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Misrepresentation & Failure to disclose
Hi,
I have a client who lived in supported accommodation (private), following a breakdown. Client has approx £70,000 in savings.
After about 3 years client felt she wanted to live more independently and purchased a flat in May 2011, however she continued to live in supported accommodation until January 2012. She was staying at the Flat 2-3 times a week as a gradual introduction back into independent living.
At the time the Manager of the supported accommodation advised the client that she would need to make a claim for HB and CTB as her savings had gone.
The manager completed all the forms on the client’s behalf and the client simply signed them, she trusted the manager so did not look at the content of the forms.
LA recently sent Cl a letter advising her that she may have been overpaid HB and CTB from May 11 to Jan 12 because she failed to declare her interest in the flat.
We have managed to get a copy of the forms and the manager did not declare the clients interest in the flat. The manager has also declared that she completed the forms.
I know that the OP can be recovered. But as it was the manager that failed to disclose a material fact (because she was aware of the property) and she was acting on behalf of the client. Is the OP still recoverable from the client?
Does anyone have any case law on misrepresentation and failing to disclose?
Many thanks
There is also another potential issue here. If she was gradually re-introducing herself back into independent living there would have come a point when the flat became the dwelling usually occupied as her home. If, then, that creates a period of overlap where HB was being paid on the supported accommodation after the flat became the dwelling usually occupied as her home then there would have been no liability to pay rent on the supported accommodation for that period.
The actions of the scheme manager, on the facts described, seem very dodgy and if I was in your client’s position and ended up financially out of pocket then I would be considering legal action against her, notwithstanding the problem with the signature.
I would run four arguments in this case:
The first three assume that there has indeed been an overpayment of the amount claimed by the Council
1. As you say, the substantive misrepresentation was by the hostel manager, not the claimant. Under Reg 101(2) that would make the o/p recoverable only from the landlord and not the claimant. Problem with that is she signed the form so technically she did misrepresent the facts
2. This is one of those cases where it is difficult to say that any one person is wholly responsible for causing the overpayment in which case by default the overpayment is recoverable both from the claimanht and from the person to whom it was paid if that is not the claimant (I am assuming it was probably paid to the landlord with it being supported accommodation). The Council would then have a choice whom to pursue and you could prevail upon them to exercise the choice to recover from the landlord (but this would not be something you could appeal)
3. The claimant and the landlord are equally to blame for misrepresenting the facts, so Reg 101(2) applies to them both at the same time - again this gives the Council a choice to go after the landlord instead of the claimant if you can persuade them to do that.
All of that presupposes that there has been an overpayment of the amount claimed. The Council should have gone through the ritual of valuiong the equity in the home your clioent has bought and then applying the diminution of capital rule, but in reality I don’t expect that will make much difference: she has probably has an asset worth more than £16,000 plus the total HB received in the overpayment period, so she’ll be over the limit any way you slice it.
Which brings us to the fourth argument: the property should have been disregarded under para 2 of Schedule 6 to the HB Regs for at least 26 weeks because she had acquired it for occupation and was taking reasonable steps to do so. The wording of para 2 implies that it is intended to be used in cases where the claimant needs to kick someone else out first - certainly if it is going to be extended beyond 26 weeks - but I think it is sufficiently imprecise to give a bit of leeway and cover a situation like this.
Hummm, thanks hbinfo,
Point 1. Would the fact that the client has poor mental health come into play?
I was thinking of asking them to use their discretion not to recover from the client because to recover would cause financial hardship (as she is receiving benefits – although she does have £12,000 capital!) and it would also be a detriment to mental health, following a long recovery.
The money was going direct to the landlord and it was the Deputy Manager of the accommodation that failed to disclose.
So I am right in thinking that the OP is definitely recoverable and it is down to the discretion of the LA who they recover from. However, whatever they decide it can not be appealed? I think the LA is aware that the Cl did not complete the forms because in their letter they are giving her a chance to respond before they request a refund of the monies paid.
Thanks once again, your response has been a great help!
There is also another potential issue here. If she was gradually re-introducing herself back into independent living there would have come a point when the flat became the dwelling usually occupied as her home. If, then, that creates a period of overlap where HB was being paid on the supported accommodation after the flat became the dwelling usually occupied as her home then there would have been no liability to pay rent on the supported accommodation for that period.
The actions of the scheme manager, on the facts described, seem very dodgy and if I was in your client’s position and ended up financially out of pocket then I would be considering legal action against her, notwithstanding the problem with the signature.
Hi Nevip, yes I had also thought of this and was wondering how this would be worked out? for example; do the LA look at how long the client was living like that before they decide its a permanent dwelling? The client was present with another support worker at the appointment and I had to ask her three times about the forms as I could not believe my ears when she was telling me. I will definitely be advising the client with regards to legal action if she is out of pocket!!
In my letter to the LA is it right to ask the LA to recover from the Landlord instead of the client? Or is it not right to do this?
Hi
No, it is not simply a matter of counting the number of nights spent in a dwelling. One has to look at the situation in the round. Factors include the amount of furniture and belongings in a place, where the post is sent, the address from where a person is registered with a doctor, etc, where (if at all) a person is registered to vote, how much time a person spends in a dwelling, liability for and payment of council tax, utility bills, local connections, etc. This list is illustrative not exhaustive.
edited to correct spelling mistake
[ Edited: 1 Jun 2012 at 02:33 pm by nevip ]In my letter to the LA is it right to ask the LA to recover from the Landlord instead of the client? Or is it not right to do this?
Yes, you are perfectly entitled to do that.
Hi
No, it is not simply a matter of counting the number of nights spent in a dwelling. One has to look at the situation in the round. Factors include the amount of furniture and belongs in a place, where the post is sent, the address from where a person is registered with a doctor, etc, where (if at all) a person is registered to vote, how much time a person spends in a dwelling, liability for and payment of council tax, utility bills, local connections, etc. This list is illustrative not exhaustive.
As far as i know she still had everything registered at the supported home. I shall investigate this further though, thanks.
There are two stages involved in overpayment recpovery: what the Uppoer Tribunal once characterised as the “could” and the “should”.
There is a right to appeal against the Council’s decision about what it could do. The decision might comprise the following:
A. There has been an overpayment of £X because the claimant was not entitled to any of the money she received
B. That overpayment is recoverable because it was not caused by official error
C. We believe the overpayment is recoverable from the claimant because she misrepresented the facts about her capital - so we have the power to recover from the claimant. Not saying we will, not saying we won’t, just saying we could.A, B and C are all appealable - in particular point C is appealable on the ground that the Council is mistaken in its opinion of who misrepresented the facts. The appellant could argue that the overpayment is recoverable from another person instead of her, or another person as well as her. I don’t think she has a strong case on “instead”, but “as well” is more promising.
Once there is a final decision as to whom the Council could recover from, they are free to go ahead and do that if they want. They might have a choice between two, and it is entirely discretionary. You can beg, plead and cajole, but not appeal at this stage.
I don’t think your client’s mental health issues will get her off the hook in an appeal if the plain fact of the matter is that she signed a declration which was not true. See the case of B, which has being doing the rounds in the domestic courts and the ECtHR for years. That is more an argument to use when urging the Council to use its discretion to write off or, if they have the choice, pursue the landlord after the appeal process is exhausted
Ah, ok. Well I am writing a letter to them now giving a brief history of the client’s health and what happened around the completion of the forms.
I am requesting because of the exceptional circumstances, the clients mental health and financial hardship they use their discretion not to recover from the client but recover to from the landlord. I will wait for a response and appeal if negative.
Thanks again.
I think that’s the wrong way round - before you look to discretion on the Council’s part, you need to establish what discretionary options they have at their disposal. Deal with the “could” before you get to the “should”.
I would ask them whom they consider the overpayment to be recoverable from and why. If they say the claimant alone, that should be challenged by an application for revision/appeal on the grounds that the overpayment is at the very least recoverable from the landlord as well. The landlord is then also a person affected by the decision and would be binvolved in any appeal.
If at the end of that process it is confirmed that the Council has the power to recover from both your claimant and the landlord (which I think is probably the right decision), that is the time to urge them to use theor discretion to pursue the landlord.
And don’t forget the possibility of a capital disregard for at least 26 weeks - that should be one of the grounds for appeal.
Thank you.