GA v London Borough of Southwark [2013] UKUT 170 (AAC)

UKUT-AAC

GA v London Borough of Southwark

[2013] UKUT 170 (AAC) · 2013-04-30

[1]This appeal arises in connection with the claimant’s appeal against a decision of the respondent council that she was liable to repay what it had found to be substantial overpayments of housing and council tax benefits totalling over £22,000. The appeal was heard by a tribunal on 27 June 2011. The claimant and her partner attended but there was nobody from the council there. The hearing was listed for 2pm and at about 2.10pm the tribunal received a request from the council for an adjournment. It appears from the decision notice that the tribunal had attempted to contact the council to obtain further information but without success, in part due to problems in the tribunal clerk’s room relating to leaking water and the phone and fax not working properly. The tribunal decided to proceed in the absence of the council and, having heard evidence from the claimant and her husband, it found in favour of the claimant and set aside the overpayment decision.

[2]By letter dated 13 July 2011, the council’s appeals officer requested that the decision be set aside “because the Council may decide to ask for the permission of the tribunal to apply to the social security commissioners to have the decision set aside as you did not comply with rule 37 of the tribunal rules.” It was asserted that the decision did not comply with rule 37 as a presenting officer was not in attendance at the hearing. The letter goes on to state:

“I made a telephone call on the 27/6/2011 at 14.00 to request that the hearing be adjourned due to receiving your Tribunal documentation advice within the organisation on 27/06/2011; this being the actual date of the hearing. The clerk that I spoke to sought advice from his manager and subsequently advised me that the case would be adjourned and I should expect to receive new documentation of the new hearing date imminently. It is for the aforementioned reason and that stipulated in the Tribunal rules 37(1)(a) that I make the said request for the case to be heard again in the interests of natural justice.”

[3]Rule 37 of the Tribunal Procedure (First-tier Tribunal) (SEC) Rules 2008 provides - “(1) The Tribunal may set aside a decision which disposes of proceedings, or part of such a decision, and re-make the decision or the relevant part of it, if –(a) The Tribunal considers that it is in the interests of justice to do so; and

(b) one or more of the conditions in paragraph (2) are satisfied. (2) The conditions are – (a) a document relating to the proceedings was not sent to, or was not received at an appropriate time by, a party or a party’s representative; (b) ….

(d) there has been some other procedural irregularity in the proceedings.

[4]It took the tribunal 4 months to deal with this letter, but by a decision dated 9 November 2011 a different tribunal judge set aside the decision of 27 June 2011. She found that it was in the interests of justice to do so and that condition (c) applied. She further found that the council had only received notification of the hearing on the day (which would seem to involve a finding that condition (a) also applied); that a request was made for the hearing to be adjourned; that the council’s officer was incorrectly told that the hearing would be adjourned; and that the tribunal clerk attempted to contact the presenting officer but was not able to do so, there appearing to have been a hiatus in the clerk’s room that day.

[5]Despite taking 4 months to reach this decision, at no time was the claimant notified of the application, let alone invited to make any representations in respect of it. When the decision was communicated to her, she, through her partner, who was representing her, refused to recognise the decision as valid, arguing that he was not informed of the application and was not given the opportunity to challenge it. He sought, and obtained an adjournment of the new hearing of the claimant’s appeal against the overpayment decision to seek legal advice to see if he could challenge the set aside decision.

[6]The claimant, having by then plainly obtained outside advice, did apply for permission to appeal the set aside decision and for an extension of time in which to do so, the application being dated 26 January 2012. She contended that she had only become aware of her right to appeal on 3 January 2012 at the new hearing of her appeal. In the application it was asserted that the claimant had had a telephone conversation on 11 January 2012 with the same appeals officer who had been involved previously. She claimed that she was told by the appeals officer that that the hearing notice for the hearing on 27 June 2011 had been received by the council on 8 June 2011 and scanned into their system on that date, but that it had mysteriously disappeared from the system and then re-appeared on 27 June 2011.

[7]The application was opposed by the council which submitted a written response dated 9 February 2012 under cover of a letter signed by a different appeals officer. The council contended that the set aside decision was correct and that in any event there was no right of appeal in the circumstances. While it gave reasons why the application was misconceived, referring to various facts that it contended justified the original set aside decision, what it did not do was to respond to the contention as to the telephone call on 11 January 2012 and what the claimant said she had then been told by the original appeals officer. Nor did it provide any explanation of how and when the notice of hearing had been received by the council or how and when it was recorded as having been received.

[8]The tribunal ignored the claimant’s application and simply relisted the main hearing for 30 April 2012 and informed the parties of the new hearing date. This led to a protest from a local advice centre on behalf of the claimant, together with an application direct to the Upper Tribunal dated 9 March 2012 for permission to appeal to it against the set aside decision. By a decision dated 11 May 2012, an Upper Tribunal judge, Judge Rowland, refused to admit the application for permission to appeal on the ground that the application to the First-tier Tribunal for permission to appeal had not yet been refused or not admitted. He did indicate, however, that he would reconsider this decision if it transpired that the First-tier Tribunal had in fact already made a decision on that application.

[9]By a decision dated 27 June 2012, the same First-tier Tribunal judge who had set aside the decision of 27 June 2011 held that her set aside decision could not be set aside under rule 37 of the 2008 Rules as that decision did not dispose of proceedings. She then considered whether to review that decision under rule 40 of those Rules and concluded that she was not satisfied that there was an error of law in respect of that decision. She found that there was no requirement for an application for a set aside to be served on the other party and that the decision to set aside could only itself be set aside on the ground of error of law on a review conducted under rule 40.

[10]She refused permission to appeal to the Upper Tribunal on the basis that the set aside decision was an excluded decision under section 11(5)(d)(iii) of the Tribunals Courts and Enforcement Act 2007 (the 2007 Act) from which there was no right of appeal. In the course of the decision notice she stated that the decision was made in response to the advice centre’s application for permission to appeal dated 19 June 2012, commenting that “No previous permission to appeal was made direct to this Tribunal.” Bearing in mind that the original, and ignored, application for permission was in the file before her at pp.187 to 190 and bears a received stamp from the Sutton Appeals Centre of 30 January 2012, I am unable to understand how she came to overlook it.

[11]The claimant then made a new application to the Upper Tribunal for permission to appeal and on this occasion Judge Rowland gave permission to appeal on the basis that it was arguable that this was not an excluded decision and that it was also arguable that either before or after the set aside decision was made, the claimant should have had an opportunity to make representations. He also drew attention to the possibility of the Upper Tribunal deciding the issue whether the substantive decision should be set aside rather than remitting that issue to the First-tier Tribunal and directed the parties to address the merits of the setting aside in their respective submissions.

[12]Both parties have made extensive written submissions on this appeal and both have indicated that they do not want an oral hearing.

[13]Section 11(1) to (3) of the 2007 Act provide that with certain exceptions, with permission any party has a right of appeal on any point of law arising from a decision other than an excluded decision. This includes interlocutory decisions ( LS v London Borough of Lambeth , [2011] AACR 27 ). Under section 11(5)(d) excluded decisions include “a decision of the First-tier Tribunal under section 9… (iii) to set aside an earlier decision of the tribunal”. It is this provision which led the First-tier Tribunal judge in this case to conclude that there was no right of appeal here. That conclusion is plainly wrong. Section 9 is concerned only with reviews of decisions, and the power to set aside referred to in that section is a power exercised after conducting a review. This was not a case where the tribunal in November 2011 was conducting a review of the June decision. Under rule 40 of the 2008 rules, such a review can only be carried out on an application for permission to appeal and if satisfied that there was an error of law in the decision. There had been no application for permission to appeal, only for a set aside under rule 37, and in setting aside the decision the tribunal had expressly referred to the condition in rule 37(2)(c). It is clear therefore that there is a right of appeal in the present case.

[14]The finding of the First-tier Tribunal on 27 June 2012 was that a party adversely affected by a decision to set aside a previous decision had no right either to receive notice of the application so as to be able to make representations and give evidence in respect of it, or to apply to set it aside except on a review under rule 40 on the basis of an error of law. In other words, a successful party could find, months after the event in the present case, that she had lost the benefit of the judgment in her favour without any opportunity to make representations or give evidence, and after having acted for that time on the basis of a judgment in her favour. This is manifestly contrary to basic principles of natural justice and to

Article 6 of the European Convention on Human Rights

[15]As it was put in JS v Secretary of State for Work and Pensions

[2013] UKUT 100 (AAC)

, at paragraph 27 in relation to the power of review:

“The salaried judge must apply the powers under the rules of procedure fairly and justly. That means that they must be exercised transparently. In order to do so, the salaried judge will need (i) to consider whether every party should be given notice before taking any action and (ii) if that is not done, to give the notice required by rule 40(4). Here, Judge Moss did not give prior notice and did not comply with rule 40(4). This had the unfortunate result that, amongst other things, Mr Wall did not know what action Judge Moss was proposing, was not given the chance to influence it, and was not properly informed of his right to make representations after the event. Such basic fairness is axiomatic without any need to rely on the overriding objective. As Mummery LJ said in Space Airconditioning plc v Guy [2012] EWCA Civ 1662 at [53] of a judge correcting a judgment: Before the correction is made the judge should obviously give both sides an opportunity to make submissions on whether there is a valid objection to a proposed amendment of the judgment.”

[16]It is hard to think of any judicial decision that does not require either that a party adversely affected should either be given the opportunity to be heard before the decision is made or to apply to set it aside within a short time of its being made. The decision of 27 June 2012 was plainly wrong in law in this respect and I set it aside.

[17]In giving permission to appeal, Judge Rowland pointed out that it may be appropriate for the Upper Tribunal to substitute its own decision as to whether the substantive decision should be set aside rather than remitting the issue and the parties were directed to address the merits of the setting aside in their submissions. They have done so, and I turn to consider whether I can substitute my own decision for that of the First-tier Tribunal.

[18]I am satisfied that the original judge at the hearing on 27 June 2011 was entitled to decide to proceed to hear the case that day. She was put in a very difficult position by the lateness of the application and the malfunctioning of the telephone and fax at the tribunal offices. The application for the adjournment as received plainly entitled her to call for further information before it could be granted, and she tried unsuccessfully to obtain such information. Being unable to do so, she was left in the unenviable position of either granting an adjournment regardless of whether it would have been right to grant one if all the information had been available or proceeding, leaving the council to apply to set aside the decision if it went against it. The claimant was there with her partner and was ready to proceed. There would have been an injustice to her in adjourning if there was no good ground to do so. I agree with what is said at paragraph 5.327 of volume III of the Social Security Legislation 2012/13, Administration, Adjudication and the European Dimension , that “tribunals are entitled to take a robust approach to the non-appearance of parties and proceed to hear cases in their absence, but a necessary concomitant of such a robust approach must be a greater preparedness to set aside decisions under r.37(2)(c)”.

[19]In considering whether to set aside the decision, there are two questions to be considered under rule 37: whether it is in the interests of justice to set aside the decision and whether one of the conditions in rule 37(2) is satisfied. There is no doubt that one of those conditions is satisfied in the present case, as the council was unrepresented at the hearing. The real question is whether it is in the interests of justice to set aside the decision. All the facts need to be considered. These include the reasons why the council was unrepresented, and the effect of the setting aside in all the circumstances including whether the council would have a real prospect of success on a rehearing. If the party applying to set aside the decision cannot satisfy the tribunal that it would have a real prospect of success, then it would not right to exercise the discretion to set aside in a way that would simply waste time and money.

[20]In the present case, the issue is whether the claimant and her partner were living together as husband and wife and that turned on the question whether at the relevant time they were living together at all. The tribunal had before it copies of tenancy agreements showing that the claimant’s partner was living at a different address at the material time, it was said because of matrimonial problems between them. There was also evidence that, as it was said by them, as a matter of convenience, the partner was continuing to use the claimant’s address for some correspondence and tax returns and that he could not produce any bank statements or utility bills showing him as living at the other addresses for which he had produced tenancy agreement. Potentially credible explanations were given for the absence of any such documents and in the absence of the council at the hearing, the tribunal was entitled to accept them as it appears to have done. Although I am not convinced that the council’s case is a particularly strong one, I do not feel able to say that the council would have had no real prospect of success had its representative attended and questioned the claimant and her partner on their evidence.

[21]The two important questions therefore are as to the reasons for the council’s failure to be represented at the hearing and the effect of the tribunal’s unacceptable failure to deal with set aside application either promptly or in accordance with the rules of natural justice.

[22]The decision was issued on 27 June 2011, although I note that it is alleged in a later document (p.197) that the decision was only received on 5 July 2011. The application to set aside the decision was by letter dated 13 July 2011 which bears a receipt stamp for 19 July 2011, suggesting that either it was not posted promptly or that it was sent by second class post. The total time between receiving the decision and the receipt of the set aside application was thus about 3 weeks. The application states, wrongly, that the decision did not comply with tribunal rules because there was no presenting officer at the hearing, but it also goes on to assert:

“I made a telephone call on the 27/06/2011 at 14.00 to request that the hearing be adjourned due to receiving your Tribunal documentation advice within the organisation on 27/06/2011; this being the actual date of the hearing. The clerk that I spoke to, sought advice from his manager and subsequently advised me that the case would be adjourned and I should expect to receive new documentation of the new hearing date imminently.”

[23]According to the appeal information sheet on the tribunal file, the parties had been notified of the hearing date on 17 May 2011. No explanation was offered at that stage as to how it came about that this “documentation advice” was only received by the council on the day of the hearing, or as to the time it was received which led to the adjournment request being made at the time when the hearing was due to start. Nor is there any explanation why the appeals officer of the council who was dealing with the matter considered that she could rely on either the clerk or his manager to make a judicial decision as to whether there should be an adjournment. Further, I am unable to see how the justice of the matter can have been affected by the misinformation which is alleged to have been given. The appeals officer appears to have been based in SE1 and the hearing was in Sutton. Had she been informed that the judge was not willing to adjourn, there was absolutely nothing she could have done to attend the hearing, which had already begun by the time at about the time the telephone call was made.

[24]There followed the wholly unacceptable delay of four months on the part of the tribunal during which nobody appears to have communicated with the claimant to tell her that this application had been made, and there is no evidence of any steps taken by the council to find out what had happened to its application.

[25]In applying for permission to appeal, the claimant stated (p.188) that on 11 January 2012 she had spoken to the appeals officer for the council and claimed that she had been told by her that the hearing notice for the original hearing had been received on 8 June 2011 and scanned into the council’s system but had then mysteriously disappeared and re-appeared on 27 June, the date of the hearing. The claimant also stated that she had been told by the judge on 27 June that the call from the council had been to the effect that the council did not have a representative to appear at the hearing and that an attempt to contact the officer who was to appear on their behalf had failed.

[26]The council’s response was unsigned but was sent under cover of a letter from a different appeals officer. It alleged, without any detail, that documents were missing from the bundle at the original hearing and repeated the same contention as before that the judge should not have proceeded when it was apparent that the council could not attend. In addition, it contended that there was no right of appeal against the set aside decision and that there was no error of law. No further explanation was offered as to how it came about that the hearing notice was only received on the day of the hearing.

[27]Following the claimant’s initial application to the Upper Tribunal for permission to appeal, the case was stayed before the First-tier Tribunal by order of 29 March 2012, and following the disposal of that application the decision of the First-tier Tribunal refusing permission to appeal was given promptly, but, as I have already indicated, inexplicably overlooking the previous application for permission to appeal made to the First-tier Tribunal the previous January.

[28]The council’s submissions on this appeal were received under cover of a letter dated 20 December 2012 and were not from the appeals officer with first hand knowledge of what had occurred in June 2011. The submissions allege that the council was denied the opportunity of defending its decision in respect of sums in excess of £22,000. It asserts, as far as I can see for the first time, that the council did not receive the hearing notice on time because it was going through a transition period having failed to renew the contract of Liberata UK, said to have been its outside contractor for housing benefit and council tax benefit amongst other services). It is said to have taken the contract in house in April and that the council had new staff that were “TUPED”, which I take to mean that they were staff that had been dealing with this before and had had their employment transferred to the council, presumably from Liberata UK. It is also said that they needed a settling down period due to “various changes” which were not specified.

[29]The appeals officer further stated that the council had written to the administrative section of tribunal service in Fox Court and Sutton informing them of the change of address, but that the notice of hearing was sent to the council’s old address despite this. I note that it is unclear whether the appeals officer is basing this statement on her own personal knowledge or on instructions from some unspecified person, and that she has not seen fit to enclose a copy of the alleged letter notifying the Sutton tribunal of the change of address. The hearing notice itself does appear at p.191 of the file. It bears a receipt stamp of the council’s Housing Benefit Client Unit dated 23 May 2011 and a signature that has not been identified by the council. There is also a stamp on it “PO TO ATTEND”. In the absence of any direction from the tribunal for a presenting officer to attend, it would appear that this endorsement was made by the council prior to the hearing date and that it is not correct that it was only received by the relevant section of the council on 27 June 2011. Indeed, it would appear to have been passed on to the relevant section, even if initially misaddressed, by 23 May 2011 when it was receipted.

[30]It is also stated that the council did have systems problems for a while after taking “the contract in-house”, but the submissions vehemently deny what was never alleged, namely that it in some way perpetrated an illegality in deleting information and re-indexing it. It is said that the document was sent to the previous address “coupled with the fact of its transition the information was not brought to the attention of the presenting officers on time” and that the council only received notice of the hearing on the day.

[31]Finally it is said that no statement of reasons was issued for obvious reasons. As to this, the obvious reason was that the council did not ask for a statement of reasons, when it could have done so – although it had made its application to set aside the initial decision, there was no decision on that application for many months and no reason why, if it had wished, it could not also have asked for a statement of reasons. Other arguments advanced have already been dealt with by me earlier in this decision.

[32]I have come to the conclusion that the hearing notice was received in good time, on 23 May 2011, by the relevant section of the council, that it was decided that a presenting officer should attend, and that for some reason which has not been properly explained by the council, but possibly in part due to problems with computer software, the hearing was overlooked until the afternoon it was due to be heard. I do not accept the explanation offered that, in some unexplained way, and by some surprising coincidence, the hearing notice appeared at the right address for the first time on the day of the hearing. Nor does it appear to me that, if, which I doubt, the appeals officer was informed and accepted that the hearing would be adjourned, that caused any prejudice to the council, which could not have attended the hearing in any event. On balance, I consider it more likely that the appeals officer was told that the manager’s view was that the tribunal was likely to adjourn but that, as she should have known in any event, this would be for the judge to decide.

[33]In all the circumstances, I set aside the decision of 9 November 2011. I do not consider that I should exercise my discretion to set aside the decision of the tribunal of 27 June 2011. I am not satisfied that the council has been frank as to the reasons why nobody attended the hearing on its behalf, and I find that the reasons were that the hearing was overlooked by somebody within the council who was responsible either for attending the hearing or for arranging for somebody to attend. While the application to set aside the decision was made relatively speedily, no notice of it was given to the claimant, who knew nothing of it for four months during which time she was entitled to proceed, and no doubt did proceed, on the basis that she had won her appeal and would not be liable to repay over £22,000. Further, while the council would have had a real prospect of success had it attended, that does not mean that it would have been likely to succeed. On balance, it appears to me therefore that the original decision should stand. (signed) Michael Mark Judge of the Upper Tribunal 3 April 2013

GA v London Borough of Southwark [2013] UKUT 170 (AAC)

Cited in 3 later judgments