CIS/1599/2007

DECISION OF THE SOCIAL SECURITY COMMISSIONER
  
1.  My decision is that the decision of the tribunal is not erroneous in point of law.  I therefore dismiss the appeal.

2.  This is an appeal against the decision of the tribunal upholding a decision of the Secretary of State under section 71 of the Social Security Administration Act 1992 to recover from the claimant the sum of £18,814.22 income support paid between 21 August 2002 and 16 March 2005 as overpaid benefit.  I held an oral hearing of the appeal on 4 February 2008 attended by the claimant, assisted by his son, and by Mr Henry Hendron, on behalf of the Secretary of State.

3.  The claimant was awarded jobseeker’s allowance in March 1991 and income support from 28 March 1996, on the basis that he was sick.  At the time of his claim he lived in a house with no mortgage and he stated on his claim form that he had no savings in excess of £2,500.00, and did not own any other property.

4.  In January 2005 it came to light that the claimant was in fact also the joint owner of another house which had been purchased in July 2002 for a price stated to be £17,000.00 and let to tenants at a rent of £450.00 every four weeks.  The claimant was interviewed under caution on 29 March 2005 and stated that the property belonged to his son (not the son who attended the hearing before me), who was the other joint proprietor, and that his son had purchased it with money given to him by his maternal grandmother.  The claimant stated that the property had been registered in his name because his son had been aged under 18 at the time he brought the house, and that he therefore owned the house as his son’s trustee.

5.  Shortly after the interview under caution, the claimant signed a ‘Declaration of Solvency’, stating that he intended to transfer the house to his son by way of gift.  A transfer into his son’s name was in fact executed on 20 April 2005, but on 27 April 2005 a decision was made (“the entitlement decision”) superseding the decision awarding income support on the ground that the claimant had actual capital in excess of £8,000.00 from the date when he acquired the house to the date he transferred his share of the house to his son, and notional capital in excess of £8,000.00 after the date of the transfer.  The claimant re-claimed income support on 12 May 2005, but that claim is not the subject of this appeal.

6.  On 11 July 2005 a second decision (“the overpayment decision”) was made, determining that as a result of the entitlement decision made on 27 April 2005, a total of £18,814.12 in income support paid to the claimant from 21 August 2002 to 16 March 2005 had been overpaid and was recoverable because the claimant had failed to disclose the fact that he had capital in excess of £8,000.00   On 14 July 2005 (probably before he became aware of the overpayment decision) the claimant appealed against the entitlement decision, on the ground that he had established that he had no assets.  The appeal was heard and dismissed by a legally qualified panel member on 2 November 2005 and the claimant did not appeal against that decision.

7.  On 28 March 2006 the claimant appealed against the overpayment decision and, on the direction of a district chairman, the appeal was heard by the chairman who had heard the appeal against the entitlement decision.  The claimant attended the hearing accompanied by an interpreter and one of his sons, and the chairman allowed the appeal to proceed despite a letter from the claimant’s solicitor sent before the hearing unequivocally withdrawing the appeal.

8.  The claimant challenged the overpayment decision solely on the ground that the entitlement decision had been wrong.  The chairman considered that he was bound by his earlier decision on the entitlement issue, but in case he was wrong in that view the chairman conducted a full re-hearing of the claimant’s case that he had not been the beneficial owner of the house which he claimed belonged to his son.

9.  The chairman noted that there was no evidence of the £5,000.00 said to have been paid by the claimant’s son’s grandmother to purchase the house (it was said that less than the full purchase price had actually been paid to enable the vendor to go on claiming social security), and he also observed that the statement in the Declaration of Solvency that the claimant was making a gift of his interest in the house to his son was inconsistent with his son already being the beneficial owner.  It is apparent that a record of the earlier proceedings was available, because the chairman noted a number of inconsistencies between the evidence given by the claimant at each of the two hearings.  The chairman did not regard the claimant’s evidence as credible, and found that the he had been the joint legal and beneficial of the house from the time it was acquired.  On the basis of his knowledge of house prices in the area, he valued the claimant’s interest in the house as being worth at least £45,000.00 and held that the claimant had actual capital of that amount until he disposed of his interest to his son, and notional capital of that amount after that date. (Information subsequently supplied by the claimant shows that it actually realised £123,091.12 in February 2007).   The chairman also held (which was not in dispute) that the other conditions entitling the Secretary of State to recover the benefit overpaid were satisfied.

10.  In granting leave to appeal on 6 June 2007, I asked whether in the light of CSG/741/2006 the tribunal was entitled to reconsider the 2005 decision and, if so, whether it was in breach of the requirements of natural justice for the same chairman to deal with both appeals.  However, I accept the Secretary of State’s written submission of 7 August 2007 that CSG/741/2006 is concerned with the validity of an entitlement decision on which an overpayment decision is based, and is therefore not relevant to this case.  I also accept the Secretary of State’s further submission that the findings of fact in the entitlement decision appeal were not binding in the overpayment decision appeal, for the reasons given by Mr Commissioner Jacobs in CIS/1330/2002.  The only live issue is therefore whether it was unfair for the same chairman to conduct both hearings.

11.  The claimant did not complain at the second hearing that the chairman was the same as at the previous hearing, and he told me that the chairman covered the same ground at both hearings.  Mr Hendron submitted that there was nothing to suggest that the chairman was influenced by his earlier decision, or that he did not conduct the second hearing with a completely open mind.

12.  The test of apparent bias is whether a fair-minded and informed observer, having considered all the circumstances which have a bearing on the suggestion that the decision-maker was biased, would conclude that there was a real possibility that he was biased-see Porter v Magill [2002] AC 357.  In Locabail (UK) Limited v Bayfield Properties Limited [2000] QB 451 the Court of Appeal made some observations about the factors which might give rise to a real danger of bias, and, while those observations were made in the context of the “real possibility of bias” test, the court said ( at para. 17) that in most cases the test which was subsequently approved in Porter would yield the same result.  In Locabail the court said:

“The mere fact that a judge, earlier in the same case, or in a previous case, had commented adversely on a party or witness, or found the evidence of a party or witness to be unreliable, would not without more found a serious objection.”

13.  In R (on the application of Holmes) v General Medical Council [2002] 2 All ER 524 the Court of Appeal held, applying the Porter test, that the fact that a Lord Justice of Appeal had refused leave to appeal was not a ground for requiring the lord justice to recuse himself from hearing the full appeal, and in AMEC Capital Projects Limited v Whitefriars City Estates Limited [2005] 1 All ER 723 the Court of Appeal held that the same principles apply even where  an adjudicator has already decided an issue on the merits against one of the parties.  In that case an adjudicator appointed under the Scheme for Construction Contracts (England and Wales) Regulations 1996 made an award in favour of a claimant in a building dispute, but the court refused to enforce the award because under the terms of the contract the dispute should have been referred to a different adjudicator.  After that adjudicator died, the original adjudicator was re-nominated and again made an award in the claimant’s favour, but in fresh enforcement proceedings the judge held that the defendant’s right to an impartial tribunal had been breached.  Allowing the appeal against the judge’s decision, the Court of Appeal (held per Kennedy LJ at paras. 20 and 21):

“In my judgment, the mere fact that the tribunal has previously decided the issue is not of itself sufficient to justify a conclusion of apparent bias.  Something more is required.  Judges are assumed to be trustworthy and to understand that they should approach every case with an open mind.  The same applies to adjudicators, who are almost always professional persons.  That is not to say that, if it is asked to re-determine an issue and the evidence and arguments are merely a repeat of what went before, the tribunal will not be likely to reach the same conclusion as before. It would be unrealistic, indeed absurd, to expect the tribunal in such circumstances to ignore its earlier decision and not to be inclined to come to the same conclusion as before, particularly if the previous decision was carefully reasoned . The vice which the law must guard against is that the tribunal may approach the re hearing with a closed mind.  If a judge has considered an issue carefully before reaching a decision on the first occasion, it cannot sensibly be said that he has a closed mind if, the evidence and arguments being the same as before, he does not give as careful a consideration on the second occasion as on the first.  He will, however, be expected to give such reconsideration of the matter as is reasonably necessary for him to be satisfied that his first decision was correct.   As I have said, it will be a most unusual case where the second hearing is for practical purposes an exact re-run of the first.

The mere fact that the tribunal has decided the issue before is therefore not enough for apparent bias.  There needs to be something of substance to lead the fair-minded and informed observer to conclude that there is a real possibility that the tribunal will not bring an open mind and objective judgement to bear.  As was said in the Locabial case, the mere fact that the tribunal had previously commented adversely on a party or found his evidence unreliable would not found a sustainable objection.   On the other hand, if the tribunal had made an extremely hostile comment about a party, the position might well be different.” 

14.  The claimant in this case was in one sense advantaged by having the same tribunal as previously, because it gave him the opportunity to plug the gaps in his case on the previous occasion, for example, by providing evidence that his son’s grandmother had paid his son the money with which to buy the house.  However, it is clear both from the record of proceedings and from what the claimant told me at the hearing before me that the chairman went further than was required by AMEC.  He did not simply reconsider his earlier decision in the light of any new points or fresh evidence advanced by the claimant, but instead conducted a complete rehearing of the case and gave reasons for his decision which were based entirely on the evidence given at the second hearing.   There is no suggestion that the chairman behaved towards the claimant in a hostile manner, nor can I find any reason to believe that the chairman did not approach his task with a completely open mind.  There is therefore nothing in my view which would lead a fair-minded and informed observer to doubt the chairman’s impartiality and objectivity, notwithstanding that he had decided the entitlement issues adversely to the claimant in the earlier appeal.

15.  For those reasons, I am satisfied that the tribunal’s decision was correct in law and I therefore give the decision set out in paragraph 1. 

	(signed on the original)	E A L Bano
		Commissioner

		30 June 2008