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[2006] UKSSCSC CH_1395_2006 (20 December 2006)

CH 1395 2006

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1. The claimant and appellant ("Mrs H") is appealing with permission of a chairman against the decision of the Wigan appeal tribunal on 15 02 2006 under reference U 06 079 2005 01635. The tribunal confirmed the decision of Wigan Metropolitan Borough Council ("the Council") that she had been overpaid housing benefit and had been allowed excess council tax benefit and that the overpayment and council tax were recoverable from her.
2. I allow the appeal. The decision of the tribunal is wrong in law and I set it aside. Because I find that the recoverability decisions were not before the tribunal, and the issues on the overpayment decisions are sufficiently clear, I consider it expedient to take the decisions that the tribunal should have taken on those decisions. These are:

1 The appeal is allowed for the period 8 05 2000 to

30 07 2000. There is no documentation before the tribunal showing

any overpayment of housing benefit or council tax benefit for that period.

2 The appeal is dismissed for all other periods between 31 07 2000 and 23 05 2004. There are overpayments of housing benefit and council tax benefit during those periods of the amounts stated in the

letter from the Respondent to the Appellant dated 28 June 2005. This is because of the accrued sum for arrears of pension paid on 15 03 2005. Notification of the overpayments was given by the letters of 23 03 2005 read with the letter of 17 05 2005.

3 The tribunal has no jurisdiction to consider whether those

overpayments are recoverable as the decision of 17 05 2005 related to overpayment and there were no decisions on recoverability under appeal before it.

REASONS

The facts

3. Mrs H claimed housing benefit and council tax benefit from 1993. In July 2004 she was awarded a contributory old age pension by the Irish authorities of 15.74 Euros a week from 05 05 2000 and 21.60 Euros a week from 02 01 2004. She was also awarded a living alone allowance of 7.70 Euros a week from 05 05 2000. This was awarded to her under the relevant European social security rules. It was based partly on contributions paid in Ireland and partly on contributions paid in the United Kingdom. Arrears of the Irish pension were paid as a lump sum to the British Pension Service on 15 03 2005. They were converted from Euros to British pounds at a stated exchange rate, the converted amount being £3845.80. That sum was sent to her by payment warrant. The council was notified of this.
4. The Council considered that as a result Mrs H had been overpaid housing benefit, and had received excess council tax benefit, from 08 05 2000 to 23 05 2004. It therefore sought to recover the overpayment. It prepared a lengthy series of letters in standard form that showed an amended calculation of her weekly housing benefit entitlement from 3 04 2000 to 3 04 2005. All the letters bear the date 23 03 2005. But there is no summary at that time of the totals shown payable and overpaid on the letters. Nor is there any letter or other document stating that the Council considered these sums recoverable. I also suspect that no one actually checked that the copies of these letters in the appeal papers together make up the sums now claimed as overpaid. Some of the letters in the papers are duplicates while there is no copy letter or other explanation in the papers for the sum said to be overpaid for the period 8 05 2000 to 30 07 2000 (an alleged overpayment of £117).
5. The papers include a copy of an attendance note. This shows that a Council officer called by appointment to see Mrs H on 01 04 2005 to explain her overpayment. It comments; "Mrs [H] was fine about it and had an idea she would owe it back. I helped (her) by request to write the cheques to repay the o.p. She will take them to (the) town hall on Monday."
6. On 6 05 2005 Mrs H's son objected that the way that the rules had been applied. A review of the decision was then said to have been made, and a letter on 17 05 2005 confirms this and gives notice of appeal rights. An appeal notice was received by the Council on 27 05 2005. There is then a reconsideration letter refusing to alter the decision. The first letter stating the alleged total amounts of overpaid housing benefit and council tax benefit was issued on 28 06 2005, after the date of the appeal. It does not contain any statement of appeal rights. An office memo on 29 06 2005 records in relation to a conversation with Mrs H's son that "on examination of our records it has been noted that appeal letters for the full period of the o/p had not been issued at the time the o/p had been assessed."
7. It is not in issue that as a result of the Irish pension Mrs H is, in accordance with the relevant rules, the recipient of overpaid housing benefit and excess council tax benefit. Nor is there any challenge in the papers to the precise sums said to be overpaid. Mrs H's son took issue on her behalf with the way the overpayment was reclaimed. He objected to the way that the benefit had been calculated and to the procedure used. After correspondence between the two parties an appeal was lodged. The grounds of appeal now take another point. They are that the Council failed completely to meet the mandatory requirements of Part VII of Schedule 6 to the Housing Benefit (General) Regulations and that the overpayment was not therefore recoverable.
8. The Council's decision that Mrs H received too much benefit was said to have been made under regulation 68 of the Housing Benefit (General) Regulations 1987 and the similar rules in regulation 59 of the Council Tax Benefit (General) Regulations. As there is no relevant significant difference between the two regulations I refer only to the housing benefit provisions in the rest of this decision. The grounds of appeal and reasons of the tribunal both failed to mention the provisions for council tax benefit. I take that to be a correctable error as the formal submissions to the tribunal clearly rehearsed the relevant provisions, all of which were either identical or parallel provisions to those applying for housing benefit, and the decision applies to both benefits.

The appeal to the tribunal

9. The substance of the grounds of appeal to the tribunal was that recovery of the overpayment had commenced before the full overpayment notifications had been issued. It was contended that the Council had failed to comply with the Housing Benefit (General) Regulations 1987, Schedule 6 (matters to be included in the decision notice), Part VII (Notice where recoverable overpayment). That Part consists only of paragraph 14 of the Schedule. It was also contended in the grounds of appeal that the Council had failed to exercise its discretion properly under regulation 99 (recoverable overpayments) of the Housing Benefit (General) Regulations 1987.
10. Mrs H's son attended the tribunal hearing, as did a representative of the Council. The overpayment manager of the Council attended as a witness.

The tribunal did not accept that the actions of the authority, or the notification handed to Mrs H, prejudiced her in any way. It found as fact that a home visit by an officer had been arranged to explain the decision to her. This was considered better than merely sending statutory notices to her. At the time of the visit she had been given letters about the overpayments together with an information sheet. The visiting officer had helped Mrs H to write out cheques for the overpayments but had not taken them from her. She had paid them in herself three weeks later. She had been informed of her rights and had had time to consider her position before she paid the cheques. The tribunal also accepted the evidence of the overpayment manager that individual consideration had been given to the decision to recover the money from Mrs H and that the Council's discretion had been exercised properly.

11. It is important to note what the tribunal actually decided. Its decision was:

"The decision of the Local Authority notified 17/05 /2005 is confirmed.

There has been a recoverable overpayment of £2117.92p housing benefit and £656.35p of council tax benefit from the 08/05/2000 to 23/05/2004 as there was a change in [Mrs H's] financial situation as she received a backdated pension."

12. The decision notified 17/05/2005 refers to the letter from the Council to Mrs H about the reconsideration of "an overpayment decision of 23/03/2005" noted above. It is not about a recoverability decision.

The grounds of appeal to the Commissioner

13. The grounds of appeal to the Commissioner repeated the contention that the Council had flouted the requirements in the regulations. It was contended that as the Council had admitted that it had not made a written decision when Mrs H was visited at home, the subsequent actions of the Council failed. This was because there had been no decision to recover. It was also contended that assistance in writing out the cheque was part of the recovery action. A chairman granted permission to appeal on those grounds without adding his or her own reasons.
14. When the papers first came before me, I considered they raised or could raise an issue of general importance. I directed the Council to make a full submission on the appeal and invited the Secretary of State to become a party and to comment on the appeal and on that submission.
15. In its submission the Council suggested that the facts were not in dispute but nonetheless set out its own understanding of events. The Council drew attention to the series of letters it had produced about overpayment by Mrs H. Mrs H had provided the Council with the information about the Irish pension on 16 03 2005. The series of letters calculating how that affected Mrs H's entitlements were dated 23 03 2005. The Council contended that those letters complied with the requirement of paragraph 14 of the 1987 Regulations. It added that these letters related to the decision about the overpayment and not the decision about recovery. The letters had been dated 23 03 2005 and the visit was on 01 04 2005. The cheques were paid on 24 04 2005.
16. The secretary of state's representative, in responding to my direction, drew attention to regulation 77 of the Housing Benefit (General) Regulations 1987. The secretary of state's representative also drew attention to the need to comply with sections 75 or 76 of the Social Security Administration Act 1992. The secretary of state's representative agreed with Mrs H's grounds of appeal that the notifications by the Council had not complied with the statutory provisions. In particular, "recovery, if that is the right term, took place before adequate notice was given that the overpayment was recoverable."
17. The secretary of state's representative then drew a distinction between recoverability and recovery. He pointed out that the decision under appeal is about recoverability and not recovery. He also argued that the failure by the Council was not fatal to the decision of the tribunal. In his view the test to be applied in dealing with a decision about recoverability is that laid down in CH 4943 2001. Did the appellant suffer substantive harm or significant prejudice by any inadequacy of notification? In the view of the secretary of state's representative there was no such prejudice. The submission concluded that the tribunal had not dealt with the matter adequately but that this did not affect the decision given and the appeal should be dismissed.
18. Shortly after that submission, a Tribunal of Commissioners took the decision now reported as R(H) 3 /04. As aspects of that decision were relevant to this appeal, Mrs H's representative was invited to comment, and did so in some detail. But this did not raise any new argument in the appeal and I therefore did not ask for a second round of submissions from the Council and Secretary of State.

The duty of the Council

19. There was no mention of regulation 77 of the Housing Benefit (General) Regulations 1987 by the Council, the appellant's representative (welfare rights officer) or the tribunal until the secretary of state's representative rightly introduced it into the record. But I agree with the Secretary of State that it is the proper starting point in this appeal. Regulation 77 provides as follows for all decisions made on or after 2 July 2001 addressed to individuals:

"(1) An authority shall notify in writing any person affected by a decision made by it under these Regulations:

(a) in the case of a decision on a claim, forthwith or as soon as reasonably practicable thereafter;

(b) in any other case, within 14 days of that decision or as soon as reasonably practicable thereafter,

and every notification shall … include a statement as to the matters set out in Schedule 6.

[(2) and (3) do not apply after 1988]

(4) A person affected to whom an authority sends or delivers a notification of a decision may, by notice in writing signed by him, request the authority to provide a written statement setting out the reasons for its decision on any matter set out in the notice.

…

(5) The written statement referred to in paragraph (4) shall be sent to the person requesting it within 14 days or as soon as is reasonably practicable thereafter."

Regulation 77 is now regulation 90 of the Housing Benefit Regulations 2006, and the former Schedule 6 is now Schedule 9. The extracted wording is the same in the new regulation as in the old regulation.

20. That regulation sets the scene for Schedule 6, on which Mrs H's representative relied. Schedule 6 to the Regulations (now Schedule 9) lists matters that notification must and may contain. The central requirements on all notifications are: in paragraph 2, that there be notification of the right to ask for a written statement of reasons, and, in paragraph 3, that there be a statement of the right to apply for a revision and to appeal and the manner and time in which to do so.
21. The significance of the mandatory language in regulation 77 and of Schedule 6 has been considered by courts and commissioners on a number of occasions. A leading authority is the decision of the Court of Appeal in Haringey LBC v Awaritefe (1999) 32 HLR 517. That case, like this, was an overpayment case. The provisions of Schedule 6 were different at that time, but contained the same core provisions as the version relevant in this case. But there are also important factual differences between that case and this. In that case there were clear decisions and the right to appeal had been indicated. It was the right to ask for written reasons that had been omitted. I record that because of the terms of the judgment given by Roch LJ:

"the question that arises in this appeal is whether the failure to comply exactly with the requirements of Part 1 of Schedule 6 of the regulations means that as the appellants did not go through the proper process they were not entitled in this case to take action in the county court, and consequently their appeal should fail, following the reasoning of this court in Warwick District Council v Freeman (1995) 27 HLR 616.

Whereas I would not seek to cast doubt on the correctness of the decision of this court in that case, my view is that the facts of that case were materially different from the facts of the present case. In Warwick District Council v Freeman it was accepted that the local authority had not followed the procedures contained in the regulations. Consequently, it was not merely a matter of failing to include in the notices of determination those matters in Schedule 6. The local authority declined to review their decision at the request of the landlord, maintaining that the landlord was not a "person affected by the determination" within the meaning of regulation 77. This court decided, and I respectfully agree, that a person from whom an overpayment is recovered is a person affected by the determination. In this case there never has been any attempt by the appellants to deprive the respondent of her right to a review of the decision or, after written representations, of a second review of their decision."

22. Roch LJ continued by noting that the court in Freeman had not been referred to cases about irregularities in procedural steps that statutory regulations require local authorities to take. He also referred to the guidance of Lord Keith and Lord Fraser in the House of Lords in London and Clydesdale Estates Ltd v Aberdeen District Council [1980] 1 WLR 182. Lord Keith (at p 201)

said:

"The word "shall" … is normally to be interpreted as connoting a mandatory provision meaning that what is thereby enjoined is nor merely desired to be done but must be done. … But that is not necessarily so … something may turn on the importance of the provision in relation to the statutory purpose which the provision is directed to achieving, and whether any opportunity exists of later putting right the failure."

Roch LJ then notes that judicial review is a discretionary remedy. He cites both Henry LJ in R v Stoke City Council ex p Highgate Projects (1994) 26 HLR 551 (at 564), and Sedley J in R v Solihull Metropolitan Council ex p Simpson (unreported) as authority for the proposition that in judicial review proceedings it is more satisfactory to look at the problem in terms of "the substantive harm done by the breach". And he indicated that that was common ground between counsel in Awaritife.

23. Roch LJ then applies that analysis to conclude that although some of the provisions in Schedule 6 "were not complied with literally or precisely", "the appellants are entitled to say that they achieved substantial compliance". He then examined the facts of that case and concluded that the judge below should have found substantial compliance with the required procedural steps and that there had been "no possibility of any injustice having been suffered by the respondent".
24. Otton LJ agreed but on a different basis. His view was that (at p 529) :

"even if there were technical breaches of Schedule 6 (upon which I do not propose to comment) the learned judge was wrong to conclude that such breaches were fatal to the appellant's claim. He should have held that the requirements in paragraphs 2 to 5 were not mandatory but directory, that none of the breaches had occasioned any significant prejudice to the respondent and that accordingly there had been "substantial compliance" with the Schedule…"

25. Pill LJ dealt with this aspect of the appeal more briefly. While criticising the authority's actions as unsatisfactory, he agreed that no substantive harm had been done by these breaches. The information given was such that it did "sufficiently alert the respondent to the availability of a further remedy". He concluded that it was "sufficiently stated to prevent a person, who did not follow the matter up, from impugning the decision on procedural grounds."
26. This topic was revisited by the Tribunal of Commissioners in R(H) 3 /04. At paragraph 76 of its decision, the Tribunal summarised its view on procedural irregularities under regulation 77 as follows:

"Thus if the tribunal is satisfied on the facts before it that the case for a recoverable overpayment determination against the appellant is made out, incidental procedural defects in the local authority's determination that no longer have any continuing practical effect and have not caused any injustice still unremedied by the tribunal itself will not in our judgment prevent it confirming the authority's determination, or if necessary making its own findings and substituting its own decision as to the amount legally recoverable".

The notifications used

27. With that guidance in mind, I turn to decisions taken and notifications given in this appeal. The series of letters issued on 23 03 2005 are in the papers in random date order. This disguises both that some of the letters are duplicates, that the series is not a complete time series, and that the actual wording in the letters varies, but not by reference to time. All follow broadly the same format. They each start with:

"Your benefit have been recalculated because of your change in circumstances, your entitlement is now as shown below."

There is then a stated weekly amount of benefit for a stated period. This is followed by:

"This leaves a weekly amount for you to pay of £… If you want to check the current balance on your rent account please contact your local Housing Office …"

Details of council tax entitlement follow, and then the detailed calculation of the amounts shown. It then states on some of the letters, but not all of them, that an overpayment has resulted of a stated amount.

28. Most of the letters, but not all, end with this rubric in bold:

"Enclosed with this letter is an information sheet, which tells you about your rights and responsibilities. You should read the notes very carefully and keep the sheet for future use."

A few of the letters end with a different rubric:

"If you disagree with this decision you must tell us within one calendar month of the date of this letter. You can ask for an explanation, ask us to look at our decision again, or appeal to an independent tribunal. Your rights and responsibilities are fully explained in the enclosed information sheet."

29. A copy of the information sheet is in the papers. It sets out in plain English the right to ask for an explanation and also tells the reader how, where, and by when to appeal.
30. Save for the letter of 17 05 2005, there was no other documentary statement of Mrs H's position issued before she paid her cheques and her son appealed for her. That letter, as noted above, details a reconsideration of overpayment decisions. It also gives notification of the right of appeal.
31. Drawing together these points, I note the following from these documents before the tribunal:

(a) there is no notification or other documentary evidence of any decision about recoverability of the overpaid housing benefit or excess council tax benefit in the papers;

(b) at most the documents could be considered to be a series of separate overpayment decisions with assumed rights to recover, brought together by the letter of 17 05 2005;

(c) for the period from 8 05 2000 to 30 07 2000 no documentation has been produced;

(d) for some periods the letter issued on 23 05 2005 includes both the statement of an amount of overpayment for a defined period and statements that the recipient is entitled both to ask for reasons and to appeal; that applies for the period 31 07 2000 to 2 04 2001, and for periods before and after those that the Council is now seeking to recover;

(e) for most periods the letter do not identify an overpayment amount for the period in express terms and do not set out rights of appeal, referring only to the leaflet enclosed. The absence of the sum said to be overpaid is not made good by the letter of 17 05 2005.

32. On that basis, the tribunal has in my opinion gone beyond jurisdiction in making a decision about recoverability. The decision that it said it was considering was a decision about overpayment and not recoverability. If it had a decision or decisions about recoverability before it, then it has failed to identify the decision or decisions.
33. The issue before it was therefore limited to that of overpayment. As the substantive issue that Mrs H had received her Irish pension arrears was not in dispute, this appeal was confined to the procedural points made by her son for her.
34. Having regard to the actual terms of the various letters, it is only for the period 31 07 2000 to 2 04 2001 that full notice of the overpayment decision was given, as judged against the procedural requirements of regulation 77 and Schedule 6. There is also a clear notice of the rights to seek reasons and to appeal. In my view there is no substantive failure by the Council in notifying Mrs H about the overpayment during that period.
35. By contrast, the tribunal had nothing before it on which it could properly confirm the decision of the Council about any overpayment between
8. 05 2000 and 30 07 2000.
36. The notifications letters issued for the remaining periods were defective. They do not identify the overpayment as such, and they do not state that the Council proposes to recover the sums. Nor do they comply on their face with Schedule 6. The fact that there was a letter in proper form issued for one of the relevant periods on the same date as the other letters emphasises the deficiencies in the other letters. However, the failure to notify appeal rights in those letters must be read with the clear notification of appeal rights in the review letter of 17 05 2005. Further, as there was no issue taken for Mrs H about the actual sums said to be overpaid, but rather about the extent of recoverability and the procedural issues involved, the notification of appeal rights on 17 05 2005 is clearly of relevance to the compliance by the Council with its statutory obligations.

Was the tribunal right to ignore the failings by the Council?

37. I have set out the decision of the tribunal in full above. It has confused the issues of overpayment, recoverability and recovery. It must be set aside.
38. The practical answer to the issues raised about recoverability is simply to note that the decision under appeal before the tribunal was not about recoverability at all. It was about overpayment. The tribunal can only decide the decisions put before it. If there had been a complete failure to make recoverability decisions, or to notify them, then the effect is that there is no operative decision and nothing to appeal. The tribunal cannot repair that deficiency by reference to fairness or substantial compliance. There either is a decision or there is not. It is either notified or it is not. The decision under appeal is not a recoverability decision, and cannot be turned into one.
39. The tribunal did have jurisdiction over the overpayment decisions. The only proper decision it could have taken about the period to 30 07 2000 was to allow the appeal. It had nothing before it by way of evidence about the amount of the overpayment, or of notification of it, before the review decision of 17 05 2005. And the letter of 17 05 2005 did not make good those deficiencies. For the period from 31 07 2000, the tribunal did have a decision on overpayment. It was in the form of the letters of 25 03 2005 read with the review letter of 17 05 2005. Further, the appellant and her representative had not taken issue with the substance of that decision. Did that comply with regulation 77 and Schedule 6, ignoring any incidental procedural faults? In my view it can be said that in substance it did, as the Council accepted an appeal from the letter of 17 05 2005, and the tribunal also accepted jurisdiction. As that was taken as the decision under appeal, and nothing was excluded from the scope of the appeal in so doing, the procedural deficiencies in the earlier letters can properly be regarded as cured by the later letter for the purposes of this appeal.
40. I therefore consider it expedient to take the decision that the tribunal should have taken. This allows part of the appeal, but dismisses most of it. And it also emphasises that the tribunal was wrong to take any decision about recoverability.

David Williams
Commissioner
20 12 2006
[Signed on the original on the date stated]