Upper Tribunal (Administrative Appeals Chamber)

IN THE UPPER TRIBUNAL Appeal No. CH/1221/2009

ADMINISTRATIVE APPEALS CHAMBER

 

Before Judge S M Lane

 

Decision: The appeal is allowed. The decision of the tribunal is set aside and remade:

 

The respondent is liable for an overpayment of Housing Benefit (HB) of £2742.07 for the period 18/09/06 to 03/12/06. This was because she became a student who was not eligible to receive HB.

 

REASONS FOR DECISION

 

1. The appellant local Authority (‘the Authority’) appeals the decision of the First-tier Tribunal (Social Entitlement Chamber) with my permission. The tribunal decided that the claimant was not liable for an overpayment of HB of £2742.07 for the period 18/09/06 to 3/12/06.

 

2. I have decided that the tribunal’s decision in the claimant’s favour must be set aside. It involved numerous errors of law. Chief amongst these was its failure to refer to a significant number of documents clearly showing that the Authority’s Benefits Service was distinctly identified as the office to which a claimant should write to notify a change of circumstances and for which the address was clearly given. The tribunal’s conclusion to the contrary was simply not sustainable in light of these documents. The tribunal was further mistaken in saying that the claimant had informed ‘the Council’ that she was a student and of the loan, for reasons I explain later. The conclusion that it was ‘entirely reasonable to assume that they were aware of it’ cannot rationally be sustained. The tribunal also failed properly to apply the principles in R (Sier) v Cambridge City Council [2001] EWCA Civ 1523 by deciding that, because the claimant did not contribute to the Authority’s mistake, she was not responsible for the overpayment.

 

3. I emphasise that there is no suggestion that the appellant behaved dishonestly.

 

4. At the hearing, the Authority was represented by Ms L Hall and Ms G Cooper, both of whom are presenting officers from the Authority. The respondent, who is the claimant, was represented by Mr A Watson and Mr A Kamara, both from the Free Representation Unit (‘FRU’). The claimant’s friend, Mr Winnister, accompanied her. I am grateful to the representatives for the care they took in presenting their cases and to the claimant, who gave oral evidence about the distressing events surrounding her move to the premises for which the overpayment arose.

 

5. In his written submission, Mr Watson submitted that if I decided to set aside the case, I should remit it to a First-tier Tribunal. I did not, however, consider that to be necessary and indicated at the outset of the hearing that, if I found a material error of law, I hoped to substitute my own decision. The power for the Upper Tribunal to do so is in section 12(2)(b)(ii) and (4) of the Tribunals, Courts and Enforcement Act 2007. Although Mr Watson said that he had not prepared for a hearing on the facts, there could be no doubt from his lengthy submission that he was fully conversant with the evidential issues arising from the documents. Indeed, at least one of his submissions would require me to make findings of fact if it was to succeed. The claimant was, in addition, present and willing to give evidence.

 

6. In deciding to substitute my own decision, I had regard to the overriding objective of the Tribunal Procedure (Upper Tribunal) Rules 2008 as set out in rule 2. The appeal has been outstanding for a considerable period of time, and if remitted, it was likely that memories of legally relevant events would fade further. Having seen and heard the claimant and Authority, I am in an equally good position to make findings of fact as a First-tier Judge sitting alone as a First-tier Tribunal. There was little to be explored in oral evidence. It would have been disproportionate in the circumstances to remit the case to a First-tier hearing.

 

The parties’ positions

 

7 The Authority’s case was that the overpayment of Housing Benefit arose not from an official error, but because the claimant did not notify the Benefits Service that she had become a student. The claimant’s case was that the overpayment was the Authority’s fault. Her representative argued that she had a reasonably based expectation that the information about her student status would be passed from the Student Finance office to the HB Service (Benefits Service) because she could reasonably have inferred this from the facts. He also submitted that she did not materially contribute to the overpayment or fail in any duty, and that she could not reasonably have been expected to be aware that she was overpaid.

 

How the overpayment arose

 

8. The claimant and her mother moved into privately rented property on 8 April 2006. Very sadly, the claimant’s mother died of a brain haemorrhage that day. The claimant, who was then 19 years old and had no other family to help her, was left to cope with her grief and the numerous practical problems arising from her mother’s death.

 

9. At the time of the move into the property, the claimant was working, but she had applied for, and been offered a place at university to begin in September 2006. In order to finance her studies, she applied on line to Merton Student Finance Direct for financial assistance (p82 and oral evidence) in February 2006. I accept that the Authority was responsible for the assessment of entitlement at that time, though not for providing the student finance money itself.

 

10. On 2 May 2006 the claimant collected a Housing Benefit/Council Tax Benefit claim form (‘the claim form’) from the Civic Centre. She signed her claim form on 3/5/06 but did not return it at that stage. At Part 8 of the claim (p16), headed ‘About being a student’, the claimant answered ‘no’ to the question ‘are you ...a student’ and left blank the box relating to a student loan. This was correct at the time. Part 8 of the form, however, states clearly in bold letters that the Authority needs to see proof of a student loan. I consider that this part of the claim form makes it clear that both becoming a student and obtaining a student loan were significant to an award of HB.

 

11. In addition, the final page of the claim form contains further instructions with a heading ‘What to do next’ in white on a black background and state in bold print ‘Changes you must tell us about’. Of the changes listed, two changes are of direct relevance, and a third is less directly so: becoming a student, if anything on the claim form changes in the future, and changes in income. In addition, there is a note which states ‘You must make sure that you tell us about these changes. Don’t rely on someone else to pass the message on’ (p29). A claimant who read the information at the end of the claim pack to the end would be left in no doubt about the requirement to report the changes mentioned, especially becoming a student, who must report the change and to whom it must be reported. It is very difficult to see why a claimant would not read these notes, which are highlighted and clearly contain important information about the claiming process.

 

12. The claim form also gives explicit instructions to inform the Merton Benefits Service (I have italicised the words Benefits Service and Benefits Office wherever that office is specifically designated on a document) at a given address (p29). Further correspondence sent by the Benefits Service to the claimant after making her claim, but before she took up her place as a student, contains an instruction to notify the Benefits Office of any change of circumstance which may affect a claim: p37, 39, 41, and 47. I do not consider that the use of the words ‘Benefits Office’ rather than ‘Benefits Service’ could have created any real doubt about the place to which changes should be reported.

 

13. On Tuesday 30 May 2006, the claimant was sent a letter, probably by the Student Finance office of the Authority, informing her that she was assessed as eligible for a student loan. This had probably not arrived by the time the claimant handed in her HB claim form on Friday 2 June 2006. The claimant said that she had this letter, but did not produce it. It does not make any difference to the outcome.

 

14. On 9 June 2006 the Authority made a provisional assessment of Housing Benefit/Council Tax Benefit (benefits) based on the claimant’s declared earnings of £480 from a part time job and also requested further information about earnings (p30 – 32). There is nothing to suggest in the document that the Benefits Office had any information about any anticipated changes in the claimant’s circumstances.

 

15. The Authority did, however, confirm in this document that under certain bereavement rules (which need not be recited here), the Authority could treat the whole rent on the flat of £1250 per month as the eligible rent without restriction as to the size of the property in relation to the claimant’s age for the first 52 weeks of her claim [my emphasis], but thereafter the rent would have to be referred to the Rent Service to determine a fair rent. There is no mention whatever that housing benefit was fixed for a year and, indeed, there is an explicit instruction at the end of the request to inform the Benefits Office of changes in circumstances since the claim. This could only mean that changes remained relevant to a claimant’s entitlement to HB, even for a claimant who was recently bereaved. I consider that the tribunal’s conclusion to the contrary, that a reasonable person would have understood from this statement that her Housing Benefit would stay the same for 12 months, is insupportable and could not have been so interpreted by any reasonable person.

 

16. The claimant’s reply to the Authority on 21 June 2006 made no reference to any anticipated change to her status and financial situation. This is in keeping with the fact that she was not yet a student and not yet in receipt of further money. One might go so far as to say that, if the claimant herself did not see fit to mention it, it is hard to see why the Student Finance Office would have considered it appropriate to relay the possible change of circumstances to the Benefits Office – it was as much of a prospective change from their point of view as from hers, and was entirely dependent upon whether the claimant chose to take up her place. The Authority then requested further information in August 2006 to which the claimant responded on 6 September 2006, only 5 days before starting her course on 11 September 2006. She did not mention the imminent change.

 

17. On or around 14 September 2006, she received her grant (p 84, 85). .She did not inform the Benefits Service of this new form of income. She received no further communication from the Benefits Service about any change in her HB because of a change in her status or, indeed, because of the changed source in her income from student finance. She simply continued to receive HB as previously assessed. It is very difficult to see in these circumstances how the claimant thought that the Benefits Service must know about her changed situation through the Student Finance Office.

 

18. On 6 November 2006, the claimant advised the Authority in writing that she no longer wished to claim Housing Benefit and Council Tax Benefit from 1 December 2006. The appellant wrote her case reference number on the letter, which bears only one received stamp, which is that of the Benefits Service (p48). I find that she must have written directly to the Benefits Service, which accords with the claimant’s oral evidence to me about her understanding of who to contact about changes. Even in this letter, she did not mention that she was now a student in receipt of a grant, though she says in the letter that she knows that ‘a dramatic change in circumstances requires you to know’ (p48).

 

19. The Authority accordingly cancelled her claim from 3 December 2006 but subsequently discovered from the National Fraud Initiative operated by the Department of Work and Pensions that the claimant had become a full time student. The Authority then revised the original decision and raised the overpayment of Housing Benefit (p49).

 

20. The claimant argued that the Authority must have known through the Student Finance Office about her student finance package; alternatively, that she had a reasonable based expectation because of the similarity of a student loan to a benefit, and the location of the Student Finance Office in the same building, that the information would be passed on. I do not agree with either proposition, but deal only at this stage with the first of them. I accept the Authority’s submission that the only method by which an Authority can find out if a claimant has become a student is through the National Fraud Initiative and that there is no link between the Student Finance Office, the Student Loan Company Ltd and the Benefits Office of their Authority. The Student Finance Office’s job involves assessment, and not the actual provision of funds. It is not concerned with whether the applicant takes up his place on a course and the financial package that goes with it. An applicant for student finance may not be a recipient of HB or Council Tax Benefit in his own right or be part of someone else’s claim. If the applicant were a young person, his name would not necessarily be revealed by checking against those of existing claimants. I see from the HB claim form provided by this Authority, that it does not request basic information such as the NINO of children and other adults living with a claimant. Moreover, the Student Loan Company Ltd would have no reason to inform the Student Finance Office whether an applicant had taken up the offer - if the money is not paid out to the student, it goes back into Student Loan Company Ltd funds. Unless the applicant chooses to tell the Student Finance Office that she has taken up her place (which she did not do in this case), it would not know. What the appellant’s representative’s submission presupposes is, in essence, an automatic, elaborate exercise to be carried out by the Student Finance Office to cross check against all benefit claimants and their children and non-dependents in order to make up any default by a benefit claimant in notifying the Benefits Office directly. This need only be stated to be rejected as improbable.

21. There was argument and evidence before me on the basis of which I conclude that:

 

(i) In an interview under caution in May 2007 the claimant admits she not read all of the information sent to her by the Benefits Service properly, or in some cases at all (pages 13 and 14). She confirmed this at the hearing before me. I conclude that she did not read the information sent to her through to the end.

 

(ii) She did not notify the Merton Benefits Service when she became a student and received her grant (p11, interview under caution; p89, further letter explaining her appeal). In letters to the Authority stamped as received 20 March 2008 (but dated by the claimant as 16 March 2007) she states that she did not inform ‘Merton’ because of emotional turmoil at the material time and her youth (p89). In a further letter dated 7 July 2007 (probably erroneously as it is stamped as received 23 July 2008, p93) she adds that she did not understand the way the system worked and honestly believed she was following the original instructions she was given when she applied for Housing Benefit. She stated at the interview under caution that she did not realise she had to do so (p12 and p16 of the interview under caution transcript). I do not accept her evidence in the written reply at p135 that she had a conversation at the Civic Centre with a person from HB in which she told him she was to become a student and he assured her it would make no difference to her HB entitlement. When pressed at the hearing, she told me that she ‘mentioned the matter in passing’ to the person she saw. The lateness with which this conversation was introduced in evidence, the vagueness of the claimant’s oral evidence about the event, and her failure to mention it at the interview under caution have led me to the conclusion that such a conversation did not, on balance, take place. Her memory is mistaken. It is useful to add here that, even if she did mention this in passing, it would not constitute a sufficient disclosure since the actual change of circumstances did not occur until some months later, when she enrolled at university. There is no certainty that a student will take up an allocated space before she does so.

 

(iii) The notification from the Student Finance office was nothing more than confirmation that she would receive a loan.

 

(iv) The representative’s submission that a lay person would think a student loan is akin to a benefit, so that it would be reasonable for a lay person to think there was a link is also not accepted. The information given to claimants in the claim pack would dispel a misconception such as this (though the likelihood of someone forming such a view seems improbable in any event): Student loans and grants are not listed as benefits in the HB claim pack (p17) and not mentioned at p14 where Income Support and Jobseekeer's Allowance (two well-known benefits) are raised.

(v) There are 5 departments located in the Civic Centre, of whose existence the claimant was unaware. Because she applied on line, the claimant accepted in evidence before me that any address on the on line application would have been irrelevant to her.

 

(vi) At the hearing before the First-tier Tribunal on 28 October 2008 she does not mention any confusion with different departments of the Authority or belief that departments are linked because of their physical proximity.

 

(vii) None of the correspondence in the bundle asserts that she informed a different office of the Authority that she had become a student, or that she expected information to be passed on from one department to another, or that she had been misinformed by another department of the Authority in a way that affected her benefit. Nor did she say this at the First-tier hearing. The only aspect about which she states she was not given correct information was in relation to how to set out her appeal properly.

 

(viii)  She confirmed at the hearing, and I accept, that she would not have sent a letter relating to HB to an unrelated office such as the Council Tax office or Leisure office, and she would have sent a letter about Student Finance only to the Student Finance office. When she replied to letters about her benefits, she knew she had to write, and consequently did write, to the Benefits Office at the given address.

 

(ix) She knew that she had to report ‘dramatic’ changes of circumstance (p48). Becoming a student and obtaining student finance (with which her studentship was closely related) were both changes of circumstance which were flagged up in the claim form as significant. The instructions at the end of the claim form specified that becoming a student was a change that must be reported, and that any changes from the information in the claim form must also be reported. The claimant overlooked the need to notify the Authority of her change of status despite clear instructions sent to her, and not because of any belief or expectation that the Student Finance Office knew of her existence and would pass on the information

 

(x) The designated office was the Benefits Service office at the address plainly given on a number of documents.

 

(xi) She did not report any change to the Benefits Office itself or an officer of it, and did not advise the Student Finance Office that she had enrolled as a student.

 

(xii) The overpayment did not occur because of the Authority failing to maintain its database or communicate between departments. It was caused by the claimant failing to tell the Benefits Service about her changed status.

 

(xiii) There was no official error by the Authority.

 

 

The law

 

Duty to Notify changes of circumstance

 

22. It is helpful to bear in mind two different aspects of HB law at the outset. The duty to notify a change of circumstances is quite different in content from the criteria for recovery for an overpayment.

 

23. The duty to notify changes of circumstance: Under regulation 88 of the Housing Benefit Regulations 2006, the claimant is under a duty to notify the designated office of a relevant Authority of changes of circumstances that he might reasonably be expected to know might affect his benefit. The designated office means the office designated by the relevant Authority for the receipt of claims to HB.

 

24 The information a claimant receives about a benefit will inevitably be an important factor in deciding what he might reasonably be expected to know might affect his benefit. There was clear information in this case to indicate (i) that becoming a student might affect her benefit and (ii) that changes in her income, including a student loan, might affect benefit. It was (i) which disentitled her to benefit and led to the supersession of her award but (ii) must also have been significant in her understanding of what she needed to report. She also knew that an increase in income could affect benefit (p7, interview under caution) though in her own mind she decided that student finance income was ‘separate’. There is no coherent reason why she should have decided this on the basis of the information requirements and instructions in the claim pack.

 

25. Could she have reasonably been expected to know that her benefit might be affected? I conclude that she could. Although the claimant was young, grieving and said she was on another planet, her actions around the relevant time indicate that her she was able to function rationally and intelligently. She was able to sort out her mother’s affairs, apply for HB, respond to correspondence, supply documents, follow instructions for joining university, obtain student housing and pursue her course. It is unlikely that grief and turmoil would have affected her ability to appreciate the need to report that she had become a student, since she reported other changes such as wishing to discontinue benefit and leaving her tenancy. I consider that she could reasonably be expected to know her benefit might be affected by this change of circumstances.

The criteria for recovery of an overpayment

26. The primary rule under regulation 100(1) of the Housing Benefit Regulations 2006 is that any overpayment is automatically recoverable regardless of fault unless it was caused by an official error. Official error is strictly confined in regulation to overpayments caused by a mistake (whether by an act or omission) by limited persons, including the relevant authority or its officers, but only where the claimant did not cause or materially contribute to that mistake.

100. —(1) Any overpayment, except one to which paragraph (2) applies, shall be recoverable.

(2) Subject to paragraph (4) this paragraph applies to an overpayment caused by an official error where the claimant or a person acting on his behalf or any other person to whom the payment is made could not, at the time of receipt of the payment or of any notice relating to that payment, reasonably have been expected to realise that it was an overpayment.

(3) In paragraph (2), "overpayment caused by official error" means an overpayment caused by a mistake made whether in the form of an act or omission by—

(a) the relevant authority;

(b) an officer or person acting for that authority;

(c) an officer of—

(i) the Department for Work and Pensions; or
(ii) Revenue and Customs,

acting as such; or
(d) a person providing services to the Department for Work and Pensions or to the Commissioners for Her Majesty's Revenue and Customs,

where the claimant, a person acting on his behalf or any other person to whom the payment is made, did not cause or materially contribute to that mistake, act or omission.

 

The relevant Authority is the Authority administering Housing Benefit: regulation 2 of the Regulations. There is no obvious justification for confining the term to the Authority when carrying out its housing benefit functions which gives rise to the possibility that a mistake made by the Authority or its officer acting in a capacity unrelated to the administration of relevant benefits may form the basis of an official error: R(H) 10/08 [28]; EM v London Borough of Waltham Forest [2009] UKUT 245 (AAC) [82].

 

Establishing a mistake

 

27. The starting point is that there must be a mistake by way of act or omission; but not every act or omission which leads to harm will be a mistake. It is particularly important to bear this in mind where the allegation of mistake is based on an omission by a recipient department to pass on information to another one. In R(H)10/08 Deputy Commissioner Whybrow (now Deputy Upper Tribunal Judge) held that a mere failure by one department of an Authority to pass on information to another would not be sufficient to amount to an official error – i.e. a mistake by act or omission - though it might be so classified where there was (i) a reasonably based expectation that the information would be passed on to the benefits service, or (ii) where internal arrangements or practices existed for passing on information. The deputy judge stated:

 

24.   ‘Its first principal error was its failure to adequately investigate, consider, make findings and reach a conclusion as to whether the alleged omission of the housing office to pass on information to the benefits service that the claimant was in Ghana during the material period amounted to an official error for purposes of regulation 81(3)[1] of the 2006 Regulations . In particular, the tribunal should have investigated and made findings of fact as to:

1 the purpose or purposes of the claimant and/or ex-husband in informing the housing office that the claimant was in Ghana;

2. whether the purpose or purposes were declared to the housing office;

3. what, if anything, officers within the housing office told the claimant or ex-husband would be done with the information they had been given;

4. whether, and, if so, what arrangements existed at the material time for information received by the housing office to be further investigated or to be passed on to the benefit service, bearing in mind the evidence that the information was passed on to the benefits service in October 2006;

5. when, and the circumstances in which, the housing investigation officer came to investigate the claimant’s absence, and why, if it was not investigated until October 2006, it was not investigated earlier.

25    In the light of these findings, the tribunal should then have considered and determined whether (1) there was any mistake in the form of an act or omission by officers within the housing office and, if so, (2) whether it was by a person who fell within the ambit of sub-paragraphs (a) to (d) in paragraph 3 of the regulation.

26. As to (1), to justify a conclusion that a mistake had been made, it would not be sufficient to found such a conclusion on the mere fact that information given to the housing office had not been passed to the benefits service. The tribunal would need to be satisfied either that the claimant on the evidence had a reasonably based expectation that the information would be passed on to the benefits service – for example, because she was told, or could reasonably infer, that this would be the case – or that, within the housing office, internal arrangements or practices existed by which information potentially relevant to entitlement to HB and CTB was to be passed to the benefits service, and that in this case those arrangements or practices had not been followed….

 

29. ...’Relevant Authority’ in the context of official error in regulation 81(3) in the context of regulation 81(3), properly construed as explained above, does not have the effect suggested by the respondent of changing the obligation on claimants to report change of circumstances only to the office designated by the Authority for receiving claims for HB. That obligation remains and it would be a breach of that obligation to report changes of circumstances to a department of the Authority which was not the designated office. Further, interpreting relevant Authority in the way I have done would not mean…that a claimant could rely axiomatically on official error where he has reported a change of circumstance to, say, a parking attendant because a mistake in such circumstances could only be committed in the much more limited circumstances I have outlined in paragraph 26 above, and because it would remain necessary for the claimant to show that the overpayment was caused by any such mistake rather than by the failure to report the change of circumstances to the benefits service in breach of regulation 69 of the 2006 Regulations [the equivalent of regulation 88 of the Housing Benefit Regulations 2006].’

 

28. There is no submission before me that there is a general duty for one department of an Authority to pass information onto another department. Such a submission would be difficult to justify in light of the very wide range of largely unrelated functions exercised by councils. I accept the proposition of law in R(H)10/08 that a mere failure by one department to pass on information to another would not amount to an official error – a mistake - in and of itself. There must be something more. The deputy judge described this further element as either a reasonably based expectation that information would be passed on or the existence of internal arrangements for doing so.

 

29   Turning to the former: The matters set out by the deputy judge in paragraph 24 show that reasonableness in this context has two aspects: The first is that the claimant does enough to put the recipient on notice that he expects the information to be passed on. A simple assumption (as in the appeal before me) that information will be passed on would not be enough. Nor would it be sufficient that some oblique or vague reference to a benefit administered by the Benefits Office is made. The second aspect (point 3) indicates the need to consider the recipient’s response in deciding whether the claimant’s expectation is reasonable. If the recipient tells the claimant to write to the Benefits Office himself, or is non-committal, or does not reply at all, there is nothing on the face of it which would lead the claimant reasonably believe that his expectation will materialise.

 

30.   Investigation of the points set out in R(H)10/08 [24] will be sufficient in many cases to enable a First-tier Tribunal to come to a conclusion, but they are by no means exhaustive. The functions of the two departments need also be borne in mind. As a matter of common sense, the less connected the functions of the recipient department and the Benefits Service are, the less likely it is that the informant would expect it to be passed on, or the recipient to realise it is meant to do so. This might be a useful testing point for tribunals and, indeed, proved so in this appeal, where the claimant confirmed that she would not have sent something about benefits to the Student Finance Office, and vice versa.

 

31.   There are, however, departments which are seen by claimants as having related functions, such as a council’s Housing Office and the Benefits Service. As in R(H)10/08, a Housing Office may have previously assisted a tenant with a HB claim by contacting the Benefits Service for him. In that sort of case, a claimant may have a firmer foundation upon which to build an argument of mistake, though the tribunal would have to investigate whether previous assistance could reasonably be seen as an assurance of the same again.

 

32. The information which the claimant receives from the Benefits Service is a further important consideration in deciding whether the claimant’s expectation is reasonable, and hence for deciding whether the alleged omission can be seen as a mistake. Where, as here, the Benefits Service has given clear instructions, it may be difficult to accept that an omission by the recipient department is a mistake in the absence of a clear undertaking by the recipient department. Put another way, it would be difficult to conclude that the claimant had a reasonable expectation or could reasonably infer that information would be passed on in the light of the instructions.

 

33. In the context of deciding whether there is a mistake, it can also be relevant to consider the existence of channels for the exchange of information between the parties. If there is an established practice or link, it may be easier to characterise a failure to follow the practice or link as a mistake. Even if the failure did amount to a mistake, it would nevertheless be necessary to go on to consider whether the claimant had caused or materially contributed to the overpayment for the purposes of regulation 100(3), and if not, whether he could reasonably have been expected to realise that it was an overpayment under regulation 100(2).

 

34. On the facts of this appeal, I am unable to find that there was a mistake by the Student Finance Office in not passing on the information. The claimant did not have a reasonably based expectation and could not reasonably have inferred (that is to say, reasonably drawn from the surrounding circumstances without being told expressly) that the information would be passed on from the Student Finance Office to the Benefits Service. Let us assume for the moment (contrary to my specific findings) that she did believe the information would be passed on. This was in all of the circumstances nothing more than an assumption. The claimant did not make her purpose known to the Student Finance Office and the Student Finance Office did nothing which could have led her to believe that they would pass on the information. The functions of the two departments are quite distinct and the information she received was clear that she must notify any changes herself.

The application of R (Sier) v Cambridge City Council [2001] EWCA Civ 1523

35. A further area in which the tribunal’s reasoning went astray is in relation to the operation of causation in cases of official error. Regulation 100(2) requires the overpayment to arise in consequence of an official error, and regulation 100(3) defines that as occurring where ‘the claimant...did not cause or materially contribute to that mistake, act or omission.’ The tribunal decided that the claimant had not contributed to the mistake. Although this reflects the wording in the regulation, it does not reflect the law as stated by the Court of Appeal in Sier, which is binding on the First-tier tribunal and the Upper Tribunal.

 

36. In Sier the Court of Appeal decided, having regard to the legislative context in which overpayment of HB arises, that a person is only to be relieved of the obligation to repay an overpayment when that has been occasioned by an administrative mistake and not through the fault of the recipient: Latham LJ, [25]. Simon Brown LJ stated at [30] that the correct approach was to ask a single composite question: was the overpayment ‘the result of a wholly uninduced official error, or was it rather the result of the claimant’s own failings, here his failure in breach of duty to report a change of circumstance?’; and at [31] that ‘If one asks the purpose for which the question arises [under regulation 99(3) of the former Housing Benefit General Regulations 1987] as to whether the overpayment was caused by an uninduced official error, the common-sense answer is so as to distinguish that sort of case from a case where the claimant himself is substantially responsible for the overpayment. It would be remarkable indeed if the claimant was liable to make repayment in a case where he merely contributed to what might be a fundamental error on the part of the department, and yet wholly escapes such liability even when himself primarily responsible for the overpayment.’

37. The test is generally taken to be whether the claimant was substantially responsible for the overpayment: R(H)1/04; CH/3083/2005, CH/3761/2005, CH/2297/09. I have no doubt that the claimant was not only substantially so, but entirely so, on the facts of this case. The reason why HB continued to be paid was because the claimant failed in her duty to notify the Benefits Service of the change of circumstance, and not because of any mistake by the Authority.

 

38 There is accordingly no reason to go on to decide what would have happened had there been an official error, and in particular whether the claimant could have reasonably have been expected to realise that there was an overpayment.

 

39. The Authority’s appeal is allowed in full.

 

 

 

 

[Signed on original] S M Lane

Judge of the Upper Tribunal

 

[Dated] 9 April 2010