DECISION OF THE UPPER TRIBUNAL
ADMINISTRATIVE APPEALS CHAMBER
The appeal to the Upper Tribunal on behalf of the claimant's estate is allowed. The decision of the Bradford First-tier Tribunal dated 3 December 2008 involved an error on a point of law and is set aside. The appeal on behalf of the estate against the Secretary of State's decision dated 15 February 2007, as revised on 16 March 2007, is remitted to a differently constituted First-tier Tribunal within the Social Entitlement Chamber for reconsideration in accordance with the directions given in paragraph 37 below (Tribunals, Courts and Enforcement Act 2007, section 12(2) and (3)).
REASONS FOR DECISION
Introduction
- This is a case about the recoverability of an overpayment of state pension credit from the estate of a deceased claimant when all the relevant actions to do with the claim were taken by the claimant's daughter (Mrs W) under a general enduring power of attorney. Mrs W is also one of the executors under the claimant's will, and a beneficiary. The main issues are whether there was a misrepresentation on the claim form about the property (a farm) owned by the claimant and her husband and whether that was a cause of the subsequent overpayment in the light of a visit to the farm in connection with the proposed claim by an officer of the Department for Work and Pensions a month before the claim form was signed.
- There was on oral hearing of the appeal to the Upper Tribunal at Leeds Combined Court Centre on 4 August 2009. Mrs W attended and was represented by her husband. The Secretary of State for Work and Pensions was represented by Mr Stephen Cooper, solicitor, instructed by the Office of the Solicitor to the Department for Work and Pensions. I am grateful to all present for helpful submissions.
The facts
- The claim for pension credit was made on a form signed by Mrs W on behalf of the claimant on 19 July 2004, under this declaration:
"I declare that the information I have given on this form is correct and complete as far as I know and believe, and I have included all my income and savings."
In part 4 of the form "About savings and investments", neither of the yes or no box was ticked to the question "Apart from the place where you live, do you or your partner own any other property or land in this country or abroad?". I shall come back later to how the form came to be sent off in that state. The yes box was ticked to the previous question about whether the claimant had any savings and investments, with a reference to statements (bank and building society accounts and ISAs) enclosed. Although some unknown person has at some date drawn a ring round the unanswered question, the form was not referred back to Mrs W before the decision was given on 23 September 2004 to award pension credit from and including 20 November 2003. Mrs W also enclosed a covering letter (a copy of which she kept) setting out some of the history and offering to answer further enquiries if the Pensions Service did not have sufficient information.
- The claimant's husband had apparently previously claimed pension credit for himself and the claimant. However, he had gone into a nursing home on a permanent basis on 14 November 2003, so that he and the claimant were no longer partners for the purposes of the legislation, although the claimant went into the home for temporary periods. On 7 June 2004, Mrs J Varley, a customer liaison manager at the Skipton office of the Pensions Service, wrote to Mrs W to say that she needed to speak to her about her father's and mother's pension credit applications and asking to arrange a visit, if necessary, to complete the applications. The visit was arranged for 17 June 2004. The Pensions Service documents relating to the visit have been destroyed in accordance with the Department's document retention policy. I shall come back to Mrs W's evidence to the tribunal about what happened in the visit.
- The tribunal made the following findings of fact in paragraphs 9 and 10 of its statement of reasons about the property owned by the claimant:
"In 1956 [Mrs W's] parents [Mr and Mrs D] bought [G Farm]. It was thought by the Department that this took place in different purchases. [Mrs W's] evidence was that it was all bought together and that evidence was accepted. With the farm there was one and only one house. At the time it was known as 32 [G Place]. [Mr and Mrs D] decided to use the correspondence address [G Farm] for the house where they lived and brought up their daughters. With the house there are farm buildings and adjoining land [extending to 6 acres]. On the same side of the road as the house there is a high pasture [of 19 acres]. There was other land on the other side of the road with 3 stone barns and a cattle shed [extending to 100 acres]. …
A plot of land was transferred to [Mrs W's] sister in the early 1960s where she and her husband had a house built. On 31 December 1979 [Mr and Mrs W] took a tenancy of 125 acres forming part of [G Farm]. This was effectively the whole of the land which had been bought by her parents, apart from the actual house and apart from the plot of land transferred to her sister. That tenancy agreement is still in place. The rent under the agreement was paid initially. However, by agreement, the rent ceased to be paid from about 2002. On 13 March 1978 [Mr and Mrs D] entered into a declaration of trust whereby the joint tenancy was severed and they became tenants in common in equal shares."
- The award of pension credit to the claimant on 23 September 2004 was made on the basis that her capital consisted only of the assets disclosed in the statements with the claim form. A lump sum was paid to cover the arrears from 20 November 2003 to 29 September 2004. On 1 November 2004 the claimant became a resident of the nursing home on a permanent basis. Mrs W informed the Pensions Service, including the information that her property was to be put up for sale to meet the fees. It was the house that was put on the market, probably from about September 2004, for that purpose reverting to its name of 32 G Place. Mr D died in July 2005. The claimant died on 10 December 2005. The house was not finally sold until later. The schedule of the claimant's estate prepared by the solicitors acting for the executors listed separately 32 G Place (value £140,000; claimant's half share, £70,000) and G Farm, let to Mr and Mrs W (value £155,000; claimant's half share, £77,500).
The Secretary of State's decisions
- A decision was made on 15 February 2007 revising the decisions awarding pension credit and altering the amounts on various changes, on the ground that they were given in ignorance of or under a mistake as to a material fact. The revised decision was that the claimant was not entitled to pension credit from 20 November 2003 to 14 December 2005. A resulting overpayment of £7,505.68 was decided to be recoverable from the claimant's estate under section 71 of the Social Security Administration Act 1992 on the ground that on 19 July 2004 Mrs W on behalf of the claimant had misrepresented the material fact that the claimant had capital assets in excess of those stated. For some reason, the calculation of the amount overpaid was made on the basis that no benefit had been paid for the nine weeks starting 2 September 2004. The decision of 15 February 2007 was revised on 16 March 2007 to make the amount of the recoverable overpayment £8,252.23. There has been no challenge to that as the amount of pension credit that was paid to the claimant from 20 November 2003 until her death. The schedule of assets showed that the value of the house itself, 32 G Close, had not been taken into account as capital (being disregarded as the claimant's home until she became a permanent resident in the nursing home and from that point as up for sale). However, the value of the claimant's interest in the tenanted farm land was taken into account throughout.
The appeal to the tribunal
- The solicitors lodged an appeal on behalf of Mrs W as executor. She supplied many documents, including her notes following the visit from Mrs Varley, a copy of the agricultural tenancy of G Farm, excluding the farmhouse known as G Farmhouse, and maps. In a comprehensive written submission Mrs W said that at the meeting with Mrs Varley she had made it clear that the claimant lived at the farm and she had a half-share of what was regarded as one asset, G Farm. The Department had not fully understood or properly investigated this. The Secretary of State's written submissions to the tribunal took the view that 32 G Close and the farm land were separate assets, as recognised in the schedule of the estate, and that it was unlikely that Mrs W had told Mrs Varley that they were regarded as one asset.
- Mrs W attended the hearing on 3 December 2008 with her daughter. No representative of the Secretary of State attended. Mrs W's evidence, as recorded by the tribunal judge, included that she would have answered no to the question on the claim form about other property and that she had told Mrs Varley that her parents had worked the farm and lived there since 1956, that each had a half share and that there was a tenancy agreement. She did not show Mrs Varley any documents, but told her that payment of rent had stopped. Mrs Varley said nothing about the farm, but there was discussion about having to send bank statements etc. Mrs W queried why, when the claim form was not fully completed, it had not been sent back for the specific question to be answered.
The tribunal's decision
10 . The tribunal allowed the appeal in part. It confirmed that there had been an overpayment of pension credit of £8,252.23, but decided that only the amount paid in respect of the period from 19 July 2004 to 14 December 2005 was recoverable from Mrs W under section 71 as a result of the misrepresentation on 19 July 2004. The Tribunals Service documentation had described Mrs W as the appellant and the tribunal made the overpayment recoverable from the appellant, but in paragraph 17 of the statement of reasons made it adequately clear that the intention was to confirm recoverability from the claimant's estate.
- The tribunal decided that the disregard of the value of the claimant's home did not extend to the farm land. It was noted that that land was not occupied by the claimant and said that the reference to a dwelling could not reasonably include 125 acres of land. Therefore, for the purposes of calculating any overpayment the value of the farm land had to be taken into account. There was no real dispute about the valuation.
- On the recoverability of the overpayment, the essence of the reasoning was in paragraphs 17 and 18 of the statement:
"17. … The overpayment occurred in consequence of a misrepresentation. That misrepresentation was contained in the claim form of 19 July 2004 by [Mrs W] acting as attorney for her mother, [the claimant]. The question is included on the form whether the claimant owned any other property or land, apart from the place where they live. [The claimant] did own the interest in the land. It was not excluded as being the place where she lived. It was not a case where the land was incidental to the ownership of the house. The area of land involved was extensive. It was also relevant that it was tenanted. The question itself on the form was not answered. However, the form contained the declaration that the information on the form was correct and complete. The information was not complete. That was the misrepresentation.
18. The overpayment occurred as a direct consequence of the misrepresentation. If there had not been the misrepresentation, the overpayment would not have occurred."
- The tribunal said this in paragraphs 8 and 20 about Mrs W's argument that the overpayment was not due to any misrepresentation, but to the Department's failure to take account of the information given to Mrs Varley or to investigate properly so as to understand the position fully:
"8. … Commissioners have consistently stated that there can still be a misrepresentation of a material fact even if there has been an earlier disclosure of that fact. The Department is entitled to rely on statements in the current claim form and is under no duty to check back to see whether those statements are consistent with earlier disclosures. It remains incumbent on claimants to be meticulous on their completion of claim forms even after a course of dealing with the Department. The Tribunal complied with those directions from Commissioners. It was therefore unnecessary to make findings as to what was or was not disclosed at the visit, because there was a subsequent claim form. The form itself will be referred to in more detail later.
20. … Reference has been made to Commissioners' decisions and it is laid down that the Department is entitled to rely on statements in the current claim form and is under no duty to check whether those statements are correct. [Mrs W] also argued the point that where a claimant gives their address as a farm it is the responsibility of the Department to look into the question of whether any land is owned by the Appellant in view of the fact that their address is a farm. The Tribunal did not agree that this would be the responsibility of the Department in such a case."
The appeal to the Upper Tribunal
- Mrs W now appeals against the tribunal's decision with my permission. The appeal was formally supported in the written submission dated 9 April 2009 on behalf of the Secretary of State, but only to the extent of submitting that the tribunal's decision should be set aside because its exclusion from the amount of the recoverable overpayment of the benefit paid in respect of the period before 19 July 2004 was mistaken. I therefore granted the request by Mr W, now acting as Mrs W's representative, for an oral hearing.
The revision of the awarding decisions
- In the absence of Mrs Varley's written record of the visit of 17 June 2004, it is not at present possible even to speculate what would have been in the Pensions Service papers before the decision-maker of 23 September 2004 apart from the claim form and bank statements etc. However, it is not necessary to explore all the possibilities. Even if the decision-maker had a report from Mrs Varley including the information that Mrs W has said that she gave her, there would still have been ignorance of the material fact of the market value of the farm land. And if the award was made despite the decision-maker's knowledge of the claimant's interest in the farm land, although no longer occupying it, the decision could be said to have arisen from an official error. As that is also a ground of revision, there was no obstacle to the making of a correct decision replacing the original decisions.
The new decision on the claim
- At the oral hearing Mr W was not prepared to concede that the only proper decision that could have been made on the evidence before the tribunal, and the facts it found, was that the claimant was not entitled to pension credit from and including 20 November 2003. In my judgment, though, there can be no real doubt that throughout the period in question the value of the claimant's capital, as it has to be calculated under the pension credit legislation, was far too high to allow for any entitlement.
- There is no dispute about the claimant's interest as a tenant in common in equal shares with her husband, and then after his death with her daughters as the beneficiaries under his will. While she was living at G Farm as her home, there was possibility of a disregard of the value of "the dwelling occupied by the claimant as his home" (State Pension Credit Regulations 2002, Schedule V, paragraph 1A). The definition of "dwelling occupied as the home" in regulation 1 is:
"the dwelling together with any garage, garden and outbuildings, normally occupied by the claimant as his home including any premises not so occupied which it is impracticable or unreasonable to sell separately, in particular, in Scotland, any croft land on which the dwelling is situated;"
Thus, the basic meaning of "dwelling occupied as the home" does not extend to any land or other premises not occupied by the person in question, whatever the nature of the other premises. As the claimant was not occupying the tenanted farm land, only the house that she occupied, as eventually put up for sale as 32 G Place, could be within that basic meaning. The meaning can be extended to include premises that are not occupied by the person in question. By necessary implication the other premises do not need to be domestic or residential premises. However, the test is that it is impracticable or unreasonable to sell the other premises separately. In view of the long-standing tenancy of the farm land and the later separation off of 32 G Place for sale purposes, the only possible conclusion is that it was not at any relevant time impracticable or unreasonable to have sold the farm land separately from the house occupied by the claimant, so that it did not count as part of the dwelling occupied as the home. Its value could not be disregarded under paragraph 1A of Schedule V.
- From that point of view nothing changed when the house was put on the market and ceased to be the claimant's home. The disregard in paragraph 7 of Schedule V ("any premises where the claimant is taking reasonable steps to dispose of the whole of his interest in those premises, for a period of 26 weeks from the date on which he first took such steps, or such longer period as is reasonable in the circumstances to enable him to dispose of those premises") came into play. "Premises" here can include land without buildings, but since the house was separated off for the purposes of being put up for sale, the disregard could not possibly have extended to the farm land.
Misrepresentation of material fact
- Mrs W understandably objected strongly to the finding that she had made a misrepresentation of material fact, with the connotations that she thought followed of fraud or dishonesty or at least of something of which a person could be said to have been "guilty". Misrepresentation in section 71(1) of the Social Security Administration Act 1992 does not have that sort of meaning. It simply means making a statement that is not factually correct. The test applies whether the misrepresentation or failure to disclose occurred "fraudulently or otherwise". Mr Cooper for the Secretary of State stressed that there was no suggestion here that the misrepresentation was anything other than innocent, but that was still enough to trigger section 71. I can add that the general justification for making overpayments of benefit legally recoverable when there has been no dishonesty of any kind is that public money has been paid out when it should not have been, so that the exceptions to the requirement to repay should be limited. But, having said that, it is always necessary to examine carefully whether the Secretary of State has proved all of the conditions for recoverability.
- The tribunal found the misrepresentation in the signing of the declaration on the claim form that the information on the form was correct and complete when the question on other property had not been answered, so that the information was not complete. There is no doubt in law that the signing of such declarations on claim or review forms can amount to misrepresentations of material fact in conjunction with the way in which the rest of the form is completed. However, the precise form of the declaration and of the questions on the form must be considered. I find a little difficulty in treating the mere signing of a declaration that information is complete, when by mistake a question has not been answered at all, as a misrepresentation of material fact. I think that the subject-matter and precise form of the unanswered question must be relevant. And here the declaration was qualified by "as far as I know and believe" and the tribunal did not suggest that it was anything more than an accidental omission that the question on other property was not answered. There was also a problem stemming from the use of everyday language, in a commendable desire to avoid off-putting legal technicalities, in the relevant question. The notion of "the place where you live" is not at all precise, although the answer will in the great majority of cases be straightforward. Here, the claimant and Mrs W could reasonably (especially if accepted that Mrs Varley had not suggested on 17 June 2004 that evidence of the value of the farm land would be needed) have taken the view that, when the farm as a whole had been worked by the claimant's family for nearly 50 years and still was, the place where the claimant lived was G Farm as a whole. That is why Mrs W has consistently said that if she had not by mistake omitted to answer the question before sending the form off, she would have answered no. At the oral hearing, Mr and Mrs W's evidence was that she had left the question, which she was not sure about, to be discussed with her husband in the evening, that that discussion reached the conclusion that the proper answer was no and that they had meant to tick no on the form before it was sent off, but had somehow overlooked that. The notion of correctness and completeness must be related to the actual questions asked on the form and there is at least an argument that the answer no would not have been incorrect. However, I do not need to reach final conclusions on those issues because of the following point.
- The point arises because the declaration on the claim form continued after the part on correctness and completeness, separated by a comma, with an unqualified declaration that all income and savings have been included. That in its plain terms seems to me to be independent of any specific questions on the form and not subject to "as far as I know and believe". Although the everyday word "savings" was used, rather than the statutory word "capital", it seems to me that the declaration has to be interpreted as covering all assets that would as a matter of law amount to capital for pension credit purposes. The claim form as signed by Mrs W did not include any mention, for instance in part 11 (other information), of the farm land as a capital asset. It seems to me that the mere giving of the claimant's address as G Farm could not be enough. Therefore, there was a misrepresentation of material fact in the declaration that all savings had been included on the form. Although that was not the misrepresentation identified by the tribunal, which focused on the other part of the declaration, there was not a material error of law justifying the setting aside of its decision.
- The tribunal was also correct in law to say that, even on the assumption that Mrs Varley was informed of the ownership and occupation of the farm land, that did not deprive the declaration of its nature as a misrepresentation. The declaration was not in fact accurate. The statement of reasons referred to Commissioners' decisions that had not been mentioned in the Secretary of State's written submissions or, so far as I can tell from the record of proceedings, at the hearing on 3 December 2008. Those decisions would include R(SB) 3/90 and the decision of the Court of Appeal in Morrell v Secretary of State for Work and Pensions [2003] EWCA Civ 526, R(IS) 6/03. As a matter of general principle, a problem of natural justice can arise when a tribunal relies in relation to some point that is necessary to the outcome on decisions which a party to the proceedings has not had the chance to consider and comment on. However, in the present case that need not be pursued at this point, as the really decisive question was the one discussed immediately below.
Payment made in consequence of a misrepresentation
- The central point of Mrs W's argument was that the overpayment was not due to any misrepresentation, but rather the Department's failure to gain a full understanding of the ownership and occupation of the farm following up the information provided to Mrs Varley on 17 June 2004. In that context, the tribunal also relied on R(SB) 3/90 and Morrell, without specifying them by name, and concluded that it was not necessary to make any findings of fact on what happened at the visit of 17 June 2004.
- How relevant are those two decisions to the present case? In R(SB) 3/90, the claimant had, when making claims for supplementary benefit in 1985 and March 1986 (the latter unsuccessful on capital grounds), disclosed that he was in receipt of an occupational pension. On making a further claim in November 1986 he answered no to a question on the claim form about whether he had any other money coming in. Benefit was awarded to which he would not have been entitled if the pension income had been taken into account. Mr Commissioner Goodman held not only that the wrong answer and the declaration on the claim form were misrepresentations of material fact despite the previous disclosures, but also rejected the claimant's argument that the overpayment was in consequence of the Department's failure to refer back to the earlier documents in his file and not of the misrepresentation. He referred to a general principle of law that if a misrepresentation in fact induces a person to act on it to his detriment it is irrelevant that the person had a means of verifying the information and continued:
"In the present case the Department was entitled to rely on the statements in the claim form of 28 November 1986 and had no `duty' to check their veracity against earlier documents."
The Commissioner described the approach of the tribunal in that case as correct in law in every respect. The tribunal said amongst other things that new claims led to new duties.
- In Morrell, the claimant had been paid income support from 1995 to 1999, during which time her mother made her loans to pay her rent. On four review forms she omitted to include the loans as income, but in 1997 and 1999 the Department had been informed by the local authority of the existence of the loans and took no action. The Department accepted that the overpayment made in the period from the first receipt of that information in 1997 down to the date of the next review form was not recoverable, but submitted that the overpayment from that date until the second communication from the local authority was recoverable. Mr Commissioner Jacobs agreed. He accepted that the Department's mistake in failing to act on the information received in 1997 broke the chain of causation from the previous misrepresentation, but held that once the claimant repeated the misrepresentation in another review form that became one of the causes of the subsequent overpayment. He also held that the principle of R(SB) 3/90 was not restricted to cases of separate claims, given that the Court of Appeal in Duggan v Chief Adjudication Officer, appendix to R(SB) 13/89, had held that the misrepresentation or failure to disclose did not need to be the sole cause of the overpayment for it to be recoverable. Richards J in the Court of Appeal (paragraphs 44 to 47 of his judgment) confirmed that approach, saying in paragraph 45 that:
"The evident purpose of the review form is to get the claimant to provide [an up to date and accurate statement of the appellant's circumstances]. In my view the Department must be entitled to rely on that information as a more up-to-date and accurate statement of the claimant's circumstances than any information it may have received in the past from a local authority or any third party about a claimant's circumstances. If, therefore, the form contains a material misrepresentation and the Department makes payments of income support to which the claimant was not entitled on the true facts, the most natural inference is that the misrepresentation was a cause of the overpayments even if the Department had other information in its possession which indicated that the historical position was different and from which, on further investigation, the true current position could have been ascertained."
I note that Richards J would have been prepared to say, if the matter had been in issue, that the receipt of the information from the local authority in 1997 did not break the chain of causation, but that the earlier misrepresentation remained one cause of the overpayment throughout.
- Those decisions can be interpreted as giving powerful support to the Secretary of State's case. I am therefore inclined to say that Mrs W was deprived of a fair opportunity of stating her case, contrary to the principles of natural justice, by the appeal tribunal's reliance on that support without having given her the chance to consider and comment on the decisions and their relevance to her circumstances.
- In addition, R(SB) 3/90 and Morrell are not to be interpreted as meaning that whenever a misrepresentation of material fact has been made nothing that has gone before can ever be relevant to the question of whether a subsequent overpayment of benefit was in consequence of the misrepresentation. In R(SB) 3/90 the question was of linking back into previous claims whose administration had been completed. In Morrell, the provision of income by the claimant's mother was something that in its nature was capable of stopping or being interrupted at any time, so that there was no necessary inconsistency between the information given earlier by the local authority and a "no" answer on the review form. Those decisions do not exclude the consideration of all the circumstances of particular cases and the fundamental test must in accordance with Duggan be that of causation, whether the misrepresentation or failure to disclose was a cause, possibly amongst other causes, of the subsequent overpayment.
- Here, Mrs W's case was that at the visit on 17 June 2004, as part of the dealing with an application for pension credit that was already in substance in being, although the formal claim had not yet been submitted, the essential information about the claimant's interest in G Farm and about the tenancy of the 125 acres of farm land was made known to Mrs Varley on behalf of the Pensions Service. Therefore, it was submitted, the subsequent mistakes of the Pensions Service, either in a failure by Mrs Varley to record that information or by a decision-maker to take it into account, compounded by the failure to refer the claim form back to Mrs W for an answer to the question about other property, was in substance the sole cause of the overpayment. It could be argued that the misrepresentation that all capital assets had been included on the claim form was, especially in the light of the ambiguity of the terms of the question about other property (see paragraph 20 above), was not a firm enough basis to allow any reasonable decision-maker to award pension credit without making further enquiries, in contrast to the position in R(SB) 3/90 and Morrell.
- Mr Cooper for the Secretary of State submitted that the tribunal had been entitled to conclude that, regardless of what was actually said at the visit of 17 June 2004, the misrepresentation in the signing of the declaration on the claim form was at least one cause of the subsequent overpayment of pension credit. He very properly drew my attention to the decision of the House of Lords in Kerr v Department for Social Development [2004] UKHL 23, [2004] 1 WLR 1372, R1/04 (SF) (where the decision-making on a claim was described as a co-operative process of investigation on which both the claimant and the Department play their part), but submitted, I think rightly, that that did not take away from the fundamental principle stemming from Duggan in the context of the recoverability of overpayments.
- I acknowledge the force of Mr Cooper's submission. The issue is very finely balanced, but in my judgment it cannot be said that the only conclusion that any reasonable tribunal could have reached was to reject the argument on causation sketched out in paragraph 28 above. It seems to me that only on that basis could the refusal to make any findings of fact about what happened at the visit on 17 June 2004 be justified. Since in my judgment it would have been possible for a reasonable tribunal to have concluded that, if everything happened at that visit as Mrs W said it did, the later misrepresentation was not a cause of the overpayment, it was an error of law for the tribunal not to make any findings of fact on that issue. That also makes it material to the tribunal's decision that it appears to have adopted a rule that I have found at the beginning of paragraph 27 above to be wrong.
The amount of the recoverable overpayment
- There cannot be any doubt that the tribunal went wrong in law in the way in which the Secretary of State has submitted in calculating the amount of the overpayment that was paid in consequence of the misrepresentation of material fact and therefore recoverable under section 71(1). I think that the chairman must have taken his eye off the ball for a moment and forgotten that the initial decision on the claim (awarding pension credit with effect from 20 November 2003 and authorising a payment of a large sum of arrears) was not made until 23 September 2004. Accordingly, if it was right to make the benefit paid as a consequence of the misrepresentation of 19 July 2004 recoverable, that decision had to extend to the whole of the benefit paid in respect of the period from 20 November 2003 to 14 December 2005 (£8,252.23) and not just to the benefit paid in respect of the period from 19 July 2004 onwards.
- Since I have concluded that the tribunal's decision is to be set aside on other grounds, I do not have to decide what I would have done if I had accepted the Secretary of State's submission that the decision could not be faulted in law except in this one respect in which it was wrongly over-generous to the claimant's estate. It would have felt odd to set the tribunal's decision aside for that reason alone on the appeal of the claimant's estate and to substitute a decision less favourable to the estate. However, as Mr Cooper observed, the Social Security Commissioners (now the Administrative Appeals Chamber of the Upper Tribunal) have always regarded their jurisdiction as inquisitorial, in the sense that the object is to ensure that the legally correct outcome is reached rather than merely to adjudicate between the express arguments made on each side. He suggested that, once the appeal on behalf of the claimant's estate was before the Upper Tribunal, it was unnecessary for the Secretary of State to go through the technicalities of making a cross-appeal to get a question of law relevant to the correct outcome decided by the Upper Tribunal. That may well in principle be right, but under section 12(2)(a) of the Tribunals, Courts and Enforcement Act 2007 the Upper Tribunal does not have to set aside the decision of a First-tier Tribunal that has involved an error of law. I would certainly have been influenced by the fact that if a representative of the Secretary of State had attended the hearing on 3 December 2008 the tribunal's mistake would no doubt have been avoided. The Department for Work and Pensions cannot expect not to suffer adverse consequences from its disrespectful and short-sighted practice of not sending representatives to hearings before First-tier Tribunals, even in overpayment recoverability cases.
The person from whom the overpayment is recoverable
- When granting permission to appeal I pointed out that the decision under appeal to the tribunal clearly made the overpayment recoverable from the claimant's estate, of which Mrs W is one of the executors. However, the Tribunals Service documents, including the record of proceedings, decision notice and statement of reasons, named Mrs W as the appellant. The decision notice stated that "the appellant" was liable to repay the amount of the overpayment found recoverable. I commented that it seemed clear from paragraph 17 of the statement of reasons that the tribunal intended only to impose the liability on the claimant's estate. I do not now need to consider whether that alone could have considered an error of law justifying setting aside the tribunal's decision. The decision is to be set aside for other reasons. On the rehearing by another tribunal care should be taken to ensure that appellant is identified as the claimant's estate, in relation to which Mrs W is acting in a representative capacity.
- At the hearing on 4 August 2009 there was some discussion with Mr Cooper over whether the decision of 15 February 2007, as revised on 16 March 2007, should have also included a decision dealing with whether the overpayment was recoverable from Mrs W personally as the person who made the (innocent) misrepresentation when signing the claim form. On an analogy with the position of a person appointed by the Secretary of State under statutory powers to act for a claimant on a claim for benefit, as discussed by a Tribunal of Commissioners in R(IS) 5/03, there could be a personal liability under section 71 of the Social Security Administration Act 1992 on the part of someone who acts for a claimant under a power of attorney as well as a liability on the part of the claimant or her estate. In a number of Commissioners' decisions (CA/1014/1999, CSDLA/1282/2001 and CIS/242/2003) it has been suggested that an attorney cannot fail to disclose a material fact, because she has only a power to act for the principal, not a duty. That difficulty does not arise in cases of misrepresentation of material fact, where by definition the attorney has exercised her power by making a positive statement of some kind. But, if the same principles were applied as for appointees, the attorney would escape liability if she had acted with due care and diligence (paragraph 63 of R(IS) 5/03).
- Mr Cooper submitted, without time for any research or instructions, that the Secretary of State needed to make a separate decision against each potentially liable person once it had been decided that recovery should be sought from that person. However, the view of the Tribunal of Commissioners in paragraph 67 of R(IS) 5/03 was that:
"in every case in which there is an appointee, the Secretary of State should, when the overpayment is discovered, issue a recoverability decision that deals with the liability of both the appointee and the claimant, even in those few cases where it is determined that one is liable and the other is not. Then, if the case goes to appeal, the tribunal will have the power to deal with the liability of both the appointee and the claimant and, if there is a decision that there is concurrent liability, the Secretary of State can at that stage exercise his discretion as to from whom to recover the overpayment."
I do not see why the same should not apply to those acting under a power of attorney. But I note that the overpayment recoverability decision substituted by the Tribunal of Commissioners in that case was directed against the appointee only and not against the estate of the claimant, for whose benefit all the overpaid benefit had apparently been applied. Therefore I do not think that it was an error of law for the tribunal in the present case simply to have dealt with the decision under appeal to it, against the claimant's estate. However, once the tribunal's decision has been set aside, the Secretary of State will have the opportunity, if thought appropriate, to revise the decision of 15 February 2007 again (Social Security and Child Support (Decisions and Appeals) Regulations 1999, regulation 3(4A)) so as to include a decision about Mrs W's personal liability. But that may not be thought appropriate, as the windfall of the overpayment seems to have gone in substance to the claimant's estate, whose net value was ample to cover a repayment.
Conclusion and directions to new tribunal
- For the reasons given in paragraphs 26 and 30 above, the tribunal's decision must be set aside as involving an error on a point of law. I am not in a position to substitute a decision on the appeal by the claimant's estate against the decision of 15 February 2007 as revised on 16 March 2007. That is because it is crucial to any such decision that findings of fact are made on what happened at the visit of 17 June 2004 and those findings should not be made until the Department has had the opportunity to investigate whether Mrs Varley is still in its service (or could be contacted by other means) and might be able to give evidence about the visit. As Mr Cooper pointed out, visits to the homes of claimants are not now routine, so that Mrs Varley might remember it, even though whatever official report she prepared has been destroyed. If the Department is not able to put forward any further evidence about the visit, the only direct evidence will be that of Mrs W. Accordingly, that appeal is remitted to a differently constituted tribunal for reconsideration.
- There must be a complete rehearing of the appeal on the submissions made and evidence produced to the new tribunal, which will not be bound by any findings made or conclusions expressed by the tribunal of 3 December 2008. Unless the Secretary of State has carried out a revision as mentioned at the end of paragraph 35 above, the appeal will be restricted to the decision against the claimant's estate and the new tribunal will be under no duty to consider Mrs W's personal liability, if any. The new tribunal must take into account the principles of law set out above, and in particular apply the approach of law to the issue of causation set out in paragraphs 23 to 27 above and to the calculation of the potentially recoverable overpayment set out in paragraph 31 above. The evaluation of all the evidence will be entirely a matter for the judgment of the new tribunal. Mr and Mrs W will understand that the fact that this appeal to the Upper Tribunal has succeeded as a matter of law does not carry any necessary implication that the case for the claimant's estate on the facts is likely to succeed before the new tribunal. The Upper Tribunal decision is neutral on that.
(Signed on original): J Mesher
Judge of the Upper Tribunal
Date: 11 August 2009
