Page and Davis v. Chief Adjudication Officer CSB 72 1990
| Jurisdiction | UK Non-devolved |
| Judge | Mr J.J. Skinner |
| Judgment Date | 24 June 1991 |
| Court | Upper Tribunal (Administrative Appeals Chamber) |
| Subject Matter | Recovery of overpayments |
| Docket Number | CSB 72 1990 |
| Appellant | Page and Davis v. Chief Adjudication Officer |
R(SB) 2/92
(Page and Davis v. CAO)
Mr. J. J. Skinner CSB/72/1990
29.6.90
CA (Dillon, Woolf and Leggatt LJJ)
24.6.91
Recovery of overpayment – overpayment due to innocent failure to disclose a material fact – whether recoverable
A widow who claimed and received supplementary benefit failed to disclose to the local office of the Department of Social Security that she had received widows benefit. As a consequence there was an overpayment of supplementary benefit. It was accepted that her failure to disclose was wholly innocent. The Commissioner rejected the claimant’s argument that on its true construction section 53(1) of the Social Security Act 1986 does not catch innocent misrepresentation or innocent failure to disclose. On 24 June 1991 the Court of Appeal (Dillon, Woolf and Leggatt LJJ) dismissed an appeal by the claimant and held that
the wording of section 53(1) was plain and unambiguous and covers innocent as well as fraudulent misrepresentation and non‑disclosure
DECISION OF THE SOCIAL SECURITY COMMISSIONER
1. My decision is that the decision of the social security appeal tribunal is not erroneous in point of law and accordingly the appeal fails
2. This is an appeal by the claimant against the decision of the Whittington House Western social security appeal tribunal given on 23 June 1988. I heard it in conjunction with two other appeals, CSB/942/1989 and CSB/73/1990, in which similar issues arose. At the hearing the claimant was represented by Mr. Michael Shrimpton of counsel as was the claimant in CSB/73/1990. Mr. English from the Free Representation Unit represented the claimant in CSB/942/1989. Mr. Parke from the solicitor’s office of the Department of social security appeared for the adjudication officer in all three appeals. I am indebted to all three gentlemen for the clarity and depth of their submissions.
3. The claimant in this appeal is a widow. The overpayment arose because she was in receipt of widow’s pension and because there had been a failure to disclose this to the local office of the Department of social security. It has been accepted by the Department at all times that the failure to disclose was wholly and entirely innocent. At the hearing before the tribunal the only issue was one of law, namely whether section 53 of the Social Security Act 1986 conferred a right to recover an overpayment of benefit, when the breach of the requirement to disclose a material fact was one which was made wholly innocently. The tribunal found against the claimant on this issue after hearing the full argument from Mr. Shrimpton and on behalf of the Department. The decision of the adjudication officer, issued on 12 February 1988, that supplementary benefit amounting to £433.05 had been overpaid and was recoverable from the claimant was confirmed by the tribunal. The members held that the ejusdem generis principle did not restrict the meaning of the words “or otherwise” as used in the phrase “fraudulent or otherwise” in the section because of the absence of a genus. They also considered the decisions of the social security Commissioners relating to section 20 of the Supplementary Benefit Act 1976 and took the view that they were bound by them.
4. This appeal raises an important point upon the true construction of section 53 of the Social Security Act 1986.1 must set out sub sections (1) and (2) of that section in full:
“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) 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 (1) above is in all cases recoverable from the person who misrepresented the fact or failed to disclose it.”
Mr. Shrimpton argues that the words “whether fraudulently or otherwise” are to be construed in accordance with the ejusdem generis rule and only bite where the failure or misrepresentation are fraudulent or culpable in a sense akin to fraud. Mr. Parke argues that the reference to “fraudulently or otherwise” extends the scope of that section beyond culpability to wholly innocent misrepresentation or innocent failure to disclose.
- Up until the coming into force of section 53 there were two different sets of rules governing the recovery of overpaid benefit. Section 119 of the Social Security Act 1975 made overpayment of benefit under that Act recoverable where there had been a failure to use due care and diligence in avoiding the overpayment. In so far as supplementary benefit was concerned, the position was regulated by section 20 of the Supplementary Benefit Act 1976. I set out the material parts of section 20:
“20. ‑ (1) If, whether fraudulently or otherwise, any person misrepresents, or fails to disclose, any material fact, and in consequence of the misrepresentation or failure -
(a) the Secretary of State incurs any expenditure under this Act; or
(b) any sum recoverable under this Act by or on behalf of the Secretary of State is not recovered;
the Secretary of State shall be entitled to recover the amount thereof from that person.”
It will be seen that section 53 of the 1986 Act is for all practical purposes identical with section 20, but of course the new section applies to all benefits under the Social Security Act 1975, child benefit, family credit and, subject to the provisions of subsection (10A) of the section, to income support. In so far as means tested benefits are concerned the phrase used can be traced back to the National Assistance Act 1948, which dealt with recovery in cases of misrepresentation or non‑disclosure, and it was again repeated in the Ministry of Social Security Act 1966, section 26. Prior to the enactment of the National Assistance Act 1948 the Poor Law Act 1930 dealt with the problem by way of the criminal law and section 20 of that Act provided that a person who did not make correct and complete disclosure was to be taken to be an idle and disorderly person within the meaning of the Vagrancy Act 1824. Since 1986 the supplementary benefit test has been applied as a common test.
6. I now turn to the decisions of the social security Commissioners interpreting section 20 of the Supplementary Benefit Act 1976. The earliest of such decisions was given in 1982 and it enunciated a construction which has been followed in later Commissioners decisions. In all six reported decisions have been cited to me in support of the proposition that the wording of the section catches a wholly innocent misrepresentation or failure to disclose. In addition to these six decisions (they span a period of five years) a great number of unreported decisions have followed the same principle of law and applied it. It is argued by Mr. Parke that all this represents a body of case law which should not be lightly set aside. I accept that there is a bulk of authority which, unless swept away, establishes the rule that a wholly innocent misrepresentation or failure to disclose will suffice to ground a claim for recovery of an overpayment. Mr. Shrimpton argues that the reported decisions of Commissioners were wrong and that all were given per incuriam; and further that they decided the question obiter and without the benefit of full legal argument.
7. R(SB) 21/82 related to the recovery of overpayments made to both a husband and wife during their lives. Benefit had been assessed and paid in reliance on statements signed by both husband and wife to the effect that neither had capital resources. Following the wife’s death it was discovered that she had possessed significant capital resources and the Secretary of State sought to recover from her estate the benefit which had been overpaid, as a result of the non‑disclosure of those resources, in accordance with section 20 of the Supplementary Benefit Act 1976. The administrator of the estate disputed that the Secretary of State was entitled to recover the overpayment and the question was referred to an appeal tribunal who determined that £2,955.08 was recoverable from the estate. The administrator appealed to a social security Commissioner. The principle point at issue before the Commissioner was whether the section enabled an overpayment to be recovered out of the estate of a deceased person from whom recovery would lie if he were still alive. The Commissioner answered this...
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