COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM A TRIBUNAL OF
SOCIAL SECURITY COMMISSIONERS
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE SEDLEY
SIR MARTIN NOURSE
|- and -
|THE SECRETARY OF STATE FOR WORK AND PENSIONS
Smith Bernal Wordwave Limited, 190 Fleet Street
London EC4A 2AG
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Official Shorthand Writers to the Court)
Mr. R Drabble QC and Mr. J Coppel (instructed by Office of the Solicitor) for the Respondent
Crown Copyright ©
Lord Justice Sedley :
(1) Every beneficiary and every person by whom or on whose behalf sums payable by way of benefit are receivable shall furnish in such manner and at such times as the Secretary of State may determine such information or facts affecting the right to benefit or to its receipt as the Secretary of State may require.
The current version is materially the same.
(1) Where it is determined that, whether fraudulently or otherwise, any person has misrepresented, or failed to disclose, any material fact and in consequence of the misrepresentation or failure
(a) a payment has been made in respect of a benefit to which this section applies; or
(b) any sum recoverable by or on behalf of the Secretary of State in connection with any such payment has not been recovered,
the Secretary of State shall be entitled to recover the amount of any payment which he would not have made or any sum which he would have received but for the misrepresentation or failure to disclose.
(2) An amount recoverable under subsection (3) above is in all cases recoverable from the person who misrepresented the fact or failed to disclose it.
(a) by Form INF4, which is routinely sent to all income support claimants and which says, under the caption "Changes you must tell us about":
"Tell us if someone you have claimed for
- move[s] to a different address [or]
- if children who you have claimed for go into care"
(b) by the order book by means of which the appellant was paid, which at the back told her that she must tell the Benefits Agency "if things change" and in particular "if any dependant or anyone else who you have told us is living with you moves to a different house". Under the caption "How to tell us about changes", it said: "You must get in touch with the social security office named at the front of this book as soon as you can"
"did not understand that the placing of her children in care was a material fact that she needed to disclose."
It is not disputed before us that, if the legal test of failure to disclose is dependent on mental capacity, the appellant lacked the necessary capacity.
The decision of the Tribunal of Commissioners
(a) that one could not disclose, nor therefore fail to disclose, what one did not know;
(b) that failure to disclose something required not merely the negative fact of non-disclosure but an affirmative obligation to disclose;
(c) that the materiality of a fact was an objective question independent of the claimant's perception; and
(d) that "fraudulently or otherwise" meant that innocent failures of disclosure could result in recovery.
62. In this case, the Secretary of State relies upon the first duty within the unamended regulation 32 (1), namely upon a request for information with which the claimant failed to comply. The requests relied upon are found in the Form INF4 ("Tell us if you or someone who you have claimed for move to a different address.. [or] if children you have claimed for go into care") and order book ("You must send us a letter or Form A9 if you or your partner or any dependent or anyone else who you have told us is living with you, moves to a different address"). These requests were unambiguous. They imposed a duty on the claimant to report the fact that her children had been removed from the house. She knew that fact. She was able to communicate that fact to others. By not disclosing the fact to the Department, she was in breach of her obligation under regulation 32(1). She failed to disclose a material fact in breach of her obligation to do so, resulting in an overpayment of benefit to her. The consequences of the breach were those under section 71, i.e. the Secretary of State was entitled to recover the overpayment resulting.
The order book
Protection of property
Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.
Prohibition of discrimination
The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status.
Is there a secondary restraint on recovery?
"I consider that a 'failure' to disclose necessarily imports the concept of some breach of obligation, moral or legal i.e. the non-disclosure must have occurred in circumstances in which, at lowest, disclosure by the person in question was reasonably to be expected."
"51. we agree that it is difficult to understand. We agree that "failure to disclose" imports some concept of breach of obligation. As we have already indicated, we do not understand what the Commissioner meant by "moral obligation" in this context, and certainly we do not understand what place such obligations have in the case of a non-disclosing claimant. However, even more obscure is what the Commissioner meant by "the non-disclosure must have occurred in circumstances in which, at lowest, disclosure by the person in question was reasonably to be expected". Mr Coppel submitted that this was an additional criterion for "moral obligation" cases but, if so, then it has been approved in many subsequent cases in respect of legal obligations to disclose. Mr Coppel submitted that, in his view, the criterion could have no place where there was a legal duty. Mr Weisselberg submitted that the Commissioner appeared to have introduced into the construction of section 71 entirely erroneously, he accepted a concept from the then-equivalent of the second duty in regulation 32(1). He frankly submitted, and we accept, that the phraseology used is so close to that used in the regulation that it would be an astonishing coincidence if it had not been derived from the regulation.
52. With considerable regret, we have concluded that, on any analysis, the passage of Mr Commissioner Edwards-Jones QC cannot represent the proper construction of what has now become section 71(1). Insofar as he imported words from the equivalent of regulation 32 (1), he was not entitled to do so. Before us, no one could suggest how those words could properly be imported otherwise. On the most generous view, the words do not represent a possible construction of section 71.
53. There was no suggestion that, in the words quoted, the Commissioner was construing the then-equivalent of regulation 32 (1) (as delimiting the scope of the duty to disclose sufficient to found an entitlement to recover an overpayment under section 71). However, if and insofar as he was, for the reasons set out above, it was equally impermissible of him to have imported a reasonable expectation criterion into the first duty, i.e. the duty relating to disclosure."
The discretion to enforce recovery
Sir Martin Nourse:
Lord Justice Buxton: