the Solicitor to the Department of Social Security. Unfortunately, he did not have a copy of my direction for an oral hearing, which had drawn attention to CFC/3/1992. However, he had independently identified an argument in favour of the claimant based on that decision and submitted, as he was bound to in those circumstances, that the appeal tribunal had erred in law in applying section 69 of the Social Security Administration Act 1992.

5. I accept that submission. As I see it, the position is as follows. It was held in CFC/3/1992, adopting the concurring submissions of counsel for the claimant in that case and for the adjudication officer, that the consent order in Kostanczuk was not binding on anyone other than the parties to the order and the appeal tribunal to whom the direction it contained was made. That was because the order was made by consent, without argument and was unsupported by any reasons at all. Thus the direction made in the order sanctioned by the Registrar of Civil Appeals in the Court of Appeal, that "capital receipts not generated by a claimant's business do not form part of the gross receipts of employment for the purpose of regulation 21 of the Family Credit (General) Regulations 1987" was not binding on the Commissioner in CFC/3/1992. I agree entirely with the reasoning of the Commissioner in that case.

6. It follows that there is no restriction on revision under section 69 by reference to the date of the consent order in Kostanczuk. It seems to me that the consent order is not a "determination ... of a Commissioner or the court" that a decision made by an adjudicating authority was erroneous in point of law. The consent order, having been sanctioned by the Registrar of Civil Appeals in the Court of Appeal, although effective in prescribing the future course of the particular case, is not a decision of the Court of Appeal in the sense required by section 69. However, if I were wrong about that and the order is a "relevant determination", I am satisfied that it is not "in consequence of" that determination that the adjudication officer's decision in the present case falls to be revised on the ground of error of law (section 69(1)(b)). Since the direction in Kostanczuk is not binding in other cases, the adjudication officer's decision falls to be revised in consequence of the acceptance of the other authority on the proper interpretation of regulation 21 of the Family Credit Regulations.

7. In CFC/3/1992 the Commissioner, on his own analysis of the legislation, reached the same conclusion as had been conceded by the Chief Adjudication Officer to be correct in putting forward the consent order in Kostanczuk and as had been reached by a Commissioner in decision CFC/24/1989 and by the Chief Commissioner in Northern Ireland in decision C1/92 (FC). In those circumstances, I am quite satisfied that CFC/3/1992, which was decided on 6 April 1994, was also not a decision in consequence of which the adjudication officer's decision in the present case falls to be revised on review. If any decision had that consequence it was CFC/24/1989, which was left as the most authoritative decision following the order in Kostanczuk. Since the date of that decision (25 July 1991) was before the date of the adjudication officer's decision under review, section 69 does not apply.

8. The appeal tribunal of 3 November 1994 therefore erred in law in applying section 69 of the Social Security Administration Act 1992 against the claimant. In addition, I think that it was technically wrong for the appeal tribunal, following the approach of the adjudication officer, to carry out a revision of entitlement, but to deny payment of arrears. If section 69 bites, it affects the question of whether there should be a revision of entitlement on review.

9. As the adjudication officer who made the decision under appeal had recalculated the family credit entitlement for the period from 31 December 1991 to 29 June 1992 on the basis of the revision of entitlement, I am in a position to substitute my decision. That decision is set out in paragraph 1 above.

10. It was a matter of agreement before the appeal tribunal that the decision awarding the claimant family credit for the period from 31 December 1991 to 29 June 1992 at the weekly rate of £12.23 fell to be reviewed on the ground of error of law and revised to the weekly rate of £43.97. Since I agree with the interpretation of regulation 21 of the Family Credit Regulations put forward in CFC/24/1989 and CFC/3/1992, I agree that the decision falls to be reviewed and revised. No challenge has been raised to the calculation of the amount of £43.97 and I accept that it is correct.

11. There is no obstacle to giving effect to the revised decision, although the request for review was not made until nearly two years after the end of the period in issue. None of regulations 65 to 69A or 70A to 71 of the Social Security (Adjudication) Regulations 1986, as in force at the date of the request for review, applied to reviews in family credit cases. Regulation 70 did specifically apply in family credit cases, but only where the review was on the ground of ignorance or mistake of material fact. Thus there is no provision limiting the payment of increased benefit following a review of a family credit decision on the ground of error of law and it is not necessary to consider regulation 64A.

12. Accordingly, my decision is as set out in paragraph 1 above.

(Signed)
J Mesher
Commissioner
9 April 1997