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Jones v. Chief Adjudication Officer Sharples v. Chief Adjudication Officer [1993] UKSSCSC CIS_359_1990 (01 July 1993)

R(IS) 7/94
(Jones v. Chief Adjudication Officer

Sharples v. Chief Adjudication Officer)

C A (Dillon, Stuart Smith and Evans LJJ) CIS/359/1990

Recovery of overpayment - declaration on order book - whether representation as to a material fact

Recovery of overpayment - representation on claim form - whether qualified by declaration at the end of the form

On 5 December 1988, J claimed unemployment benefit from the Department of Employment and income support from the Department of Health and Social Security. On his income support claim form, he declared that that he had claimed unemployment benefit. He received his first payment of unemployment benefit on 13 December 1988 and thereafter received regular girocheques. He received an order book for income support on 21 December 1988 and cashed orders after signing on each one a declaration "that I have correctly reported any fact which could affect the amount of my payment and that I am entitled to the above sum". He did not report to the Department of Health and Social Security the fact that he had been awarded unemployment benefit. Income support was overpaid because the unemployment benefit was not taken into account. The Commissioner held that the overpayment was recoverable under section 53 of the Social Security Act 1986 on the basis that J had misrepresented a material fact when signing the declaration on the order book. J appealed on the ground that a representation that material facts had been correctly reported was not itself a representation as to a material fact and a representation that he was entitled to the benefit was a representation of law and not of fact.

S claimed supplementary benefit on a form on which he answered "no" to a question whether he or his partner had any life insurances or endowment policies and at the end of which he declared: "As far as I know, the information on this form is true and complete." In fact, unknown to S, his partner did have life insurances or endowment policies. Supplementary benefit was overpaid because the policies were not taken into account. The Commissioner held that the overpayment was recoverable because the claimant had misrepresented a material fact when completing the claim form. S appealed on the ground that he had represented only that he did not know that he and his partner had any life insurances and endowment policies.

Held, dismissing J's appeal (Evans LJ dissenting) and allowing S's appeal, that:

by signing the order book declaration, J had represented that he had correctly reported any facts known to him and (per Stuart Smith LJ) that was a representation as to a material fact because, unless it was true, the claimant was not entitled to any benefit and (per Dillon LJ) the representation could not be qualified by the addition of words such as "in so far as disclosure could reasonably be expected of me";

(per Evans LJ) the declaration "I am entitled to the above sum" was a representation of law although it might include a representation of fact such as "I, the person claiming, am the person to whom the award was made or to whom the order book was sent";

(per Stuart Smith LJ) J failed to disclose a material fact because he knew he was in receipt of unemployment benefit and must have known that it affected the amount of income support to which he was entitled;

(per Stuart Smith LJ) where the order book declaration is signed, an overpayment is recoverable by reason of either misrepresentation or failure to disclose, provided the failure to disclose is established;

S's statement that he and his partner had no life insurances or endowment policies was qualified by the form of words used in the declaration at the end of the claim form and it therefore amounted only to a representation that, as far as he knew, they had no policies, which was not a misrepresentation because he did not know of the policies possessed by his partner.

DECISION OF THE COURT OF APPEAL

Mr. M. Rowland (instructed by Messrs. Raleys, Barnsley) appeared on behalf of the Appellant Jones.

Mr. R. Drabble (instructed by Messrs. Cartridges, Exeter) appeared on behalf of the Appellant Sharples.

Mr. J. R. McManus (instructed by P. K. J. Thompson, Office of the Solicitor to the Department of Social Security, London WC2A) appeared on behalf of the Respondent.

LORD JUSTICE EVANS: In these two cases the Department of Health and Social Security seeks to recover certain amounts of social security benefit paid to the appellants in excess of their legal entitlement. It is not disputed that there was an overpayment in each case. Mr. Jones received income support from 20 December 1988 until 2 October 1989 without deducting the amount of unemployment benefit which he also received from the Department of Employment during that period, totalling £2,244.57. Mr. Sharples received supplementary benefit totalling £3,486.20 in respect of the period from 29 August 1987 until 12 February 1988, which, as it now appears, by reason of certain insurance policies which his girlfriend and partner had inherited from her late father, he was not entitled to receive.

The Secretary of State's right to recover the amount of any overpayment is governed for present purposes by section 53 of the Social Security Act, 1986:

"53. (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) ... ,

the Secretary of State shall be entitled to recover he amount of any payment which he would not have made .... But for the misrepresentation or failure to disclose.

(2) An amount recoverable under subsection (1) above is in all cases recoverable from the person who misrepresented the fact or failed to disclose it.

(3) ....

(4) Except where regulations otherwise provide, an amount shall not be recoverable under subsection (1) above ... Unless the determination in pursuance of which it was paid has been reversed or varied on an appeal or revised on a review."

(Subsections (5) (7) and (10) apply these provisions to supplementary benefit and to income support, respectively.)

The claims were allowed by the adjudication officers and their decisions were upheld on appeal by the social security appeal tribunal ("SSAT"). The appellants then appealed to a social security Commissioner and in each case the appeal was supported by the adjudication officer. Nevertheless, both appeals were dismissed.

The appellants now appeal to this court with leave from Lord Justice Lloyd.

Mr. Sharples' appeal depends upon a short question of construction of the application form, form B1, which he completed first on 26 August 1987 and on two later dates, each time in, so far as is relevant, identical terms.

Mr. Jones' case, however, is more complicated. It is not suggested that he either made any misrepresentations or failed to disclose any material fact when he completed his application form, the same form B1, on 5 December 1988. The Department relies upon the declaration which he made when receiving weekly payments of benefit from the Post Office on the standard form of "pension or allowance order book", in the following terms:

"I DECLARE that I have read and understand all the instructions in this order book, that I have correctly reported ANY facts which could affect the amount of my payment and that I am entitled to the above sum.

I acknowledge receipt of the above sum.

Signature ."

Mr. Mark Rowland, who appeared on behalf of Mr. Jones, has presented his appeal on the basis that it raises issues of principle regarding the application of section 53. The claim against Mr. Sharples is founded on the same section. The two appeals were argued together. For these reasons, the scope and operation of section 53 can conveniently be considered first and in general terms, before turning to the detailed facts of the two cases.

Section 53

Mr. Rowland is correct, in my judgment, to draw attention to the fact that the Secretary of State's right to recover payments (or overpayments) of benefit is limited to cases where there has been a misrepresentation of or failure to disclose a material fact and where the payment was made "in consequence of" the misrepresentation or failure. This makes it clear that there is no statutory right of recovery in other cases and that accordingly the mere receipt of benefit to which the recipient was not entitled does not give rise to any statutory obligation to repay. It is established law, and not disputed in the present case, that the words "whether fraudulently or otherwise" mean that the section covers cases of innocent as well as fraudulent misrepresentation, and of non disclosure also. Mr. Commissioner Edwards-Jones QC ruled to this effect in the cases reported as R(SB)21/82. Mr. McManus, for the defendant, referred also to the Court of Appeal's decision in Page v. Chief Adjudication Officer (Civil Appeal No. Of 1991, 24 June 1991). We were told that the 1982 ruling has been generally followed and applied since that date. This means that, when a person has misrepresented a material fact, his knowledge of that fact is relevant so far as section 53 is concerned. It is sufficient that there was the misrepresentation, whether the fact was known to him or not. Section 55, on the other hand, makes it a criminal offence knowingly to make a false statement for the purpose of obtaining benefit, and the person's knowledge of the true facts would therefore become relevant if such a charge was brought.

But knowledge is not irrelevant in the case of non disclosure, even though section 53 covers innocent as well as fraudulent non disclosure. This is because of the equally well established rule that a person cannot be held liable for failing to disclose what he does not know. This rule, which has long been recognised in insurance law, was applied in a similar context to the present by the Queen's Bench Divisional Court in Regina v. Medical Appeal Tribunal (North Midland Region) Ex parte Hubble [1958] 2 QB 228, where Diplock, J giving the judgment of the Court said this:

"'Non disclosure' in the context of [section 40(1) of the National Insurance (Industrial Injuries) Act, 1946], where it is coupled with misrepresentation, means a failure to disclose a fact known to the person who does not disclose it. The term 'non disclosure' is a familiar term in insurance law. It may be innocent if the person failing to disclose the fact does not appreciate its materiality. But there can be no disclosure of a fact which is not known." (p.242).

It follows from this that the Secretary of State's right to recover payments under section 53 is easier for him to establish when he alleges a misrepresentation rather than a failure to disclose a material fact. This was recognised by Mr. Commissioner Edwards-Jones in R(SB)21/82, as follows:

"24. I should for completeness mention that whilst the Department have not in their terms of reference in this particular case incorporated any charge of misrepresentation, alleging only 'failure to disclose', it is settled law that knowledge is not a material ingredient in 'innocent misrepresentation'. Thus if knowledge is a material ingredient in 'failure to disclose' the alternative charge may in other cases be an easier ground to establish."

Observations to the same effect were made by Mr. Commissioner Mitchell in R(SB)9/85 and by Mrs. Commissioner Heggs in the present (Mr. Sharples') case.

A further question which arises is whether "failure to disclose" is established for the purposes of section 53 when a person knew the fact in question but could not reasonably be expected to disclose it in the circumstances of the particular case. Mr. Commissioner Edwards-Jones in R(SB)21/82 dealt with this as follows:

" .... Whilst the concept of making or not making a misrepresentation needs no explanation or refinement, I consider that a 'failure' to disclose necessarily imparts the concept of some breach of obligation, moral or legal i.e. the non disclosure must have occurred in circumstances in which, at least, disclosure by the person in question was reasonably to be expected ...." (para. 4/(2))

As will appear below, the present appeals are concerned solely with allegations of misrepresentation, and in Mr. Jones' case Mr. Rowland seeks an order remitting the matter to the tribunal so that the Department's claim can be re-considered on the basis of failure to disclose, rather than misrepresentation. In these circumstances, it is unnecessary to express a concluded view on this question and I would add only the following comments:

(1) the restriction suggested by Mr. Commissioner Edwards-Jones may well correspond with, or include, the limits placed upon the insured's duty of disclosure in insurance law, as regards facts which are known or presumed to be known to the insurer: see section 18(3)(b) of the Marine Insurance Act, 1906, which also states 'The insurer is presumed to know matters of common notoriety or knowledge, and matters which an insurer in the ordinary course of his business, as such, ought to know". If so, this could be relevant in Mr. Jones' case, where the Department acknowledges that there was some breakdown in the normal processes of communication between itself and the Department of Employment; and

(2) there is no issue as to the definition of "material" facts in the present case, although reference was made to the judgments in Saker v. Secretary of State for Social Services (CA 15 January 1988 reported as an appendix to R(1)2/88). There, Lloyd LJ relied upon the Court of Appeal's decision in C.T.I. v. Oceanus [1984] 1 L1 R 476, and I should record that that judgment has recently been commented upon and perhaps modified by the judgment in Pan Atlantic Insurance Co. Ltd v. Pine Top Insurance Co. Ltd. (CA 3 March 1993). I should also express a personal hope that the application of section 53 will not become subject to the kind of refined analysis which has been permitted to enter the law of marine insurance. The printed heading to form B1 refers to information "which the Department needs to work out your benefit". That may be a sufficient and convenient definition of "material facts" for all practical purposes when applying section 53.

Against this background, I turn to the circumstances of the two cases before us. In both, the Department alleges a misrepresentation, rather than a failure to disclose material facts, but apart from this the issues are wholly distinct.

Mr. Jones

Mr. Jones worked for the National Coal Board for 15 years. He became unemployed. After a period of unemployment, he commenced a part time job with the Community Programme, but this ceased on 2 December 1988. He was in receipt of supplementary benefit which was renamed income support in April 1988.

On 5 December 1988 he went to the unemployment benefit office of the Department of Employment in Shambles Street, Barnsley, and made a further claim for unemployment benefit. He was given form B1 with which to reclaim income support. This was necessary because he had become unemployed, and because he had changed his address with a consequent increase in the amount of his mortgage repayments. He stated in the form that he had claimed unemployment benefit, which he had done, but that he had not received any, which he had not. (This was done, apparently, by ticking the box for "claimed" rather than "received".) He took the form to the DHSS office nearby on the same day.

He received his first girocheque for unemployment benefit from the Department of Employment office on 13 December 1988. On 21 December he received a new order book in respect of income support from the DHSS. Thereafter, he received unemployment benefit weekly by girocheque from the D of E. And he claimed income support weekly from the Post Office acting as paying agents for the DHSS. This continued until October 1989 when, as a result of a further visit which he made to the DHSS in connection with another matter, it was discovered that the amount of income support had been wrongly calculated. It should have been reduced to take account of the unemployment benefit which he had received on and after the 13 December 1988. The mistake would not have occurred, or would have been spotted, if the DHSS had communicated with the D of E in the normal way. This is because weekly girocheques from the D of E include both payments, and the amount of income support is notified by the DHSS to the D of E for this purpose. In Mr. Jones' case, the DHSS failed to take account of the fact that the claim was made on form B1 by Mr. Jones as an unemployed person and that he had claimed unemployment benefit as he revealed in the form.

It is not suggested that Mr. Jones knowingly either misrepresented or failed to disclose the fact that he was receiving weekly payments of unemployment benefit, at any stage. He stated, correctly, that he had claimed it on 5 December in form B1. He failed to disclose the fact that he received it weekly thereafter, although this was obviously a fact which was known to him and which was material. The contrary is not argued. On any sensible and straightforward analysis, this was a case of non disclosure and the question which arises is whether the defendant can establish a claim under section 53 on that basis in the circumstances of this case. It may be said that Mr. Jones could assume that the fact in question was already known to the Department, or that he was under no legal or moral duty to disclose it, if that is indeed the effect of section 53.

But the claim is put on the basis of misrepresentation, no doubt so that the Department can assert that innocent misrepresentation is enough and that all questions of knowledge, belief etc. are irrelevant. The weekly declaration made when each page of the order book was signed contained, it is said, a misrepresentation of a material fact or facts. The declaration, which I have quoted above, has to be read in the light of the Notes, which include the following:

"D. Changes that you must tell us about. You must read these pages carefully. Every time you sign an order you are declaring that you have read and understood them.

Remember

The amount of money that you are entitled to is based on what you told us when you claimed.

If things change and you do not tell us, you might get the wrong amount of money and you could be breaking the law."

(Note 12 requires disclosure of changes, either by letter or by means of form A9 or by visiting the Social Security office.)

"16. Any new benefits.

You must send us a letter or form A if you

....

.... Start to get new benefit."

Against this background, Mr. McManus for the Department submits that there was a misrepresentation of material facts each time this declaration was made. With respect to his argument, I am not entirely clear what the misrepresentations are alleged to have been. One was "I am entitled to the above sum". Another is a representation that all material facts have been correctly reported, which includes, he submits, a further representation of those underlying material facts themselves (skeleton argument, para. 11) and a further representation that no material facts have not been disclosed. But he does not contend that the declaration refers back to the original claim ("my original claim was correct" or "the representations which I made remain true") .

Mr. Rowland's main submission is that the declaration contains no representation as to any material fact. "Material", he submits, means relevant to the calculation of benefit and therefore is limited to factors which affect the amount of benefit which the claimant is entitled to receive. This meaning, which in my judgment is correct having regard to section 53 alone, is supported by reference to section 53(4) and section 104(1) and (1A) of the Social Security Act, 1975, which it is unnecessary for me to quote. Whether or not he had reported, or correctly reported, the material facts, was not itself "material" in this sense. Nor was any representation that he made to the effect that he was entitled to receive the amount awarded to him a representation of a material fact, even if it was a fact rather than law.

In my judgment, Mr. Rowland's analysis is correct. The declaration is an express representation that the applicant has correctly reported all material facts, with or without the qualification "so far as they are known to me". It does not purport to make any statement or representation as to the material facts themselves, as distinct from the fact of their disclosure.

The declaration may also be said to carry with it, either expressly or by implication, a further representation that the applicant has disclosed all material facts, subject again to the same qualification as regards knowledge. The material fact in the present case is that he was receiving unemployment benefit at the material times.

These representations were untrue, because he had failed to disclose that material fact. But the fact of non disclosure was not itself a material fact. The calculation of benefit was not affected by the fact of non disclosure. He could not be penalised for the failure to disclose, except by means of a claim for repayment under section 53 which is governed, according to Mr. Edwards-Jones' decision, by the question of duty as well as knowledge to which he referred.

The need to make this hair-splitting distinction between the fact of non disclosure and the material fact which was not disclosed arises solely because the Department claims repayment on the basis of misrepresentation rather than non disclosure, doubtless in order to avoid the potential difficulties for them which were foreshadowed by Mr. Edwards-Jones and the Commissioners who have adopted his view. In my judgment, Mr. Jones should succeed on this narrow ground, but I would also put the matter more broadly. This was essentially a case of non disclosure, not one where Mr. Jones misrepresented a material fact, and in my view the claim under section 53 should be dealt with as such.

If contrary to this view the declaration did contain a representation of material fact, then it would become necessary to consider whether it is permissible for the Department to convert every case of failure to disclose into a case of misrepresentation by means of the declaration which must be made weekly before any payment is received, and therefore before any over payment can be made. For the reasons given, this question in my judgment does not arise.

The second misrepresentation relied upon, "I am entitled to the above sum", raises the question whether the Department really means to contend that it relies upon claimants, not merely to disclose all material facts, but to represent to its officers what amount of benefit is due. Without exploring that question further, the representation relied upon, in my judgment, is one of law, not of fact, although it may include, as Mr. Rowland submits, a representation of the limited facts, such as that "I, the person claiming, am the person to whom the award was made, or to whom the order book was sent". The need to distinguish between representations of fact and law arises from the wording of section 53(1) itself and I do not regard the observations of Lord Denning MR. In Andre & Cie. S.A. V. Ets Michael Blanc & Fils [1979] 2 L1 R 427, to which we were referred, as being relevant in this case.

Mr. Rowland's further submission was that the declaration represents only that the claimant has correctly reported any fact which he understood had to be reported. This was supported by the decision of Mr. Commissioner Skinner in CSB/790/1988 but was rejected by the Commissioner in the present case. If there was no misrepresentation of material facts, this question does not arise except possibly in relation to failure to disclose, and in the circumstances say no more about it in this judgment.

The Commissioner held that on each occasion when Mr. Jones made the weekly declaration "he was guilty of a misrepresentation, and this resulted in overpayment. It follows that [he] is caught by section 53 ..." (para.9). In my judgment, for the reasons given, there was no misrepresentation of material fact, and Mr. Rowland is correct in his submission that the case essentially is one of failure to disclose, rather than misrepresentation. I would therefore allow this appeal, and if the defendant seeks to pursue the claim further, would remit the matter for further consideration, as Mr. Rowland submits.

Mr. Sharples

Mr. Sharples' appeal turns on a straightforward question of construction. Section 5 of form B1, headed "Money and Savings", includes the following:

"Do you or your partner or dependant children have any life insurances or endowment policies.."

which Mr. Sharples answered "No" by ticking the appropriate box. Section 12 of the form reads as follows:

"12. YOUR SIGNATURE

Remember that if you deliberately give false information you may be prosecuted.

As far as I know, the information on this form is true and complete. I claim Supplementary Benefit.

Your Signature Date ".

It is common ground that the answer to question 5 was incorrect, but that Mr. Sharples was not aware of the policies which his partner had inherited from her father. Therefore, his declaration "As far as I know" in section 12 was true. If section 5 stands alone, there was a misrepresentation of material fact; if it is read with section 12, there was not. This is the sole issue between the parties.

Mrs. Commissioner Heggs held that there was a misrepresentation each time the form was completed. "He gave a specific answer to a specific question. The claimant did not qualify his answer in any way so as to put the Department on notice that he was unaware of the precise position .... I accept that the misrepresentation was innocent, but if he did not know he should have said so".

This passage acknowledges, apparently, that if section 5 had been qualified by words such as "As far as I know", then there would have been no misrepresentation. Mr. McManus refers to the heading to the form, which includes the instruction "If you cannot answer a question on the form write 'I don't know' and carry on" and points to other questions to which Mr. Sharples responded in this way. But the Commissioner, with respect, does not deal with the question whether the effect of section 12 is to introduce the qualification which, if it had been stated expressly in section 5, would have meant that no misrepresentation was made.

Mr. Drabble submits shortly that the claimant could hardly be expected to write "as far as I know" in each answer where that might be appropriate, rather than rely upon the general qualification in section 12 where his signature appears.

Mr. McManus' underlying submission is that the declaration in section 12 is directed, not towards the truthfulness or otherwise of the individual answers given in sections 1 to 11, but to the possibility of criminal liability under section 55 of the Act. That is the risk of prosecution, in the case of knowing misstatement, to which express reference is made. But this does not provide the answer, in my judgment, to the question of construction which arises in relation to sections 5 and 12. Is section 5 "freestanding", as he submits, or should it be read in the light of the signature and the qualified form of words found in section 12?

In my judgment, Mr. Drabble's submission is correct. Section 12 provides space for the signature without which the form is incomplete, and if that signature is qualified, as it is, then it is qualified as regards section 5 as well as the rest of the forms. The issue does not permit of further elaboration. In my judgment, this appeal also should be allowed.

LORD JUSTICE STUART SMITH: I have had the advantage of reading the judgment of Evans LJ in draft and I gratefully adopt his summary of the statutory provisions and relevant facts.

The Sharples Case

I entirely agree with the judgment of Evans LJ and have nothing to add.

The Jones Case

Although the point in this case is a short one, I have not found it easy.

There is no dispute that Mr. Jones was overpaid by the amount of unemployment benefit totalling £2,244.57. The question is whether, when he signed the declaration contained in the order book Mr. Jones misrepresented a material fact. If he did, then the case fell within s.53(1) of the Social Security Act 1986 (now s.71 of the Social Security Administration Act 1992), with the result that the Secretary of State is entitled to recover the overpayment. The declaration is in these terms:

"I declare that I have read and understand all the instructions in this order book and that I have correctly reported any facts that could affect the amount of my payment and that I am entitled to the above sum."

There are two relevant instructions in the order book:

"11. Remember

The amount of money that you are entitled to is based on what you told us when you claimed.

If things change and you do not tell us, you might get the wrong amount of money and you cold be breaking the law."

And:

"16. Any new benefits

You must send us a letter or form A9 if you or your partner or your dependents start to get a new benefit."

It is common ground that the receipt of unemployment benefit affected the amount of income support payable. It is also common ground that Mr. Jones had not reported the fact that he had received unemployment benefit, as opposed to the fact that he had claimed it. As Mr. McManus pointed out, not everyone who claims unemployment benefit, receives it; there may be many reasons, why upon investigation, the Department of Employment decide that the claimant is ineligible.

There cannot be a non disclosure of a fact which is unknown to the claimant. See Regina v. Medical Appeal Tribunal (North Midland Region) ex parte Hubble [1958] 2 QB 228. But Mr. Jones knew that he was in receipt of unemployment benefit; he must have known that this affected the amount of income support to which he was entitled and certainly any reasonable man who had read the instructions in the order book, which he said he had, would know this. It seems to be plain therefore that there was a failure to disclose a material fact.

Moreover the overpayment was made in consequence of that non disclosure, even though, if the Department had followed their proper procedure, they would have discovered that Mr. Jones was not entitled to it. It would not have been paid if Mr. Jones had disclosed the true position.

But the Department have not proceeded on the basis of non disclosure. Mr. McManus submits that the effect of the declaration is to convert the non disclosure into a misrepresentation. The declaration "I have correctly reported any facts which could affect the amount of my payment" must be qualified by the implied inclusion of the words "known to me" after the words "reported any facts". Subject to this, it is a representation of fact, and in this case it was not true. But Mr. Rowland submits that it is not a representation of a material fact. A material fact he submits is one that affects the entitlement to or amount of the benefit. Thus the material fact in this case is the receipt of unemployment benefits and not the fact that this receipt has or has not been reported.

In my judgment there are two answers to this submission. First, on the facts of this case the declaration can properly be expanded by the inclusion of the words underlined to read as follows "I have correctly reported any facts known to me which could affect the amount of any payment, including the fact that I have received unemployment benefit." In other words the greater and general "any facts" must include the lesser and particular fact.

Secondly, the statement "I have correctly reported any facts which could affect the amount of my benefit" is itself a statement of fact, and in my view a material fact since unless the statement is true the claimant is not entitled to the amount of benefit claimed.

In the absence of the declaration the respondent could only rely on a non disclosure of a material fact. Where the declaration is signed, such non disclosure is equally a misrepresentation and it is immaterial whether the Secretary of State claims to be entitled to recover the sum overpaid by reason of a misrepresentation or failure to disclose, provided the latter is established. In my view, it is. Accordingly I would dismiss the appeal in this case.

DILLON LJ: I gratefully adopt the summary of the relevant statutory provisions and of the facts of these cases in the judgment of Evans LJ.

Sharples

Mr. Sharples' appeal raises a very short and to my mind clear point. I see no answer to the final paragraph in the judgment of Evans LJ and I agree with him that Mr. Sharples' appeal should be allowed.

Jones

I find Mr. Jones' case considerably more difficult. Section 53 of the Act gives the Secretary of State the right to recover an overpayment where any person has misrepresented or failed to disclose any material fact. It is not in doubt that that covers innocent, as well as fraudulent, misrepresentation or non disclosure. The form of declaration which Mr. Jones signed on the order in the standard form of pension or allowance order book each time he received payment of benefit from the Post Office seems to have been calculated to ensure that each time he received a payment he represented that he had disclosed all material facts viz: "I DECLARE that ... I have correctly reported ANY facts which could affect the amount of my Payment." I read that declaration as a representation by Mr. Jones, each time he signed such a declaration, that there were no facts, known to him at the time he signed, which could affect the amount of his payment, but which he had not reported. The representation must be limited, as a matter both of common sense and law, to a representation that he has disclosed or reported all material facts known to him, since he cannot sensibly be expected to represent that he has disclosed all material facts that are not known to him. But that is not in itself enough to carry Mr. Jones home on this appeal, since he did know that he had been awarded and from 13 December 1988 was receiving unemployment benefit, and he had merely disclosed that he had applied for such benefit. The question is therefore whether the representation each time he signed an order can be further qualified by the addition of words such as "in so far as disclosure could reasonably be expected of me" as suggested by Mr. Commissioner Edwards-Jones QC in paragraph 4(2) of his decision in the case R(SB) 21/82.

We were told by Mr. McManus, on instructions, that the Department accepted Mr. Edwards-Jones' formulation as correct when it was a question of recovering overpayments on the ground of innocent non disclosure. We are however here concerned with a representation.

With considerable regret I have reached the conclusion that it is not possible to read Mr. Edwards-Jones' qualification into the representation.

It is well established in insurance law, as stated by Fletcher Moulton LJ in Joel v. Law Union and Crown Insurance Company [1908] 2KB 863 at 884 that the duty of an applicant for insurance is to disclose to the insurer not merely what the applicant himself bona fide, considers to be material, but what a reasonable man would consider to be material even if the applicant himself does not. But the actual words of the representation "any facts which could affect the amount of my payment" are too wide and clear to be limited even to what a reasonable man would think would affect the amount of the payment. Moreover Mr. Edwards-Jones' formulation goes even further than that of Fletcher Moulton LJ in that it would or might exclude the applicant for benefit from having to disclose matters which the applicant might reasonably have thought that the Department would know.

It must follow if the representation is not qualified by Mr. Edwards-Jones' formulation, that this appeal must fail, and for my part I would dismiss it.

Order: Mr. Sharples' appeal is allowed. Costs awarded. Mr. Jones' appeal is dismissed. Legal Aid Taxation awarded. Leave to appeal to the House of Lords refused.