DECISION OF THE UPPER TRIBUNAL

(ADMINISTRATIVE APPEALS CHAMBER)

 

The DECISION of the Upper Tribunal is to allow the appeal by the appellant.

 

The decision of the Leicester First-tier Tribunal dated 26 January 2011 under file reference SC038/10/04646 involves an error on a point of law and is set aside. 

 

The appellant’s appeal against HMRC’s decision dated 03 September 2010 in relation to her claim for child benefit is remitted to be reheard by a different First-tier Tribunal, subject to the Directions below.

 

This decision is given under section 12(2)(a) and 12(2)(b)(i) of the Tribunals, Courts and Enforcement Act 2007.

 

 

 

DIRECTIONS

 

The following directions apply to the re-hearing:

 

(1) The re-hearing will be at an oral hearing;

 

(2) The new tribunal should be differently constituted from the First-tier Tribunal which considered this appeal on 26 January 2011;

 

(3) HMRC should provide a supplementary written submission for the new tribunal explaining its procedures for receiving post and registering claims on receipt. This supplementary submission should be sent to the Birmingham regional office of HMCTS within one month of the issue of this decision;

 

(4) The new tribunal must consider all the evidence afresh and is not bound in any way by the decision of the previous tribunal. 

 

These directions may be supplemented by later directions by a District Tribunal Judge in the Social Entitlement Chamber of the First-tier Tribunal. 

 

 

REASONS FOR DECISION

 

The decision in summary

1. I allow the claimant’s appeal to the Upper Tribunal, as the First-tier Tribunal (FTT)’s decision involves an error on a point of law. The FTT’s decision is set aside. The Upper Tribunal is not in a position to substitute (or to “re-make”) its own decision for the one that the FTT made. This means that the appeal will need to be re-heard by a differently constituted tribunal.

 

2. The outcome of the re-hearing depends on the view taken by the new FTT of all the evidence in the case. The fact that this appeal has succeeded on a point of law is no indicator one way or the other as to the likely result of the re-hearing, which will be determined on the facts.

 

The issue in the appeal to the First-tier Tribunal

3. The claimant, a woman now aged 34, is of Somali origin, has limited spoken ability in English and is the mother of five children born between 2000 and 2007, the last, B, being born on 23 December 2007. The issue in this appeal is the date from which she is entitled to child benefit in respect of B.

 

4. HMRC’s case to the FTT was that there was only one claim for child benefit in respect of B and that this claim was not received until 24 March 2009, when B was 15 months old. On that basis, as the time limit for claiming child benefit is 3 months, her entitlement as regards B only ran from 29 December 2008 (just after B’s first birthday). HMRC had made a decision to that effect on 3 September 2010.

 

5. The claimant’s case to the FTT was that the 24 March 2009 claim was in fact the second claim for child benefit made in respect of B. She argued that she had made a claim for B in January 2008, shortly after his birth.

 

The proceedings before the First-tier Tribunal

6. Following the decision of 3 September 2010, the claimant lodged an appeal with HMRC on 20 September 2010. She argued that she had made an earlier claim within 3 months of B’s birth and that HMRC had lost both that claim and other documentation. She gave the name and address of her welfare rights representative. On 19 November 2010 HMRC referred the appeal to Her Majesty’s Courts and Tribunals Service (HMCTS). The proforma referral also repeated the representative’s name and address.

 

7. On 29 November 2010 HMCTS sent the claimant (but not her representative) the standard pre-hearing enquiry form. The claimant says that she never received it; she certainly did not reply to it. A reminder was sent (again, only to the claimant) on 14 December 2010 but again there was no reply. On 21 January 2011 the file was referred to a District Tribunal Judge.

 

8. On 26 January 2011 the District Tribunal Judge dealt with the case on the papers. His decision, contained in a “Directions Notice”, was short and to the point:

 

“1. Neither party has objected to this matter being decided without an oral hearing.

2. The appeal fails.

3. The decision of the 31/08/10 is confirmed.

4. I find that the facts and law have been correctly considered by the Respondent in the submission presently before me.

5. This decision notice also serves as a statement of reasons.”

9. On 21 April 2011 the claimant’s representative wrote complaining that neither she nor the claimant had been sent an enquiry form, let alone notified of the hearing. She argued that this was a breach of natural justice and asked for the FTT’s decision to be set aside. In the alternative, she applied for a statement of reasons.

 

10. On 19 June 2011 a different District Tribunal Judge refused the set aside application, giving the following reasons:

 

“Even granting that [the claimant] did not receive the standard Tribunal Service enquiry form, or a letter that was sent to her reminding her that she had not returned it, I do not set aside the decision of the Tribunal. That is because [her] appeal would appear to have no reasonable prospects of success. She cannot receive Child Benefit in respect of a period that is more than three months before the date of her claim. She made her claim (or rather, her claim was accepted as having been made) for her firth child, B, on 24 March 2009. Payment has been put in place from 29 December 2008. B was born on 23 December 2007. The question whether any claim was made earlier is not the subject of the appeal.”

 

11. On 14 July 2011 the claimant’s representative repeated her request for a full statement of reasons from the FTT. On 27 September 2011 the District Tribunal Judge who had refused the set aside application directed that “both decision notices shall stand as statements of reasons.” He also refused permission to appeal to the Upper Tribunal on 31 January 2012.

 

The grounds of appeal to the Upper Tribunal

12. The claimant’s representative then renewed the application for permission to appeal on her behalf. The extensive grounds ran to 6 pages and challenged both the procedural and substantive aspects of the tribunal’s decisions to refuse the appeal and then to refuse the set aside application. In certain respects the grounds of appeal were both confused and confusing. However, there was sufficient to give permission to appeal.

 

The proceedings in the Upper Tribunal

13. Both parties’ representatives have made further written submissions on the appeal. The claimant’s representative asks for an oral hearing, but I am satisfied that the Upper Tribunal can deal with this appeal most effectively on the papers, as there will need to be a hearing before the FTT in any event.

 

14. D P Eland has provided a helpful and clear submission on behalf of HMRC, supporting the appeal to the Upper Tribunal. He argues that “by any standard, the reasons given for the decision are inadequate” and so the FTT erred in law. He also agrees that the FTT was wrong to proceed on the papers without giving adequate reasons for so doing (see MM v Secretary of State for Work and Pensions [2011] UKUT 334 (AAC)). He argues that the failure to send the enquiry form to the claimant’s representative was not an error of law (relying on MP v Secretary of State for Work and Pensions [2010] UKUT 103 (AAC)). He finally suggests that, given his earlier submissions, there is no need to consider whether the second District Tribunal Judge erred in law in refusing to grant the set aside application.

 

The Upper Tribunal’s analysis

15. I have no hesitation in allowing this appeal for the two reasons identified by Mr Eland.

 

 

16. As to the first ground, there is no obligation (although it may be good practice) on a FTT to include reasons in its decision notice (see rule 33 of the Tribunal Procedure (First-tier Tribunal) (Social Entitlement Chamber) Rules 2008 (SI 2008/2685)). On that basis, the decision notice in this case, standing alone, cannot be challenged for inadequacy of reasons. The problem here was that the FTT later ruled that the original decision notice and the decision on the set aside application were to stand together as a statement of reasons.

 

17. A proper statement of reasons can undoubtedly cure any inadequacy of reasons in the original decision notice (see Social Security Commissioner’s decision CIS/2345/2001 at paragraph 17(3))). There are two reasons why this principle did not apply in the present case. First, the reasons given in the set aside decision were directed to the “interests of justice” aspect of rule 37(1)(a); they were plainly insufficient to deal with the substantive issues on the appeal (and, in particular, the conflict of evidence as to whether there had been an effective earlier claim for child benefit). Second, these were the reasons of a different District Tribunal Judge to the one who had decided the substantive appeal. Although the obligation to give reasons on request is imposed on “the Tribunal” by rule 34(2) and (3), meaning “the First-tier Tribunal” (see rule 1(3)), as a matter of first principle the reasons should be those of the judicial office holder who made the substantive decision, not those of a colleague dealing with a subsequent set aside application (see by analogy under the old procedural rules CIS/2132/1998 (at paragraphs 3-8)).

 

18. As to the second ground of appeal, Judge Mesher held in MM v Secretary of State for Work and Pensions [2011] UKUT 334 (AAC) that where a tribunal does not hold an oral hearing, and there is no record of proceedings, then any statement of reasons must deal explicitly with both of the conditions in rule 27(1). Accordingly, the FTT must actively consider whether it is able to decide the appeal without the appellant being present at the oral hearing. In the present case there was a plain conflict of evidence about the date of claim. Simply to record that “Neither party has objected to this matter being decided without an oral hearing” was, in the circumstances, wholly insufficient.

 

19. Given those conclusions on the first two grounds, I need not deal with the other two points in any detail. I just make two observations. First, I agree with Judge Turnbull’s observation in MP v Secretary of State for Work and Pensions [2010] UKUT 103 (AAC) (at paragraph 23) that, while there may have been no error in law in sending the pre-hearing enquiry notice only to the claimant, and not to their named representative, it may not have been sensible to do so. Second, it is not clear what the District Tribunal Judge meant by asserting that “The question whether any claim was made earlier is not the subject of the appeal”. If the claimant could not challenge HMRC’s position on the date of claim in this appeal, when could she do so? It is well-established that the question as to whether a “claim was made, if so when it was made and when it was received at an office of the Department are all questions for determination by the statutory adjudicating authorities”, the pre-Social Security Act 1998 terminology that would now include the FTT and the Upper Tribunal (R(SB) 5/89 at paragraph 10).

 

Directions to the new tribunal

20. Standard directions to the new FTT are listed at the start of this decision by the Upper Tribunal. The new tribunal should also bear in mind the following guidance. As D P Eland notes in his written submission on behalf of HMRC, the substantive appeal raises consideration of two questions – first, did the claimant send an earlier claim for child benefit and, second, was any such earlier claim actually received?

21. The FTT may consider that there are three possible scenarios as regards the disputed earlier claim. The first scenario is that the claimant made an earlier claim and that it was received by HMRC or its agent. If so, the HMRC written statement to the effect that the child benefit records have been checked and there is no trace of any earlier claim (doc 11) is mistaken. The second scenario is that the claimant made an earlier claim and that it was never received by HMRC or its agent; for example, it may have been lost in the post. The third scenario is that it is the claimant who is mistaken and she in fact never made any earlier claim. If so, the first claim was that made on 24 March 2009.

 

22. At the time in question, regulation 5 of the Child Benefit and Guardian’s Allowance (Administration) Regulations 2003 (SI 2003/492) laid down three requirements. First, a child benefit claim had to be made either to HMRC or to “a relevant authority” (regulation 5(1)). Second, the claimant “must deliver or send it to an appropriate office” (regulation 5(2)), which could be either the HMRC Child Benefit Office or a Department for Work and Pensions Jobcentre Plus Office (see regulation 2). Third, and crucially, “the claim is made on the date on which it is received by the appropriate office” (regulation 5(3)).

 

23. The claimant’s representative seeks to place great reliance on the statement in the HMRC submission to the FTT that the claimant contacted the telephone helpline to inquire about her claim in January 2009 and it was “arranged to send her another claim form” (emphasis added). It is suggested that this is evidence that HMRC lost the original claim form. I have to say that, of itself, it proves nothing of the sort. The contemporary telephone log simply records that (i) the claimant had said she had filled in a form already; but (ii) the staff member had told her “there was nothing on the system” and had agreed to “send a form out”. That telephone log is certainly consistent with either the second or third scenarios described in paragraph 21 above. It cannot be proof that the first scenario is what actually happened.

 

24. The question of whether an earlier claim was made than the one accepted in March 2009 is ultimately a question of fact for the new FTT.  The FTT will doubtless weigh up the evidence and decide that question on the balance of probabilities. In this respect the claimant’s representative seeks to rely on Levy v Secretary of State for Work and Pensions [2006] EWCA Civ 890, reported as R(G) 2/06. However, in reality that authority provides little if any support for her arguments. The Court of Appeal in Levy dismissed the claimant’s appeal, holding that she was not assisted by section 7 of the Interpretation Act 1978, which provides that, unless a contrary intention appears, a document required to be served by post will be deemed to have been received in the ordinary course of posting if properly addressed and posted. That provision was displaced by regulation 6(1)(a) of the Social Security (Claims and Payments) Regulations 1987 (SI 1987/1968), which provides that a claim is made on the date on which it is received in an appropriate office. As noted above, regulation 5 of the Child Benefit and Guardian’s Allowance (Administration) Regulations 2003 applies the same principle in the present context. Rather, the question of whether or not an earlier claim was properly made will have to be assessed in the light of all the evidence.

 

25. There are a number of factors which might suggest that the HMRC account is accurate. These include (i) the claimant’s limited understanding of English; (ii) the lack of a detailed account as to when and where the alleged earlier claim was made; (iii) the absence of any record in the Child Benefit Office of any earlier claim; and (iv) the fact that the first recorded follow-up enquiry was apparently not until 23 January 2009, a year or so after the claim was supposedly made.

 

26. On the other hand, and conversely, there are a number of factors which suggest that the claimant’s account is accurate. These include (i) when B was born she was already receiving both income support and child benefit for her four older children and was familiar with the system for claiming for a new child; (ii) she had informed the income support office of B’s birth on 14 January 2008 and had duly received arrears of that benefit for B; (iii) HMRC has conceded that the March 2009 child benefit claim was “mislaid in remote storage”, giving credence to the view that it had mislaid the original claim too; (iv) even after B’s birth certificate was provided to the local HMRC office in June 2010, HMRC stated it had not been received; and (v) the national Citizens Advice Bureau has reported systemic problems in processing child benefit claims in 2008 (see CAB, Evidence – Child benefit delays: The impact on CAB clients.

 

27. The weight to be attached to these various considerations is entirely a matter for the new FTT.

 

Conclusion

28. I conclude that the decision of the First-tier Tribunal involves an error of law for the reasons summarised above. I therefore allow the appeal and set aside the decision of the tribunal (Tribunals, Courts and Enforcement Act 2007, section 12(2)(a)). The case must therefore be remitted for hearing by a new tribunal subject to the directions and guidance above (section 12(2)(b)(i)). 

 

 

 

 

 

Signed on the original Nicholas Wikeley

on 22 October 2012 Judge of the Upper Tribunal