IN THE UPPER TRIBUNAL	Case No.  CIS/1726/2010
ADMINISTRATIVE APPEALS CHAMBER

Decision of the Judge of the Upper Tribunal

The appeal by the Secretary of State is allowed.  Permission to appeal was given by a district tribunal judge.  The decision of the First‑tier Tribunal (Social Entitlement Chamber) (the tribunal) sitting in Newcastle on 1 April 2009 is wrong in law.  I set aside the tribunal’s decision and re‑make it with the decision that the tribunal should itself have given (Tribunal, Courts and Enforcement Act 2007, section 12(2)(b)(ii)).  The re‑made decision of the tribunal is in the following terms:

	The appeal, made by the claimant on 21 July 2008 against an overpayment decision of a decision‑maker (DM) on behalf of the Secretary of State dated 15 July 2008, is dismissed.  The DM’s decision of 15 July 2008 is at document 91 of the papers and is confirmed in full, with the result that the whole of the overpayment of income support (IS) of £55,372.48 in respect of the period 27 November 1998 to 11 September 2003 is recoverable from the claimant.  

REASONS FOR DECISON

Background

1.	At no stage, despite being given specific opportunities to do so, has it ever been contended on the claimant’s behalf that he was not in remunerative work for the period 27 November 1998 to 11 September 2003, or that there was no failure to disclose that material fact, or that the amount of the resultant IS overpayment is incorrect.  The argument centres solely on whether the Secretary of State could properly make the overpayment recoverability decision in issue. 

2.	An original overpayment decision by a DM, covering approximately the same period less a year, was made on 28 February 2006 (and revised on 18 April 2006).  An appeal tribunal decision upholding that original overpayment decision was set aside by a Commissioner because a request for a postponement had not been before that tribunal.  The rehearing was concluded at Sunderland (the Sunderland tribunal) on 6 March 2008.  The Secretary of State put in a submission to the Sunderland tribunal, acknowledging that a proper alteration of the previous benefit entitlement, which was required in order to underpin a valid recoverable overpayment, had not yet been made.  The Sunderland tribunal was asked to correct the decision‑making process and, in effect, give such a decision constituting the necessary revision of prior benefit entitlement.

3.	In its decision notice, however, (and no statement of reasons was ever requested) the Sunderland tribunal decided as follows on 6 March 2008:-

	“The appeal is allowed.

	By agreement of the parties;

	The decision of the Secretary of State dated 28/2/2006 is revised.

	The overpayment of Income Support amounting to £44,129.06 from 26/11/1999 to 11/9/2003 is not recoverable because Section 71(5A) of the Social Security Administration Act 1992 has not been satisfied. 

	The decision of the Secretary of State dated 18/4/2006 is revised.

	The overpayment of Income Support amounting to £47,531.22 from 26/11/1999 to 11/9/2003 is not recoverable because Section 71(5A) of the Social Security Administration Act 1992 has not been satisfied.”

4.	On 19 May 2008 a DM revised the claimant’s awards of IS for the period from 27 November 1998 to 11 September 2003 on the basis that all such decisions were given in ignorance of the material fact that he had been in remunerative work throughout the period so that there was in fact no IS entitlement.  The composite decision of 19 May 2008 revising prior IS entitlement and substituting a nil award has not been appealed, nor has objection ever been made to any of its content so far as accuracy is concerned.  

5.	A DM then tackled the recoverability of the overpayment which arose as a result of the decision of 19 May 2008 (the entitlement decision).  The first such attempt sought to revise the original overpayment decision of 28 February 2006.  The supposed revision of 4 June 2008 was then withdrawn because what it purported to revise had already been disposed of by the Sunderland tribunal.

6.	On 15 July 2008, a DM made a new decision in terms that, following the entitlement decision of 19 May 2008 revising the claimant’s entitlement to IS for the relevant period, there was a resulting overpayment of IS which, as a result of his failure to disclose a material fact, was recoverable.  It is the recoverable overpayment decision of 15 July 2008 that was before the tribunal.  An appeal against it was lodged on 21 July 2008.  

7.	The claimant did not attend the tribunal hearing.  He has been represented throughout these proceedings by the Newcastle Law Centre.  Written submissions have been prepared by Counsel.  I refer to submissions made on the claimant’s behalf, whether by the Law Centre or by Counsel, as those of “the representative”.  The representative has consistently contended that the Sunderland tribunal’s decision of 6 March 2008 is binding on any future decision‑maker in respect of the period from 26 November 1999 to 11 September 2003, that the Sunderland appeal tribunal’s decision was that the overpayment applicable to that period was not recoverable from the claimant, and therefore that is fatal to any subsequent attempt to recover the same overpayment. 
8.	The argument was accepted by the tribunal; it set aside the decision of the Secretary of State issued on 15 July 2008 (except and insofar as it applied to the period 27 November 1998 to 25 November 1999 which, it was conceded on behalf of the appellant, fell outside the ambit of the Sunderland appeal tribunal’s decision on 6 March 2008).  The tribunal took the view that what it was being asked to do was to supersede the Sunderland appeal tribunal’s decision and, particularly standing the absence of a full statement of reasons for that decision, it had no material on which it could conclude there were grounds for such supersession.  The tribunal therefore reasoned that the Sunderland tribunal’s decision remained the operative one and had the effect that there was still, because it was a final decision, no recoverable overpayment.  

Appeal to the Upper Tribunal 

9.	The Secretary of State relies in this appeal on the decision of Mr Commissioner Mesher (as he then was, now Upper Tribunal Judge Mesher) in R(IS) 13/05, with respect to the effect of the relevant sections of the Social Security Administration Act 1992.  

10.	Section 71(1) of the Social Security Administration Act 1992 provides that:

	“71.	-	(1)	Where it is determined that, whether fraudulently or otherwise, any person has misrepresented, or failed to disclose, any material fact and in consequence of the misrepresentation or failure –

					(a)	a payment has been made in respect of a benefit to which this section applies; or 

					(b)	any sum recoverable by or on behalf of the Secretary of State in connection with any such payment has not been recovered.

				the Secretary of State shall be entitled to recover the amount of any payment which he would not have made or any sum which he would have received but for the misrepresentation or failure to disclose”.

			Section 71(5A) further provides that:

				“(5A)	Except where regulations otherwise provide, an amount shall not be recoverable under subsection (1) […] unless the determination in pursuance of which it was paid has been reversed or varied on an appeal or has been revised under section 9 or superseded under section 10 of the Social Security Act 1998”.

11.	Founding on the above legislation and on R(IS) 13/05, the Secretary of State contends as follows:

	“It is my submission that the tribunal has erred in law.  The tribunal held that the decision of the earlier tribunal of 6 March 2008 was final and unchangeable.  According to the relevant Decision Notice the earlier tribunal concluded that there was no recoverable overpayment in respect of the period 26 November 1999 to 11 September 2003 ‘because Section 71(5A) of the Social Security Administration Act had not been satisfied’.  In my submission, the decision of the Commissioner in R(IS) 13/05 properly explains the nature and consequences of such a decision.  In his decision the Commissioner considered the recoverability of an overpayment said to be the result of the claimant having failed to disclose that she was living together as husband and wife with another person.  The tribunal had held that section 71(5A) was satisfied by the Secretary of State’s finding that the claimant was living together.  The Commissioner, however, held that the Secretary of Stat’s finding was a ‘determination’ (i.e. a ‘building block’ of an outcome decision) and not an outcome decision itself (paragraph 9).  In effect, no supersession of the award had been carried out, even if a first step towards such a decision had been taken.  The initial implication of this was set out by the Commissioner in paragraph 1 of this decision:

		‘the Secretary of State has failed to prove that the conditions for recoverability of an overpayment for that period were met, in that the condition in section 71(5A) of the Social Security Administration Act 1992 is not satisfied.  I deal in paragraph 15 below with where that leaves the case’.

	In paragraph 15, he went on to say:

		‘15.	The upshot for the claimant is this.  First, no decision has been made that takes away her entitlement to income support for the period from 26 February 1992 to 25 March 1997.  Thus no overpayment for that period can yet be identified.  Second, the effect of my decision in paragraph 1 above is that there is no overpayment recoverability decision in existence in relation to that period.  However, there is nothing in law to stop the Secretary of State from taking action now to make a proper revision or supersession decision in relation to that period …  If the Secretary of State does make a proper revision or supersession decision covering the period from 26 February 1992 to 25 March 1997, he may also consider making an overpayment recoverability decision properly based under section 71(5A), either as part and parcel of the revision or supersession decision or separately.  The claimant would have a right of appeal against any decision or decisions that are made’.

	The Commissioner thus, in my submission, held that the effect of a decision that ‘the Secretary of State has failed to prove that the conditions for recoverability of an overpayment for that period were met, in that the condition in section 71(5A) of the Social Security Administration Act 1992 is not satisfied’ is that ‘there is no overpayment recoverability decision in existence in relation to that period’.  In my submission, this principle applies equally to the decision of the tribunal of 6 March 2008.  The tribunal found that section 71(5A) was not satisfied in respect of the period from 27 November 1998 to 11 September 2003; therefore ‘there is no overpayment recoverability decision in existence in relation to that period’.”  (original emphasis)

12.	For the claimant, the representative relies on the principle of finality under section 17 of the Social Security Act 1998, which means that an outcome decision, as opposed to a determination, is final and remains conclusive until it is altered by means of a revision or supersession or is overturned on appeal by a tribunal.  So far as a tribunal decision is concerned, as distinct from that of a decision‑maker on behalf of the Secretary of State, a tribunal’s decision may not be altered for error of law except on appeal to the Upper Tribunal.  The representative submits that, as the Sunderland appeal tribunal’s decision of 6 March 2008 is that the overpayment for the period 26 November 1999 to 11 September 2003 is not recoverable, which is a final and binding decision for the purposes of s.17 of the Social Security Act 1998, that impels the conclusion to which the tribunal correctly came, that the DM on 15 July 2008 could not make an inconsistent decision.

Discussion

13.	I reject the submission made on behalf of the claimant by the representative.  What is crucial is what the tribunal sitting on 6 March 2008 actually decided.  As Mr Commissioner Henty put it in CIS/4246/2004 at paragraph 8, in relation to a similar earlier tribunal decision that “the overpayment for the period … is not recoverable”:

	“It was not, in my view – and evidently in the view of the Commissioner in para 26 CSIS/332/02 – a decision that the overpayment could not be recoverable for all time.  All that the decision of 3.2.04 affected (sic) was that the overpayment was not then recoverable, based as it was on an apparently invalid supersession – but that is entirely without prejudice to any future overpayment claim based on a valid supersession.”

14.	If there is no sufficient section 71(5A) decision in relation to all parts of the period of an alleged overpayment then, as Mr Commissioner Mesher explained in R(IS) 13/05, “the Secretary of State has failed to prove that the conditions for recoverability of an overpayment for that period were met, in that the condition in section 71(5A) of the Social Security Administration Act 1992 is not satisfied” (para 1), so that “there is no overpayment recoverability decision in existence in relation to that period” (para 15).  The outcome decision of the Sunderland appeal tribunal of 6 March 2008 therefore had the effect that the DM’s original overpayment decision of 28 February 2006 was nullified.  This was on the basis that there was no satisfaction of section 71(5A), because there had been no valid decision altering entitlement under a prior award which could underpin any resultant overpayment as recoverable.

15.	It is irrelevant that, in R(IS) 13/05, there was no valid alteration of prior entitlement because what was relied on by the DM was a mere determination and not an outcome decision.  The reason that section 71(5A) is not satisfied could equally well be that there has been no prior attempt whatsoever at revision or supersession of entitlement or, as seems to be the present case, earlier decisions purporting to change the terms of the award were contradictory.  Sometimes, a tribunal can rectify errors in a decision‑making process; but the Sunderland appeal tribunal on 6 March 2008 considered it could not do this and its decision that there was no proved recoverable overpayment by the date of its hearing remains a final and binding decision.  Nor is it in any way relevant, as the representative contends, that in R(IS) 13/05, a tribunal decision was set aside, whereas here the decision of the Sunderland appeal tribunal remains extant.  In R(IS) 13/05, the Commissioner substituted the outcome decision that the appeal tribunal should have given i.e. that the Secretary of State had failed to prove that the conditions for recoverability of an overpayment for the relevant period were met because the section 71(5A) condition was not satisfied; that part of the Commissioner’s decision, (which is quite distinct from the legal principles set down in the case), has exactly the same status as that of the Sunderland appeal tribunal of 6 March 2008 and so was subject to alteration under like principles.  

16.	The DM’s original overpayment decision of 28 February 2006 was in substance declared invalid and of no effect by the Sunderland appeal tribunal of 6 March 2008;  but this in no way prevents the Secretary of State from beginning again and carrying out a fresh overpayment process correctly.  This was done, firstly, by the revisions of 19 May 2008 which constituted the necessary underpinning s.71(5A) alteration of IS entitlement for the purposes of a recoverable overpayment and, secondly, by the linked new recoverable overpayment decision of 15 July 2008 which was the subject of the appeal to the tribunal.  The tribunal went wrong in considering it was being asked to supersede a decision of the Sunderland appeal tribunal on 6 March 2008.  The DM’s decision in issue before it was a wholly fresh and distinct overpayment recoverability decision, now properly based under section 71(5A) on a DM’s new and correct alteration of entitlement decision of 19 May 2008.  The DM’s decision on 15 July 2008 could not undermine the final decision of the Sunderland appeal tribunal of 6 March 2008 but it did not do so.

SUMMARY 

17.	The only points raised on the claimant’s behalf have been the above legal submissions, which I reject; it is therefore appropriate, as submitted on behalf of the Secretary of State, that the DM’s decision of 15 July 2008, in issue before the tribunal, is confirmed, and the claimant’s appeal to a tribunal against it, dismissed.

			(Signed on the Original)
							L T Parker
							Judge of the Upper Tribunal 

							26 July 2010