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 Liverpool First-tier Tribunal dated 29 March 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 CDLA/2972/2011, 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. 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 26 July 1939. In 2003, while still living in the United Kingdom, he was awarded the lowest rate of the care component of DLA for the period from 11 February 2003 to 18 March 2006. He had last worked in the United Kingdom on 9 November 2002 and has been in continuous receipt of state retirement pension since 26 July 2004.

6. The claimant moved to Spain on 11 July 2005. It is not clear exactly how or when notification was given to the Disability and Carers Service or when the supersession decision removing entitlement to benefit was made. The tribunal of 29 March 2011 found that the relevant decision was that notified in the letter dated 21 April 2006 (page 113), which stated that he was not entitled to DLA from and including 7 September 2005 because he had stopped living in Great Britain. At page 51 is a copy of a letter dated 27 October 2005 from the claimant to the Service complaining about his benefit payments having stopped after 6 September 2005, apparently without any prior notification to him. But it apparent from the letter of 22 March 2006 from the Service asking for more information (page 108) that no proper decision had yet been made. The tribunal of 29 March 2011 was therefore quite justified in finding that the decision was made on 21 April 2006 and that it removed entitlement not from 11 July 2005, but from 7 September 2005 (possibly on the basis that the claimant’s intentions had not been firm enough for his ordinary residence to have changed until that date). The Department has no record of any appeal being made by the claimant against the decision of 21 April 2006, which was in law the first proper appealable decision that had been made. Nor do any of the documents put forward by the claimant suggest that such an appeal was made, rather than his raising challenges (in some of which he used the word “appeal”) against payment of benefit after 6 September 2005, but prior to the decision of 21 April 2006. The tribunal of 29 March 2011 was therefore entitled to find as a fact that the claimant had not appealed against the decision of 21 April 2006 and that finding of fact must be accepted for the purposes of this appeal to the Upper Tribunal.

7. On 18 February 2008 the claimant requested reinstatement of his DLA from 7 September 2005. The initial decision on 17 April 2009 was to refuse to revise the decision disallowing benefit, but to supersede the decision and disallow benefit from and including 12 February 2008 because he was not entitled to DLA under the past presence test. The claimant wrote asking for reconsideration of that decision, which was turned down on 18 August 2009, following which he lodged an appeal on 16 September 2009. Then on 19 July 2010 the decision of 17 April 2009 was revised on the ground that the past presence test should not have been applied and the decision was given that the claimant was entitled to the lowest rate of the care component from and including 18 February 2008. 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 17 April 2009 as revised in his favour. The letter of notification said nothing about the lapsing of the appeal, although it did right at the end say that the claimant had a right of appeal within a month. It does not seem the claimant lodged a specific new appeal, but he plainly continued to challenge the outcome and everyone has proceeded on the basis that a valid appeal was before the First-tier Tribunal. 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 17 April 2009, as revised on 19 July 2010, looked at as a composite package, was made up of an express decision that the decision of 21 April 2006 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 18 February 2008. It is absolutely clear that the refusal to revise in the decision of 17 April 2009 remained in existence and undisturbed by the revision on 19 July 2010. Then, although the revision did not identify a ground to supersede the decision of 21 April 2006, 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 18 February 2008 could only have been based on a supersession, as was shown by the brief reference to supersession in the box on page 99 for reasons. I take the decision of 17 April 2009 as revised on 19 July 2010 as a recognition that as at 7 September 2005 a decision could have been made to replace the claimant’s existing fixed period award of DLA down to 18 march 2006 with an award for an indefinite period, but subject to there being no power to put that award into effect until 18 February 2008.

The First-tier Tribunal’s decision

9. The tribunal of 29 March 2011, constituted by Tribunal Judge S R Jones 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 21 April 2006 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 18 February 2008 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 21 April 2006 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 question of whether there was an error in the decision of 21 April 2006 about the date from which the disallowance of benefit could take effect.

The appeal to the Upper Tribunal

10. I gave the claimant permission to appeal to the Upper Tribunal on 8 December 2011 and gave case management directions. 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 29 March 2011 did not err in law in deciding that the Secretary of State’s decision of 21 April 2006 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 17 April 2009 as revised on 19 July 2010 to substitute a revision of the decision of 21 April 2006 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 18 February 2008 (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 an additional question of whether there was an error in the decision of 21 April 2006 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 September 2005 and down to 9 April 2006 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 2003 was a “disability benefit decision”, but the relevant change of circumstances on which the supersession carried out on 21 April 2006 was grounded did not relate to a disability determination. Accordingly, regulation 7(2)(c)(ii) as in force down to 9 April 2006 could not have applied because of the nature of the change of circumstances and regulation 7(2)(c)(iii) could not have applied because it expressly excluded supersessions of disability benefit decisions from its effect. That would have left only the default rule in section 10(5) of the 1998 Act to apply. Thus, down to 9 April 2006 the Secretary of State would have had no power in law to take away the claimant’s entitlement to DLA on his moving to another member State (leaving aside for the moment the requirements of EU law) with effect from 7 September 2005 rather than the date on which the supersession decision was made.

14. However, regulation 7(2)(c) of the Decisions and Appeals Regulations was amended with effect from 10 April 2006 and the supersession decision removing entitlement to DLA was made after that date. That is an important distinction from the circumstances of CDLA/2972/2011, BM v Secretary of State for Work and Pensions (DLA) [2013] UKUT xxx (AAC). As from 10 April 2006, head (iii) of regulation 7(2)(c) as set out in the previous paragraph was removed and new heads (iv) and (v) inserted as follows:

“(iv) in the case of a disability benefit decision, where the change of circumstances is not in relation to the disability determination embodied in or necessary to the disability benefit decision, from the date of the change; or

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

15. The important new provision is head (iv). That requires a supersession not to the advantage of a claimant for a change of circumstances not relating to the disability conditions (such as ceasing to satisfy the residence and presence conditions in the DLA Regulations) to take effect from the date of the change. Thus on the face of it when the Secretary of State made the decision on 21 April 2006 he had power to take away the claimant’s entitlement to DLA, not just from 21 April 2006 (as would have been the case on the previous version of regulation 7(2)(c)), but from 7 September 2005 as the date of the change of circumstances.

16. There is, though, yet another complication. In Secretary of State for Work and Pensions v JL (DLA) [2011] UKUT 293 (AAC), now reported as [2012] AACR 14, a three-judge panel of the Upper Tribunal held on 15 July 2011 that those amendments to regulation 7(2)(c) could not bee given retrospective effect, so that the Secretary of State could rely on the new power under head (iv) only to take away entitlements for some period from 10 April 2006 onwards and not for any period before that date. If that rule was to be applied in the present case, it would mean that in the decision of 21 April 2006 entitlement to DLA could only have been taken away from 10 April 2006 and not from 7 September 2005. However, that rule cannot be applied in the course of the present appeal. The only way that the decision of 21 April 2006 could now be altered from the outset to the claimant’s benefit is by way of revision on the ground of official error. The error of law made on 21 April 2006 in giving the decision a prohibited retrospective effect was only shown to be an error by the subsequent decision of the Upper Tribunal in JL. Therefore, the exception to the definition of “official error” in regulation 1(3) applies, so that there cannot be revision on that ground. For completeness I note that section 27 of the 1998 Act would come into play in the circumstances of the present case. The decision in JL is a “relevant determination” for the purposes of that section. It was given on an appeal arising out of a decision of an adjudicating authority (the Secretary of State) and had the effect that that decision was erroneous in point of law. However, we are concerned with the decision the Secretary of State should have given in 2009 and 2010, before the date of the decision in JL. By virtue of section 27(2), the particular restrictions imposed by the provision can only take effect where the date of the “relevant determination” falls before that at which the Secretary of State is making a decision in some other case.

17. There is therefore no question, as there was in CDLA/2972/2011, BM, of the existence of a ground of revision for official error in relation to the effective dates of the supersession decision removing entitlement to DLA “opening the door” to a general reconsideration of the decision that should have been made on 21 April 2006 including what EU law is now known to require.

18. In addition, even if such an official error had been established, it could not have done the claimant any good within the confines of the appeal that was before the tribunal of 29 March 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 17 April 2009 as revised on 19 July 2010 the tribunal had no power to substitute a revision of the decision of 21 April 2006 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 2008 simply applied for a revision of the decision of 21 April 2006 on the ground of official error in getting the effective date wrong and been refused, he would not have been able to appeal to a First-tier Tribunal. The appeal would have to be against the decision of 21 April 2006 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.

19. Accordingly, the tribunal of 29 March 2011 did not make a material error of law (ie one affecting the outcome) in failing to deal with the points discussed in paragraphs 12 to 16 above, because it did not have the power to carry out a revision of the decision of 21 April 2006 for official error and there was in any case no official error as to the effective date of the decision.  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 (22 February 2008) 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

20. The claimant has made similar arguments to those mentioned in paragraph 82 of CK and JK about having appealed against the removal of entitlement to DLA at the time. As stated there, there would be nothing to stop him from making another attempt to persuade the Secretary of State that he did lodge a valid appeal in 2005 or 2006 that should now be processed and referred to the First-tier Tribunal. I have not said anything about Mrs K’s prospects of success in her and her husband’s cases. I must say that in my view the claimant here would have a much steeper hill to climb, in that on present evidence no appealable decision appears to have been made until 21 April 2006 and nothing that the claimant has so far been able to put forward suggests that he sent in any document that could fairly be regarded as an appeal against that decision.

(Signed on original):  J Mesher

  Judge of the Upper Tribunal

Date: 3 May 2013