DP v London Borough of Lambeth

Factual and Procedural Background

These proceedings arise from a decision by the Respondent Local Authority ("Company A") on 11 October 2018 to reduce the Appellant's entitlement to receive Housing Benefit ("HB") retrospectively. The reduction was based on the assertion that, contrary to a declaration made by the Appellant in 2014, her son had been living with her as a non-dependant adult during the period from September 2014 to October 2018. Company A claimed a substantial overpayment of HB and sought recovery.

The Appellant had submitted a change of circumstances form in September 2014 stating that she was the sole occupier and that her son had left the property two days prior. This declaration increased her entitlement to HB and Council Tax support. In December 2017, Company A investigated the Appellant’s entitlement to the Council Tax single person's discount and conducted an interview under caution in March 2018, where the Appellant repeated her claim that her son had moved out in 2014. Despite this, documentary evidence obtained by Company A indicated the son’s address was still the Appellant’s property.

The Appellant believed Company A's investigation and decision were motivated by retaliatory animus following her obtaining a Debt Relief Order in February 2018. She appealed the decision to the First-tier Tribunal (FtT), which dismissed her appeal in January 2021 after she failed to provide documentary evidence or have her son attend hearings as directed. The FtT drew adverse inferences from the absence of independent evidence supporting her claim that her son had left the property in 2014.

The Appellant’s solicitors later obtained witness statements and a psychiatric report indicating possible lack of capacity, and applied to set aside the FtT decision, which was refused in February 2022. Permission to appeal to the Upper Tribunal (UT) was granted in December 2022 on grounds of an arguable mistake of fact concerning the Appellant’s capacity. The UT dismissed the appeal and refused permission to appeal further, leading to the current application for permission to bring a second appeal to this court.

Legal Issues Presented

1. Whether the First-tier Tribunal erred in finding it was a relatively straightforward and simple matter for the Appellant to provide evidence that her son did not reside at her property during the relevant period, taking into account her alleged lack of capacity.
2. Whether the Upper Tribunal correctly applied the principles concerning mistake of fact and procedural unfairness in dismissing the Appellant’s appeal.
3. Whether the Appellant’s mental capacity and related procedural fairness considerations warranted the setting aside of the FtT decision and a rehearing.
4. Whether permission to bring a second appeal should be granted on the basis that the appeal raises important points of principle or there is a compelling reason to hear it.

Arguments of the Parties

Appellant's Arguments

• The Upper Tribunal Judge (UTJ) misinterpreted the psychiatric evidence provided by Dr Kumar, which established that the Appellant suffered from a mental disorder affecting her litigation capacity during the relevant period.
• It was not a straightforward or simple matter for the Appellant to provide the requested evidence about her son’s residence due to her mental health condition, which impaired her ability to comply with the FtT’s directions.
• The UTJ should have concluded that the FtT’s finding on the ease of providing evidence was a material mistake of fact that rendered the proceedings unfair.
• Procedural unfairness arose because the Appellant’s compromised capacity was not properly accounted for, and had it been, the hearing outcome might have been different.
• The appeal satisfies the second appeals test as it raises important points of principle and there is a compelling reason to hear it based on procedural unfairness.

Respondent's Arguments

• The second appeals test is not satisfied as the FtT and UT applied the relevant principles correctly.
• Significant allowances were made by the FtT through case management directions, and the Appellant had the opportunity to attend hearings and provide evidence but failed to do so.
• The UTJ was correct to regard Dr Kumar’s evidence as relevant only to the time of his examination in November 2021 and not to the earlier period of the FtT proceedings.
• Procedural fairness depends not simply on capacity but on whether the litigant is vulnerable or compromised in a way requiring steps to prevent unfairness; the FtT’s proceedings were fair on the facts.
• The Appellant has not produced further evidence about her son’s residence despite opportunities to do so, including after the appointment of a litigation friend.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
E & R v Secretary of State for the Home Department [2004] EWCA Civ 49	Conditions for a mistake of fact to amount to procedural unfairness and be a ground of appeal on a point of law.	The court applied the principles to assess whether the FtT made a material mistake of fact regarding the Appellant’s capacity that led to unfairness.
CF v Secretary of State for Work and Pensions [2017] UKUT 356 (AAC)	Consideration of capacity and procedural fairness in tribunal proceedings.	The court distinguished the present case from CF, noting the lack of objectively verifiable evidence of incapacity during the FtT proceedings here.
Tendring DC v CD [2024] EWCA Civ 1509	Flexibility in tribunal procedure to support vulnerable or protected parties.	Reaffirmed the importance of flexible procedural approaches in tribunals to ensure fairness, relevant to the Appellant’s compromised capacity.
AM (Afghanistan) v SSHD [2017] EWCA Civ 1123	Flexibility and natural justice in tribunal rules, including appointment of litigation friends.	Supported the principle that tribunals must ensure fair access to justice for vulnerable parties, informing the court’s approach.
DTM v Kettering (CTB) [2013] UKUT 625 (AAC)	Role of respondent in social security appeals to assist tribunal in reaching correct decision.	Emphasised the tribunal’s inquisitorial role and the respondent’s duty, relevant to procedural fairness considerations.
Griffiths v TUI (UK) Ltd [2023] UKSC 48	General principles on the acceptance and rejection of expert evidence.	The court applied the principles to accept Dr Kumar’s unchallenged and reasoned psychiatric evidence as reliable.
Ladd v Marshall [1954] 1 WLR 1489	Principles governing admission of fresh evidence on appeal.	Referenced in considering whether new evidence from the Appellant’s solicitors should be admitted on rehearing.
Hussain v SSWP [2016] EWCA Civ 1428	Flexibility in applying rules to unrepresented or vulnerable litigants to achieve just outcomes.	Supported a flexible, fair approach to evidence and procedural rules in tribunal proceedings involving vulnerable parties.
Uphill v BRB (Residuary) Ltd [2005] EWCA Civ 60	Compelling reasons to grant permission to appeal where procedural irregularity leads to unfairness.	Justified granting permission to appeal here due to procedural unfairness affecting the Appellant’s case.

Court's Reasoning and Analysis

The court carefully examined the procedural history and evidence, focusing on whether the FtT’s finding that it would have been straightforward for the Appellant to provide evidence about her son’s residence was a material mistake of fact that caused procedural unfairness. The court reviewed the psychiatric evidence from Dr Kumar, who diagnosed the Appellant with major mental illnesses, including a delusional disorder with fixed paranoid beliefs about the local authority, impairing her litigation capacity.

The court rejected the UTJ’s view that the psychiatric evidence only established lack of capacity from November 2021 onwards, finding that the evidence showed the Appellant’s mental illness and compromised capacity were present throughout the relevant period, including the FtT proceedings. The court noted that the FtT had not been alerted to the Appellant’s compromised capacity and had drawn adverse inferences from her failure to comply with directions and provide evidence, which was unfair in light of her condition.

The court emphasized the flexible and inquisitorial nature of tribunal proceedings and the duty to ensure fair participation, especially for vulnerable litigants. It acknowledged that while there is no strict equivalent in tribunal rules to the Civil Procedure Rules’ provisions on litigation friends for those lacking capacity, tribunals must avoid procedural unfairness and take appropriate steps to enable participation.

The court found Dr Kumar’s evidence to be unchallenged, reasoned, and reliable and concluded that the FtT’s error about the ease of compliance materially affected the fairness of the proceedings. The court also considered additional witness evidence obtained by the Appellant’s solicitors, which, if admitted on rehearing, could further support her case.

Accordingly, the court held that the procedural unfairness established by the psychiatric evidence and failure to accommodate the Appellant’s compromised capacity justified setting aside the FtT decision and remitting the case for rehearing.

Holding and Implications

The court's final decision is to GRANT PERMISSION TO APPEAL, ALLOW THE APPEAL, AND REMIT THE CASE TO THE FIRST-TIER TRIBUNAL FOR REHEARING in light of the procedural unfairness arising from the Appellant’s compromised capacity and the FtT’s material mistake of fact.

The direct effect is that the Appellant will have the opportunity for a fair rehearing with consideration of the psychiatric evidence and any other relevant material. The decision does not establish new precedent but clarifies the application of existing principles concerning capacity, procedural fairness, and flexibility in tribunal proceedings involving vulnerable litigants. It underscores the necessity for tribunals to identify and accommodate compromised capacity to avoid unfairness.