[2008] UKSSCSC CH_2233_2007 (22 October 2008)

PLH                                                                            Commissioner's File: CH 2233/07

	SOCIAL SECURITY ACTS 1992-2000

APPEAL FROM DECISION OF APPEAL TRIBUNAL
ON A QUESTION OF LAW

DECISION OF THE SOCIAL SECURITY COMMISSIONER

     1.     	This claimant’s appeal is allowed.  The decision of the Portsmouth appeal tribunal of 22 February 2007 (Mr P D McEldowney, chairman, sitting alone) was in my judgment erroneous in point of law in failing to record a clear finding on a material issue as to the nature and origin of a sum of over £16,000 held in an undisclosed building society account in the claimant’s name.  That was an issue having an important bearing on whether the money belonged beneficially to the claimant, so that the tribunal’s conclusion that it did so belong to him must in my judgment be held unsafe and invalid without it having determined that issue.  I set the decision aside and in accordance with paragraph 8(5)(c) Schedule 7 Child Support, Pensions and Social Security Act 2000 remit the case to a fresh tribunal for redetermination of that and all other material issues.
     2.     	The claimant is a man now aged 76, who originally claimed housing and council tax benefit for his privately rented flat on 20 October 2004.  The means he disclosed at the time of his application were meagre, consisting only of his state retirement pension plus a private annuity of a few extra pounds a week, and total savings in various bank and building society accounts amounting to not much more than a thousand pounds.  After the usual checks had been carried out the respondent council, which is his housing benefit authority, issued decisions on 4 and 24 December 2004 awarding him both housing and council tax benefit at the full rates from 25 October 2004 onwards.  
     3.     	He continued in receipt of these until a routine case review carried out by a visiting officer on 22 September 2006 brought to light that he also had a sum of over £16,000 standing to his credit in another, previously undisclosed, building society savings account in his own name.  The claimant signed a review form completed for him by the visiting officer showing the current balance of £16,063.30 in this further account as his capital:  pages 58-61.  A few not very complicated further enquiries showed he had opened the account on 22 November 2004 with an initial cheque deposit of £17,658.82 and the credit balance in the account had been maintained at over £16,000 ever since, though during 2006 the claimant had made withdrawals of £700 in March, £800 in June and £950 in August, all of which he had deposited in his ordinary banking account.    
     4.     	On the basis of the new information in the signed review form the council issued the decision letter dated 15 October 2006 at pages 78-79 which was the subject of the appeal to the tribunal, to the effect that as he had more than £16,000 in capital he was not entitled to housing or council tax benefit and that if he disagreed he could appeal.  The decision letter did not specify the date from which the benefit entitlement was being terminated: nor did it refer to a letter the claimant had sent in shortly before, asserting that the undisclosed account was “a trust fund for my sons from the settlement of the estate of my late sister-in-law”: (see letter dated 5 October 2006 at pages 70-71).  A further letter issued by the council dated 7 December 2006 (at pages 90-92) repaired the first, procedural, defect to some extent by stating:  
“Your claim was cancelled back to 25/10/04 as it is considered that you have had capital in excess of £16,000 since you first made a claim, therefore not entitled to receive housing or council tax benefit”.  
     5.     	The second letter then continued by saying that
“The cancellation created a housing benefit overpayment of £10,053.23 for the period 25/10/04 to 8/10/06 and a council tax benefit overpayment of £1,327.15 for the period 25/10/04 to 31/3/07.  Unfortunately you were not advised of this overpayment at the time …” 
and that the appeal the claimant had already lodged against the first letter stopping his entitlement would be treated as if he was also appealing against “the housing and council tax benefit overpayment”.    Whether that was an effective way of making a determination that the alleged or any other overpaid sums of benefit were legally recoverable from the claimant in terms of section 75 Social Security Administration Act 1992 is open to doubt; but  I do not at present need to go any further into that aspect of the matter as  as it has been conceded by the council in the course of this appeal that the issue of whether there was a recoverable overpayment was not properly before the tribunal on the appeal it heard on 22 February 2007, and the tribunal did not in any event deal with it.
     6.     	The question before me is therefore limited to whether the tribunal chairman was correct in law to confirm, as he did on 22 February 2007 for the reasons he gave in his statement issued on 20 April 2007, the decision of the council as recorded and conveyed in those two letters, that the claimant had had no entitlement to housing or council tax benefit at any time from 25 October 2004 onwards because there had been capital of over £16,000 standing to his credit in the undisclosed account from 22 November 2004.
     7.     	The claimant’s explanation was less than precisely formulated and hazy on detail, though his age may to some extent account for this.  It was in substance that the money in the account represented part of what had been left to his sons by their aunt, who had died in Australia some 15 years before.  He said their mother (his ex-wife) had asked him to look after it at a time when she was herself ill, and although the sons were now of full age and entitled to the money, they still wished a separate sum kept aside for her medical expenses or funeral costs if the worst happened.  
     8.     	There was no contemporaneous evidence to show the creation of a trust of the money in the undisclosed account, and no evidence to show why it was necessary for the money to be put in the claimant’s sole name at the end of 2004, rather than being held by one or more of his sons (who were all capable of managing their own affairs, and had had absolute vested interests under the will since 2000 at the latest), or by their mother, whose illness appeared by the end of 2004 to have receded.  Nor when the will was produced did she appear to have ever been an executor or trustee of it as his evidence had said she was.
     9.     	Having heard the claimant at the hearing the tribunal chairman found his explanations unconvincing and unsatisfactory. That was a not unreasonable reaction on the chairman’s part to the evidence as presented to him, even making allowances for the claimant’s age and possible confusion and misunderstandings in giving his oral evidence. Despite the best efforts of the Portsmouth Citizens’ Advice Bureau in the written submission it sent in on the claimant’s behalf before the hearing (at pages 107-109), there were obvious gaps and discrepancies in the account the claimant gave of what this money was doing in his hands.  The various documents he produced had a strong flavour of having been put together afterwards, as a reconstruction of events to support his case for retaining his housing benefit; and the facts that he had chosen to open the account in his own sole name as an ordinary beneficial account and not as trustee, and had helped himself to sizeable sums of money out of it for his own purposes during 2006 which he afterwards claimed had been “loans”, did his story no favours at all.  
     10.     	Nevertheless the chairman does appear to have accepted what was put before him to some extent at least, since he recorded as a fact in paragraph 8 of his statement of reasons at page 114a that:  
“On 28.8.91 [the claimant’s ex-wife] wrote (p83) in terms suggesting that he might take over the administration of their sons’ inheritance from their late aunt;  however, as [he] explained, it never led to anything until the [undisclosed] account was opened in November 2004 with the arrival of £17,658.82 (p72).”
     11.     	In view of that apparent acceptance that the claimant did have at least some involvement with the inheritance money at the end of November 2004, and that the money he put into the undisclosed account had “arrived” from somewhere at that time, it was in my judgment incumbent on the chairman to go on then to address and make a clear finding on the crucial issue of whether the deposit cheque used to open the account in fact represented money then belonging to the claimant’s sons, derived from the will of their aunt, or whether it was money of the claimant’s own derived from some other source he had been dishonestly concealing.  
     12.     	Without such a finding, even given the unsatisfactory and confused nature of the claimant’s answers at the hearing which made his whole story sound unconvincing, and the chairman’s justified reservations about the worth of the documents he was shown, there was in my judgment no sound basis for his immediate conclusion reached without further analysis, that the claimant held the money in the undisclosed account beneficially for himself alone.  That for example fails to address the fairly obvious possibility that if the £17,658.82 cheque deposited in the claimant’s name on 22 November 2004 did represent money belonging to his sons derived from their aunt’s estate, the placing of such a sum of their capital into his name would, in the absence of any clear declaration or agreement to the contrary (and even if the point of doing it was misguided or obscure), have given rise to a bare trust in their favour by operation of law, there being no presumption of an outright gift in such circumstances.
     13.     	A minor additional point is that if, as the tribunal chairman appears to have accepted, the capital standing to the credit of the claimant’s account only “arrived” or came into his possession at the end of November 2004, there was no basis for the actual decision he gave, which as stated in the decision notice at page 116 was to confirm without modification the council’s decision of 15 October 2006.  That must have been erroneous because as it stands (in its amplified and revised form set out in the later letter of 7 December 2006 at page 90) the decision had purported to hold the claimant disentitled to benefit right back to the starting date of 25 October 2004 on the ground of a sum of capital he was only shown to have possessed at the end of the following month.
     14.     	For those reasons, I set aside the decision of the tribunal and remit the case to a fresh tribunal which I direct to carry out a rehearing and redetermination of the claimant’s appeal against the council’s decision on the question of his entitlement to housing and council tax benefit from 25 October 2004, as embodied in its two letters of 15 October and 7 December 2006.  
     15.     	The new tribunal is to carry out a complete re-examination of the case, including the various further contentions and evidence the claimant has sought to submit in the course of this appeal, and as already indicated the most obvious starting point is an enquiry into where the claimant got the cheque for £17,658.82 with which he opened the undisclosed account in his own sole name on 22 November 2004.  Since that was on the face of it an ordinary beneficial account which he was able to (and did) operate and use for himself, the onus is of course on him to show that in truth it was money not belonging to him but held on trust for somebody else.  As noted above he may be able to do this if he can demonstrate by evidence that at the time he received it this was money belonging to his sons from the estate of their late aunt, and was not intended as a gift to him or to be used for purposes of his own; but it is for him to satisfy the tribunal of this.  
     16.     	I further direct the new tribunal that (as acknowledged by the council in the course of these proceedings) what was said in the council’s second letter of 7 December 2006 about “overpayments” was insufficient to constitute a separate effective and appealable determination that the amounts allegedly overpaid were legally recoverable from him under section 75 Social Security Administration Act 1992.  It must therefore be for the council to decide whether to attempt to make a further formal determination on this issue at once, in the hope that it can be brought on appeal before the same tribunal on the rehearing, or simply to wait until the tribunal has redetermined the question of entitlement before considering whether any issue of recoverability remains to be pursued.  

(Signed)
P L Howell
Commissioner
22 October 2008