DJ-v-Department for Communities (IB) [2018] NICom 23

Decision No:  C1/17-18(IB)

SOCIAL SECURITY ADMINISTRATION (NORTHERN IRELAND) ACT 1992

SOCIAL SECURITY (NORTHERN IRELAND) ORDER 1998

INCAPACITY BENEFIT

Appeal to a Social Security Commissioner
on a question of law from a Tribunal's decision
dated 10 March 2017

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1.	The decision of the appeal tribunal dated 10 March 2017 is in error of law.  The error of law identified will be explained in more detail below. Pursuant to the powers conferred on me by Article 15(8) of the Social Security (Northern Ireland) Order 1998, I set aside the decision appealed against. 

2.	I would ask the LQPM to note that the basis of the error in law is the failure, accepted by the Department, to locate and provide a copy of instructions to the appellant for a particular part of the period of overpayment and to provide that information to the appeal tribunal. It is the case, however, that the failure to locate the instructions given to the appellant for a particular part of the period of the overpayment may have an effect on the coherency of the decision-making process giving rise to the appeal.  The appeal tribunal, on a wholly inadvertent basis has erred in law in upholding a decision of the Department which may be lacking in rationality.   

3.	I am unable to exercise the power conferred on me by Article 15(8)(a) of the Social Security (Northern Ireland) Order 1998 to give the decision which the appeal tribunal should have given.   

4.	I refer the case to a differently constituted appeal tribunal for re-determination.  In referring the case to a differently constituted appeal tribunal for re-determination, I direct that the parties to the proceedings take into account the guidance set out below.

5.	It will be noted that the directions which I have set out below are detailed and complex.  It may be the case that the President of Appeals Tribunals will wish to reserve further stewardship of this case to himself or to the full-time Legally Qualified Panel Member.  

	Background

6.	In the proceedings before the Social Security Commissioner, the Department has been represented by Mr McGrath of the Decision Making Services unit (DMS).  In his written observations on the application for leave to appeal Mr McGrath set out the following case history which I adopt:

‘Case History 

On 17-4-91 (the appellant) claimed Invalidity Benefit.

On 17-2-10 a form (BF85A) was returned by (the appellant) in which he stated that he was self-employed.

On 17-4-10 a letter was received from (the appellant’s) solicitor which advised the Department that the BF85A had been completed incorrectly and that (the appellant) was not self-employed.
 
National Insurance records for the years 1994 to 2009 were received on 6-7-10 followed by End Of Year Tax Returns for 13 of the year’s between1992 to 2010.

Further National Insurance Records for the tax years 1991 to 2009 were received on 20-9-10.

On 2-12-10 a reply was received from (the appellant’s) accountant concerning the payment of Class 1 contributions. 

It was also stated that (the appellant) was a director of the company and therefore an office holder and receives payment for this but he was not employed by the company.

Finally it was stated that if the company had been deducting Class 1 National Insurance in error could they be advised how to rectify this both for the company and (the appellant) personally.

On 9-3-11 a decision maker disallowed (the appellant’s) Incapacity Benefit from and including13-4-95. 

Notification of this decision was issued to (the appellant) on 10-3-11.

On 20-5-11 an overpayment decision was given for the period 13-4-95 to 15-11-10 amounting to a £71,274.25. However it was determined that only the overpayment for the period 13-4-95 to 8-3-10 amounting to £67,448.87 was recoverable.

Notification of this overpayment decision was issue to (the appellant) on 20-5-11.

On 17-4-12 (the appellant) appealed this decision.

On 27-4-12 reasons for his late appeal were received from (the appellant) and on 29-5-12 the Legally Qualified Member admitted the appeal.

On 8-08-12 a reconsideration was undertaken of the decision dated 20-5-11 but this decision was not changed.
        
The Appeal Tribunal disallowed the appeal on 4-7-13 and on 25-7-13 (the appellant) requested a “Statement of Reasons” for this decision.

On 15-1-15 the Commissioner set the tribunal decision aside and referred it to a new tribunal.

On 10-5-16 the Department prepared a new appeal submission.

On 5-12 -16 the hearing of the appeal was adjourned with directions issued to the (the appellant) and the Department.

On 15-12-16 copies of letters issued to (the appellant) and his accountant as directed in the terms of adjournment were received by the Department. (see appendix 3)

On 10-3-17 a tribunal disallowed (the appellant’s) appeal.

On 24-7-17 (the appellant) applied to the Commissioner for leave to appeal having been refused such leave by the tribunal on 30-6-17.’

	Proceedings before the Social Security Commissioner

7.	As was noted by Mr McGrath, on 25 July 2017 an application for leave to appeal against the decision of the appeal tribunal dated 10 March 2017 was received in the Office of the Social Security Commissioners.  

8.	On 15 August 2017 observations on the application for leave to appeal were requested from DMS.  In written observations dated 29 September 2017, Mr McGrath, for DMS, supported the application for leave to appeal.  Written observations were shared with the appellant on 2 October 2017.  Written observations in response were received from the appellant on 23 October 2017 which were shared with Mr McGrath on 24 October 2017.

9.	On 20 December 2017 I granted leave to appeal.  When granting leave to appeal I gave, as a reason, that an arguable issue arose as to whether the appeal tribunal had identified, for a particular period, the evidential source of the duty to disclose.  On the same date I directed an oral hearing of the appeal.

10.	The oral hearing took place on 30 January 2018. The appellant was present and was accompanied by Mr Mayes.  The Department was represented by Mr McGrath.  Gratitude is extended to all of the parties for their detailed and constructive observations, comments and suggestions. 

	Errors of law

11.	A decision of an appeal tribunal may only be set aside by a Social Security Commissioner on the basis that it is in error of law.  What is an error of law?

12.	In R(I)2/06 and CSDLA/500/2007, Tribunals of Commissioners in Great Britain have referred to the judgment of the Court of Appeal for England and Wales in R(Iran) v Secretary of State for the Home Department ([2005] EWCA Civ 982), outlining examples of commonly encountered errors of law in terms that can apply equally to appellate legal tribunals. As set out at paragraph 30 of R(I) 2/06 these are:

“(i)	making perverse or irrational findings on a matter or matters that were material to the outcome (‘material matters’);

(ii)	failing to give reasons or any adequate reasons for findings on material matters;

(iii)	failing to take into account and/or resolve conflicts of fact or opinion on material matters;

(iv)	giving weight to immaterial matters;

(v)	making a material misdirection of law on any material matter;

(vi)	committing or permitting a procedural or other irregularity capable of making a material difference to the outcome or the fairness of proceedings; …
Each of these grounds for detecting any error of law contains the word ‘material’ (or ‘immaterial’).  Errors of law of which it can be said that they would have made no difference to the outcome do not matter.” 

	Analysis

13.	In his comprehensive written observations on the application for leave to appeal, Mr McGrath made the following submissions:

‘Other issues

The period of the overpayment is 13-4-95 to 8-3-10. In the previous Commissioner’s decision on this case it was noted at paragraph 15,

“I further pressed Mr McGrath on the issue of the information materials headed “Notes about Incapacity Benefit” shown to the tribunal.  It was said that these had been issued to the applicant and they were relied upon as the basis of the applicant’s duty to disclose between 1992 and 2009.  However, the IB40 was a version dated 1997, which was a full five years after the failure to disclose was said to arise.  Mr McGrath accepted that the Department would have needed to produce contemporaneous evidence of notification to the applicant of his duty to disclose.”

Despite several attempts I am unable to obtain a copy of the IB 40 notes that were current in 1995.  Therefore it cannot be confirmed that (the appellant) at or around this time had received instructions to disclose his receipt of payments as a director of the company. 

I would also note that at the foot of the decision dated 9-3-11 it states “Date BS20 issued: 10-3-11”. 

The BS20 is the notification of the entitlement decision that was issued to (the appellant) and the accompanying Appendix 1, which is a computer printout, confirms that it was issued on 10-3-11. 

Likewise the overpayment decision contains within it the statement “as shown on the attached schedule”.  While this schedule was not contained within the papers before the tribunal I have now enclosed it as appendix 2.  

I further note that the entitlement decision dated 9-3-11 states,

“I have superseded the decision dated 13-11-93 of the adjudication officer awarding Invalidity Benefit (known as Incapacity Benefit from and including 13-4-95) from and including 9-11-93.....

As a result (the appellant) is not entitled to Incapacity Benefit from 12-4-92 to 7-4-02.”

This decision purports to supersede a decision dated 13-11-93 in order to disallow entitlement from 6.4.92.  I would submit that this is incorrect

This is because the awarding decision would have to been made at some time prior to 6-4-92.

		From the Departments own archive, 
(http://dsdintranet.intranet.nigov.net/index/comms_gateway_guidance-pg/comms_benefits_and_pensions-pg/esabr_gdc-pg/esabr_guides-pg/esabr_credtg-pg/esabr_credtgprb-pg.htm)  I have reproduced the following

Sickness Benefit & Invalidity Benefit 

5. IVB was introduced in 1971 and was payable to people who had qualified for SB and had been sick for 28 weeks. People subject to the 312 day rule could not qualify for IVB. IVB was payable at a standard rate, regardless of the rate at which SB had been paid.  Customers, who had qualified for IVB at either 6 April 1975 or May 1977, continued to be entitled to IVB as long as they remained incapable of work. 

From paragraph 1, Section 4, of the Departments appeal submission I note that (the appellant) was in receipt of Sickness Benefit from 12-4-91 and then he was awarded Invalidity Benefit from 25-10-91 i.e. 28 weeks.

Therefore I would submit that “13-11-93” quoted as being the date of the entitlement decision to be superseded contains a typographical error and that the “93” should actually read “91” making the decision which awarded Invalidity Benefit dated 13-11-91 which would be in keeping with the correct chronology of the case.  

I also note that the overpayment decision states that (the appellant) failed to disclose the material fact that he was fit for work.

I would however submit that this decision should have stated that (the appellant) had failed to disclose the material fact that he had returned to work (as a director).’

14.	I accept the submissions which have been made by Mr McGrath and for the reasons which he has outlined above agree that the decision of the appeal tribunal has to be set aside.

15.	Having found, for the reasons set out above, that the decision of the appeal tribunal is in error of law, I do not have to consider the appellant’s other grounds for appealing.  I would indicate, however, that I would not have found the decision of the appeal tribunal to be in error of law on the other grounds cited by the appellant. 

	Disposal

16.	The decision of the appeal tribunal dated 10 March 2017 is in error of law.  The error of law identified will be explained in more detail below. Pursuant to the powers conferred on me by Article 15(8) of the Social Security (Northern Ireland) Order 1998, I set aside the decision appealed against. 

17.	I am unable to exercise the power conferred on me by Article 15(8)a of the Social Security (Northern Ireland) Order 1998 to give the decision which the appeal tribunal should have given.   

18.	I refer the case to a differently constituted appeal tribunal for re-determination.  In referring the case to a differently constituted appeal tribunal for re-determination, I direct that the parties to the proceedings take into account the guidance set out below.

19.	It is imperative that the appellant notes that while the decision of the appeal tribunal has been set aside, the issue of whether there has been an overpayment of IB, the period during which the overpayment occurred, the amount of the overpayment and whether the overpayment is recoverable from the appellant remains to be determined by another appeal tribunal.  In accordance with the guidance set out below, the newly constituted appeal tribunal will be undertaking its own determination of the legal and factual issues which arise in the appeal.  

	Directions

		(i)	The appellant is encouraged to seek professional advice and assistance in connection with the further appeal tribunal hearing.

		(ii)	In advance of the further listing of the appeal, the appellant is directed to obtain the following information: 

			(a) The date when the company was founded.

			(b) The initial directors of the company.

			(c) The identity of the directors of the company for each year from 1991 to 2010.

	(d) A copy of the company accounts for each of the years from 1991 to 2010 with regard to the relative remuneration of each director.

			(e)	A copy of the records of all company meetings.

	(f)	Details of all authorised cheque signatories for each year from 1991 to 2010.

	(g)	The minutes of any meeting confirming that the appellant’s remuneration was arranged solely to compensate him for loss of earnings due to his injuries as alleged.

	(h)	Diary records for the company for each year from 1991 to 2010.

	(i)	Details of how long the company has acted as the company accountant.

	(j)	Details of any company of which the appellant is a company director together with details of any income or payment received by the appellant from any other such company (if applicable) from 1991 to 2010.

	(k)	Details of how any payments have been made to the appellant by any company [ i.e. paid monthly/weekly; by direct debit or other means.

		(iii)	The appellant is to forward the information specified in paragraph (ii) above to the Appeals Service (TAS) within a period of two months from the date of the issue of this decision.  The appellant/his representative may add a submission to the information to explain its context and relevance.

		(iv)	If the appellant/his representative requires an extension of time within which to obtain and forward the information then an application for such an extension must be made to a Legally Qualified Panel Member (LQPM) in TAS.

		(v)	provide the information specified in paragraph (ii) may result in a decision maker/appeal tribunal drawing adverse inferences in relation to the appellant’s assertions. 

		(vi)	On receipt of the specified information from the appellant, TAS is to forward same to the Department.

		(vii)	If, after a period of two months from the date of this decision, or any extended period determined by an LQPM in accordance with paragraph (iv), there has been no further response from the appellant/his representative, the matter is to be referred to the Department to comply with the further directions below.

		(viii)	On receipt of any additional information from the appellant/his representative and, more significantly, in light of the submissions made by Mr McGrath in his written observations on the application for leave to appeal, particularly those submissions in connection with the lack of availability of instructions to the appellant for a particular period, the Department is to give further consideration to the coherency of the decision making process which gave rise to the decision of 20 May 2011.

		(ix)	If, as a consequence of the further consideration, there is a revision of the decision of 20 May 2011, then the appellant will be accorded further appeal rights against subsequent decision. In that case, the Department is to prepare a further submission in connection with any further appeal. 

		(x)	If, as a consequence of the further consideration, there is no revision of the decision of 20 May 2011, then the Department is to prepare a further submission in connection with the appeal against the decision of 20 May 2011 which is being remitted to a differently constituted appeal tribunal for re-determination.  The submission should draw on the written observations prepared by Mr McGrath in connection with the proceedings before the Social Security Commissioner.

		(xi)	The further submission is to be shared with the appellant/his representative who may wish to prepare a submission in response.

		(xii)	The additional directions set out by Mr Commissioner Stockman in paragraphs 39 and 40 of his decision in DJ v Department for Social Development (IB & IVB) ([2015] NICom 3) remain extant.

		(xiii)	The appeal is to be re-listed as an oral hearing. The appellant/his representative are encouraged to attend the oral hearing.  A Departmental Presenting Officer must attend the oral hearing.

		(xiv)	It will be for both parties to the proceedings to make submissions, and adduce evidence in support of those submissions, on all of the issues relevant to the appeal; and 

		(xv)	It will be for the appeal tribunal to consider the submissions made by the parties to the proceedings on these issues, and any evidence adduced in support of them, and then to make its determination, in light of all that is before it. 

		(xvi)	These directions may be supplemented by any additional directions deemed necessary by an LQPM in TAS.        

	(signed) KMullan

	Chief Commissioner

	4 June 2018