B v Secretary of State for Work and Pensions
| Jurisdiction | England & Wales |
| Judge | Lord Justice Sedley,Sir Martin Nourse,Lord Justice Buxton |
| Judgment Date | 20 July 2005 |
| Neutral Citation | [2005] EWCA Civ 929 |
| Docket Number | Case No: C3/2004/2753 |
| Court | Court of Appeal (Civil Division) |
| Date | 20 July 2005 |
[2005] EWCA Civ 929
Lord Justice Buxton
Lord Justice Sedley and
Sir Martin Nourse
Case No: C3/2004/2753
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM A TRIBUNAL OF
SOCIAL SECURITY COMMISSIONERS
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr. J Howell QC and Mr. T Weisselberg (instructed by Child Poverty Action Group) for the Appellant
Mr. R Drabble QC and Mr. J Coppel (instructed by Office of the Solicitor) for the R espondent
The appellant, who has quite severe learning disabilities, is the mother of three children. She is literate, but her mental capacity is described as below borderline. Nevertheless, and notwithstanding the pitiful state in which she has been living, no person had been appointed by the Secretary of State, under powers which he is given by his own Regulations, to exercise her right to claim social security and to receive and deal with payments on her behalf.
From May 1990 she was claiming and receiving, in addition to child benefit, income support for herself and her children. But in October 2000, because of her inability to cope, the children were taken into care and – what is not the same thing – removed from her home and taken to live elsewhere. The Benefits Agency, which acts on the Secretary of State's behalf, did not know and was not told of this, and so continued to pay child-related benefit premiums for a substantial further period. Adjusted for the disability premium to which it turned out that the appellant had been entitled but which she had not claimed, the overpayment amounted to £4626.74, and this sum the Secretary of State claimed an entitlement to recover.
His own decision to this effect was overset by the Hounslow Appeal Tribunal (chairman Mr P. Quinn) on 7 July 2003, but his appeal to a Tribunal of Commissioners succeeded. The fact that a full tribunal (HH Judge Hickinbottom, the Chief Commissioner, Mr Commissioner Henty and Mr Commissioner Jacobs) sat reflects the importance of what was to be decided. The decision, however, was one of principle: it determined only whether the Secretary of State was entitled to recover the net amount overpaid. Whether he would proceed to do so if successful was not only a matter for his discretion but – as is accepted on his behalf – a decision subject to scrutiny in public law.
The issues
The central issue for the Commissioners and for this court arises out of two provisions, one of primary and one of delegated legislation. For reasons which will become clear, it is appropriate to cite the latter first.
Regulation 32 of the Social Security (Claims and Payments) Regulations 1987 (SI 1987/1968) provided at the material time:
(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.
Section 71 of the Social Security Administration Act 1992 provides:
Overpayments – general
(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.
The Secretary of State's contention is that the appellant was required, by virtue of Reg. 32, to tell the Benefits Agency if any of her children stopped living with her, and that by virtue of s.71 her failure to do so entitled him to recover the amount consequently overpaid. The material requirement, for the purposes of Reg. 32, had been communicated to her
(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"
Among the arguments advanced for the appellant is that it was assumed by the Commissioners without evidence that the appellant had received form INF4. On the face of it this is correct, and it is no answer for the Secretary of State to assert in his skeleton argument, as he does, that his records show that the form was duly issued more than once to the appellant. But it does not follow that the Commissioners, with their knowledge of the day-to-day working of the system, were not entitled to assume that the form had routinely reached the appellant unless the contrary was asserted. One may compare the approach of the House of Lords in Secretary of State for Work and Pensions v Hinchy [2005] 1 WLR 967, §8. There was in any case the uncontested entry to similar effect (which is further considered at §16 below) at the back of the appellant's order book. It is appropriate in these circumstances for this court to approach the appeal on the same factual footing as the Commissioners did.
The appellant's case (which is not in any significant way dependent on the foregoing) is that a claimant who is unable to understand that she has an obligation to report something has not "failed to disclose" it within the meaning of s.71(1) if she does not report it. On her behalf John Howell QC (appearing with Tom Weisselberg, who represented her before the Commissioners) accordingly relies upon the finding of the Appeal Tribunal that, although she could read the material requirements, the appellant
"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
The decision from which this appeal is brought (CIS/4348/2003) is so closely and fully reasoned that any attempt at paraphrase risks doing it an injustice. It records, however, certain important propositions which were uncontentious:
(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.
The Commissioners concluded that the present duty of disclosure arose not from s.71(1) but from Reg. 32. They considered, however, that a failure which constituted a breach of the duty did not import additionally a breach of some moral or legal obligation such as made it reasonable to expect disclosure by the individual concerned. In so deciding, they departed from a substantial line of commissioners' decisions, starting in 1982, which had limited the Secretary of State's entitlement to recover overpayments by qualifying the claimant's obligation of disclosure. Since it has been submitted by Mr Howell that this line of authority should be restored by us, it will be necessary to look at it in some detail, as the Commissioners did.
The Commissioners concluded:
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.
Arguments
Mr Howell argues, first, that it would have been very simple, had it been Parliament's intent, to provide for the Secretary of State to recover any benefit to which the recipient...
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