AM v Department for Social Development (IS) (Capital) [2016] NICom 4_2 (19 July 2016)
Application Nos:  A4/15-16(IS)
A5/15-16(IS)
A6/15-16(IS)

SOCIAL SECURITY ADMINISTRATION (NORTHERN IRELAND) ACT 1992

SOCIAL SECURITY (NORTHERN IRELAND) ORDER 1998

INCOME SUPPORT

Application by the above-named claimant for
leave to appeal to a Social Security Commissioner
on a question of law from a tribunal's decision
dated 17 April 2015

DETERMINATION OF THE SOCIAL SECURITY COMMISSIONER

	These are a claimant’s applications for leave to appeal from three decisions of an appeal tribunal sitting at Dungannon.  As those appeals arose from a common factual background and were heard together by the same appeal tribunal, I propose to consider the applications together.

	An oral hearing of the application has not been requested and I consider that the proceedings can properly be determined without a hearing.

	For the reasons I give below, I refuse leave to appeal.

	REASONS

	Background

	The applicant had claimed income support (IS) from the Department for Social Development (the Department) from 16 April 1997 on the basis that he was a carer.  He was awarded IS but his claim was superseded and disallowed for the period from 16 April 1997 to 2 August 2010 on the basis that he possessed capital in excess of the prescribed limits during the period of his claim.  He appealed to a tribunal and subsequently to the Social Security Commissioner.  I decided his case, which was given the neutral citation AJM v Department for Social Development [2013] NI Com 46 (“AJM v DSD”).  In my decision I set aside the decision of the appeal tribunal, which had in turn upheld the Department’s decision, and made findings of fact wherein I adopted a different view of the facts concerning the applicant’s possession of capital to that taken by the Department and the appeal tribunal.  I gave that decision on 26 June 2013 and, despite the difference in my approach to the facts, I confirmed that the applicant was not entitled to IS from 16 April 1997 to 2 August 2010.

	On 28 September 2010, the applicant had made a new claim for IS.  On 15 November 2010, the Department considered all the evidence and determined that the applicant did not have entitlement to IS from and including 28 September 2010 on the basis that he possessed or was deemed to possess capital in excess of the prescribed limit of £16,000. The applicant appealed.  The applicant made a further claim to IS from 21 October 2011.  The Department disallowed this claim on 24 November 2011, on the same basis as before.  Again the applicant appealed.  The applicant again claimed IS from 4 July 2013.  This claim was disallowed on 3 October 2013 and the applicant appealed. 

	Two of the appeals were postponed pending my decision in AJM v DSD. After I gave my decision on 26 June 2013, the Department revised the first two of these decisions to reflect the understanding of the facts following my decision.  The third decision post-dated and had been made in the knowledge of my decision of 26 June 2013.  The decisions under appeal involved findings on some issues of fact which I had settled in my decision and also on some new issues arising from it.  

	The appeals were considered by a tribunal consisting of a legally qualified member (LQM) sitting alone on 17 April 2015.  The tribunal disallowed the appeals.  The applicant then requested statements of reasons for the tribunal’s decisions and these were issued on 16 June 2015.  The applicant applied to the LQM for leave to appeal from the decisions of the appeal tribunal. Leave to appeal was refused by determinations issued on 20 July 2015.  On 17 August 2015 the applicant applied for leave to appeal from a Social Security Commissioner. 
	
	Grounds

	The applicant submits that the tribunal has erred in law on the basis that:

(i)	it accepted the findings I had made in my decision of AJM v Department for Social Development and was therefore prejudiced;

(ii)	it accepted evidence presented in the form of a table of capital which had been disapproved by me in AJM v Department for Social Development;

(iii)	it made irrational findings on the issue of notional capital, as the amount assessed as actual capital or notional capital by the Department was higher than the amount I had found some years previously.

	The Department was invited to make observations on the appellant’s grounds.  Ms Toner of Decision Making Services (DMS) responded on behalf of the Department.  She submitted that the tribunal had not erred in law as alleged and indicated that the Department did not support the application. 

	The tribunal’s decision

	The issue before the tribunal was whether the applicant possessed capital in excess of the prescribed limit for IS at any of the dates on which he had claimed IS.  The Department took as its starting point my decision in AJM v DSD.  In its modified decision in the first case it decided that the applicant at 4 August 2010 had a total of £57,473.27 actual or notional capital.  The Department allowed a reduction in this amount to take into account notional expenditure on living expenses amounting to £164.40 per week.  At the relevant dates of claim, the Department submitted that the applicant had a) actual unaccounted for capital of £21,608.67 and notional capital of £34,385 at 28 September 2010; b) actual unaccounted for capital of £13,251.92 and notional capital of £33,210.05 at 21 October 2012; and c) actual unaccounted for capital of £1,496.82 and notional capital of £24,104.27 at 4 July 2013. The Department submitted that the applicant was not entitled to IS on any of these dates of claim. 

	The tribunal considered the documentary evidence in the Department’s submission and heard evidence from the applicant, who was represented by his brother.  It accepted the Department’s figures in each case, which included some expenditure by the applicant that had the effect of reducing the overall total of assessed capital.  It accepted the findings I had made in AJM v DSD, concerning some of the applicant’s submissions about his awareness of the relevant capital rules and about whether he was holding money in trust.  The tribunal disallowed all three of the appeals. 

	Submissions and assessment

	The applicant firstly submits that the tribunal based its findings in part upon my conclusions in AJM v DSD and that it was therefore prejudiced. In the decision I made in AJM v DSD, I was considering the entitlement of the applicant to IS for the period from 16 April 1997 to 2 August 2010. My decision was based on certain findings of fact which I made in the course of that decision, concerning the issue of whether the applicant possessed capital in excess of the prescribed limit. 

	By Article 17 of the Social Security (NI) Order 1998, a principle of finality applies in social security decision making. My decision on entitlement for the period in question was final, subject to any appeal to a higher authority. No such appeal was made.  The decision remains final, albeit subject to being superseded on grounds of ignorance or mistake as to a material fact (under regulation 6(2)(c)(i) of the Social Security and Child Support (Decisions and Appeals) Regulations (NI) 1999). Equally, the principle of res judicata applies to tribunal and Commissioner proceedings. Res judicata is a Latin expression. Something which is res judicata has already been decided judicially and cannot be reargued before a different tribunal.  My findings and decision in AJM v DSD are res judicata and, as a result, the tribunal whose decision the applicant seeks to challenge was prevented from re-opening issues which had been determined previously by me. 

	However, in AJM v DSD, I only needed to make certain findings of fact for the purpose of the proceedings before me.  Based on the evidence, I was satisfied that the applicant possessed capital in excess of the prescribed limit between the dates in issue in that case.  I made certain observations in relation to the capital which the applicant had possessed at different times in the course of the decision, but I did not need to make specific findings of fact and did not in fact make findings on those particular issues. 

	In AJM v DSD, it was convenient to refer to the variety of bank accounts held by the applicant by three-digit mnemonics.  In the course of my decision  I referred to sums deposited to accounts, held in accounts, transferred between accounts and withdrawn from accounts. In the course of my decision  I ascertained that the capital sums held in accounts at all times exceeded the prescribed capital threshold, rejecting certain submissions that elements of those sums were held on trust for others.  I made reference to other transactions, which might have required fuller investigation and explanation, but did not reach settled findings on them. 

	One such instance was my conclusion that I did not need to decide on the source and destination of four sums which were deposited to account number “073” and withdrawn almost immediately – namely, £5,000 on 2 January 2003, £7,613.05 on 14 March 2005, £5,300 on 15 April 2005 and £7,650 on 16 September 2005 – totalling £25,653.05 (AJM v DSD, paragraph 53).  These deposits suggested to me that the applicant had further undiscovered and undisclosed accounts or source of capital. I made no finding to this effect, however, as I did not need to. I further considered that I did not need to determine the whereabouts of the sum of £23,088.27 withdrawn from account “051” on 13 November 2003 (AJM v DSD, paragraph 54) and not subsequently deposited into any of the accounts known to exist.  However, whereas I observed the existence of this cash sum and considered its whereabouts to be unexplained, it was again unnecessary for me to pin down the whereabouts of that money over and above the sums in the accounts which I formally took into account.  

	However, when the applicant made new claims for IS on 28 September 2010, 21 October 2011 and  4 July 2013, it would have become necessary for the Department to take these findings into account when assessing the amount of capital in the applicant’s possession for the purpose of those claims.  While I did not make any formal findings on those issues, the Department – and the tribunal after it - was entitled to make its own findings and base a decision on them.  I do not consider that there is merit in the applicant’s submission to the effect that the tribunal was prejudiced by my findings.  My findings were final as to the amounts held in the various known bank accounts.  It was entirely a matter for the Department and the tribunal, in assessing the new claims, to make independent decisions on those aspects of the case which I had not finally decided. 

	I consider that the tribunal adopted the correct course in its proceedings and I see no merit in the applicant’s first submission. 

	The applicant’s second submission is that the Department, despite criticism by me in AJM v DSD of the tribunal’s reliance on a document purporting to set out the applicant’s capital at various dates in a spreadsheet style as reliable evidence of the applicant’s capital at those various dates, had relied again on a spreadsheet-style table. 

	The sum of capital attributed to the applicant at the three dates of claim has its origin in the assessment of his capital as of 4 August 2010.  Based on my findings as to the amounts possessed by the applicant in various bank accounts, the Department assessed him as possessing actual capital amounting to £19,121.95 at that date.  It further found that the sum of £23,088.27 (referred to above and at paragraph 54 in AJM v DSD) was unaccounted for capital.  It further found that the applicant had “notional capital” amounting to £15,263.05.  This latter sum was derived from the sums referred to by me above and at paragraph 53 of AJM v DSD. It was based on an acceptance by the Department that a reasonable explanation was advanced for expenditure in two sums of £5,000 and £5,300 respectively, but that expenditure in the two sums of £7,613.05 and £7,650 amounting to a total of £15,263.05 was not reasonable.  These figures produce a total of £57, 473.27. 

	The Department made allowance for the fact that the applicant had not been entitled to IS from 2 August 2010, and decided that £250 per week was a reasonable amount for his weekly living expenses.  As he continued to receive carers allowance (“CA”), the amount of his weekly CA was deducted from the £250.  The balance was then deducted from the Department’s assessment of his capital.  Three spreadsheets were presented by the Department to the tribunal. 

	Spreadsheet A shows the figure of £23,088.27 at the end of July 2010 reduced on a weekly basis until September 2013 by the sum of £250 per week net of the weekly amount of CA received by the applicant. I do not consider that this contains any misleading elements, such as I found in the tables employed before the tribunal in AJM v DSD.  From the last week of May 2011, Spreadsheet A shows that the applicant’s unaccounted for capital dips below the £16,000 prescribed income threshold. 

	Spreadsheet B deals with notional capital.  Notional capital is capital which the claimant is treated as possessing, although it is accepted that he does not actually possess it. Notional capital can be ascribed to a person on the basis that, inter alia, they have disposed of capital with a view to obtaining entitlement to IS or increasing the amount of entitlement they would otherwise have.  The Department treated the applicant as possessing £34,385 of notional capital on 4 August 2010. This figure was made up of two elements - £5,000 and £14,121.95 – transferred by the applicant into an account in the names of three of his children and which I had found to be notional capital at paragraph 58 of AJM v DSD – plus two of the four sums referred to by me at paragraph 53 of that decision of £7,613.05 and £7,650 respectively. Two other sums totalling £10,300 also referred to by me in paragraph 53 were accepted by the Department as reasonably spent. 

	The figures in spreadsheet B show the amount of notional capital deemed to be in the possession of the applicant from 4 August 2010. From June 2011, and the commencement of a notional entitlement to IS on a tariff income basis once the unaccounted for capital in spreadsheet B falls below the prescribed threshold, the notional capital figure is shown to decrease on the basis of the diminishing notional capital rule at regulation 51A of the Income Support (General) Regulations (NI) 1987. 

	Spreadsheet C duplicates spreadsheet A to an extent, but is designed to show more clearly the application of the tariff income rule to the unaccounted for capital as it continues to be treated as diminishing on the basis of estimated weekly expenditure. 

	The criticism I directed at the table used by the Department and adopted by the tribunal in AJM v DSD was that it was inaccurate and, whereas it presented itself as evidence, amounted to no more than submission. I accept that the spreadsheets presented in this case are presented as, and amount to, explanatory material to show the effect of the Department’s legal interpretation of the capital rules on the capital possessed or deemed to be possessed by the applicant.  They do not purport to amount to evidence.  These are not the same sort of table as relied upon in AJM v DSD and I reject the applicant’s criticisms of them in his second submission. 

	The applicant finally submits that the tribunal has made an irrational decision.  This is on the basis that as I had found that he had capital of £18,853.60 in April 2006 it was “therefore impossible to legally explain how the Department and the tribunal find my notional capital to be £24,104.27 seven years later”. 

	It is correct that I had made such a finding.  However, the finding related to the amount of capital possessed by the applicant at a particular date. I had expressed my concern at other examples of unaccounted for capital in the course of my decision. In determining the appeal, I did not find it necessary to ascertain precisely what amount of capital the applicant possessed or should be treated as possessing.  All I needed to determine was whether between the specified dates he possessed capital in excess of £16,000. 

	The applicant has now made three subsequent claims for IS.  In order to determine those claims, it became necessary to make more precise findings on the amount of his capital beyond the period which I had to consider.  The Department has therefore considered the matter in more detail.  The applicant has failed to explain what he did with the sum of £23,088.27 withdrawn from account “051” on 13 November 2003.  He has given a partial explanation of the source and destination of sums deposited to account number “073” and withdrawn almost immediately – namely, £5,000 on 2 January 2003, £7,613.05 on 14 March 2005, £5,300 on 15 April 2005 and £7,650 on 16 September 2005 – totalling £25,653.05.  My finding as to the position of what sum was held in what bank account at April 2006 can have had no bearing on the position regarding these sums.  The Department and the tribunal made findings of fact based on explanations and information, accepting some of what the applicant said by way of explanation and rejecting some.  The tribunal has clearly found that the applicant was not an entirely credible witness. However, it was entitled to make that judgement. It has based its decision on the explanations and information advanced by the applicant and has reached a decision which was open to it on the evidence. 

	I do not accept that the applicant has established an arguable case that the tribunal has erred in law and I refuse leave to appeal. 

(Signed):  

O STOCKMAN

COMMISSIONER

22 June 2016