JC-v-Department for Social Development (PC) [2013] NICom 58

Decision No:  C1/13-14(PC)

 

 

 

 

SOCIAL SECURITY ADMINISTRATION (NORTHERN IRELAND) ACT 1992

 

SOCIAL SECURITY (NORTHERN IRELAND) ORDER 1998

 

 

PENSION CREDIT

 

 

Application by the claimant for leave to appeal

and appeal to a Social Security Commissioner

on a question of law from a Tribunal’s decision

dated 28 July 2011

 

 

DECISION OF THE SOCIAL SECURITY COMMISSIONER

 

 

1.     I grant leave to appeal and proceed to determine all questions arising thereon as though they arose on appeal.  The decision of the appeal tribunal dated 28 July 2011 is not in error of law.  Accordingly the appeal to the Social Security Commissioner does not succeed.  The decision of the appeal tribunal to the effect that the appellant is entitled to state pension credit (SPC) from 29 May 2006 at the rate of £4.05 per week and excluded from SPC from and including 5 February 2007 is confirmed.

 

         Background

 

2.     The appellant made a claim for SPC on 8 June 2006 and requested that his claim be considered from 29 May 2006.  Following the making of the claim the appellant provided details concerning his present living arrangements and the circumstances surrounding his previous occupation of a property in W....... .

 

3.     On 14 January 2008, and following the earlier provision of advice concerning the value of the property in W......., the Department issued a request to the Valuation and Lands Agency to obtain a valuation of the appellant’s share of the property at 29 May 2006 and 29 May 2007.  The appellant’s share was subsequently valued at £77400 on 29 May 2006 and £89300 on 29 May 2007.

 

4.     On 21 July 2008 a decision-maker of the Department decided that the appellant was not entitled to SPC from 29 May 2006.  A copy of the decision dated 21 July 2008 is attached to the original appeal submission as Tab No 11.  The basis of the decision was that the appellant had an assumed income from capital of £128.00 per week which was in excess of his applicable amount of £114.05.

 

5.     An appeal against the decision dated 21 July 2008 was received by the Department on 18 August 2008.  There then followed a period of information gathering by the Department.  On 16 June 2010 the Department reconsidered the decision dated 21 July 2008 but did not change it.

 

6.     The first oral hearing of the appeal took place on 19 October 2010.  The appeal was adjourned to permit the appellant’s representative to provide a submission on certain issues arising.  Following receipt of the relevant submission, the Department provided an addendum for the appeal tribunal.  In that addendum the Department indicated that following receipt of additional information the valuer had revised the valuations of the relevant property as follows - £67400 as of 29 May 2006 and £79350 as of 29 May 2007.  The Department also addressed the three grounds which had been raised by the appellant’s representative in the submission forwarded following the first adjournment of the appeal.

 

7.     The substantive oral hearing of the appeal took place on 28 July 2011.  The appellant was present and was represented.  The Department was represented by a Departmental Presenting Officer.  The appeal tribunal disallowed the appeal and issued a decision notice to the following effect:

 

‘The capital value of the property at … falls to be taken into account in the calculation of his Pension Credit award.  As a result the appellant is entitled to Pension Credit of £4.05 per week from 29/5/06 and excluded from entitlement to Pension Credit from 5/2/07.’

 

8.     On 3 January 2012 an application for leave to appeal to the Social Security Commissioner was received in the Appeals Service (TAS).  On 13 January 2012 the application for leave to appeal was refused by the legally qualified panel member (LQPM).

 

         Proceedings before the Social Security Commissioner

 

9.     On 30 April 2012 a further application for leave to appeal was received in the Office of the Social Security Commissioners.  There then followed a delay in ascertaining whether the appellant was represented.  On 8 August 2012 I accepted the late application for special reasons.  Also on 8 August 2012 written observations on the application for leave to appeal were sought from Decision Making Services (DMS) and these were received on 5 September 2012.  In these written observations, Mr Crilly, for DMS, opposed the application on the grounds submitted on behalf of the appellant.  On 5 September 2012 I directed an oral hearing of the application.  Written observations were shared with the appellant on 6 September 2012.  On 9 November 2012 the office was informed that McGuigan Malone Solicitors were now on record for the appellant.

 

10.   The oral hearing of the application took place on 5 December 2012.  The appellant was present and was represented by Miss Paula McVeigh of Counsel.  The Department was represented by Mr Crilly.  Gratitude is extended to both representatives for their detailed and constructive observations, comments and suggestions.

 

11.   Following the oral hearing of the application I directed both parties to provide an additional submission addressing the question of the extent to which the principles in R(IS) 5/07 (as approved in AM v Secretary of State for Work & Pensions (SPC) ([2010] UKUT 134 (AAC)) applied to the issues arising in the application.  Further submissions were subsequently received from Mr Crilly and Miss McVeigh and were cross-shared.

 

         What is an error of law?

 

12.   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.

 

13.   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.”

 

         The relevant legislative background

 

14.   Section 15(2) of the State Pension Credit (Northern Ireland) Act 2002, as amended provides that:

 

‘(2)  Regulations may provide that a person's capital shall be deemed to yield him income at a prescribed rate.’

 

15.   Regulation 15(6)(b) of the State Pension Credit Regulations (Northern Ireland) 2003, as amended, establishes the prescribed rate under which a claimant’s capital shall be deemed to yield a weekly tariff income.

 

16.   Regulation 17(8)(a) of the State Pension Credit Regulations (Northern Ireland) 2003, as amended, provides that:

 

‘(8) Schedule 5 shall have effect so that—

 

 …

 

(b) the capital specified in Part II of that Schedule shall be disregarded for the purpose of determining a claimant’s income under regulation 15(6).’

 

17.   Regulation 19 of the State Pension Credit Regulations (Northern Ireland) 2003, as amended, provides that:

 

‘19. Capital which a claimant possesses in the United Kingdom shall be calculated at its current market or surrender value less—

 

(a) where there would be expenses attributable to sale, 10 per cent.; and

 

(b) the amount of any encumbrance secured on it.’

 

18.   Regulation 23 of the State Pension Credit Regulations (Northern Ireland) 2003, as amended, provides that:

 

‘23. Where a claimant and one or more persons are beneficially entitled in possession to any capital asset they shall be treated as if each of them were entitled in possession to the whole beneficial interest therein in an equal share and the foregoing provisions of this Part shall apply for the purposes of calculating the amount of capital which the claimant is treated as possessing as if it were actual capital which the claimant does possess.’

 

         What did the appeal tribunal decide?

 

19.   Three arguments were put to the appeal tribunal.  As these arguments were also advanced in support of the application for leave to appeal to the Social Security Commissioner, it is worth setting these out in some detail together with the appeal tribunal’s response to them.

 

20.   The first argument was summarised by Mr Crilly in the written observations on the application for leave to appeal as follows:

 

‘In his first ground, (the claimant) submitted that his wife should be regarded as a “close relative” for the purposes of his claim for state pension credit.  This, along with the assertion that his wife is over 60 and is incapacitated, would allow the capital value of his share of the property at … to be disregarded in accordance with paragraph 4(a) of Part I of Schedule 5 to the SPC Regulations.

 

Regulation 17 of the SPC Regulations provides for the calculation of a claimant’s weekly income.  Paragraph (8) of that provision states:

 

(8) Schedule 5 shall have effect so that—

 

(a) the capital specified in Part I of that Schedule shall be disregarded for the purpose of determining a claimant’s income, and

 

(b) N/A

 

At initial date of (the claimant’s) claim, paragraph 4(a) of Schedule 5 to the SPC Regulations provided:

 

4. Any premises occupied in whole or in part—

 

(a) by a person who is a close relative, grandparent, grandchild, uncle, aunt, nephew or niece of the claimant or of his partner as his home where that person is either aged 60 or over or incapacitated;

 

    …

 

The term “close relative” is defined in regulation 1(2) of the SPC Regulations in the following terms:

 

“close relative” means a parent, parent-in-law, son, son-in-law, daughter, daughter-in-law, step-parent, step-son, step-daughter, brother, sister, or if any of the preceding persons is one member of a couple, the other member of that couple;’

 

21.   The appeal tribunal’s response to this ground was set out in the statement of reasons for its decision as follows:

 

‘Initially he claimed that the (sic) since (the claimant’s wife) was incapacitated and over 60 years old she should be treated as a close relative of (the claimant).  Schedule 5 to the State Pension Credit Regulations (NI) 2003 sets out capital which can be disregarded for the purpose of calculating income and one such disregard is where premises are occupied by a close relative where that person is either aged 60 or over or incapacitated.  Regulation 1(2) of the State Pension Credit Regulations (NI) 2003 defines close relative and the Tribunal concluded that (the claimant’s wife) would not be considered as a close relative for pension credit purposes.  This point was conceded by the appellant’s representative at the hearing.’

 

22.   The second ground advanced on behalf of the appellant was set out in the written submission prepared for the appeal tribunal hearing as follows:

 

‘It is contended that the decision is seen as flawed and incorrect when the decision of the Commissioner as recorded under R(IS) 1/03 is applied.  If (the claimant) is charged as having equitable interest in the Matrimonial Home by virtue of the Matrimonial Causes Act 1973 this could not be effective unless and until a Property Adjustment Order was made by the Court.  (The claimant’s) rights under the Matrimonial Causes Act 1973 were not such as to give him any equitable interest in the property.  Rather he had a right contingent on his applying for and obtaining either a decree of divorce or a judicial separation.  However, the contingent cannot be regarded as capital at all.  The Commissioner in R(IS) 1/03 states ‘It appears to me that it is no more a capital asset than a spouses (sic) legal right to be supported by the other person which has never been treated as capital.  I do not see how it can be legally sold or charged especially as the sale would have to contain provision for the Claimant to take proceedings for a judicial separation or divorce against her husband, a provision which, it seems to me, would be against public policy.’”

 

As the property then is not a capital asset no question of the appellant depriving himself of the asset can arise.

 

Furthermore, an additional point is made relating to the declaration (recorded in Section 4 facts of the case (para 13) by the Land and Property Services who stated that under the particular circumstances of this case, a Court could decide in favour of the appellant (the claimant) and order the sale of the property.  This statement has no standing and indeed falls outside the ambit of the Lands and Property Services if Section 25 of the Matrimonial Causes Act 1973 is to be accepted.  That section clearly outlines matters to which the Court is to have regard in deciding how to exercise its powers under Section 23 and 24 of the Act.  Matters to be closely assessed relate to such things as income, incapacity, age, financial needs, duration of marriage, the contribution made by each of the parties to such essentials as the Welfare of family, looking after the home, caring for the family etc.  It is respectfully submitted that no Court would find in favour of the appellant given the neglect displayed by him towards his spouse and family over many years and thus the statement made by Land and Property Services is seriously flawed, unacceptable and cannot be used in support of any decision.

 

The conclusion made under R (IS) 1/03 clearly militates against the decision to charge (the claimant) with available capital.’

 

23.   In the statement of reasons for its decision, the appeal tribunal dealt with this ground as follows:

 

‘The tribunal rejected this ground of appeal.  The Tribunal concluded that the appellant was a joint owner of the property and that no property adjustment order had ever been sought.  The Tribunal accepted that the property was no longer a family home and there were no dependants living there.  Indeed the appellant had taken legal advice and transferred his share of the property to his children after the decision date.  In the circumstances the Tribunal accepted the assumptions made by the Land and Property Services in valuing the property on the basis that the court would be likely to make an order for the sale of the property.’

 

24.   The final ground advanced on behalf of the appellant before the appeal tribunal was set out in the written submission as follows:

 

‘Proprietary estoppel.  This should be considered in this claim also because (the claimant), from the date he left the matrimonial home many years ago, led his spouse to believe that he was transferring his interest in … to her.  He relinquished all responsibility for and interest in the property (sic) and his family.  (The claimant) never properly conveyed his interest under the law but his spouse accordingly acted over the years in the belief that she had sole ownership.  She took on the improvements of the property, the maintenance and the financial burden (ie the mortgage) of the property from the date of the separation …

 

(The claimant) would submit then that the property of … was not his capital asset but entirely his spouse’s …’

 

25.   The appeal tribunal dealt with this issue in the statement of reasons for its decision as follows:

 

‘The Department submitted that proprietary estoppel normally involved claims of interest in property or land.  The appellant had disclaimed his interest in the matrimonial home.  Proprietary estoppel could not be used to disclaim an interest or share in capital.  Therefore it was argued that proprietary estoppel could not apply in the appellant’s case.

 

The tribunal rejected this ground of appeal.  It was argued that the appellant had given up his share in the property.  However it was clear that after the date of decision he had in fact transferred his share in the property to his children thereby confirming that he had a legal interest in the property.  It was considered that proprietary estoppel could not be used in this case.’

 

         Analysis

 

26.   I am in a position to deal with the first submitted ground by applying the fundamental principles of statutory interpretation.  As was noted by Mr Crilly in his written observations on the application for leave to appeal, Regulation 17 of the State Pension Credit (Regulations (Northern Ireland) 2003, as amended, provides for the calculation of a claimant’s weekly income.  Paragraph (8) of Regulation 17 states:

 

‘(8) Schedule 5 shall have effect so that—

 

(a) the capital specified in Part I of that Schedule shall be disregarded for the purpose of determining a claimant’s income, and

 

(b) n/a’

 

27.   As has again been observed by Mr Crilly, at the initial date of the appellant’s claim, paragraph 4(a) of Schedule 5 to the State Pension Credit Regulations (Northern Ireland) 2003, as amended, provided that:

 

‘4. Any premises occupied in whole or in part—

 

(a) by a person who is a close relative, grandparent, grandchild, uncle, aunt, nephew or niece of the claimant or of his partner as his home where that person is either aged 60 or over or incapacitated;’

 

28.   The term “close relative” is defined in regulation 1(2) of the State Pension Credit Regulations (Northern Ireland) 2003, as amended, as follows:

 

“close relative” means a parent, parent-in-law, son, son-in-law, daughter, daughter-in-law, step-parent, step-son, step-daughter, brother, sister, or if any of the preceding persons is one member of a couple, the other member of that couple;’

 

29.   It is argued on behalf of the appellant that the definition of ‘close relative’ in regulation 1(2) of the State Pension Credit (Regulations (Northern Ireland) 2003, as amended, should be extended to incorporate a spouse who is aged 60 or over.  Through that extension, and as the appellant’s spouse was both over 60 and incapacitated then the capital value of the premises which she was occupying as of the date of claim to benefit should be disregarded under regulation 17(8) and paragraph 4(a) of Schedule 5 to the State Pension Credit Regulations (Northern Ireland) 2003, as amended.  In the initial submission which was before the appeal tribunal and replicated before the Social Security Commissioners, reference was made to the parallel provisions in connection with entitlement to income support where it was submitted the definition of ‘close relative’ in the relevant statutory provisions was so extended.

 

30.   With respect to this submission, I cannot accept it and I am of the view that the appeal tribunal was also correct to reject it.  The definition of ‘close relative’ in regulation 1(2) is clear and the categories of individual who fall within that definition, as set out in that regulation are exclusive.  The disregard of the capital value of premises occupied by a close relative (and others) in paragraph 4(a) of Schedule 5 to the 2003 Regulations serves a very clear purpose.  There can be no extension of the definition to include a spouse or former spouse.  In AM v Secretary of State for Work & Pensions (SPC) ([2010] UKUT 134 (AAC)) the facts were similar to those arising in the instant case.  At paragraph 4 of his decision, Upper Tribunal Judge Howell stated:

 

‘… None of the other disregarding provisions was applicable either, since as the tribunal rightly held the claimant’s wife was not within the definition of “close relatives” protected under paragraph 4(a) and nor could she be within paragraph 6(a) as they had already been separated for a lot longer than 26 weeks and she was not a “lone parent” since their daughter was grown up.’

 

31.   Paragraph 6 of Schedule 5 to the 2003 Regulations (which is the Northern Ireland equivalent to the paragraph 6(a) being discussed by the Upper Tribunal Judge) provides that:

 

‘6.(1) Where a claimant has ceased to occupy what was formerly the dwelling occupied as the home following his estrangement or divorce from, or dissolution of his civil partnership with his former partner, that dwelling for a period of 26 weeks from the date on which he ceased to occupy that dwelling or, where the dwelling is occupied as the home by the former partner who is a lone parent, for so long as it is so occupied.’

 

32.   As in AM the disregard provided for in that paragraph can have no applicability here as, by the date of claim to the relevant benefit, the 26 week period had long since dissipated and the appellant’s spouse was not a lone parent.  Finally I would add that I cannot find any reference, as has been submitted on behalf of the appellant, to the extension of the definition of ‘close relative’ in the parallel income support statutory provisions.  Therein the definitions are identical.

 

33.   As was noted above, following the oral hearing of the application for leave to appeal, I requested that the parties to the proceedings provide an additional submission on the extent to which principles in R(IS) 5/07 (as approved in AM v Secretary of State for Work & Pensions (SPC) ([2010] UKUT 134 (AAC)) applied to the issues arising in the application.  One of the reasons for seeking observations on the decision in these cases was the potential application of paragraph 4(b) of Schedule 5 to the State Pension Credit Regulations (Northern Ireland) 2003, as amended.  Paragraph 4(b) provides for a disregard of the capital value of:

 

‘4. Any premises occupied in whole or in part—

 

…

 

(b) by the former partner of the claimant as his home, but this provision shall not apply where the former partner is a person from whom the claimant is estranged or divorced or with whom he had formed a civil partnership that has been dissolved.’

 

34.   In R(IS)/07, the Social Security Commissioner was considering identically-worded provisions in connection with entitlement to income support in that jurisdiction.  The Commissioner emphasised that there had to be a full investigation of all of the facts before deciding whether any capital disregards apply.  In his further submission on the potential impact of this part of the decision in R(IS) 2/07 Mr Crilly stated the following:

 

‘Concerning the disregard in paragraph 4(b) of Schedule 5, I submit that the issue of estrangement was not raised by (the claimant) or the Department and was not considered by the tribunal which does not appear to have been aware of R(IS) 5/07 in this case.  In accordance with what was held in that decision, however, I agree that it was necessary to establish if Mr and Mrs C were estranged from 1993 onwards and that the tribunal erred in law in not doing so.  However, for the reasons outlined below, I respectfully submit that this error does not vitiate the tribunal’s decision in this case.

 

(The claimant) made a written statement dated 06.10.06 in which he stated:

 

“I separated from my wife about 7 or 8 years ago and she is still living in the house in W....... .  I am unsure whose name it is in and there are no intentions of selling the house on my part.”

 

At the same time he confirmed that he had previously stayed with his daughter at weekends when he had been working in the Republic of Ireland during the week.  When he ceased work in 2004, he stayed with his daughter on a permanent basis.

 

The claimant completed Form A64A (PC) which was issued to him by the Department on 25.06.07.  In questions 12 and 16 (the claimant) referred to ‘RC’ as his ex-wife.

 

(The claimant) was also asked a series of questions on 27.11.07 to which he responded on 06.12.07.  The questions, which I have emphasised in bold, and his response to each were as follows:

 

“Do you own the house jointly with your ex partner or as tenants in common.  If it is as tenants in common we will need verification from the solicitor of you (sic) share.

 

No.  The house was purchased in joint names in 1983 but I left the family home in the early nineties.

 

Would your wife be willing to sell the property to give you your share?

 

No.  I have made no contributions towards this property as we separated at the time.

 

Why have you not pursued your share of the property?

 

I haven’t done so as I made no payments towards the mortgage or upkeep of the property since my departure.”

 

I submit there is no doubt in this case that Mr and Mrs C had separated and had been living apart from 1993 onwards.  I further submit that there is nothing in the papers to suggest that there has been any contact between them since 1993.  Indeed, the evidence points to (the claimant) having nothing to do with either Mrs C or the former marital home after the separation.  He conceded that he did not contribute in any way to the mortgage payments and that he did not make any arrangements to help with the maintenance and upkeep of the property.

 

As noted above, the claimant did not at any time intimate that he and his wife enjoyed a cordial or friendly relationship after the separation.  Rather, I submit that there does not appear to have been a relationship of any kind during this time.  (The claimant) stayed with his daughter on a part-time basis between 2004 and 2006 and then on a permanent basis when his self-employment ended.  With this in mind, I submit that it is reasonable to infer from the evidence that what occurred in 1993 was a marital breakdown which resulted in a complete cessation of relations between Mr and Mrs C.  I further submit that this in turn suggests that they were estranged from that point onwards and that paragraph 4(b) of Schedule 5 has no application in this case.

 

If it is agreed that Mr C is estranged from Mrs C, I submit that paragraph 6 of Schedule 5 to the SPC Regulations will not be relevant to his application for leave as it had been more than 26 weeks since he had ceased to occupy what was formerly the dwelling occupied as his home and Mrs C was not a lone parent at the date of her former partner’s claim for state pension credit on 29.05.06.

 

I further submit that paragraph 7 of Schedule 5 cannot apply in the present case as Mr C confirmed from the outset that he had no intention of realising his share in the former marital home.

 

As a result, I submit that whilst the tribunal erred in accepting that Mr and Mrs C were estranged without stating why this was so, it nevertheless arrived at the correct conclusion in relation to his share of the former marital home being taken into account as his capital for the purposes of his claim for state pension credit.’

 

35.   In the further written submission provided on behalf of the appellant, it was asserted that there was nothing within the statement of reasons for the appeal tribunal’s decision to suggest whether the parties were estranged and whether the disregard under paragraph 4(b) of Schedule 5 applied.  The appeal tribunal did note that the parties had not divorced.  But there was no evidence to show that it considered whether or not they were estranged.

 

36.   I am satisfied that the appeal tribunal, exercising its inquisitorial role, was obliged to consider whether any of the capital disregards in Schedule 5 to the State Pension Credit Regulations (Northern Ireland) 2003, as amended, applied to the appellant’s circumstances.  It is clear, on the clear and irrefutable evidence which was before the appeal tribunal, that the majority of the capital disregards in Schedule 5 did not have any relevance to the appellant’s circumstances.  The appeal tribunal did consider the potential application of the Schedule 5 paragraph 4(a) capital disregard as it formed the basis of one of the submitted grounds of appeal.  As was noted above, I have concluded that the appeal tribunal was correct to reject the submission that the paragraph 4(a) disregard applied to the appellant’s circumstances.  I am of the view, however, that the paragraph 4(b) capital disregard also had the potential to apply to the appellant’s circumstances.  Although no discrete submission was made in connection with paragraph 4(b) it seems to me that the appeal tribunal was obliged to consider its potential application in line with its inquisitorial role.

 

37.   Does the failure to consider the potential application of paragraph 4(b) render the decision of the appeal tribunal as being in error of law?  Mr Crilly submits that although the failure does render the decision as being in error of law the error does not vitiate the appeal tribunal’s overall decision.  I agree with Mr Crilly on this point.  In my view, the evidence concerning the nature of the relationship between the appellant and his former spouse between his departure from what was the family home in 1993 and his eventual claims to social security benefits is overwhelming and indisputable.  The appeal tribunal reviewed that evidence in arriving at its overall conclusions on the issues which were before it.  Mr Crilly has set out what that evidence was.  I have no reason to doubt that had the appeal tribunal considered the potential application of the capital disregard in paragraph 4(b) of Schedule 5 to the State Pension Credit Regulations (Northern Ireland) 2003, as amended, it would have concluded that the capital disregard did not apply as did none of the other Schedule 5 disregards.  Accordingly its overall decision would have remained the same.

 

38.   I would add that if I am wrong in concluding the appeal tribunal’s failure to consider the potential application of the paragraph 4(b), while an error, did not vitiate its overall decision, I would have been prepared to exercise the power given to me under Article 15(8)(a)(ii) of the Social Security (Northern Ireland) Order 1998 to give the decision which I consider the appeal tribunal should have given as I can easily do so having made a further finding of fact.  The further finding of fact is that the clear evidence is that by the date of claim to SPC the appellant and his former spouse were estranged from each other.  In R(IS) 5/05, the Social Security Commissioner, in considering identically-worded legislative provisions relating to entitlement to income support in Great Britain set out the principles to be applied in considering whether a couple were estranged.  The key factor, as set out by the Commissioner in paragraph 12 of his decision was whether the parties have ceased to consider themselves to be a couple.  This significant aspect of R(IS) 5/05  was approved of by another Social Security Commissioner in Great Britain in CH/117/2005.  Applying that test in the circumstances of the present case, I would have no hesitation in concluding that by the date of the relevant claim to benefit the appellant and his former wife had ceased to consider themselves to be a couple.

 

39.   I turn now to the third ground on which it was submitted that the decision of the appeal tribunal was in error of law.  I take this ground out of turn as it relates to the extent to which the appellant had an interest in the property which was his former matrimonial home.  The second ground of appeal was concerned with the manner in which any interest should be valued.  Accordingly it is apposite to consider the interest question first.  If there is a finding that there is no such beneficial interest then the question of value becomes redundant.

 

40.   In the written submission which was before the appeal tribunal and which was replicated as the grounds on which the appellant has sought leave to appeal to the Social Security Commissioner this ground is headed ‘Proprietary Estoppel’.  The doctrine of proprietary estoppel was at the heart of the decision of the then House of Lords in Thorner v Majors and others ([2009] UKHL 18).  At paragraph 29 of the decision, Lord Walker, who gave the principal speech, stated:

 

‘… most scholars agree that the doctrine is based on three main elements, although they express them in slightly different terms: a representation or assurance made to the claimant; reliance on it by the claimant; and detriment to the claimant in consequence of his (reasonable) reliance (see Megarry & Wade, Law of Real Property, 7^th edition (2008) para 16-001; Gray & Gray, Elements of Land Law, 5^th edition (2009) para 9.2.8; Snell’s Equity, 31st edition (2005) paras 10-16 to 10-19; Gardner, An Introduction to Land Law (2007) para 7.1.1).’

 

41.   It seems to me that what is being argued on the part of the appellant is that when he left the matrimonial home in 1993 he had relinquished any beneficial interest which he might have had in the former matrimonial property and abandoned any responsibility for the property.  Further, although there had never been any formal or legal conveyance of his interest to his spouse, he had led her to believe that he had renounced any formal legal interest in the property.  In turn his spouse’s continued financial commitment to paying the mortgage on the property and to the ongoing maintenance, upkeep and, indeed, improvement to the property, was evidence of the spouse’s reasonable belief that the appellant’s interest in the property, from the date of his departure in 1993, was now hers.

 

42.   I am assuming that in terms of the three key elements of proprietary estoppel, as identified by Lord Walker in Thornier v Majors above, the argument is that the actions by the appellant in 1993 amounted to a representation or assurance made by the appellant to his spouse; that she had relied on that representation - evidenced by her ongoing commitment to the purchase, upkeep and improvement to the property – and that she had relied on that representation to her detriment.  The detriment, presumably, would be that the appellant’s share in the former matrimonial home was not ever formally conveyed to her or had not increased in % terms in line with the additional commitments which she made following the departure of her former husband.  In these circumstances the appellant would be estopped from denying the representation and its effect and equity will intervene to provide the most appropriate remedy.

 

43.   In the instant case, the ‘elephant in room’, if I might phrase it that way, with the submission based on the application of the doctrine of propriety estoppel is the series of actions undertaken by the appellant and members of his family in February 2009.  In the file of documents which is before me is a copy of an indenture representing an agreement between the appellant and his spouse and the appellant’s spouse and their seven children.  The agreement is for the transfer of what was described above as the appellant’s former matrimonial home to the appellant’s spouse and their seven children in the following shares – 50% to the appellant’s spouse and the remaining 50% in equal shares to the seven children.  The copy of the indenture which is before me is undated but I am assured that it was agreed and signed in February 2009.  In the file of papers which is before me there is also a copy of a land certificate relating to the what has been described thus far as the appellant’s former matrimonial home.  That certificate confirms that titles to the ownership of the leasehold land relating to the former matrimonial home were registered on 29 July 2009 in shares of 50% (i.e. seven-fourteenths) to the appellant’s spouse and a one-fourteenth share each to each of the seven children.

 

44.   What is being argued on behalf of the appellant is that he had relinquished his entire ownership to any share which he might have had in the former matrimonial home and further, on any claim by his spouse to what was his former share of the interest, the doctrine of proprietary estoppel would prevent him from denying a representation on his behalf that he had so relinquished his former interest.  If that is the case then I fail to see the requirement for the appellant and his spouse to enter into a formal legal agreement to ensure that what was his interest in the former matrimonial home was transferred in the manner in which was in the February 2009 indenture.  It seems to me that the making of the indenture and the subsequent registering of the various titles was confirmation that the appellant’s interest in the former matrimonial home was real and legal and not illusory.  Further, the interest could be easily and readily transferred by agreement and did not require to be claimed by way of equitable doctrine.  It has been argued that the action which was undertaken by the appellant by making and agreeing to the indenture was precipitous and taken without proper legal advice.  It seems to me that that argument is wholly without foundation.  From all that I have seen the making of the indenture and the transfer of the appellant’s interest in the former matrimonial home was action taken in the accordance with sound and proper legal advice and guidance.  Finally if the claim of the appellant’s spouse to a share of the property greater than 50% was of such significance that is argued that the doctrine of proprietary estoppel could readily come to her aid and defeat any counter-claim of her former husband then I fail to see why she was not insistent on a claim to an interest greater than 50%.

 

45.   The appeal tribunal rejected the submission that the doctrine of proprietary estoppel should assist the appellant and confirm that he had abandoned any title to any interest in his former matrimonial home.  For the reasons which I have set out above I conclude that the appeal tribunal was correct to do so.

 

46.   This far I have concluded that none of the capital disregards in Schedule 5 to the State Pension Credit Regulations (Northern Ireland) 2003, as amended, applies to the appellant’s circumstances.  Further I have concluded that the appellant cannot rely on the doctrine of proprietary estoppel to deny his title to his interest in the former matrimonial home.  I have confirmed that the appeal tribunal did not err in law on the basis of either of those submitted grounds.  Attention, therefore, turns to the manner in which the appeal tribunal assessed the value of the appellant’s interest.

 

47.   In the written submission which was before the appeal tribunal and which formed the basis of the application for leave to appeal to the Social Security Commissioner, it was submitted that the approach undertaken by the appeal tribunal did not accord with the principles set out by the Social Security Commissioner in Great Britain in R(IS) 1/03.  As was noted above, following the oral hearing of the application for leave to appeal I requested that the parties to the proceedings provide a further submission on the extent to which the issues arising in the principles in R(IS) 5/07 applied to the issues arising in the application.  Detailed submissions were received on behalf of both the appellant and the Department.

 

48.   I would begin by noting that after rejecting the submissions made on behalf of the appellant in connection with the principles in R(IS) 1/03, the appeal tribunal undertook a detailed analysis of the further submission which had been provided by the Department immediately prior to the date of the appeal tribunal hearing.  That analysis was important because the Department was submitting that a further valuation of the relevant property, based on additional evidence which had been received, was more favourable to the appellant.  The Department, had, however, decided not to revise the decision under appeal as this would have the effect of passing the appeal.  Instead the Department recalculated the appellant’s entitlement to SPC based on the new, more favourable valuation and invited the appeal tribunal that if it agreed to substitute a decision to that effect.  Insofar as the appeal tribunal addressed that further late submission its approach cannot be faulted.

 

49.   In his initial written observations on the application for leave to appeal, Mr Crilly submitted that:

 

'I respectfully submit that R(IS) 1/03 can be distinguished from (the claimant’s) circumstances.  In this case, there is no doubt that the claimant was the legal owner of a 50% share in the former marital home at the initial date of his claim of 29.05.06.  With this in mind, I submit that this ownership was not based upon a contingent right under the Matrimonial Causes Act 1973.  I further submit that the decision maker did not determine that (the claimant) had an equitable interest in (his former matrimonial home) by virtue of the Matrimonial Causes Act 1973.  Rather, I submit that the decision maker’s considerations in this respect were based upon the claimant’s actual ownership of the 50% share.

 

(The claimant) left the property in 1993 from which time his wife assumed sole responsibility for the payment of the mortgage until it was discharged in 2004.  He has clarified that he did not contribute towards the former matrimonial home in any way from that time onwards.  That being the case, I respectfully submit that it would have been open to (Mrs C) to exercise her right to apply for either a decree of divorce or a judicial separation in order to seek a property adjustment order in her favour under the Matrimonial Causes (Northern Ireland) Order 1978 to reflect the situation with regard to her assuming sole responsibility for (the former matrimonial home) from 1993 onwards.  I submit that, whilst there was nothing in place to prevent the adoption of this course of action, there was no guarantee that such an application would have resulted in her increasing the share of her interest in the property or indeed to be granted sole ownership of it.  I respectfully submit that until such time as an application to this effect was brought, any right on Mrs C’s part to an increased share in her interest would have been a contingent one as outlined in R(IS) 1/03.  With this in mind, I submit that the decision maker and the tribunal would have been wrong to assume otherwise in the absence of a property adjustment order.’

 

50.   I agree with this submission made by Mr Crilly.  There was no requirement on the part of the decision-maker to determine any interest which the claimant might have in equity or, indeed, what the situation might have been had the appellant’s spouse sought to exercise rights under the Matrimonial Causes (Northern Ireland) Order 1978.  That was because the decision-maker had determined that the appellant had an actual ownership of a 50% share in the former matrimonial home.  For the reasons which are set out above, I have concluded that the appeal tribunal was correct to confirm this aspect of the decision under appeal.

 

51.   It seems to me that the key paragraph in R(IS) 5/07 is paragraph 28 which reads as follows:

 

‘On valuation, I adopt the views expressed by Commissioner Jacobs in CIS/3197/2003. (See also his CH/1953/2003).  These seem to me to be fully in line with the views of the deputy Commissioner in R(JSA) 1/02.  It is the current market value of Mrs P’s “half” of the house sold at the date of the decision under appeal, with her husband in it as of right and not willing to buy Mrs P out or to sell either his “half” or the house as a whole (so not in the current market or cooperating with it, and acting as an encumbrance in practical if not legal terms) and with no litigation in prospect to enforce any rights against the husband.  (Future rights are excluded by R(IS) 1/03 or R(IS) 1/97 in any event.)’

 

52.   I shall return to one key aspect of that paragraph below.  In R(JSA) 1/02, the Deputy Social Security Commissioner in Great Britain stated, at paragraph 13 of his decision:

 

‘Proper valuation evidence should include details of the valuer’s expertise, the basis on which he or she holds him or herself out as able to give expert evidence in relation to the property in question.  Where it is the sale of a share in a property which is in issue, the evidence should deal with the valuer’s experience in relation to such shares, and their sale.  The property, and any leasehold interest, should be described in sufficient detail, including details of the length of any lease, of any special terms in it, and of the location, size and condition of the property, to show that the factors relevant to its value have been taken into account, and the reasons for the conclusion as to the value should be given.  A similar approach should be applied to a share of a property, and an explanation should be given of the factors identified as relevant to the valuation, and how they affect it.  The expert should also give evidence of any comparables identified, or of other reasons why it is concluded that the share could be sold at any particular price.  If there is no evidence of actual sales of such interests, an acceptable explanation of the absence of such evidence should be given.

 

53.   As was noted by Mr Crilly, the decision of the Deputy Social Security Commissioner in R(JSA) 1/02 was endorsed in this jurisdiction by Mrs Commissioner Brown in her decision in C23/02-03 (IS).  I would also note that the approach taken by Commissioner Jacobs in CIS/3197/2003 was a wholly practical one specific to the facts of that case but, as was observed by Commissioner Williams in R(IS) 5/07, wholly in keeping with the guidance provided for in R(JSA) 1/02.

 

54.   As was noted above, the appeal tribunal accepted the revised valuation which had been undertaken on behalf of the Department and, in the statement of reasons for its decision, set out why it thought that the revised valuation should be accepted.  The question which remains to be asked is whether the valuation was undertaken in accordance with the principles set out in R(JSA) 1/02 and as approved in C23/02-03 (IS).  At the oral hearing of the application for leave to appeal, Mr Crilly readily accepted that the valuation process in the instant case was fragmentary but, by the date of the appeal tribunal hearing had become comprehensive and in keeping with the principles in R(JSA) 1/02.  Mr Crilly put matters as follows in his further submission following the oral hearing of the application:

 

‘There were a number of valuations carried out in (the claimant’s) case.  The first value of £195,000 was provided by Land and Property Services in a letter dated 23.05.07.  This was amended on 29.01.08 to take into account the joint ownership of the property.  Overall values of £195,000 and £225,000 were attributed to (the claimant’s) former home at 29.05.06 and 29.05.07 respectively with the value of his share being assessed at £77,400 and £89,300 at the same dates.  This was supported by a report also dated 29.01.08.

 

In arriving at these amounts, the valuer took into account the factors outlined in Part 2 of Form A64(PC).  Although only boxes B, C and D were ticked at this stage, Land and property services confirmed in a letter dated 06.01.10 that points E to K in Part 2 of the form were also taken into account.  These included consideration of the rights of other owners, the attitude of the courts, planning or other restrictions as well as sales of similar interests.

 

The valuation of (the claimant’s) share was further addressed in a report drawn up by Land and Property Services for the benefit of the tribunal.  This reduced the value of his share from £77,400 to £67,400 at 29.05.06 and from £89,300 to £79,350 at 29.05.07.  In doing so, the valuer had regard to the personal circumstances of both Mr and Mrs C.  The tribunal accepted these latter amounts.  I submit that the amounts attributed reflect the value of his share of the asset and not merely the value of 50% of the house.

 

I submit that the valuation was carried out in accordance with what was held in R(JSA) 1/02 as referred to paragraphs 28 and 29 of R(IS) 5/07.  I further submit that the considerations outlined in paragraph 5 of AM v Secretary of State for Work & Pensions (SPC) [2010] UKUT 134 (AAC) were also adhered to.  With that in mind, I respectfully submit that the valuations taken into account by the tribunal were sound and in accordance with relevant caselaw.’

 

55.   The use of Form A64 was the subject of comment by Mrs Commissioner Brown in C23/02-03 (IS).  In that case, as in the instant case, certain parts of the form were not completed and the Commissioner found that, in the absence of additional evidence, it was not clear that the valuer had taken into account all of the relevant factors as mandated by R(JSA) 1/02.

 

56.   On behalf of the appellant it was submitted that the Commissioner in R(IS) 5/07 also discussed the decision in R(IS) 1/97, which, in turn, was concerned with whether the capital disregard in paragraph 5 to Schedule 10 to the Income Support (General) Regulations 1987 had any potential application.  The equivalent to paragraph 10 in Schedule 5 to the State Pension Credit Regulations (Northern Ireland) 2003, as amended, is paragraph 5 which reads:

 

‘5.  Any future interest in property of any kind, other than land or premises in respect of which the claimant has granted a subsisting lease or tenancy, including sub-leases or sub-tenancies.’

 

57.   It was argued that the appeal tribunal had not taken evidence concerning any arrangements which might have existed for the appellant’s spouse’s continuing occupation of the house following the appellant’s departure.  It was conceded, however, that this issue might be redundant if it was found that the appellant had an actual legal interest in the property.  That concession was, in my view, properly made, and as I have agreed that the appeal tribunal was correct to conclude that the appellant had such an interest the R(IS) 1/97 principles need not be considered.

 

58.   It was submitted on behalf of the appellant that the decision in R(IS) 5/07 makes it clear that the valuation should relate to the value of the relevant property at the date of the decision under appeal.  In the instant case, the date of the decision under appeal was 21 July 2008 and the valuations were concerned with earlier dates.  With respect to the decision of the Commissioner in R(IS) 5/07, I am of the view that the reference to a valuation as of the date of the decision under appeal is erroneous.  I believe that the Commissioner, in referring to the date of the decision under appeal, was exhorting decision-making authorities to have regard to the rule in section 12(8)(b) of the Social Security Act 1998, which at the date of the decision in R(IS) 5/07 provided that in deciding an appeal an appeal tribunal must not take into account any circumstances not obtaining at the time when the decision being appealed against was made.  Section 12(8)(b) is replicated in this jurisdiction in Article 13(8)(b) of the Social Security (Northern Ireland) Order 1998, as amended.  The key date is clearly the date of claim to the relevant benefit and whether a claimant had capital assets as of that date and whether those capital assets were in excess of the prescribed capital limits for entitlement to benefit.  That was the approach taken in AM above.  To that extent, therefore, I reject this submission made on behalf of the appellant.

 

59.   Finally it was argued on behalf of the appellant that the valuation which was obtained on behalf of the Department was not made in accordance with the principles set out in R(IS) 5/07.  The primary basis advanced for this submission was that the report was based on a number of assumptions without underlying evidence to support them.  Further, a more complete investigation of the facts would have resulted in a disregard of the appellant’s interest in the property or a valuation at a nugatory level.

 

60.   I am of the view that the valuation of the relevant property undertaken on behalf of the Department and which formed the basis of the Department’s initial and subsequent revised decision was in keeping with the principles in R(JSA) 5/07 and the earlier and, in my view, more significant decision in R(JSA) 1/02.  I agree with Mr Crilly that the evidence-gathering process at the initial decision-making stage was somewhat disjointed.  I also agree with Mr Crilly, however, that by the date of the production of the report immediately prior to the oral hearing of the appeal, the evidence base for the valuation was more comprehensive.  It is also of considerable significance that the appeal tribunal was in a position to take oral evidence from the valuer at that oral hearing.  The comprehensive record of proceedings for the appeal tribunal hearing records the detailed evidence given by the valuer.  The appeal tribunal gave a satisfactory explanation of the reasons why the valuation should be accepted and why it agreed to substitute a decision which, in an albeit marginal manner, was to the favour of the appeal.  Accordingly I find no fault with the reasoning of the appeal tribunal in this regard.

 

         Disposal

 

61.   The decision of the appeal tribunal to the effect that the appellant is entitled to State Pension Credit (SPC) from 29 May 2006 at the rate of £4.05 per week and excluded from SPC from and including 5 February 2007 is confirmed.

 

 

(signed):  K Mullan

 

Chief Commissioner

 

 

 

15 August 2013