THE SOCIAL SECURITY COMMISSIONERS

Commissioner’s Case No: CIS/359/2008 

SOCIAL SECURITY ACT 1998

APPEAL FROM THE APPEAL TRIBUNAL UPON A QUESTION OF LAW

COMMISSIONER A J GAMBLE

Oral Hearing

Appellant:  				Respondent:  Secretary of State

Tribunal:  Lincoln			Tribunal Case No:  040/07/00617

DECISION OF SOCIAL SECURITY COMMISSIONER
1.	My decision is that the decision of the Lincoln appeal tribunal of 12 September 2007 is erroneous in law.  I set it aside and substitute for it the decision which the tribunal should have given, viz.:

The tribunal has no jurisdiction.  The determination made by a decision maker, on behalf of the Secretary of State, on 15 March 2007 purportedly appealed to the tribunal by the claimant is not an appealable decision under section 12 of the Social Security Act 1998, being a refusal to revise a decision taken by a decision maker, on behalf of the Secretary of State, on 27 November 2002.  

Background
2.	The circumstances of this case are not in dispute.  On 2 February 2001, the claimant took out a loan from Alliance and Leicester plc (number 097-291339-08-06) to purchase a flat in Tallin, Estonia.  The tribunal’s findings of fact are silent on whether this loan was secured or unsecured.  However, the claimant informed me at the oral hearing that it was secured over his home in Collingham, Nottinghamshire.  On 16 April 2002 the flat in Tallin was sold.  The proceeds were remitted to the claimant’s solicitors in Lincoln.  However, the above loan was not redeemed.  That was because the above proceeds, amounting to £40,000, were frozen in the hands of the claimant’s solicitors as a result of action taken by solicitors acting on behalf of his wife in divorce proceedings against him.  Those proceedings were concluded by an order of Lincoln County Court on 15 October 2002 (reproduced as document 9) under which the claimant was obliged to pay £34,000 to his wife within seven days of the making of a decree absolute of divorce.  No new loan was taken out by him to meet that obligation.  Rather it was met out of the above proceeds which were still being held by his solicitors.  The claimant thus remained (and indeed still remains) liable to repay the loan referred to above.  He has never redeemed it.  He has been unable to do so because of his compliance with the court order referred to above.  

The decision maker’s decision of 27 November 2002
3.	Meanwhile, on 21 July 2002, the claimant had applied for income support.  That claim was determined by a decision maker’s decision, taken on behalf of the Secretary of State on 27 November 2002.  In that decision, the interest on the loan described in paragraph 2 above, was expressly disallowed as not being part of the claimant’s housing costs.  It was thus excluded from the calculation of his applicable amount in determining his entitlement to income support.  See paragraph 7 on document 5, the record of the above decision.  The claimant did not appeal.  

The present proceedings
4.	Thereafter, on 3 February 2007 the claimant wrote to the Department for Work and Pensions revisiting the issue of the loan described in paragraph 2 above.  His letter is reproduced as document 6.  In it, he explained that he had previously made telephone contact with the department on 30 January 2007.  On 15 March 2007, the Department for Work and Pensions responded to his letter (see document 32) stating that “the decision maker has decided not to reconsider the original decision”, clearly a reference to the decision maker’s decision of 27 November 2002, described in paragraph 3 above.  On 11 April 2007, the claimant completed an appeal form which he submitted, along with an attached letter, in response to the determination of 15 March 2007.  See documents 13 – 15.  The case then proceeded to an oral hearing before the tribunal of 12 September 2007.  They disallowed the appeal stating that “the decision of the Secretary of State issued on 15 March 2007 is confirmed”.  See document 40.  The claimant now appeals with leave of a district chairman.  His appeal is not supported by the Secretary of State.  

The oral hearing
5.	The claimant requested an oral hearing.  That request was granted by Mr Commissioner Bano.  A hearing was arranged in Doncaster.  That hearing was cancelled in advance, at the claimant’s request because he was moving to Scotland.  He has now done so.  A rescheduled oral hearing took place before me in Edinburgh on 24 September 2008.  The claimant was present.  He was not represented.  He clearly explained that his former representatives, Ollerton and District Citizens Advice Bureau, were no longer acting for him.  He expressly stated that he wanted to go ahead with the oral hearing without representation. He also specifically stated that he did not wish an adjournment to obtain fresh representation.  The Secretary of State was represented at the hearing by Mr David Bartos, Advocate, instructed and accompanied by Miss Ciara Mccurry, a solicitor from the Office of the Solicitor to the Advocate General for Scotland.

6.	I am indebted to Mr Bartos for his thorough oral submissions.  These were manfully presented in the face of persistent interruptions from the claimant which continued despite my repeated requests that he desist.  The claimant’s obvious conviction of the justice of his case and his perception, albeit mistaken, that his arguments were not being understood explain the highly repetitive character of his oral submissions.  Those strong feelings do not however justify the barrage of interruptions which he directed both at counsel and myself.  That behaviour was simply discourteous.  It also represented a misunderstanding of the judicial character of the oral hearing and a blatant disregard of the authority of the Commissioner.  Certainly, it made the conduct of a constructive debate difficult.  Despite the claimant’s conduct in the court room, every effort was made to furnish him with a full and fair hearing.  He received one.  

The claimant’s adjournment request at the oral hearing
7.	As explained in paragraph 5 above, the claimant declined my offer of an adjournment at the commencement of the oral hearing to secure fresh representation.  However, on at least two occasions during it, he sought an adjournment.  Mr Bartos opposed that motion.  I noted the claimant’s request and informed the parties that I would reserve my decision on whether to grant an adjournment to the end of the hearing.  Just before I indicated that the hearing had concluded, I informed the claimant and Mr Bartos that I had decided not to adjourn the case.  I exercised my discretion in that manner for the reasons set out in paragraph 8 below.

8.	The claimant put forward three grounds for an adjournment.  Firstly, he wished the case adjourned in order for him to obtain more information from Alliance and Leicester plc and/or the solicitor who had acted for him in his divorce as to the nature of the loan taken out by him on 2 February 2001 (described in paragraph 2 above) and the circumstances in which the proceeds of the sale of the flat in Estonia had had to be used to meet his obligations under the County Court order of 15 October 2002, again referred to in detail in paragraph 2 above.  I did not consider that this ground had merit.  There was ample information on file and provided orally by the claimant at the hearing on these matters for me to decide the appeal.  I did not consider that any further useful material could be obtained from the sources identified by the claimant which would assist me in deciding whether any error of law existed in the tribunal’s decision.  Secondly, he wished an adjournment to restructure his indebtedness either with Alliance and Leicester plc or, he suggested at one point, his father as an alternative lender.  That was a wholly irrelevant ground as any restructuring now of the claimant’s financial obligations could not affect the position as it had existed in the past and especially at the date of the decision maker’s determination which had been brought under appeal 
(15 March 2007) and at the date of the original decision maker’s decision (27 November 2002).  Thirdly, the claimant wished the case adjourned in order for him to obtain more information from a senior welfare rights officer from Leicestershire County Council (unnamed) who had advised him, he said, on his argument that the underlying objective of income support law, that of tackling poverty, prevailed over the specifics of the Income Support (General) Regulations 1987 in regard to the treatment of loans for the purposes of income support.  I rejected that argument for the following reasons.  The claimant had already declined my earlier offer of an adjournment to obtain fresh representation.  See paragraph 5 above.  He had had ample opportunity to prepare and present whatever legal arguments seemed to him relevant to his appeal.  Finally, even if the above argument which he sought assistance to present was correct (and I have in any event rejected it in paragraphs 13 - 14 below), it would not avail, as Mr Bartos astutely submitted, against the fundamental challenge to the tribunal’s decision on the ground of lack of jurisdiction, discussed in paragraphs 9 – 10 below.  To summarise, none of the grounds for an adjournment advanced by the claimant prevailed against the strong considerations of further delay and expense which argued to the contrary and favoured a determination of the appeal on the basis of the written submissions already on file and the discussion at the oral hearing.

The tribunal’s lack of jurisdiction
9.	The admittedly technical argument that the tribunal lacked jurisdiction to determine the appeal by the claimant was advanced for the first time in these proceedings in the written submissions made on behalf of the Secretary of State to the Commissioner.  It appears in paragraphs 4 – 8 of documents 67 – 68.  It was not spotted by the decision maker who carried out a reconsideration of the determination of 15 March 2007 on 9 May 2007.  See document 10.  Nor was it picked up in the written submissions made by the Secretary of State to the tribunal, documents 1A – 3.  Not surprisingly, in those circumstances, it was not noticed by the tribunal.  Near the commencement of the oral hearing, Mr Bartos specifically adhered to the above paragraphs.  He later developed their contents orally in a painstaking and persuasive manner.  

10.	I found these written and oral submissions compelling.  I accept them.  The issue of the inclusion of the interest on the loan of 2 February 2001 in the claimant’s income support entitlement was, as narrated in paragraph 3 above, specifically dealt with in the decision maker’s decision of 27 November 2002.  That decision was clearly one taken under section 8(1)(a) of the Social Security Act 1998.  By virtue of section 17(1) of that Act, it is a “final” decision.  That means that it can only be altered by processes prescribed by that Act.  There are three such processes – revision, supersession and appeal.  As explained in paragraph 3 above, the claimant did not appeal against the decision of 27 November 2002.  Further, his letter of 3 February 2007 (document 25) cannot be considered to be a request for a supersession of that decision, under section 10 of the above Act and regulation 6 of the Decisions and Appeals Regulations 1999.  That is because none of the grounds of supersession laid out in that regulation are mentioned in any way, however informally in that letter.  Nor do any of those grounds actually exist.  In particular, as Mr Bartos correctly pointed out, all of the circumstances relating to the loan of 2 February 2001 were known and known correctly by the decision maker who took the decision of 27 November 2002.  Nor had any of those circumstances changed between that date and 3 February 2007 when the claimant wrote to the department.  It has not ever been asserted that any such change took place.  Thus, if the claimant’s letter of 3 February 2007 is to have any effect on the decision of 27 November 2002 at all, it has to be construed as being a request for a revision of that decision under section 9 of the above Act and regulation 3 of the above Regulations.  The departmental response to the claimant’s letter of 3 February 2007 is found in their letter of 
15 March 2007, reproduced as document 32.  That response falls, in turn, therefore, to be analysed, in terms of the statutory adjudication process, as a refusal to revise the decision maker’s decision of 27 November 2002.  That is so even although document 32 uses the more informal phrase “to reconsider that decision”.  I consider that that phrase is, for all practical purposes, a synonym for the statutory expression “to revise” that decision.  Correctly, the decision maker, on document 32, points out that the absolute time limit of 13 months for a revision of an earlier decision maker’s decision, laid down by regulation 4(3)(b) of the above Regulations applied so as to render revision of the decision maker’s decision of 27 November 2002 legally impossible.  That point further strengthens the view that document 32 has to be construed as a refusal to revise.  The character of the decision maker’s determination on document 32, as now decided by me means that the tribunal lacked jurisdiction over the appeal against it.  Indeed, strictly, it should be described as a purported appeal.  That lack of jurisdiction arises because an appeal only lawfully lies to an appeal tribunal under section 12 of the above Act against a decision taken by the Secretary of State either under section 8 of that Act (an original decision) or section 10 of that Act (a supersession decision).  A refusal to revise is not a decision taken under either of those provisions.  Such a refusal is thus not lawfully appealable to an appeal tribunal.  I entirely agree with and endorse the statement to that effect made in the commentary on page 556 of Volume III:  Administration, Adjudication and the European dimension of the Social Security Legislation 2007.  The tribunal thus erred in law by, however understandably, failing to carry out the analysis laid out in this paragraph and then going on to hold that they lacked jurisdiction.  Their decision falls to be set aside.  I have replaced it by my own decision which is the decision the tribunal should have given.  

Coverage of the interest on the claimant’s loan from the Alliance and Leicester plc of 
2 February 2001 in income support entitlement
11.	My decision on the jurisdictional issue is sufficient to decide the appeal.  However it is appropriate, given the detailed discussion in the written submissions and at the oral hearing to deal also with the merits.  I hold that the tribunal’s decision on the substance of the case were correct and revealed no error of law.  Essentially they held that the interest on the loan of 2 February 2001 did not fall to be included in the claimant’s applicable amount because it was not taken out to purchase property to be used as his home.  See especially the final paragraph of document 42, the tribunal’s statement of reasons.  

12.	The claimant does not at all dispute that the original purpose of his loan from the Alliance and Leicester plc of 2 February 2001 was to buy property in Estonia while his home remained in England.  However, he emphasises that, in his view, the purpose of that loan changed because of the divorce proceedings, described in paragraph 2 above, so as to become, for all practical purposes, a new loan which he describes eg. on page 59 as “the loan forced by a court order”.  He does not dispute that the loan taken out on 2 February 2001 has never been redeemed nor that no fresh loan has ever been arranged or taken out.  Rather, he submits that the change of use of the monies lent to him by the loan of 2 February 2001 changed the character of that loan so as to permit the interest charged under it to be included in his “applicable amount” for the purposes of income support entitlement.  

13.	The necessary foundation for the decision taken by the tribunal on the merits of the case is that the only loans on which interest can be met by income support are those that are “housing costs” as defined and specified by legislation and no others.  That foundation is entirely sound.  The Secretary of State has no lawful authority to meet the costs of interest on any loans as part of a claimant’s income support apart from those where he has been granted specific power to do so by Parliament.  Mr Bartos, in his oral submissions, clearly demonstrated this by taking me through a careful analysis of the relevant primary and secondary legislation.  His starting point was section 124(4) of the Social Security Contributions and Benefits Act 1992 where the legal concept of “the applicable amount” as the basis of the calculation of income support as an “income – related benefit” is established.  Section 135 of that Act, in turn, goes on permit the prescription by regulations of the detailed calculation of the “applicable amount” for income support claimants.  The regulations where that prescription has been laid down are the Income Support (General) Regulations 1987, as amended.  I pause to mention at this point that those regulations are not merely “a decision maker’s check list” as the claimant described them in the course of the oral hearing but rather part of the law of the land as being subordinate legislation made under the authority of an act of Parliament.  In particular, regulation 17(1)(e) of the above Regulations defines a claimant’s “applicable amount” as including, among other elements, “any amounts determined in accordance with schedule 3 (housing costs) which may be applicable to him in respect of mortgage interest payments”.  Thus, the interest on the claimant’s loan taken out on 
2 February 2001 can only be included in his applicable amount and thus be met from public funds as part of his entitlement to income support if and only if it is covered by schedule 3 to the above Regulations.  In paragraph 15 below, I deal with that matter in detail.  

14.	It is the consequence of my explanation of the law narrated in paragraph 13 above that such general concepts as “welfare law”, “tackling poverty” and “the relief of poverty” are an insufficient foundation for the claimant’s contention that the interest on his loan of 2 February 2001, if analysed as one forced upon him by a court order, can be met either as a matter of strict entitlement or on the basis of discretion by his income support.  Specific and detailed statutory provision would be required to achieve that result.  Such provisions do not exist.  The only provisions which permit the meeting of interest on loans for income support purposes are those laid out in paragraph 13 above.  These are the provisions which Parliament has chosen to enact, no doubt in pursuit of the legislative purposes alluded to above.  What however counts is the text of the precise statutory provisions and not those policy objectives.  The claimant’s loan in question does not come within the statutory provisions referred to in detail in paragraph 13 above if it is analysed, as the claimant does, as one forced by a court order.  In any event, in my view, it is not actually such a loan and I consider in paragraph 15 below whether on its correct classification interest upon it can be met under schedule 3.  Finally, in this connection, a Commissioner has no general equitable jurisdiction to do justice as he sees fit, as was submitted by the claimant at one point during the oral hearing.  My jurisdiction is restricted to questions of law arising from tribunal decisions.  In exercising it I am as much bound as decision makers and appeal tribunals by the precise text of applicable primary and secondary legislation ie. Acts of Parliament and Regulations made under powers conferred by such Acts.

15.	  Turning then to schedule 3 of the Income Support (General) Regulations 1987 which prescribe, for the reasons laid out in detail in paragraph 13 above, the circumstances in which interest on loans can be paid, I hold that the loan the claimant took out on 2 February 2001 was not “taken out to defray monies for … acquiring an interest in the dwelling occupied as the home” for the purposes of paragraph 15(1)(a) of that schedule.  That is the statutory provision which was actually relied on by the tribunal and which they should specifically have cited rather than making, as they did, a loose and general reference to regulation 17 of the above Regulations.  That however is not an error of law of sufficient materiality to vitiate their decision.  Without a doubt, the above provision could not apply in this case.  The claimant has never disputed that he retained his home in Nottinghamshire when he took out the loan to purchase the flat in Estonia.  The provision I have just cited makes it clear by plain language that the key point for testing the nature of a loan is when it was taken out.  That point also excludes the claimant’s main argument that the purpose of this loan changed as a result of the divorce proceedings.  I thus hold specifically that the loan in question could not be met under paragraph 15(1)(a) of schedule 3 to the above Regulations, just cited.  Nor could it be covered by paragraph 15(1)(b) which relates to loans to pay off other loans used to purchase property to be occupied as a home.  Paragraph 16 of the above schedule also does not avail the claimant as that provision relates to loans for repairs and improvements to a home.  Thus the loan at issue in these proceedings is not covered by any provision whatever in schedule 3.  In consequence, as I have demonstrated in paragraphs 13 and 14 above, interest payable on it cannot be met in the claimant’s “applicable amount”.  This applies however that loan is classified whether, correctly, as a loan taken out to purchase property which was not to be occupied as the claimant’s home or, as the claimant wishes it to be classified, as a loan forced upon him by a court order.

Conclusion
16.	The tribunal’s decision is set aside as erroneous in law for the reasons narrated in detail in paragraphs 10 and 11 above.  That conclusion in no way assists the claimant and my substituted decision does not give him a favourable result.  It is however the result which is demanded by the applicable legislation which it is my responsibility to apply.  

						(signed)
						A J Gamble
						Commissioner
						Date: 29 September 2008