Upper Tribunal (Administrative Appeals Chamber)

 

THE UPPER TRIBUNAL

 

ADMINISTRATIVE APPEALS CHAMBER

 

DECISION OF THE UPPER TRIBUNAL JUDGE

 

Before: A J Gamble

 

Attendances:

 

For the Appellant: Mr C Orr, Welfare Rights Officer, Glasgow City Council

 

For the Respondent: Mr D Bartos, Advocate instructed by Ms K Mulligan, Solicitor, of the Office of the Solicitor to the Advocate General

 

The claimant’s appeal is allowed.

 

The decision of the Glasgow First-tier Tribunal of 13 May 2009 is set aside.

 

The case is referred to the First-tier Tribunal (Social Entitlement Chamber) for redetermination by a differently constituted tribunal in accordance with the directions in paragraph 9 of the Reasons.

 

REASONS FOR DECISION

 

1. This is an appeal by the claimant, brought with the permission of the District Tribunal Judge, against the decision of the Glasgow First-tier Tribunal of 13 May 2009.

 

2. At the request of the claimant’s representative, the Registrar granted an oral hearing which took place on 3 February 2010 before me.  The claimant did not attend.  Representation is noted above.

 

3. The claimant and his wife made a joint claim for Jobseeker’s Allowance on 8 December 2008.  In connection with that claim, they disclosed various amounts of capital held in their names, jointly and individually.  On 12 January 2009, a decision maker calculated the amount of their capital for the purposes of the above claim. The claimant appealed against that decision.  However, on 13 February 2009 a decision maker revised it.  See documents 24-25.  In the revised decision the claimant and his wife were held to be the owners of all of the capital in their joint savings account until 29 December 2008.  They were also held to have deprived themselves of capital on that date.  In consequence, they were treated as possessing notional capital from then.  The decision of 13 February 2009 was itself revised on 25 February 2009 documents 62-62A.  (In the revising decision of 25 February 2009, the decision of 13 February 2009 is referred to as being dated 15 February 2009.  That was presumably by a slip of the pen.  Nothing turns on the slight divergence of dates.)  The revision of 25 February 2009 did not affect the substance of the decision of 13 February 2009.  However, it did lay out more clearly and accurately the amount of actual capital (£3,462.13) and notional capital (£7,500) respectively attributed to the claimant and his wife from 30 December 2008.  The decision of 25 February 2009 continued to determine that they were the owners of all the monies in their joint savings account until 29 December 2008.

 

4.               After the complex history of departmental decision making summarised in paragraph 3 above, the claimant’s appeal proceeded to determination by the tribunal.  They allowed the appeal in part.  They held that the claimant and his wife had not deprived themselves of capital on 29 December 2008 for the purposes of regulation 113 of the Jobseeker’s Allowance Regulations 1996 and thus were not to be treated as possessing notional capital from that date. See their decision notice, document 73 and the third paragraph under the heading “Supplementary Findings and Reasons for Decision” in their Statement of Reasons, documents 75-76. 

 

5. However, the tribunal upheld the determination of the decision makers that all the monies in the joint savings account of the claimant and his wife until and on 29 December 2009 actually belonged to them.  See document 73.  It had been the claimant’s position from the lodging of his Letter of Appeal, documents 8-9, onwards that some of the money in that account was being held by his wife and himself on behalf of her mother.  A letter from the claimant’s mother-in-law supporting that contention, document 64, was lodged. Oral evidence to the same effect was given by the claimant.  See documents 68-69, the tribunal’s Record of Proceedings.  The contention of the claimant just summarised was rejected.

 

6. The tribunal explained that rejection in the second paragraph under the heading “Supplementary Findings and Reasons for Decision” on document 75, their statement of reasons.  There, they expressed themselves thus “In the first place, the appellant claimed that certain funds held in the account of himself or his spouse did not belong to the appellant or his spouse but were held in trust for the mother of the appellant.  There was no documentary evidence of the creation of any such trust and there were no circumstances present which supported the creation or existence of any such trust and the tribunal rejected the oral evidence of the appellant to the effect that such a trust existed because of the lack of any specification of relevant circumstances.  The tribunal accordingly found that all of the funds present in the accounts of the appellant and his spouse were within the legal and beneficial ownership of the appellant and his spouse”. In the above paragraph, the tribunal made a mistake of fact by saying that the claimant and his wife were allegedly holding some of the money in their joint account for his mother whereas the correct position was that they claimed that they were holding that money for her mother.  Setting that point aside, the tribunal’s reasoning is expressed in terms of the legal concept of trust.  They held that no trust in favour of a third party had been established. 

 

7. In her written submissions to the Upper Tribunal, the Secretary of State did not support the claimant’s appeal.  See documents 89-91.  However, at the oral hearing, Mr Bartos reneged from that position.  In his submissions summarised in paragraph 8 below, he argued that the tribunal’s decision was materially erroneous in law and invited me to set it aside.  Mr Orr made no independent submissions and fully associated himself with those of Mr Bartos. 

 

8.               The legal arguments advanced by Mr Bartos were as follows:

 

(a)             The tribunal had misdirected itself in law by considering whether a trust had been established.

 

(b)             The correct starting point for the legal analysis of the issue before the tribunal was the common law rule laid down (or at least well illustrated) by the decision of the Inner House of the Court of Session in Trotter v Spence (1885) 22 S.L.R.353, Documents 98-101.  That rule is that the presumption in the case of a bank deposit held in joint names is joint ownership and that presumption had to be redargued or, in current terminology, overcome.  In other words, the presumption is rebuttable.  In answer to a question from me, Mr Bartos conceded that the precise issue in Trotter v Spence did not arise in this  case because,  by  virtue  of  regulation  88  of  the Jobseeker’s Allowance

Regulations 1996, all the capital of the claimant and his wife, however held, was aggregated.  Thus there was no need to establish between them which of them possessed the right to capital held in their joint names. 

 

(c)             However, Mr Bartos went on to submit that the principle laid down in Trotter v Spence also applies when it is asserted that sums held in the name of one or more persons in a bank account actually belong to someone else.  Once again, title was not conclusive.  A presumption of ownership arises from it but that presumption can be rebutted.  In support of that proposition, he referred me to Cairns v Davidson 1913 S.C.1054, another decision of the Inner House, Documents 111-115.  Crucially for the purposes of Mr Bartos’ submission that case also established that such rebuttal could be by any admissible evidence including oral evidence.  Proof that money on deposit belonged to someone other than the person in whose name the deposit was held did not require to be by writ or oath. Prior to the coming into force of the Requirements of Writing (Scotland) Act 1995, such restricted proof was required to establish the existence of a Trust by virtue of the Blank Bonds and Trusts Acts 1696, which ceased to have effect under Section 11(1) of the 1995 Act.  Cairns v Davidson clearly established that the 1696 Act did not apply in a case where what was at issue was the true ownership of money in a bank deposit. Mr Bartos correctly submitted that Cairns v Davidson therefore represented the proposition that in a case like that before the tribunal no proof of trust was required.  Rather, what was at issue was simply the true ownership of some or all of monies held on deposit.  Mr Bartos particularly relied on Lord Salvesen’s judgement on Documents 112-113 where His Lordship clearly distinguishes between, for example, a title deed to land and a deposit receipt with a bank. For the sake of completeness, Mr Bartos submitted, again correctly, that there is nothing special about a deposit receipt and the same principle applies to a bank book or a bank statement in joint names. 

 

(d)             On the basis, therefore, of Cairns v Davidson Mr Bartos submitted that the tribunal had asked itself the wrong question.  They had effectively asked themselves whether a trust in favour of the claimant’s mother-in-law (or as they erroneously thought his mother) had been established.  Rather they should have asked themselves whether the presumption in favour of all the monies in the  joint  savings  account  of  the claimant  and his wife actually belonging to

them had been rebutted so as to establish that some of those monies truly belonged to the claimant’s mother-in-law although held in an account in the names of the claimant and his wife.  Their failure to ask themselves that question, he submitted, was a material error of law.

 

 

 

 

(e)             He further submitted that the tribunal had made a separate material error of law by failing, in their Statement of Reasons, to state explicitly what they made of the evidence contained in document 64, the letter from the claimant’s mother-in-law supportive of the view that some of the money in the joint savings account was actually hers.  In this regard, they had not provided an adequate explanation of the reasons for their decision.

 

I am grateful to Mr Bartos for his helpful analysis. I found his submissions convincing.  I accept them.  The tribunal materially erred in law in the ways suggested. I set their decision aside.  It is not appropriate for me to remake it.  That requires a process of fact finding better carried out by a First-tier Tribunal.  I thus remit the case to a freshly constituted tribunal for redetermination in accordance with the directions contained in paragraph 9 below.

 

9.               The new tribunal should proceed as follows:

 

(a)             They should decide whether the presumption in favour of all of the money in the joint savings account held in the names of the claimant and his wife actually belonging to them has been redargued or rebutted, on balance of probabilities.  They should reach their decision recalling that the claimant bears the onus of proof on that issue, on the basis of such of the evidence, written and oral available to them as they accept. If they decide that any part of the money in that joint savings account actually belonged to the claimant’s mother-in-law then they should determine its amount.  That amount should not be included in the calculation of the capital of the claimant and his wife for the purposes of their joint claim to Jobseeker’s Allowance.

 

(b)            They should also determine whether the admitted spending of £7,500 on a car by the claimant and his wife on 29 December 2008 amounted to deprivation of capital for the purposes of Regulation 113 of the Jobseeker’s Allowance Regulations 1996.   On that issue, the Secretary of State bears the onus of proof.  She will have to show that increasing entitlement to Jobseeker’s Allowance was a significant operative purpose in the above transaction.

 

(c)             Finally, they should determine the actual capital of the claimant and his wife on 29 December 2008 and on 30 December 2008 and if they are against the claimant on the issue referred to in sub-paragraph (b) above what amount of notional capital should be attributed to him from 30 December 2008.  In the light of these determinations, they should remit calculation of the precise amount of entitlement to Jobseeker’s Allowance to the Secretary of State.

 

 

 

 

 

 

 

 

10.            The claimant’s appeal succeeds.  He should draw no inference as to his eventual success.  The merits of the case will be determined by the new tribunal rehearing it in accordance with the directions given in paragraph 9 above.

 

 

 

 

 

(Signed)

AJ GAMBLE

Judge of the Upper Tribunal

Date: 11 February 2010