CP_1425_2007 [2008] UKSSCSC CP_1425_2007 (13 March 2008)

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[2008] UKSSCSC CP_1425_2007 (13 March 2008)


     
    ToC: DJM, PLH, EAJ Commissioner's File: CP 1425/07 (heard with CP 2862/07 & CSP 503/07)
    SOCIAL SECURITY ACTS 1992-1998
    APPEAL FROM DECISION OF APPEAL TRIBUNAL
    ON A QUESTION OF LAW
    DECISION OF A TRIBUNAL OF SOCIAL SECURITY COMMISSIONERS
    Claim for: Retirement Pension
    Appeal Tribunal: Lancaster
    Tribunal Case Ref: 067/06/00234
    Tribunal date: 16 February 2007
    Reasons issued: 16 March 2007
    [ORAL HEARING]
    Introduction
  1. This appeal by the claimant succeeds in part. The decision of the Lancaster appeal tribunal of 16 February 2007 was erroneous in point of law and we set it aside. We refer the case back to the Secretary of State for the claimant's retirement pension entitlement to be redetermined in accordance with the directions given below. This should result in some increase in the claimant's pension, though not all she seeks.

  2. This appeal arises out of a written application the claimant made to the Secretary of State by letter dated 8 May 2006 asking for her category A retirement pension, then already in payment to her for nearly seven years since it had been duly claimed and awarded from her 65th birthday, to include additional backdated payments for the preceding five years back to when she was 60. The questions are whether any additional or modified award of category A retirement pension ought to have been made to her in consequence of that letter, and if so from what date and at what rate.

  3. We held an oral hearing of the appeal, together with two others raising related issues. Ms E Cox of Linklaters LLP appeared for the claimant and Mr J Heath of the Solicitor's Office, Department for Work and Pensions for the Secretary of State. Our accompanying decision of the same date in case CP 2862/07 deals more fully with certain common points, and to avoid repetition is to be read in conjunction with this one.

    4. Factual history
  4. The claimant is a male to female transsexual, born male on 1 July 1934. For most of her adult life she lived as a man, marrying and remaining married as a man until shortly before attaining the female pension age of 60 on 1 July 1994. According to her own letter of 8 May 2006 (appeal bundle page 1I) she had then been living full-time as a woman since 22 June 1994 and this date appears to have been accepted by the tribunal, though in the submissions on her behalf the date she had begun living full-time in a female role was given as 28 April 1993. On 30 June 1994 the marriage was brought to an end by divorce, and from then at latest the claimant lived at all material times as a woman. On 8 June 1996 the claimant had gender reassignment surgery; and immediately after the Gender Recognition Act 2004 came into force on 4 April 2005, she made a successful application for her change of gender to be formally recognised, under the transitional provision in the Act for persons who had then already been living in their acquired gender for over six years. Her full gender recognition certificate was issued on 4 May 2005 (51).

    5. Claim history
  5. On 4 July 1994 (that is a few days after her divorce and her 60th birthday) the claimant wrote to the National Insurance Contributions Agency (at that date part of the Department of Social Security) referring to a telephone call she had made and saying:

    6. "Please be informed of the following changes in my personal circumstances.
    1. Change of address: [details omitted]
    2. Change of name: Mr [_______] To be known as Ms [_______] wef 1/7/94.
    3. Marital status:- Divorced. (No dependants)
    4. All other details remain the same.
    Yours faithfully"
  6. On 7 September 1994 that office replied by letter confirming that the altered details were noted and enclosing a new national insurance number card, but saying that "this change will have no effect on your future title to Social Security Benefits"; the minimum pension age of 65 for a man remained applicable, which the records showed the claimant would reach on 1 July 1999; and "In addition your change of name etc will have no effect on your liability to pay National Insurance contributions." (132,133: these documents were not put before the tribunal).

  7. The claimant's letter of 4 July 1994 was not expressed or pursued by her as the making of a claim for immediate payment of a retirement pension. It was not in the form required for such a claim and was dealt with by the contributions office simply as the notification it appeared from its terms to be. It has never been accepted by the Secretary of State as having amounted to a claim, and in her own letter of 8 May 2006 the claimant said expressly that she had not made a claim for state pension in 1994.

  8. On or shortly before attaining the male pension age of 65 on 1 July 1999, the claimant duly applied for her category A retirement pension. The claim form submitted and other relevant documents from that time were not before the tribunal or before us, having since been destroyed, but we were told there was no reason to doubt the claim was in similar terms to a later example we were shown, applying for payment of the pension from the earliest possible date. It is not in dispute that category A retirement pension, consisting of both basic and additional (earnings-related) components, was awarded to the claimant on that claim; or that it was calculated and paid on the basis that she was a man whose pensionable age was 65, taking into account her entire contribution and earnings record up to that age, and starting from the earliest possible date on that basis which would have been 5 July 1999, the start of the first benefit week after her 65th birthday. The claimant did not seek to challenge or appeal against the decision in 1999 which determined the amount and starting date of her pension entitlement in that way.

  9. The payment of the claimant's category A retirement pension under that award continued until May 2005, when the Secretary of State was notified of the issue of the gender recognition certificate requiring her now to be treated for all purposes as woman instead of a man. On 15 June 2005 a further decision letter was issued (184: also not before the tribunal) altering the claimant's pension award with effect from 9 May 2005, the start of the first benefit week after the certificate was issued, in the following terms:

    10. "Due to a change in your circumstances your State Pension has been revised.
    Your claim has been looked at again. It has been decided that you are only entitled to a State Pension at £97.79 a week from 9 May 2005. This change has affected your additional State Pension. ... Because you were in an Employer's Pension Scheme, the change in the insurance record also affects the amount we take away from your additional State Pension. ... The decision about your State Pension explained in this letter takes the place of anything else we may have told you about your State Pension. You have been entitled to the amount shown since the date in the first section ..."
  10. The calculation set out in that letter showed that the claimant continued to be entitled to the full basic pension on the basis of a full contribution record as before, but her net earnings-related additional pension under the state scheme as a former contracted-out employee, based on earnings down to 5 April 1997, was cut by a small amount. We were not given further details but were told this was likely, in view of the terms of the letter, to have been because earnings-related contributions and earnings factors previously taken into account for years after the claimant was 60 had now been removed from the calculation. Again the claimant did not seek to challenge or appeal against the decision of 15 June 2005 redetermining the amount of her pension entitlement in that way; though she considers it unjust (as would we) if it really is the case that she loses the benefit of those contributions and earnings factors while there is no provision for the contributions at least to be returned to her, so they are in effect simply expropriated.

  11. A few days after the European Court of Justice ("ECJ") had held in case C-423/04 Richards v Secretary of State ("Richards", now reported as R(P) 1/07) that a male-to-female transsexual should be entitled to claim retirement pension on an equal basis with other women, the claimant wrote her letter of 8 May 2006 to the pension service (1I) saying:

    12. "I am a transsexual woman and have been living permanently as a woman since 22/06/94. I reached the age of 60 on the 1st July 1994 but at that time did not make a claim for state pension having been advised that I would be unsuccessful.
    On the 7th September 1994 I received a letter ... stating that although I had told the DSS of my change of lifestyle I WOULD NOT be getting my OAP until I was aged 65 in 1999 as I was still legally regarded as a male. ...
    I now wish to apply for my pension to be backdated to 1st July 1994 when I reached the age of 60yrs, in light of the recent decision of the European Court of Justice in the case of Sarah Margaret Richards v Secretary of State for Work and Pensions (Case C-423/04) ECJ 27-04-06".
  12. That letter was received by the Secretary of State on 11 May 2006 and accepted as an application made on that date for an additional or supplemental award of pension. On 15 August 2006 a departmental decision maker on behalf of the Secretary of State recorded a decision rejecting it in the following terms (2):

    13. "Decision – Type – reconsideration. Effect on benefit – not changed. [The claimant] is not entitled to State Pension from 1st July 1994 to 30th June 1999 (both dates included). This is because there is a time limit for claiming all benefits including State Pension. The time limit for claiming State Pension is 12 months, from the date of 1st July 1994 (ending on 1st July 1995). Therefore as more than 12 months have elapsed since [the claimant]'s 60th birthday the claim is out of time and disallowed."
    The terms of that decision were notified to the claimant in a decision letter dated 18 August 2006 (3-4), which also referred to the substantive arguments on human rights and European law underlying the application, stating the department's understanding that it remained the case that a male to female transsexual could not have become entitled to state retirement pension under the male pensionable age of 65 before the Gender Recognition Act came into force on 4 April 2005.
  13. The procedural ground on which the application had actually been rejected was further explained in another letter of 1 September 2006 by the decision maker who had given the decision (9-10), saying:

    14. "Claims for State Pension are dealt with in accordance with the procedures provided for in the Gender Recognition Act. Any claim made and decided before domestic legislation ie the Gender Recognition Act, permitted a female transsexual to be regarded as such, cannot be re-decided because of that legislation as it was not retrospective. ...
    There can be no entitlement to State Pension unless a claim is made. Where no claim was made at age 60, the claim was made after the time for claiming ... The date a claim is made cannot be altered retrospectively by supersession once the claim has been decided ...
    In your particular case, as there was no claim made to State Pension at age 60, the claim was made after the time for claiming ... Therefore, once the date of claim is made it cannot be altered retrospectively by supersession once the claim has been decided (for claims made at age 65)."
  14. On 16 February 2007 that rejection was upheld by the tribunal, which confirmed the decision of 15 August 2006, holding in the same terms that the claimant was not entitled to state pension from the age of 60 because she had failed to claim it within 12 months of her 60th birthday. In its statement of reasons for disallowing the appeal, issued on 16 March 2007 (51-53), the tribunal further rejected the substantive argument that the claimant was so entitled by virtue of European Community law, stating that:

    15. "The tribunal found that Richards can be distinguished on its facts from those of the appellant in that Richards dealt with both what might be described as a current claim for pension and the claim to entitlement arose prior to the implementation of the Gender Recognition Act 2004 ("the Act")...
    Section 9 of the Act provides that upon the grant of a full certificate a person's gender becomes for all purposes the acquired gender though this does not affect things done or events occurring before the certificate is issued ...
    The tribunal found that for the purposes of the judgment of the court in Richards (at paragraph 21) section 9 of the Act imposes a condition on the acquisition of gender in that it operates to govern or determine the circumstances under which legal recognition is given. That is to say that (presumably) to maintain certainty of decision making the grant of a certificate will not affect decisions or things done in the past. At the time the appellant approached the Pensions Service in 1994 the settled position in law was that pension entitlement was governed by birth gender. When the appellant again approached the Pensions Service in May 2006 the position had then been settled by the Act and as set out above section 9 precludes a challenge against things done in 1994. For these reasons the tribunal found that the case of Richards does not assist the appellant."
  15. On 3 April 2007 the chairman granted the claimant leave to appeal against the tribunal decision on a question of law and that is the appeal before us.

    16. The legal context
  16. The general provisions of United Kingdom domestic law and the directly applicable European Union law in this area are summarised in paragraphs 14-22 of our decision in case CP 2862/07, which are to be read as incorporated here, subject to the additional point that for retirement pension claims made before 6 July 2005 the time limit referred to in paragraph 17 was 3 months instead of 12.

  17. In the present case, unlike that one, the claimant had already duly claimed and been awarded her category A retirement pension for life many years before the application that gave rise to these proceedings, so it is also necessary to consider the law about binding decisions on benefit entitlement and the extent to which these may be reopened.

  18. Under section 8 Social Security Act 1998 ("the 1998 Act") it is for the Secretary of State to decide any claim for a relevant benefit, which includes a claim for a retirement pension, and under transitional provisions any corresponding decision on entitlement made before the 1998 Act came into force is treated (so far as relevant here) as one made by the Secretary of State under section 8. In the same chapter of the 1998 Act, section 17 ("Finality of decisions") provides so far as material that:

    19. "17. - (1) Subject to the provisions of this Chapter, any decision made in accordance with the foregoing provisions of this Chapter shall be final; ..."
  19. Apart from an appeal to a tribunal under section 12, the 1998 Act provides for only two relevant ways in which an award decision on a claim for retirement pension, determining the amount of pension to which the claimant is entitled and the date from which that entitlement started, may be altered by a later decision, as an exception to the statutory rule of legal certainty (or res judicata) that otherwise applies under section 17.

  20. Under section 9 ("Revision of decisions") any such decision may be revised by the Secretary of State in prescribed cases or circumstances; and unless regulations otherwise provide the revision takes effect from the effective date of the original decision.

  21. Under section 10 ("Decisions superseding earlier decisions") any such decision, whether as originally made under section 8 or as already revised under section 9, may be superseded by a further decision of the Secretary of State in prescribed cases or circumstances; and unless regulations otherwise provide, the superseding decision takes effect from the date it is made, or where applicable the date of the application for it.

  22. The circumstances in which these powers may be exercised are prescribed in the Social Security and Child Support (Decisions and Appeals) Regulations SI 1999 No 991 ("the Decisions and Appeals regulations") by which so far as material :

    23. (1) by regulation 3(5)(a) a decision may be revised under section 9 if it "arose from an official error", and in that case there is no modification of the rule in the section itself that the revision has effect back to the same date as the original decision. However the scope of this power is confined by the definition in regulation 1(3) of what counts as an "official error" for this purpose, as:
    " 'official error' means an error made by ... an officer of the Department for Work and Pensions ... acting as such which no person outside the Department ... caused or to which no person outside the Department ... materially contributed; ...
    but excludes any error of law which is shown to have been an error of law by virtue of a subsequent decision of a Commissioner or the court;"
    (2) by regulation 6(2)(a) and (b) a decision may be superseded by another decision of the Secretary of State under section 10 if (a) there has been a relevant change of circumstances since the original decision took effect; or (b) the original decision was erroneous in point of law. By regulation 7 a superseding decision for change of circumstances under (a) may take effect from the date of the change, or the date it is notified if the notification is late, but never earlier; and for a superseding decision on the ground of error of law under (b) there is no relevant provision for the corrective award to be given effect from any earlier date than that provided in section 10, namely that of the superseding decision itself or the application for it.
  23. The facts of this case also make it necessary to consider two of the special provisions in Schedule 5 to the Gender Recognition Act dealing with the effect of a recognised gender change on state social security benefits, including retirement pensions.

    24. (1) First, by paragraph 7 ("Category A retirement pension"):
    "7 (1) Any question -
    (a) whether the person is entitled to a Category A retirement pension (under section 44 of the 1992 Act) for any period after the certificate is issued, and
    (b) (if so) the rate at which the person is so entitled for the period,
    is to be decided as if the person's gender had always been the acquired gender. ...
    (4) But sub-paragraph (1) does not apply if and to the extent that the decision of any question to which it refers is affected by -
    (a) the payment or crediting of any contributions, or the crediting of earnings, in respect of a period ending before the certificate is issued, ...."
    (2) Second, by paragraph 7(5) and paragraph 10 ("Deferment of pensions"):
    "10. (1) The person's entitlement to -
    (a) a Category A retirement pension, ...
    is not to be taken to have been deferred for any period ending before the certificate is issued unless the condition in sub-paragraph (2) is satisfied.
    (2) The condition is that the entitlement both -
    (a) was actually deferred during the period, and
    (b) would have been capable of being so deferred had the person's gender been the acquired gender."
    Arguments on the appeal
  24. On behalf of the claimant similar contentions were advanced to those noted in paragraph 23 of our decision in case CP 2862/07 on the direct effect of Article 4(1) of EU Council Directive 79/7/EEC ("the Directive"), as interpreted by the ECJ in Richards, as entitling her to the same pension benefit from the age of 60 as if female from birth; though in this case no reliance was placed on the Human Rights Act as giving rise to any direct entitlement.

  25. It was further contended that the decision on the claimant's application of 11 May 2006 ought to have been to award her that pension benefit retrospectively to July 1994; either because the contact she then had with the Department of Social Security, including her letter of 4 July 1994 noted at paragraph 5 above, amounted to the making of a claim for pension which had never been properly adjudicated upon, or because the Secretary of State was estopped by his department's responses at that time from denying the claimant the entitlement that should have been established on a proper application of the Directive had she then pursued a claim for it. Further or alternatively, to do anything other than make such an award in response to her application of 11 May 2006 asserting her entitlement under the Directive was inconsistent with its direct effect.

  26. On the latter point, similar arguments to those noted in case CP 2862/07 on the decision of the ECJ in Emmott were relied on for disregarding any national procedural provisions or time limits that would otherwise prevent or restrict the retrospective award sought; and in this context it was said that the departmental response in July 1994 amounted to "unconscionable conduct" such as to invalidate any later reliance on the pension not having been claimed at the age of 60. Finally it was submitted that the award of pension that should have been made in response to the claimant's application of 11 May 2006, whether retrospective or only prospective from that date, ought to incorporate the correct automatic increase for "deferment" from the age of 60 to the actual starting date of the pension under the provision noted in case CP 2862/07 paragraph 18, it being common ground that no such increase had ever been included.

  27. On behalf of the Secretary of State similar arguments were relied on to those noted in case CP 2862/07 paragraphs 26-7 as regards the application of the Gender Recognition Act to determine questions of gender for benefit purposes at all times after it came into force. The claimant had claimed her pension on attaining 65 in 1999 and not before: there was no scope for this fact to be altered or some separate entitlement to be created by the doctrine of estoppel. Though it was agreed after some reflection that there might be continuing scope for asserting entitlement on the basis of equal treatment under the Directive as regards periods before 4 April 2005 because the Gender Recognition Act had not been made fully retrospective, it was submitted that this could be of no assistance to the claimant on her application of 11 May 2006. This was because the period for which backdated benefit was being sought was long in the past, outside that for which any fresh claim could have been made; and the application was also outside any relevant power to alter retrospectively the previous binding decisions which had already determined the starting date and amount of the claimant's category A retirement pension. In particular the power in section 9 of the 1998 Act was not available to revise her pension entitlement back to (still less before) the start of her original award in 1999, because there had been no "official error" within the definition: the decisions of the ECJ and the Commissioner in Richards, showing the previous generally held understanding of the scope of the Directive to have been too narrow, only came much later.

  28. The Secretary of State further submitted that as in case CP 2862/07 the claimant's reliance on Emmott was misplaced, and the correct principle was that set out in the later authorities which distinguished it. It was not inconsistent with the Directive for an application for benefit based on the principle of direct effect to be subject to the same procedural requirements and time limits as other applications made under the domestic law. There was therefore no scope for a retrospective award for any period.

  29. It was confirmed that the claimant's pension award had at no time included any increase for deferment, and the Secretary of State submitted that since the application of 11 May 2006 had not contained any claim for increased pension on that ground, neither he nor the tribunal should be held wrong in law for not having considered or dealt with it as an issue, and it did not arise in this appeal. The question of deferment increases at least for the future might need to be revisited separately if the claimant was held to have been entitled to claim her pension from some point earlier than her 65th birthday, but neither such increases nor the correctness of the decision of 15 June 2005 which had reduced her pension from 9 May 2005 were matters before us for decision. If contrary to these submissions the application asking only for backdating was correctly to be viewed as one for the claimant's entire pension award to be corrected to conform with her rights under the Directive, it was accepted that the relevant powers were those in the 1998 Act to revise or supersede it on the ground of error of law; it was not disputed that the tribunal on the appeal, and thus we, could exercise all relevant powers of the Secretary of State: cf. R(IB) 2/04 paragraph 25. It was confirmed that section 27 of the 1998 Act (the "test case" rule, referred to at an earlier stage in argument as potentially limiting the retroactive effect of Richards in social security cases) was of no relevance on the facts of this case, and was not relied on to limit any award to which the claimant might be entitled.

    30. Conclusions
  30. Our general conclusions on the direct effect of the Directive and the way this interacts with the national law in the Social Security Acts and the Gender Recognition Act appear from paragraphs 29-43 of our decision in case CP 2862/07, and are to be read as incorporated here.

  31. It follows from those general conclusions, in particular from that in paragraph 31 that the possibility of an increased or additional entitlement under the Directive has to be taken into account under the European Communities Act 1972 after the Gender Recognition Act came in force as well as before, that both the original decisionmaker and the tribunal in this case erred in law in assuming the contrary in the way they dealt with the claimant's application of 11 May 2006 relying on the Directive; and we are not able to accept the Secretary of State's main submission that the Gender Recognition Act removes any scope for reliance on the Directive and Richards could therefore not assist the claimant.

  32. Specifically, the tribunal misdirected itself in law by holding in its decision, as noted above, that section 9 of the Gender Recognition Act precluded any reliance on the Directive to challenge things done in 1994. Since we are satisfied that Richards can in fact assist the claimant by entitling her to at least some increase in her pension as explained below, that was a material misdirection and on that ground we set the tribunal's decision aside.

  33. We further reject the Secretary of State's submission that the scope of the appeal ought to have been confined to the single issue of backdating the claimant's pension award, ignoring the question of whether it was correctly calculated. The claimant's letter of 8 May 2006 specifically invoked her right to equal treatment under the Directive and that was in our view sufficient to put in issue all relevant aspects of whether its requirements had been given effect in her existing award: to take a narrower view would not observe the principle of effectiveness in relation to her Community law rights.

  34. There is no separate claim machinery under the Directive, and any "claim" (in the broad sense, of an assertion of the right and an application for payment) to increased or additional benefit by virtue of its direct effect (a) must be made within the framework of the national rules for claiming social security benefits and applying for existing awards of such benefits to be altered; and (b) is subject to the same general time limits and restrictions on such claims and applications as any other.

  35. The principle of Steenhorst-Neerings and Johnson (No. 2), referred to in paragraph 34 of our decision in CP 2862/07, applies in our judgment with equal force to the national procedural provisions here in point as summarised above. Specifically, we hold that the rule of finality in section 17 of the 1998 Act is consistent with the Directive as the principle of legal certainty is one fundamental to the Community legal order; and although the time limits and restrictions on the reopening of existing awards are different from those expressly approved in relation to original claims in Johnson (No. 2), we find no material difference in the principle and hold that the Directive does not preclude them.

  36. We reject the argument for the claimant that a claim asserting her rights under the Directive was validly made by her in July 1994. It is plain from its terms that the letter of 4 July 1994 did not make a claim of any kind, and there is no evidence of any other: the claimant's own letter of 8 May 2006 said expressly, and so far as we can see entirely accurately, that she had not made a claim at that time.

  37. We further reject the arguments that an entitlement to pension from the claimant's 60th birthday is created for her by the doctrine of estoppel, and that the conduct of the Secretary of State has been "unconscionable" so as to require any national procedural limits or rules to be disregarded on the authority of Emmott as explained in Walker-Fox, referred to in CP 2862/07 paragraphs 34-35. The argument on estoppel is hopeless, it being well established that the doctrine cannot be used in this statutory jurisdiction to create an "entitlement" outside the terms of the legislation itself: R(P) 1/80; R(SB) 4/91 Davies v Secretary of State, CA; and the departmental responses in 1994 explaining the position as it then stood in United Kingdom law came nowhere near bringing this case within the exceptional category of "unconscionable conduct", for the same reasons as we give in CP 2862/07 paragraph 35.

  38. The procedural effect of the claimant's application of 11 May 2006 therefore needs to be considered. There was in our judgment no valid way it could have been treated as a separate additional claim in its own right, under the Directive or otherwise, for the category A retirement pension she had already duly claimed and been awarded for life in 1999; and if, as was stated in the Secretary of State's submissions and assumed throughout argument, the claimant's letter was treated solely in that way, despite the terms at paragraphs 12-13 above in which the decision was notified to her, that was in our view a further error. There is no scope in the national procedure for the making of a fresh or separate claim for a category A retirement pension already duly claimed, awarded and currently in payment, and there are good reasons why that should be so. Unlike some other benefits which may be claimed and awarded more than once for different or repeated periods while specified qualifying conditions are met, such a pension is a single benefit which must (with immaterial exceptions) be claimed and awarded once and for all, for life, from a single specified starting date which itself governs the rate at which the pension continues to be payable throughout its duration. Any later application for such a pension to be paid instead from a different starting date therefore necessarily involves reopening the whole basis of the existing award, rather than adjudicating on the application as if it were a fresh claim on its own.

  39. It follows that the only relevant way in which the application of 11 May 2006 fell to be considered, and should have been considered, was as one for the claimant's existing award of category A retirement pension to be corrected so as to give effect to her equal treatment rights under the Directive, subject to the same limits and restrictions as any other application to alter the date or amount of an existing pension award which has otherwise become final.

  40. The powers of alteration (and the only relevant powers) that required considering were those noted above, of revising the existing award under section 9 of the 1998 Act or superseding it with another decision under section 10; and the reason the exercise of those powers required to be considered in relation to the existing award was that both the original decision in July 1999 determining the start date and the rate of her pension entitlement, and the later one of 15 June 2005 altering the rate under that award from 9 May 2005, had since been shown to have been erroneous in law.

  41. That was shown by the decision in Richards that a male to female transsexual was entitled to equal treatment with other women in relation to retirement pensions; and for the reasons explained in CP 2862/07 this had the consequence that a person in the position of the claimant had, under the principle of direct effect and even before the Gender Recognition Act, an increased underlying entitlement in respect of the period since she first qualified for such equal treatment under the Directive, which neither of those awarding decisions had recognised.

  42. As was correctly submitted by Mr Heath on behalf of the Secretary of State the failure of those decisions to give effect to the entitlement thus shown by Richards to have existed invokes the powers of correction for error of law, rather than those for change of circumstances, because of the principle that judicial interpretation of existing legislation is declaratory. It reveals the meaning that always ought to have been applied, and as noted elsewhere there was no temporal limit on the effect of the decision in Richards, so that principle applies here without qualification.

  43. We accept the Secretary of State's further submission that the error thus identified falls outside the definition of "official error" quoted in paragraph 22 above, because it was only shown to have been an error of law by the interpretation declared by the ECJ in Richards. Whether the decision that "showed" it to be so for this purpose was the ruling of the ECJ itself, or the subsequent one of the Commissioner implementing it, is immaterial in this case: the consequence either way must be that there is no power on this ground to revise either or both of the awarding decisions so as to correct them back to their original dates.

  44. Accordingly subject to the point raised in the next paragraph, the only relevant power to be exercised in response to the claimant's application was that to supersede the current pension award under section 10 and regulation 6(2)(b) cited above, with effect from the date of the application on 11 May 2006, which was accepted by the Secretary of State as the correct date under section 10(5) for this purpose if, contrary to his main submission, the question of using the superseding power arose in this appeal at all.

  45. Though not directly before us, the correctness of what was done in the decision of 15 June 2005 to reduce the claimant's pension from 9 May 2005 is, on what we were told, open to question and itself also requires to be reconsidered. Though the letter of 15 June 2005 loosely uses the word "revise" in relation to that decision, the substance of what it purported to do makes clear that the decision can only have been an exercise of the Secretary of State's power in section 10 of the 1998 Act and regulation 6(2)(a) cited above (the only relevant and available power) to supersede the original award decision so as to reflect the change of her circumstances caused by the coming into force of the Gender Recognition Act and the issue of her full gender recognition certificate, by altering the amount of her pension award from 9 May 2005 (the start of the first benefit week after the change) to that determined as appropriate to a woman instead of a man. In terms of the domestic legislation there can be no doubt of the availability of the power to supersede the original award with any further one needed to reflect what, on any view, was a momentous change in the claimant's circumstances. However even apart from the still undetected error in not taking account of her entitlement to equal treatment under the Directive, the terms of the letter at page 186, and what was suggested at the hearing about periods of contribution and earnings factors after the age of 60 being excluded so as to cause a reduction, give cause for doubt whether the special provision in paragraph 7(4) of Schedule 5 to the Gender Recognition Act cited in paragraph 23 above, which appears designed to stop such a thing happening, had been given its intended effect; and if not, it would render the decision of 15 June 2005 in error of law on that quite separate ground.

  46. We further direct the Secretary of State that if there was a mistake about this and the reduction in the earnings-related part of the claimant's pension should not have been imposed in 2005 because of paragraph 7(4), then the mistake would count as an "official error", reopening the calculation of the claimant's whole pension back to 9 May 2005 and requiring a use of his revision power to correct it from that date; in which case the revision should incorporate the correct treatment under the Directive as well. There is no question of this present decision "showing" there to have been such a mistake so as to exclude that power, because paragraph 7(4) speaks for itself, and as the Secretary of State rightly submits, whether it was correctly applied in 2005 is not before us for decision.

  47. As already noted we do not accept the Secretary of State's argument that the correctness of the rate of pension under the claimant's existing award as at May 2006, and in particular whether it should include the increases for "deferment" automatically applicable to any pension whose actual starting date is later than the earliest it could have been validly claimed, were outside the scope of the application of 11 May 2006 and thus of this appeal. Contrary to what was suggested such increases are not a separate benefit requiring to be separately claimed before they have to be considered, but an integral part of the necessary calculation of the correct rate of the pension, and that became a necessary issue on the application of 11 May 2006 so as to ensure that the claimant's rights under the Directive were given proper effect.

  48. As indicated in paragraph 43 of our decision in CP 2862/07, the principle of equal treatment of a male-to-female transsexual under the Directive requires that she be accorded the same percentage increases in pension for deferment as a non-transsexual woman, for a period of deferment beginning with when the claimant first qualified for such equal treatment as a woman (or attained the age of 60 if later) and ending with the actual starting date of her pension. It follows that a person in the present claimant's position is entitled by the Directive to have her pension made up to the level required for equal treatment, calculated in the way just indicated, to the extent that the national law falls short of providing it; and self-evidently, the provision in paragraph 10 of Schedule 5 to the Gender Recognition Act noted above falls short of doing so in this case.

  49. For this purpose we confirm that for the reasons given in case CP 2862/07 any question whether a person has become entitled to the benefit of equal treatment under the Directive in their acquired gender is to be determined by applying the same tests as in the Gender Recognition Act, even as regards periods before it came into force. We approve and follow the decision of the Commissioner in case CP 3485/03 to the same effect.

  50. For those reasons we allow the appeal, set aside the decision of the tribunal and refer the case back to the Secretary of State to redetermine the claimant's entitlement to her category A retirement pension in accordance with the principles explained and the directions given in this decision, calculate the corrected amount of the pension award, notify it to the claimant and arrange for the payment of any arrears due.

  51. We direct the Secretary of State that for this purpose:

    52. (1) he should first determine the date from which the claimant first became entitled to equal treatment under the Directive. There being no other relevant conditions unmet before she attained the age of 60, this will be the date when she first met the condition of having lived in her acquired gender for the continuous period of two years: 22 June 1996, if the date given in her letter of 8 May 2006 was the correct one; or 28 April 1995 if the earlier date we were given in argument can be accepted;
    (2) he should next calculate the appropriate percentage increase for deferment of retirement pension by a woman from that date to 5 July 1999, the actual starting date of the claimant's pension which remains unaltered;
    (3) he should then reconsider what was done when the amount of the claimant's pension award was altered from 9 May 2005, and determine whether the decision notified to her on 15 June 2005 wrongly failed to give effect to paragraph 7(4) of Schedule 5 to the Gender Recognition Act; in which case the award must be revised for official error in accordance with the directions in paragraph 43 above so as to correct both that and the error in not recognising her equal treatment rights, both with effect from 9 May 2005;
    (4) unless revised under (3), the decision notified on 15 June 2005 on the rate of the claimant's pension award from 9 May 2005 is to be superseded by virtue of this decision so as to correct the error of law in not recognising her equal treatment rights, with effect from the date of the application of 11 May 2006;
    (5) in either case the corrective pension award is to include from its effective date:
    (a) as regards the basic element of the pension, the percentage increase determined under (2); and
    (b) as regards the additional (earnings-related) element of the pension, whichever is the better of
    (i) that percentage increase; and
    (ii) any extra pension attributable to the operation of paragraph 7(4) Schedule 5 to the Gender Recognition Act for periods after the claimant was 60;
    (but not both, because that would involve an element of double benefit for periods after 60 and more than required under the Directive for equal treatment).
    (Signed)
    D J May QC
    P L Howell QC
    E A Jupp
    Commissioners
    13 March 2008

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URL: http://www.bailii.org/uk/cases/UKSSCSC/2008/CP_1425_2007.html