Upper Tribunal (Administrative Appeals Chamber)

DECISION OF THE UPPER TRIBUNAL

(ADMINISTRATIVE APPEALS CHAMBER)

 

The DECISION of the Upper Tribunal is to dismiss the appeal by the local authority.

 

The decision of the Bolton First-tier Tribunal dated 14 January 2011 under file reference 122/10/02736 does not involve an error on a material point of law.  The decision of the tribunal stands.

 

This decision is given under section 11 of the Tribunals, Courts and Enforcement Act 2007.

 

 

REASONS FOR DECISION

 

A summary of the Upper Tribunal’s decision

 

1. This is an appeal by the local authority against the decision of the First-tier Tribunal (the FTT).  The local authority had decided that an overpayment of housing benefit and an excess payment of council tax benefit were recoverable from the claimant.  The FTT decided to the contrary, ruling that the overpayment had occurred due to “official error” and, moreover, that the claimant could not reasonably have been expected to realise that there had been such an overpayment/excess payment.

 

2. The Upper Tribunal’s decision is that there is no material error of law in the FTT’s decision.  The FTT was entitled to make the central findings it did, relating to official error and what the claimant could reasonably have been expected to realise.  I accept that there is a mistake of fact in the FTT’s decision but I am also satisfied that it did not materially affect the outcome of the case.  For those reasons I dismiss the local authority’s appeal to the Upper Tribunal.

 

The oral hearing of the Upper Tribunal appeal

 

3. A district tribunal judge gave the local authority permission to appeal against the FTT’s decision on the basis that its grounds of appeal were arguable.  I held an oral hearing of the Upper Tribunal appeal at Manchester Civil Justice Centre on 20 October 2011.  The local authority was represented by Mrs J Giblin, its Appeals Team Leader.  The claimant attended in person, accompanied by her partner.  I am grateful to Mrs Giblin and the claimant respectively for the clear and careful way in which they made their submissions in circumstances which were doubtless unfamiliar to both of them.

 

The background to the appeal to the First-tier Tribunal

 

4. The claimant, who had been unwell following the birth of her child, applied to the Department for Work and Pensions (DWP) for employment and support allowance (ESA) in February 2010.  She would have preferred to do so face to face but, as is increasingly the case, she was advised that her ESA claim had to be made by telephone.  In a detailed written account that she sent to the FTT, she explained as follows:

 

“I explained to the woman [on the telephone] everything and she started to run through the claim, she asked me plenty of questions including information regarding my partner, and myself.  She asked me if I wanted to claim ‘contribution’ based or ‘income’ based ESA, never having claimed before I didn’t know what it meant, she went on to explain and asked further questions about our circumstances which resulted with the conclusion to make a claim for ‘contribution’ based.  Also during this telephone call she asked me if I wanted to claim as a ‘single’ or ‘couple’ ... again I was unsure and asked her what did this mean obviously telling her I had a partner and that I was making the claim for ESA for myself as there was only me that wasn’t fit enough to be working at that moment in time and [he] was working.  She later advised that a claim for help with rent and council tax could be made and that they did it, they sent all the forms straight to the local authority we were with.  I gave her all the information she requested and awaited all the forms she had told me I would receive.  I received the papers from DWP regarding my claim for ESA and read through them, sent the documents they requested back. On 12.2.10 I received the council tax and housing benefit forms, I read through these and as far as I understood and could see these were right. I did read the income for myself and to me it was correct I was in receipt of the benefits shown. I also read at the bottom the couple premium so from my understanding they knew about [my partner] being with me at this address.”

 

5. The housing benefit (HB) and council tax benefit (CTB) form that the claimant mentioned was the 14-page “LACI” (Local Authority Claim Information) form.  It was completed on-line by the DWP member of staff who took the claimant’s telephone call about her ESA claim, generated and printed by computer and then sent direct to the local authority with a copy to the claimant. It was clear from the LACI form that the claimant had applied for contribution-based ESA (see “ESA(C)” on page 2); that she was co-habiting (page 3), that she had a partner (page 4; his name, date of birth and national insurance number were included at page 5), that she had a child and was getting child benefit (page 6).  The boxes relating to “Partner other income details” had been left blank by the DWP.

 

6. There is no dispute that, in fact, the claimant’s partner had been in work throughout the period in question.  However, it is also clear that the local authority only realised that the claimant’s partner had earnings some months later, when the claimant’s own contribution-based ESA award ceased and she claimed jobseeker’s allowance (JSA).

 

The decision of the First-tier Tribunal

 

7. The FTT heard the claimant’s appeal at Bolton on 14 January 2011.  The claimant attended with her partner. The local authority did not attend.  Mrs Giblin told me, and I accept, that the authority’s policy was normally to attend FTT hearings.  However, she was the only officer able to act as presenting officer and on this particular date she had not been available.  She indicated that she thought the case could proceed in her absence and, had that not been the case, she would have applied for an adjournment.  In those circumstances she – quite rightly – took the view that she could not afterwards apply for a set aside of the FTT’s decision on procedural grounds.

 

8. The FTT plainly found that the claimant was a credible and reliable witness.  Her account of events had been consistent throughout.  As indicated above, the tribunal concluded that there had been an official error by the authority and that the claimant could not reasonably have been expected to realise that there had been an overpayment and excess payment of benefit.  Referring to the well-known passage in the judgment of Baroness Hale of Richmond in Kerr v Department for Social Development [2004] UKHL 23 at [62], dealing with the co-operative nature of the claiming and decision-making process for benefit claims, the FTT reasoned as follows:

 

“13. There is clearly a duty upon the claimant to provide such information as is requested of him or her and to provide such information as he or she may reasonably be expected ought to be supplied.  However, there is also a duty upon the authority administering the Benefit (in this case Bolton MBC [clearly a misprint for Bury MBC]) to ask appropriate questions and raise appropriate enquiries in order to enable the claimant to comply with the duty of disclosure.

 

14. Furthermore, where a claimant has provided information to the relevant department and that information ought to have ‘flagged up’ the need for further enquiries then the failure of that adjudicating authority to raise appropriate enquiries at the appropriate time is an error on the part of that Local Authority.

 

15. In this particular case, on the facts as found the respondent had before it sufficient information to flag up the need for further enquiries about the appellant’s partner’s income.  The failure of the respondent to make these enquiries amounted to ‘official error’.”

 

The submissions to the Upper Tribunal

 

9. The submissions to the Upper Tribunal can be summarised as follows.  The local authority put in carefully argued written submissions which were developed at the oral hearing by Mrs Giblin.  The local authority’s original grounds of appeal argued, in summary, that the information that the claimant’s partner was in work was not included on the LACI form and indeed had never been proactively provided by the claimant.  The LACI form indicated that the primary household income was ESA alone.  There was nothing to put the local authority on notice that the claimant’s partner had any earnings.  On that basis, it was argued that the FTT’s conclusion that there had been an official error by the local authority involved a mistake of law.  The authority’s written submission to the Upper Tribunal added:

 

“Guidance from DWP confirms that Authorities should accept information on application forms as completed by their officers, and that it is not necessary for supporting information to be requested as it will have already been seen by their officers.  This is standard practice across local authority benefits offices.  The Authority submits that the information provided was accepted as correct on the basis that it came from DWP.  The claimant will also have been given a copy of the form to check.”

 

10. In a further written submission prepared for the oral hearing, the local authority advanced two further arguments by way of challenge to the FTT’s decision.  First, it was said that any error that occurred was the responsibility of either the DWP or the claimant herself.  Secondly, and relying on the Court of Appeal’s decision in R (Sier) v Cambridge City Council HBRB [2001] EWCA Civ 1523, the local authority contended that the overpayment was caused by the claimant’s failure to disclose her partner’s income, and that any failure by the authority to make further enquiries did not contribute to or cause the overpayment.

 

11. Understandably, the claimant herself was not in a position to counter these detailed legal arguments. In her written and oral submissions, she essentially repeated the account of events that she had given to the FTT.  She was unhappy with any suggestion that she had been evasive in any way.  She also explained that, in her view, the overpayment was not her fault – she argued that the local authority had an obligation to make enquiries where appropriate, just as she had a duty to provide the correct information when asked.

 

The Upper Tribunal’s analysis

 

12. I should start by saying that I am satisfied that there is one clear mistake of fact in the statement of reasons prepared by the FTT. I agree with the local authority to that extent.  The FTT found (at paragraph 5) that the claimant had informed the local authority “of her working tax credit [WTC] and, therefore, they should have been aware that there was some income coming into the household over and above the ESA”.

 

13. However, at the time of the claim for ESA, and at the date that the LACI form was completed, in February 2010, the claimant had neither applied for, nor received, any WTC.  She made a WTC claim later, with effect from the start of the 2010/11 tax year in April 2010.  She was sent a notice of her WTC award by Her Majesty’s Revenue & Customs on 31 May 2010, and it was agreed that she would not have received her first payment of WTC until some date in June 2010.

 

14. So what actually happened? The appeal file indicates that there were no communications between the claimant and the local authority between February 2010, when the HB/CTB award was finalised, and 1 July 2010.  On that latter date the local authority wrote to the claimant suspending her HB/CTB claim on the basis of information received from the DWP that her ESA claim had ended.  At this point, the local authority also established from official computer records that WTC was in payment.  Accordingly, on 7 July 2010 the local authority wrote to the claimant, noting that she was in receipt of WTC, and asking for information about her partner’s income.

 

15. The claimant went into the local authority’s office the next day.  The counter clerk’s record of the visit was as follows:

 

“COUNTER: Claimant to counter with 3 wage slips for partner and JSA notification.

 

Note: partner has been in work since start of claim.  We never asked about his income.  Have notified claimant that will need details of partner’s income since start of claim and that will remain suspended in meantime to prevent OP [overpayment]. Don’t think this is claimant’s fault as we never asked in first place.”

 

16. It follows that the FTT’s finding set out at [12] above was wrong.  The claimant had not been in receipt of WTC in February 2010 (so she could hardly have informed the authority of that fact then).  Rather, the local authority became aware of her subsequent WTC award through its own checks in July 2010.  However, this mistake as to the facts does not, in my view, involve an error of law.  It would only amount to an error of law if the mistake of fact in question could have affected the overall outcome.

 

17. In my judgment the tribunal’s mistaken finding of fact was not material for the following reasons.  First, it is necessary to consider what actually happened in February 2010. Screen-prints from the local authority’s records system confirmed that the LACI form was received on 11 February 2010.  They also recorded that “all searches done”.  Mrs Giblin confirmed that her colleagues had access to certain DWP and HMRC data through a computer system known as Customer Information Systems (CIS).  The claimant’s income was recorded on the authority’s system as ESA, child benefit (CB) and child tax credit (CTC).  Her partner’s income was entered as “nil”.  The records entry concluded “All required is CB evidence” (she was not asked for the details of her CTC award as the local authority had access to that data direct from HMRC via the CIS).  This entry therefore prompted the local authority to write to the claimant on 15 February 2010, asking for proof of her child benefit award.  A couple of days later the claimant duly supplied a copy of the relevant HMRC letter about her child benefit. The local authority then sent her a detailed award letter running to 9 pages. This listed her income as ESA, child benefit and CTC.  Throughout the document it referred to e.g. “your total weekly income” and “the amount of money you have coming in each week”. It also stated that “your applicable amount” included a couple element.

 

18. Second, it is also necessary to consider the FTT’s other findings of fact, as set out in its statement of reasons.  These included the following, namely (i) the claimant had given the local authority all the information requested of her; (ii) the claimant had given all relevant information to the DWP; (iii) it was obvious from the LACI form that she had a partner living with her; and (iv) at the time that the original award was made the local authority had before it sufficient information to flag up the need for further enquiries about the income of claimant’s partner.

 

19. As to finding (i) in the previous paragraph, this was demonstrated by the claimant’s prompt and full response to the local authority’s requests for further information in both February and July 2010.  She may not have volunteered the WTC information as soon as she had received payment in June 2010, but this did not affect the events of February 2010 in any way.

 

20. As regards finding (ii), the FTT had clearly accepted the claimant’s case that she had told the DWP telephones claim handler about her partner’s income (see e.g. as stated in her letter of appeal).  The FTT found her to be a reliable witness and the Upper Tribunal would need firm grounds to interfere with a credibility finding by the FTT (for what it is worth, I also found her to be credible in her account).

 

21. So far as finding (iii) is concerned, the name and personal details of the claimant’s partner were set out on the face of the LACI form, even though the income boxes had been left blank. It is also clear from the local authority’s computer records that his existence was known by the authority at the time of the award, although his income had been mistakenly entered on the authority’s records system as “nil”.

 

22. Those three findings were all findings of primary fact and each was eminently justified on the evidence that was before the tribunal.  Finding (iv) – that the local authority had sufficient information to flag up the need for further enquiries about the partner’s income – was strictly a finding of secondary fact, in that it involves an inference from the evidence as a whole and the findings of primary fact.  Was it justified?  Mrs Giblin, for the local authority, argues that it was not.  I disagree, for the following reasons.

 

23. First, the LACI form itself indicated that the claimant, her partner and her child were living on contribution-based ESA and child benefit alone.  Mrs Giblin conceded at the oral hearing that in her experience this would be unusual.  I would suggest that it was not so much unusual as very unlikely, and certainly so improbable that it should at least have prompted the local authority to make further enquiries at that stage.  In practice, the most common reasons for one member of a couple claiming contribution-based ESA, and not income-based ESA, are that either the other partner has earnings from work and/or possibly that one or other of them has a substantial amount of capital.  Either reason would of course be highly relevant to the question of entitlement to means-tested benefits such as HB and CTB.

 

24. Second, the LACI form did not specifically state in terms that the claimant’s partner had a “nil” income.  The relevant boxes were actually left blank (as were those for savings), which someone at the local authority simply assumed to mean nil.  This too should have prompted enquiries to have been made, bearing in mind the other circumstances of this case.  In this context Mrs Giblin seeks to rely on Social Security Commissioner’s decision CH/1257/2005 as authority for the proposition that, where relevant income boxes on a form are left blank or answered “no”, then that can only reasonably be taken as a declaration that the person has no such income.  I do not think that the decision of Miss Commissioner Fellner can stand for quite such a broad proposition.  As Mrs Giblin fairly concedes, the case is for the most part about a late appeal. In any event, it seems self-evident that, depending on the circumstances, there may well be a difference between a box being answered “no”, “none” or “nil” on the one hand and a box being left unanswered on the other.  In this context it is also significant that the form was completed by the DWP telephone claims handler, and not directly by the claimant.  This is more akin to the position in the reported decision R(SB) 18/85, albeit a decision applying a different test for the recovery of overpayments, where it was held that a representation in a claim form was qualified by the claimant’s oral disclosure which the interviewing officer had failed to record properly.

 

25. Third, Mrs Giblin placed considerable stress on the DWP’s guidance to local authorities (see [9] above).  I was not actually shown this guidance, but accept that some such guidance may well exist.  The point, however, is that it is guidance and not binding law.  I was not shown and am not aware of any legislative provisions requiring local authorities to assume that all relevant information on the LACI form had been included and checked by DWP.  As a matter of first principle, if a relevant box is left blank on a LACI form, and the local authority needs the information in question, then presumably it is the local authority’s responsibility to obtain that information directly from the person concerned. 

 

26. Furthermore, the local authority’s submission on this point was somewhat undermined by its own conduct on receiving the LACI form in February 2010.  In particular, the local authority did not simply “take it as read” – as noted at [17] above, the local authority carried out certain independent checks.  In doing so, the authority (i) identified that CTC was not included on the LACI form but was in payment; and (ii) asked for proof of the child benefit award (notwithstanding the official guidance relied upon by the local authority).  

 

27. In making these submissions Mrs Giblin also relied upon Commissioners’ decisions R(H) 1/04 and R(H) 2/04. I am not persuaded that either authority advances the local authority’s case.  In R(H) 1/04 Mr Commissioner (now Judge) Turnbull held that a local authority’s failure to question an award of income support made to a claimant was not a mistake or an official error, given that an award of income support led to automatic entitlement to HB/CTB.  In the present case the claimant had not been awarded any means-tested benefit that passported her to HB/CTB entitlement; on the contrary, she had been awarded a contribution-based benefit that was paid irrespective of her means.

 

28. In R(H)  2/04 Mr Commissioner (now Judge) Howell QC ruled that there had been no “official error” where an authority made an award on the best information available to it and had then relied on the claimant to notify it if those details transpired to be incorrect. However, that was a case on rather different facts, where the claimant had completed her own form, had disclosed the existing level of a tax credits award but had later failed to tell the council about a subsequent increase in that award.  That was not a case where there had simply been no answer entered to a relevant question on an original claim form which was completed by an official on the claimant’s behalf.

 

29. Taken together, therefore, the FTT’s findings amounted to a reasonable evidential basis for its conclusion that there had been an “official error” by the local authority (within the terms of regulation 100(3) of the Housing Benefit Regulations 2006 (SI 2006/213), which was unaffected by the FTT’s one mistaken finding of fact about the WTC issue.  I accept that the FTT might also have found that there had been an official error on the part of the DWP (e.g. by failing properly to record information supplied by the claimant, or by failing to transmit that information to the local authority), but the FTT did not need to make that finding in order to decide the appeal before it in the claimant’s favour.

 

30. This is not, however, the end of the local authority’s argument.  The original written submission to the FTT also argued that the claimant had been sent a series of detailed notification letters about her HB/CTB award in February 2010 which stated her income to be ESA, child benefit and CTC.  She had, it was said, failed to inform the local authority that her partner had his own earnings and had also failed to notify the authority of her WTC award from April 2010.

 

31. I am not sure the latter point takes the local authority very far.  Although the claimant’s award of WTC ran from April 2010, she did not receive notification of her award until June 2010, shortly before the authority took the steps described above.  As I think Mrs Giblin rightly conceded at the oral hearing, this point was at best incidental.

 

32. The former point made by the local authority might have been a stronger one.  However, the submission to the FTT about the notification letters was made in the context of the authority’s primary argument that there had been no official error on its part in the first place.  As noted at [7] above, the local authority was not represented at the FTT and so did not develop that argument in any more detail.  Before the Upper Tribunal, the local authority now seeks to argue more fully that the cause of the overpayment was the claimant’s non-disclosure, and not any official error on its part.  I do not find these arguments persuasive for three reasons.

 

33. First, the FTT found that the claimant had in fact advised the DWP telephone claims handler about her partner and his circumstances. It also found that in the circumstances of this case, and in particular on what was contained in the LACI form, then the local authority should itself have made further enquiries.

 

34. Second, the FTT had also found as a fact that the DWP claims handler had given the claimant to understand that she qualified for HB/CTB and had also, at least by implication, accepted her argument that she had no previous knowledge or experience of the benefits system.  I note also that the notification letter refers to “your income” throughout and nowhere makes it clear that this means household income.  Given the nature of the advice that she had received when making the telephone claim, it does not seem to me that the reference to a couple rate for the applicable amount necessarily undermines the claimant’s case.

 

35. Thirdly, the case law shows that what matters is the substantial cause of the overpayment, viewed in a common sense way (see R (Sier) v Cambridge City Council Housing Benefit Review Board [2001] EWCA Civ 1523).  The facts of Sier were a long way removed from the present case, and the substantial cause of the overpayment there was undoubtedly the claimant’s failure to inform the local authority (not least that he was simultaneously claiming housing benefit in another authority).  Although the Sier argument was not fully advanced before the FTT, it is clear to me that the FTT found that the substantial cause of the overpayment was the local authority’s failure to make further enquiries.  That was a decision that was reasonably open to the tribunal.  The fact that the local authority disagrees with the conclusion does not mean the tribunal erred in law.

 

36. The other authorities cited do not take the local authority’s case any further forward.  On the facts of R(H) 1/04 the primary cause of the overpayment of CTB was the claimant’s failure at the outset to disclose his receipt of an occupational pension to the DWP, which in turn caused the mistaken award of income support.  Here the claimant had informed the DWP about her partner and his circumstances.  In R(H) 2/04 the causation point was dealt with more shortly, but again the common sense approach in Sier was followed.  In the present case I reiterate that the FTT found the authority’s failure to make the appropriate enquiries the primary cause of the overpayment.  The FTT plainly took the view that the claimant had neither caused nor materially contributed to the authority’s mistake.  Mrs Giblin also relies on CH/240/2009, an unreported decision of Mr Commissioner (now Judge) May QC.  In that case, however, the Judge found that the relevant notifications were “quite clear in their terms” and that the tribunal in that case went beyond the bounds of what was a reasonable judgment.  That is not the case here.

 

37. I should mention that I have not placed any particular weight on the counter clerk’s statement to the claimant in July 2010 that the authority should have made enquiries earlier (“Don’t think this is claimant’s fault as we never asked in first place”: see [15] above).  As Mrs Giblin argued, that was that individual’s interpretation and it was not their decision to make – in today’s parlance it was “above their pay grade”.  However, it does indicate that the issue of causation is not necessarily as straightforward as the local authority now seeks to argue.

 

38. Finally, the FTT’s decision in this case might be criticised for not spelling out more fully quite why it had concluded that the claimant could not reasonably have been expected to realise that there had been an overpayment/excess payment of HB/CTB.  However, the FTT had obviously been entitled to accept the claimant’s account of her previous lack of experience of claiming and the advice received by telephone from the DWP, both of which justified its conclusions.

 

39. It may be that a different tribunal on a different day might have reached a different decision.  The outcome may also have been different if Mrs Giblin had been able to attend the hearing before the FTT and had made some of the points which she made to me.  However, that is not the test for establishing whether the FTT has erred in law in any way.

 

Conclusion

 

40. For the reasons explained above, the decision of the First-tier Tribunal does not involve any material error of law.  I must therefore dismiss the appeal (Tribunals, Courts and Enforcement Act 2007, section 11). 

 

Signed on the original Nicholas Wikeley

on 7 November 2011 Judge of the Upper Tribunal