Upper Tribunal (Administrative Appeals Chamber)

DECISION OF THE UPPER TRIBUNAL

ADMINISTRATIVE APPEALS CHAMBER

The claimant's appeal to the Upper Tribunal is allowed. The decision of the Carlisle First-tier Tribunal dated 10 March 2009 involved an error on a point of law and I set it aside. It is appropriate for the Upper Tribunal to re-make the decision on the appeal against the Secretary of State's decision dated 30 October 2008 (Tribunals, Courts and Enforcement Act 2007, section 12(2)(a)(ii)). The decision as re-made is that the claimant is entitled to a social fund funeral payment of £1,070 without the making of any deduction under regulation 10(1)(a) of the Social Fund Maternity and Funeral Expenses (General) Regulations 2005 (assets of the deceased available to the responsible person).

REASONS FOR DECISION

1. This is an unusual case raising the question of how regulation 10(1)(a) of the Social Fund Maternity and Funeral Expenses (General) Regulations 2005 (assets of the deceased available to the responsible person) should be applied when the person who has taken responsibility for the funeral has no authority to deal with the estate and says that he cannot find out what assets the deceased had. Regulation 10(1) provides that various amounts are to be deducted from the amount of any award of a funeral payment that would otherwise be payable, including:

"(a) the amount of any assets of the deceased which are available to the responsible person (on application or otherwise) or any other member of his family without probate or letters of administration, or (in Scotland) confirmation, having been granted."

2. The claimant has requested an oral hearing before the Upper Tribunal. However, I have decided the case substantially in his favour on the papers. The award made above does not meet the full cost of the funeral, but that is a consequence of the strict limits placed by the legislation on the amounts to be allowed in a social fund funeral payment (explained in paragraphs 18 and 19 below). And I did not wish to add any extra delay to the time within which the claimant will actually receive payment under that award. Accordingly, a hearing has not been necessary and I refuse the claimant's request for one. For the same reasons I have not delayed to seek the claimant's comments on the submission dated 29 January 2010 on behalf of the Secretary of State.

The background

3. The claimant took responsibility for the funeral of his friend, Mr O, who had a room in the same accommodation as him and for whom he was a carer. Mr O died on 25 September 2008 and the funeral was on 8 October 2008. The claim for a funeral payment was made in good time. The claimant ticked that he was getting housing benefit and council tax benefit (CTB). He said that Mr O had left no partner or surviving close relatives. He had a death certificate, but no bank details. He said that he was sorting out Mr O's financial affairs. In the section on money available, the claimant ticked that there was cash at the bank belonging to Mr O, writing in "£97 + benefits". That was the claimant's estimate. He thought that there might be two weeks' worth of disability living allowance (highest rate care component and higher rate mobility component) and income support. The funeral directors' account, which the claimant said he had already paid, was for £1,670 in total, made up of £295 for the burial fee paid on the claimant's behalf and £1,375 for "the provision of all necessary professional and supplementary services to provide a basic funeral service including the basic coffin".

4. An officer wrote to the claimant asking for sight of housing benefit and CTB award notices and for the claimant to contact Mr O's bank to ask them to send him the closing statement. The claimant replied that he had no letters to say how much was paid direct to his landlord and that he did not have access to Mr O's bank details and that they could not trace him. The decision was then made on 30 October 2008 that the claimant was not entitled to a payment because, as a closing bank statement had not been supplied, the estate was assumed to be meeting the costs of the funeral. The claimant appealed, saying that Mr O had had no assets, only a few personal possessions. On 23 December 2008 another letter was sent to the claimant asking for the same things as before, but the claimant could add no further information beyond saying that Mr O's bank cards had been stolen before he died.

5. The claimant had opted for a "paper hearing". The tribunal sitting on 16 February 2009 directed the claimant to provide a closing statement for the deceased's bank account, following which the Secretary of State was to make a further submission. The claimant's letter dated 18 February 2009 stated that Lloyds TSB would not acknowledge Mr O's death or close the account or provide the claimant with details to check whether probate was required or release any money for funeral costs. An appeals officer made a submission suggesting that there would have been no difficulty in obtaining information about money left in Mr O's account if the required details were given and pointing out that the claimant had not yet provided evidence that he was receiving a qualifying benefit at the time of his claim. That was based on the following report of her telephone conversation with Lloyds TSB's dedicated phone line:

"I was informed that a person who is arranging a funeral for one of their deceased customers should go to the branch office with the following documents: Death certificate, final funeral bill, a will if there is one and ID for themselves. They will be asked to complete a form and declaration. The form is then referred to a processing centre. A check will be made to see if the deceased had left any instructions also to see if anyone else had a claim on the estate.

If there is any money in the account a cheque would be sent direct to the Funeral Directors."

The funeral directors had told the appeals officer that only £186 was outstanding on the account, but that they could not now say where previous payments had come from.

6. In response to that, the claimant wrote that he had attended a Lloyds TSB office in Blackburn in November 2008 with the documents described, but had not been allowed to use any of Mr O's assets. He enclosed a statement from his own Post Office card account starting on 26 November 2008 showing a payment-in of jobseeker's allowance on that date and subsequent payments.

The tribunal's decision

7. On 10 March 2009 the tribunal disallowed the claimant's appeal. The statement of reasons went through the matters summarised above and concluded that the claimant had failed to submit information that the decision-maker was entitled to request under regulation 10, continuing:

"The tribunal was satisfied that although the Decision Maker could obtain details of [the claimant's] own entitlement to a qualifying benefit he could not obtain details of the deceased's bank account. In the circumstances, the Secretary of State was entitled to decide that the allowable costs for the funeral were deemed to be met from the money in the deceased's bank account."

The appeal to the Upper Tribunal

8. The claimant now appeals against that decision with my permission. There was a very helpful submission dated 7 October 2009 from Mr McClure on behalf of the Secretary of State that supported the appeal. He submitted that the decision of the tribunal should be set aside and that directions should be given to the Secretary of State as to how to make a further decision on the basis that regulation 10(1)(a) did not apply in the circumstances. The way that the tribunal's error of law was put was this:

"The claimant has submitted on a number of occasions, perhaps most clearly in his letter to the Appeals Section dated 28 December 2008 (page 34), that the deceased had no capital of his own. While it was not unreasonable for the [decision-maker] to seek evidence of the balance of the account, I submit that the Secretary of State has no authority to `deem' that there is any sum of money in an account in respect of which no information is held, or that the sum is sufficient for any particular purpose. For this reason, at least, I submit that the decision of the tribunal was wrong in law, and should be set aside."

9. I agree with the general thrust of that submission, but would put things slightly differently. That is because what I think that the tribunal was meaning to say was that as the claimant had failed to supply the information directed on 16 February 2009 adverse inferences were to be drawn against him as to the assets of Mr O's estate being sufficient to meet the amount that could have been awarded as a social fund funeral payment. There will be circumstances in relation to many issues within the social security system in which it is only right and proper to draw adverse inferences against a person who does not produce information or evidence that can reasonably be concluded to be within their knowledge or ability to obtain where there is no reasonable obstacle to its disclosure. That general principle was set out authoritatively by Baroness Hale in paragraph 63 of Kerr v Department for Social Development [2004] UKHL 23, [2004] 1 WLR 1372, R1/04 (SF) (and also see Lord Hope at paragraph 16):

"The first question will be whether each partner in the process [claimant and Department] has played their part. If there is still ignorance about a relevant matter then generally speaking it should be determined against the one who has not done all that they reasonably could to discover it. As Mr Commissioner Henty put it in decision CIS/5321/1998, `a claimant must to the best of his or her ability give such information to the AO as he reasonably can, in default of which a contrary inference can always be drawn'. The same should apply to information which the department can reasonably be expected to discover for itself."

It is plain also that in the right circumstances an adverse inference drawn in that way may be sufficient to discharge the burden of proof on an issue.

10. However, in the present case there was not a sufficient basis for drawing adverse inferences against the claimant such as to require his claim for a funeral payment to be disallowed. There are three linked factors that I consider important.

11. The first is the limited scope of regulation 10(1)(a). It does not contain a rule that the value of the deceased's estate or of any assets within the estate is always to be set against the amount of a funeral payment that would otherwise be awarded. The value of the estate as such is relevant at a later stage if section 78(4) of the Social Security Administration Act 1992 on recovery of social fund awards comes to be considered:

"(4) Payments to meet funeral expenses may in all cases be recovered, as if they were funeral expenses, out of the estate of the deceased, and (subject to section 71 above) by no other means."

By contrast, regulation 10(1)(a) applies only to assets of the estate that can be made available before any grant of probate or administration. And they have to be available to the claimant or some member of his family. Thus, if the information recorded by the appeals officer about the practice of Lloyds TSB (paragraph 5 above) were taken at face value, it would not in fact support the availability of assets to the claimant. According to that record, the bank said that if there was money in the account a cheque would be sent to the funeral directors. There was not in fact an indication that money would have been paid over to the claimant, a person apparently not entitled to any share of Mr O's estate and not an executor under a will or an administrator on intestacy. Nor was there a clear indication that such a person would be provided with a copy of the closing bank statement.

12. The second factor is that the claimant had put forward a case that he had attempted to obtain a bank statement and payment of funeral expenses from Lloyds TSB, but had been unsuccessful. Since he had opted for the paper hearing, the tribunal did not have the opportunity to obtain further details from him about those attempts or to get him to explain some apparent differences in what he had said at different times. The appeals officer who had recorded the information from Lloyds TSB was not present either. The tribunal did not make any express finding whether or not money in Mr O's bank account was available to the claimant, but the conclusion it reached could I think only have been reached on the assumption that the information recorded by the appeals officer was correct. The failure to make findings of fact on which to base the tribunal's conclusion might well be an independent error of law. For present purposes, it seems to me that from everyday knowledge of the practice of banks there was sufficient doubt that the claimant would have been given a copy of Mr O's bank statement by Lloyds TSB that that point could not have been assumed to have been concluded by the telephone information. Mr McClure pointed out in paragraph 11 of the submission of 7 October 2009 that from the Lloyds TSB website it is apparent that for a person to be provided with information regarding and/or access to the deceased's account they must be the executor, administrator or next-of-kin. That evidence was not before the tribunal of 10 March 2009 and does not rule out an exception in favour of a person who has taken responsibility for funeral costs where there are no next-of-kin, but it points up the uncertainty identified above.

13. The third factor is that there was no evidence to suggest that Mr O had or had had in the past capital assets of any particular value or of a value exceeding the likely amount of any funeral payment. There was nothing to contradict the claimant's assertion that Mr O was in receipt of the highest rate of the care component and the higher rate of the mobility component of DLA and of income support, with the guess that there might be two weeks' benefit in the account plus £97 (wherever that figure came from). The Department would have been able to check the amounts paid to Mr O, whether they were paid direct into his bank account and the last date of payment (plus whether any repayment was due for periods after the date of his death). It might also have had available a declaration as to the amount of savings for income support purposes. Mr O does not appear to have been living in luxurious circumstances. This was not a case where there was clear evidence of his having had substantial capital at some point and there being no explanation of where it had gone.

14. Taking account of all those factors, the evidence before the tribunal of 10 March 2009 was not capable of supporting the drawing of the inferences that Mr O's estate included assets of any particular value or substance or that any such assets were available to the claimant. The tribunal therefore erred in law in concluding that the claim failed by virtue of regulation 10(1)(a). It seems to me that, since the form of regulation 10 is to specify deductions from the amount of a funeral payment that would otherwise be made, the burden of showing that the conditions are met for the making of a deduction falls on the Secretary of State. The Secretary of State had failed to discharge that burden either directly or by adverse inferences against the claimant. But my conclusion would have been the same if the burden is on the claimant to show that the conditions are not met.

15. Accordingly, the tribunal's decision is set aside.

The Upper Tribunal's decision on the appeal against the decision of 30 October 2008

16. Mr McClure had suggested in his submission of 7 October 2009 that the Upper Tribunal should declare that regulation 10(1)(a) was not to apply and then leave it to the Secretary of State to determine whether all the conditions of entitlement were met, in particular the condition of having an award of a qualifying benefit in respect of the date of claim. I wished to be able to substitute a decision on the appeal against the decision of 30 October 2008 and so gave further directions on 18 December 2009 for the Secretary of State to provide further information, drawing attention to her powers to require a housing benefit or CTB authority to provide her with information for any purpose relating to social security (Social Security Administration Act 1992, section 122D). The submission dated 29 January 2010 had attached copies of documents showing clearly that at the date of the claim for a funeral payment the claimant had awards of two qualifying benefits, income-based JSA and housing benefit.

17. As it has from the outset been accepted that the claimant qualified as a close friend of Mr O and there are no relatives of the latter to consider, there is no obstacle to the claimant's entitlement to a funeral payment. It is also accepted that the evidence does not support the application of regulation 10(1)(a). What therefore remains is to calculate the amount of the funeral payment that can be allowed under regulation 9. Although the funeral directors' account is not very detailed it is sufficient, subject to one small point, to calculate what the regulation allows.

18. The structure of regulation 9 is to set out in paragraph (3) a number of categories of expenditure that are to be met in full, subject to some limits ((a) - (f)) and then the final category:

"(g) any other funeral expenses which shall not exceed £700 in any case."

It is that £700 limit, unaltered since 2003, that bites hardest in the present case.

19. The £295 burial fee is to be met under paragraph (3)(a). (e) covers the cost of a hearse and an additional vehicle to the funeral from the funeral directors' premises and back. Presumably even a basic funeral service would include a hearse, but I would have expected that if an additional vehicle had been provided that would have been mentioned on the account. Since the professional services provided for £1,375 were not broken down, I have made the estimate that they included expenditure of £75 under (e). If either the claimant or the Secretary of State considers that that is factually wrong and has evidence in support, there can be a supersession of my decision by the Secretary of State on the ground of mistake of material fact. There is no evidence for the application of categories (b) to (d) or (f). (b) is to do with cremation. (c) covers the cost of obtaining documents necessary to release assets of the deceased, but no such assets were released and, although the claimant was put to a lot of inconvenience, it does not seem that he had to pay for any particular documents. (d) covers costs of transport when the person dies away from home, so does not apply. (f) covers the necessary cost of a return journey for the claimant to arrange the funeral, which he said on the claim form he did not incur. That therefore leaves only (g), under which no more than £700 can be added to the already identified £295 and £75. The total of the award is £1,070.

20. The decision to that effect is at the head of page 1 of this decision. It is now open to the Secretary of State to use whatever powers are available to discover the value of Mr O's estate and to take action, if thought fit, under section 78(4) of the Social Security Administration Act 1992.

(Signed on original): J Mesher

Judge of the Upper Tribunal

Date: 12 February 2010