UK Social Security and Child Support Commissioners' Decisions

 


[2007] UKSSCSC CPC_3743_2006 (02 July 2007)

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1. The claimant's appeal to the Commissioner is allowed. The decision of the Rochdale appeal tribunal dated 1 August 2006 is erroneous in point of law, for the reasons given below, and I set it aside. The case is referred to a differently constituted appeal tribunal for determination in accordance with the directions in paragraphs 38 to 40 below, subject to action as described in paragraph 37 below (Social Security Act 1998, section 14(8)(b)).

The issue and the relevant legislation

2. This is an overpayment recoverability case which raises an interesting question about how section 71(5A) of the Social Security Administration Act 1992 operates in conjunction with section 12(8)(b) of the Social Security Act 1998. Section 71(5A) provides that:

"(5A) Except where regulations otherwise provide, an amount shall not be recoverable under subsection (1) above unless the determination in pursuance of which it was paid has been reversed or varied on an appeal or has been revised under section 9 or superseded under section 10 of the Social Security Act 1998."

Section 12(8)(b) of the Social Security Act 1998 provides that:

"(8) In deciding an appeal under this section, an appeal tribunal--

(b) shall not take into account any circumstances not obtaining at the time when the decision appealed against was made."

The question is whether, if only part of the period of an alleged overpayment of benefit is covered by a decision or decisions satisfying the conditions of section 71(5A) at the date of the decision purporting to make the overpayment for the whole period recoverable, a subsequent decision revising the original awarding decision for the excluded period, made before the appeal tribunal hears the appeal, can satisfy section 71(5A).

The relevant decisions in the case

3. The course of the investigation and decision-making is complicated and needs to be set out with care. I have got considerable help from the chronology supplied by Mr Cahill on behalf of the Secretary of State in his submission dated 3 February 2007 and have taken into account the decision of Mr Commissioner Jacobs in case CPC/1759/2006, in which he dismissed the claimant's appeal against the decision of the Rochdale appeal tribunal dated 3 March 2006, itself disallowing an appeal against one of the decisions relevant to the present case. I record at the outset that I have considered afresh how the various official events should be characterised, but agree with the Commissioner's conclusions. Some of the information mentioned below was not known to the appeal tribunal of 1 August 2006.
4. The claimant was awarded state pension credit from and including 24 November 2003. I think that that would have been the right date for payment to start. The claimant's 60th birthday was on 20 November 2003 and 24 November 2003 would have been the first Monday after that date. On the claim form signed on 14 November 2003 she ticked no to the question about whether, apart from her home, she owned any other property or land and stated that she had no money coming in. The declaration at the end of the form was that the information given was correct and complete. That form was apparently not the right one for pension credit and the claimant signed another form on 3 March 2004, giving the same answers. The decision to award her pension credit appears to have been given on 8 March 2004. There was an uprating given effect on 17 January 2005 that would not have involved a superseding decision by the Secretary of State.
5. On about 3 March 2005 it was discovered in the course of an investigation into the benefit affairs of the claimant's son that a property near to the claimant's home was registered in her sole name. The son had been arranging the letting of the property and, I think, receiving the rents. On 4 April 2005 the claimant executed a transfer of her entire legal interest in the property to the son, declaring that "in consideration of the transferee being the beneficiary of the property the transferor as trustee at the direction of the transferee transfers the property to the transferee". At some date after that, possibly 9 May 2005 but at any rate before 24 June 2005, the claimant was interviewed under caution. No transcript of that interview is in the papers before me, but it appears that the claimant gave an explanation of the circumstances that led her to regard herself as holding the property (which had been in her legal ownership since 9 July 1996) on trust for her son and mentioned the transfer on 4 April 2005.
6. On 24 June 2005 a specialist decision-maker recorded what was described in the heading as a decision. There was a determination that the claimant as the legal owner of the property had a capital asset valued at not less than £100,000 in November 2003, £90,000 after deducting the 10% under the regulations for the expenses of sale. But the record merely stated that the claim should be revised from 20 November 2003 to take account of that capital and (probably unnecessarily) that a supersession was required from 4 April 2005 to remove capital and consider deprivation of capital. It was recorded that the decision had not been referred to the section as there was not yet enough information to process the supersession. It therefore seems to be the case that no outcome decision was in fact made to revise or supersede the decision making the initial award of pension credit. Certainly no notification was given to the claimant of any decision at that time.
7. On 9 August 2005 the same specialist decision-maker recorded, under the heading of a decision, that the claimant had deprived herself of capital on 4 April 2005 with the intent of enhancing her benefit entitlement and should be fixed with notional capital from that date, so that a supersession was required from 4 April 2005. There was an instruction to reassess the claim, complete an overpayment referral and return the file to a local office. On 22 September 2005 a letter was sent to the claimant from the Pension Service notifying her that from 4 April 2005 she was not entitled to pension credit, because of the amount of tariff income from capital. I agree with Mr Commissioner Jacobs that, although there is no copy of an actual superseding decision with effect from 4 April 2005, the evidence of an instruction to make such a decision and of a letter of notification consistent with such a decision having been made is sufficient to raise an inference that a superseding decision was made.
8. The claimant appealed against the decision notified on 22 September 2005. The Rochdale appeal tribunal on 3 March 2006 disallowed that appeal and confirmed the Secretary of State's decision. It rejected the arguments for the claimant that there had not been an outcome decision with effect from 4 April 2005 and that she had held the property on trust for her son, so that she had not deprived herself of any actual capital. There was a full and closely reasoned statement. It was the claimant's appeal from that decision that Mr Commissioner Jacobs dismissed in CPC/1759/2006, holding that the appeal tribunal had been entitled to reach the conclusions it did.
9. In the meantime, on 10 January 2006, the following decision was given:

"As a result of the decision dated 09 August 2005, an overpayment of Pension Credit has been made from 24 November 2003 to 14 August 2005 (both dates included) amounting to £9495.50.

On 14 November 2003 [the claimant] misrepresented the material fact that she did not have any other property when in fact she was the owner of property ... in Oldham.

As a consequence, Pension Credit amounting to £9495.50 from 24 November 2003 to 14 August 2005 (both dates included) was paid which would not have been paid but for the misrepresentation.

Accordingly, that amount is recoverable from [the claimant]."

The letter notifying the claimant of that decision stated that the Department had not been notified of the "change" (which I think must mean the ownership of the property) until 9 May 2005. That may have been the date of the interview with the claimant.

10. An appeal against that decision was lodged on 20 January 2006, with the assistance of Ms Isabel Fordham of Oldham Law Centre. The appeal was on the basis that the claimant had not had a capital asset and also noted that in the Secretary of State's submission on the appeal against the decision notified on 22 September 2005 it was said that the Department became aware of the claimant's ownership of the property on 3 March 2005.
11. On 1 February 2006 the following decision was given, apparently as part of the reconsideration process following the appeal:

"I have reconsidered the decisions of the decision maker dated 8.3.2004 and 17.1.2005 awarding pension credit to [the claimant] on the grounds that the decisions were given in ignorance of material fact. Namely that [the claimant] was the legal owner of another property at ... that she purchased on 5th August 1996. On 9.8.2005 a decision maker decided that the capital value of the property was calculated as £100000.00 less 10% cost of sale = £90000.00 and should be used to assess [the claimant's] entitlement to pension credit for the period from 20.11.03 to 3.4.05 (both dates included). On 22.9.2005 the decision maker decided that [the claimant] was not entitled to pension credit and her claim was terminated.

As a result of the decision disallowing pension credit from 2.10.05 I have revised the decisions of the decision makers dated 8.3.04 and 17.1.05 awarding pension credit and my revised decision is that pension credit was not payable to [the claimant] from 20.11.03 to 14.8.05 (both dates included) and any benefit so awarded has been overpaid."

Mr Cahill has submitted that, although the final sentence of that decision purported to cover the period for which entitlement had already been removed by the decision notified on 22 September 2005, it was not to be taken to have revised the decision notified on 22 September 2005, but to have been a revision of the initial awarding decision of 8 March 2004 on the ground of ignorance of material fact under regulation 3(5)(b) of the Social Security and Child Support (Decisions and Appeals) Regulations 1999. I agree.

12. A letter sent to the claimant on 1 February 2006, signed by the same officer who had given the decision set out in the previous paragraph, said that the decision of 10 January 2006 had been looked at again, but had not been changed. The calculation and the reason for the overpayment were correct.

The decision of the appeal tribunal of 1 August 2006

13. The Secretary of State's written submission on the appeal against the decision of 10 January 2006 simply asserted that section 71(5A) was satisfied and that the overpayment resulted from the claimant's failure to disclose her ownership of the property. Initially only copies of the decisions of 10 January 2006, with the notification letter, and of 1 February 2006 were included. Ms Fordham put in a written submission, raising among other things the arguments that section 71(5A) was not satisfied (because the decision of 9 August 2005 was not an outcome decision altering entitlement, referring to R(IS) 13/05) and that, as the Department knew of the claimant's legal ownership of the property on 3 March 2005, the overpayment after that date could not be the result of any misrepresentation or failure to disclose (which was not admitted). In response, the Secretary of State submitted that the decision of 9 August 2005 was only part of the outcome decision of 22 September 2005 and provided copies of those documents. It was said that the question of beneficial ownership had been decided in the appeal against the decision of 22 September 2005. A further written submission from the Secretary of State after an adjournment said that the decision of 9 August 2005 was a revision of the earlier decision of 24 June 2005, but did not provide a copy of the document of that date. Ms Fordham's response was that the decision of 9 August 2005 or 22 September 2005 had only altered entitlement from 4 April 2005, as confirmed by the appeal tribunal of 3 March 2006.
14. The appeal tribunal of 1 August 2006 disallowed the claimant's appeal and confirmed the Secretary of State's decision of 10 January 2006. On the arguments about section 71(5A), the statement of reasons contained the following:

"The presenting officer said that two decisions had been taken with regard to entitlement to benefit. The first decision dated 9 August 2005 superseded entitlement to Pension Credit from 4 April 2005. A further decision was taken on 24 June 2005 which superseded entitlement back to the start of the overpayment period, that is 20 November 2003. Both decisions were promulgated to the claimant on 22 September 2005.

It was not in dispute that the claimant received the decisions in question. The issue raised was that the overpayment decision commencement date was 24 November 2003 and there had not been any valid supersession of any awarding decisions between that date and 4 April 2005.

I did not accept that argument. My view was that both decisions taken by the Department were effective in superseding entitlement to Pension Credit back to the commencement date of the overpayment decision."

The statement also rejected the argument that, because the claimant believed that she was not the beneficial owner of the property, she had nothing to disclose. The appeal tribunal found that the answers on the claim forms were failures to disclose information that had been asked for and were material to entitlement. It appears also to have rejected the existence of any trust in favour of the claimant's son.

The appeal to the Commissioner

15. The chairman of the appeal tribunal granted the claimant leave to appeal to the Commissioner. Mr Cahill's submission of 3 February 2007 on behalf of the Secretary of State supported the appeal on the ground that the appeal tribunal could not properly have concluded that section 71(5A) was satisfied on the basis of the explanation given in the statement of reasons. However, he submitted, after his analysis of the adjudication chronology, that the Commissioner should substitute a decision to the same effect as that of the appeal tribunal on the basis that either the decision of 22 September 2005 was a valid and effective decision and satisfied section 71(5A) despite having the wrong effective date or that the effect of the decision of 1 February 2006 was that by the date of the appeal tribunal hearing the whole of the period of the overpayment was covered by a supersession or revision decision. There was no reference to section 12(8)(b) of the Social Security Act 1998.
16. In her reply dated 7 March 2007 Ms Fordham submitted that the appeal tribunal had erred in that the decision of 1 February 2006 could not be used as a basis for the earlier decision of 10 January 2006, in not dealing with the argument about causation from 3 March 2005 onwards and in not dealing adequately with the argument about whether ownership of the property was material. Her request for an oral hearing was granted by Mr Commissioner Williams.
17. The hearing took place at Bury County Court on 1 May 2007. The claimant did not attend, but was represented by Caroline Wood, accompanied by Ms Fordham. The Secretary of State was represented by Mrs Gillian Jackson of the Office of the Solicitor to the Department for Work and Pensions. I am sorry that this decision will be issued much later than I estimated at the hearing.

Section 71(5A)

18. I conclude that, not only did the appeal tribunal err in law in the way submitted by Mr Cahill, but it also erred in accepting that section 71(5A) was satisfied in relation to the period prior to 4 April 2005.
19. There can be no doubt about the first error. The appeal tribunal had been provided with no copy or other details of the alleged decision of 24 June 2005 in support of the assertions on behalf of the Secretary of State. The evidence in the form of the copy of the letter of 22 September 2005 on page 41 pointed against any decision in relation to the period from 24 November 2003 to 3 April 2005 having been notified to the claimant on that date. The existence of the decision of 1 February 2006, a copy of which was before the appeal tribunal, was inconsistent with entitlement for the period from 24 November 2003 to 3 April 2005 already having been taken away by any decision on 24 June 2005. The appeal tribunal's reasoning as set out in paragraph 14 above was not capable of supporting its finding of fact to that effect.
20. Mrs Jackson conceded that prior to the decision of 1 February 2006 there had been no decision revising or superseding the awarding decision of 8 March 2004 so as to take away entitlement for the period from 24 November 2003 to 3 April 2005. She very fairly indicated that the Secretary of State would welcome a specific ruling on whether in the circumstances of the present case an appeal tribunal could take account of the decision of 1 February 2006 in considering whether or not section 71(5A) was satisfied, notwithstanding section 12(8)(b) of the Social Security Act 1998. Equally helpfully she put forward the best arguments she could for an affirmative answer.
21. Mrs Jackson submitted first that the letter of 1 February 2006 (page 23) indicated that there had been consideration of whether to revise the overpayment recoverability decision of 10 January 2006, leading to a decision not to revise it. However, I do not see how that takes matters any further forward, since there was no evidence of any revision of any kind having been made in that decision. Mrs Jackson submitted that there was a clear intention to do that and a mere oversight in failing to do so, but that does not get over the fact there was no revision. There was already an appeal in being and the relevant date for the purposes of section 12(8)(b) would have remained 10 January 2006 even if there had been a revision (Tribunal of Commissioners' decision R(IB) 2/04, paragraphs 38, 53, 55(7) and 188). It might have been different if, following the revising decision of 1 February 2006, there had been a decision revising the overpayment recoverability decision of 10 January 2006 (under the power in regulation 3(4A) of the Decisions and Appeals Regulations, if not under regulation 3(5)(a) on official error) to rebase it on the revising decision of 1 February 2006 as well as on the supersession notified on 22 September 2005. I discuss some of the potential consequences and problems below. But that is not what actually happened.
22. Mrs Jackson submitted also that the circumstances relevant as at the date of the overpayment recoverability decision were whether or not the claimant was properly entitled to benefit for all parts of the period of the alleged overpayment. Therefore, she said, the revising decision of 1 February 2006 was merely a confirmation that the proper position as at 10 January 2006 was that the claimant was not entitled to pension credit for the whole of the period from 24 November 2003 to 3 April 2005. She was in effect drawing an analogy with the principle that evidence coming into being after the date of a decision under appeal may be taken into account under section 12(8)(b) if relevant to the circumstances obtaining at that date. That does not work in the context of section 71(5A). That provision makes it a condition of recoverability that the decision authorising payment of benefit has been revised or superseded (or varied on appeal). The relevant circumstance is not as put forward by Mrs Jackson, but whether one of those kinds of change of the awarding decision has taken place. If there has not been such a change at the date of the overpayment recoverability decision in relation to all parts of the period of the alleged overpayment, that deficiency cannot later retrospectively be made good merely by making the change for the missing part of the period before the hearing of the appeal against the overpayment recoverability decision. That would be a breach of section 12(8)(b). It is necessary, as it was put at the oral hearing, for the Secretary of State to have all his ducks in a row, in terms of proper decisions altering entitlement for all parts of the period of the alleged overpayment, at the date on which the overpayment recoverability decision is made.
23. Mrs Jackson stressed what she saw as the practical and administrative advantages of allowing an appeal tribunal to take account of such a retrospective validation in circumstances like those of the present case, rather than putting everyone to the trouble and delay of requiring the Secretary of State to start again in relation to the affected period and forcing a claimant to make another appeal. There may be some merit in that approach, but the answer lies in the hands of the Secretary of State and those who make decisions on his behalf. There is a broad point that, if such officers displayed the understanding of the basic principles of adjudication that was routinely shown by officers making overpayment decisions under the pre-Social Security Act 1998 legislation, there would be very few technical problems and things could be got right first time. The narrower point is that it seems to me that the Secretary of State has the power to repair the deficiency if it is realised after an overpayment recoverability decision has been made that there has been no proper alteration of entitlement for all or some part of the period of the alleged overpayment. That is easily done if the whole of the period of the alleged overpayment is affected. There are particular difficulties if only part of the period is affected, as in the present case, and it is the repair process in that situation that I discuss below.
24. There can either be, as in the present case, a new decision revising or superseding the awarding decision for the missing part of the period or possibly a revision (for official error) or supersession (for error of law) of the currently limited revising or superseding decision. Mr Cahill suggested in his submission of 3 February 2007 that it would be more elegant to revise or supersede the currently limited revising or superseding decision, but I am not entirely sure that that works. It could be said that there was nothing wrong as such with the decision issued on 22 September 2005, so as to justify revision or supersession of it. It was just that it was limited to the period from 4 April 2005 onwards. And of course once the appeal tribunal of 3 March 2006 had confirmed that decision, revision of the appeal tribunal's decision and supersession for error of law was impossible. Thus the course actually taken in the decision of 1 February 2006 was the most direct and plainly available in law.
25. What should then have been done from the Secretary of State's point of view, but was not done, was to take the necessary steps in consequence to repair the deficiency in the decision of 10 January 2006. There was no detailed discussion at the oral hearing about how that could be done. Accordingly, I shall not attempt an analysis of all the possibilities and their potential problems, but merely indicate briefly what I consider would have been the safest course of action from the Secretary of State's point of view. The answer is relevant to the question of what decision the appeal tribunal of 1 August 2006 should have given.
26. The first step is to identify the nature and extent of the deficiencies in the decision of 10 January 2006. It is firmly established that if there has been no section 71(5A) decision at all in relation to all parts of the period of an alleged overpayment, any recoverability decision in relation to that whole period is of no force and effect. Commissioners' decisions R(SB) 7/91 and R(IS) 2/96 hold that an appeal tribunal considering an appeal against the overpayment recoverability decision in such circumstances can only declare that to be the result or, as I put it in R(IS) 13/05, decide that, because of the failure of the Secretary of State to prove that the condition in section 71(5A) for recoverability of an overpayment had been met, no overpayment recoverability decision was in existence. How does that principle apply when there is a section 71(5A) decision underpinning part of the period covered by a single overpayment recoverability decision, but no such decision underpinning the rest of the period? Is the consequence that the overpayment recoverability decision in its entirety is of no force and effect? In my judgment, the answer is no. Where a distinct period can be identified that is covered by a distinct decision that meets the condition of section 71(5A), the overpayment recoverability decision is to be regarded as effective in relation to the amount overpaid in that period, despite its lack of effect in relation to the rest of the amount overpaid. The lack of authority to make a recoverability decision does not infect the whole decision. The ineffective part can clearly be severed from the effective part.
27. For the reasons explained above, the Secretary of State could not in the present case regard the subsequent making of the decision of 1 February 2006 as automatically and retrospectively repairing the deficiencies in the decision of 10 January 2006 in relation to the period from 24 November 2003 to 3 April 2005. There might have been problems in seeking to revise the decision of 10 January 2006 so as to rebase it for section 71(5A) purposes on the decision of 1 February 2006 as well as on that issued on 22 September 2005. That solution might also have fallen foul of the requirement that the section 71(5A) decision pre-dates the overpayment recoverability decision, although I am not expressing any final conclusions on that point. The safest course would therefore have been to revise the decision of 10 January 2006 so as to remove the ineffective part of the decision, relating to the period from 24 November 2003 to 3 April 2005, but to leave intact the part relating to the period from 4 April 2005 to 14 August 2005. As the claimant's appeal against the decision of 10 January 2006 was still pending, there would have been power to revise under regulation 3(4A) of the Decisions and Appeals Regulations. The revision would have been to the claimant's advantage, as the amount recoverable would have been reduced, so that the existing appeal would have lapsed and a fresh right of appeal would have arisen (section 9(6) of the Social Security Act 1998 and regulations 30(1) and (2) and 31(2) of the Decisions and Appeals Regulations). If there had been no appeal against the decision of 10 January 2006 by 1 February 2006, the ground of revision would have been official error and the making of the revision would have re-started the time limit for appealing against the decision of 10 January 2006 as revised.
28. It would then have been open to the Secretary of State, having restricted the effect of the decision of 10 January 2006, to make a fresh overpayment recoverability decision relating to the period from 24 November 2003 to 3 April 2005 underpinned for the purposes of section 71(5A) by the decision of 1 February 2006. He could then ensure that there was no problem of decisions being made in the wrong order. The claimant would have had the right to appeal against the fresh decision.
29. A disadvantage of the process just described would have been that the claimant would have had to make fresh appeals against a number of decisions to ensure that every element of the decisions against her were challenged. That is a disadvantage that would have been avoided if the Secretary of State's decision-makers had got the technicalities right first time. But given that the course of decisions had gone wrong, it seems to me that the disadvantage is balanced out by the eventual clarity as to what decisions were effective and in operation and needed to be challenged on their merits by appeal if the claimant disagreed with them.
30. The appeal tribunal of 1 August 2006 was of course not faced with the outcome of a process as described above, but with the decision of 10 January 2006 as originally made. The appeal tribunal erred in law in concluding that section 71(5A) was satisfied in relation to the period from 24 November 2003 to 3 April 2005, as well as in the way identified in paragraph 19 above. I return below to what the appeal tribunal should have done.

Causation of the overpayment after ownership of the property known

31. Mrs Jackson for the Secretary of State submitted that there could not properly have been a suspension of payment of benefit as soon as the Department learned of the claimant's legal ownership of the property on 3 March 2005. Many investigations needed to be made about the beneficial ownership of the property, its value and any encumbrances secured on it and whether any disregards might apply. Then, by the time that the claimant was interviewed, she had transferred the property to her son and further investigation of that change of circumstances was needed. Mrs Jackson submitted that the lapse of time to 9 August 2005 was not unreasonable and that the claimant's misrepresentation on the claim forms remained a substantial cause of the overpayment throughout the period, in that she would not have received benefit down to 14 August 2005 if her answers had been accurate.
32. That submission did not really meet the nature of the defect in the appeal tribunal's reasons. The appeal tribunal, no doubt misled by the Secretary of State's written submission to it, based its reasoning on failure to disclose, although the actual decision of 10 January 2006 had been based on a misrepresentation of material fact. It is hard to see how it could confidently have been concluded that the claimant was still in breach of a continuing duty to disclose after her interview, without evidence of what she said in that interview and possibly in response to enquiries on the instructions of the specialist decision-maker of 24 June 2005. Her legal ownership of the property and her transfer of it were known and she had apparently given some account of the circumstances of the purchase and why she regarded the property as held on trust for her son absolutely. The decision-maker was no doubt right that more enquiries needed to be made, but until the claimant was asked further questions she had not been required to furnish the information under regulation 32(1) of the Social Security (Claims and Payments) Regulations 1987 and it would be unrealistic to hold that the claimant could reasonably have been expected to know that more details of the change of circumstances than the provision of a copy of the transfer might affect her right to benefit. The appeal tribunal therefore erred in law in failing to explain, on the assumption that its decision was based on failure to disclose, either why the breach of the continuing duty to disclose did not come to an end from some date prior to 9 August 2005 (such as the date of the interview: 9 May 2005?) or why any failure to disclose did not cease to be a cause of the overpayment from that date.
33. There would still have been an error of law if the appeal tribunal's decision had been based on a misrepresentation of material fact in the claim forms, as would have been the more logical and easier to prove basis. The final part of Mrs Jackson's submission cannot be accepted. It will always be the case, whenever there has been a misrepresentation leading to an award of benefit, that in one sense all subsequent payments of benefit would not have been made if the misrepresentation had not been made in the first place, to get the award going. But it is firmly established for the purposes of section 71 that if the office dealing with the claimant's case comes to know of the true facts that had been misrepresented, yet payment of benefit continues, from that point onwards the overpayment is no longer in consequence of the overpayment. It can no longer be said that the payment would not have been made if the misrepresentation had not been made, because the payment has continued after the true facts are known. That I think must be the principle, although there will sometimes be difficult questions about when sufficient is known to the relevant office for the causative effect of the misrepresentation to expire.
34. That is so in the present case. The misrepresentation on the claim forms was in some ways very simple, in omitting the property altogether. But when unpacked it included a representation that she did not have any legal or beneficial interest in the property. By 24 June 2005 at the latest, and probably by 9 May 2005, the relevant office plainly knew that from 4 April 2005 the claimant's son was the legal and beneficial owner and that prior to that date the claimant held at least the legal ownership. The specialist decision-maker of 24 June 2005 thought that the evidence about the claimant's legal ownership prior to 4 April 2005 was sufficient to justify his conclusion that there ought to be a revision going back to 24 November 2003, although by mistake no revision was actually carried out. But he was ignoring the issue of beneficial ownership and the documents before the appeal tribunal of 1 August 2006 do not show what the claimant had said at her interview under caution. The appeal tribunal of 3 March 2006 thought it significant that the claimant had given different accounts at different times about the circumstances, for instance about where the purchase price had come from in 1996. However, the appeal tribunal of 1 August 2006 gave no sufficient explanation of why the claimant's argument about causation of the overpayment did not succeed from some date prior to 9 August 2005.

Conclusion

35. For the reasons given above, I set aside the decision of the appeal tribunal of 1 August 2006 as erroneous in point of law. I thought for some time that I would be able to give the decision on the claimant's appeal against the Secretary of State's decision of 10 January 2006, having made the necessary findings of fact that the course of the relevant decisions in this case were as set out above. But that turns out not be possible, as explained below. Accordingly, subject to the possibility of action as described in paragraph 37 below, I refer the appeal to a differently constituted appeal tribunal for determination in accordance with the directions given in paragraphs 38 to 40 below.
36. The reason why I cannot substitute a decision is this. What the appeal tribunal of 1 August 2006 should have done was to decide that there was on overpayment recoverability decision in effect in relation to the amount said to have been overpaid in the period from 24 November 2003 to 3 April 2005, but go on to deal with the amount said to have been overpaid in the period from 4 April 2005 to 14 August 2005. The appeal tribunal did deal with the latter period, but its reasoning was flawed on the causation of the overpayment at the least and it also failed to make the necessary findings of fact about the extent of the knowledge of the office dealing with the claimant's pension credit at various dates through that period. I could substitute a decision in relation to the period from 24 November 2003 to 3 April 2005, but could not substitute a decision in relation to the period from 4 April 2005 to 14 August 2005 without obtaining further evidence. The gathering and evaluation of new evidence, with the possibility of further explanations in person from the claimant, is proper to a new appeal tribunal.
37. However, the need for a rehearing of the current appeal may be short-circuited. The effect of the setting aside of the decision of the appeal tribunal of 1 August 2006 is that the claimant's appeal against the decision of 10 January 2006 is once again outstanding and undetermined. Thus the position is as described in paragraph 27 above. The Secretary of State has the power under regulation 3(4A) of the Decisions and Appeals Regulations to revise the decision of 10 January 2006. If he were to revise that decision in the way suggested in paragraph 27, the claimant's existing appeal would lapse. She would have to make a fresh appeal against the decision as revised, ie an overpayment recoverability decision in relation to the period from 4 April 2005 to 14 August 2005. If the Secretary of State also went on to make a fresh overpayment recoverability decision in relation to the period from 23 November 2003 to 3 April 2005, the claimant could only challenge such a decision by way of a fresh appeal. In view of the targets adopted for listing rehearings of cases referred back to appeal tribunals by Commissioners, if the Secretary of State wishes to exercise the power of revision in regulation 3(4A) of the Decisions and Appeals Regulations there should be no undue delay. And in view of the complexity of the legal position great care should be taken in the formulation of any new decisions and in the notifications and explanations given to the claimant and her representatives.

Directions to the new appeal tribunal

38. If the current appeal proceeds to a rehearing, there must be a complete rehearing of the appeal against the decision of 10 January 2006 on the evidence presented and submissions made to the new appeal tribunal, which will not be bound by any conclusions expressed or findings made by the appeal tribunal of 1 August 2006. There will be an oral hearing and I am sure that the new appeal tribunal would be greatly assisted if the claimant, and any representative, were able to attend to give evidence and answer questions in person.
39. I direct the new appeal tribunal that, if the case reaches it on the basis assumed in the previous paragraph, it must decide that there is no overpayment recoverability decision in effect in relation to the amount said to have been overpaid in the period from 24 November 2003 to 3 April 2005, because the condition in section 71(5A) of the Social Security Administration Act 1992 is not satisfied in relation to that amount.
40. In relation to the amount said to have been overpaid in the period from 4 April 2005 to 14 August 2005, the Secretary of State must make a fresh written submission prior to the rehearing, setting out clearly what misrepresentation(s) of material fact or failures to disclose material fact are said to have caused that overpayment and providing copies of the record of the interview under caution with the claimant and of the answers to any enquiries made on the instructions of the specialist decision-maker of 24 June 2005, so that the appeal tribunal can determine the issues mentioned in paragraphs 32 to 34 and 36 above. In determining whether there was an overpayment for that period the new appeal tribunal will not be bound by any findings of fact or other determinations made by the appeal tribunal of 3 March 2006 in reaching its outcome decision that the claimant was not entitled to pension credit from and including 4 April 2005 (see paragraphs 16 and 17 of Commissioner's decision CA/2650/2006 and the other decisions mentioned there). The evaluation of all the evidence will be entirely a matter for the judgment of the new appeal tribunal.

(Signed) J Mesher

Commissioner

Date: 2 July 2007