Upper Tribunal (Administrative Appeals Chamber)

IN THE UPPER TRIBUNAL Case No.  CDLA/4880/2014

ADMINISTRATIVE APPEALS CHAMBER

 

Before Judge Mark

 

Decision:  The appeal is allowed.  I set aside the decision of the tribunal and the decisions under appeal and substitute my own decision superseding the decision of 12 January 2000 awarding benefit with effect from 17 May 2012.  I further find that there is a recoverable overpayment in respect of sums paid because of the claimant’s failure to disclose that his condition had improved significantly so that he was no longer entitled to any award of disability living allowance.  That disclosure should have been made by 17 May 2012 and the period of recoverable overpayment is from that date until 23 June 2013.  The amount of that overpayment, there being no dispute as to the payments made as set out at p.222 of the file, is £4267.80, being 47 payments of £74.60 and 10 payments of £76.25.

 

 

REASONS FOR DECISION

 

1.    This is an appeal by the claimant with the permission of an Upper Tribunal Judge from a decision of the First-tier Tribunal dated 24 April 2014 allowing the claimant’s appeal from decisions dated 31 August and 4 September 2013.  The claimant had been entitled to the higher rate of the mobility component of disability living allowance (DLA) from 10 April 2000 because he had been found to be virtually unable to walk.  He had also been entitled to the lowest rate of the care component from the same date because he could not prepare a cooked main meal for himself.  Those benefits had been awarded by a decision dated 12 January 2000 following a renewal claim by the claimant, who must therefore have had an earlier award ending on 9 April 2000.

 

2.    The tribunal allowed the appeal and found that there had been an overpayment of benefit for the period from 10 May 2012 until 31 August 2013 and that the overpayment in that ;period was recoverable from the claimant. The claimant contends that the period of the recoverable overpayment should have been shorter and that there were no findings of fact which justified a finding that his condition had improved before about July 2012 and no explanation for the cut off date of 31 August 2012, some months after the DWP had carried out the investigation, interviewed him and stopped his benefit.

 

3.    The representative of the Secretary of State agrees that there were errors of law in the decision but contends that it was an abuse of process for the claimant to protest that he had not failed to disclose a change of circumstances in 2006 or to assert that there had been no improvement in his condition because he had been convicted of an offence in the North Avon Magistrates Court of failing to disclose such a change of circumstances and that it would be a collateral attack on his conviction and would bring the justice system into disrepute to allow him, in effect, to challenge that conviction other than by way of appeal from it.

 

 

The criminal prosecution, the conviction and the written evidence before the tribunal

 

4.    Following a fraud investigation by the DWP, a decision was made on 31 August 2013 superseding the decision of 12 January 2000 and determining that the claimant was not entitled to either award from and including 23 March 2006.  The decision was made following covert surveillance of the claimant in 2013 which revealed that by that date at least his disability was not nearly as severe as he had claimed in 1999/2000.  After obtaining other evidence including witness statements, and after interviewing the claimant, it was concluded by the decision maker that his condition had improved by 23 March 2006 to an extent that he was no longer entitled to benefit.  That date appears to have been chosen because it was the date on which the claimant had contacted the DLA unit to state that he was thinking of doing voluntary work for 6-8 hours at a country park, sitting down and watching people on go-karts and that he wanted to know if this would affect his benefit.  He had then been sent a review form, which had led to his writing to the DLA unit on 8 May 2006 stating that his condition had not changed.

 

5.    Following the supersession decision, a decision was made on 4 September 2013 that as a result of the supersession decision the claimant had been overpaid DLA from 29 March 2006 to 18 June 2013 totalling £25316.75 and that this sum was recoverable from him.  This was said to be because on 23 March 2006 the claimant had failed to disclose that his capabilities had improved.

 

6.    The claimant appealed.  His grounds of appeal were that his condition had not changed until about July 2012 when he had been prescribed morphine by his doctor and had also started taking cannabis.  They had led to his condition improving and he stated that he was “guilty of not notifying the dwp of a change in my pain from july 2012 until april 2013”, but that he had stopped self-medicating in April 2013.  His appeal had initially been listed to be heard on 27 November 2013.  The time allotted was too short and the hearing was postponed. 

 

7.    It would appear that at some stage a prosecution had been brought against the claimant in the Magistrates Court.  The only evidence of this prosecution is in a letter dated 14 March 2014 from the solicitors who had acted for the claimant at the hearing and two documents from the North Avon Magistrates Court relating to the outcome of the proceedings.

 

8.    The letter from the solicitors is dated 14 March 2014 and is written to the claimant to confirm the outcome of the hearing, which had been on 11 March 2014.  That letter states as follows:

 

“We engaged in some negotiation with the prosecution team before the trial. I could not persuade them to accept a guilty plea to a failure to notify a change of circumstances running from in round terms your birthday in July 2012 through to when the benefits stopped.  I put this forward on the basis that it was a simple failure to notify, not a dishonest one

 

While the DWp representative and the prosecuting agent would have been happy with this solution the lawyer with conduct of the case in Cardiff insisted that there should be a trial.

 

Accordingly after trial you were found not guilty of the offence of the specific failure to declare a change in circumstances in 2006.  {Mr. J] who gave evidence as to the work you undertook at the country park could say nothing to your detriment.

 

As we had predicted the surveillance evidence [I note that this dated from 2013] was particularly unhelpful, added to which was the candid admission that you had to make that your health had improved significantly from around your birthday in 2012.

 

Accordingly the Magistrates found you guilty of the other charge against you as a dishonest failure to notify a change in circumstances.  They would not accept my argument that a failure to notify does not have to be a dishonest one.”

 

9.    The two documents from the Magistrates Court are (1) a notice of fine and collection order and (2) a community order.  The first documents describes the offence as “1/ Dishonestly fail to notify change of circumstances affecting entitlement to social security benefit/advantage/payment”.  The second document describes the offence as “Between 29/03/2006 and 18/06/2013 at in [sic] the commission area of avon, dishonestly failed to promptly notify the Department for Work and Pensions in the prescribed manner of a change in circumstances which you knew would affect your entitlement to Disability Living Allowance, namely mobility and care needs had changed.”

 

10. There is no evidence from the Secretary of State as to what was addressed in the evidence before the court or as to the reasons given by the magistrate(s), if any were given, for finding the claimant guilty or indeed for acquitting him, as his solicitor states, without challenge in these proceedings, to have been the case, of the specific failure to declare a change in circumstances in 2006. 

 

The tribunal hearing

 

11. The tribunal hearing took place 6 weeks after the conviction and the DWP was represented by a presenting officer and a fraud officer, with another fraud officer observing.  Despite this, there is no hint in the record of the proceedings or the statement of reasons that any point was taken that the matter had been determined in any way by the conviction or that it was an abuse of process to challenge the conviction, or that the conviction was in any way relevant in relation to events before the admitted improvement in the claimant’s condition in 2012. 

 

12. Nor does it appear to me that this was something the tribunal ought to have considered enquiring into.  The DWP was heavily represented and well able to raise the point if it wished.  So far as could be seen from the very limited evidence, the claimant had been acquitted of a charge of failure to disclose in 2006 and could well have been convicted on the basis that there was a dishonest failure to disclose at some point between the two dates in the charge as set out in the community order, namely the admitted failure to disclose between about July 2012 and April 2013.  Even if the point had been taken by the representatives of the DWP at the tribunal hearing, there was no evidence to show that the conviction related to anything other than the admitted failure to disclose in 2012/13 and therefore no basis for a contention that there was anything inconsistent in the claimant’s contentions with the conviction.

 

Conclusion as to the abuse of process point

13. Regardless of whether, as the Secretary of State has contended, my decision in AM v Secretary of State [2013] UKUT 94, (AAC) failed to give adequate weight to the particular interests that are the basis of the general rule in Hunter v Chief Constable of the West Midlands Police [1982] AC 529, for the reasons given above there is no error of law in this respect on the part of the First-tier Tribunal in this case.

 

14. In deference to the contentions put forward by the representative of the Secretary of State, however, I shall deal briefly with some of the points raised by him in relation to my decision in AM.  He has made particular reference to observations of Lord Browne-Wilkinson in Arthur J S Hall v Simons [2002] 1 AC 615 at p.685B, where he said:

 

“Hunter v. Chief Constable of the West Midlands Police [1982] AC 529 establishes that the court can strike out as an abuse of process the second action in which the plaintiff seeks to re-litigate issues decided against him in earlier proceedings if such re-litigation would be manifestly unfair to the defendant or would bring the administration of justice into disrepute. In view of the more restrictive rules of res judicata and issue estoppel it is not clear to me how far the Hunter case goes where the challenge is to an earlier decision in a civil case. But in my judgment where the later civil action must, in order to succeed, establish that a subsisting conviction is wrong, in the overwhelming majority of cases to permit the action to continue would bring the administration of justice into disrepute. Save in truly exceptional circumstances, the only permissible challenge to a criminal conviction is by way of appeal.”

 

15. I note firstly that in Secretary of State for Trade and Industry v Bairstow [2003] EWCA Civ 321, the question was whether the defendant was unfit to be concerned in the management of a company.  The Secretary of State sought to rely on findings adverse to the defendant in earlier proceedings brought against him by the company of which he had been a director, findings which had been upheld by the Court of Appeal.  After reviewing the case law, Sir Andrew Morritt V-C, giving the only judgment, concluded that the facts and findings in the earlier proceedings were not admissible as evidence of the facts found in the case before the court.  He then turned to the question whether the defence was a collateral challenge to an earlier decision of a court and as such an abuse of process.  After reviewing the authorities, including Hunter v Chief Constable of the West Midlands Police and Arthur J S Hall v Simons, the Vice-Chancellor stated at paragraph 38 of his judgment:

 

“In my view these cases establish the following propositions:

a) A collateral attack on an earlier decision of a court of competent jurisdiction may be but is not necessarily an abuse of the process of the court.

b) If the earlier decision is that of a court exercising a criminal jurisdiction then, because of the terms of ss. 11 to 13 Civil Evidence Act 1968, the conviction will be conclusive in the case of later defamation proceedings but will constitute prima facie evidence only in the case of other civil proceedings. (It is not necessary for us to express any view as to whether the evidence to displace such presumption must satisfy the test formulated by Earl Cairns in Phosphate Sewage Co.Ltd v Molleson, cf the cases referred to in paragraphs 32, 33 and 35 above.)

c) If the earlier decision is that of a court exercising a civil jurisdiction then it is binding on the parties to that action and their privies in any later civil proceedings.

d) If the parties to the later civil proceedings were not parties to or privies of those who were parties to the earlier proceedings then it will only be an abuse of the process of the court to challenge the factual findings and conclusions of the judge or jury in the earlier action if (i) it would be manifestly unfair to a party to the later proceedings that the same issues should be relitigated or (ii) to permit such relitigation would bring the administration of justice into disrepute.”

 

 

16. I interpose that the reference to ss.11 to 13 in paragraph 38b does not apply to tribunals where the strict rules of evidence do not apply (see s.18 of the Civil Evidence Act 1968 and paragraph 14 of AM)

 

17. The observations of Lord-Browne Wilkinson were not adopted by any other of their Lordships and in my view the starting point needs to be the propositions set out by the Vice-Chancellor in Bairstow cited above.

 

18. Further, the position in this case, and other overpayment cases, is that the claimant is in effect the defendant to a claim by the Secretary of State for payment of a substantial sum.  In this respect he seems to me to be closer to the position of the defendants in Bairstow and in Simms v Conlon [2006 EWCA Civ 1749.  In the latter case, a solicitor had been held by the Solicitors Disciplinary Tribunal (SDT) in contested proceedings to have acted dishonestly aand had been ordered to be struck off the role of solicitors.  That decision followed a 14 days hearing at which the solicitor himself had given evidence and had been upheld by the Divisional Court which agreed with the SDT that the claimant had been dishonest.  Shortly after the SDT gave its decision, his former partners had commenced proceedings against him for fraud, relying on the findings of the SDT.  In his defence the solicitor denied the allegations of dishonesty.  The trial judge, who heard the case after the decision of the Divisional Court, had held that this was an abuse of process and that the solicitor was bound by the findings of the SDT.

 

19. On appeal, the Court of Appeal reversed the trial judge.  The leading judgment was given by Jonathan Parker LJ.  At paragraphs 132-134 he agreed with and followed  Bairstow, in holding that Hollington v Hewthorn was still good law and that the factual findings and conclusions of the Divisional Court in the earlier proceedings were not evidence of the facts found in the case which the Court of Appeal was considering.

 

20. He went on to consider the question of abuse of process in the following terms:

 

139. As I have already pointed out, we are bound by the decision of this court in Bairstow – a decision which, in so far as it relates to abuse of process, was in turn based upon the decision of the House of Lords in Hunter. Accordingly, the starting-point on this aspect of the case must be Sir Andrew Morritt V-C's proposition (d) in paragraph 38 of his judgment in Bairstow. I quote that proposition again, in full:

"If the parties to the later civil proceedings were not parties to or privies of those who were parties to the earlier proceedings then it will only be an abuse of the process of the court to challenge the factual findings and conclusions of the judge or jury in the earlier action if (i) it would be manifestly unfair to a party to the later proceedings that the same issues should be relitigated or (ii) to permit such relitigation would bring the administration of justice into disrepute."

140. Sir Andrew Morritt V-C's formulation of that proposition plainly derives from Lord Diplock's general description of abuse of the process of the court (see Hunter p.536C-D) as:

"… misuse of its procedure in a way which, although not inconsistent with the literal interpretation of its procedural rules, would nevertheless be manifestly unfair to a party to the litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people."

141. However, as Lord Diplock also said in Hunter (at p.6536C), the circumstances in which abuse of process can arise are very varied – indeed, he described the facts of Hunter as unique. So in the nature of things there can be no catch-all formula for identifying an abuse of process, since each case will depend on its own facts.

142. In Hunter, for example, it was the plantiffs who were abusing the process of the court. Hence Lord Diplock's reference to "the intending plaintiff" in the passage from his speech in Hunter quoted in paragraph 138 above. Lord Diplock had no difficulty in finding (at ibid. p.541F-G) that the plaintiffs' "dominant purpose" in bringing the actions was not to recover damages, but that the actions had been brought:

"… in an endeavour to establish, long after the event when memories and witnesses other than [the claimants] themselves may be difficult to trace, that the confessions on the evidence of which they were convicted were induced by police violence, with a view to putting pressure on the Home Secretary to release them from the life sentences that they are otherwise likely to serve for many years to come".

143. In Bairstow, on the other hand, the party said to be abusing the process of the court was the defendant in disqualification proceedings, but he had been the unsuccessful claimant in the previous action in which the relevant findings had been made.

144. It is also to be noted in this connection that in the Reichel litigation (Reichel v. Bishop of Oxford (1889) 14 App Cas 259 and Reichel v. Magrath (1889) 14 App Cas 665 – the two appeals being heard by the House of Lords on the same day), which was cited by Lord Diplock in Hunter (at p.542A-D) and by Sir Andrew Morritt V-C in Bairstow (at paragraph 28) as an example of a collateral attack on an earlier decision, the defendant in the second action had been the claimant in the first.

145. In the instant case, by contrast with the Reichel litigation, with Hunter and with Bairstow, Mr Simms is the defendant in the present action, and he was also the defendant before the SDT (albeit he was the appellant before the Divisional Court).

146. In such circumstances I consider that there is force in Mr Simms' submission that in denying the allegations of dishonesty made against him in the present action he is doing no more than continuing to protest his innocence of the charges brought against him by the Law Society, albeit he is doing so in the face of the adverse findings of the SDT and the Divisional Court: to use his own words, he has initiated nothing. At the very least, as it seems to me, that is a factor which should be brought into account in considering whether the Bairstow conditions are satisfied, on the basis that in general the court should be slower in preventing a party from continuing to deny serious charges of which another court has previously found him guilty than in preventing such a party from initiating proceedings for the purpose of relitigating the question whether he is guilty of those charges.

147. It should also be borne mind, when determining whether a party (be he claimant or defendant) is abusing the process of the court by mounting a collateral attack on a previous court decision, that the practical effect of finding him guilty of such an abuse is to prevent him denying the allegations against him save in circumstances where he is in a position to adduce additional evidence which could not with reasonable diligence have been adduced in the earlier proceedings and which, if admitted, would have "changed the whole aspect of the case" (see Phosphate Sewage Co Ltd v. Molleson (1879) 4 App Cas 801, 814 per Earl Cairns LC and Hunter at p.545B-F per Lord Diplock). To that extent the party guilty of abuse of process will, as I see it, be placed in a worse position in regard to the adducing of evidence than he would have been in had the previous decision been admissible as prima facie evidence (for it would be no more than that) of the facts found.

148. With those introductory observations, I turn to the question whether the Bairstow conditions are satisfied in the instant case.

149. As to the first of those conditions (unfairness to Mr Conlon and Mr Harris if the issues as to Mr Simms' dishonesty had to be relitigated), I consider that that condition is not satisfied in the instant case. As claimants in the action, Mr Conlon and Mr Harris have to establish, essentially, that had they known that Mr Simms had acted dishonestly in the course of his practice as a solicitor when they entered into the relevant agreements with him they would not have entered into those agreements; and that in consequence they have suffered financial loss. I can see no good reason why, in attempting to do so, they could not have pleaded and proved specific examples of Mr Simms' dishonest conduct, rather than seeking to import the entirety of the SDT's findings into their pleading as, in effect, determinative of the issue of dishonesty. Indeed, it may well be that a single example of Mr Simms' dishonesty, if serious enough, would (if proved) be sufficient to support their claim. As it was, Mr Engelman was allowed to cross-examine Mr Simms on selected aspects of the comprehensive findings of the SDT in the absence of any pleading or other form of advance notice of the particular matters to be relied on; and the judge proceeded to make findings of fact on such matters adverse to Mr Simms.

150. By contrast, Mr Simms, as defendant in the action, is doing no more than denying the allegations of dishonesty. I find it hard to see that how, simply by so doing, he is "initiating" anything, in any relevant sense; or, for that matter, how he can be said to be thereby "changing the form of the proceedings" (see Reichel v. Magrath at p.668 per Lord Halsbury, quoted by Lord Diplock in Hunter at p.542C-D). Were the issues before the SDT and the issues in the present action identical, the position might be different, but they are not. The basic issue before the SDT was whether Mr Simms' dishonest conduct, taken as a whole, justified his being struck off. The basic issue in the present action is whether Mr Conlon and Mr Harris were deceived by Mr Simms into entering into agreements with him.

151. In my judgment, however, the critical factor in the context of the first of the Bairstow conditions is that Mr Conlon and Mr Harris could, without (so far as I can see) any real difficulty, have selected particular matters from the SDT findings and pleaded and proved them: it was not necessary for them, in order to make good their claim, to seek to import the entirety of those findings. In my judgment the selectivity so skilfully employed by Mr Engelman in his cross-examination of Mr Simms could and should have been reflected in the Amended Particulars of Claim.

152. As to the second Bairstow condition (to permit such relitigation would bring the administration of justice into disrepute) I consider that that condition also is not satisfied in the instant case, for essentially the same reasons. In my judgment right-thinking people (to use Lord Diplock's expression in Hunter) would consider it unfair to Mr Simms that, faced with a pleading which sought to import the SDT findings en bloc, he should be prevented from requiring Mr Conlon and Mr Harris to prove their case.

153. Accordingly, I respectfully disagree with the judge's conclusion (in paragraphs 239 and 240 of his judgment) that in seeking to deny the findings of the SDT in the present action Mr Simms is abusing the process of the court. In my judgment a case of abuse of process is not made out.

 

21. Agreeing with Jonathan Parker LJ, Moore-Bick LJ stated at paragraph 174:

 

As Jonathan Parker L.J. has pointed out, this is not a case in which Mr. Simms invoked the process of the court in order to challenge the findings made by the Solicitors' Disciplinary Tribunal. As the defendant to the proceedings he simply put in issue the claimants' allegations and thereby required them to prove their case by any admissible evidence available to them. That there may be circumstances in which it is an abuse of the process for a party to seek to put in issue by his defence a matter determined against him in previous proceedings is demonstrated by cases such as Reichel v Magrath (1889) 14 App. Cas. 665 and North West Water Ltd v Binnie & Partners, but the facts of those cases were unusual and not at all comparable to those of the present case. In these circumstances I am unable to accept that it would be unfair to require Mr. Conlon and Mr. Harris to prove their case in the usual way or that to do so would bring the administration if justice into disrepute. It follows that I am unable to accept that the course taken by Mr. Simms was an abuse of process.

 

22. In my judgment, these authorities, and those to which I referred in my decision in AM, support the view that it is generally necessary to examine closely the facts and circumstances relating to a criminal conviction for benefit fraud in order to determine whether and to what extent it would be an abuse of process to adduce evidence or arguments which were or might have been adduced in the criminal proceedings.  That requires evidence of a kind which, as I have indicated, was not before the tribunal in the present case, other than the minimal evidence to which I have referred and which indicated that there was no abuse for the reasons given.

 

The remaining issues

 

23. The remaining issues are that there are no findings which explain either the tribunal’s selection of a start date for the non-disclosure, and resulting loss, of 10 May 2012 or an end date of 31 August 2013.  While the tribunal gave no reasons for the start date of 10 May 2012, the claimant’s own evidence was that his improvement dated from when he started using morphine.  The medical records at p.181 of the file show that he was first prescribed buprenorphine in May 2012 and that he was having some good times afterwards as reported by him on 29 May 2012.  It appears to me that the tribunal correctly identified, this time as when the improvement began and must have been able to read the first date as 10 May 2012. 

 

24. It appears to me that the tribunal erred in selecting this date, when the prescription was first issued, as the date by which the improvement should be reported.  It appears to me that the claimant was entitled to wait a few days to ensure that there was a continuing improvement and that the tribunal ought therefore to have selected a date of 17 May 2012 as the date by which the improvement should have been reported.

 

25. There is no basis for an end date of 31 August 2013.  The overpayment decision under appeal was only in relation to payments made up to 18 June 2013, when I assume payment was suspended.  I note from page 165 of the file that bupronorphene was last prescribed on 17 April 2013.  As I read that page a four weeks supply was issued at that time.  Assuming that this was not a last minute supply, that would take the pain relief to late May.  If the claimant had ceased to be entitled to DLA in the period up to when payment ceased because he would have required a new three months qualification period.  Accordingly, although the end date of the overpayment requires to be changed, he would not have been entitled to DLA in the qualifying period when he came of the butrenorphine.  I therefore find that the overpayment was from 17 May 2012 until 23 June 2013.

 

 

 

(signed)

 

Michael Mark

Judge of the Upper Tribunal

1 May 2015