ON APPEAL FROM their application on paper by Sir Richard Buxton (himself a recently retired judge of the Court of Appeal) dated 7 October 2009.
Royal Courts of Justice
Strand, London, WC2A 2LL
Before :
LORD JUSTICE WALL
Between:
THE QUEEN ON THE APPLICATION OF HEAD | Appellant |
- and - | |
SOCIAL SECURITY COMMISSIONER & ANR | Respondent |
Mr Head appeared in person
Hearing date: 4th November 2009
Judgment
Lord Justice Wall:
I heard this application on 4 November 2009. At that point I had unfortunately not had the opportunity fully to read the papers. What I decided to do, therefore, was to hear the applicant (who was represented by his wife) and to reserve judgment. I had intended to hand down judgment in the Michaelmas term, but was prevented from doing so by pressure of other work. I would like, accordingly to apologise to the applicant and to Mrs. Head for the fact that I have not been able to give the application my full attention until today.
I am also very grateful to Mr and Mrs. Head for supplying me promptly with their response to the written refusal of their application on paper by Sir Richard Buxton (himself a recently retired judge of the Court of Appeal) dated 7 October 2009.
Before dealing with the substance of the application, it seems to me necessary to explain to Mr. and Mrs. Head just how limited my function is in an application of this nature. I am dealing with a renewed application for permission to appeal. I can only grant permission if I consider (a) that the appeal would have a real prospect of success or (b) there is some other compelling reason why the appeal should be heard:- see rule 52.3(6) of the Civil Procedure Rules 1998 (CPR).
My function, accordingly, is to look at what the judge did and said. Did he (arguably) make any error of law? Alternatively, is his decision so plainly wrong that, arguably, he must have been in error in some way in the manner in which he exercised his discretion not to make an order? If I am satisfied that the judged acted appropriately, and reached a conclusion which was properly open to him, there is no basis upon which this court can interfere, and permission to appeal must be refused.
Secondly, as Sir Richard Buxton pointed out, this is an application for permission to appeal against a refusal by a High Court Judge to grant judicial review, to which particularly stringent criteria apply.
Thirdly, Mr. George was represented before the judge, and the essence of the argument which he seeks to advance was not put to Nichol J. I cite the first paragraph of the judge’s judgment:-
The Claimant in this case seeks judicial review of the refusal of a Social Security Commissioner to grant him permission to appeal against the disallowance of his appeal by the Social Security Appeal Tribunal. The underlying issue of substance concerns the computation of the state retirement pension to which Mr Head is entitled. For part of his working life, Mr Head was a member of an Occupational Pension Scheme (OPS) that was contracted out of the State Earnings Related Pension Scheme (SERPS). For another part, Mr Head was not contracted out of SERPS. This state of affairs is sometimes called 'contracted in'. Although that term gives the misleading impression that some positive agreement was necessary, it is a convenient label which I, too, will use. While he was contracted out of SERPS, Mr Head had to pay only a lower rate of National Insurance contributions (NICs). His NICs were higher when his employment was contracted in. Mr Head's essential complaint is that the method of computing his pension does not sufficiently allow for the period that his employment was contracted in and he was paying these higher rates of contributions. As originally formulated, the Claim Form took issue with the interpretation of the relevant legislation, which is the Pension Schemes Act 1993 s.46, as a matter of purely domestic law. At the hearing of the present application, Mr Clifford on behalf of the Claimant made clear that he was not pursuing those arguments. However, he does submit that the interpretation which has so far been adopted by the Department for Work and Pensions and the Appeal Tribunal is incompatible with his rights under Article 1 Protocol 1 of the European Convention on Human Rights. At the hearing he canvassed an alternative possibility that the 1993 Act discriminated against him contrary to Article 14 of the ECHR when read with Article 1 of Protocol 1.
It is very unusual for this court to allow an appellant to raise in this court an argument which was expressly abandoned before the judge.
Fourthly, the Court of Appeal operates on the doctrine of precedent. This means that not only is the judge at first instance bound by decisions of this court, but that this court regards itself as bound by its own decisions. For a summary of this position, see paragraph 12-54 of volume 2 of Civil Procedure (otherwise known as “The White Book”) for 2009.
What Nichol J did was, first of all, to examine what he described as the “procedural issues” to see whether, on the authorities, it was open to him to grant judicial review to quash the decision of a Social Security Commissioner. After examining the authorities, he cane to the conclusion that judicial review was open but that it was to be invoked “only in the plainest possible case” (R v. The Social Security Commissioner and the Social Appeal Tribunal ex parte Pattini (1993) 23 Fam Law 213 or where there were “exceptional circumstances”: see Sinclair Gardens Investments (Kensington) Limited v The Lands Tribunal [ 3006] 3 All ER 650.
Like Sir Richard Buxton, I cannot fault the judge on this part of the application. Mr and Mrs. Head seem to raise two arguments in reply. The first is that Calvert Smith J gave leave to apply, so he must have thought the case sufficiently exceptional: the second which has echoes of the facts in Pattini is that their experience of what I may loosely call the “internal” appeal structure had been unsatisfactory. I will deal in a moment with the Commissioner’s reliance on Lloyd LJ’s refusal of permission in Pearce v Secretary of state for Work and Pension and Another (case number C3 2005/0551) (Pearce) and the decision of this court in Wilkinson v. Secretary of State for Work and Pensions [2009] EWCA Civ 1111 (Wilkinson).
The grant of permission to apply for judicial review is not the same as the substantive application. It is a filter. It is usually made ex parte – that is to say without notice to the respondent. I have, of course, read the transcript of the hearing before Calvert Smith J and note the extremely caution terms in which he expressed himself: - see, in particular, the first three paragraphs on the penultimate page, numbered 118. The “decisions from a full court heard after full argument” to which Calvert Smith J refers is, of course, the hearing of the application for judicial review. Self-evidently, not every application in which leave is given succeeds, and the fact that leave has been given cannot be used as an argument for saying that the judge who heard the substantive application for judicial review was wrong.
The same argument also deals with the second point. However unsatisfactory the hearing at 30-31 Friar Street was (see page 55 of the Bundle) Mr and Mrs. Head had a full and proper hearing before Nichol J, who not only delivered a reserved judgment, but went out of his way to consider what I can collectively call the “section 46 arguments” in the European Convention on Human Rights (ECHR) context. Had the judge not done so it might have been arguable that Mr and Mrs Head had not had a full hearing. However, as it is, I find myself in complete agreement with Sir Richard Buxton when he comments:-
The judge nonetheless, and as a concession, went on carefully to consider the (ECHR) argument, and demonstrated that it failed on authority, both domestic and European. What was called the section 46 “stand alone” argument was not put to him, and cannot be pursued now; but it would in any event be quite inappropriate to pursue it in what would be an appeal on a judicial review basis.
This leads me to the decision of this court in Wilkinson, which I have extracted from the Bailii website and read. I assume that this is the case referred to in the correspondence from the Treasury Solicitor – see, for example, page 196 of the Bundles of documents.
Mr and Mrs Head seek to distinguish this case, which would be binding on any division of the Court of Appeal hearing their appeal, on the basis that in Wilkinson, Patten LJ (with whom the other members of the Court agreed) is recorded in paragraph 17 of his judgment as saying “Neither side on this appeal has suggested that any other construction of either s.46(1) or s.29(1) is even seriously arguable”, whereas in the instant case that is precisely what Mr and Mrs Head wish to argue.
In my judgment, however, this argument does not assist them. I do not think that Wilkinson can be distinguished in this way. In the first place, the fact that an argument is acknowledged by counsel to be untenable in one case does not mean that it is tenable in another. Secondly, when the sentence extracted by Mr and Mrs Head is read in context, it is plain that not only is Patten LJ expressing complete agreement with Lloyd LJ’s judgment in Pearce but that he has given full weight to both previous and subsequent authority:-
On the appeal to the Upper Tribunal Mr James Clifford of Counsel (for Mr Wilkinson) accepted that the decision of the Secretary of State was consistent with the literal interpretation of s.46. That is obviously right. In both s.46 and in s.29(1) of SSPA 1975 the reference to "any period" in the opening line is clearly a reference to the period in which the additional pension and a GMP are both payable. It is not directed to the period of employment in which contributions were made and pension entitlement accrued. The amount of the reduction is similarly related to the additional pension payable in that period and is not limited by reference to any period of accrual. The deduction is to be made against the additional pension as a whole up to the amount of the GMP if less. Section 46(1)(i) does, of course, limit the deduction to additional pension earned up to 5th April 1997 after which GMP ceased to accrue as a result of changes made by the Pensions Act 1995 and additional pensions were no longer calculated by reference to earnings from contracted-out employment. But the reference to the qualifying additional pension being "attributable to earnings factors for any tax years ending before (5th April 1997)" serves to emphasise that all additional pension derived from any periods of prior employment, whether contracted-out or not, are included for purposes of the statutory set-off.
This view about the construction of s.46(1) has been accepted by various Social Security Commissioners and by Lloyd LJ when refusing permission to appeal in (Pearce) with whose judgment I agree. Neither side on this appeal has suggested that any other construction of either s.46(1) or s.29(1) is even seriously arguable. But, notwithstanding this, Judge Rowland expressed the view that it was anomalous that the legislation required any GMP to be set off against the totality of the pre-April 1997 additional pension rather than being limited to additional pension attributable to the contracted-out years. In his judgment he said that:-
It does seem to me that, looking at the scheme of the legislation as a whole, it is anomalous that a guaranteed minimum pension derived from a contracted-out pension scheme should be offset against an additional pension derived from earnings factors attributable to contributions or earnings in employment that was not contracted-out. Although the state scheme had a topping-up role in relation to pensions attributable to contracted-out employment as well as providing pensions in respect of other employment, occupational pension schemes generally have a role only in relation to the contracted-out employment to which they are linked and are not expected to subsidise pensions attributable to contributions paid in respect of other periods. It would be easy to amend the wording to make it clear that the offset should be limited to the additional pension attributable to the contracted-out earnings, although the words I would read in would not be precisely the same as those suggested by Mr Clifford. Moreover, this is just the sort of point that a draftsman can overlook. It is very easy, when a draftsman has a clear vision of the effect that legislation should have, for him or her to forget the need to make explicit all the points that he or she considers obvious. For an example of a very similar case, where benefits could be offset against compensation and the draftsman did not expressly limit the amount of benefits that might be offset to the amount paid in the period in respect of which compensation for loss of earnings had been paid, see paragraphs 31 and 32 of R(CR) 2/04.
However, at the end of the day, I am not "abundantly sure" that the anomaly was overlooked in this case, even though none of the contemporaneous material produced by Mr Henshaw dealt specifically with the issue, or that, if it was, it would necessarily have been avoided.
The state scheme is a "pay-as-you-go" scheme and is not funded, so that a contributor cannot expect complete correlation between contributions and benefits. It seems to me to be important to keep in mind that the state scheme bore a substantial part of the risk of inflation and, at least when the scheme started, was far more likely to be topping up provision made through an occupational pension scheme in respect of period when a claimant was in contracted-out employment than gaining in respect of other periods from the existence of a guaranteed minimum pension. It was possible to envisage the state scheme as providing a safety net over the whole of a claimant's working life and, as between occupational pension schemes and the State, it makes sense that, if the risk of a fixed-rate revaluation being at a rate less than inflation is borne by the State, the State should gain if the revaluation rate turns out to be greater than the rate of inflation. That is not a particularly compelling approach because, although it makes sense as between pensions schemes as a whole and the State, it operates arbitrarily as between one contributor and another. However, the point is not unarguable, particularly as it may have been thought that the scale of the anomaly was likely to be small."
These observations were directed to Mr Clifford's alternative submission which was that the obvious or overwhelming likelihood was that Parliament had intended to limit the statutory set-off to additional pension earned in contracted-out employment and that the draftsman of s.29(1) had made a mistake when he formulated the section in the way that he did. It was therefore open to the court to apply the principles set out by the House of Lords in Inco Europe v First Choice Distribution[2000] 1 WLR 586 and to revise the language used in a way which will give effect to what was intended.
In my judgment, therefore, the decision of this court in Wilkinson is a further, insuperable obstacle in Mr. Head’s way.
I have no doubt that Mr. and Mrs. Head will continue to feel aggrieved by the fact that, on his case, he has been “short changed” by the State. I am sorry about this, and have some sympathy for him. However, I am in no doubt at all the an application for permission to appeal against the judgment of Nichol J is not the way forward for him, and that his application for permission to appeal against the judge’s order must be refused.
Mr Head may also like to reflect on the fact that, had I given permission, and were his appeal to be unsuccessful, he would be liable to pay the Department’s costs of the appeal.