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[2007] UKSSCSC CIS_1462_2006 (11 January 2007)

CIS 1462 2006

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1. I grant the applicant permission to appeal and, with the consent of both parties, consider the appeal. I allow the appeal.
2. The claimant and appellant is appealing with my permission against the decision of the Eastbourne appeal tribunal on 8 12 2005 under reference U 45 171 2005 00788.
3. For the reasons below, the decision of the tribunal is wrong in law. It is set aside. I refer the appeal to a new tribunal to consider in accordance with the directions in this decision.
4. I held an oral hearing of this appeal in London on 31 October 2006. The appellant, who did not attend, was represented by Tope Adeyemi of the Free Representation Unit. The Secretary of State for Work and Pensions was represented by Roger Lutteodt of the Office of the Solicitor to the Department for Work and Pensions. I am grateful to Ms Adeyemi for her assistance generally in this case and to both for their help at the oral hearing.
5. DIRECTIONS FOR REHEARING

A The rehearing will be at an oral hearing.

B The new tribunal should not involve any member who has previously been a member of a tribunal involved in this appeal. (Social Security Act 1998, section 14(9)).

C The appellant and representative are reminded that the tribunal can only deal with the appeal as at the date of the original decisions under appeal.

D The Secretary of State is directed to produce to the new tribunal all the evidence held by the Secretary of State in connection with these decisions. This is to include the full transcripts of all interviews with the appellant and with her husband. If the appellant and those representing her ask for the production of the tapes of those interviews then those are also to be produced to the tribunal and made available to the appellant and representatives. The tribunal should also be provided with full copies of the relevant income support claim forms on which the Secretary of State relies. The transcripts and all other documentary evidence are to be produced to the tribunal within one month of issue of this decision. The tribunal is to copy all the documents to the appellant and representative upon receipt.

E The Secretary of State is also directed to provide the tribunal with a new submission or revised submission dealing with all the evidence. This is to correct the error in the existing evidence that suggests that the appellant herself had sole control over the funds to take account of the fact that all relevant accounts were joint accounts. It is also to take into account the terms of the enduring power of attorney now produced in favour of the appellant's husband. That submission is to be made within the same time limit as that in paragraph D.

F The Secretary of State is directed to be represented at the hearing, and is reminded that the burden of proof rests on him.

G If the appellant has any further submission or documentary evidence to be presented to the tribunal, it is to be sent to the tribunal within one month of the receipt of the full evidence from the Secretary of State. If the appellant wishes the tribunal to receive evidence from any witness, including the appellant's husband, or to receive any written statement from any witness, then the details of any witness to attend the oral hearing, and the statement of any other witness, are to be submitted to the tribunal at the same time as the further submission or documentary evidence.

H This appeal is not to be listed for hearing until the appellant and representative have had not less than the time directed in paragraph G to consider all evidence submitted by the Secretary of State.

These directions are subject to any later direction by a district chairman.

REASONS FOR THE DECISION

6. I gave an oral decision granting permission to appeal at the oral hearing. I did so after hearing the parties because I considered that, in the light of all the documentation put before me at the hearing, the grounds of appeal that the tribunal had not looked adequately at the question of ownership of the capital in question in the appeal were arguable. I confirm that decision. Both parties consented to me also considering the appeal. I discussed that with them on the basis that if I allowed the appeal I would direct that a tribunal retake the decision under appeal and that I would not decide it myself.

The facts

7. The appellant ("Mrs R") claimed, and was awarded, income support for herself, her husband ("Mr R") and their disabled son from 12 07 2000. Before that date, Mr R was the claimant. He had been unable to work. He also received incapacity benefit. But he was found capable of work on 04 04 2000.
8. On 26 10 2004 the local social security office was alerted to the fact that Mrs R had various building society accounts held in her name of which it was not aware. This information came to light through a routine check using the Generalised Matching Service against the details of Mrs R and Mr R.
9. The office identified a number of accounts held by Mrs R and Mr R. As a result, her income support was ended and she was asked to pay back the income support received. She appealed. The original decisions under appeal are that (a) Mrs R was overpaid income support from 12 07 2000 to 15 02 2005 totalling, after offsets, £27,425.55, (b) there was a misrepresentation on 11 07 2000 as a result of which capital for which there was a tariff income was not taken into account, (c) on 09 08 2000 there was a failure to disclose capital in excess of £8,000 and as a result (d) the overpayment was recoverable from Mrs R.
10. The appeal papers sent to the tribunal incorporate two bundles of papers. The first included copies of various details of the building society accounts and detailed calculations of the income support entitlement of the appellant in the light of that information. The second included medical evidence about Mrs R and her family produced by her. She also raised three issues in the papers. The first was that she and Mr R had been claiming incapacity benefit not income support until the local office advised them to change. The second is that their son was and is seriously disabled and her husband has also been seriously unwell. She was also unwell and receiving incapacity benefit. The third issue was that the money had come from her mother for the benefit of their disabled son.
11. The appeal was listed for consideration at a paper hearing. Neither party asked for an oral hearing. The chairman before whom the appeal was listed adjourned it for an oral hearing because of the very large sums involved. Mrs R responded by sending in considerably more information about the family's medical condition. She also copied warnings that court proceedings had been started against her for outstanding council tax of about £5,800.
12. The matter came back to another tribunal and Mrs R attended with her husband. The record of proceedings suggests that only Mrs R spoke at the hearing. There was no one representing the Secretary of State at the hearing, despite the large amount of public money involved and the complex yet also incomplete nature of the paperwork put before the tribunal as the official submission from the Secretary of State. I comment below on the absence of a representative of the Secretary of State.

The decision under appeal

13. The tribunal dismissed the appeal. It found both a misrepresentation and a failure to disclose. It summarised its decision on the decision notice in the following terms:

"Three times the appellant completed income support forms and not once did she indicate that she had other bank accounts in her name. Legally the accounts being in her name meant that she and she alone could access the money. There was no additional evidence produced regarding the money/accounts."

The chairman also produced a statement of reasons to the same effect. It stated that Mrs R did not dispute the details about the accounts. But Mrs R did assert that the sums were not hers and had come from her mother in law for their son.

14. Mrs R was not represented at the tribunal hearing. Her grounds of appeal were concerned about the way the tribunal, in her view, failed to take account of the disablement and illnesses of the family. On first considering the papers, I formed the view that there were important issues relating to the capital that had not been considered properly either by the Secretary of State or by the tribunal. I asked a legal officer to suggest to Mrs R that this might be a case that would benefit from assistance from someone in the Free Representation Unit. She agreed to that suggestion. I directed an oral hearing of the application. Due to an administrative muddle, the Free Representation Unit were only alerted to this, under the scheme agreed by Commissioners and the Free Representation Unit, at short notice. I am grateful to the Unit for accepting this brief at short notice.
15. Ms Adeyemi put in new grounds of appeal for Mrs R. I accepted those grounds as presented in a skeleton argument before the oral hearing. At the hearing, she pressed two grounds. The first was that the tribunal misapplied the law about beneficial ownership of the capital. The second, linked with this, was that the tribunal failed to make adequate findings of fact about the capital.
16. Mr Lutteodt resisted the application and appeal. However, it became clear during the oral hearing that those instructing him had not provided him with a full set of the papers before me. A submission on the case had been sent to the Office by the Department on 18 October 2006. This relied in part on a transcript of an interview of Mrs R under caution to support its case. It was stated that this had been sent to the Office to be added to the papers. But if it was sent, it did not arrive on the file. It may have been sent under the wrong file number or name. A copy was faxed on 26 October and added to the papers just before the hearing. But I note that the papers suggest that both Mrs R and Mr R were interviewed. A transcript of the interview with Mr R should also have been produced. I have not seen that transcript and therefore do not know what relevant information, if any, was given by Mr R.
17. Of greater importance in my view to the adequacy of the proceedings was the production by Mrs R, again at the last minute, of an enduring power of attorney signed by her mother in law in favour of her (Mrs R's) husband. That power of attorney had been produced to and validated by the Court of Protection some time before. The tribunal had accepted that the mother in law was not mentally able to give evidence, and this is clearly confirmed by the official validation of the power of attorney.
18. In my view, the adequacy of the tribunal proceedings were clearly open to question when three important documents were not before the tribunal, and the tribunal was not even aware of one of them. That is why I granted permission to appeal. As I indicated at the hearing, they were matters on which I accepted that Mr Lutteodt had no instructions and one was also clearly not known to the official instructing him.
19. I indicated at the oral hearing that I was concerned about the challenge faced by a tribunal dealing with this case on the submission made to it and without a presenting officer present. I told Mr Lutteodt to pass back to those instructing him my view that it was not in the public interest that such a large and complicated matter should come before a tribunal without a presenting officer present. The burden of proof rests on the Secretary of State in a case such as this, and not on the appellant.
20. The failure of the Secretary of State to be represented at a tribunal imposes a heavy burden on the tribunal – especially when it has only one member – to ensure fairness in handling a case where the burden of proof is on the Secretary of State and the factual and legal issues are complex. It is always difficult for a tribunal properly to balance the duties on it when it has to act both as judge and as inquisitor in a case where the burden of proof is on someone who is not there. In this case the difficulties facing the tribunal were compounded with the difficulties facing the appellant. She was unrepresented. She was clearly not aware of the procedures in issue, of the relevance of facts she was trying to establish about the health of her family, or of the importance of the points of law behind other issues of fact she was raising. And the submission to the tribunal omitted important aspects of the evidence, although she was not aware of the importance of that.
21. I have looked at the indication given to the tribunal by the Department at the time the appeal went forward for listing in the light of the evidence now available. This indicates that there would be no presenting officer and no official request for an oral hearing. It also indicated that the Departmental officer making the return did not think the case involved any complex issues. Given the exchanges recorded in the transcript of the fraud interview – and the frank acknowledgement of the officer conducting the fraud investigation that he or she did not fully understand one aspect of the case - I cannot see how this case could fairly be described as not involving complex issues. It obviously involves several such issues. These include the benefit history of the family, the health of the mother in law, and the claims that Mrs R could not touch the money.
22. Having now read the transcript and all the other papers in the light of the submissions for the parties, I am of the view that the tribunal decision should be set aside on the grounds of inadequacy. It also made a number of errors of law.
23. I record first that contrary to paragraph 2) of the statement of reasons the appellant did not request the oral hearing. She asked for a paper hearing. That hearing was adjourned by a tribunal chairman for an oral hearing. The tribunal appears to have overlooked that.
24. Of greater significance is the finding of fact at paragraph 3) b) that Mrs R has three accounts in her name. These are then detailed. But the documentary evidence in the submission clearly shows that all three of those accounts were joint accounts held by Mr R as well as Mrs R. And there is no information in the papers about whether Mrs R could make payments into or out of the accounts without the consent of her husband. While it may be assumed that joint accounts may be operated by any of the joint account holders, there is no evidence about this in this case. The tribunal made a finding of fact on this matter without evidence. There was no basis in the evidence for its conclusion on the decision notice that "she and she alone" could perform those tasks. The error of the tribunal may be because of an error in the decision made by the decision maker acting for the Secretary of State to the same effect. That also wrongly stated the "the customer" had accounts when all the accounts that mattered were clearly joint accounts. The error suggests that the tribunal did not look at the documentary evidence before it any more closely than the decision maker acting for the Secretary of State.
25. The tribunal also erred in going ahead with the hearing without first ensuring that it had before it the transcripts of the interviews with both Mrs R and Mr R. The absence of the transcripts meant that important evidence about the beneficial ownership of the accounts was not before the tribunal. By that I refer to the explanation given by Mrs R when challenged. I still do not know what evidence was given by Mr R. And I cannot therefore comment on its relevance. The decision maker acting for the Secretary of State had available, and was relying on, evidence not made available to the tribunal. Inevitably that gives rise to the distinct possibility that this provided the decision maker acting for the Secretary of State with an evidential advantage not available to the appellant. It may be assumed, though again I do not know, that she was not present when her husband was interviewed. In addition to ensuring that the burden of proof is put properly on the Secretary of State in cases such as this, a tribunal also has the duty of ensuring equality of arms between the parties. This is now an inherent part of the fairness that a tribunal must ensure. This tribunal allowed the hearing to go ahead without all the directly relevant evidence available to the Secretary of State, and of which it should have been aware from the papers, being made available to the appellant and being placed before the tribunal, and without anyone present for the Secretary of State to explain the position. That is in my view a failure to ensure equality of arms. The proceedings were in that sense unfair.
26. Had the tribunal been alert to the joint ownership of the various accounts, and had it taken on board the importance of the absence of the transcripts, it might have considered taking evidence from Mr R as well as Mrs R. But the record of proceedings suggests that only Mrs R spoke. I comment on this because of the very belated production of the enduring power of attorney given by Mr R's mother to him. As I now know – but the tribunal did not – Mr R held the enduring power of attorney I have identified above throughout most, if not all, of the period relevant to this appeal. That may put a whole new light on the nature of the accounts set up in part by Mr R. But the tribunal and the decision maker acting for the Secretary of State both appear to have ignored Mr R's involvement in the accounts. Perhaps that explains why so important a document only came to light at such a late stage in this appeal. As I stated at the oral hearing, I find it very difficult to believe that this case was investigated properly by departmental officers, and then considered properly by the tribunal, without it occurring to anyone – not least Mrs R and her husband – that the enduring power of attorney was relevant. This is particularly so as the tribunal made an express finding about the incompetence, in the legal sense, of Mr R's mother. The power was not one that had been filled in and then placed in a drawer and forgotten. It had clearly been approved by the Court of Protection and placed on the public record.
27. Behind these evidential and other problems lies the heart of the appellant's case. It was not her money. She did not have access to it. The money was, she said, put on one side for her disabled son. I do not know much about the son from the papers, because most of the relevant claim forms have not been included in the bundle of papers put before the tribunal.

There may therefore be relevant details in the forms of which the tribunal and I are not aware. But it is clear that the son is severely disabled. For example, in the period starting 20 03 2002 the appellant was receiving income support that included disabled child premium, enhanced disabled child premium, a carer premium, and an offset for invalid care allowance.

28. As the tribunal will have been aware, someone in the position of the appellant and her husband and who was well advised could have moved funds directly from the mother in law into a trust for a severely disabled child such that the capital never became the beneficial property of either Mrs R or Mr R even if they were the trustees for their son. This would be particularly so if the son was too young or otherwise not competent to handle his own affairs. Had the full position been made clear to the local office, then the comments of the Commissioner in R(IS) 15/96 might be relevant. This is that in appropriate cases the exclusions of capital under Schedule 10 of the Income Support (General) Regulations should not only be borne in mind by the decision maker acting for the Secretary of State but also drawn to the attention of a claimant. In my view that should also apply to funds being set aside for a severely disabled dependant such that they do not become capital of a claimant.

It is relevant here because of the second claim, if not the first.

29. It is against that background that the tribunal should have considered if there was a trust here. There are many decisions of Commissioners looking at the question whether a trust exists in particular situations relevant to a benefit. Many follow the issues raised in the case of Barclays Banks v Quistclose Investments Ltd [1970] AC 567. There is a full account of the law at paragraphs 2.344 and following of Volume II of Social Security Legislation 2006, ed Wood et al, Thomson Sweet & Maxwell. Rather than embark on comments about these issues when I do not know the full facts of the situation, I direct the attention of the appellant's advisers, the Secretary of State and the tribunal to the relevance of these principles of law.
30. I am also not clear on these papers – and again I have not seen all the evidence – why the decision directed repayment of benefit to 15 02 2005 when the Secretary of State became aware of the capital on 26 10 2004.
31. Finally, no attention seems to have been given by the tribunal to the schedule of capital in the papers. I am afraid I am unable to understand the principles on which it has been produced. The figures in the various columns do not show whether they are credits or debits or whether they represent current total balances, additions or payments out. What happened for example on 20 12 2003? I cannot see how the figures against that date can explain how the total capital changed on that date from £44, 829.87 on 16 12 2003 to £45,405.87. Nor do I readily see how it is established that either of those figures is a correct summary of the appellant's capital at either of those dates. There is no explanation or indication of what items were included in, and what were excluded from, the schedule. If items are included as receipts but not excluded as matching deductions there is a risk of double counting in the totals column. There may of course be a full explanation. But again I must remind the Secretary of State that the burden of proof is on him. If his evidence does not make sense, then he has failed to discharge the burden of proof. The Secretary of State may therefore wish to re-present this information to the tribunal with a proper explanation of how the schedule is to be read and understood by the tribunal.
32. I must also comment on another aspect of the case. The appellant had produced much evidence about her own ill health and that of other members of her family. That will be relevant to her arguments that money previously belonging to her mother in law had been put in funds for her son because of his disabilities. But it is not otherwise relevant to the case. If she and her husband were misadvised by an officer of the Secretary of State about the benefits they should claim, then they should take that up, as I also indicated at the oral hearing, with the Secretary of State through the appropriate channels for complaints about such advice. Neither the tribunal nor a Commissioner have any power to investigate or make decisions about such issues.

David Williams

Commissioner

11. 01. 2007