IN THE UPPER TRIBUNAL Case No  CIS/2694/2009

ADMINISTRATIVE APPEALS CHAMBER

 

Before UPPER TRIBUNAL JUDGE WARD

 

Decision:  The appeal is allowed.  The decision of the First-tier Tribunal sitting at Manchester on 28 April 2009 under reference 946/09/00676 involved the making of an error of law.  I exercise my discretion for the reasons set out below in favour of setting it aside.  Acting under section 12(2)(b)(ii) of the Tribunals, Courts and Enforcement Act 2007 I substitute a decision that income support claimed to have been overpaid to the claimant is not recoverable under the decision (or purported decision) of 17 September 2008.  This is because there was not the valid revision or supersession decision in place which statute requires.  This decision does not prejudice the Secretary of State’s ability to take further or alternative steps to recover such income support.

 

REASONS FOR DECISION

 

1. The claimant had been claiming income support since 15 May 1998. At the time of the overpayment his applicable amount included the severe disability premium.  In 2008 it became known to the DWP that the claimant’s friend, Mr P, had moved in in January 2002 and continued to live with him.  A decision was taken that they were not living together as civil partners.  The effect of Mr P “normally residing” with the claimant as a non-dependant was that the claimant’s entitlement to the severe disability premium would cease, unless Mr P’s normal residence could be disregarded  on the grounds, that, in effect, Mr P was himself disabled to a specified extent: see the Income Support (General) Regulations 1987/1967, schedule 2, paragraph 13(2)(a)(ii) for the non-dependant condition and paragraph 13 (3) for when residence by a non-dependant is to be disregarded.  The necessary enquiries were made and it was established that there were no grounds to disregard Mr P’s normal residence with the claimant.

 

2. On 9 September 2008 the DWP purported to supersede the decision awarding the claimant income support. On 17 September 2008 a decision was taken that the claimant had been overpaid income support amounting to £11,691.50 for the period 4 September 2003 to 16 July 2008 and that it was recoverable for failure to disclose.  (The date of 4 September 2003 was chosen by the DWP because it had no records of payment to the claimant before that date.)

 

3. The appeal proceeded on the basis that Mr P had been claiming benefit at the same address and had informed the DWP that he lived at that address with the claimant. It was submitted that the claimant was aware that Mr P had so informed the DWP and that the DWP thus had actual knowledge of the situation, held within the same office.

 

4. The tribunal held, in essence, (a) that there had not been a failure to disclose by the claimant, because there had been disclosure by Mr P; and (b) that in the circumstances of the case it was not reasonable to expect him to take steps to make any further disclosure.

 

5. The Secretary of State appealed, with permission given by a First-tier Tribunal judge.

 

6. I return briefly in [32] below to the question of disclosure by third parties but it seemed to me that there was a more fundamental reason why, irrespective of the Secretary of State’s grounds of appeal, the claimant was entitled to have succeeded in his appeal against the decision of 17 September 2008.  This was that there was no evidence before the First-tier Tribunal as to the content of the claimed entitlement decision of 9 September 2008 and specifically as to whether it contained the necessary revision(s) and or supersession(s), to comply with section 71(5A) of the Social Security Administration Act 1992.  The revisions and/or supersessions would have had to cover all the decisions pursuant to which payment was made to the claimant during the overpayment period.  Accordingly, submissions were invited from the parties on this point.

 

7. The Secretary of State’s representative has been commendably diligent in his research and properly frank in his dealings with the Upper Tribunal and, through it, with the claimant and his representative.  In response to my Direction, he replied:

 

“…It appears that the sequence of decision making was as follows. Due to their programming, the Department’s computers cannot be used to carry out a supersession that has to take effect from a date more than 14 months before the date of decision.  This case fell into   that category.  The required supersession should have been done on paper.  But matters went wrong. The claimant had been paid up to and including 16 July 2008.  The Secretary of State’s decision maker therefore used the computer to terminate the award with effect from the day after, namely 17 July 2008.  The “A14 assessment reports” [which were in the bundle] were also drawn up.  However, those forms were never signed by a decision maker or notified to the claimant.  Instead, they were simply passed to the Department’s Debt Management decision makers, to whom it fell to decide whether any overpayment was recoverable.  I am advised that the “decision(s) dated 09/09/2008” referred to by the overpayment decision maker… does not exist.  There is only the computer decision in respect of 17 July 2008 onwards, which was made on 1 August 2008.”

 

8. The submission went on to exhibit various documents  which (inter alia) provided a record of what had been sent to the claimant and which did not include anything as having been sent on or around  9 September  2008.

 

9. On the basis of this material, the Secretary of State was prepared to concede that:

 

 

“In my submission, a decision that has not been notified has no legal effect (see the decision of the House of Lords in R. v Secretary of State for the Home Department and another ex parte Anufrijeva [2003] UKHL 36).  That being so, the reassessments on forms A14 do not constitute a legally [operative] supersession of the claimant’s award.  There is only the computer decision removing the severe disability premium with effect from 17 July 2008. This is not sufficient to vouch an overpayment in respect of 4 September 2003 to 16 July 2008.  Thus section 71(5A) is not satisfied to even the smallest extent. It follows, in my submission, that the overpayment decision of the Secretary of State was of no force and effect (CPC/3743/2006 at paragraph 26).  For this reason, the   tribunal had no jurisdiction to hear an appeal against that purported decision.”

 

(The italics have been added by me to the passage at the end of the quoted extract and the italicised passage is discussed further at [25] – [28] below.)

 

10. On 9 December 2010 the Court of Appeal in Northern Ireland delivered its judgment in Hamilton v Department for Social Development [2010] NICA 46. In Deane v Secretary of State [2010] EWCA Civ 699 the Court of Appeal (in England and Wales) endorsed the position stated in R(SB)1/90 that identically worded provisions operating in both Northern Ireland and Great Britain should be interpreted uniformly.  For this reason, the Tribunal of Commissioners in R(SB)1/90 had made clear that decisions of the Court of Appeal in Northern Ireland on such provisions, though not technically binding, were to be followed by commissioners (and so, now, by judges of the Upper Tribunal.)  Accordingly, I invited submissions as to the effect, if any, of Hamilton on the present case.

 

11. Hamilton concerned a person in receipt of income support whose entitlement ought, because of a change of circumstances, to have been terminated from 4 October 2004, had the true facts been known.  When they did become known, a decision was taken on 1 June 2006 to terminate Ms Hamilton’s income support with effect from 31 January 2006.  That was as far back as the Department’s computer system would go.  On 5 June 2006 the Department sought to remedy the deficiency by making a “manually recorded decision removing entitlement to income support from 4 October 2004 to 30 January 2006”.  If properly effected, this would have ensured that the whole period of the overpayment was covered. It failed to notify this decision to Ms Hamilton immediately.  Nonetheless, it went on to consider whether a recoverable overpayment had occurred, which led to a decision of 14 August 2006 holding that an overpayment of income support of £7,142.14 was recoverable from Ms Hamilton in respect of the period 4 October 2004 to 29 May 2006.  The decision was notified to her by way of a letter dated 8 September 2006.  On 4 October 2006 the amount said to be recoverable was revised down to £6,991.74. The revised decision was notified the same day.

 

12. Ms Hamilton appealed against the revised recoverability decision on 18 October 2006. Her appeal was rejected. When the case came before a Social Security Commissioner he found, in the words of the Court, that “the second entitlement decision was valid and had been perfected by subsequent notification to the appellant of the decisions which could be found in the bundle of documents to which she had access before the appeal started”.  Ms Hamilton appealed to the Court of Appeal. In response to a direction, the Commissioner posed two questions to the Court:

 

“(1) Did I err in law in holding that the requirements of Section 69(5)(a) of the Social Security Administration (Northern Ireland) Act 1992) (‘the Act’) [the Northern Ireland equivalent of section 71(5A) of the Social Security Administration Act 1992] were satisfied in circumstances where a decision superseding the determination in pursuance of which benefit was paid to the appellant was made but was not communicated to the appellant until after a determination that benefit was recoverable from her under Section 69(1) of the Act was made and communicated to the appellant?

 

(2) Although the specific point was not raised in argument before me, did I err in law in failing to hold that Article 13(8)(b) of the Social Security (Northern Ireland) Order 1998 [the Northern Ireland equivalent of section 12 (8)(b) of the Social Security Act 1998] required the Tribunal not to take into account the communication of the decision superseding the determination under which benefit was paid to the appellant as the communication of that decision was a circumstance not obtaining a the time when the decision appealed against was made?”

 

13. In the event, the Court decided that the notification of 8 September 2006 (as triggered by the decision of 14 August 2006 on the recoverability of the overpayment) included a proper notification of the supersession decision of 5 June 2006 that terminated Ms Hamilton’s income support with effect from 4 October 2004.  The letter of 8 September 2006 is described by the Court in the following terms in paragraph 9 of its decision:

 

“[9] The first paragraph of its letter dated 8 September 2006 stated:

 

“We are writing to you because we have had to look again at your money.  We have decided that you have been paid £7,142.24 too much income support from 04 October 2004 to 29 May 2006.  This was because your carer’s allowance had ended and you no longer satisfied the conditions of entitlement to income support.  You need to pay this back.”

 

The letter went on to inform the claimant that if she wanted more information she should get in touch with the Department at the address and phone number shown.  The letter also indicated that she had a right to appeal and could obtain a relevant leaflet and appeal form from her local Social Security Office.  The letter also recorded details of the sum as calculated.  By its further letter of 4 October 2006 the Department stated that that sum had to be reduced by the sum of £150.40 for the period 3 August 2004 to 27 September 2004 at £18.80 per week.”

 

14. The Court based its decision on the ability of the letter of 8 September 2006 to perform a dual notification function:

 

“[29] The letter of 8 September 2006 makes clear that the Department had decided two things.  Firstly, it had decided that the claimant’s entitlement to income support had ceased from 4 October 2004 because her carer’s allowance had ceased.  Secondly, it had decided that the sum of £7,142.14 was recoverable.  Inasmuch as the claimant had been previously made aware of the first entitlement decision taking the period of non-entitlement back to 4 October 2004 beyond the date of 31 January 2006 (of which decision the claimant was aware) the letter of 8 September 2006 itself brought to the claimant’s notice the effect of the second entitlement decision.  The letter of 8 September 2006 accordingly satisfied the requirements of Regulation 28 in that it gave her written notice of the decision as well as notice of her right to appeal and her right to ask for reasons. Anyone receiving the letter would have known that they could appeal against the decisions that the moneys were recoverable and that they were recoverable from 4 October 2004.”

 

15. With respect, I do have a little difficulty in following the reasoning here.  The first entitlement decision was that taken on 1 June 2006 and went back to 31 January 2006.  That decision was notified. It did not go back beyond 31 January 2006 to 4 October 2004.  That was done by the second entitlement decision.  However, it is clear that what was important was that the letter “brought to the claimant’s notice the effect of the second entitlement decision” (as well as the recoverability decision).

 

16. If, therefore, the present case were one where the notification of the recoverability decision was sufficient also to encompass a notification of the entitlement decision on supersession, it might be that I would be constrained to follow the decision in Hamilton. 

 

17. It does respectfully seem to me that Hamilton may give rise to difficult questions of the interaction between the taking of a decision, the communication of a decision and the rule referred to in the second of the questions posed by the Commissioner in the case stated.  The decision of 5 June 2006 had not been communicated at all by the time that the recoverability decision was taken on 14 August 2006 and was not communicated until 8 September.  Certainly in Great Britain there is authority at Commissioner/Upper Tribunal level – CPC/3743/2006 (Judge Mesher), which I followed in CIS/527/2010 -  that (in GB) section 12(8)(b) requires there to be “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.”  There is no indication that Judge Mesher’s decision was cited in Hamilton and indeed the Court considered that it did not need to address the second of the questions posed by the Commissioner at all.

 

18. I am not required to resolve these issues, however, as the Secretary of State in the present case concedes, rightly in my view,  that the letter which was sent to the claimant notifying him of the overpayment on 17 September 2008 should not be construed as a notification of the decision of 9 September 2008.

 

19. The letter was sent by the DWP’s Debt Centre.  It reads, so far as relevant:

 

“We are writing to you because too much Income Support has been paid.

 

This is because of [sic] your entitlement to a premium has stopped.

 

The overpayment is calculated as follows: [details of the benefit, overpayment period and amount are then given]

 

This amount that has been overpaid must be paid back under Social Security law.

…

 

You have the right of appeal against this decision. Further information is available on the page entitled “Questions about the overpayment decision” including what to do if you disagree with this decision.

 

If you would like more information, please call us on 0845 600 8656…”

 

20. The letter consistently uses the singular “decision”.  The information sheet with answers to questions is about, specifically, the “overpayment decision”.  To say that “your entitlement to a premium has stopped” was not a fair summary of the supersession decision, which was not merely about the claimant having been overpaid because entitlement had stopped, but about apparent entitlement for a past period having been removed. 

 

21. The Secretary of State‘s representative goes on to point out that it was certainly not the intention of the letter to notify the entitlement decision as well, for the Debt Centre, who sent the letter, does not deal with entitlement decisions beyond being required to satisfy itself that there is one, sufficient to satisfy section 71(5A) of the 1992 Act, and would not be equipped to answer questions posed in response to the letter about any entitlement decision.

 

22. While the DWP’s internal working practices could not be determinative of the legal effect of the letter, it is entirely unsurprising that the phrasing of the letter in the respects set out in [20] is consistent with how the DWP does in fact deal with such matters.

 

23. I therefore accept as properly made the concession on behalf of the Secretary of State, which was in the following terms:

 

“In view of the foregoing, any reasonable person receiving the letter would not have known that there existed a separate supersession decision against which he could appeal. The notification simply does not say that, whether expressly or by reasonably clear implication. This would seem a little too close for comfort to the “hole in the corner decisions” deprecated by Lord Steyn in paragraph 28 of Anufrijeva. To borrow another phrase from his Lordship, if this is the Secretary of State’s way of notifying supersession decisions that produce an overpayment, “transparency is not its hallmark” (Anufrijeva, paragraph 24).”

 

24. It follows therefore that no legally effective decision such as can satisfy section 71(5A) of the 1992 Act was made.

 

25. What then is the effect?

 

26. In paragraph 26 of CPC/3743/2006, Mr Commissioner Mesher (as he then was) said:

 

“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”.

 

27. In paragraph 1 of R(IS) 13/05 Mr Commissioner Mesher ultimately made this decision:

 

“I substitute the decision that the appeal tribunal should have given (Social Security Act 1998, section 14(8)(a)(i)). The decision is to allow the claimant’s appeal against the decision dated 13 November 2003, in relation to the period from 26 February 1992 to 25 March 1997, and to decide that the Secretary of State has failed to prove that the conditions for recoverability of an overpayment for that period were met, in that the condition in section 71(5A) of the Social Security Administration Act 1992 is not satisfied.”

 

He went on to say (at paragraph 15):

 

“..the effect of my decision in paragraph 1 above is that there is no overpayment recoverability decision in existence in relation to that period.  However, there is nothing in law to stop the Secretary of State from taking action now to make a proper revision or supersession decision in relation to that period.”

 

28. I note from the extracts from R(IS)13/05 quoted above that it was the decision of Mr Commissioner Mesher that had the effect of meaning that there was no recoverability decision in existence.  The same would follow if a First-tier Tribunal were to find that there was no compliance with section 71(5A).  It seems to me that it does not follow from the fact that the appeal process may find the recoverability decision (or purported decision) invalid at the end of the process that the tribunal should have expressed itself as lacking jurisdiction, as originally suggested by the Secretary of State in the italicised wording quoted at [9] above.  To accept jurisdiction, but then in an appropriate case to declare that the recoverability decision did not meet the conditions required of it and so was invalid, would seem more consistent with the view, as expressed in paragraph 72 of R(IB) 2/04, that a flawed decision should only be regarded as having no effect if has “so little coherence or connection to legal powers” that it does not amount to a decision at all.  An overpayment decision that mistakenly finds that section 71(5A) is satisfied by an un-notified alteration of the award is not utterly incoherent or wildly unrelated to the relevant legal powers.  It is simply wrong.  On this view, it should not be regarded as a non-decision such as would compel the tribunal to express itself in terms of declining jurisdiction but rather be set aside and replaced with a decision that because section 71(5A) was not met it was invalid. This, in effect,  is the view now submitted by the Secretary of State, in preference to the italicised wording quoted at [9] above, from which the claimant, who is legally represented, has not dissented.  I do not regard it as inconsistent with either R(IS)2/96 or R(SB)7/91.

 

29. I next have to consider whether the effect of finding that section 71(5A) has not been complied with is determinative of the question of recoverability for all time or merely means that this particular exercise undertaken by the Secretary of State to recover the money has failed, but without prejudice to his right to take further steps to recover it.  The issue fell to be considered by Upper Tribunal Judge Parker in AG v Secretary of State for Work and Pensions [2010] UKUT 291 (AAC).  Referring to previous authorities, such as the decision of Mr Commissioner Henty in CIS/4246/2004 and to R(IS)13/05 she reached the conclusion (paragraph 16) that:

 

“the [decision maker’s] original overpayment decision…was in substance declared invalid and of no effect by [the appeal tribunal];  but this in no way [prevents the Secretary of State from beginning again and carrying out a fresh overpayment process correctly.” 

 

I respectfully agree.

 

30. It is argued on behalf of the claimant that for the reasons set out below it would be neither reasonable nor fair on the claimant to allow the Secretary of State a further opportunity to make the recovery legal. If the nature of an overpayment recovery exercise is correctly understood, the only discretion vested in me from which the Secretary of State requires to benefit in order to restart the recovery process is that, having found there to be an error of law in the tribunal’s decision, I have a discretion whether to set it aside. 

 

31. The claimant’s representative first refers to certain passages in CPC/3743/2006.  However, in those passages Judge Mesher was considering what the Secretary of State might have to do to  put right the situation where part of an overpayment period was not covered by a decision which satisfied section 71(5A).  This was intended as guidance and I do not think that the claimant’s representative needs to distinguish it as she attempts to do, as I do not see it as relevant to the discretion under consideration.

 

32. She next points out that in the present case, a tribunal has already provided “two clear reasons for allowing the appeal on the merits of the case”.  However, the first of those two reasons (on which the second was dependent) was under challenge by the Secretary of State in the present appeal before the section 71(5A) point emerged.  If I was satisfied that the tribunal’s decision was right in the result, then I might have refused to set aside its decision notwithstanding the lack of a supersession decision to satisfy section 71(5A).  But it is, to put the matter at its very lowest, plainly arguable that the tribunal erred in applying R(SB)15/87, in that the disclosure said to have been made by Mr P was not in connection with the claimant’s own benefit, as required by R(SB)15/87, and was both “casual” and “incidental” (and thus, under R(SB)15/87, insufficient) in that any mention of the claimant came up while Mr P’s own benefit position was under discussion.  It is not for me to give a ruling on the Secretary of State’s original appeal given that, for the reasons stated, his recovery exercise does not get off the ground.  But I certainly would not regard the claimant’s chances of resisting the original appeal to the Upper Tribunal as being so strong that I ought on that ground to exercise in his favour the discretion not to set aside the decision of the First-tier Tribunal.

 

33. It is of course also true, as the representative points out, that to remit the matter to the Secretary of State would incur further public money as well as time.  That is a regrettable consequence of the errors which have occurred, but it does not provide a reason why the Secretary of State should be deprived of the chance, if he sees fit, to attempt to prove that the public purse is entitled to recover monies paid in excess of entitlement of £11,000 plus. 

 

34. It is then said that the shortcomings of the Department’s computer system should rebound to their loss rather than that of the claimant.  However, it is not about a loss to the claimant, but about whether he is entitled to retain an apparently unjustified gain.  Further, the Department is already having to bear the consequences of its computer shortcomings and of the inadequate attempts to remedy these through having this attempt at recovery rejected, causing it as a minimum a significant delay in recovering the use of the money and additional administrative costs.

 

35. Finally, a point is made on behalf of the claimant that it is not a change of circumstances where something new which has been in existence for a long time comes to the notice of the Secretary of State. I would merely observe that if it is not a change of circumstances, it may well amount to grounds for revision of an earlier decision as having been given in ignorance of, or under a mistake as to, a material fact.  Again, I am not satisfied that any renewed attempt at a revision or supersession is destined to fail, so that it would be wrong to allow the Secretary of State the chance.  However, if the Secretary of State does decide to make a further attempt at recovery, the claimant will have a further right of appeal and can make such points as he wishes concerning any supersession or revision on which the Secretary of State is then attempting to rely.

 

36. I therefore do not regard any of the above arguments, taken individually or together, as sufficient to justify exercising my discretion not to set aside the tribunal’s decision.  Whether as a matter of policy to make a further attempt at recovery is a matter for the Secretary of State, over which I have no jurisdiction.  I am however satisfied for the above reasons that it would not be appropriate to use my discretion under section 12(2) in a way which would have the effect of depriving him of the opportunity to launch a further recovery attempt, if he sees fit.

 

 

 

CG Ward

Judge of the Upper Tribunal

10 May 2011