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IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE SOCIAL SECURITY COMMISSIONERS
(Mr H. Levenson)
Case Nos CIS/1216/2005 and CH/1220/2005
||Royal Courts of Justice
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE LLOYD
LORD JUSTICE RICHARDS
SIR PETER GIBSON
Mr John Lofthouse (instructed by Edward Hayes) for the Appellant
Mr Jason Coppel (instructed by The Solicitor to the Department for Work and Pensions) for the Respondents
Hearing date : 13 November 2007
HTML VERSION OF JUDGMENT
Crown Copyright ©
Lord Justice Richards :
- Between February 1996 and September 2002 the appellant, Mr Mote, was in receipt of income support totalling approximately £32,000. The decision to pay that benefit was then revised on the ground that it had been made in ignorance of a material fact, namely that his income exceeded the applicable amount and that he was therefore not entitled to the benefit. During much of the period he had also been in receipt of housing benefit totalling approximately £35,000 from the local authority, Chichester District Council. Those payments were made in the belief that he was entitled to income support, a matter which, if correct, entitled him to housing benefit without separate means testing. That decision was also revised, on the ground that he had not, after all, been entitled to income support. The result of the revised decisions was that the appellant had received overpayments totalling approximately £67,000 which were recoverable from him pursuant to s.71 of the Social Security Administration Act 1992 and regs. 98-99 of the Housing Benefit (General) Regulations 1987.
- The appellant brought separate appeals to the Social Security Appeal Tribunal ("the tribunal") against the decisions that benefit had been overpaid. The appeal in respect of housing benefit was brought in July or August 2002, and the appeal in respect of income support in July 2003.
- In January 2004, before the appeals were heard, the appellant was charged with criminal offences of dishonesty in relation to his benefit claims. In April 2004 he was committed to the Crown Court.
- Early in 2004 the department and the council wrote to the tribunal to ask it to consider postponing the hearing of the appellant's appeals in the light of the criminal proceedings. In May 2004, however, the district chairman directed that there be no further postponement and that the matters be listed before him, sitting alone. He refused further written requests by the claimant for a postponement.
- The hearing of the appeals was then fixed for 3 September 2004. On that date there was no attendance at the hearing by the appellant or his representatives. The chairman took that as an implied application to adjourn, which he again refused. He proceeded to hear the appeals, which he dismissed on the day, though written reasons for the decision were not given until early 2005. A subsequent application to set the tribunal's decision aside was also dismissed. (There were in fact two separate decisions, one in respect of income support and the other in respect of housing benefit. But the latter followed from the former and it is convenient to refer to them collectively as the decision of the tribunal.)
- The appellant obtained leave to appeal from the tribunal's decision to the Social Security Commissioners. The appeals were heard in March 2006 by Mr Levenson, who dismissed them in a decision dated 20 July 2006. He refused permission to appeal to this court, but permission was granted by the Rt. Hon. Sir Henry Brooke in January 2007.
- In the meantime the criminal proceedings had taken an eventful course. In June 2004, not long after his committal to the Crown Court, the appellant was elected a Member of the European Parliament. In November 2004 the criminal proceedings against him were stayed on the ground that they were in breach of his privilege as an MEP. Following an application by the Attorney General, the European Parliament adopted a resolution in July 2005 waiving the appellant's immunity. Despite an application by the appellant to the Court of First Instance for annulment of the European Parliament's decision, the stay on the criminal proceedings was eventually lifted and directions were given with a view to a trial being fixed for July 2007.
- That is how matters stood at the time when permission to appeal to this court was granted. Since then, however, the trial has taken place, and on 17 August 2007 the appellant was convicted on 21 out of a total of 25 counts against him. On 4 September he was sentenced to 9 months' imprisonment on each of the 21 counts, to run concurrently.
- At the hearing before us, Mr Coppel applied on behalf of the respondents for material relating to the criminal trial to be admitted in evidence on the present appeal. He sought in particular to rely on the judge's sentencing remarks and on passages in the summing up which referred to admissions made by the appellant in the course of the trial about the receipt of previously undisclosed funds during the period relevant to the benefit claims. Mr Lofthouse had not had sufficient notice of the application and would have needed an adjournment in order to respond to that material. In any event the main relevance of the material was to the exercise of this court's discretion to remit the case to the tribunal if we were persuaded that the appeal was otherwise well founded. We deferred a decision on the application until the conclusion of the hearing, but decided then that the appeal could fairly be determined without recourse to the additional material.
- At the time of the hearing before us, the appellant also had an outstanding application for leave to appeal against conviction. That application has since been heard by the Court of Appeal (Criminal Division), presided over by the Lord Chief Justice, on 5 December 2007. The court granted leave to appeal and heard the substantive appeal. Judgment was reserved. In view of our decision not to have recourse to the material relating to the criminal trial, however, we are in a position to reach a decision on the appeal before us without waiting for the Court of Appeal (Criminal Division) to hand down its judgment.
- An appeal to this court from the commissioner lies only on a point of law. The appeals from the tribunal to the commissioner also lay only on a point of law. In practice, therefore, it is possible for us to focus directly on the tribunal's decision and the question whether it was affected by a material error of law, and it is unnecessary to refer to the detail of the commissioner's decision. Nonetheless I wish to pay tribute to the thoroughness with which the commissioner addressed the issues in his decision.
- Mr Lofthouse, appearing for the appellant, has advanced two main submissions. The first is that the tribunal chairman erred in deciding not to adjourn the hearing of the appeals on 3 September 2005. The second is that the substantive decision dismissing the appeals was based on an inadequate exercise of the tribunal's inquisitorial function and an inadequate analysis of the facts.
The decision not to adjourn the hearing of the appeals
- Reg. 49(4) of the Social Security and Child Support (Decisions and Appeals) Regulations 1999 confers on the tribunal the power to proceed with a hearing in the absence of a party, having regard to all the circumstances including any explanation offered for the absence. Reg. 51(4) empowers the tribunal to adjourn an oral hearing at any time on the application of any party or of its own motion. On the face of it, therefore, the chairman had a broad discretion whether or not to proceed with the hearing. He gave detailed reasons for his decision not to adjourn.
- He said first that there might well be cases in which it would be preferable for social security appeals to await the outcome of a related criminal prosecution, but whether or not that was so would depend on the circumstances of each case and in particular the precise nature of the criminal charges and the precise issues raised by the appeal.
- He then examined the extent of overlap between the issues in the criminal proceedings and in the tribunal proceedings. In summary, he said that the criminal court would be concerned with the question of dishonesty, which was wholly irrelevant to the tribunal proceedings; and that the tribunal was concerned with entitlement to benefit, whereas it would be no answer to the criminal charges for the appellant to say that he had not gained by any deception because he had not been paid any benefit to which he was not entitled: the question of entitlement would at most be relevant to mitigation. So the issues were separate.
- The chairman said that he could not see how proceeding with the appeals could possibly prejudice the criminal proceedings. He referred to the power of the trial judge to exclude any evidence that would be prejudicial to a fair trial. He could not accept the concerns expressed in correspondence that if the appellant had to give evidence it might compromise his own position in the criminal proceedings and would negate the presumption of innocence and infringe his right to silence. The presumption of innocence would be respected in the tribunal proceedings. The right to silence had very limited relevance to those proceedings, but the chairman would have advised the appellant, had he attended the hearing, that he did not have to reply to any question where to do so might incriminate him.
- The chairman pointed next to the fact that the appeals were brought by the appellant, not the Secretary of State or the local authority, and that there was a public interest in the proceedings being determined in a reasonable time. He observed that it would not be a proper exercise of the tribunal's power to adjourn if it were to grant the appellant an adjournment solely to allow him to retain the tactical advantage of surprise in subsequent criminal proceedings.
- The chairman also said that there were positive reasons why the appeals should be heard before the criminal proceedings. As the issue of entitlement would be relevant at least for the purposes of mitigation in the event of a conviction, it was desirable that that issue should be authoritatively determined by the body to which it had been entrusted by Parliament.
- In his decision, the commissioner stated that "the tribunal gave a cogent, reasonable explanation for its decision to proceed, and in the absence of any error of law, there is no basis for a commissioner to interfere with the exercise of its discretion". He concluded that there had been no error of law.
- The submissions made to us by Mr Lofthouse need to be examined in the light of a substantial line of authority concerning the relationship between concurrent civil and criminal proceedings.
- In Jefferson Ltd v Bhetcha  1 WLR 898 the plaintiffs brought a claim to recover monies appropriated by a former employee who was also facing prosecution for offences in connection with the same matters. The Court of Appeal held that the court had a discretion to stay the civil proceedings or to adjourn an application for summary judgment having regard to the concurrent criminal proceedings. One factor to be taken into account was whether there was "a real danger of causing injustice in the criminal proceedings", for example if publicity might influence potential jurors in the criminal proceedings or if disclosure of the defence might enable prosecution witnesses to prepare a fabrication of evidence or might lead to interference with witnesses (per Megaw LJ at 905D). It was held on the facts that the application for summary judgment should be allowed to proceed.
- A similar approach was adopted at much the same time by the Employment Appeal Tribunal in Bastick v James Lane (Turf Accountants) Ltd  ICR 778, in declining to interfere with the exercise of discretion by the chairman of an industrial tribunal not to adjourn proceedings for unfair dismissal in circumstances where the employee faced criminal proceedings in respect of the activities that had led to the dismissal.
- The context in V v C  EWCA Civ 1509 was similar to that in Jefferson. It concerned an application for summary judgment against a defendant who also faced a criminal investigation and possible criminal proceedings in respect of the same matters. The defendant's case was that in order to provide a detailed defence to the claim he would be required to provide information that would or might assist a prosecution. It was contended that to proceed with summary judgment would require him to "buy" his right not to incriminate himself at the price of having judgment entered against him, or to forgo that right with the attendant risks to the criminal process under way against him. The Court of Appeal held, first, that the privilege against self-incrimination was a privilege against being compelled on pain of punishment to provide evidence or information, and the privilege did not give rise to a defence in civil proceedings or to a right not to plead a defence in civil proceedings.
- A separate question was whether there should be a stay or postponement of the summary judgment application because it might affect the fairness of the criminal trial. As to that, the Court of Appeal held that it was a matter of discretion and that the judge's decision to proceed with the application for summary judgment and to give summary judgment could not be successfully impugned. First, there was no right to silence in the context of civil proceedings. Second, if a defendant had a positive defence, the criminal law now expected him to adumbrate it at an early stage if there was to be no danger of adverse inferences being drawn or adverse comment made; so that disclosure of a defence in civil proceedings was unlikely to disadvantage a defendant in criminal proceedings. Third, it was legitimate to start from the position that a positive defence was likely to exculpate rather than incriminate; and the judge was entitled to take into account that the defendant had chosen not to provide any answer to the claimant's allegations. The reasoned judgment would be available to the prosecuting authorities, but the suggestion that they might use it was fanciful: no reliance could be placed on it in the criminal trial so as to prove the guilt of the defendant, and the fact of judgment did not take them any further than the assertions in the points of claim. Finally, there was no risk of a potential juror being affected by publicity.
- In Barnet London Borough Council v Hurst  EWCA Civ 1009,  4 All ER 457, it was held that concurrent proceedings for civil contempt and criminal proceedings arising out of the same incident were permissible. Brooke LJ referred to a series of decisions of the court which held inter alia that the court had a discretion to adjourn contempt proceedings pending the outcome of the criminal proceedings, "but only where it is satisfied that there would otherwise be a real risk of prejudice which might lead to injustice" (para 33). For reasons set out in his judgment, he did not consider that the implementation of the Human Rights Act 1998 altered the position at all. In the event, however, no decision was required on the facts of the particular case. Brooke LJ observed that on another occasion "it may be necessary for this court to consider the possible effect of art 6 of the convention when a defendant in criminal proceedings complains that there would be a real risk of prejudice which might lead to injustice if he was required to defend himself in prior contempt proceedings" (para 44).
- R v Payton  EWCA Crim 1226 was an appeal against conviction for possession of a controlled drug with intent to supply. The appeal was allowed on a ground that is immaterial to the present proceedings. In its judgment, however, the court also considered the implications of the fact that, at the same time as the criminal proceedings, the appellant had faced proceedings in the magistrates' court for forfeiture, under Part 5 of the Proceeds of Crime Act 2002, of a large sum of money that had been found on a search of the appellant's flat and that was relied on in the criminal proceedings in support of the allegation of an intention to supply. The forfeiture proceedings were initiated by the police. The Crown Prosecution Service was not party to them and, surprisingly, was not aware of them at the time. Although the hearing in the forfeiture proceedings had been fixed for a date after the criminal trial, the appellant had disclosed a considerable amount of material in them in advance of the criminal trial. The judge's summing up in the criminal trial referred to the fact that the appellant had supplied information and had given the police the names of witnesses in the context of the forfeiture proceedings.
- The court observed that the concurrent forfeiture proceedings had not led to the making of an abuse of process application in the Crown Court and that, in the event, no abuse of process or prejudice to the appellant had been established. But it had sufficient concerns to invite written representations about the practice followed. In the course of summarising the effect of the note received, Pill LJ (giving the judgment of the court) stated, at para 26:
"It is accepted that 'close liaison' would be expected between investigators in the civil and in the criminal proceedings. It is submitted that 'the overwhelming likelihood is that the police would lodge an application for forfeiture (and so effect the detention of the cash and the preservation of the status quo) but then seek an adjournment of the application until criminal proceedings (including any appeal) are concluded'. The advantages of this course are described in the note. They include the preservation of the status quo and ensuring that the defendant is 'not embarrassed into having to rehearse what may be part of his defence to the criminal allegation'. The defendant is unlikely to be in receipt of public funding in the civil proceedings. The potential saving of expense by adjourning civil proceedings is also mentioned."
- Pill LJ went on to record submissions on behalf of the appellant that there was "a real potential unfairness for a defendant to be put in the position of giving evidence on oath about matters which could affect his criminal trial before his criminal trial takes place. If the defendant chooses not to give such evidence, it might well result in forfeiture of cash seized before his criminal trial has concluded, or even started". He said that the concern expressed by the court at the hearing was reflected in the contents of the notes and the submissions but that it was not necessary or appropriate to investigate further the issues arising, in the absence of fuller argument and a live issue. He continued, at para 31:
"It is, however, important that care is taken to ensure that the fair trial of a defendant is not prejudiced by anything arising in civil proceedings in the magistrates' court and steps should be taken accordingly. Liaison between police acting under Part 5 of the 2002 Act and the prosecuting authority is essential. In view of what happened in this case, the issue should be addressed by them."
- In R v L  EWCA Crim 1902,  1 WLR 3092, the Court of Appeal considered the situation where there are care proceedings in respect of a child and parallel criminal proceedings against a person connected with that child in respect of a serious offence against the child. The court said in terms that it was not suggesting any alteration in the practice of the Family Division that the criminal proceedings of themselves are not a reason to adjourn the care proceedings, because delay is detrimental generally to the children (para 72). It did, however, refer to the desirability of liaison between the relevant authorities and some linkage between directions hearings as the cases progress.
- In his submissions, Mr Lofthouse made clear that he was not arguing for a rule of law that a criminal trial must always take precedence over related civil proceedings. He submitted, however, that a change of approach was required by the coming into force of the Human Rights Act 1998. Formerly the civil court or tribunal had a discretion to adjourn if there was a real risk of prejudice to the defendant in concurrent criminal proceedings; but it did not have to adjourn, and might conclude that policy factors came down in favour of a speedy determination of the civil case. Now, however, the civil court or tribunal has a duty to safeguard the defendant's rights in the criminal proceedings and must not proceed with the civil case if to do so would be in breach of those rights.
- I do not accept that the Human Rights Act 1998 requires any material change of approach in this area. In my judgment the court still enjoys a real discretion whether or not to adjourn. The authorities make clear that a relevant consideration is whether the continuation of the civil proceedings will give rise to a real risk of prejudice to the defendant in the criminal proceedings. If there is a risk of prejudice, then I would expect it to weigh heavily in favour of an adjournment pending the conclusion of the criminal proceedings, but it will not necessarily be decisive. I accept, of course, that the court must not act in breach of the defendant's Convention rights; but it is difficult to see how the continuation of the civil proceedings could give rise in itself to a breach of those rights. As the tribunal chairman held in the present case, the civil proceedings can be conducted in such a way as to respect them. An additional and important safeguard lies in the powers of the judge in the criminal proceedings to stay those proceedings for abuse of process or to limit the evidence admitted at the trial if, in the circumstances then prevailing, it is necessary to do so in order to prevent a breach of Convention rights or to ensure a fair trial. The civil court or tribunal can take into account the existence of those powers when considering the exercise of its own discretion whether to adjourn.
- The contention that the Human Rights Act has altered the position derives no support from the authorities. A similar contention, in relation to concurrent contempt proceedings and criminal proceedings, was expressly considered and rejected in Barnet London Borough Council v Hurst (para 25 above). That conclusion was plainly not thought to be undermined by the fact that the court left open the possible effect of article 6 of the Convention in relation to the question of risk of prejudice in the criminal proceedings. V v C (paras 23-24 above) post-dated implementation of the Human Rights Act but applied the earlier authorities. It is clear that the court in R v Payton (paras 26-28 above) had concerns about the risk of prejudice to the criminal proceedings, but it, too, impliedly accepted that the court hearing the concurrent proceedings had a discretion in the matter and it focused on the fact that no abuse of process or prejudice had been established in the criminal proceedings. R v L (para 29 above), the most recent of the authorities cited to us, strongly supports the existence of a discretion - indeed, a discretion generally to be exercised in that particular context in favour of bringing on the parallel proceedings without waiting for the conclusion of the criminal proceedings.
- As to the particular circumstances of the present case, Mr Lofthouse sought to make something of the fact that the department and the local authority had originally invited the tribunal to postpone the hearing of the appeals. This meant, he suggested, that the appellant had no reason to expect that the hearing would go ahead in his absence. He also submitted that the previous attitude of the parties should have carried substantial weight in the decision whether to adjourn. In my view there is no substance in those points. The original request by the department and the local authority that the tribunal should consider postponing the hearing of the appeals had been superseded by the chairman's direction that there should be no further postponement and by his rejection of the appellant's written applications for a postponement. It must have been clear to all concerned that the hearing was likely to proceed on the date then fixed for it. The department and the local authority went prepared for the hearing. There was no reason why they should have maintained their original request that the tribunal consider postponement or why that request should have carried weight in the decision whether to adjourn. The appellant, for his part, stayed away as a matter of deliberate choice, as the chairman held in rejecting the subsequent application to set his decision aside. The appellant cannot have expected the chairman to adjourn the hearing by reason of his absence. The application to set aside contained no suggestion that the appellant had been taken by surprise by what happened.
- The first aspect of the chairman's reasoning that Mr Lofthouse challenged was the view that there was no overlap of issues between the social security appeals and the criminal proceedings. In particular, he submitted that the chairman was wrong to say that entitlement to benefit would be of no relevance in the criminal proceedings. Dishonesty does not exist in a vacuum: if a man is entitled to something, it is unlikely that he will be convicted of dishonesty in seeking to obtain it or that any representation in relation to it will be found to have been a material misrepresentation. In my view that submission has a degree of substance to it. Whilst a lack of entitlement to benefit formed no part of the criminal charges against the appellant, it was possible in principle that the question of entitlement might play some part in the trial as being relevant to the issue of dishonesty. To that extent the chairman was wrong to say that the issues in the appeals and in the criminal proceedings were "separate". But this was not a serious error; and as Mr Coppel submitted, the chairman could have given the further and better reason that any finding by the tribunal on entitlement to benefit would be inadmissible in the criminal proceedings (see, for example, what was said in para 43 of V v C), so that any overlap of issues was not a problem.
- As to the chairman's view that proceeding with the appeals could not possibly prejudice the criminal proceedings, the main point advanced by Mr Lofthouse was that the appeals would provide the department and local authority with an unfair opportunity for a rehearsal of the criminal trial. In this case, unlike the previous cases cited, the parties to the civil proceedings were the same as the parties to the criminal proceedings: the department and the local authority were not only respondents to the appeals but also prosecutors in the criminal proceedings. The hearing of the appeals, submitted Mr Lofthouse, would give them the opportunity to study the appellant's reaction and to assess what questions to ask in the criminal trial. This was a prejudice to the appellant which could not realistically be the subject of an abuse of process application in the criminal proceedings. There was no effective remedy for it apart from postponing the hearing of the appeals pending the conclusion of the criminal trial.
- The rehearsal point does not feature in any of the decided cases concerning concurrent proceedings. The nearest one gets to any mention of it is in R v Payton, where the representations to the court stated that one of the advantages of adjourning the parallel forfeiture proceedings pending the conclusion of the criminal trial was that the defendant would "not be embarrassed into having to rehearse what may be part of his defence to the criminal allegation" (para 27 above). I do not think that the point being made there was the same as the rehearsal point put forward by Mr Lofthouse, and in any event it is not clear what weight it carried with the court. In general, as it seems to me, the fact that the prosecution has had a previous opportunity to rehearse its case cannot be said to give rise to substantial prejudice to the defendant in a subsequent criminal trial. If it were otherwise, it would provide a ground of objection to a retrial in criminal proceedings where the jury have been unable to agree in the first trial or where a conviction in the first trial has been quashed on appeal. If this were a point of substance, I would also expect it to have been mentioned in the previous cases. In any event, it cannot in my view assist the appellant in the present case, since there is nothing to show that it was relied on in the representations made to the tribunal or, therefore, that the chairman fell into error in failing to have regard to it or to cover it in his reasons. It is not a point that the chairman was bound to deal with of his own motion. (Having been sent this judgment in draft, Mr Lofthouse sought to persuade the court that the point was in fact raised before the tribunal. But the correspondence on which he relied does not support that submission. It makes the different point, which is sufficiently dealt with in this judgment, that the appeals would be used as a fishing expedition for evidence and to see the defence.)
- The fact that the parties to the appeals to the tribunal were the same as the parties to the criminal proceedings was something on which Mr Lofthouse relied more widely than for the rehearsal point which I have just covered. To my mind, however, it is a fact without significance in that wider context. I do not see how it can affect any of the other issues that arise or can undermine any part of the chairman's reasoning. I should mention that Mr Coppel sought to rebut this aspect of Mr Lofthouse's argument by reference to a decision of Lloyd J (as he then was) in Secretary of State for Health v Norton Healthcare Limited  EWHC 1905 (Ch). I am not persuaded that the matter addressed in that case is sufficiently close to be of real assistance in the present context; but in the circumstances I consider it unnecessary to examine the decision further.
- Mr Lofthouse made a separate submission that to proceed with the appeals constituted a breach of the appellant's right to silence, since it placed the appellant in a position where he had either to give evidence to the tribunal or allow the case to go by default. This is similar to the argument as to infringement of the privilege against self-incrimination which was rejected in V v C (para 23 above), and in my view the chairman was entitled to reject it in this case too. Mr Lofthouse said that it was not enough that the appellant would not be required to answer questions that might incriminate him, since he would still be giving his case to the other side. The difficulty faced by that point, however, is that the appellant was obliged in any event to make early disclosure in the criminal proceedings of the substance of his defence to the charges against him (a point also made in V v C: see para 24 above); and even now, after the conclusion of the criminal trial, the appellant has not identified a single concrete example of how it might have been damaging to him in the criminal proceedings for him to participate in, and put forward a positive case at, the hearing of his appeals to the tribunal. Mr Lofthouse criticised the chairman's observation that it would not be a proper exercise of the tribunal's power to adjourn for it to grant an adjournment solely to allow the appellant to retain the tactical advantage of surprise in subsequent criminal proceedings. He submitted that this was not an appropriate way to describe reliance on a fundamental right. In my view, however, the observation was in the circumstances a sound one.
- Mr Lofthouse submitted that the matters relied on by the chairman as positive reasons why the appeals should be heard before the criminal proceedings did not justify the refusal of an adjournment: the circumstances in which an authoritative determination by the tribunal of the appellant's entitlement to benefit could assist in the criminal proceedings would be rare. I can readily accept that the positive reasons relied on by the chairman may not have been a strong factor in favour of proceeding with the appeals, but in my view there was nothing wrong with his taking the factor into account.
- My overall conclusion on this issue is that the chairman gave appropriately careful consideration to the matter before deciding to proceed with the appeals and that his exercise of discretion was well reasoned and free from material error. The commissioner was therefore right to find that there was no basis for interfering with his decision.
The challenge to the substantive decision
- The chairman made a number of findings of fact on the balance of probabilities. They included one clear error, that the appellant was receiving his retirement pension: the appellant was in fact only 60 years old at the time and it is not in dispute that he was not in receipt of his retirement pension. It was not, however, a material error; and although Mr Lofthouse relied on it as indicating a lack of care on the part of the chairman, I do not think that it helps the appellant's case at all. The real question is whether the material parts of the chairman's findings reveal a lack of adequate investigation or analysis.
- The most important findings of fact were set out at paragraph 4(o) to (t) of the decision relating to income support:
"(o) On 29 November 2000, Mr Mote entered into a credit agreement with Sainsbury's Bank Plc …. In support of his application for a loan, Mr Mote told the bank that:
i) he was a management consultant with 30 years length of service;
ii) he was employed by JC Commercial Management; and
iii) that he had a total monthly income of £4,000.00
(p) For a period which began on a date which I am unable to ascertain from the papers (but which was before 19 January 1996) until 23 May 2001 (when the account was closed) Mr Mote held a postal account with the Douglas, Isle of Man branch of Barclays Bank Plc ('the Account'). …. Mr Mote did not at any time reveal either the existence of the Account or any of the transactions shown by [the] statements either to the Secretary of State for Work and Pensions or to Chichester District Council. The Account was a personal account ….
(q) The total amounts paid into the Account during the years from 1996 to 2000 were as follows:
(r) On 23 May 2001, the Account was closed. He obtained a personal loan from Barclays to settle the overdraft and the monthly repayments on that loan account … were settled by a standing order from the Tanner Management account.
(s) Those payments into the Account were income in the hands of Mr Mote. Given that Mr Mote's applicable amount was £101.05 in 1996 and would subsequently have increased only in line with annual uprating, that income was sufficient to disentitle Mr Mote from income support during the years 1996 to 1998.
(t) During the years 1999-2000 the income into the Account would – taken on its own – only have reduced Mr Mote's entitlement to income support, not extinguished it. However, I also have to consider Mr Mote's income from JC Commercial Management of which he was a director. Mr Mote had worked as a management consultant for 30 years and by November 2000 was earning £4,000 per month from JC Commercial Management (see sub-paragraph (o) above). That sum was also sufficient on its own, even assuming that deductions had to be made for tax and national insurance, to disentitle Mr Mote to income support at that time. Given his long history as a management consultant, it is improbable that Mr Mote was earning substantially less than that sum during 1999. It is also improbable that the income from JC Commercial Management would have reduced in subsequent years. It is therefore more likely than not that the two sources of income taken together had that effect of disentitling him to income support from 1999 to the end of the overpayment period."
- Those findings led to a conclusion expressed in the following terms at para 17 of the decision:
"Mr Mote's own evidence, in the form of his application to Sainsbury's Bank Plc, shows that he was working for JC Commercial Management as a management consultant and that he drew [an] income from that employment which, as at November 2000 was £4,000 per month. There is also the evidence of the regular and substantial payments into Mr Mote's personal account with Barclays bank in the Isle of Man which, in the absence of any explanation to the contrary for Mr Mote, are more likely than not to be income. Those payments indicate a level of income which is wholly incompatible with entitlement to any sort of income-related benefit, including income support."
- It was further held at para 18 that, as the existence of the income was positively denied by the appellant in his various claim forms and as the circumstances surrounding it were either positively denied or not disclosed, the total amount paid by way of income support during the relevant period was recoverable. In the separate decision in respect of housing benefit, the same essential reasoning led to the conclusion that the appellant had not been entitled to housing benefit during the relevant period and that the amount paid by way of benefit was recoverable.
- Mr Lofthouse's submissions on this part of the case were to the following effect. The chairman's findings were based on two elements: the Isle of Man bank account and the Sainsbury's loan document. Yet the annual figures for the bank account did not even potentially support the respondents' case for the years later than 1998; and the chairman then adopted an unsupported inference to telescope back and forward from the loan document so as to cover the remainder of the relevant period. The respondents were saying that the statements in the loan document were true and were supported by the Isle of Man accounts; but it was not difficult to see that the accounts did not reveal income of £4,000 a month in any of the years in question, and even in the years of substantial receipts the distribution of those receipts bore no appearance of the regularity associated with income. Nor was there any sign of an employee's salary, let alone of a salary of £4,000 a month, in the bank accounts of JC Commercial Management. There was no other relevant evidence before the tribunal. Moreover it was obvious from the papers before the tribunal that the appellant himself was denying receipt of income.
- In those circumstances, submitted Mr Lofthouse, the tribunal ought to have exercised its inquisitorial function (as to which, see Kerr v Department for Social Development  1 WLR 1372 at para 62, and the decision of the Court of Appeal of Northern Ireland in Mongan v Department for Social Development  NICA 16 at paras 15-19 and 27) and asked whether the money in the Isle of Man bank account was income at all and where the suggested income of £4,000 a month was coming from and was going to. There was a realistic prospect that proper examination would have resulted either in a finding in the appellant's favour or in a finding that overpayment took place over a much more restricted period. The chairman failed, however, to carry out a proper investigation of this issue. Alternatively, there were such inadequacies in the chairman's fact-finding that the flaws amounted to an error of law.
- It is unnecessary to consider the precise effect of what was said in Kerr and Mongan, since the suggestion that the chairman ought to have carried out further investigation in this case is in my view wholly unrealistic. The appellant had given no further explanation of the bank account figures or the loan document and had declined in interview to answer further questions about them. His failure to attend the hearing notwithstanding the rejection of his applications for a postponement showed that there was no change in his stance. There was no reason to consider that further investigation would produce any additional evidence. The chairman had to make findings on the evidence before him. The true question, as it seems to me, is whether there was a rational basis in the evidence for the findings made.
- As to that, I am satisfied that the chairman's findings were properly open to him on the evidence. In the absence of any other explanation it was reasonable to infer that the money going into the Isle of Man account was income (even if issue can be taken with the chairman's description of the payments in as "regular"). It was also reasonable to rely on the appellant's own statements in the loan document completed by him and to draw the inferences that the chairman drew from that document. The statements made in the document were, when taken together, an ample basis for the inference that the appellant had had an income of £4,000 a month throughout the relevant period. It was not necessary to try to match up the stated income of £4,000 a month with the payments into the Isle of Man account or with the payments out of the JC Commercial Management account. It was not to be assumed or inferred that there were no other bank accounts from which or into which the payments could be made.
- Accordingly, in my judgment, the commissioner was right to reject the challenge to the tribunal's substantive decision on the two appeals.
- For the reasons given I would dismiss this appeal.
Sir Peter Gibson :
- I agree.
Lord Justice Lloyd :
- I also agree.
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