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[2008] UKUT 10 (AAC) (13 November 2008)

 


THE UPPER TRIBUNAL Appeal No. CH 2353 2008

ADMINISTRATIVE APPEALS CHAMBER [2008] UKUT 10 (AAC)

DECISION

The appeal is allowed. For the reasons below, the decision of the tribunal is set aside. I refer the appeal to a new tribunal to decide the appeal again in accordance with the following directions.

Directions for new hearing

A The new hearing will be at an oral hearing.

B The new tribunal should not involve any judge or other member who has previously been a member of a tribunal involved in this appeal.

C The appellant is reminded that the tribunal can only deal with the appeal as at the date of the original decision under appeal.

D The parties are directed to send any further written evidence that they wish to have considered by the tribunal to the tribunal within one month of the issue of this decision.

These directions are subject to any later direction by a tribunal judge.

REASONS FOR DECISION

1. The claimant and appellant (G) is appealing against a decision of the London (Fox Court) tribunal on 13 03 2008 under reference 160 08 00260.
2. The decision under appeal to the tribunal is a decision of the London Borough of Islington (the Council) made on 28 09 2007 and revised on 5 10 2007. The revised decision is that there had been an overpayment of housing benefit to G and that, after taking into account an underpayment, there was an outstanding overpayment of £4,532.97 recoverable from her. The precise terms of the revised decision are not entirely clear from the papers, but I take from the letter to G dated 5 10 2007 (document 233) that the period of overpayment is now accepted to be from 23 12 2003 (or perhaps 29 12 2003 – see document 1D) to 24 06 2007.

The issue under appeal

3. G appealed against that decision claiming that the whole overpayment was unrecoverable. This was because:

"My claim has been wrongly assessed for many years and I am expected to take the responsibility. I have no understanding on how benefit is calculated and it is not my responsibility to do so. When asked I produced all relevant paperwork and documentation that was required. Your department did not process it correctly the error lies with yourselves. The error came to light in September 2007 and I was notified. Obviously I am willing to accept the reduction in my benefit from then."

4. There is much common ground in this. The original decision was that G had been overpaid throughout a period from 15 10 2001 to 24 06 2007. This was revised after the initial appeal. It was accepted that there had been an underpayment rather than an overpayment for the initial period. This resulted in the revision offsetting the underpayment for the earlier period against the later overpayment. The Council accepted that the miscalculation that gave rise to these errors were errors on its part. It was common ground that G did not directly contribute to the error. It is common ground throughout that the error relates to one point only: the payment of an allowance to G for childcare expenses when she did not have any childcare expenses.
5. Where the parties disagreed was stated by the Council as follows:

"Overpayments which have arose from Official Error shall remain recoverable if, it is deemed that the claimant could have reasonably been expected to know they were being overpaid. As your notification letters, all included

details of expenses in your entitlement breakdown, its reasonable that you did know you were being overpaid."

6. The legislation to which that refers is in the Housing Benefit Regulations 2006, regulation 100. This provides:

"(1) Any overpayment, except one to which paragraph 920 applies, shall be recoverable.

(2) … this paragraph applies to an overpayment which arose in consequence of an official error where the claimant … could not, at the time of receipt of the payment or any notice relating to that payment, reasonably have been expected to realise that it was an overpayment."

Paragraph (2) is not a deeming provision. That aspect of the Council's decision is wrong. There is, initially, a question of fact as to the information available to the individual at the time of any payment or notice. It is then a question for the judgment of the decision maker whether it was reasonable for that individual to be expected to have realised that either the payment or the notice included an overpayment. That is the approach adopted in CH 2554 2002 and by Commissioners on a number of subsequent occasions including, more recently, CH 2943 2007.

The tribunal decision

7. G's representatives put a careful written submission to the tribunal identifying the issues and drawing attention to CH 2554 2002. The central contention was that on the evidence G could not reasonably have been expected to realise that her housing benefit payments contained an overpayment.
8. The Council put a lengthy written submission before the tribunal. This contained a full chronology and copies of claim forms and letters. It drew attention to two Commissioners' decisions: CH 672 2003 and CH 4918 2003.
9. The tribunal held an oral hearing at which the appellant attended and was represented. The Council was represented. The tribunal issued its decision confirming the decision of the Council that day. It later provided a full statement of its reasons. This relied on the decision of the House of Lords in Secretary of State for Work and Pensions v Hinchy.

Grounds of appeal

10. G's representatives put in a lengthy statement of grounds of appeal against that decision. It challenged the evidence on which the tribunal rested its decision, the clarity of its findings, and the test it used to conclude that it was reasonable to expect G to realise that there were overpayments. It contended that the tribunal had confused what G had been told with what the Council had been told. The submission relied on decisions CH 609 2004 and CH 2943 2007.
11. The Council responded with a full written submission. This repeated the chronology of events with a focus on the points in dispute. It submitted that over the four years in question G had received at least 10 notification letters but that G had not acted on any of them. It relied on the decisions noted above and the decision of the Commissioner in CH 1307 2006.
12. G's representatives responded to that submission. They pointed out that G had given formal evidence on affirmation in support of her appeal and that she had been cross-questioned on it. They drew attention to notifications by G to the Council. They restated that G had throughout always given all the correct information and all information she knew might affect her claim.
13. Neither party asked for an oral hearing of the appeal, and I have not held one.
14. I agree with the appellant's representatives that the proper approach is to consider the three issues identified above (following CH 2554 2002) and I do so in that order.

"… the claimant … could not … reasonably have been expected to realise"

15. I am satisfied that the tribunal and the parties focussed on the correct test to be applied to G, as set out above. Did the tribunal, as contended for G, misinterpret it? The tribunal received full submissions from both parties about the test it had to apply. They included references to the authorities. I see no purpose in repeating those cases here. They are well documented in the standard work (see the commentary to regulation 100 in CPAG's Housing Benefit and Council Tax Benefit Legislation). The submission for G was that the tribunal used a "reasonable person" test rather than asking what this appellant should reasonably have done. I am not persuaded of this. The tribunal made a series of findings of fact about the capabilities and experience of G, and its reasoning suggests that this was the starting point for its decision. I do not consider that this shows any error of law by the tribunal.
16. G's representatives raised another point. The tribunal had, in their view, adopted too wide a focus in operating this test. It was submitted that the tribunal had put more weight on what G had told the Council than on what the Council had told G.

That point must be considered as part of the analysis of the overall information flows between G and the Council on which any decision about reasonableness is based.

"… receipt of the payment or any notice relating to that payment"

17. What information was G given, and what information did she have, when payments were made to her or notifications sent to her? The papers include useful chronologies, but these must be considered carefully for two reasons.
18. First, the relevant period in the revised decision starts at the end of 2003. The papers go back to 2001. They include information relevant only if it was reasonable for G to carry forward either the documents or the knowledge she received in the earlier period to the later period. The chief difficulty with that is that it is clear that she received substantially less housing benefit in 2001 and 2002 than she should have received. It is not clear how that can be used to show that she should have known that she was overpaid in later years.
19. Second, this appeal is not about a single decision on a single date. It must involve a series of decisions about whether this appellant, on each occasion on which she was given a payment or information, could reasonably have identified the overpayment. While it would be disproportionate to expect either the Council or an appellant to deal with this point on every single occasion on which a payment was made or notification sent, there is a more general point. G's representatives drew attention to the fact that the Council altered its standard notifications substantially during the period. They put in issue that the change in the form of notification itself suggested that notification before that date was deficient. They argued that different considerations apply at different times in the relevant period for the decision. That general point is right. It is not clear that the tribunal kept this in mind. The question must be posed at each significant point in the period whether at that point it was reasonable for G to realise that there was an error.

The evidence

20. The first directly relevant document put in evidence is the claim form G filled in and returned on 23 12 2003 with enclosures. This shows that G was receiving £148 monthly in "working families tax credit" (the form was out of date). There is nothing in the form about childcare charges. But G provided the Council with a copy of her latest tax credit notification. The notification states that G had no qualifying childcare costs. It confirms that her tax credit payment will be £148 every 4 weeks.
21. The next letter is from G to the Council dated 5 01 2004 stating that she was no longer eligible for tax credit as her hours were reduced to 8 hours a week. (She should have said "working tax credit".) The first official notification to G is dated 7 01 2004. It is a council tax account operative from 29 12 2003 to an unstated date. G responded to that by sending in, on 21 01 2004, a new completed form with all her details. The tribunal commented at paragraphs 11 – 13 of its decision on this form:

"12 She responded that she had childminding costs but that was no longer true.

13 I cannot understand how she completed the form to offer that answer."

The answer to that point is that she did not complete the form in that way. The copy before me clearly shows the "No" box ticked against the question "Do you … pay any childminding costs…?". See document 59. The tribunal is plainly wrong on this point. What is more, the Council itself accepted in the letter setting out the revised decision under appeal that G had told it she had no childcare costs on both 23 12 2003 and 21 01 2004. See document 233. So the point was not even in issue between the parties. The adverse conclusion the tribunal drew from its own error was an entirely unjustified adverse conclusion about G that, to use the tribunal's own language, I cannot understand.

22. The next document is a notification on 11 03 2004 to G from the Council of her housing benefit entitlement from 5 04 2004. This is followed by a short review form returned by G on 26 06 2004, showing tax credits of £166.88 monthly. It does not ask about childcare, and G does not mention it.

The evidence for 2003-04

23. Stopping at that point, we see for 2003-04 one notification to G about her council tax benefit, and none about her housing benefit. We see 3 occasions on which G provided information to the Council in that year. We see direct evidence from G and the Tax Credits Office that she had no childcare expenses that year.
24. Applying the regulation 100 test, what information was G given during 2003- 04 about her housing benefit? The strict answer, on the evidence, is none. There probably was a notification but it is not in evidence. (It appears that the photocopying went wrong between documents 51 and 53 of my papers, leaving a gap in evidence to which no one has drawn attention). I have evidence about the council tax benefit. Did that assist G? The notice sets out her applicable amounts and then her income. The income is presented as follows:

"INCOME

Weekly earned income

Earnings 138.00

Weekly unearned income

Family tax credit <30 hours 160.42

Child benefit – eldest 16.05

Other amounts

Expense 94.50

Amount disregarded 36.90

___________

total income 183.07"

From this G was reasonably expected to establish, it is submitted, that the reference to "expense" was a reference to her childcare expenses. In fact she had told the Council the previous month that she had no childcare expenses and that she was receiving tax credits of £148 monthly. She told the Council a few days before receiving that notification that she was not entitled to tax credits. She told the Council a fortnight later that she had no childcare expenses and that she received child tax credit of £96.28 a month.

25. The calculation set out in the previous paragraph was presented to the tribunal with no accompanying notes or explanation. If the Council sent G any accompanying explanations, they were not put in evidence. There is therefore nothing presented as evidence to the tribunal to explain what "family tax credit <30 hours" included or excluded.
26. It is the Council's submission to me that: "the local authority submits that a simple calculation of the appellant's income would show that the amount under expenses was being deducted. The appellant would not need to be an expert in housing benefit to deduce this information especially when at times the notification letters showed her income to be nil." (The latter point is not relevant in 2003-04).
27. What concerns me about this is the idea of a "simple calculation". To ensure G understood that there was an error in the calculation she would need to understand and then check each line of the calculation. Working out what was added and what was subtracted was a minor aspect of that task. The "expense" only makes any sense if it is an expense against something else and, in addition, G knew what "expense" meant and against what it was deducted. Here the "something else" includes a weekly amount of tax credit of £160. That is why I added the detail about G's tax credits in my analysis of the evidence. If, on round figures, the £94 expenses are deducted from the £160 credit to give £66 net, then we are much nearer the weekly £37 (from a 4 weekly £148) or £24 (from a 4 weekly £96) shown as the weekly tax credit being received at the time (on the information in the papers) than the Council's figure of £160. There is no explanation of this in the papers, and the tribunal paid no attention to it. But it is against that information that the test under regulation 100 is to be applied for the opening period of this decision.

The evidence for 2006-07and 2007-08

28. By contrast, things had changed markedly by the end of the period. On 26 10 2006 the Council sent G an entirely different form of notification. This itemises working tax credit and child tax credit separately. It specifically identifies a deduction for childcare costs in the calculation at £175 a week against both housing benefit and council tax benefit. And it puts the deduction in a sensible place in the calculation. There is no ambiguity about that statement. And there is no ambiguity about the way the calculation is presented. Similar notification, with similar detail, was sent out on 12 03 2007. Both were sent out some time before the letter from G on 20 09 2007 accepting the point that she had no childcare costs.

What was reasonable?

29. It is clear from the above analysis that the tribunal had no direct evidence in front of it that G had been told anything about the breakdown of her housing benefit in 2003-04, but that by contrast she had explicit information about the inclusion of childcare costs notified to her in the breakdown provided on more than one occasion in 2006-07. It is clear that the tribunal focussed on what G told the Council rather than what the Council told the appellant. It is also clear that, in doing so, the tribunal drew a conclusion about the information provided by G to the Council in 2003-04 that was perverse in that it drew an adverse conclusion based on a finding of fact that went directly against the actual evidence before it. That was an aspect of a more general error of law in the way the tribunal focussed on what it (wrongly) found that G did or did not do without putting that into the overall context of the information flows between G and the Council.

My decision

30. The tribunal decision is patently unsafe and must be set aside. The case must go to a new tribunal. That new tribunal must retake the entire decision. In doing so, I direct it that it must look at the question of what G was told and what she could reasonably be expected to know as the claims and awards evolved. The Council's view that she might reasonably be expected to know there was an error in 2006 should not be attributed back to 2003 without further thought. Equally, the representative's view that she could not reasonably be expected to know there was an error in 2003 should not be attributed forward to 2006 without further thought.
31. The Council may wish to reconsider further revising its original decision in the light of my decision. If it does not, then it must provide the tribunal with clear evidence about the notifications given by it to G during the earlier period of the current decision as well as that in the later periods. I emphasise that there is at present no evidence in the papers about any notification for housing benefit before the notification noted at paragraph 22 above. If the Council sent out any explanation to G about its calculations and the meaning of "expense" then that should also be put in evidence with its notifications. And the Council should explain how it arrived at the detail in the "simple calculation" set out at paragraph 24 of this decision. That will prevent the tribunal being misled by any error in my comments on that calculation arising because of information held by the Council that is not in the papers or the submissions to me. In any event the Council should confirm to the tribunal what the start and end dates for the overpayment period are as these are not entirely clear from the documentation.

General

32. From 3 11 2008 the work of the Social Security Commissioners has been transferred to a new court of record known as the Upper Tribunal. The Upper Tribunal is from that date dealing with all applications and appeals made to the Social Security Commissioners.

Dr David Williams

Judge of the Upper Tribunal

13 11 2008

[Signed on the original on the date stated]