UK Social Security and Child Support Commissioners' Decisions

[2001] UKSSCSC CIS_2345_2001 (30 November 2001)

 


[Diagram or picture not reproduced in HTML version - see original .rtf file to view diagram or picture] THE SOCIAL SECURITY COMMISSIONERS
Commissioner's Case No: CIS/2345/2001
SOCIAL SECURITY ACTS 1992-1998 APPEAL FROM DECISION OF AN APPEAL TRIBUNAL ON A QUESTION OF LAW DECISION OF THE SOCIAL SECURITY COMMISSIONER
COMMISSIONER: Mr C. Turnbull
1. This is an appeal by the Claimant, brought with my leave, against a decision of the Bolton Appeal Tribunal made on 12 January 2001. For the reasons set out below I dismiss the appeal.
2. The Claimant is a man now aged about 43. On 31 January 2000 he made a claim for income support. That claim was refused on 17 February 2000 on the ground that the Claimant owned a property in Bolton ("the Property") in which his daughter and two friends were living, which he said was worth £12,000 to £13,000.
3. On 24 February 2000 the Claimant made a further claim for income support, and provided a letter from his solicitor saying that he had on 24 February 2000 executed a transfer of the Property to his daughter by way of gift.
4. On 28 February 2000 a decision maker refused that claim on the ground that the Claimant had deprived himself of the Property in order to secure entitlement to income support. On 6 March 2000 the Claimant appealed against that decision.
5. On 22 March 2000 a valuer instructed by the Benefits Agency gave an opinion that the Property was worth £20,000.
6. The Claimant withdrew the appeal after the decision maker's submission had been sent to the Appeals Service. On 5 May 2000 the Claimant made a further claim for income support, stating that his circumstances had changed in that his daughter had given back the Property and it was now on the market. Income support was awarded from 5 May 2000.
7. On 24 July 2000 the Claimant lodged a further purported appeal against the decision dated 28 February 2000, contending that he should have been awarded income support pursuant to his second claim. He gave reasons why the Property had been transferred to his daughter, and those reasons did not include a desire to obtain income support. That late appeal was accepted for consideration.
8. The decision maker's written submission to the Tribunal in relation to that appeal referred to Reg. 51(1) of the Income Support (General) Regulations 1987:

"A claimant shall be treated as possessing capital of which has deprived himself for the purpose of securing entitlement to income support ………."

The submission later continued:

"I submit that [the Claimant] has deprived himself of a capital asset by giving [the Property] to his daughter. I also submit that the timing of the gift is significant. [The Claimant] was issued with a decision refusing benefit on 17 February 2000. On 24 February 2000 he submitted a new claim having disposed of the property by giving it to his daughter on the same day.

I therefore submit that [the Claimant] has deprived himself of a capital asset ….. and that a significant operative purpose of that deprivation was to qualify for income support."

9. The Claimant attended the Tribunal hearing on 12 January 2001 and gave extensive oral evidence through an interpreter. The Tribunal dismissed the appeal. Its Decision Notice, issued on the day of the hearing, stated as follows:

"Following Commissioners decision R(SB) 40/85 and Commissioners Decision 38/85 the gift of property at 43 Pine Street Bolton by the appellant on 24 February 2000 to his daughter to repay a loan and to enable her to obtain a visa for future potential husband is not an acceptable disposal for the purposes of entitlement to Income Support. On the balance of probabilities the explanation as to why this occurred on 24 February 2000 rather than at any other time is unlikely."

10. The Claimant requested a statement of the Tribunal's reasons, which the Chairman produced and signed on 8 February 2001. Section III of the reasons set out the "question and issue to be decided" as follows:

"Did the Appellant intentionally deprive himself of an asset so that he would satisfy the requirements as to savings for Income Support?

The Tribunal had regard particularly to the following Commissioners' decisions:

The Commissioner's decision R(SB) 40/85:

The purpose of deprivation is a matter of inference from the primary facts.

The Commissioner's decision 38/85:

The nearness (of the deprivation) to the date of claim is of obvious relevance."

11. The reasons then rehearsed the explanation given by the Claimant in his oral evidence as to why the Property had been transferred to his daughter on 24 February 2000. Then (in para. 5 of Section V) the Tribunal "noted" six points, which were in effect reasons why it considered that the Claimant's evidence did not sufficiently explain why the Property had been transferred, or at any rate not at the time when it was transferred. Point (c), for example, was that "the property was subsequently valued at approximately £20,000 so that its value far exceeded the funds "invested" by the Appellant's daughter."
12. The final paragraph of the reasons was as follows:

"In conclusion, whilst noting that the Appellant stated that everything he had said was true, on the balance of probabilities the Tribunal considered that the reasons given by the Appellant for why the property was transferred to his daughter and why it occurred on 24 February 2000 rather than at any other time to be unlikely."

13. The grounds for this appeal are that "the Tribunal on 12 January 2001 has failed to establish and explain the reason of the significant operative purpose for the transfer of the Property." At the time of granting leave to appeal, I asked:

"Did the Tribunal err in law (1) in failing in terms to state whether it found that the Claimant had deprived himself of the house for the purpose of securing entitlement to income support and (2) in stating in its Decision Notice that the gift of the house to his daughter to repay a loan and to enable her to obtain a visa for a future husband "is not an acceptable disposal for the purposes of entitlement to income support"?"

The Secretary of State has filed a very brief submission indicating agreement with "the errors of law identified by the Commissioner in granting leave to appeal."

14. In my judgment the Claimant has a point in his ground of appeal in that even the Tribunal's full statement of reasons does not in express terms say that the Tribunal found that Claimant's purpose, or one of his purposes, in transferring the Property was to secure entitlement to income support. However, when those reasons are looked at as a whole, and particularly in the light of the Tribunal's statement therein of the "question and issue to be decided", it is in my judgment sufficiently clear that that was just what the Tribunal was saying in the final paragraph.
15. However, greater problems arguably arise from the way in which the decision had been explained in the Decision Notice (see para. 9 above). From the first sentence of that explanation it looks as though the Tribunal was accepting that the Claimant's reasons for transferring the Property had been to repay a loan to his daughter and to enable her to obtain a visa for a future potential husband, but yet was stating that it was (for some unexplained reason) nevertheless "not an acceptable disposal for the purposes of entitlement to income support". The second sentence, however, indicates that the Tribunal was not accepting that the Claimant's stated reasons for transferring the property at the particular time when it was transferred were his real, or only, reasons. The Decision Notice certainly does not state in terms that the Tribunal found that the Claimant transferred the Property in order to secure entitlement to income support.
16. The position, therefore, is in short this. The Decision Notice contained a very brief statement of reasons which is very unclear, and certainly does not indicate that the Tribunal did apply its mind to the statutory test of whether the Property was transferred in order to secure entitlement to income support. However, the subsequent statement of reasons, although not anywhere stating in terms that he did transfer the Property in order to secure such entitlement, in my judgment did, looked at as a whole, make a finding to that effect, and sufficiently explained the reasons for making such a finding.
17. What effect does an unsatisfactory explanation in a Decision Notice have on the validity of the Tribunal's decision? Although of course all must in the end depend on the circumstances of the particular case, it is my judgment possible to state some general principles:

(1) The Decision Notice is prepared at or immediately after the hearing and, as a matter of common sense, if it positively indicates, however briefly, that the Tribunal did not apply the law correctly, that is likely to be accepted as a more reliable statement of the Tribunal's reasons than a subsequent, conflicting explanation in the full statement of reasons;

(2) In any event, a conflict between the reasons given in the Decision Notice and those given in the full statement is likely of itself to amount to an error of law in that, when the two documents are taken together, the Tribunal will not have made its actual reasoning sufficiently clear;

(3) However, there is no obligation to set out any reasons in the Decision Notice. If reasons are set out which, although in some respect unsatisfactory, are not inconsistent with an adequate explanation of the reasons contained in the full statement, the unsatisfactory nature of the explanation in the Decision Notice is unlikely to render the decision wrong in law.

18. If follows from (1) and (2) above that if a Tribunal chairman does decide to give some explanation in the Decision Notice of the reasons for the decision, he must take considerable care in doing so. It may well not be possible to use the full statement, however fully and carefully prepared, to cure a carelessly inaccurate explanation in the Decision Notice. This is far from the first case where I have encountered problems of this nature arising from a brief (and unnecessary) statement of reasons in the Decision Notice. I would add that if the Chairman's purpose in including in the Decision Notice a brief explanation of the reasons is to make a request for a full statement less likely, that purpose will not be achieved if the explanation is unsatisfactory; a request for a full statement will then be more, not less, likely.
19. In this case I have come to the conclusion, although not without some hesitation, that the Decision Notice, in stating that the gift of the Property for the reasons given by the Claimant was "not an acceptable disposal for the purposes of entitlement to income support", did not indicate that the Tribunal had applied some test other than the correct one – i.e. whether the transfer had been made in order to secure entitlement to income support. I therefore consider that I can and should look to the full statement to ascertain the Tribunal's actual reasons. That statement shows, as I have said, that the Tribunal applied the law correctly. It follows that I must dismiss the appeal.

(Signed) Charles Turnbull

(Commissioner)

(Date) 30 November 2001