MS-v-Department for Social Development (JSA) [2016] NICom 53

Decision No: C1/15-16(JSA)

SOCIAL SECURITY ADMINISTRATION (NORTHERN IRELAND) ACT 1992

SOCIAL SECURITY (NORTHERN IRELAND) ORDER 1998

JOBSEEKERS ALLOWANCE

Appeal to a Social Security Commissioner
on a question of law from a Tribunal's decision
dated 18 July 2014

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1.	The decision of the appeal tribunal dated 18 July 2014 is in error of law. The error of law identified will be explained in more detail below. Pursuant to the powers conferred on me by Article 15(8) of the Social Security (Northern Ireland) Order 1998, I set aside the decision appealed against. 

2.	For further reasons set out below, I am unable to exercise the power conferred on me by Article 15(8)(a) of the Social Security (Northern Ireland) Order 1998 to give the decision which the appeal tribunal should have given.  This is because there are further findings of fact which require to be made and I do not consider it expedient to make such findings, at this stage of the proceedings.  Accordingly, I refer the case to a differently constituted appeal tribunal for re-determination. 

3.	In referring the case to a differently constituted appeal tribunal for re-determination, I direct that the appeal tribunal takes into account the guidance set out below.

4.	It is imperative that the appellant notes that while the decision of the appeal tribunal has been set aside, the issue of his entitlement to jobseeker’s allowance (JSA), for a particular period, remains to be determined by another appeal tribunal. In accordance with the guidance set out below, the newly constituted appeal tribunal will be undertaking its own determination of the legal and factual issues which arise in the appeal.  

5.	The Legally Qualified Panel Member (LQPM) of the appeal tribunal should note that the Department has accepted that the Department was in possession of evidence which was relevant to the decision-making process and which was not made available to the appeal tribunal.  The Department has also conceded that the failure to provide relevant evidence to the appeal tribunal meant that the tribunal was not in a position to give a fully informed and reasoned decision in relation to the specific issues of actual capital and mortgage redemption. 

Background

6.	In his carefully-prepared and analytical written observations on the application for leave to appeal, Mr Crilly set out the following background:

‘(The appellant) had been in receipt of jobseeker’s allowance. The Department became aware that he had received £103,439.29 on 17.01.08 which he had failed to disclose.  As a result, a decision maker decided on 31.10.12 that he was not entitled to jobseeker’s allowance from 16.01.08 because he possessed capital in excess of £16,000.

‘(The appellant) appealed against the decision dated 31.10.12.  The appeal was heard on 05.02.14 and was disallowed by the tribunal in its decision of the same date. This decision by the tribunal is currently the subject of an application to the Commissioner for leave to appeal by the claimant under the reference, A5/14-15(JSA). 

(The appellant) made a new claim for jobseeker’s allowance from 18.02.14.

The decision maker decided on 23.02.14 that (the appellant) was not entitled to jobseeker’s allowance from 18.02.14 because he had actual capital of £20,437.19 on that date.

(The appellant) appealed against the decision dated 23.02.14.  His appeal was received by the Department on 11.03.14.     

The decision dated 23.02.14 was reconsidered and revised on 15.04.14.  The decision maker decided at that point that (the appellant) was not entitled to jobseeker’s allowance from 18.02.14 as he possessed actual capital of £13,537.19 and notional capital of £6,385.37. (The appellant) was notified of this decision on 15.04.14.  As this decision was not in (the appellant’s) favour, his appeal continued against the decision dated 23.02.14 as revised on 15.04.14.’

Proceedings before the appeal tribunal

7.	The appeal tribunal hearing took place on 18 July 2014. The appellant was present and was represented.  The tribunal disallowed the appeal and confirmed the decision of 23 February 2014.  

8.	On 3 November 2014 an application for leave to appeal to the Social Security Commissioner was received in the Appeals Service (TAS).  On 20 November 2014 the application for leave to appeal was refused by the LQPM.

Proceedings before the Social Security Commissioner

9.	On 7 January 2015 a further application for leave to appeal was received in the Office of the Social Security Commissioners. On 20 January 2015 observations on the application for leave to appeal were requested from Decision Making Services (DMS). In written observations received on 9 February 2015, Mr Crilly, for DMS, supported the application for leave to appeal.  Written observations were shared with the appellant and his representative on 10 February 2015. 

10.	Following applications to that effect, the appellant’s representative was given two extensions of time to provide observations in reply to those provided by Mr Crilly. In e-mail correspondence dated 21 May 2015, the appellant’s representative noted that the appellant was in agreement with Mr Crilly’s proposal that the appeal should be remitted to a differently-constituted appeal tribunal for re-determination. In addition, the appellant’s representative submitted that she was not in a position to provide detailed comments on Mr Crilly’s observations as despite numerous requests to TAS she was not in receipt of a full set of papers. The appellant’s representative requested that the TAS files be obtained by the Office of the Social Security Commissioners. 

11.	Further written correspondence to the same effect was received in the office on 28 May 2015. On 28 May 2015 correspondence was forwarded to the appellant’s representative in which it was explained that the Office of the Social Security Commissioners could not obtain a copy of the TAS files on the appellant’s behalf. 

12.	On 1 July 2015 I granted leave to appeal. In granting leave to appeal, I gave, as a reason, that an arguable issue arose as to the manner in which the appeal tribunal addressed the question of the amount of capital, both actual and notional.  The appellant’s representative was given the opportunity to provide an additional submission. Correspondence was received from the appellant’s representative on 27 August 2015 in which she indicated that she had received the appeal papers from TAS and that the appellant had requested that Counsel be engaged on his behalf.  She sought an extension of four weeks for this purpose. 

13.	On 7 September 2015 I directed that the appellant’s representative be informed that I was content to proceed without further observations from her and without the requirement for an oral hearing.  There followed further oral discussions between the Legal Officer to the Social Security Commissioners and the appellant’s representative.  Following these discussions, the appellant’s representative confirmed that she was content for the matter to be placed before the Social Security Commissioner to be dealt with on the papers. 

14.	The appeal was then placed into my workload.  Due to an increase in the volume of work which is before the Social Security Commissioners there has been a delay in the promulgation of this decision.  Although unavoidable, apologies for that delay are extended to all of the parties to the proceedings.

Errors of law   

15.	A decision of an appeal tribunal may only be set aside by a Social Security Commissioner on the basis that it is in error of law. What is an error of law?

16.	In R(I) 2/06 and CSDLA/500/2007, Tribunals of Commissioners in Great Britain have referred to the judgment of the Court of Appeal for England and Wales in R(Iran) v Secretary of State for the Home Department ([2005] EWCA Civ 982), outlining examples of commonly encountered errors of law in terms that can apply equally to appellate legal tribunals. As set out at paragraph 30 of R(I) 2/06 these are:

“(i)	making perverse or irrational findings on a matter or matters that were material to the outcome (‘material matters’);

(ii)	failing to give reasons or any adequate reasons for findings on material matters;

(iii)	failing to take into account and/or resolve conflicts of fact or opinion on material matters;

(iv)	giving weight to immaterial matters;

(v)	making a material misdirection of law on any material matter;

(vi)	committing or permitting a procedural or other irregularity capable of making a material difference to the outcome or the fairness of proceedings; …

Each of these grounds for detecting any error of law contains the word ‘material’ (or ‘immaterial’). Errors of law of which it can be said that they would have made no difference to the outcome do not matter.” 

Analysis

17.	In the application for leave to appeal the following submissions were made on behalf of the appellant:

‘Tribunal erred in application and interpretation of the law in relation to the following:

1.	Para 20 Sch 7 JSA Regulations (NI) 1996 – Surrender value of Life Assurance Policy was not disregarded when assessing actual and/or notional capital.

2.	Para 15 JSA Regulations (NI) 1996 – Personal items to include but not limited to 60 inch Smart TV was not disregarded in accordance when assessing notional capital.

3.	Para 8 JSA Regulations (NI) 1996 – Appellant’s chattels to include but not limited to curtains purchased were not disregarded when assessing notional capital.

4.	Tribunal had no evidence or not enough evidence to support decision in relation to the applicable entitlement period.

5.	Tribunal erred in law in failing to consider applicant’s entitlement to JSA from 17.08.08 to date having regard to diminishing capital during the applicable period and thereafter determining notional capital.

6.	Tribunal did not make findings of fact having regard to the Appellant’s bank statements for Halifax a/c … from 01/10/2007 to date of entitlement decision.

7.	Tribunal erred in law in that no direction was made that the foregoing information was provided by the Appellant.

8.	Tribunal erred in law by failing to seek clarification of the period of expenditure in relation to expenditure on home improvements (£50,000.00) and purchase of a motor vehicle.’

18.	In his written observations on the application for leave to appeal, Mr Crilly made the following submissions:

‘I submit that, for the reasons outlined below, the decision of the tribunal in this instance should be set aside and remitted to a new tribunal for determination.

Failure to specify amounts of capital 

I submit that the tribunal erred in this instance by failing to make clear which figures it relied on when determining that (the appellant) had capital in excess of £16,000 at the date of his claim for jobseeker’s allowance.

The Department had determined that the claimant possessed actual capital of £15,537.19 and was treated as possessing notional capital of £6,385.37.  The tribunal initially referred to these amounts in the statement of reasons.  However, it then went on to detail amounts of £6,194 and £14,173 before outlining in its decision notice that the claimant’s appeal had been disallowed because the claimant had excess capital.
   
Notwithstanding my comments in the paragraphs below in relation to the tribunal’s consideration of the issues of actual and notional capital, I submit that the tribunal did not make clear if it relied on the Department’s figures in relation to the claimant’s actual and notional capital or on its own when making its decision.  I further submit that if it is the latter then the tribunal has failed to adequately explain how and why it arrived at the amounts of £6,194 and £14,173.  This leads on to a further problem; namely, the precise figure to which the diminishing notional capital rule should be applied in accordance with regulation 114 of the JSA Regulations.  I submit that this represents an error in law. 

Provision of relevant evidence and determination of actual capital

In paragraphs 20 to 23 of these observations I outlined that (the appellant) had submitted an application to the Commissioner for leave to appeal against the decision of a prior tribunal dated 05.02.14 which has been listed under the reference, A5/14-15(JSA).  I provided comments in relation to this application in observations dated 01.12.14.  

The appeal papers in A5/14-15(JSA) contained copies of the bank statements for (the appellant’s Halifax accounts 0022**** and 0099****.  Account 0022**** is a current account in which his inheritance of £103,439.29 was lodged in January 2008.  Account 0099**** is a savings account which was opened on 04.03.08 when an amount of £40,000 was deposited into it.  Whilst the papers in A5/14-15(JSA) contained statements for account 0099**** which related to a period from 04.03.08 to 12.09.11, the statements for account 0022**** only covered the period of 01.10.07 up to and including 06.05.08.   

The appeal papers in relation to the claimant’s present application also contain limited details concerning both accounts.  There is one bank statement for account 0099**** covering the dates 09.05.13 to 30.12.13 showing £5,800 being deposited into it on 03.09.13 with amounts totalling £2,800 then being withdrawn at different dates. There are copies of 4 pages of bank statements in relation to account 0022****.  The first page relates to the period of 05.12.07 to 23.01.08.  It shows the claimant’s inheritance of £103,439.29 being deposited in the account on 17.01.08 with the separate amounts of £50,000 and £4,617.68 then being withdrawn on 23.01.08.  The second and third pages relate to a period beginning on 11.07.13 and ending on 22.11.13.  These statements outline that the amount of £16,264, derived from the cashing in of (the appellant’s) insurance policy, was lodged into the account on 29.08.13.  There were then withdrawals of £7,200, £5,800 and £1,500 on 03.09.13 as well as withdrawals of £300 on 12.09.13 and 17.10.13 respectively.  The balance in account 0022**** account stood at £251.69 on 22.11.13.  The fourth and final statement for account 0022**** relates to the period of 17.02.14 to 07.03.14.

I submit that the Department had actually been provided with much more information relating to account 0022**** than was disclosed to the tribunal.  Tab 4 in the Department’s Schedule of Evidence, which was in the papers before the tribunal on 18.07.14, refers to a copy of a determination dated 29.01.13.  This was actually a referral dated 29.01.13 which was questioning if the decision dated 19.12.07 entitling (the appellant) to jobseeker’s allowance should be superseded.  The referral outlined the documents that were attached to it when it was passed to the decision maker.  These included bank statements for account 0099**** for the period of 04.08.13 to 12.09.11 and also statements for account 0022**** for the period of 01.10.07 to 12.09.11.  Indeed, it transpires that the Department was actually in possession of statements for account 0022**** up to and including 19.03.12.  The Department had also been provided with statements for this account pertaining to a further period of 14.08.12 to 29.08.12.

I submit that the information contained in all of the bank statements for accounts 0022**** and 0099**** were pertinent to the claimant’s appeal to the tribunal.  I further submit that the whole of this information should have been included as evidence in the appeal papers and that, if it had been, there is the possibility that the tribunal may have arrived at a different conclusion to which it did.  

I submit that the bank statements for account 0022**** that were in the possession of the decision maker reveal a pattern involving sums of money  being taken out by the claimant on a regular basis from January 2008 onwards.  The statements show that many of these withdrawals were for lesser amounts which were used to pay bills and to cover daily expenses.   

In PMcC-v-Development for Social Development (IS) [2012] NICom 46 or C7/12-13(IS) the claimant and his wife received a compensation payment of £385,000 in November 2005.  He then submitted a claim for income support in October 2009.  This was disallowed and the claimant appealed.  The resulting tribunal upheld the Department’s decision on the basis that the claimant was “.....treated as possessing capital amounting to £280,479.77 less the amount of £1,119.76 contained in his wife’s bank account number *******.”   

In setting the tribunal’s decision aside, the Chief Commissioner held:

“24.  In the instant case, the appeal tribunal had before it copies of statements relating to the appellant’s current account with the First Trust Bank.  Those statements are in the file of papers which is before me.  From those statements it is clear, as the appeal tribunal concluded, that the sum of £385,000 was deposited in the appellant’s current account on 8 November 2005.  On 14 November 2005 the sum of £270,000 was transferred to a fixed term account.  Statements relating to the fixed term account from 14 November 2005 are also in the file of papers which are before me.  Returning to the current account, the transfer on 14 November 2005 of the sum of £270,000 to the fixed term account left a balance in the current account on 14 November 2005 of close to £40,000.  There then followed a systematic dissipation in the funds within the current account, by various methods – cheques, withdrawals, direct debits – such that by 24 November 2005 the level of funds was reduced to just under £4000.  On 24 November 2005 the sum of £10,000 was transferred into the current account and there is a parallel entry from the statement of the fixed term account to confirm that this was the source for the transferred-in funds.  Thereafter a pattern emerged of regular dissipation of the funds in the current account followed by what I might term ‘top-ups’ from the fixed term account.  The funds in the fixed term account were also dissipated by separate direct withdrawals.  This pattern continued until by 25 March 2009 there were no remaining funds in the fixed term account.  The last entry which I have for the current account is for 1 October 2008 when the available funds were just short of £5,000.

25.  The only possible conclusion which can be drawn from the evidence set out in the preceding paragraph is that by March 2011 the bulk of the £385,000 was no longer in the appellant’s bank accounts.  For the appeal tribunal to conclude, if that was its conclusion, that the appellant, as of the date of claim to IS, that is 9 March 2011, had actual capital of £275,467.43 would mean a finding, as a primary fact, that the basis of the actual capital, monies in the amount of £275,467.43, and which were no longer in the appellant’s bank accounts, were being retained or held elsewhere.  I regard that to be highly improbable.  It seems to me that by 9 March 2011 the bulk of the £385,000 was gone.  Accordingly and to utilise the language of Carswell LCJ cited above, in the instant case ‘…the primary facts do not justify the inference or conclusion drawn but lead irresistibly to the opposite conclusion, so that the conclusion reached may be regarded as perverse …’.  To that extent, the decision of the appeal tribunal is in error of law.” 

The Chief Commissioner addressed similar issues in MMcP-v-Department for Social Development (JSA) [2013] NICom 57 (C5/13-14(JSA)).  He held the following in paragraph 15 of that decision:

“.....The diminution in the funds in the account is accounted for by a series of withdrawals, including on five separate occasions, daily withdrawals of £2500.  Once again, the only possible conclusion to be drawn from that evidence is that by 27 April 2012 the bulk of the original £17,782.77 had gone.  As in PMcC, for the appeal tribunal to conclude, if that was its conclusion, that the appellant, as of the date of disallowance to JSA, that is 27 April 2012, had actual capital of £17,782.77 would mean a finding, as a primary fact, that the basis of the actual capital, monies in the amount of £17,782.77, and which were no longer in the appellant’s bank accounts, were being retained or held elsewhere.  Once again I would regard that as being highly improbable.

Whilst I accept that the Chief Commissioner was concerned with the issue of unaccounted for capital in PMcC v DSD and MMcP v DSD, I submit that his comments in respect of the evidence contained in the claimants’ respective bank statements along with those concerning the pattern of spending which was identified in both cases are pertinent to the circumstances of the present case under consideration.

In this instance, I submit that an examination of all of the bank statements for the 2 bank accounts, 0022**** and 0099****, would have shown the tribunal that the claimant’s pattern of spending, as outlined above, continued on a regular basis.  I submit that this is made clear by the fact that the claimant’s funds in account 0022**** had reduced to £54.91 on 18.09.08.  The statements for 0099**** reveal that £2,000 was withdrawn by (the appellant) from that account on 23.09.08 leaving a remaining balance of £38,000.  The amount of £2,000 was transferred into 0022**** on the same date leaving him with a new balance of £2,054.91 in that account.  In the ensuing period up to and including 10.12.09, the amount of £8,424.68 was transferred from savings account 0099**** into 0022**** and then quickly withdrawn at intervals from the latter account.  During the same time, withdrawals of £900 on 07.01.09, £3,600 on 06.04.09 and £500 on 10.08.09 were made by the claimant from his savings account which were not transferred into 0022**** and, as yet, have not been accounted for by (the appellant). 

The statements for account 0099**** on 10.12.09 show that the claimant withdrew 2 amounts of £15,760 and £240 leaving a remainder of £10,500 in that account.  The claimant has stated that the former amount of £15,760 was used to buy a car and he has provided evidence to support this.  The decision maker and the tribunal accepted that this money had been disposed of for this reason.  The latter amount of £240 was transferred into account 0022**** on the same date to increase the balance of that account to £318.74.  With this in mind, I submit that, on paper at least, the claimant’s capital in both accounts on 10.12.09 amounted to £10,818.74 which fell below the prescribed upper limit of £16,000.  I submit that this accords with the claimant’s assertion in his application to the LQM for leave in which he stated that his savings had fallen below the level of £16,000 from December 2009.  Consequently, there is a possibility that, from 10.12.09, the claimant may have been entitled to jobseeker’s allowance at a reduced level due to the application of a tariff income from that date.  

The evidence in the bank statements suggests that the claimant’s pattern of spending continued.  After 10.12.09, he went on to make withdrawals from account 0099**** on various dates from 18.12.09 to 07.04.10, the sums of which were immediately transferred into account 0022****.  It seems that the claimant made these transfers in order to top up the balance in 0022****.  The statements for the latter reveal that the claimant continued to draw upon this account on a daily basis during this time.  

On 07.04.10, the balance of the claimant’s savings account 0099**** stood at £5,030.35.  The amount in his current account on 20.04.10 stood at £827.90.  Again, just taking into account these figures, (the appellant’s) capital in both accounts amounted to £5,858.25 on 20.04.10 which fell below the tariff income threshold of £6,000.  As a result, subject to the outcome of any determinations in relation to notional capital, I submit that there is a possibility that the claimant may have been entitled to an award of jobseeker’s allowance at the full rate from 20.04.10 onwards.

The statements for account 0099**** show that this was closed on 12.09.11 with a nil balance.  As noted above, the claimant provided statements for account 0022**** which covered the periods of 14.08.12 to the 29.08.12 and 17.02.14 to 07.03.14.  The balance in account 0022**** on 29.08.12 was £1,051.60 whilst this had reduced to £475.01 on 17.02.14, the day before (the appellant) made his claim for jobseeker’s allowance.  I submit that this evidence calls into question the decision maker’s findings that the claimant was in possession of actual capital of £7,373.19 on 07.11.12 and £13,537.19 on 18.02.14 as outlined in the reconsideration decision dated 15.04.14.

I submit that the information in all of the bank statements in this case was relevant to the claimant’s appeal but this was not placed before the tribunal for consideration.  I further submit that the statements reveal a pattern of behaviour on the part of (the appellant) which suggests that he had disposed of his inheritance on a steady basis from January 2008 onwards.  I also submit that this pattern of spending supports his assertion that he had spent most of his money by the date of his claim for benefit on 18.02.14 and that he did not have the amount of actual capital that he was found to possess on that date.  Indeed, I respectfully submit that, subject to the consideration of notional capital, the bank statements outline the possibility that (the appellant) may have been entitled to a reduced award of jobseeker’s allowance from 10.12.09 and a full award of the same from 20.04.10.  

I submit that the Department’s failure to place this evidence before the tribunal means that that body was not in a position to give a fully informed and reasoned decision in relation to the actual capital in (the appellant’s) possession at the date of his claim on 18.02.14.  The issue of relevant evidence not being placed before a tribunal was considered in a decision by Commissioner Stockman, C2/13-14(HB).  The Commissioner held in that decision:  

“22.	In relation to the first applicant, the evidence of Mr Long and Dr Sweeney referred to above was not before the tribunal dealing with the appeal and I suspect that had the tribunal seen the relevant evidence, that it would most likely have reached a different conclusion.  However, does that mean that the tribunal has erred in law?

23.	I consider that it does.  In the case of R(Iran) v Secretary of State for the Home Department [2005] EWCA Civ 982 it was accepted that an error of law could arise where the tribunal decision involved “making a mistake as to a material fact which could be established by objective and un-contentious evidence, where the appellant and/or his advisers were not responsible for the mistake, and where unfairness resulted from the fact that a mistake was made”.  Here, the recent evidence, relating to the applicant’s learning disability and indicating that she did not have an outright interest in the house occupied with the second applicant, and which was not before the tribunal, is accepted by LPS and is not contentious.  The first applicant, who did not attend the tribunal, or her advisers were not responsible for the mistake.  Unfairness has resulted, in that LPS now supports the first applicant’s case and does not oppose a contrary conclusion to that of the tribunal.  Had the facts been correctly known, the first applicant would have succeeded.”

I submit that, in this instance, if the tribunal had been aware of and privy to the bank statements then it may well have made a different decision concerning the claimant’s actual capital for the reasons given above.  In accordance with what the Chief Commissioner held in PMcC v DSD and MMcP v DSD, the tribunal may have come to the conclusion that the evidence in the bank statements would have shown that “. . . the primary facts do not justify the inference or conclusion drawn but lead irresistibly to the opposite conclusion, so that the conclusion reached may be regarded as perverse …’  in relation to the Department’s determination that Mr Sefton possessed actual capital of £13,537.19 on 18.02.14.  Consequently, I support the claimant’s grounds in the claimant’s application for leave to appeal in relation to this point.

I would like to stress that the error in this instance lay with the Department in not including the statements in the appeal papers and not with the tribunal which should not be faulted for failing to take into account evidence of which it was not aware or party to.  However, notwithstanding this, if the Commissioner agrees with my comments above, I respectfully submit that the panel’s decision in this instance should be set aside and remitted to a new tribunal to allow all of the relevant evidence to be properly and fully taken into account.  

A copy of all of the bank statements in respect of the claimant’s current account, 00229435, was included in the papers accompanying my observations dated 01.12.14 in relation to A5/14-15(JSA).

Redemption of mortgage 

In both the decision dated 23.02.14 and the reconsideration decision dated 15.04.14, the Department acknowledged that (the appellant) had redeemed his mortgage.  As a consequence, the amount of £35,015.94 was subtracted from the figure of £103,439.29 and disregarded for capital purposes.  I submit that the Department was mistaken in carrying out this action as the amount used to redeem the mortgage on 14.08.12 was not derived from (the appellant’s) inheritance.

As noted earlier in paragraph 45 of these observations, (the appellant) had provided the Department with a copy of a bank statement for account 0022**** for the period of 14.08.12 to 29.08.12.  This document shows that £34,853.80 was paid into account 0022**** on 14.08.12 with £33,628 being transferred out of the account to pay off the mortgage on the same date.  I submit that the bank statement reveals that the payment of £34,853.80 was made by St. Andrews Life and, as a result, this capital did not form part of the original amount of £103,439.29 but was separate and distinct from it.  Consequently, I submit that whilst it still falls to be disregarded, it should not have been used to reduce the amount of the claimant’s inheritance when the matter of his possession of actual capital was under consideration.  Despite this, however, I continue to submit that the information in the bank statements suggest that the claimant did not have the amount of £13,537.19 in actual capital on 18.02.14 that was attributed to him in the reconsideration decision dated 15.04.14.

Once again, I submit that the tribunal should not be faulted for this error as it was not provided with or made aware of the relevant evidence by the Department.  If the Commissioner agrees that this case should be remitted, I respectfully submit that the new tribunal will be required to address this matter when considering the issue of what actual capital, if any, was in (the appellant’s) possession at the date of his claim on 18.02.14. 

Notional income

Regardless of my comments in paragraphs 39 and 41 of these observations, I submit that tribunal erred in its consideration of the issue of notional capital in this case. 

I submit that the decision maker in the decision dated 23.02.14, as outlined in paragraph 25 of these observations, determined that the expenses relating to the purchase of jewellery and curtains by the claimant were “unnecessary”.  I further submit that the decision maker went on to apply a test of reasonableness in respect of the amounts spent by (the appellant) on a computer and a smart TV. 

The decision maker who carried out the reconsideration decision dated 15.04.04 went a step further when considering these amounts and determined that they fell to be treated as the claimant’s notional capital.  In so doing, the decision maker outlined that a significant reason for (the appellant’s) disposal of this capital was to enable him to continue receiving benefit.  I submit that, in the absence of any evidence to the contrary, this conclusion may have been based upon the same consideration of reasonableness of expenditure along with that relating to whether or not it was deemed to be necessary or unnecessary, as explicitly expressed in the decision dated 23.02.14.  

With this in mind, I submit that the basis for this conclusion was not made clear by the decision maker.  As a consequence, I respectfully submit that the reasoning behind decision maker’s determination that the claimant was to be treated as possessing notional capital was inadequate.  I submit that the tribunal, in agreeing with the Department’s reasoning, did not consider if (the appellant) was aware of, or had knowledge of the capital rules for the purposes of jobseeker’s allowance.  In addition, it is my further submission that the tribunal failed to explore the purpose behind the claimant’s expenditure as it was required to do so under regulation 113 of the JSA Regulations.

The issue of determining whether or not a claimant is to be treated as being in possession of notional capital was considered by Commissioner Stockman in LS-v-Department for Social Development (IS) [2012] NICom 327 (C7/11-12(IS)).  The Commissioner held in paragraph 44 of that decision:

“I consider that while the legal issues are different, similar principles have to be applied in the case of notional capital, in terms of examining individual instances of deprivation of capital.  The tribunal found that the applicant had deprived herself of a global sum of £14,640 for the purpose of securing entitlement to IS.  The significant operative purpose test was correctly identified by the tribunal.  However, the tribunal did not separate the individual elements making up the figure of £14,640.  I consider that this was an error of law.  There is a considerable difference between the gift of £1,000 to a parent, made on the day of receipt of the proceeds of sale of the house - an amount which makes no significant difference to the extent by which the capital exceeded the prescribed amount - and a gift of £12,000 to a grandchild some six months later when the capital had already diminished by some £73,000.  It is not sufficient to lump them together as if they were one single event of intentional deprivation of capital, when the significant operative purpose for each gift could be very different.”

I submit that, in accordance with the above, the tribunal should have considered each of the amounts concerned on an individual basis in order to determine if the claimant had deprived himself of capital.  In so doing, the tribunal would have been required to establish the nature and timing of each transaction as well as seeking an explanation from the claimant as to his purpose behind the expenditure on the various occasions.  I further submit that, in this context, whilst consideration of the reasonableness of any expenditure may play a part in the eventual determination of whether or not notional capital is applicable in this case, it should not be the sole basis for such a conclusion.

I submit that the tribunal erred in law in its treatment of the issue of notional capital in this instance for the reasons outlined above.  If the Commissioner agrees with my earlier submission concerning the remittance of this case to a new tribunal, I submit that that body should consider the question of the claimant’s notional capital afresh taking into account all relevant factors concerning this.’

19.	Mr Crilly’s written observations have been prepared with care and precision.  His analysis of the Departmental decision-making in this and a related appeal has been methodical and detailed. It has revealed that the Department was in possession of evidence which was relevant to the decision-making process and which was not made available to the appeal tribunal.  He has conceded, in line with his role as an amicus curiae, that the failure to provide relevant evidence to the appeal tribunal meant that the tribunal was not in a position to give a fully informed and reasoned decision in relation to the issues of actual capital and mortgage redemption.  He has also conceded that the reasoning behind a determination by the decision maker that the appellant was to be treated as possessing notional capital was inadequate.  He submits that although the appeal tribunal was not misled with respect to the inadequacy of the decision-making in that regard, its endorsement of the reasoning also amounted to an error.

20.	I agree with Mr Crilly, for the reasons which have been outlined by him, that each of the identified errors amounts to a material error of law and that the cumulative effect of those errors most certainly renders the decision of the appeal tribunal as being in error of law.  The decision of the appeal tribunal is, therefore, set aside. 

21.	I have noted that Mr Crilly, in his written observations, does not support three of the grounds of appeal which had been advanced on behalf of the appellant.  These relate to the disregard of the amount paid by him in respect of curtains and in respect of a television and in respect of the surrender value of a life assurance policy. It will be for the appellant and/or his representative to continue to argue these grounds before the appeal tribunal to which the appeal is being remitted. If those grounds continue to be advanced then they may be dealt with by the Department in the fresh appeal submission which I am directing should be prepared. 

Disposal 

22.	The decision of the appeal tribunal dated 18 July 2014 is in error of law. The error of law identified will be explained in more detail below. Pursuant to the powers conferred on me by Article 15(8) of the Social Security (Northern Ireland) Order 1998, I set aside the decision appealed against. 

23.	For further reasons set out below, I am unable to exercise the power conferred on me by Article 15(8)(a) of the Social Security (Northern Ireland) Order 1998 to give the decision which the appeal tribunal should have given.  This is because there are further findings of fact which require to be made and I do not consider it expedient to make such findings, at this stage of the proceedings.  Accordingly, I refer the case to a differently constituted appeal tribunal for re-determination.       

24.	I direct the Department to prepare a new submission for this and a related appeal which is also being remitted to a differently constituted appeal tribunal.  The new submission must draw on the detailed analysis set out in the written observations prepared by Mr Crilly. On receipt of the new appeal submission the appellant’s representative should prepare a submission in response.  

25.	It is appropriate the two appeals which are being remitted to a differently constituted appeal tribunal are listed for oral hearing together.  The President of Appeal Tribunals or the Full-Time LQPM may wish to give case management directions in advance of the listing of the appeals.         

(signed):  K Mullan

Chief Commissioner

3 August 2016