IN THE UPPER TRIBUNAL Case
No. CPC/962/2012
ADMINISTRATIVE APPEALS
CHAMBER
Before Judge Mark
Decision: The appeal is allowed. I set aside the decision of
the tribunal and I vary the decision of the decision maker dated 17 September
2010 so as to provide that the period of overpayment in respect of which the
sums overpaid are recoverable from the claimant is between 8 January 2007 and
30 April 2010, both dates included. I remit to the Secretary of State the
calculation of the amounts recoverable.
REASONS FOR DECISION
- This appeal is brought by
the Secretary of State with the permission of a district tribunal judge
from a decision of the First-tier Tribunal allowing in part the appeal of
the claimant from a decision of a decision maker that there had been an
overpayment of pension credit to her as a result of a material
misrepresentation by her. The misrepresentation was not in dispute and
the only question before the tribunal at the hearing was whether there had
been a break in the chain of causation so that part of the overpayment was
not recoverable.
- The misrepresentation was
in the claimant’s pension credit application on 8 January 2007, when she
stated that she was not in receipt of any private pension. In fact, she
was in receipt of an occupational pension from a former employer. The
office dealing with her pension credit became aware on 7 October 2009,
through a Generalised Matching Service Scan (GMSS), that the claimant was
in receipt of her occupational credit, but despite this it carried on
paying the claimant pension credit until 1 August 2010. The Secretary of
State accepted that overpayments between 4 July 2010 and 1 August 2010
were not caused by the original misrepresentation, and the overpayment
recovery decision under appeal only related to the period from 8 January
2007 to 4 July 2010.
- The tribunal determined
that the claimant’s failure to disclose her occupational pension was the
cause of the overpayment until the Secretary of State became aware of the
fact of her receipt of that pension and had a reasonable time to act on
it. It concluded that the reasonable time in this case was one month and
found that the overpayments between 8 November 2009 and 4 July 2010 were
not recoverable.
- The Secretary of State,
who was not represented at the hearing, has appealed, contending that the
failure to act on the information provided by the GMSS did not break the
chain of causation and that the claimant’s initial misrepresentation
remained one of the effective causes of the overpayments. It is also
contended that the tribunal was wrong in its statement of reasons to treat
the claimant’s misrepresentation as non-disclosure. As to this last
point, the Secretary of State is plainly correct. The claimant had been
asked if she or her partner had any private pensions and she responded by
giving details only of a small private pension of her partner. This
plainly involves a representation that there were no other such pensions,
and that was plainly a misrepresentation. The point is, however, irrelevant
to the question of causation on the facts of this case and would not
justify setting aside the tribunal’s decision.
- The question of causation
is one of fact, and requires an analysis of the relevant facts in order to
determine whether any failure by the DWP to act on information received
was sufficient to break the chain of causation resulting from the original
misrepresentation or non-disclosure or was merely a concurrent cause of
the overpayment. Once a question of causation is raised which the tribunal
considers to be arguable, the Secretary of State must have an opportunity
of dealing with it. This is both as a matter of natural justice that a
party should have the opportunity of dealing with the other side’s case
and because potentially relevant facts as to what happened and why nothing
was done for so long are within the peculiar knowledge of the Secretary of
State. He has therefore the obligation to disclose the relevant
information and documentation in accordance with his duty to help the tribunal
to achieve the overriding objective of dealing fairly and justly with the
case (Tribunal Procedure (First-tier Tribunal) (SEC) Rules 2008, rule 2(1)
and rule 2(4)(a)).
- In the present case, the
claimant, who was then acting in person, raised no point as to causation
in her notice of appeal, nor was it raised at any time until the tribunal
hearing, where, as usual, the Secretary of State was not represented. It
is also plain from an examination of the submissions of the decision maker
to the tribunal that it was, understandably, not thought necessary to
address the question of causation in those submissions, because no such
point had been taken. Had the point subsequently been taken in advance of
the hearing, the Secretary of State would, or may, have had the
opportunity of dealing with it and producing necessary documentation and
other evidence, and in the absence of any response, the tribunal may have
been able to make adverse inferences against him. When, however, the
point was first taken at the hearing, the Secretary of State was deprived
of any opportunity of dealing with it unless the tribunal adjourned.
- Bearing in mind the
importance in cases of causation of ascertaining what did cause the
relevant office to continue the overpayments, it appears to me that the
only proper course to have taken, once the tribunal had concluded that
there was some merit in the claimant’s new contentions, was to adjourn the
hearing and give directions for the production of the relevant information
and documentation by the Secretary of State and for such written or oral
submissions as he may care to make.
- I therefore set aside the decision
of the tribunal. The representative of the Secretary of State has now
sought to provide the missing information and has made his submissions on
the question of causation. I must consider whether, in those
circumstances, I should substitute my own decision for that of the
tribunal or whether I should remit the case to a new tribunal with
directions as to the further information and documentation that the
Secretary of State should provide.
- In the course of this
appeal a direction was given, dated 6 September 2012, by a Registrar of
the Upper Tribunal for the Secretary of State to make some enquiries
regarding the history of the events that might throw some light on certain
points. The matters identified in the directions were (1) the lack of
information of what, if anything, the DWP did between the receipt of the
GMSS in October 2009 and the decision to disallow the claim in July 2010,
(2) information as to copy payslips relating to the claimant’s
occupational pension at pp.24-29 of the file which had been certified as
true copies by somebody on 30 April 2010, (3) what contact the DWP had had
with the claimant following receipt of the GMSS to ask if she was in
receipt of an occupational pension, despite the inference from the papers
that it had not done so, and (4) why the overpayment decision excluded the
overpayments after 4 July 2010.
- The response from the
representative of the Secretary of State on this appeal is as follows:
“3. … I wrote to the officer in the
Pension Service Appeals Team who referred [the claimant’s] case to my office
for the information [the Registrar] requested. The reply I initially received
was as follows:
“I have looked through the file and all the papers. It
would appear that several letters were issued to the customer regarding the
Occupational Pension along with a form A42 [an authorization for the
Department to contact a third party for information about the claimant] to
sign if she could not provide the information the first being sent between
14/04/10 and 29/04/10 information was then sought from the pension provider.
There is no indication in the papers why it took form October 2009 to April 2010
for the GMS scan to be actioned.
I am not sure who noted the wage slips as certified true
copies and I also do not know why the recoverable overpayment ceased on 4 July
2010.”
4.
I then asked
whether the claimant had replied to any of the letters sent to her, and whether
there was any evidence as to who sent the pension payment slips at pages 24-9
and when they were received. The reply was:
“It is not clear of how we found out about the NHS pension
but she did reply about the increase to her husband’s Occ Pen” and
“there does not appear to be any covering letter with the
pay slips therefore, I cannot comment on who sent them in.”
5.
However, I also
raised four additional points with the Pensions Service:#
“a) First, you say ‘several letters were issued to the
customer regarding the Occupational Pension along with a form A42 to sign if
she could not provide the information the first being sent between 14/04/10 and
29/04/10.’ Is the exact date of the first enquiry not recorded? What makes
you think the letter was issued in the period between 14/04/10and 29/04/10?
b) You also said that ‘information was then sought from the
pension provider.’ Do we have a date for when this request was sent? What
response was received and when did it arrive?
c) When and how did the claimant reply about the increase to
her husband’s Occ Pen? Is it possible to fax me a copy of the reply?
d) Did the claimant ever complete the A42? If she did, when
was this received, and can you fax me a copy?
6.
I received no
reply on these points.
7.
… The new
information above suggests that no step was taken until the claimant was
contacted during the second half of April 2010. No specific information is
available as to why this delay occurred. In my experience, however, such
delays are generally the result of GMS producing far more reports than an
individual office or section can cope with. In these circumstances, the
section or office typically responds by stockpiling the reports until such time
as they can be acted on. This may well be many months later.
- The representative went on
to state that it was possible that the pay slips had been certified either
by the pension provider or possibly by an officer of the DWP. He conceded
that the pay slips should be taken as having been received on 30 April
2010 and that this would break the chain of causation. I accept that
concession. It is plain that the pay slips contained sufficient
information to enable the pension credit office to stop the pension credit
payments immediately and that as a matter of commonsense it was that
failure to do so which led to the payments continuing (see GJ v
Secretary of State, [2010] UKUT 107 (AAC)).
- The claimant was given the
opportunity to respond to the Secretary of State’s various submissions but
did not do so.
- In the submissions to
which I have referred, the representative of the Secretary of State
submits that the case should now be remitted to a new tribunal which could
take evidence from the claimant about her dealings with the pension credit
office and direct a Presenting Officer to investigate the relevant
departmental records and attend an oral hearing. That may be an
appropriate course in future cases where similar issues arise, but both
parties have had the opportunity to address these issues before me. The
question of how the claimant responded to letters from mid-April 2010
appears to me to be irrelevant in view of the concession that the chain of
causation was broken from 30 April 2010. There is no suggestion that
there were any relevant dealings between her and the pension credit office
before mid-April. Further, it appears likely that one of those letters
was responded to giving permission for the DWP to contact the pension
provider and that it was that which led to the provision of the pay slips
by the pension provider (unless of course the pay slips were provided by
the claimant herself and the copies were then taken and authenticated by
an officer at the DWP. If, therefore, the relevant cut off date for
causation purposes depended on the claimant’s response to correspondence
in any way, I see no reason to treat that cut off date as any other than
30 April 2010.
- In all the circumstances,
it appears to me that I should substitute my own decision for that of the
tribunal rather than remit the case as suggested by the representative of
the Secretary of State. Each side has now had the opportunity to deal with
the evidence produced by the Secretary of State and the law has been
thoroughly explored. There is nothing to indicate that any further
information will be produced by Secretary of State if the matter was
remitted than could have been, and has been, produced on this appeal.
There is no evidence that the claimant can give to explain the delay on
the part of the Secretary of State. The law has been comprehensively
explored in the written submissions.
- I accept that the likely
explanation for the failure to act on receipt of the GMSS was that
provided by the representative of the Secretary of State – that there was
not enough staff adequately to deal with the GMSS reports provided to the
pension credit office. The essential question that I must determine is
whether that lack of adequate staff to deal with the GMSS report in this
case is a concurrent cause for the overpayments together with the original
misrepresentation or whether, and if so at what point, as a matter of
common sense, it effectively broke the chain of causation. The fact that
the DWP’s neglected the information provided is not enough if it is only
one of the effective causes and the original misrepresentation remains
another one (Morrell v Secretary of State, [2003] EWCA Civ 526,
reported as R(IS) 6/03).
- However, what is an
effective cause is to be determined as a matter of common sense. Breaking
the chain of causation does not mean that a situation must be arrived at
where the original non-disclosure or misrepresentation was not in any way
responsible for the overpayment. Even when the relevant office of the DWP
has all the relevant information but fails to act promptly on it, and even
where that information has been supplied late by the claimant, as a matter
of strict logic the original breach of duty by the claimant remains a
cause of the overpayment because had the duty been performed the
overpayment would never have been made. Nevertheless, at least by that
stage it is generally accepted that the failure of the DWP to act with
reasonable speed breaks the chain of causation. What in my judgment is
really meant by breaking the chain of causation applying the commonsense
required the authorities referred to by me in GJ v Secretary of State [2010] UKUT 107 (AAC) is that a situation has been reached where intervening
factors mean that it would not be right as a matter of common sense, and
in all the circumstances, to hold the claimant responsible for subsequent
overpayments.
- The answer to the factual
question whether there has been a break in the chain of causation because
of inaction thus depends on all the facts of the case. The facts in the
present case are that the GMSS report clearly identified the claimant as
having pension credit and a retirement pension at least from 26 September
2009, but it gave no information as to the amount of the retirement
pension or as to whether it had been taken into account in assessing
entitlement to pension credit. It would be necessary first for somebody
to investigate whether the retirement pension had been disclosed. Once it
was found that it had not been disclosed, it would be necessary to find
out how much it was. A very small retirement pension may have little or
no effect on entitlement to pension credit. All this could take time to
ascertain, even in a well run and adequately staffed office.
- By contrast, a different
GMSS report in relation to a different benefit might immediately provide
information that made it apparent that benefit could no longer continue.
For example it may show that a person in respect of whom carer’s allowance
was being paid to a claimant had ceased to be entitled to disability
living allowance and the award had been terminated. In those
circumstances, little if any further investigation might be required
before terminating or at least suspending the allowance. Or, as in GJ
v Secretary of State, the information that benefit had terminated
might be on a computer screen which had been accessed and viewed by an
officer at the relevant office.
- A further relevant factor
in the present case is that it is clear from the payslips at pp.24-29 that
the claimant’s pension increased annually, rising incrementally between
January 2007 and April 2009 from £5073.69 to £5576.25. The Pension Credit
information booklet at pp.91-98 contains three references to pensions. At
p.93 it is stated that “you do not need to worry about reporting changes
to your pensions … unless it means you may get more Pension Credit.” At
p.95, it states that “If you have a personal or work-related pension, we
work out how much they go up each year using the information you or your
pension provider has given us. If you were not able to give us this
information, we assume that the pension goes up in April by an amount
based on the previous September’s retail price index.” Finally, at p.98
the claimant was told to tell the DWP if she or her partner started to get
any personal or work related pensions and “If you or your partner are
already getting these you must also tell us if they change.”
- While it may be unclear
whether the claimant was to report the, possibly index linked, increases
to her pension, she was plainly on notice to check this in view of the
final sentence quoted above, even if, which she has never stated, she
believed that she had disclosed everything initially.
- I bear in mind that there
has been no real explanation as to why the claimant failed to disclose her
own pension in her claim form. It was plainly something that she knew
about and it was also something that she was subsequently reminded about in
the information booklet.
- I have been referred to a
number of relatively recent cases raising the same issues. In CDLA/1708/2001,
the claimant had a life award of the higher rate of the mobility component
and the highest rate of the care component of disability living
allowance. She had been observed and recordings of her had been made
between 22 April and 13 May 1999, and she had been interviewed on 19 May
1999 when the recordings were put to her. But it was only on 6 August
1999 that her award had been superseded. There was no explanation for the
delay in superseding the award. Mr. Commissioner Mesher concluded that the
causal link to the claimant’s failure to disclose her true condition had
been broken on 19 May 1999 when the investigating officer felt he had
enough information to put it to her in an interview and had heard her
reactions and explanations. This was a conclusion of fact to which he
came in that case. His approach is similar to that of the representative
of the Secretary of State in the present case, but he did not have to
consider a period of extensive delay by the DWP in investigating the
matter.
- In JM v Secretary of
State, [2011] UKUT 15 (AAC), the claimant had been in receipt of
income support. His home had been destroyed by a gas explosion and he
received two capital sums – an insurance payout of nearly £19,000 in
February 2002 and £10,000, the proceeds of sale of the land on which his
home had stood, in December 2003. The DWP received information as to his
capital which appeared to be incompatible with his claim in a GMSS report
on 7 February 2007. Judge Lane pointed out that this information provided
evidence that he was legal owner of the capital but it did not necessarily
follow that he was beneficial owner. In that case the claimant was
interviewed on 6 March 2007 when he stated where the money had come from
and that he had been told that the money or some of it would be
disregarded. Receipt of the GMSS report did not demonstrate categorically
that the claimant was not entitled to benefit and the interval between
receipt of the information and the interview was only a month. Judge Lane
held that mere receipt of the information from the GMS was not enough, and
it is not suggested otherwise in the present case. There was no
subsequent delay in interviewing the claimant, and the overpayment
decision was only in respect of the period ending on 7 March 2007. This
decision also provides no assistance in deciding how delay should be
treated in relation to causation. Nor does it mean that in every case
where information is provided, whether by means of a GMSS report or
otherwise, the information should not be acted on immediately. Some
information may be sufficiently clear to demand immediate action to avoid
further potential overpayments.
- In CSG/595/2011, the
claimant had been in receipt of carer’s allowance for her daughter from 12
August 2002. She had limited earnings as a cleaner with the local council.
At some point between then and the 2008/9 tax year, her earnings had
increased to an extent that she was no longer entitled to carer’s
allowance. On 20 May 2009, a report issued by HMRC indicated that her
earnings in the year ending 5 April 2009 appeared from her National
Insurance Contributions to have been £6583. The benefits office, on
receipt of this information, had written to HMRC on 3 June 2009 for
details of her employer and HMRC duly provided this information. There
was then a delay of over 7 months before the DWP contacted the employer
(still the local council) on 13 January 2010 asking for information as to
the claimant’s employment and earnings. The delay was unexplained. It is
unclear how long the council took to respond, but on 1 April 2010 the
claimant was asked for details of work related expenses. These were
provided by the claimant by letter of 6 April 2010.
- It appears that it then
took until 28 October 2010 for a supersession decision to be made and on 9
December 2010 an overpayment decision was made covering the period from 17
April 2006 to 31 January 2010. It would appear therefore that the
claimant had earnings in excess of the permitted amount from the earlier
of those dates. It would also appear either that benefit had been
suspended from 31 January 2010 or that it had been determined that any
subsequent overpayment was solely caused by the DWP’s failure to act on
the information it had.
- The First-tier Tribunal
determined that the department was aware on 20 May 2009 that the claimant
was in receipt of a greater income than that declared and should have
suspended payment pending further enquiries, so that the subsequent
payments were due to official error. The Secretary of State appealed,
contending that the First-tier Tribunal had erred in law in concluding
that the causal link had been broken when the benefits office received the
information as to the claimant’s earnings from HMRC. The decision of the
Upper Tribunal, Judge Burns QC, referred to JM v Secretary of State
and to the contention of the Secretary of State that the principles set
out in that case applied equally in the case before him. It was pointed
out in the Secretary of State’s submissions that further information was
still needed as to possible deductions before the claimant’s entitlement
in that case could be calculated.
- Judge Burns pointed out
that the Secretary of State did not appear before the tribunal to present
his case or attempt to discharge any burden of proof, and there was no
evidence before the tribunal to enable it to determine that the
information from HMRC was in any way inadequate to enable the Secretary of
State to take appropriate action. The information was that the earnings
were prima facie over the permitted limit, and the action referred to was
suspension of benefit. The tribunal was entitled to come to the view that
the chain of causation had been broken and the Secretary of State had
failed to provide the necessary evidence as to why the benefit had not
been suspended.
- Judge Burns held in effect
that the information provided by HMRC was such that, in the absence of any
explanation from the Secretary of State as to why benefit was not
suspended, a tribunal was entitled to conclude that it should have been
suspended and that, as a matter of fact, the failure to do so was of such
significance as to break the chain of causation. It emphasises the
importance of the Secretary of State providing a proper explanation of any
delay in taking this type of action. It does not lay down any sort of
general rule that information of this kind must always be acted on. Even
in that case, evidence from the Secretary of State as to the reasons for
not acting immediately may have persuaded the First-tier Tribunal to come
to a different conclusion. The decision of Judge Burns was simply that on
the evidence before it, the First-tier Tribunal was entitled to come to
the conclusion of fact that it did reach.
- CG/0344/2012 was another
case of carer’s allowance where in the course of the award the claimant’s
earnings exceeded the statutory limit, but she failed to notify the DWP of
this. The eventual overpayment decision covered the period from 3
December 2007 to 17 January 2010, but on appeal the First-tier Tribunal
found that the liability of the claimant to repay the overpayment was only
from 3 December 2007 until 31 May 2009 on the grounds that the Secretary
of State had known of her earnings from 28 May 2009, when information as
to her earnings had been received from HMRC. On that occasion the
Secretary of State was represented at the hearing by a presenting officer.
- The appeal was determined
by Judge Jacobs. He accepted the submission of the Secretary of State
that the information on the HMRC form did not properly allow the Secretary
of State to supersede the claimant’s award of carers’ allowance bearing in
mind the complexities involved in arriving at a final weekly figure. He
also determined that, on the facts of that case, it would have been
premature to have suspended payment merely on the basis of the information
on that form. He does not set out the facts which led him to that
conclusion, and it is possible that it was a borderline case where
deductions may have meant that the claimant remained entitled to the award
or it may be that he had in mind that as the figures provided by the
revenue were historic (as pointed out by him in the previous paragraph of
his decision) it could not be assumed that the claimant was earning any
particular amount when the information was received.
- Judge Jacobs concluded
that the tribunal had been in error of law in determining that the
relevant cut-off date was 31 May 2009 because the further information to
which he referred was needed before a decision could be reached. He then
went on to substitute his own decision in favour of the Secretary of
State. In doing so, he considered the unexplained delay that occurred
after 28 May 2009. He finds that it did not look as if the Secretary of
State made any enquiries of the claimant’s employer until January 2010 and
that it was not possible to tell why not. However, he concluded that that
did not help the claimant even if the Secretary of State had some
responsibility for not acting sooner. The overpayment was the consequence
of her failure to report her change of circumstances. It did not matter
that there had been another cause.
- There is an apparent
conflict between the decisions of Judge Burns and Judge Jacobs. Insofar
as it turns on the effect of the information supplied by HMRC in each
case, it is not a conflict that I need to resolve. Insofar as they
involve different findings of fact based on similar evidence, that is also
something that need not concern me. Judge Burns was accepting that the decision
of the tribunal under appeal involved a finding of fact which it was
entitled to make on the evidence. Judge Jacobs came to a different
finding of fact on similar, but not identical evidence. Even on identical
evidence, two judges can come to different findings of fact and be upheld
on appeal.
- While it appears to me
that there may well be circumstances where a failure to act properly or
expeditiously by the DWP, even without full information, may well lead to
the chain of causation being broken, that is not the case here. The
claimant misrepresented that she was not receiving an occupational pension
in response to a clear question at a time when she was well aware that she
was receiving such a pension. She received annual increases to that pension
and the information booklet would have drawn attention to its relevance
and to the possible need to disclose the increases. I see no reason to
find in those circumstances that the chain of causation was broken at some
point because there was a delay on the part of the DWP in acting on the
incomplete information received by way of the GMSS report. Accordingly,
the claimant is liable to repay the overpayments received during the
period of delay. The result may have been different, for example, if the
overpayment had resulted from an innocent misrepresentation as to a
partner’s income of which the claimant had no knowledge, or as a result of
a failure to disclose where, although there was a duty to disclose, the
matter that required disclosure was one where it was understandable that
the claimant had failed to appreciate its significance.
- There may also come a
time when the delay becomes so great that the original chain of causation
must, as a matter of common sense, be treated as broken. This is so whether
the information is complete or incomplete, although the more complete it is,
the less delay is tolerable. It does not appear to me that the DWP can
simply neglect matters indefinitely while paying benefit and then seek to
recover overpaid sums from relatively impecunious people to whom they have
been paid, possibly in many cases as a result of a misrepresentation or
failure to disclose made in wholly innocent circumstances. That is not in
the interests either of the taxpayer whose money is being spent in this
way or the possibly morally innocent recipient who will have to repay
anything overpaid.
- In the present case,
however, I am satisfied that the chain of causation was only broken, as
conceded by the Secretary of State, on 30 April 2010, and overpayments
made after that date are therefore not recoverable.
(signed
on the original) Michael Mark
Judge of the Upper Tribunal
7 June 2013
