CPC/2696/2009

DECISION OF THE UPPER TRIBUNAL

(ADMINISTRATIVE APPEALS CHAMBER)

Decision and Hearing

1. This appeal by the claimant succeeds. In accordance with the provisions of section 12(2)(b)(i) of the Tribunals, Courts and Enforcement Act 2007 I set aside the decision of the Social Entitlement Chamber of the First-tier Tribunal sitting at Ipswich and made on 11^th June 2009 under reference 140/08/00965. I substitute my own decision. This is to the effect that during the period relevant to this appeal, and in particular from November 2005, the claimant remained habitually resident in the United Kingdom.

2. I refer to the Secretary of State any outstanding questions relating to entitlement to benefit.

3. I held an oral hearing of this appeal on 10^th May 2010. The claimant attended in person but was not represented. The Secretary of State was represented by Mr Leo Scoon of the office of the Solicitor to the Department for Work and Pensions. I am grateful to them for their assistance.

Background and Procedure

4. The claimant is a man who was born on 10^th November 1942. He is a citizen of both Australia and the United Kingdom. He lived and subsequently worked in the United Kingdom from 1952. He was a member of the Chartered Institute of Taxation (of the United Kingdom) and remains a retired Life Member. Having previously been employed, he was then self-employed until November 2005. In November 2005 the claimant gave up his rented accommodation, put his personal effects into storage and left the United Kingdom to work as a volunteer with Voluntary Service Overseas (“VSO”) in India, where he remained based until June 2008. It is in the nature of such voluntary work that it is of a temporary nature (in fact he entered India on a temporary visa and never acquired a right under Indian law to reside in India). The claimant visited the United Kingdom occasionally for a month at a time, until he took extended leave from VSO and returned to the United Kingdom on 14^th June 2008, intending to stay for about three and a half months. (In fact he returned to India for the period from the end of September 2008 to mid-March 2009.) His bank account is in Guernsey; his GP is in Suffolk; he has no family in the United Kingdom. On his return visits he stayed with friends or with his former wife.

5. On 25^th June 2008 the claimant made a claim for state pension credit. On 1^st August 2008 the Secretary of State refused to make an award on the grounds that the claimant was not habitually resident in the United Kingdom. On 12^th September 2008 the claimant appealed to the Appeal Tribunal against that decision of the Secretary of State. On 3^rd November 2008 the matter was transferred to the Social Entitlement Chamber of the First-tier Tribunal. The First-tier Tribunal considered the matter on 11^th June 2009 and allowed the appeal to the extent of finding that the claimant was habitually resident in the United Kingdom as from 14^th June 2008, but it also found that he had lost his habitually resident status on 11^th May 2005 when he left for India.

6. The claimant applied for permission to appeal to the Upper Tribunal against the decision of the First-tier Tribunal and on 14^th August 2009 this was given by the District Tribunal Judge. On 1^st February 2010 I directed that there be an oral hearing of the appeal.

The Law and the Parties

7. Section 1(2)(a) of the State Pension Credit Act 2002 makes it a condition of entitlement to state pension credit (but obviously not the only condition) that the claimant is in Great Britain.

8. Regulation 2(1) of the State Pension Credit Regulations 2002 provides as follows:

2(1) A person is to be treated as not in Great Britain if, subject to the following provisions of this regulation, he is not habitually resident in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland.

The other provisions of regulation 2 are not relevant in this particular appeal.

9. Regulation 3 provides:

3 A claimant’s entitlement to state pension credit during periods of temporary absence from Great Britain is to continue for up to 13 weeks if –

(a) the period of the claimant’s absence from Great Britain is unlikely to exceed 52 weeks; and

(b) while absent from Great Britain the claimant continues to satisfy the other conditions of entitlement to state pension credit.

I am not concerned in this decision with the other conditions of entitlement.

10. The meaning of “habitually resident” is not defined by statute or by regulations, but there have been many court pronouncements on the nature of the concept, not all of which are helpful.

11. I queried whether this appeal raised a purely academic issue, as the claimant has now been awarded state pension credit from the date of claim, but I am satisfied that the finding in relation to whether he had lost his habitual residence has real consequences, for example in relation to pensions uprating.

12. In granting permission to appeal, the District Tribunal Judge asked whether, when a claimant brings an appeal asserting that he never lost his status as habitually resident, it is an error of law for a tribunal to make a finding that a person was habitually resident at the date of claim and not specifically deal with the period of absence. I am not sure that is what the First-tier Tribunal did in this case, but the answer must be that if it is a real issue, one with consequences, then it must be an error of law not to deal with it. On the other hand, if there are no real consequences, than I see nothing wrong with finding that a claimant was habitually resident as at a particular date, or no later than a particular date.

13. There cannot be a finding that person has resumed habitual residence without a logically prior finding or assumption that such a status has been lost. The arguments addressed to me in the papers and at the oral hearing seemed to focus on the issue of acquiring habitual residence status. In the present case the Secretary of State had accepted the decision of the First-tier Tribunal that the claimant had resumed habitual residence status from 14^th June 2008. The real area of dispute was whether he had ever lost it.

Losing Habitual Residence Status

14. It is well established that whether a person is habitually resident in a particular country is a question of fact to be decided by reference to all the circumstances in each case. Many of the judicial expressions of opinion reflect the facts of the particular case in issue, and any general statements have to be applied with caution. There have been many such statements in relation to acquiring habitual residence but relatively few in relation to losing it. In a child custody rights case, In re J [1990] 2AC 562 at 578, Lord Brandon said in the House of Lords:

“A person may cease to be habitually resident in country A in a single day if he or she leaves it with a settled intention not to return to it but to take up long-term residence in country B instead.”

15. Clearly in the case before me there is no doubt that when he embarked on VSO the claimant had no intention of taking up long-term residence in India but intended to return to the United Kingdom.

16. The reasons given by the First-tier Tribunal for finding that the claimant had lost his habitually resident status were that he intended to volunteer for upwards of two years and that he had taken steps to surrender his tenancy and store his possessions. In my view these reasons cannot justify the conclusion reached by that tribunal. Given the particular purposes for which the claimant left the United Kingdom (to which the tribunal seems to have paid no special attention), I do not see how the fact that he intended to serve for over two years necessarily meant that he was no longer habitually resident. Did the tribunal expect him to continue to pay rent for accommodation that he was no longer occupying and thus incur an extra financial penalty for volunteering? Did not the fact that he stored his goods rather than disposing of them show precisely the opposite intention to that inferred by the tribunal?

17. The decision of the First-tier Tribunal was made in error of law because it did not focus on the right question and drew unjustified conclusions from the facts which, in my opinion, show that the claimant retained his habitually resident status.

18. For the above reasons this appeal by the claimant succeeds.

H. Levenson

Judge of the Upper Tribunal

19^th May 2010