Upper Tribunal (Administrative Appeals Chamber)

IN THE UPPER TRIBUNAL ADMINISTRATIVE APPEALS CHAMBER

Case Nos.  CH/2790/2011 CH/2791/2011 CIS/2793/2011

 

Before Upper Tribunal Judge Rowland

 

Decision:  The claimant’s appeals against the decisions dated 18 April 2011 are dismissed.

 

REASONS FOR DECISION

 

1. The three cases before me are appeals from three decisions made together by the First-tier Tribunal on 18 April 2011.  One concerns council tax benefit, one concerns housing benefit and one concerns income support.

 

2. The cases arise out of the claimant’s former ownership of what was, at the material time, her home.  Before the sale, the property had been in the claimant’s sole name.  She had lived there with her husband and teenage daughter and she had been in receipt of council tax benefit, income support, incapacity benefit and disability living allowance.  She sold the property on 15 January 2010.  The sale price was £160,000.  The buyer met the costs of sale.  £40,000 was paid as a “restriction redemption” and the balance of £120,000 was transferred to the claimant’s bank account on 15 January 2010.  £6,000 was withdrawn from the account on the same day.  On 18 January 2010, £114,000 was transferred from the account to the claimant’s husband.  The claimant and her daughter remained living in the property.  However, she reported that her husband had left on 18 January 2010.

 

3. The claimant claimed housing benefit on 5 February 2010.  That claim was rejected on the ground that she had formerly owned the property and so, by virtue of regulation 9(1)(h) of the Housing Benefit Regulations 2006 (SI 2006/213), she was to be treated as not liable to make payments in respect of the dwelling.  Section 130(1)(a) of the Social Security Contributions and Benefits Act 1992 has the effect that it is a condition of entitlement to housing benefit that a person “is liable to make payments in respect of a dwelling”.  Regulation 9(1)(h) of the Regulations provides –

 

“A person who is liable to make payments in respect of a dwelling shall be treated as if he were not so liable where –

…

(h)  he previously owned … the dwelling in respect of which the liability arises and less than five years have elapsed since he … ceased to own the property, save that this subparagraph shall not apply where he satisfies the appropriate authority that he … could not have continued to occupy that dwelling without relinquishing ownership;

…”

 

4. The claimant’s award of council tax benefit was superseded with effect from 18 January 2010 on the ground that she had actual capital of £40,000 and notional capital of £114,000 from the proceeds of sale of the property, as well as a small amount of savings already in her bank account.  The view was taken by the local authority that she should be regarded as still having the £40,000 because she had not explained the restriction redemption.  It was accepted that she had spent the £6,000 on a car.  It was considered that she had deprived herself of £114,000 for the purpose of obtaining council tax benefit.  A person is not entitled to council tax benefit if she possesses capital exceeding £16,000: see section 134(1) of the 1992 Act and regulation 33 of the Council Tax Benefit Regulations 2006 (SI 2006/215).  Regulation 39 of those Regulations makes provision for what is known as “notional capital”.  In particular, regulation 39(1) provides –

 

“A claimant shall be treated as possessing capital of which he has deprived himself for the purpose of securing entitlement to council tax benefit or increasing the amount of that benefit except to the extent that that capital is reduced in accordance with regulation 40 (diminishing capital rule).”

 

5. I observe that housing benefit legislation contains similar provisions relating to capital, which would have provided a second ground for disallowing the claim for housing benefit: see section 134(1) of the 1992 Act and regulations 43 and 49(1) of the Housing Benefit Regulations 2006.

 

6. Income support legislation also contains similar provisions: see section 134(1) of the 1992 Act and regulations 45 and 51(1) of the Income Support (General) Regulations 1987.  The claimant’s award of income support was superseded with effect from 15 January 2010 on the ground that she had notional capital of £120,000 arising from the proceeds of the sale.  Thus, the Secretary of State had drawn slightly different conclusions from the evidence from those drawn by the local authority, but they had the same immediate effect.

 

7. The claimant appealed to the First-tier Tribunal against all three of those decisions.  

 

8. In relation to the housing benefit claim, the claimant appears to have had no answer to the local authority’s reliance of regulation 9(1)(h) of the Housing Benefit Regulations.  She never claimed that it was necessary to sell the property in order to be able to stay in it.  Indeed, her evidence to the First-tier Tribunal was that it was only after completion of the sale that she formed any intention to stay in the property.  The First-tier Tribunal rejected that evidence and found that the sale had been on a sale-and-lease-back basis all along, but that did not matter for the purposes of regulation 9(1)(h) because the First-tier Tribunal also found that she was under no compulsion or undue influence to sell the property.

 

9. In relation to the capital, the First-tier Tribunal considered each of the three elements identified above: the £40,000 paid for the restriction redemption, the £6,000 withdrawn on 15 January 2010 and the £114,000 transferred on 18 January 2010.

 

10. It found in the claimant’s favour, consistently with the Secretary of State but against the local authority, that she neither retained the £40,000 paid as a restriction redemption nor had deprived herself of it for the purpose of obtaining benefit, because it found that the payment was part of the sale-and-lease-back arrangement.

 

11. It accepted that the £6,000 had been used to buy a car but it expressly did not consider the point on which the local authority and the Secretary of State had again differed, which was whether that purchase had been made partly to obtain benefit so that the purchase price could be treated as notional capital.  In the light of its further findings, it was strictly unnecessary for it to decide the point.

 

12. The crucial issue was whether the claimant had deprived herself of the £114,000 for the purpose of obtaining benefit.  The claimant’s oral evidence was that her husband, who had subjected to her to violence throughout the marriage, had kept her a prisoner in the house from 15 January 2010 to 18 January 2010 and then marched her to the bank and forced her to transfer the money to his account.  In a letter subsequently submitted on 16 March 2011, it appears to be suggested that he forced her to make the transfer on 15 January 2010 and then refused to leave her until 18 January 2010 when he was sure the money was in his account.  That does not appear consistent with the entry on her bank statement.  The First-tier Tribunal accepted that the relationship had been violent but did not accept that the claimant had been compelled to make the transfer.  It found that the claimant had been aware that possession of that much capital would disentitle her from council tax benefit and income support and that she “gave this money to [her husband] as part of a pre-arrangement for the purpose of securing entitlement to [those benefits]”.  However, it found that the claimant’s husband had a 50% interest in the proceeds of sale – presumably, although this was not made explicit, because the house was purchased from the proceeds of sale of a previous property in which there was evidence that he had a 50% interest – and it therefore found that the claimant had deprived herself of only the balance.  That was presumably £54,000, not counting the £6,000 considered separately.

 

13. The First-tier Tribunal’s detailed reasoning has not been criticised on this appeal as being inadequate or otherwise unlawful and I do not consider it can be.  It is therefore unnecessary for me to set the reasoning out here in full.  In short, the issue was whether the claimant had been forced to part with her share of the proceeds of sale.  If she had, she could not have been said to have “deprived [her]self” of it or to have parted with it “for the purpose of  securing entitlement” to the relevant benefits.  A distinction is to be drawn between a case where a woman has capital effectively stolen from her by her husband and a case where she willingly gives capital to her husband in order to facilitate a separation or simply to hide the asset.  The First-tier Tribunal considered that she had not been forced to part with her share of the proceeds of sale.  It regarded her explanation for the financial transactions as being unsatisfactory, given a number of inconsistencies, her failure to provide documentary evidence and some evidence suggesting the concealment of assets on a previous claim.  It was quite entitled to disbelieve the claimant and find that she had not been forced to relinquish her share of the proceeds of sale.

 

14. However, the decision is challenged by the claimant on two procedural grounds.  Since no other reason was given by the First-tier Tribunal judge when giving permission to appeal, I presume he considered the grounds to be arguable.  He was not the judge who made the decision being challenged.

 

15. First, it is submitted that there was a breach of natural justice because both the local authority and the Secretary of State had two representatives at the hearing. 

“It was decided by the judge to allow two to represent the departments and two would be observers only.  However, during proceedings there was [sic] conversations between the observers and representatives, constant note swapping and during the hearing one observer left the room to bring further paperwork from their office, this paperwork was then allowed to be used as evidence without copies being given to the appellant or her representative.

 

As such, these so called observers took part in the appeal.  This made the session very intimidating for the appellant and we feel had an adverse affect [sic] on her ability to answer questions clearly.  It was clear as proceedings went on these representatives did not attend as observers and attempted to take part whenever they were allowed to.”

 

Before granting permission to appeal, the First-tier Tribunal obtained comments on this ground from the judge and the other parties. 

 

16. It appears clear that, as has been alleged, the local authority observer left the hearing room and brought back documents relating to an earlier claim from her office.  It is also clear that the observer with the Secretary of State’s representative was a trainee presenting officer and that she did pass a note to the presenting officer.  In relation to the documents brought back by the local authority observer, the judge says they were included in the bundle and it would have been out of character for him not to have arranged for them to be copied to the claimant.  The local authority says they were copied.  I think that that evidence is now included in the council tax benefit file before me.  There is no indication in the statement of reasons that any document I do not have was taken into account by the First-tier Tribunal and the claimant has not suggested that any evidence that is now before me was not available during the hearing.  I am not satisfied that the First-tier Tribunal saw any evidence that has not been seen by the claimant.

 

17. In my judgment, this first ground of appeal is unarguable.  It is well recognised that tribunal proceedings can be stressful and that the presence of too many people from a public authority at a hearing can be intimidating, particularly where a citizen is unrepresented.  However, most hearings before the First-tier Tribunal are open to the public, even if members of the public seldom attend, and, subject to what a tribunal may decide in any particular case, a public authority is entitled to send more than one person to a hearing, whether it is for training reasons or merely because a person who is not a presenting officer has a more complete knowledge of the appellant’s case and so can assist the presenting officer.  There is nothing unlawful about another representative communicating with a presenting officer during a hearing.  What is important is that the representatives of a public authority should not act in an intimidating way.  Moreover, even if there is a breach of good practice, it does not follow that the conduct is such as to be oppressive and unlawful.  In the present case, even if there was more communication between those designated observers and the presenting officers than they remember, it clearly was not oppressive or bullying conduct.  No complaint was made at the time by the claimant’s representative nor did the judge observe anything that appeared unfair.

 

18. Nor have any particulars been given as to the evidence that the claimant feels she neglected to give. She does appear to have given a different version of events in her letter of 16 March 2011, but there is no suggestion in that letter that her earlier version had been inaccurate because she had felt intimidated.  She may have been under stress, but I do not consider it possible to hold the conduct of the other parties’ representatives significantly to have increased it.

 

19. The second ground of appeal is that, having adjourned the hearing on 18 February 2011 with a direction that the Secretary of State obtain the claimant’s conveyance file from her solicitors, the First-tier Tribunal erred in not obtaining further evidence, perhaps at a further hearing, when the file was not produced.  

 

20. However, although the written adjournment notice was not issued until 1 March 2011, it seems clear that it merely recorded what was said orally on 18 February 2011, including that, when the documents were obtained and the parties had had an opportunity to comment on them, the judge would decide whether a further hearing was necessary and, if not, would issue a decision without any further hearing.  By 1 March 2011, the Secretary of State had already sought the conveyance file.  It was not obtained because the claimant’s solicitors had said the file was archived, that a fee would be payable if it had to be obtained but that documents had been sent to the claimant before the file was archived.  When asked to provide the documents, the claimant had sent some documents to the Secretary of State and those had been produced to the First-tier Tribunal.  The claimant had then written her letter of 16 March 2011, explaining that she could not find the conveyancing documents and could not afford to pay the fee of £37.50 although she volunteered to provide evidence from proceedings she had brought against her husband.

 

21. In these circumstances, I do not consider that the First-tier Tribunal can properly be criticised for not holding a further hearing or making further directions to obtain the conveyance file.  It had no reason to suppose that it would be assisted by evidence of the proceedings against the claimant’s husband, given that he had not participated in them.  The claimant knew well that the First-tier Tribunal considered that it was likely that the property had been sold on a sale-and-lease-back basis and that that was why the First-tier Tribunal had wished to see the conveyance file and it seems inconceivable that she had not at some time had a document explaining the restriction redemption.  She had not attempted any explanation in her letter of 16 March 2011.  The First-tier Tribunal actually decided in the claimant’s favour the question whether the restriction redemption represented capital that she had retained.  It seems unlikely that the question whether she had deprived herself of her share of the proceeds of sale would have been directly answered by the conveyance file, since the whole of the proceeds of sale had been paid to her.  The broad question of whether the sale had been on a sale-and-lease-back basis was one the claimant had already had an opportunity to address at an oral hearing and she had had an opportunity to produce further documentary evidence that she should have had in her own possession.

 

22. I am satisfied that the First-tier Tribunal’s decisions were not erroneous in point of law.

 

Mark Rowland

26 November 2012