COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
ADMINISTRATIVE COURT (LAWS LJ and DAVIS J)
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE THOMAS
LORD JUSTICE LLOYD
| SECRETARY OF STATE FOR WORK AND PENSIONS
|- and -
|MR JOHN BALDING
MR PAUL STAGG (instructed by Leicester Law Centre) for the Respondent
Hearing dates : 6th November 2007
Crown Copyright ©
LORD JUSTICE MUMMERY :
The issue on the appeal
We have paid you too much
Dear Mr Balding,
The Adjudication Officer has looked at your claim for Income Support. He has decided that we paid you £8680.45 too much income support from 19 March 1991 to 29 March 1993. This is because you failed to disclose that you were no longer liable to pay the mortgage on your former home. The Adjudication Officer has also decided that you have to pay this money back to us.
The table I have sent you with this letter shows you how the Adjudication Officer worked out this amount.
Adjudication Officers are people who decide whether the law says you are entitled to benefit or not. They also decide how much benefit the law says you are entitled to.
The Adjudication Officer's decision is written on the sheets Adjudication Officer's Decision in the words of the law.
If you think the decision is wrong.
You have the right to appeal. The sheet with the Adjudication Officer's decision on it also tells you how to appeal.
If you do not want to appeal against this decision
Please pay back the £8680.45 as soon as you can."
(1) As a result of the determination made by the Adjudication Officer under section 71(1) of the 1992 Act Mr Balding was under a liability to repay the overpayment of benefit. Davis J said ".the overpaid benefit was recoverable from Mr Balding just because, by reason of the determination, he was liable to repay the overpaid benefit" (paragraph 43).
(2) This was "a liability to pay money under an enactment" within section 382(4) of the 1986 Act and was therefore a bankruptcy debt. The fact that Mr Balding's benefit entitlement was to the net amount after deduction did not displace the fact that there was a repayment liability under the 1992 Act (paragraph 44).
(3) The overpayment was recoverable by the Secretary of State from Mr Balding by two methods of recovery specified in section 71 "without prejudice to any other method of recovery." Deduction from prescribed benefits was one of the methods of recovery specified in section 71(8). The other was by issue of execution from the county court: section 71(9). It was conceded that by the Secretary of State that, if he had sued Mr Balding for recovery of the overpayment as a debt, he could elect to prove for the debt as a creditor in the bankruptcy. Davis J commented that the liability to repay cannot be said not to be a "bankruptcy debt" if one form of recovery is adopted, but is a "bankruptcy debt" if another form of recovery is adopted (paragraph 46).
(4) The discharge from bankruptcy released Mr Balding from the liability under the 1992 Act for the overpayment of benefit. A bankrupt is released from all the bankruptcy debts on his discharge from bankruptcy: section 281 of the 1986 Act. The legislative policy is to wipe the slate clean and, broadly speaking, enable the bankrupt to make a fresh start (paragraph 48(i)). The case does not fall within any of the express exceptions to discharge, such as fraud. A liability to repay under section 71 is not listed in the exceptions to discharge in section 281.
(5) The Secretary of State had no entitlement to recover the overpayment by continuing to make deductions from the prescribed benefits payable to Mr Balding after his discharge from bankruptcy.
Submissions of the Secretary of State
Discussion and conclusion
Lord Justice Thomas:
Lord Justice Lloyd: