UK Social Security and Child Support Commissioners' Decisions

 


1. This appeal, brought with my leave, succeeds. The decision of the tribunal on 27 3 02 was erroneous in point of law, on the ground that the appellant's ex-wife Ms P, who is also both the mother of the daughter who lives with him and his former landlady, and from whom the local authority seeks to recover an overpayment of housing benefit to the appellant, was properly a party to the proceedings before it but was not procedurally treated as such by the Appeals Service. I set the tribunal's decision aside and remit the appeal to a differently-constituted tribunal for rehearing, with Ms P added as a party – presumably as second respondent.
2. The above was not the tribunal's fault, but an additional ground for my setting aside the decision is its acceptance that the overpayment of housing benefit under regulation 7(1)(d), which undoubtedly occurred because the child living with the appellant at the property was also his landlady's daughter, was recoverable because it was not caused by official error. I expressed doubts about this when granting leave to appeal, because it seemed to me that continuing to use outdated forms which did not reflect the 25 1 99 amendment to the regulations could in this case constitute an official error. The council has now conceded this point.
3. As I read the legislative provisions, Ms P had to be a party to this appeal (even though she had not exercised her own appeal rights as clearly notified to her) because under paragraphs 6(3) and (6) of Schedule 7 to the Child Support, Pensions and Social Security Act 2000 and regulation 3 (1)(d) of the Housing Benefit and Council Tax Benefit (Decisions and Appeals) Regulations 2001 she was a "person affected" by the decision appealed against, being "a person from whom the relevant authority determines that an overpayment [of housing benefit] is recoverable". Regulation 23 incorporates into these regulations parts of the Social Security etc (Decisions and Appeals) Regulations 1999, which contain references to the "principal parties" to an appeal. Regulation 1 of the Housing Benefit etc Decisions and Appeals Regulations defines "principal parties" by reference to paragraph 7(4) of Schedule 7 to the 2000 Act. This definition includes a person affected by the decision appealed against. I therefore, by this tortuous route, conclude that Ms P is a principal party to the present appeal and should have been shown as such on the documents and given notice of the proceedings by the Appeals Service.
4. I blame myself for having compounded the error. If I had properly appreciated the procedural point, I could have rectified it by directing Ms P to attend the oral hearing before me to give her own evidence. I was aware from the file that she had been properly notified of her own separate right of appeal, and that she had not availed herself of it. The only excuse I can give is that the appellant has throughout the course of this appeal complained bitterly that both he and Ms P had always wanted and meant to attend a hearing, that they had been improperly denied one before the tribunal, and that his request of 21 11 02 for an oral hearing before me gave the reason that "Both myself and Miss [P] need to discuss our case and character". He added in the covering letter "I request a hearing for this matter where both Ms [P] and myself may attend". This satisfied me that she would attend the hearing I directed, particularly as she was also the appellant's witness in relation to the regulation 7(1)(l) allegation of a contrived tenancy,
5. I was therefore most surprised when she did not attend. The appellant gave me an account of having telephoned this office to ask if she needed to come and being told that she was not "required" to do so. He said he interpreted this as not "allowed" to do so, so she did not after all. He may have telephoned - my inquiries have not shown that he did not, since records are not made of this type of call, though no-one remembers it and my information is that people are not told that someone they want to bring is not allowed to come. But of course if Ms P had been joined as a party or there had been a direction for her to attend, no confusion could have arisen.
6. I decided, though with hindsight perhaps I should have sent everyone straight back to East Anglia, to go ahead with the hearing, at which the council was represented by John Booty, the Benefits Manager. Mr Baker from the council was also present as an observer. The appellant grudgingly consented to this. The appellant represented himself. He had not brought his papers with him. He said no-one had told him to, though he confirmed he had received the additional documents sent to him by the council and had marked passages of them for comment. He said he did not bring the papers because he was "sick of the case". He complained of unfairness in not being legally represented. He had not been able, he said, despite making inquiries of the Legal Aid Board Franchise Department in London, to find a local solicitor who was not "too busy" to take the case on. But the appeal form at page 106, from where I infer that the appellant obtained the Legal Aid Board's address and telephone number, also contains contact numbers for the Citizens Advice Bureau and the Community Resource Centre, who are well accustomed to tribunal work, including housing benefit, and will sometimes attend hearings with clients. The appellant said he had telephoned the CAB three times and had a long talk with someone who told him (correctly) that he had been overpaid and that the question was one of recoverability. But his telephone calls were not returned and he did not follow up any further (alternatively the number was always engaged when he tried). He had spent hours and hours on regular occasions making these phone calls. But he had not consulted the Community Resource Centre.
7. The decision appealed against was made well over a year ago, and I do not find it credible that the appellant could not have obtained representation during that period if he had persevered. Nor, from what I observed, do I think he is other than well able to take care of his own legal interests, despite claiming to be at a major disadvantage. His written submissions demonstrated a detailed knowledge of the papers.
8. The appeal concerns an allegedly recoverable overpayment of housing benefit under regulation 7(1)(d) or 7(1)(l) of the Housing Benefit Regulations 1987 as amended. The appellant's landlady was his former wife, and the appellant had living with him their daughter J, for whom he claimed child benefit and working families tax credit (WFTC). To claim child benefit the appellant had to be "responsible for" J, and he fell foul of regulation 7(1)(d) which treats a person who is liable to make payments for a dwelling as not so liable if he is "responsible for" his landlady's child. But because the first and second forms he was sent to complete in November 1999 and October 2000 did not ask the question about the relationship of anyone else in the house to the landlord that had become relevant from 25 1 99, official error has been conceded. The third form in October 2001 did ask the right question, and the appellant completed it entirely misleadingly, but this was outside the overpayment period. He says he made a genuine mistake, but that is neither here nor there, an innocent misrepresentation as well as a fraudulent one being capable of establishing a recoverable overpayment.
9. It was also asserted, following the council's examination of bank statements into which housing benefit was paid but which, though being in credit throughout, it argued showed no cash withdrawals likely to have constituted rent payments, that the liability of the appellant to his landlady was under regulation 7(1)(l) created to take advantage of the housing benefit scheme. The appellant's business affairs were embarrassed, and housing benefit gave him a source of income additional to the WFTC and child benefit he received by virtue of having his daughter live with him, despite continuing to go to school in the different town where her mother lived. Since both the appellant and Ms P were adamant that the rent had been paid in cash, the lack of anything referable to a regular cash payment seemed suspicious, and it was asserted that rent had not in fact been paid, so that there had been an overpayment on a different ground. Overpayments are recoverable in accordance with regulation 99, and under regulation 101 they may be recovered from the claimant, or the person to whom payment was made, or from a person to whom a payment of housing benefit may be made if that person has, on behalf of the claimant or of herself, misrepresented a material fact which resulted in the payment being made. As the original benefit application had been supported (page 13, see also page 176) by a "rent proof" signed by Ms P (as Ms P, at least one other communication has been signed with her married name), and as the rent could have been, though it was not, paid to her direct, it was contended that she had misrepresented the material fact that the arrangement was one under which rent would be payable, and this had led to the overpayment. Of course it is correct that on the council's contention Ms P never received any rent; but the public purse lost the money overpaid, and regulation 101 contemplates recovery from someone who may never have received the overpayment.
10. The decisions were fully explained to both parties, and requests were made for proof of the alleged payments. Both parties gave only bare assertions that the rent was paid in cash. No further details were offered, despite several opportunities. The parties took the line that they were not obliged to conduct the transactions through a bank (as indeed they were not), nor to have a written tenancy agreement or rent book (as indeed they were not), and that their bare assertions should be accepted without more. Of course, these assertions are evidence; but there is no obligation to accept them as true. This depends on an evaluation of the whole circumstances. The appellant was unable at the oral hearing to tell me whether Ms P had completed tax returns. He said Ms P needed the rent to pay the mortgage. He denied keeping any record of rent due from time to time. He said that he paid it from the housing benefit except for an occasion when this was paid late. Later he said friends and family had chipped in to help. He first said he paid regularly, but then that he paid when he was "good and ready".
11. Ms P did not appeal. The appellant did. Neither he nor Ms P attended the tribunal hearing. The appellant had asked for an oral hearing, and this and two other appeals (in respect of which I have refused leave to appeal) were listed for 10am. By 11 45 the appellant had not arrived, nor had any request for a postponement been received, so the tribunal proceeded in absence. It did not, of course, specifically consider Ms P's position, as she was not a party.
12. The appellant applied for leave to appeal the decision on the ground that "I was unable to attend of the tribunal hearing date as was Ms P", and new evidence for both himself and Ms P had not been reviewed. His application to me was further supported by 56 points of complaint, the first being "I failed to attend the hearing on the date set for the first appeal. This was an oversight". When I queried the apparent inconsistencies, I was told that the appellant had telephoned the Appeals Service before the hearing and explained that he was unwell and could not attend. He had been told to put this request in writing, but he refused to do so as he considered he had done all he needed to do by telephoning. He was wrong, as regulation 51 of the Social Security etc (Decisions and Appeals) Regulations 1999, which is incorporated in the Housing Benefit and Council Tax Benefit (Decisions and Appeals) Regulations 2001 by regulation 23, requires postponement requests to be in writing. He further said that Ms P who had also meant to attend had written a letter saying she could not be there due to unforeseen circumstances. No such letter has ever come to light. I was not therefore persuaded that the absences were either unavoidable or unintended.
13. Another of the appellant's complaints at the hearing before me was that the contrived tenancy allegation was tantamount to an allegation of fraud, and he ought to have had legal representation. I have already dealt with that point. I also explained that for purposes of overpayment recovery there is no need to show fraud, and I was not concerned with that. Mr Booty explained that the standard of proof in civil and criminal proceedings is different, the latter being more demanding. Criminal proceedings had not been taken, and the time for them might be past.
14. The appellant gave me his own account of how the letting arrangement had come into being, and of his wish, after absence abroad on business, to give his daughter stability and get to know her better. He said he had persuaded Ms P, who wished to sell the property (and did so at the end of October 2001), to let it to him instead. They were good friends, and there was no need for anything in writing. They saw each other most days. If he had known of the trouble the letting would cause, he would have found other accommodation from the outset.
15. He declined my invitation to deal in greater detail with his 56 points of appeal.
16. He disputed that Ms P was just ignoring the matter. It was not odd that she had not pursued her own appeal rights, despite having received an invoice for £7058.31 from 25 11 99 to 2 9 01 and said she would defend herself. Rightly or wrongly, she had placed her trust in him. He had only realised at the oral hearing that there could be recovery from her (this does not seem to accord with point 33 of his grounds of appeal, at page 161).
17. I have recorded the substance of the evidence the appellant gave me, in case he fails to attend on the rehearing. He said he was going abroad on 1 March, returning from time to time.
18. The rehearing tribunal will conduct its own investigation of the case, bearing in mind that the burden of establishing a contrived tenancy is on the local authority. It may find it useful to have regard to CH/1618/02 and to the judicial review cases cited by the council: R v Solihull MBC HBRB, ex p Simpson [1995] 1 FLR 140, R v Poole BC, ex p Ross (1995) 28 HLR 351 and R v Stratford-upon-Avon HBRB, ex p White (1997) 30 HLR 178. Copies of these have already been supplied to the appellant by the council. If it finds there was a contrived tenancy, it may find the overpayment recoverable from the appellant. If it further finds that Ms P's rent proof form materially contributed to the overpayment being made, it may find the overpayment recoverable from both parties, and it will be for the local authority to decide from whom actually to recover it. As all the events here happened before regulation 101 was amended from 1 10 01, it is the form in the 13^th edition of Findlay that is the relevant one.
19. Care should be taken with relisting, to ensure that a date suitable to both the appellant and Ms P is fixed, which they would have no cause for not attending. I stress that Ms P will become a party and require to be treated as such, and not merely as a witness. If difficulty is experienced in fixing a date, then notice of proceeding in absence may be sent to the appellant and to Ms P at the addresses on file, unless different ones are provided. They must be aware that if they do not provide further documentary evidence as to payment of rent, and/or attend when given a reasonable opportunity to do so, adverse inferences may (though not necessarily will, as the tribunal will be the judge of fact, be drawn) despite their assertions that there was no contrived tenancy. I tell the parties directly that they must bring all their papers with them. They are naturally free to obtain legal representation before and/or at the rehearing. If there is any question of illness, details of the illness must be given in writing.

(signed on original) Christine Fellner

Commissioner

7 March 2003