Upper Tribunal (Administrative Appeals Chamber)

DECISION OF THE UPPER TRIBUNAL

ADMINISTRATIVE APPEALS CHAMBER

The claimant's appeal to the Upper Tribunal is disallowed. Either the decision of the Wakefield First-tier Tribunal dated 24 August 2011 did not involve any material error on a point of law or, if it did, in the exercise of the discretion under section 12(2)(a) of the Tribunals, Courts and Enforcement Act 2007 I decline to set it aside. The decision accordingly stands. However, I direct the attention of the claimant to the important postscript in paragraphs 19 and 20 below.

REASONS FOR DECISION

1. There was an oral hearing of this appeal on 5 February 2013, on the same day as the hearing in two linked appeals, CG/2052/2011 and CDLA/2053/2011, and in CA/2028/2011, all raising related issues. The four appeals were selected as lead cases from a group of appeals, with a view to determining the major questions of law common to all the cases in the group.

2. All the claimants involved had their entitlement either to the care component of disability living allowance (DLA), to attendance allowance (AA) or to carer’s allowance (CA) removed on supersession on their leaving Great Britain to live in another Member State of the European Union at some date prior to that of the decision of the European Court of Justice (which I shall call the ECJ although it is now the Court of Justice of the European Union) in Commission of the European Communities v European Parliament and Council of the European Union, Case C-299/05, [2007] ECR I-8695 on 18 October 2007. That removal of entitlement was correct under the terms of regulation 2(1)(a) of the Social Security (Disability Living Allowance) Regulations 1991 (and the corresponding provisions for AA and CA), which make it a condition of entitlement that a claimant is ordinarily resident and present in Great Britain. I do not need to do more than mention the additional condition in relation to any day of potential entitlement that a claimant has been present in Great Britain for at least 26 weeks out of the previous 52 (the past presence test). That rule was regarded as decisive at past stages in the history of these cases, but is now agreed not to be an obstacle. The significance of Commission v Parliament is that the ECJ ruled that the care component of DLA, AA and CA were not to be categorised as special non-contributory benefits for the purposes of article 10a of Council Regulation (EC) No 1408/71, which would have allowed the United Kingdom to restrict entitlement to claimants who were resident in the United Kingdom. Instead, those benefits were to be categorised as sickness benefits under Regulation No 1408/71, which meant that in certain circumstances the United Kingdom was required not to make entitlement dependent on the residence or presence of the claimant here. That is commonly described as meaning that the benefits are “exportable” to other Member States.

3. All the claimants applied after the decision in Commission v Parliament for their entitlement to the benefit in question to be reinstated from the date of its removal. The eventual decisions of the Secretary of State in response were that the provisions in the British legislation for revision and supersession (discussed in detail in the decision in CG/2052/2011 and CDLA/2053/2011) did not allow any alteration to the decisions removing entitlement from any date earlier than the date of the application for reinstatement, which was also the date from which an award could have been made if the application for reinstatement were regarded as a new claim. That was subject to the making of payments on an extra-statutory basis for the periods from 18 October 2007 down to the day before awards were made from the date of the application for reinstatement. Well after the dates of the decisions in the present cases, the Social Security and Child Support (Decisions and Appeals) Regulations 1999 were amended to allow a superseding decision on the ground of error of law to take effect in these particular circumstances from 18 October 2007 (Social Security (Disability Living Allowance, Attendance Allowance and Carer’s Allowance) (Miscellaneous Amendments) Regulations 2011). The First-tier Tribunals in all the cases were concerned with challenges to the refusal to award entitlement for, in practice, the period from the date of removal of entitlement to 17 October 2007 and confirmed that refusal.

4. The appeals against the First-tier Tribunal decisions raise very difficult issues of both British and European Union law. That is why the oral hearing was directed. The claimant did not attend and was not represented, but the claimant in CG/2053/2011 (Mrs K) remained on 5 February 2013 to observe the hearing in the present case. The Secretary of State was represented by Mr Stephen Cooper, solicitor, instructed by DWP Legal Group. The decision in the present case has had to await the decision in CG/2052/2011 and CDLA/2053/2011, which was delayed to give the parties there the opportunity to put in further material. A copy of the Upper Tribunal decision on those appeals, now to be referred to as CK and JK v Secretary of State for Work and Pensions (CA; DLA) [2013] UKUT xxx (AAC), is to be sent to the claimant with this decision.

The factual background

5. The claimant is a British citizen born on 9 April 1941. In 1994, while still living in the United Kingdom, she was awarded the lowest rate of the care component of DLA on an indefinite basis with effect from 2 June 1994. She had last worked in the United Kingdom in June 1996 and has been in continuous receipt of state retirement pension since 23 January 2001.

6. The claimant moved with her husband to Spain for an indefinite period on 17 March 2002. It is not clear exactly how or when notification was given to the Disability Benefits Unit, but it is apparent from the letter dated 17 October 2002 from the Unit that a decision had been notified in a letter dated 27 May 2002 superseding the decision awarding DLA, presumably on the ground of relevant change of circumstances, and deciding on supersession that she was not entitled to DLA, presumably from and including 17 March 2002, because she would not be residing or present in Great Britain. On 7 October 2002 the claimant had written to the Unit to say that she had recently moved to Spain and that her DLA had been stopped, but she had received no notification of the reason and wanted to know why. She referred to her right of free movement within the EU and asked whether Spain had a similar scheme to DLA. She asked for reinstatement of her benefit. (pages 124 and 125). The letter of 22 October 2002 was written in reply. It gave some reasons, explained what the claimant needed to do if she wanted to make a late appeal against the decision notified to an address in Spain on 27 May 2002 and said that the write was unable to give any advice about Spanish benefits. It seems that no further steps were taken at the time to appeal.

7. On 7 November 2007 the claimant requested reinstatement of her DLA from 2002. The initial decision on 3 April 2009 was to refuse to revise the decision of disallowing benefit and not to supersede the decision because she was not entitled to DLA under the past presence test. She appealed against that decision. On 21 June 2010 the decision of 3 April 2009 was revised on the ground that the past presence test should not have been applied and the decision given that the claimant was entitled to the lowest rate of the care component from and including 7 November 2007. Accordingly, the existing appeal lapsed under section 9(6) of the Social Security Act 1998, but a new period started for the claimant to appeal against the decision of 3 April 2009 as revised in her favour. Following an unsuccessful request for a reconsideration, it is not entirely clear that the claimant lodged a specific new appeal, but everyone has proceeded on the basis that a valid appeal was before the First-tier Tribunal and I do not propose to upset that position now.

8. For the reasons given in paragraphs 62 and 63 of the decision in CK and JK, I am quite satisfied that the Secretary of State’s decision of 3 April 2009, as revised on 21 June 2010, looked at as a composite package, was made up of an express decision that the decision notified on 27 May 2002 (although not identified by date) was not to be revised and an express decision that that decision was to be superseded so as to award the lowest rate of the care component from and including 7 November 2007. It is absolutely clear that the refusal to revise in the decision of 3 April 2009 remained in existence and undisturbed by the revision on 21 June 2010. Then, although the revision did not identify a ground to supersede the decision of 27 May 2002, and the form used did not contain a pre-printed section that was apt to record that aspect of the decision, there is no doubt that in substance the revised outcome decision reinstating entitlement to DLA from and including 7 November 2007 could only have been based on a supersession, as was shown by the brief reference to supersession in the box on page 104 for reasons.

The First-tier Tribunal’s decision

9. The tribunal of 25 August 2011, constituted by Tribunal Judge Derek Searby sitting alone, disallowed the appeal without a hearing. The judge correctly identified that the claimant could only achieve any practical success under British legislation by showing that the decision of 27 May 2002 had to be revised on the ground that it arose from official error. Although it was and is common ground that that decision was erroneous in law (because as we now know EU law was that entitlement to the care component of DLA should not have been removed and also because there was an error on the effective date), supersession on that ground could only assist the claimant with effect from 7 November 2007 because there is nothing in the Decisions and Appeals Regulations to take such cases out of the general rule in section 10(5) of the Social Security Act 1998 that a superseding decision takes effect from the date on which it is made or, where applicable, the date on which the application for supersession is made. As explained in paragraphs 11, 12 and 77 to 80 of CK and JK, regulation 7(6) of the Decisions and Appeals Regulations would not operate in the present cases to require the supersession to take effect from 18 October 2007. The tribunal concluded that the error of EU law on 25 May 2002 did not come within the definition of “official error”, because the error was only revealed by the ruling of the ECJ in Commission v Parliament and had not already been shown by its ruling in Jauch v Pensionsversicherungsanstalt der Arbeiter (Case C-215/99) [2001] ECR I-1901 (8 March 2001).  I deal below with the consequences of the Secretary of State and the First-tier Tribunal not having identified the error in the decision of 27 May 2002 about the date from which the disallowance of benefit could take effect.

The appeal to the Upper Tribunal

10. Permission to appeal to the Upper Tribunal was granted to the claimant by Judge Searby on 6 October 2011 and I gave case management directions on 8 December 2011. It is a matter of regret that it has taken so long from then to get to a decision in the lead cases. However, it has taken a long time to ensure that the best arguments of law that could be made in support of all the claimants concerned were taken into consideration, primarily by the representation of the claimants in CK and JK by the Child Poverty Action Group, allowing representation by very experienced counsel at the hearing on 5 February 2013.

11. For the reasons set out at length in paragraphs 16 to 46 of the decision in CK and JK the tribunal of 25 August 2011 did not err in law in deciding that the Secretary of State’s decision of 27 May 2002 could not be revised on the ground of official error based on EU law. Then, for the reasons set out in paragraphs 55 to 69 of CK and JK, even if that ground of revision had been made out, the tribunal would not have had power in law on the appeal against the decision of 3 April 2009 as revised on 21 June 2010 to substitute a revision of the decision of 27 May 2002 for the supersession that was carried out. For the reasons set out in paragraphs 70 to 76 of CK and JK, the application of those rules was not contrary to EU law and in particular the principles of equivalence and effectiveness. Those conclusions would lead to the disallowance of the claimant’s appeal to the Upper Tribunal. Either there was no material error of law or, if there was an error of law in that the supersession to reinstate entitlement to benefit should have taken effect from 18 October 2007 rather than 7 November 2007 (the point left undecided in paragraphs 77 to 80 of CK and JK), the setting aside of the tribunal’s decision for that error is not justified (see paragraph 77 of CK and JK).

12. However, in the present case there is the additional element of the error in the decision of 27 May 2002 about the date from which it purported to take effect. That turns first on the rule in section 10(5) of the Social Security Act 1998 that, subject to regulations made under subsection (6), a supersession decision is to “take effect as from the date on which it is made or, where applicable, the date on which the application was made”. Then regulation 7(2)(c) of the Decisions and Appeals Regulations as in force in 2002 was as follows (omitting the provisions relating specifically to incapacity benefit decisions):

“(2) Where a decision under section 10 is made on the ground that there has been, or it is anticipated that there will be, a relevant change of circumstances since the decision was made, the decision under section 10 shall take effect—

 …

(c)           where the decision is not advantageous to the claimant—

 …

(ii)            in the case of a disability benefit decision […], where the Secretary of State is satisfied that in relation to a disability determination embodied in or necessary to the disability benefit decision […], the claimant or payee failed to notify an appropriate office of a change of circumstances which regulations under the [Social Security Administration Act 1992] required him to notify, and the claimant or payee, as the case may be, knew or could reasonably have known that the change of circumstances should have been notified,

(aa) from the date on which the claimant or payee, as the case may be, ought to have notified the change of circumstances, or

(bb) if more than one change has taken place between the date from which the decision to be superseded took effect and the date of the superseding decision, from the date on which the first change ought to have been notified, or

(iii) in any other case, except in the case of a decision which supersedes a disability benefit decision […], from the date of the change.”

13. As explained in paragraphs 47 and 48 of CK and JK, the decision awarding the claimant DLA in 1994 was a “disability benefit decision”, but the relevant change of circumstances on which the supersession carried out on 27 May 2002 was grounded did not relate to a disability determination. Accordingly, regulation 7(2)(c)(ii) could not apply because of the nature of the change of circumstances and regulation 7(2)(c)(iii) could not apply because it expressly excluded supersessions of disability benefit decisions from its effect. That left only the default rule in section 10(5) of the 1998 Act to apply. The Secretary of State on 27 May 2002 had no power in law to take away the claimant’s entitlement to DLA on her moving to another member State (leaving aside for the moment the requirements of EU law) with effect from 18 March 2002 rather than 27 May 2002. All that was accepted in paragraph 16(2) and (3) of the written submission dated 13 February 2012 on behalf of the Secretary of State. The surviving evidence of the exact terms of the decision of 27 May 2002 is slight, but the standard practice at the time was make such decisions effective from the day after the move and the Secretary of State’s written submission to the First-tier Tribunal stated the issue in dispute as being whether the claimant was entitled to the care component of DLA from 18 March 2002 to 21 October 2007. I am satisfied that the decision did purport to be effective from 18 March 2002. In the absence of any other evidence as to the date on which the decision was actually made, I treat it as made on 27 May 2002.

14. That in itself plainly amounts to an official error and provides a ground for revising the decision of 27 May 2002. However, there is an issue whether the exclusion to the definition of “official error” in regulation 1(3) of the Decisions and Appeals Regulations applies on the basis that the error was only shown by the subsequent decisions of Mr Commissioner Turnbull in CIB/763/2004 (21 September 2004). In that decision the Commissioner pointed out the hole in regulation 7(2)(c) in relation to incapacity benefit decisions and supersessions for changes of circumstances not relating to capacity or incapacity for work. As recognised in paragraph 97 of the decision of the three-judge panel of the Upper Tribunal in Secretary of State for Work and Pensions v JL (DLA) [2011] UKUT 293 (AAC), now reported as [2012] AACR 14, that conclusion was obvious once it was pointed out and had to apply as much to disability benefit decisions as to incapacity benefit decisions. In my judgment, though, this is not a case where the error was “shown” by the decision in CIB/763/2004. To adopt the phrase used by the Tribunal of Commissioners in paragraph 46 of R(P) 2/09, the words of regulation 7(2)(c) speak for themselves. They are plain as a pikestaff. It requires no exercise of interpretation to see what on the plain words can be the only possible meaning. In those circumstances, the existence of the subsequent decision in CIB/763/2004 does not prevent its being concluded that the decision of 27 May 2002 arose from official error within the definition in regulation 1(3).

15. Further, once that ground of revision has been identified, in my judgment that opens the door to a full consideration of the proper decision that should have been given on 27 May 2002, including the application of EU as it is now known to have been at the time as a result of the decision of the ECJ in Commission v Parliament. That seems to me to follow as a matter of principle. Once a decision properly falls to be revised on some ground it must be looked at again and it does not matter that some other ground of revision could not be made out because of the effect of a subsequent decision. In the present case, section 27 of the 1998 Act cannot apply so as to require that it be assumed for any period prior to 18 October 2007 the law was the opposite of what was decided in Commission v Parliament. That is because, as accepted on behalf of the Secretary of State in the submission of 13 February 2012, the ruling of the ECJ in that case is not a “relevant determination” (see paragraph 12 of CK and JK). Moreover, in paragraph 46 of R(P) 2/09 the Tribunal of Commissioners adopted the same approach in a related context (I have underlined the crucial words):

“We further direct the Secretary of State that if there was a mistake about this and the reduction in the earnings-related part of the claimant’s pension should not have been imposed in 2005 because of paragraph 7(4) [of Schedule 5 to the Gender Recognition Act 2004], then the mistake would count as an `official error’, reopening the calculation of the claimant’s whole pension back to 9 May 2005 and requiring a use of his revision power to correct it from that date; in which case the revision should incorporate the correct treatment under the Directive as well.”

In that case there could not have been an official error on the basis only of incorrect treatment under the EU Directive concerned, because the incorrectness had only been revealed by a subsequent decision either of the ECJ (Richards v Secretary of State for Work and Pensions (Case C-423/04) [2006] ECR I-3585, R(P) 1/07) or by the Social Security Commissioner’s decision implementing the ECJ ruling.

16. I am not sure that Mr Cooper for the Secretary of State had appreciated the force of this point before the hearing on 5 February 2013. He submitted that if there was a power to revise the decision of 25 May 2002 to correct the date of effect of the removal of entitlement, the scope of the revision should be limited to that correction and should not extend to the correct of other mistakes which could not have been got at in isolation because the precise definition of official error was not met. However, I do not consider that that submission can stand with what in my view principle requires or with the approach of the Tribunal of Commissioners in R(P) 2/09.

17. None of that, though, can do the claimant any good within the confines of the appeal that was before the tribunal of 25 August 2011, which confines also limit the powers of the Upper Tribunal on further appeal. As stressed by Mr Cooper, that is because on the appeal against the decision of 3 April 2009 as revised on 21 June 2010 to substitute a revision of the decision of 27 May 2002 for the supersession that was carried out. In paragraph 11 above I referred to the full reasons given in paragraphs 55 to 69 of CK and JK. If the claimant had in 2007 simply applied for a revision of the decision of 27 May 2002 on the ground of official error in getting the effective date wrong and been refused, she would not have been able to appeal to a First-tier Tribunal. The appeal would have to be against the decision of 27 May 2002 as not revised and therefore a long way outside the 13 month absolute time limit. As noted in paragraph 65 of CK and JK, the Tribunal of Commissioners in R(IS) 15/04 decided that that limitation could not be avoided in case in which the Secretary of State made a decision expressly covering both supersession and revision. The fact that an appeal against the decision is in time so far as the supersession element is concerned cannot be used to allow a tribunal then to substitute a revision for the supersession.

18. Accordingly, the tribunal of 25 August 2011 did not make a material error of law (ie one affecting the outcome) in failing to spot the error about the effective date because it did not have the power to carry out a revision of the decision of 27 May 2002 for official error. It could not have gone back to correct the error from the start. And in so far as there would have justification for a supersession on the ground of error of law, that could not have been effective for any date prior to the date of the application (7 November 2007) and so could not have helped the claimant. There being no material error of law on this potential additional ground, the appeal to the Upper Tribunal has to be disallowed.

Postscript

19. However, that is not the end of the road for the claimant. I stressed in paragraph 74 of CK and JK that there is no time limit on the Secretary of State’s power to revise a decision for official error and no time limit on a claimant’s ability to apply to the Secretary of State for such a revision. Multiple applications may be made and the fact that an earlier application has been unsuccessful does not prevent the making of a further application to which the Secretary of State would be bound to give proper attention. Thus, there is nothing to stop the claimant now making an immediate application to the Secretary of State to revise the decision of 27 May 2002 for official error in purporting to make the decision effective from too early a date and request the Secretary of State in the course of carrying out to apply the EU law on exportability of the care component of DLA as established by the ECJ in Commission v Parliament in the light of what I have said in paragraphs 15 and 16 above.

20. I do not see how the Secretary of State could decline to revise the decision of 27 May 2002 on the ground of the error as to dates, unless that error has already been corrected, but if he did the claimant would have no right of appeal. She would be restricted to a possible application for judicial review or to making a further application for revision. If the Secretary of State revised the decision of 27 May 2002 so as to correct the effective date, but declined to apply the EU law on exportability, a new month for appealing against the decision of 27 May 2002 as revised would start to run from the date of notification of the revision (Social Security Act 1998, section 9(5) and Tribunal Procedure (First-tier Tribunal) (Social Entitlement Chamber) Rules 2008, Schedule 1: see paragraph 58 of CK and JK). The claimant could thus challenge before a First-tier Tribunal any decision made taking an approach contrary to that put forward in paragraphs 15 and 16 above. If the Secretary of State did follow that approach and reinstate entitlement to the lowest rate of the care component of DLA from 18 March 2002 that would seem to give the claimant all that she is asking for.

(Signed on original):  J Mesher

  Judge of the Upper Tribunal

Date: 3 May 2013