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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Byrom v Social Security Commissioner [2001] EWCA Civ 1921 (7 December, 2001) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2001/1921.html Cite as: [2001] EWCA Civ 1921

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IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE SOCIAL SECURITY COMMISSIONER

		Royal Courts of Justice Strand London WC2 Friday 7th December, 2001

1. LORD JUSTICE MUMMERY: This is an application for permission to appeal. The oral hearing of the application was originally due to be heard on 9th November, but was adjourned until today to enable full preparations to be made for the presentation of the applicant's case by counsel, Mr Simon Harding, who comes into this case via the Pro Bono Unit.
2. The application is for permission to appeal against a decision of the Social Security Commissioner, Deputy Commissioner Smithson. On 2nd April 2001 he dismissed an appeal by Mr Ronald Byrom against a decision of the Social Security Appeal Tribunal at Wrexham on 2nd August 1999. The Social Security Commissioner held that there was no error of law in the Appeal Tribunal's decision. The Appeal Tribunal had dismissed Mr Byrom's appeals against two decisions of the adjudication officer, given on 29th October 1997, in exercise of the adjudication officer's powers under section 25 of the Social Security Administration Act 1992. The decisions of the adjudication officer related to alleged overpayments to Mr Byrom of benefits in the sum of £10,185.34 in respect of the period 20th March to 10th October 1995, and a further £4,599.28 in respect of the period 11th October 1995 to 16th January 1996.
3. Mr Harding has very helpfully prepared a chronology and a skeleton argument.
4. The factual background to the decisions relating to overpayments is that Mr Byrom was instrumental in setting up a company called Greenworld Ecology Systems Ltd in May 1995 in order to market a catalyst. Mr Byrom did work from about March 1995 in respect of which he received no payment at the time. Shares in the company were sold to investors. They realised a total of £150,000. Out of the proceeds of the sale of those shares £14,000 was paid to Mr Byrom on 5th December 1995, a sum which he described as wages or salary, and which it is accepted was paid in respect of work done.
5. The issue which Mr Harding submits was erroneously decided in law by the Appeal Tribunal and the Social Security Commissioner was that what was done by Mr Byrom was remunerative work at the time when he did it. Remunerative work is defined under the Income Support (General) Regulations 1987, regulation 5, as:

"Work ... done in the expectation of payment."

6. Mr Byrom's case quite simply is that, although he was paid for work, he did not at the relevant time - that is the time when he did the work - expect to be paid for it. The Appeal Tribunal dealt with this point in their conclusion in these terms:

"It is in the light of Mr Byrom's own evidence given in the CPS interview, which he has not sought to deny, the Tribunal finds on a balance of probability that as at the 20.3.95 Mr Byrom was working in expectation of payment notwithstanding that the Company at that time had failed to make a profit and indeed Mr Byrom was rewarded in December 1995 when he arranged for the payment to himself of £14,000 by way of retrospective salary.

In view of these findings of fact the Tribunal accepts that the Adjudication Officer has correctly established the findings of fact in the Summary of Facts in respect of both appeals.

The relevant law has been fully and accurately set out and applied to the facts in the Adjudication Officer's submissions in respect of both appeals and in supplemental submissions and the same is adopted by way of explanation for these decisions."

7. Earlier on in their decision the Appeal Tribunal had referred not only to Mr Byrom's submissions as to why the adjudication officer's decisions were flawed, but also to the evidence before it, including statements of Mr Byrom.
8. In his decision dismissing the appeal, the Social Security Commissioner set out the relevant parts of the decision of the Tribunal, commenting, in paragraph 5 of his reasons:

"I consider that the tribunal gave a clear if succinct explanation of why the appeals were dismissed."

9. In paragraph 6 he said this:

"The issue was whether the work had been done in expectation of payment. The tribunal correctly had regard to the fact that in early December 1995 some eight and a half months after the beginning of the overpayment period the appellant did obtain £14,000 which he described as salary (see in that connection continuation sheet no 27 of the interview with the North Wales Police, page 125 in the bundle). The money came out of £150,000 realised from the sale of shares in the Company to investors. The payment may have been irregular in company law terms but for income support purposes it was sufficient that the appellant took the money as a reward for his past endeavours. Where payment for work is actually received that is a strong pointer towards it having been done in that expectation."

10. The Social Security Commissioner referred to regulation 5 of the regulations, stating that each case has to be individually considered. While looking for payment within six months may be useful as a rule of thumb in terms of expectation, that is not a binding principle. He went on to state this:

"The greater the enterprise the longer may be the expectation period. Expectations can be reasonably formed but not fulfilled. There is no certainty about them. The guiding principle is, as stated in R(IS) 1/93, one of commonsense and an appreciation of the reality of the situation. The reality here was a product which the appellant believed could be marketed and for which he duly found substantial investors. It was open to the tribunal to conclude that there was an expectation from March 1995 onwards rather than just a hope of payment. The appellant expected to succeed in his venture as indeed, in terms of attracting investment for it, he did."

11. The Social Security Commissioner rejected an application for permission to appeal against that decision on 28th June 2001.
12. Mr Harding, having referred to the relevant statutory provisions and regulations and summarising the decision of the Appeal Tribunal and the Commissioner, submitted that there were legal errors in the decisions. As for the Appeal Tribunal, he said that they had failed to deal adequately at all with the issues before them; there was no reasoning given for why the Tribunal came to the conclusion that they did; and therefore it was impossible to assess the reasoning behind the decision. It was submitted that the question before the Tribunal and the Social Security Commissioner was one, not just of fact, but mixed fact and law. As a matter of fact the issue was what was Mr Byrom's state of mind as of 20th March 1995 and at other times when he was doing the work, and, as a matter of law, whether that amounted to an expectation or only to a hope.
13. As to the law, Mr Harding helpfully referred to the decision cited by the Social Security Commissioner, 1/93, where it is pointed out that work carried out in the expectation of payment means in realistic expectation of payment, not just in the desire, hope or intention of claiming a reward.
14. He also referred to a valuable summary of the approach to this issue which is set out in the judgment of Millett LJ in the case of CAO v Ellis 22/95. Millett LJ emphasised that the question falls to be decided - that is the question of whether work is done in the expectation of payment - at the time when the work is done and not at the end of the year or other period of account. He also pointed out that it was the character of the work and not its economic result which was decisive. He said that if the work is actually paid for, the inquiry need proceed no further. It is only when it is not paid for that the question of expectation arises. In those circumstances, it was necessary in relation to a business which was under consideration in that case to consider the question of the profitability of the business.
15. In the light of the legal principles Mr Harding submitted that the decisions were flawed. As regards the Tribunal's factual findings, no reason as to why such a finding was made was given, apart from what was contained in the CPS interview. On the face of it, there was little in the CPS interview that could have led the Tribunal to consider overwhelmingly that Mr Byrom was working in the expectation of payment. They had also failed to refer to the relevant case law affecting the issue before them. Instead of interviewing and making findings of fact on the basis of Mr Byrom's own evidence, the Tribunal had simply acted on the basis of what was said in the police interviews. He criticised the Appeal Tribunal for not providing an analysis of what was said in the CPS interviews on this issue.
16. Applying the correct legal principles, Mr Harding submitted that merely receiving money for work done in the past was not necessarily indicative of a past expectation of remuneration, and the fact that the monies received covered work done during a period in which benefit was claimed did not mean that the money became due for repayment as an overpayment. There was, he said, a difference between expecting to be paid for work and expecting to strike lucky for a service that could be offered. He emphasised again that Mr Byrom had never been interviewed on the issue of his expectations or work done. For those reasons, the Appeal Tribunal had erred in law in failing to deal adequately or at all with the factual and legal issues before it.
17. As for the Social Security Commissioner, he had failed to rectify these errors and had made no attempt to face the problems posed by the decision of the Appeal Tribunal. He should have concluded that the Tribunal was not entitled to come to the findings of fact which it made and the overall conclusion that Mr Byrom had been working in the expectation of payment.
18. I have also looked at Mr Byrom's own grounds of appeal and skeleton argument submitted by him, in which he characterised the payment of £14,000 as a capital receipt by the company and not a payment that was revenue in nature. That is not a point that was relied upon by Mr Harding and is clearly misconceived. The £14,000 that is relevant is the payment received by Mr Byrom out of the proceeds of sale of the shares. It does not follow that, because the proceeds of sale are a capital receipt by the company, the £14,000 paid out of that capital sum to him also has the quality of capital. Mr Harding accepted that the £14,000 was paid in respect of work which had been done and could be correctly described as wages or salary.
19. I agree with Mr Harding that it does not necessarily follow that because payment is received for work done that the work was done at the relevant time in the expectation of being paid. There is no misdirection of law by either the Appeal Tribunal or the Social Security Commissioner that receipt of payment meant that it had been expected at the time when the work was done. Nor was there any error of law in regarding the fact of payment as a pointer or indicator to the expectation of receiving it. It must be relevant that payment is received, though that is not of course conclusive that there was an expectation of receiving it at the relevant time.
20. I have carefully considered all of Mr Harding's points, but have come to the conclusion that this appeal has no real prospect of success. It is possible to criticise almost any decision reached in the circumstances in which Appeal Tribunals have to deal with these cases as not containing a full analysis of all the materials, factual and legal; or as not setting out all the relevant evidence on the issue; or as not referring to relevant decisions on the law. Those criticisms, even if valid, do not mean that there is an error of law in the decision or that the decision is Wednesbury unreasonable, so as to entitle an aggrieved applicant to appeal on a point of law. What matters is whether the Tribunal applied the right test in law to factual materials which would entitle them to reach the conclusion they did, even if another decision-making body might, on the same materials, come to a different conclusion. In my judgment, looking at the materials which were available to the Tribunal, they were entitled to come to the conclusion that Mr Byrom did the work in March 1995 in the expectation that he would be paid for it.
21. Mr Harding referred to passages in the police interviews, in particular a passage at page 39 of the bundle, which is a part of the transcript of the interview in which Mr Byrom was explaining the circumstances in which he had carried out a lot of work by himself, as he put it to get the business going. He added that there was a possibility of this revolutionary system of converting it into a profit business. He said he was working probably full-time, trying to expand the company. He was not doing else. He was working full-time without being paid.
22. I do not read that part of the evidence of Mr Byrom as inconsistent with the finding of the Appeal Tribunal that, on the balance of probabilities (which is the correct test to apply), he was working in March 1995 in expectation of a payment. The Tribunal were entitled to reach that conclusion on the basis of what direct evidence they had, and also on the basis of making inferences as to the probabilities of the situation from the other materials before them, and the general common sense and realistic approach to the decision of such an issue which is commended in the authorities.
23. I cannot find any error in the interpretation of the statutory provisions or of regulation 5(1). Although the Tribunal did not refer to the decisions of the Social Security Commissioner and the Court of Appeal laying down the legal principles, they did in fact apply, in my view, the correct legal principles to reach a decision that was open to them on the materials placed before them.
24. For those reasons, I would refuse this application for permission. I express in doing so my gratitude to Mr Harding for the work that he has put into the preparation of the papers and of his submissions. They have been helpful in my consideration of the application.
ORDER: Application for permission to appeal refused. (Order not part of approved judgment)