UK Social Security and Child Support Commissioners' Decisions

[2003] UKSSCSC CIS_4901_2002 (28 November 2003)

 


CIS/4901/2002

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1. The decision of the Income Support Appeal Tribunal dated 2 September 2002 is erroneous in law. I set that decision aside and, as empowered by section 14(8)(a)(ii) of the Social Security Act 1998, I give my own decision which is:-

The claimant's application for Income Support is to be treated as having been made on 9 May 2002 and his entitlement to that benefit in the period from 10 May 2002 to 13 June 2002 is to be assessed on that basis.

2. The claimant appeals, with my leave and the support of the Secretary of State's representative, against the tribunal's decision that the claimant's application for Income Support cannot be treated as made on 10 May 2002.
3. The history of the case is that the claimant was in receipt of Jobseeker's Allowance until 9 May 2002. On that date he visited the Jobcentre and, in the light of what he reported, he was advised that he should be claiming either Income Support or Incapacity Benefit. The adviser in the Jobcentre telephoned the Benefits Agency and arranged for claim forms to be sent to the claimant. The claimant received those forms by post. He completed the forms and, because a prepaid return envelope had not been supplied by the Agency, he put them in an envelope of his own with a first-class stamp and posted them. When he received no response he telephoned the Benefits Agency and, he says, after several repeat telephone calls he was sent a new set of forms by recorded delivery. That was because the Benefits Agency local office had not received the first set. The claimant completed the second set and they were received by the Benefits Agency on 14 June 2002. Income Support was awarded with effect from 14 June 2002. The claimant appealed that decision on 8 July 2002.
4. On or about 26 July 2002 the first set of forms were returned to the claimant by the Post Office in the envelope in which he had posted them. There were two Post Office endorsements on the envelope. One endorsement had been made by the Revenue Protection Section indicating that the letter was under-stamped by 27p and that a handling fee of 50p had been incurred. The total of those two amounts is of course, what would normally have needed to be paid for the understamped package to be delivered. The other endorsement was dated 26 July 2002 and was to the effect that the package had "not [been] called for".
5. The claimant did not attend the tribunal hearing but his representative did. The case which the representative put to the tribunal both in a written submission and in her oral submissions was that the claimant should be treated as having intimated his intention to claim benefit when the Jobcentre adviser telephoned the Benefits Agency on 9 May 2002 and arranged for the claim forms to be sent to the claimant. The reason for the need for the second set of claim forms was the Post Office's failure to operate a bulk surcharge account arrangement with the Department for Work and Pensions in respect of the relevant local office of the Benefits Agency whereby mail is delivered to the local office whether it is under-stamped or not, the Benefits Agency being billed at a later date for all the surcharges incurred in the accounting period. The claimant should, therefore, be treated as having made his claim on the day on which his intention to claim was intimated by the Jobcentre adviser's phone call to the Benefits Agency. Alternatively, the claimant, who was confined to his house by his illness, could not reasonably be expected to have made the claim earlier and was entitled to backdating under regulation 19(5) of the Social Security (Claims and Payments) Regulations 1987.
6. The statement of the tribunal's reasons for dismissing the claimant's appeal is in the following terms:-

"This was an appeal against refusal to backdate the date for claiming Income Support from 14 June 2002 to 10 May 2002. In fact, the appeal letter states that the claimant should have been paid Income Support from 10 May 2002 and the claim should not have started on 14 June 2002. I therefore treat this appeal as wide enough to include, not only backdating, but also an appeal as to the start date of the claim.

The claimant did not attend the hearing. [The claimant's representative] attended. She said she had spoken to him at the end of August and that he was nervous about attending. He had said he would attend, but he obviously had not attended and she did not have any further information about his non-attendance than this. No application for adjournment was made and I therefore heard [the representative] and decided the case accordingly. There was no Presenting Officer.

Immediately prior to the hearing [the representative] handed up a letter from Capita dated 29 August 2002. That letter, together with the documents submitted in respect of this appeal, established that the claimant submitted by post a claim for Incapacity Benefit. The letter was postmarked 16 May 2002 (page 17). It was returned by the Royal Mail on 26 July 2002 (page 17) as insufficient postage had been paid. A letter from Capita dated 29 August 2002 explains that the Benefits Agency have a surcharge account with the Royal Mail to ensure that all underpaid or unpaid mail was delivered, regardless of underpayment or non-payment and the Royal Mail would then charge the Benefits Agency accordingly. The letter goes on to say that it is unfortunately not possible for Capita definitely to confirm that the procedure was correctly adhered to in the present case. Capita say that 'It would appear that the Post Office may not have followed this set-up and this item slipped through the net.'

It is clear from the evidence that the claimant in fact submitted a claim by letter dated 16 May 2002. He paid insufficient postage and the Royal Mail did not deliver the letter to the Benefits Agency, as it ought to have done, in accordance with the surcharge account set up over 12 months ago. The claimant did not realise that his forms had not been received by the Benefits Agency and began to chase. In his appeal letter (page 8) he says that after many telephone calls, a new set of the forms were sent out weeks latter. He gives no dates. In her submission, [the representative] states that he asked for a new set of forms on 30 May 2002. I did not think it appropriate to rely on specifics such as dates which appeared in submissions but which did not appear in any document signed or otherwise tendered by the claimant. The claimant was not present today to support the date of 30 May 2002 and in the circumstances I do not consider that I can rely upon that as the correct date. I consider that the evidence which comes out from the claimant is that he made a number of telephone calls and eventually a new set of forms were sent out, weeks later.

[The representative] confirmed that this was a case which did not fit within the ordinary backdating role of regulation 19 of the Claims and Payments Regulations. I looked through the provisions of regulation 19 and was unable to identify any of the regulations which would appear to be appropriate to the facts of the present case and I concluded that backdating this appeal was not appropriate. It did not fit within regulation 19.

[The representative] also submitted that this is a case where the Benefits Agency wrongly refused to accept the claim as having been made on 10 May 2002. She referred to the authority of CS/48/92 in which the Commissioner decided that the effect of paragraph 6 in the light of section 7 and section 23 of the Interpretation Act 1978 was such that a Social Security Benefit Claim is a document authorised by an Act of Parliament to be served by post and is to be presumed to have been delivered in the ordinary course of post unless this is proved not to have been the case. I decided that this was not an appropriate analogy. There are 2 reasons for this conclusion:

1. I do not consider that the claim form in the present case was served in the ordinary course of post. The ordinary course of post cannot include mailing with insufficient postage appended.

2. The presumption in this case is, in any event, rebutted. It is clear that the letter, even if sent in the ordinary course of post, was not in fact received.

[The representative] contended that the fault lay, at least in part, with Capita who were a body associated with the Benefits Agency, and that, therefore, the Benefits Agency must be regarded as to blame. I do not accept this is sufficient for two reasons:

1. The surcharge account was with the Royal Mail and not with Capita. It is the Royal Mail who failed to follow procedures and not Capita. The Royal Mail is not a subsidiary or body otherwise associated with the Benefits Agency. Nor is Capita.

2. The original error lay with the claimant who failed to pay the correct postage. It may have been compounded by the Royal Mail who failed to apply the provisions on the surcharge agreement but nevertheless the error in underpaying postage was initially that of the claimant.

In the circumstances, I considered that the claim should not be treated as having been correctly made had the claim originally posted on 16 May 2002 been received.

As regards the assertion that the Benefits Agency failed to get to the claimant new claim forms on time, I do not find the evidence in this case of particular relevance. The claimant says on his appeal form that he made many telephone calls. At this stage, he felt that the original claim form had got lost. The claimant was not present and could not, therefore, explain the nature of the telephone calls, whether, they were asking for new claims, or whether they were chasing the Benefits Agency to track down the original claim or for what other purpose. For the reasons given above, I do not consider that I can rely upon the submissions of [the representative] which are, at best, hearsay about which I have no evidence.

In the circumstances, this appeal fails.".

7. The grounds for appealing the tribunal's decision to a Commissioner put forward for the claimant by his representative are that the tribunal's decision is erroneous in law by reason of the tribunal's failure to make findings in fact as to the date of the claimant's first intimation of an intention to claim, the breach of the rules of natural justice constituted by the rejection as hearsay of the evidence as to the claimant's actings  given to the tribunal by his representative and the tribunal's failure to give adequate reasons for its conclusion that none of the provisions of regulation 19 of the Claims and Payments Regulations permitting backdating of claims applied in the claimant's case.
8. In granting leave to appeal I observed that it was arguable that the tribunal had made insufficient inquiry into what had happened to the undelivered claim and into the applicability of regulation 19(5) of the Social Security (Claims and Payments) Regulations 1987. I also directed that the Secretary of State's representative's submission on the appeal should explain the role of Capita and deal with the question of whether the Post Office or Capita was bailee for the Benefits Agency in respect of the undelivered claim.
9. In his written submission of 15 April 2003 the Secretary of State's representative took a preliminary jurisdictional point. That was that at the time material to the claim regulation 27 of the Social Security and Child Support (Decisions and Appeals) Regulations 1999 as read with paragraph 5 of Schedule 2 to those Regulations arguably excluded questions arising under regulation 6 of the Claims and Payments Regulations from the jurisdiction of the tribunal and the Commissioner. In CIS/540/02 a Commissioner had decided that the purported exclusion from the tribunal's jurisdiction by regulation 27 of the Decisions and Appeals Regulations of questions arising under regulation 4(1A)(b) and (c) and (1B) and regulation 6(1A) is contrary to Article 6(1) of the European Convention on Human Rights and should not be applied. The Secretary of State had applied for leave to appeal to the Court of Appeal against that decision and it was suggested that I should defer my decision on this appeal until the outcome of the Secretary of State's challenge to CIS/540/02 was known. However, in a further written submission of 28 July 2003 the Secretary of State's representative advised that although leave to appeal to the Court of Appeal was granted the Secretary of State had not proceeded with an appeal and was content to accept that questions arising under regulation 6(1A) of the Claims and Payments Regulations are within the tribunal's jurisdiction.
10. In paragraph 9 of his submission of 15 April 2003 the Secretary of State's representative argues that the tribunal was entitled to consider whether the provisions of regulation 19(4) and (5) of the Claims and Payments Regulations applied in the claimant's case. He does not consider that it has been established that they do and suggests that the evidence that the claimant had made repeated phone calls to the Benefits Agency in order to obtain replacements for the claim forms which seemed to have gone missing indicated that the claimant could reasonably have been expected to have telephoned a relative, friend or neighbour to ask him to go to the local office and obtain the forms. Sub-paragraph (b) of regulation 19(5) probably did not, therefore, apply. However, the tribunal had made no findings in fact on that issue and had given inadequate reasons for its conclusion that none of the regulation 19 provisions assisted the claimant. I agree with that part of the submission for the Secretary of State and on account of the error in law so identified I have to set the tribunal's decision aside.
11. In addition to the Secretary of State's representative's point on paragraphs (4) and (5) of regulation 19 there is the further point that the tribunal has not explained why it decided that paragraphs (6) and (7) did not assist the claimant. Paragraph (6) provides that the time for claiming Income Support can be extended to a maximum of one month where one of the circumstances specified in paragraph (7) applies and as a result of that circumstance the claimant could not reasonably have been expected to make the claim earlier. Included in the circumstances specified in paragraph (7) is:-

" (c) There were adverse postal conditions;".

No doubt that head is intended to include such things as postal strikes, weather conditions which prevent the delivery of mail and accidents but the wording seems to me to be wide enough to include such things as misdelivery of post and other mistakes on the part of Post Office employees such as the omission to comply with special arrangements for delivery made with an addressee. It is arguable that until the claimant had established that his claim had not been received by the Department due to the failure of the bulk surcharging arrangement and had received replacement forms from the Agency he could not reasonably be expected to submit the claim made on 16 June 2002 earlier than that date. As far as I can see from the papers that argument was not put to the tribunal but the tribunal's own survey of regulation 19 referred to in the statement of reasons should have led the tribunal to consider the relevance of paragraphs (6) and (7).

12. A second error which I see in the tribunal's decision is that the tribunal has rejected as hearsay the evidence given by the claimant's representative as to the dates on which the claimant made phone calls to the Benefits Agency to ask about progress with his claim or for replacement claim forms. As is well known the tribunal's role is inquisitorial and the rules of evidence do not apply. Hearsay evidence is not, therefore, automatically inadmissible. A tribunal must consider hearsay evidence along with the other available evidence although it can reject the hearsay provided that it gives reasons for doing so. The statement of the tribunal's reasons for decision is sceptical about the lack of any documentary evidence signed or otherwise tendered by the claimant which would support his representative's specification of the dates on which the claimant telephoned the Benefits Agency to obtain replacement forms. There is nothing inherently improbable in the idea that the claimant's representative had satisfied herself that the claimant had a reasonably accurate recall of the dates on which he made the various phone calls and the purpose for which he made them. There is nothing in the record of the tribunal's proceedings or in the statement of the reasons for the tribunal's decision which indicates that the tribunal asked the representative why she was satisfied as to the accuracy of what the claimant had told her. The tribunal's failure to inquire into that matter and give a reason for its conclusion is an error in law and the assertion, in the last sentence of the statement of reasons, that the evidence as to the phone calls was at the best hearsay about which the tribunal had no evidence indicates that the tribunal has misdirected itself on the law of evidence as it applies to tribunals.
13. However the point on which the appeal turns is in my view the tribunal's failure to deal with the question of whether or not the Post Office was a bailee for the Benefits Agency in relation to the first set of claim forms posted by the claimant. Although I disagree with the submission for the Secretary of State on this matter I am grateful to his representative for the research which he has done in response to the direction included in my grant of leave to appeal. He has produced a copy of the Post Office Inland Letter Post Scheme 2000 made on 4 April 2000 and coming into operation on 27 April 2000. That scheme was made under section 28 of the Post Office Act 1969. Section 28 was repealed by section 127(6) of the Postal Services Act 2000 as read with Schedule 9 to that Act. The relevant enactment is now section 89 of the 2000 Act. That section was brought into force on 26 March 2001 by the Postal Services Act 2000 (Commencement No. 3 and Transitional and Saving Provisions) Order 2001 (SI 2001/878) which order was made under the order making power conferred on the Secretary of State by section 130(1) of the 2000 Act. The Post Office was dissolved by section 75 of the 2000 Act and the relevant commencement order and replaced by a successor postal services company. The 2000 Scheme was continued in force after 26 March 2001 by Article 37(1) of the Postal Services Act 2000 (Commencement No. 4 and Transitional and Saving Provisions) Order 2001. According to Article 37 the Scheme is now to be cited as the Successor  Postal Services Company Inland Letter Post Scheme 2001. For convenience in the following paragraphs I shall refer to the Scheme and to the Post Office.
14. Section 17 of the Scheme deals with the matter of underpaid or unpaid postage and fees. It provides that where a letter is under stamped the Post Office may deliver the letter, allow the addressee or someone on his behalf to collect it from a specified office, return the letter to the sender, treat the letter as undeliverable in accordance with section 8 of the Scheme or otherwise deal with or dispose of the letter at the discretion of the Post Office. Section 17 provides also that the Post Office may retain the letter for as long as it considers necessary and may require the addressee or the sender to pay an amount, fixed by the Post Office, before the letter is delivered or released for collection.
15. The Secretary of State's representative has produced also copies of correspondence which he has had with the manager of the Procurement Services, Postal Management Group, in the Department for Work and Pensions and with the manager of the Service Specification Section of the Royal Mail. The Department's Procurement Services Manager explains in his letter that because much of the mail addressed to Benefits Agency Local Offices is under stamped the Department has set up with the Post Office in respect of several individual local offices a "bulk surcharge account". Where that has been done the Post Office delivers all mail addressed to the local office whether it is under stamped or not. Bills are then periodically rendered to the Department in respect of the surcharge on those items of post which were under stamped. The manager has ascertained that at the relevant time such an arrangement was in place in respect of the local Benefit Office to which the claimant in this case had sent his forms. It occasionally happens that the Post Office overlooks the existence of the bulk surcharge account and instead of delivering the under stamped mail follows the normal procedure which is to inform the addressee by postcard that the mail is available for collection or delivery on payment of the surcharge. Capita who provide the post opening service at the relevant local office are aware of both procedures and would have reacted to a notification that an item was being held pending payment of the surcharge but there is no record of any such notification. The Royal Mail had been unable to explain why the claimant's letter had not been the subject of one or other of the two procedures and had said that normally it would make every effort to ensure that the surcharge was paid by the addressee as the cost of returning mail to the sender cannot be recovered.
16. The manager of the Service Specification Section at Royal Mail says in his letter that the bulk surcharge service is provided under the provisions of the Inland Letter Post Scheme 2001, section 17.3, and is therefore, in his view, not contractual in nature.
17. In the light of that information the Secretary of State's representative argues that in respect of the claimant's letter posted in May 2002 the Post Office was not the Benefits Agency's bailee. A bailee  is a person to whom goods are committed for a purpose such as custody or repair without the transfer of ownership. At common law a general duty of care is imposed when one person takes care of goods for another. That relationship creates bailment which imposes a duty on the bailee to ensure that the goods are not damaged, lost or negligently dealt with and to deliver those goods or have them collected by the owner, the "bailor " when required so to do. In this case the Post Office was not the bailee for the Agency because at no point did the Agency place anything in the hands of the Post Office. It was the claimant who did that. The existence of the bulk surcharge account, authorised by the 2000 Scheme, made no difference. The responsibility for under stamped letters is as provided in section 17 of the Scheme and the Scheme does not create a relationship of bailment between the Agency and the Post Office.
18. I disagree with that part of the submission for the Secretary of State but in saying so I should also say that when I made the direction which I included in my reasons for granting leave to appeal I neglected to refer to Commissioner's decision R(SB) 8/89. In that case the Commissioner held that an arrangement whereby mail addressed to the Department's local offices is retained by the Post Office on Saturdays or other delivery days when the local offices are shut and not delivered until the first day on which the local offices are open constitutes the Post Office the bailee for the Department in respect of the retained mail. Consequently, claims for Benefit which are retained by the Post Office in accordance with that arrangement are to be treated as having been made on the date on which they would have arrived in the local office in the ordinary course of post had they not been so retained.
19. In arriving at that conclusion the Commissioner was applying the ratio of the judgments of Sellers and Davies, L. JJ., in the majority decision of the Court of Appeal in the case of Hodgson v. Armstrong and Another, [1967] 2 QB.299. That case concerned an arrangement whereby mail addressed to the County Court was held by the Post Office on days when the court office was shut and then delivered on the first day upon which that office opened again. The Commissioner quotes the second sentence of the penultimate paragraph of the judgment of Davies, LJ., (page 322 of the Hodgson report) which is:-

"But on the whole it seems to me that the right conclusion is that when the County Court directed that mail which would ordinarily be delivered on the Saturday should not be so delivered but should be held by the Post Office until the following Monday, or in this particular case Tuesday, the County Court were constituting the Post Office their bailees of the mail and accordingly it could rightly be said that the tenant's application was made at latest on the Saturday.".

In the same case Sellers, LJ. said at page 315 of the report:-

"In the ordinary course the postal authorities would be the agents of the sender and mere postage of a sum of money or of an application or notice to the court would not normally be equivalent to delivery to the court. But here the circumstances are different. The court has expressly intervened and interfered with the ordinary postal facilities. The mail due to be delivered on Saturdays was withheld from delivery at the express request of the court. It was held at the local Post Office. For whom did the Post Office then hold the mail? Not, I think, for the sender because it was his desire that the delivery should be made in the course of post and he was no party to any postponement of delivery. It seems to me that the Post Office in these particular circumstances were made the agents of the local County Court to hold on its behalf the mail which would normally have been delivered on a Saturday. It would appear that the tenant's application would have reached the court in due time but for the special arrangements which the court made and I see no reason why the tenant should be prejudiced by them.

I would therefore further old that the tenant's application was delivered to the court which was to receive it on April 17, 1965, or was to be treated as so delivered as it was held on that date on behalf of the court. It was therefore in time.".

20. The circumstances of the case before me are, of course, the converse of those in R(SB) 8/89 and in Hodgson's case. The bulk surcharge account is not an arrangement for the retention of mail which would otherwise be delivered. It provides for the delivery in ordinary course of post of mail which would otherwise be retained until the addressee has paid the Post Office's charges. The obvious purpose of the arrangement is to ensure that claimant's do not suffer hardship through delays in delivery of under stamped claims for benefit. It seems to me, therefore, that when the Post Office detained the claim in question while it pursued, contrary to its agreement with the Department, the matter of the under stamping it rendered itself the bailee for the Department because it was holding property belonging to the Department which it had already agreed with the Department it would deliver in the normal course of post.
21. Bailment can be constituted without the owner of the item having consented to or having been aware of the bailee's possession of the item (The Pioneer Container [1994] 3WLR1 and Newman v. Bourne and Hollingsworth (1915) 31 TLR 209). I do not think that the fact that there is a statutory scheme which includes provisions as to how Post Office may deal with under stamped mail prevents the Post Office becoming the bailee for addressees where extra-statutory arrangements have been made. Subsection (2) of section 89 of the 2000 Act defines a scheme under the section as being:-

"… a scheme for determining any or all of the following (so far as not otherwise agreed) –

(a) the charges which are to be imposed in respect of the services concerned,

(b) the other terms and conditions which are to be applicable to the services concerned, …".

I think that the bulk surcharging account is an arrangement for a special service which the Post Office will provide to the Department for Work and Pensions in respect of under stamped mail, that the arrangement amounts to something "otherwise agreed" within the meaning of section 89(2) and that, contrary to what is said in the letter from the Royal Mail to the Secretary of State's representative, the arrangement is contractual.

22. My conclusion is that, as argued for the claimant, his intention to claim Income Support was intimated on 9 May 2002 when the Jobcentre adviser telephoned the local Benefit Office and asked for the forms to be sent to the claimant. There is no reason to dispute the claimant's contention that he posted the forms on 16 May 2002. Had the bulk surcharging account arrangement been operated by the Post Office in accordance with its agreement with the Department the claim would have been delivered to the local office in the ordinary course of post not later than 20 May 2002. That would have been well within the month from the date of the intimation of intention to claim allowed by regulation 4(5) of the Claims and Payments Regulations for the lodgement of the claim. As is evidenced by the Benefits Agency's contention that it did not receive the claim and the Post Office's return of the undelivered claim in July 2002, the claim was retained by the Post Office from the date on which it would have been delivered in the ordinary course of post had the bulk surcharging account arrangement been applied. On the principles enunciated in R(SB) 9/89 and in Hodgson's case the claim was in the hands of the Department's bailee and was to be treated as being in the hands of the Benefits Agency from 20 May 2002 until it was returned by the Post Office to the claimant. The claimant, therefore, made a claim not later than 20 May 2002 which is to be treated as having been made on the day on which it was intimated. That day was 9 May 2002, the last day of the claimant's entitlement to Jobseeker's Allowance. Entitlement to Income Support is, therefore, to be assessed from 10 May 2002 to 13 June 2002.
23. For the foregoing reasons the claimant's appeal succeeds and my decision is in paragraph 1 above.

(Signed) R J C Angus

Commissioner

(Date) 24 November 2003