Upper Tribunal (Administrative Appeals Chamber)

IN THE UPPER TRIBUNAL Appeal No. CIS/98/2010

ADMINISTRATIVE APPEALS CHAMBER

Before Judge S M Lane

The decision of the Birmingham First-tier Tribunal (Social Entitlement Chamber) tribunal heard on 24/8/09 under reference 024/08/06103 involves errors on points of law. The tribunal’s decision is SET ASIDE and RE-MADE under section 12(2)(a) and (b)(ii) of the Tribunals, Courts and Enforcement Act 2007.

The appellant is liable for an overpayment of Income Support for the period 24/10/02 to 17/10/07 because he misrepresented the material fact that he possessed capital in excess of the prescribed amount.

The appeal is remitted to the Secretary of State to recalculate the amount of the overpayment to reflect the fact that the appellant had £4508.01 in a Nationwide account (p107) on 24/10/02, and not £6365.35 (as recorded by the tribunal judge) or £6068.89 (as shown on p121 of the Submission).

The appellant is at liberty to apply to the Upper Tribunal solely on the amount of the overpayment as recalculated, within one month of the date the Secretary of State issues the fresh calculation.

REASONS FOR DECISION

1.     This appeal is brought by the appellant with my permission. It involves an overpayment of Income Support in the region of £25,000 for the period 24/10/02 to 17/10/07. Although there was no clear appeal against the entitlement decision underlying the overpayment, the tribunal sensibly treated the appeal as concerning both aspects.

2.     The entitlement issue and subsequent overpayment arose because the appellant and his wife had bank accounts which were unknown to the Department and which contained capital in excess of the prescribed amount from the outset of the appellant’s claim. For the purposes of Income Support, the income and capital of a claimant’s family member is treated as his own (Social Security Contributions and Benefits Act 1992, section 136) unless it falls within an exception, to which there are none relevant in this case.

3.     Although there was some misunderstanding about the name on account 9172, the tribunal proceeded on the basis that the account was in the appellant’s wife’s name and contained money, allegedly a bequest from the appellant’s mother in law, to be held by his wife for her children and grandchildren (p. 3, 4^th paragraph from bottom). This reflects appellant’s statement throughout that the money in wife’s account belonged to his mother in law and was meant for his wife’s children. The basis upon which the tribunal proceeded meets the solicitor’s concern in his submission received on 2/8/10 that the appellant was not able to give evidence about the misunderstanding. This submission was one day late, but I exercise my discretion to admit it in the interests of justice.

4.     The tribunal rejected the appellant’s explanation that this money was a bequest, as well as the rest of the appellant’s evidence generally. It found the explanation improbable, having regard to documentary evidence of payments in and out of the account since it opened. The tribunal found that the appellant was owner of the money in law and equity. The tribunal was entitled to come to this conclusion on the evidence before it.

5.     The tribunal did, however, overlook a small discrepancy in the evidence on amount the appellant had in one of his own accounts during the period in question. This would have a small effect on the diminishing capital calculations that the Secretary of State was obliged to make. It is unnecessary to go into further details on this or other aspects of quantification since the representative did not suggest that there was any other error and I could see none.

6.     The tribunal accepted, in accordance with the Secretary of State’s original Submission, that the overpayment was recoverable under section 71(1) of the Social Security Administration Act 1992 because the appellant failed to disclose the material fact about his capital. However, it was the appellant’s case throughout that he did not know that this account existed.

7.     It is a longstanding principle in social security law that there cannot be a failure to disclose a fact if the claimant does not know it. The tribunal was therefore obliged to make a finding of fact about the claimant’s knowledge if it was to rely on this basis of liability, but it omitted to do so.

8.     In granting permission to appeal I noted that, even though this was an error of law, the evidence nevertheless supported a finding under section 71(1) that the appellant had misrepresented his capital in the claim pack as opposed to having failed to disclose it. The representative has not argued otherwise. It would be very difficult to see how he could since a statement made orally or in writing which is untrue is a misrepresentation. The reason why a claimant gave incorrect information is not relevant: R(SB)18/85.

9.     I indicated that I was prepared to substitute a decision on this basis if necessary. The Secretary of State was content with this proposal and the representative has not, as mentioned above, made any submission on this issue. In the circumstances, I am substituting this basis for the recoverability of the overpayment. There can be no doubt from the information eventually made available to the Department that the couple’s capital was well over the prescribed limit from the outset. Although the claim form is not in the bundle, there is no doubt that it contains the standard section in which claimants are required to set out their capital and give details of their bank accounts and so forth. From the interview under caution (p21) and the reference to the decision maker (p25) it can be said, on balance, that the appellant neither set out the various accounts nor given correct details of their capital.

10.  Finally, the representative mentioned in his appeal to the Upper Tribunal that he believes that the First-tier Tribunal would have benefitted from the appellant’s presence at the hearing though he had failed in to get the decision set aside on this basis under rule 37 of the Tribunal Procedure (First-tier Tribunal) (Social Entitlement Chamber) Rules 2008 The Secretary of State dealt with this briefly in his response and does not support the appeal on this ground. I remain of the view that there is nothing in this point.

11.  It appears that the appellant telephoned the Administrative Support Centre very shortly before the time set for the hearing (14:40). His telephone call appears not to have been reported to the clerk until shortly before 15:00, following which he telephoned back the appellant. The message taken by the clerk was that the appellant had had a bout of diarrhoea and wanted the hearing to proceed in his absence. The appellant, however, says that he had told the clerk about his gastric disturbance but said that he could get a lift and be there in 10 minutes but was told that the hearing would go on in his absence. As it happens, the tribunal was unaware of any of this, and had decided the appeal by the time the clerk gave it the message as understood by the clerk. I consider it most unlikely that a tribunal clerk, who understands the importance of telephone calls from parties regarding attendance, would have got the message entirely back to front, as is alleged. The message received by the tribunal justified its earlier decision to proceed in the appellant’s absence, even though that earlier decision may have been made somewhat robustly.

12.  Under rule 31 of the Tribunal Procedure (First-tier Tribunal) (Social Entitlement Chamber) Rules 2008 (the Rules) a tribunal may hear an appeal in absence where an appellant fails to attend a hearing if it is satisfied that the appellant has been properly notified of the hearing (this is not in issue) and it is in the interests of justice to do so.

13.  A decision on whether it is in the interests of justice to proceed requires an exercise of judicial discretion. Under the Rules, this is informed by Rule 2(1), which states that the overriding objective of the Rules is to enable the tribunal to deal with cases fairly and justly. The factors which are included in that assessment are set out in rule 2(2). These serve to focus the tribunal’s mind on matters relevant to that consideration. Not every factor will be appropriate to the circumstances of every case. At the end of the day, the question under rule 2(1) is whether the tribunal has dealt with a case fairly and justly.

14.  The Record of Proceedings indicates that the tribunal considered the problem of the appellant’s absence (p181) and noted that credibility issues arose, but came to the conclusion that it could proceed. In the context of a hearing in which the appellant fails to appear (or, indeed a paper hearing), it is useful to bear in mind that in practice, a tribunal can backtrack on a decision to hear the appeal in absence if it become apparent that oral evidence (or further evidence) would assist it. It is plain from the Statement of Reasons that, in light of bank statements produced to it, the tribunal found it implausible that a large sum of money whose ownership was disputed derived from an inheritance. But even if it could be said that this evidential reason was insufficient to justify the decision to proceed, it made no difference since the telephone message from the appellant must, on balance, have requested that the hearing go ahead.

15.  For these reasons, while the appeal is technically allowed, it will make very little difference to the overall amount of the overpayment for which the appellant is liable.

[Signed on original] S M Lane

Judge of the Upper Tribunal

[Date] 12 August 2010