R (Morrell) v Secretary of State for Work and Pensions
| Jurisdiction | England & Wales |
| Judge | RICHARDS J |
| Judgment Date | 11 April 2003 |
| Neutral Citation | [2003] EWCA Civ 526 |
| Docket Number | C3/2002/2024 SSTRF |
| Court | Court of Appeal (Civil Division) |
| Date | 11 April 2003 |
[2003] EWCA Civ 526
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE SOCIAL SECURITY COMMISSIONERS
(COMMISSIONER EDWARD JACOBS)
Lord Justice Thorpe
Lord Justice Sedley and
Mr Justice Richards
C3/2002/2024 SSTRF
PHILIP COPPEL (instructed by Messrs Withers of London EC4M 7EG) appeared for the appellant.
MISS ELISABETH LAING (instructed by Department of Work & Pensions Legal Services) appeared for the respondent.
This is an appeal from a decision of the Social Security Commissioner (Mr Commissioner Jacobs) dated 25 April 2002 by which he upheld a decision of an appeal tribunal confirming that the Secretary of State was entitled to recover sums from the appellant as overpayments of income support. The issues raised are (1) whether certain payments received by the appellant by way of loan were "income" of the appellant for the purposes of the income support legislation, (2) whether, if there were overpayments, they were "in consequence of" misrepresentations by the appellant, and (3) whether the decision of the appeal tribunal was adequately reasoned.
The facts
The appellant received income support for the period 23 June 1995 to 1 August 1999.
For much of that period she was also receiving regular sums of money from her mother, either paid to her and used by her towards rent and other living expenses, or paid directly to her landlord or the landlord's agents in respect of her rent. The sums paid by the mother varied over time, from £2,000 per month, to £1,733 per month and then £1,906 per month. The payments were made in order to help the appellant out after her divorce. It is not in dispute that they were made to her by way of loan. There is only limited evidence, however, as to the terms of the loans. In a letter dated 25 January 1997 the mother stated that "I expect to be reimbursed gradually as her problems decrease". In a letter dated 15 March 1999 she wrote that "[t]he money has been paid by me on the basis that it is a loan, to be repaid by my daughter when she is able to find employment and my daughter has signed annual IOUs to that effect".
During the period when she was in receipt of income support, the appellant was required to fill in income support review forms on four occasions, namely 14 September 1995, 24 October 1995, 27 April 1998 and 6 January 1999. Each of those forms included the question: "Does anyone pay money to someone else on your behalf?". In each case the appellant answered "no".
By letter dated 30 January 1997 to the benefits investigation team at the London Borough of Hammersmith and Fulham the appellant advised that she had been in receipt of a regular monthly loan from her mother since September 1995, in a total amount to date of £20,000. The letter appended the mother's letter dated 25 January 1997 confirming the loan arrangement and the total amount outstanding.
The benefits investigation team took the view that the amounts received from the mother should be classed as income and referred a copy of the appellant's letter to the Benefits Centre dealing with her income support payments. It was received by the Benefits Centre on 13 February 1997. No action was taken on it.
In early 1999 the appellant was questioned further by the local authority's benefits investigation team. In a witness statement dated 2 March 1999 she stated that the whole of her monthly rent was being paid directly to her landlord by her mother, that the payment was a loan and she had to write her mother an IOU on an annual basis, and that she did not know how much was owing at the moment. Her mother provided the letter of 15 March 1999 confirming the amount paid by way of rent per week on the appellant's behalf and the fact that it was a loan.
This further information was sent by the local authority to the Benefits Centre for consideration of whether income support should cease. It was received on 14 April 1999. Again no action was taken on it.
On 1 August 1999, however, the appellant's income support was terminated for a different reason, namely that she had notified the Benefits Centre that she was moving in with her fiancé and no longer required benefit.
On 11 February 2000 the appellant was notified by the Benefits Agency's Overpayments Centre of a decision to recover overpayments of income support from her. There were various reconsiderations of that decision, culminating in decisions to recover (1) overpayments amounting to £5,274.32 in the period 11 September 1995 to 13 February 1997 and (2) overpayments amounting to £3,650.00 in the period 24 April 1998 to 8 April 1999.
The significance of those periods is this. The first period ran from the week of the appellant's income support review form dated 14 September 1995 until the date in February 1997 on which the Benefits Centre first received information from the local authority that she had been in receipt of loans from her mother. The second period ran from the week of her review form dated 27 April 1998 until the date in April 1999 on which the Benefits Centre received further information from the local authority about her receipt of loans from her mother. The essential reasoning was that in each case the review form contained a material misrepresentation that no-one was paying money to a third party on her behalf, as a consequence of which overpayments of income support were made; but that in each case, as from the date when the information or further information was received by the Benefits Centre, the overpayments became attributable to "official error" rather than to the misrepresentation.
On 30 July 2001 an appeal tribunal dismissed an appeal against the decisions to recover overpayment, giving the following written reasons:
"1. Having considered all the evidence in the papers, together with [Commissioners' decisions] R(SB) 9/85 and R(SB) 3/90. The Tribunal accepts that the Appellant misrepresented the material fact that she was receiving an income from a third party when completing review forms on 14.9.95, 24.10.95, 27.4.98, and 6.1.99.
2. The Tribunal does not accept that it was reasonable for Ms Morrell to believe that 'no' was the correct answer to the question asking if anyone paid money to someone else on her behalf. Clearly the Appellant's mother was paying the full amount of her rent. The Tribunal find that this positive and deliberate action (R(SB) 9/85) resulted in Income Support being paid which would not have been paid but for the misrepresentation.
3. The Tribunal also find that there was a period during which official error caused overpayment to be made but this was followed by a further period of misrepresentation notwithstanding the earlier disclosure (R(SB) 3/90).
4. The Tribunal to the issue before it accepted the provisions of various Acts and Regulations referred to by the Adjudication Officer in his submissions as relevant."
The appellant obtained leave to appeal that decision to the Social Security Commissioner. On the appeal the appellant challenged the entirety of the appeal tribunal's decision. The Secretary of State sought to uphold the decision only in so far as it related to the first period of overpayment, from September 1995 to February 1997. As to the second period, from April 1998 to April 1999, the Secretary of State submitted that the tribunal had erred in law, in that the overpayment was not in consequence of the appellant's misrepresentation but was caused by a failure of the department to act timeously on the information provided in 1997.
The Commissioner upheld the appeal tribunal's decision in its entirety. On the first issue before him, whether the loan payments were income, he stated:
"7. The tribunal found that the loans made by the claimant's mother were income. It was entitled to make that finding.
8. A loan is not necessarily income. It may be no more than a one off payment or one of a few instalments. That explains why a student's loan has to be treated as income in the legislation and why paragraph 30 of Schedule 9 to the Income Support (General) Regulations 1987 uses the word 'payment'.
9. Whether the claimant is receiving income has to be judged by reference to the normal meaning of that word.
9.1 It obviously means money, or the equivalent, that is coming to the claimant. It need not come directly to the claimant. It is sufficient if it is paid to someone else on her behalf. So, it does not matter whether her mother paid the money to her or paid it for convenience to the landlord.
9.2 A further requirement is that it must be recurring. In this case it was paid regularly each month for a number of years.
9.3 Also in this case, its payment was predictable and the amount was known or ascertainable in advance. Those are not, perhaps, essential features of income. But they reinforce the classification of the mother's payments as such.
10. There is authority that money that a claimant is liable to repay does not count as income: see the Court of Appeal decision in Leeves v Chief Adjudication Officer reported as R(IS) 5/99. However, the principle laid down by that case only covers money which is subject to an immediate obligation to repay. The money was not immediately repayable in this case. I have no doubt that the mother was accurately recording what was agreed when she wrote: 'I expect to be reimbursed gradually as her problems decrease'."
The Commissioner found next that there had been misrepresentations by the claimant, rejecting an argument that the wording of the review...
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