Upper Tribunal (Administrative Appeals Chamber)

IN THE UPPER TRIBUNAL Case No.  CH/2859/2011

ADMINISTRATIVE APPEALS CHAMBER

 

Before: Upper Tribunal Judge Rowland

 

Decision:  The local authority’s appeal is dismissed

 

 

REASONS FOR DECISION

 

1. This is an appeal by Bristol City Council against a decision of the First-tier Tribunal dated 6 June 2011, whereby it allowed the claimant’s appeal against the Council’s decision that she was not entitled to housing benefit or council tax benefit from 15 November 2010.

 

2. The local authority had refused benefit on the ground that the claimant had no right to reside in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland and therefore could not be treated as habitually resident in Great Britain with the consequence was that she was a “person from abroad” who could not be treated as making payments in respect of her dwelling for housing benefit purposes and was a person of a prescribed class for council tax benefit purposes and thus did not meet the conditions for entitlement to benefit (see sections 130(1)(a) and 131B(1) and (3)(b) of the Social Security Contributions and Benefits Act 1992, regulation 10 of the Housing Benefit Regulations 2006 (SI 2006/213) and regulation 7 of the Council Tax Benefit Regulations 2006 (SI 2006/215)).

 

3. The First-tier Tribunal allowed the appeal on the ground that the claimant was not a “person from abroad” because she had an extended right of residence in the United Kingdom under regulation 14 of the Immigration (European Economic Area) Regulations 2006 (SI 2006/1003) as a “self-employed person” within the scope of regulation 4(1)(b) which provided that that term meant “a person who establishes himself in order to pursue activity as a self-employed person in accordance with Article 43 of the Treaty establishing the European Community”.  Other issues in the case were left to be determined by the local authority, since it had not previously had to consider them.

 

4. The First-tier Tribunal’s decision was made following an oral hearing at which the claimant was represented by Mr Andy King of Avon and Bristol Law Centre and the local authority was represented by Ms Hilary Keevil, the Appeals and Revisions Team Leader in its Housing and Council Tax Benefits Department.  Mr King and Ms Keevil are also the parties’ representatives on this appeal and I am grateful for their written submissions.  Neither has sought an oral hearing before the Upper Tribunal.  I am satisfied that I can properly decide the case without a hearing.

 

5. The claimant is a Romanian national.  She is a single mother with four children, the eldest of whom is severely disabled and entitled to disability living allowance.  He was nine years old at the material time.  The claimant was in receipt of carer’s allowance and tax credits.  The First-tier Tribunal recorded –

 

“The appellant attended the hearing and gave evidence.  She said she had arrived in the United Kingdom in 2007 and came to this country specifically to claim benefits.  She had found out from her friends that she could come to the united kingdom and sell the big issue and she started doing so three or four years earlier.”

 

6. The First-tier Tribunal had before it evidence as to the arrangements under which sellers of the Big Issue worked and the number of copies she had bought each week and figures for the profit that would be expected if she sold them all.  It found, correctly in my view, that the claimant was self-employed rather than employed and it then turned to the question whether she was a “self-employed person” for the purposes of the 2006 Regulations.  It said –

 

“8. For someone to be regarded as a worker the work must be genuine and effective and not marginal or ancillary.  Factors to be taken into account in assessing this are the period of employment, the number of hours worked, the level of remuneration and whether the work was regular or erratic.  The ECJ in Jany made it plain that a similar test of genuineness and effectiveness was applicable to self-employment.

 

“9. The question to be resolved was whether the appellant’s self-employment was genuine and effective.  The appellant had undertaken this work for over three years.  She generally worked at least 16 hours a week increasing to 24.  Based on the revised schedules the appellant’s profit in the period from August to the beginning of November 2010 was around £45 a week.  From early November 2010 to the end of December 2010 the average was around £150 a week, with the average for the period from August to the end of December around £90 a week.  Apart from two weeks when she did not work the appellant worked in all the other weeks and in most weeks she bought at least 50 magazines.  She did not submit tax returns or pay national insurance contributions as her earnings were below the relevant threshold.

 

“10. Although the factors set out in paragraph 8 above have to be considered, whether work is genuine and effective is a question of fact.  Accordingly decided cases may be indicative and illustrative but not binding.

 

“11. By way of example, the tribunal considered in particular that TG v SSWP [2009] UKUT 258 (AAC) was relevant.  In this case, a claimant who had been working for two months as a self-employed interpreter, working only three or four hours a week and for the rest of his time marketing and making no profit was held to be self-employed.  In R(IS) 12/98 an au pair who worked for 13 hours a week for a low wage and board and lodging was a worker.

 

“12. The fact that the appellant’s earnings were not sufficient to mean she did not need recourse to benefits to live was not the test to be applied in assessing whether the work was genuine and effective.  Indeed, the tax credits and housing benefit schemes are based on the fact that people in work will need to have recourse to those benefits to live.

 

13. The tribunal considered the appellant’s candid statement that she had come to the United Kingdom to claim benefits following information she had received.  The tribunal did not consider that that was a relevant factor.  What had to be considered was whether the appellant’s economic activity satisfied the relevant definition.

 

“14. The tribunal considered that the work as genuine and effective.  The hours worked of 16 to 24, the level of remuneration between £45 and £150 a week depending on which period was used and the regularity of the work all led to the conclusion that the work was genuine and effective.

 

“15. The appellant therefore had a right to reside as a self-employed person.”

 

7. When referring to Jany v Staatssecretaris van Justitie (Case C-268/99) [2001] ECR I-8615, the First-tier Tribunal presumably had paragraph 33 of that decision in mind.

 

8. The local authority sought permission to appeal on the ground that the First-tier tribunal had “made an error of law in making ‘a finding of fact’ to the effect that the claimant was ‘selling’ copies of the Big Issue” and also had “made an error of law in placing significant weight on the evidence contained at page 104 of the schedule of evidence”, stating that “we question the authenticity of that evidence”.

 

9. In granting permission to appeal, the judge of the First-tier Tribunal did not refer to the local authority’s grounds but said that the appeal raised the following issues of principle –

 

1.     Whether a person undertaking the activity of a big issue seller can be regarded as self-employed for the purposes of the right to reside test

2.     It was admitted by the appellant that her reason for coming to the United Kingdom was specifically to claim benefits.

3.     HMRC had awarded tax credits for over three years.

 

10. On the notice of appeal, the local authority merely repeated the grounds on which it had sought permission.  When issuing case management directions, I suggested that those grounds did not raise points of law.  Mr King has agreed with my observations and added that even if the local authority’s points had been raised before the First-tier Tribunal it could still properly have reached the conclusion it did.  Ms Keevil has referred to the “issues of principle” identified by the judge of the First-tier Tribunal but has not developed any of them and has stuck to her original grounds.

 

11. It is convenient to deal first with the points identified by the judge of the First-tier Tribunal.  These are all interesting points of which something could have been made forensically before the First-tier Tribunal but I do not consider it to be arguable that the First-tier Tribunal erred in law in respect of any of them.  I know of nothing in the law of the European Union that suggests that selling the Big Issue cannot amount to self-employment.  As regards the claimant’s intention to claim benefit, the First-tier Tribunal could have taken it into account when considering whether the claimant was genuinely and effectively establishing herself in self-employment but it did not misstate the law in paragraph 13 of its statement of reasons and her intention of claiming benefits did not provide an independent ground for treating her as not being a self-employed person once it had decided that her work was genuine and effective.  In paragraph 7 of the statement of reasons, it had correctly stated that HMRC’s decision to award tax credits was not binding on it on the question whether the claimant was a self-employed person.

 

12. I turn then to the grounds of appeal in more detail.  They essentially challenge the First-tier Tribunal’s findings of fact but, although an appeal to the Upper Tribunal lies only on a point of law, I accept that it is an error of law to make irrational findings which might include, for instance, misconstruing the evidence or having regard to irrelevant evidence or failing to take account of relevant evidence.

 

13. The grounds focus on doc 104, which is a table setting out in respect of each week from 2 August 2010 to the week commencing 21 February 2011 the number of magazines bought by the claimant and the “profit” expected.  The table is on notepaper headed “The Big Issue South West”, which appears to be the Bristol office of The Big Issue Company Ltd.  The document supplied by Mr King to the First-tier Tribunal was a photocopy.

 

14. It is correctly pointed out by the local authority that the figure for “profit” assumes that all the copies were sold and it is asserted (without challenge by Mr King) that the First-tier Tribunal asked the claimant what she did with any unsold copies and that the claimant replied that she “threw them in the bin”.  It is said that the evidence supported the view that the purchases were made to support the claims for benefit, rather than for the purposes of genuine sales activity, that the claimant had failed to provide any evidence of income from self-employment and that the First-tier Tribunal erred in accepting the figures as profit, rather than just a projection of expected profit.  I do not accept that any of these points show an error of law.  The First-tier Tribunal recorded in paragraph 5 of its decision that “[i]f magazines were not sold she had no refund” and it had itself enquired what happened to unsold copies.  It is fanciful to suggest that it did not realise that the figures for profit on doc 104 did not assume that all the copies were sold.  It had the claimant’s own evidence and for the purpose of deciding whether the claimant had a right of residence it was not necessary for the figures to be absolutely precise.  If the local authority wished to suggest that the number of copies bought but not sold was significant, it had to make that point to the First-tier Tribunal and that does not appear to have been done.  Moreover, it seems unlikely that that was the case while the claimant was purchasing only a modest number of copies.  It could quite reasonably have been suggested that the surge in the purchases at the end of 2010 was only temporary and for the purpose of obtaining benefits but that was an issue of fact and the First-tier Tribunal was not bound to take that view.

 

15. The local authority also says that it has doubts about the genuineness of the document, because it is not in a format usually supplied by The Big Issue South West, it appears to have been cut and pasted onto a blank page of stationery and the profit column did not reflect the correct face value of the Big Issue. However, I pointed out in my observations when making case management directions that there was no indication that the local authority suggested to the First-tier Tribunal that doc 104 was not a genuine document, supplied with doc 103, or on what grounds it did so and that it would be easy enough for the local authority to ask The Big Issue South West whether docs 103 and 104 came from its office.  No further material has been provided with the local authority’s reply, although it has been suggested that further enquiries could be made.  In the circumstances, the First-tier Tribunal cannot be said to have erred in law in relying on the doc 104.  If it is to be argued on an appeal to the Upper Tribunal that a decision is vitiated by fraud, there needs to be clear evidence of the alleged fraud.  There is none and I do not propose delaying making a decision in this case, partly because I do not share the local authority’s suspicions about the evidence – the fact that the document is in an unusual format and was prepared at the law centre’s request for the purposes of the tribunal proceedings does not mean that the information in it was not genuine and, while the document may well have been produced by cutting and pasting, that is not in itself a ground for rejecting the evidence provided it was the company and not the claimant who did it and the information was accurate – and partly because it remains open to the local authority to supersede the First-tier Tribunal’s decision with retrospective effect if it ever obtains evidence of fraud.  I would also point out that the table does reflect a change in the face value of the magazine from the beginning of December 2010.

 

16. The local authority also relies on two different sets of figures having been produced by the claimant and argues that the explanation for the difference advanced by a colleague of Mr King’s at the law centre in a letter dated 5 January 2011 cannot be correct.  In that letter (doc 54), she said –

 

“Tom Ward of the Big Issue office in Bristol has recently provided an amended print out of [the claimant’s] sales figures which is more detailed than the one provided in early December by his colleagues (when he was off sick for several weeks) which left out some weeks’ sales figures for September 2010.

 

With that letter was enclosed a new “self-employed questionnaire”, showing the claimant’s gross profit to have been £854.25 from 2 August 2010 to 22 November 2010.  The use of the term “print out” in the law centre’s letter may have been inappropriate because I am not sure that the law centre ever saw a document produced by a computer, which is what the term implies.

 

17. I entirely accept Ms Keevil’s point that leaving out “some weeks’ sales figures for September 2010” is not an adequate explanation for the difference between the figures that had earlier been provided by the claimant and the new figures provided with the law centre’s letter, given the sales figures for September 2010 on doc 104.  However, I do not accept that that shows that the First-tier Tribunal erred in law.  The inadequacy of the explanation is not necessarily significant.  The explanation may simply have been wrong but that would have been the company’s error rather than the claimant’s.  It seems likely that both sets of figures were based on figures supplied by The Big Issue South West and that the difference largely reflects their error rather than being evidence of dishonesty on the claimant’s part.  In any event, the second set of figures, which was accepted by the First-tier Tribunal, was obviously based on the figures supplied by The Big Issue South West on doc 104 and which had presumably also been supplied to the claimant earlier, since £854.25 is the gross profit (i.e., the profit, assuming all copies of the paper were sold, before the deduction of expenses) expected during the 17 weeks from 2 August 2010 to the end of week commencing 22 November 2010 according to doc 104.  The claimant’s only error was to date the end of the period covered by her questionnaire as 22 November rather than 28 November (i.e., the end of the week).

 

18. If what is being suggested is that the inadequate explanation for the difference between the two sets of figures casts doubt on doc 104, I am still not satisfied that the First-tier Tribunal erred in law.  The point was not advanced before the First-tier Tribunal and the First-tier Tribunal was entitled to rely on this second set of figures as being accurate.  The inadequate explanation on doc 54 was certainly not sufficient to show that doc 104 had been forged or was deliberately inaccurate.

 

19. It may well be that a differently-constituted tribunal would have reached a different conclusion on the evidence before the First-tier Tribunal.  However, I am quite satisfied that the decision of 6 June 2011 was not erroneous in point of law.  It follows that this appeal must be dismissed.

 

 

 

 

 

 

 

 

 

Mark Rowland

21 December 2011